Advertising Meets its Slippery Slope

We’ve now reached the crux of the matter when it comes to the ad biz.

For a couple of centuries now, we’ve been refining the process of advertising. The goal has always been to get people to buy stuff. But right now, there is now a perfect storm of forces converging that requires some deep navel gazing on the part of us insiders.

It used to be that to get people to buy, all we had to do was inform. Pent up consumer demand created by expanding markets and new product introductions would take care of the rest. We just had to connect better the better mousetraps with the world, which would then duly beat the path to the respective door.  Advertising equaled awareness.

But sometime in the waning days of the consumer orgy that followed World War Two, we changed our mandate. Not content with simply informing, we decided to become influencers. We slipped under the surface of the brain, moving from providing information for rational consideration to priming subconscious needs. We started messing with the wiring of our market’s emotional motivations.  We became persuaders.

Persuasion is like a mental iceberg – 90% of the bulk lies below the surface. Rationalization is typically the hastily added layer of ad hoc logic that happens after the decision is already made.  This is true to varying degrees for almost any consumer category you can think including – unfortunately – our political choices.

This is why, a few columns ago – I said Facebook’s current model is unsustainable. It is based on advertising, and I think advertising may have become unsustainable. The truth is, advertisers have gotten so good at persuading us to do things that we are beginning to revolt. It’s getting just too creepy.

To understand how we got here, let’s break down persuasion. It requires the persuader to shift the beliefs of the persuadee. The bigger the shift required, the tougher the job of persuasion.  We tend to build irrational (aka emotional) bulwarks around our beliefs to preserve them. For this reason, it’s tremendously beneficial to the persuader to understand the belief structure of their target. If they can do this, they can focus on those whose belief structure is most conducive to the shift required.

When it comes to advertisers, the needle on our creative powers of persuasion hasn’t really moved that much in the last half century. There were very persuasive ads created in the 1960’s and there are still great ads being created. The disruption that has moved our industry to the brink of the slippery slope has all happened on the targeting end.

The world we used to live in was a bunch of walled and mostly unconnected physical gardens. Within each, we would have relevant beliefs but they would remain essentially private. You could probably predict with reasonable accuracy the religious beliefs of the members of a local church. But that wouldn’t help you if you were wondering whether the congregation leaned towards Ford or Chevy.  Our beliefs lived inside us, typically unspoken and unmonitored.

That all changed when we created digital mirrors of ourselves through Facebook, Twitter, Google and all the other usual suspects. John Battelle, author of The Search,  once called Google the Database of Intentions. It is certainly that. But our intent also provides an insight into our beliefs. And when it comes to Facebook, we literally map out our entire previously private belief structure for the world to see. That is why Big Data is so potentially invasive. We are opening ourselves up to subconscious manipulation of our beliefs by anyone with the right budget. We are kidding ourselves if we believe ourselves immune to the potential abuse that comes with that. Like I said, 90% of our beliefs are submerged in our subconscious.

We are just beginning to realize how effective the new tools of persuasion are. And as we do so, we are beginning to feel that this is all very unfair. No one likes being manipulated; even if they have willing laid the groundwork for that manipulation. Our sense of retroactive justice kicks in. We post rationalize and point fingers. We blame Facebook, or the government, or some hackers in Russia. But these are all just participants in a new eco-system that we have helped build. The problem is not the players. The problem is the system.

It’s taken a long time, but advertising might just have gotten to the point where it works too well.

 

What the Hell is “Time Spent” with Advertising Anyway?

Over at MediaPost’s Research Intelligencer, Joe Mandese is running a series of columns that are digging into a couple of questions:

  • How much time are consumers spending with advertising; and,
  • How much is that time worth.

The quick answers are 1.84 hours daily and about $3.40 per hour.

Although Joe readily admits that these are ‘back of the envelope” calculations, regular Mediapost reader and commentator Ed Papazian points out a gaping hole in the logic of these questions: an hour of being exposed to ads does not equal an hour spent with those ads and it certainly doesn’t mean an hour being aware of the ads.

Ignoring this fundamental glitch is symptomatic of the conceit of the advertising business in general. They believe there is a value exchange possible where paying consumers to watch advertising is related to the effectiveness of that advertising. The oversimplification required to rationalize this exchange is staggering. It essentially ignores the fields of cognitive psychology and neuroscience. It assumes that audience attention is a simple door that can be opened if only the price is right.

It just isn’t that simple.

Let’s go back to the concept of time spent with media. There are many studies done that quantify this. But the simple truth is that media is too big a catchall category to make this quantification meaningful. We’re not even attempting to compare apples and oranges. We’re comparing an apple, a jigsaw and a meteor. The cognitive variations alone in how we consume media are immense.

And while I’m on a rant, let’s nuke the term “consumption” all together, shall we? It’s probably the most misleading word ever coined to define our relationship with media. We don’t consume media any more than we consume our physical environment. It is an informational context within which we function. We interact with aspects of it with varying degrees of intention. Trying to measure all these interactions with a single yardstick is the same as trying to measure our physical interactions with water, oxygen, gravity and an apple tree by the same criterion.

Even trying to dig into this question has a major methodological flaw – we almost never think about advertising. It is usually forced on our consciousness. So to use a research tools like a survey – requiring respondents to actively consider their response – to explore our subconscious relationship with advertising is like using a banana to drive a nail. It’s the wrong tool for the job. It’s the same as me asking you how much you would pay per hour to have access to gravity.

This current fervor all comes from a prediction from Publicis Groupe Chief Growth Officer Rishad Tobaccowala that the supply of consumer attention would erode by 20% to 30% in the next five years. Tobaccowala – by putting a number to attention – led to the mistaken belief that it’s something that could be managed by the industry. The attention of your audience isn’t slipping away because advertising and media buying was mismanaged. It’s slipping away because your audience now has choices, and some of those choices don’t include advertising. Let’s just admit the obvious. People don’t want advertising. We only put up with advertising when we have no choice.

“But wait,” the ad industry is quick to protest, “In surveys people say they are willing to have ads in return for free access to media. In fact, almost 80% of respondents in a recent survey said that they prefer the ad-supported model!”

Again, we have the methodological fly in the ointment. We’re asking people to stop and think about something they never stop and think about. You’re not going to get the right answer. A better answer would be to think about what happens when you get the pop up when you go to a news site with your ad-blocker on. “Hey,” it says, “We notice you’re using an ad-blocker.” If you have the option of turning the ad-blocker off to see the article or just clicking a link that let’s you see it anyway, which are you going to choose? That’s what I thought. And you’re probably in the ad business. It pays your mortgage.

Look, I get that the ad business is in crisis. And I also understand why the industry is motivated to find an answer. But the complexity of the issue in front of us is staggering and no one is served well by oversimplifying it down to putting a price tag on our attention. We have to understand that we’re in an industry where – given the choice – people would rather not have anything to do with us. Unless we do that, we’ll just be making the same mistakes over and over again.

 

 

The Rain in Spain

Olá! Greetings from the soggy Iberian Peninsula. I’ve been in Spain and Portugal for the last three weeks, which has included – count them – 21 days of rain and gale force winds. Weather aside, it’s been amazing. I have spent very little of that time thinking about online media. But, for what they’re worth, here are some random observations from the last three weeks:

The Importance of Familiarity

While here, I’ve been reading Derek Thompson’s book Hitmakers. One of the critical components of a hit is a foundation of familiarity. Once this is in place, a hit provides just enough novelty to tantalize us. It’s why Hollywood studios seem stuck on the superhero sequel cycle.

This was driven home to me as I travelled. I’m a do-it-yourself traveller. I avoid packaged vacations whenever and wherever possible. But there is a price to be paid for this. Every time we buy groceries, take a drive, catch a train, fill up with gas or drive through a tollbooth (especially in Portugal) there is a never-ending series of puzzles to be solved. The fact that I know no Portuguese and very little Spanish makes this even more challenging. I’m always up for a good challenge, but I have to tell you, at the end of three weeks, I’m mentally exhausted. I’ve had more than enough novelty and I’m craving some more familiarity.

This has made me rethink the entire concept of familiarity. Our grooves make us comfortable. They’re the foundations that make us secure enough to explore. It’s no coincidence that the words “family” and “familiar” come from the same etymological root.

The Opposite of Agile Development

seville-catheral-altarWhile in Seville, we visited the cathedral there. The main altarpiece, which is the largest and one of the finest in the world, was the life’s work of one man, Pierre Dancart. He worked on it for 44 years of his life and never saw the finished product. In total, it took over 80 years to complete.

Think about that for a moment. This man worked on this one piece of art for his entire life. There was no morning where he woke up and wondered, “Hmm, what am I going to do today?” This was it, from the time he was barely more than a teenager until he was an old man. And he still never got to see the completed work. That span of time is amazing to me. If built and finished today, it would have been started in 1936.

The Ubiquitous Screen

I love my smartphone. It has saved my ass more than once on this trip. But I was saddened to see that our preoccupation with being connected has spread into every nook and cranny of European culture. Last night, we went for dinner at a lovely little tapas bar in Lisbon. It was achingly romantic. There was a young German couple next to us who may or may not have been in love. It was difficult to tell, because they spent most of the evening staring at their phones rather than at each other.

I have realized that the word “screen” has many meanings, one of which is a “barrier meant to hide things or divide us.”

El Gordo

Finally, after giving my name in a few places and getting mysterious grins in return, I have realized that “gordo” means “fat” in Spanish and Portuguese.

Make of that what you will.

Sharing a Little about the Sharing Economy

In the last week, I’ve had first hand experience with the sharing economy, using both Uber and Air BnB. I – not surprisingly – am a sucker for disruption and will gladly adopt new technologies. I appreciate the rational logic of a well thought out platform that promises to be a game changer. I push my wife’s comfort level to the breaking point, trying mightily to maintain the balance between delightful discovery and that cold stare that means I’ve completely messed up this time. It is in that spirit – and with the admitted bias of being a sample of one – that I share some of my macro-level observations.

Creating an Opening for Innovation

To me, using the term the “sharing economy” doesn’t quite cut it. That only explains one aspect of this disruption – the supply side. What is really happening here is the democratization and fragmentation of a previously verticalized market, where the platform creates a new type of one-to-one market connection. That spreads the market horizontally, which in turn opens a wide door for participation at all levels. And that, inevitably, spurs innovation. When you allow everyone to be creative – rather than just a few within a vertically integrated chain who have it in their job description – the pace of innovation can’t help but accelerate.

Disruptive Platforms and Network Effects

Innovation is a good thing, but there is another side to this. If you allow for rampant innovation and facilitate one-to-one connections at all levels of the market, you are going to have network effects. Markets become more chaotic and less predictable. The rising tide of innovation will eventually raise all boats, but it also means the waters can get a little choppy on the way. Disruptive platforms strip away traditional control systems – corporate oversight, traditional forms of consumer protection and legislative regulation. All faith – on both sides of the market – is placed on the design of the platform to ensure self-correcting regulation. There’s just one problem with that…

Compression of Pendulum Markets

When you depend on self-correction in a dynamic market, you forego stability that typically comes from vertical oversight. Not only do you remove the oversight but you also remove predictability. There are new players entering and exiting the market all the time. And even if the players stabilize, experience has limited value in a marketplace that may not do tomorrow what it did yesterday.

All sharing platforms – Uber and AirBnB included – depend on market feedback to ensure self correction. In these two cases, they have well thought out market control mechanisms but feedback is – by necessity – a reactive rather than a proactive device. You can anticipate with reasonable confidence in a stable, controlled market but you can’t in a dynamic, networked market. All you can do is respond. This creates a pendulum effect. Constant connection to the platform means that feedback is fast, but the physics of a pendulum mean that the volatility of the swings back and forth are greatest at the beginning and stabilize over time.

This creates what I would call the Bubbles and Backlash phenomenon. As markets open up, new suppliers jump on the bandwagon. Some are great, some are horrible, some are mediocre. But it will take the platform and it’s self-correcting mechanisms some time to sort them out. Also, we have to hope the mechanisms are reasonably robust against suppliers who want to game the system. I think both Uber and AirBnB are working their way through this particular pain point right now. I find ratings artificially high on many suppliers which whom I’ve had personal experience. There could be a number of reasons for this, including the psychological bias of reciprocity, but I think most platforms have some tweaking to do before the user ratings provide a reasonable frame of expectations.

Inevitable Gaps in the User Experience

Finally, because the travel market is moving from a vertical orientation to a horizontal one, it leaves it up to the user to navigate her way through the various horizontal layers that stack together to create her individual user journey. When you’re in a layer – taking Uber to the airport for example – you’re probably okay. But it’s moving from layer to layer that places a little extra demand on the user. The previous players who inhabited the niches within the vertical ecosystem are understandably reluctant to share their niches with new, disruptive players. Where, for example, do you catch the Uber at the airport?

But All’s Well that Ends Well

In the end, it comes down to a matter of taste. I am an early adopter, so I will always choose disruption over the status quo. For those of a different bent, the vertically integrated path is still open to them. But for all of us, I believe disruption has created a travel marketplace that is more diverse, authentic and rewarding than ever before.

 

Short Sightedness, Sharks and Mental Myopia

2017 was an average year for shark attacks.

And this just in…

By the year 2050 half of the World will be Near Sighted.

What could these two headlines possibly have in common? Well, sit back – I’ll tell you.

First, let’s look at why 2017 was a decidedly non-eventful year – at least when it came to interactions between Selachimorpha (sharks) and Homo (us). Nothing unusual happened. That’s it. There was no sudden spike in Jaws-like incidents. Sharks didn’t suddenly disappear from the world’s oceans. Everything was just – average. Was it the only way that 2017 was uneventful? No. There were others. But we didn’t notice because we were focused on the ways that the world seemed to be going to hell in a handbasket. If we look at 2017 like a bell curve, we were focused on the outliers, not the middle.

There’s no shame in that. That’s what we do. The usual doesn’t make the nightly news. It doesn’t even make our Facebook feed. But here’s the thing..we live most of our live in the middle of the curve, not in the outlier extremes. The things that are most relevant to our lives falls squarely into the usual. But all the communication channels that have been built to channel information to us are focused on the unusual. And that’s because we insist not on being informed, but instead on being amused.

In 1985, Neil Postman wrote the book Amusing Ourselves to Death. In it, he charts how the introduction of electronic media – especially television – hastened our decline into a dystopian existence that shared more than a few parallels with Aldous Huxley’s Brave New World. His warning was pointed, to say the least, “ There are two ways by which the spirit of a culture may be shrivelled,” Postman says. “In the first—the Orwellian—culture becomes a prison. In the second—the Huxleyan—culture becomes a burlesque.” It’s probably worth reminding ourselves of what burlesque means, “a literary or dramatic work that seeks to ridicule by means of grotesque exaggeration or comic imitation.” If the transformation of our culture into burlesque seemed apparent in the 80’s, you’d pretty much have to say it’s a fait accompli 35 years later. Grotesque exaggeration is the new normal., not to mention the new president.

But this steering of our numbed senses towards the extremes has some consequences. As the world becomes more extreme, it requires more extreme events to catch our notice. We are spending more and more of our media consumption time amongst the outliers. And that brings up the second problem.

Extremes – by their nature – tend to be ideologically polarized as well. If we’re going to consider extremes that carry a politically charged message, we stick to the extremes that are well synced with our worldview. In cognitive terms, these ideas are “fluent” – they’re easier to process. The more polarized and extreme a message is, the more important it is that it be fluent for us. We also are more likely to filter out non-fluent messages – messages that we don’t happen to agree with.

The third problem is that we are becoming short-sighted (see, I told you I’d get there, eventually). So not only do we look for extremes, we are increasingly seeking out the trivial. We do so because being informed is increasingly scaring the bejeezus out of us. We don’t look too deep nor do we look too far in the future – because the future is scary. There is the collapse of our climate, World War III with North Korea, four more years of Trump…this stuff is terrifying. Increasingly we spend our cognitive resources looking things that are amusing and immediate. The information we seek has to provide immediate gratification. Yes, we are becoming physically short-sighted because we stare at screens too much, but we’re also becoming mentally myopic as well.

If all this is disturbing, don’t worry. Just grab a Soma and enjoy a Feelie.

Drawing a Line in the Sand for Net Privacy

Ever heard of Strava? The likelihood that you would say yes jumped astronomically on January 27, 2018. That was the day of the Strava security breach. Before that, you had probably never heard of it, unless you happened to be a cyclist or runner.

I’ve talked about Strava before. Then, I was talking about social modality and trying to keep our various selves straight on various social networks. Today, I’m talking about privacy.

Through GPS enabled devices, like a fitness tracker or smartphone, Strava enables you to track your workouts, include the routes you take. Once a year, they aggregate all these activities and publish it as a global heatmap. Over 1 billion workouts are mapped in every corner of the earth. If you zoom in enough, you’ll see my favorite cycling routes in the city I live in. The same is true for everyone who uses the app. Unless – of course – you’ve opted out of the public display of your workouts.

And therein lies the problem. Actually – two problems.

First, problem number one. There is really no reason I shouldn’t share my workouts. The worst you could find out is that I’m a creature of habit when working out. But if I’m a marine stationed at a secret military base in Afghanistan and I start my morning jogging around the perimeter of the base – well – now we have a problem. I just inadvertently highlighted my base on the map for the world to see. And that’s exactly what happened. When the heatmap went live, a university student in Australia happened to notice there were a number of hotspots in the middle of nowhere in Afghanistan and Syria.

On the problem number two. In terms of numbers affected, the Strava breach is a drop in the bucket when you compare it to Yahoo – or Equifax – or Target – or any of the other breaches that have made the news. But this breach was different in a very important way. The victims here weren’t individual consumers. This time national security was threatened. And that moved it beyond the typical “consumer beware” defense that typically gets invoked.

This charts new territory for privacy. The difference in perspective in this breach has heightened sensitivities and moved the conversation in a new direction. Typically, the response when there is a breach is:

  1. You should have known better
  2. You should have taken steps to protect your information; or,
  3. Hmmm, it sucks to be you

Somehow, this response has held up in the previous breaches despite the fact that we all know that it’s almost impossible to navigate the minefield of settings and preferences that lies between you and foolproof privacy. As long as the victims were individuals it was easy to shift blame. This time, however, the victim was the collective “we” and the topic was the hot button of all hot buttons – national security.

Now, one could and should argue that all of these might apply to the unfortunate soldier that decided to take his Fitbit on his run, but I don’t think it will end there. I think the current “opt out” approach to net privacy might have to be considered. The fact is, all these platforms would prefer to gather and have the right to use as they see fit as much of your data as possible. It opens up a number of monetization opportunities for them. Typically, the quid pro quo that is offered back to you – the user – is more functionality and the ability to share to your own social circle. The current ecosystems default starting point is to enable as much sharing and functionality as possible. Humans being human, we will usually go with the easiest option – the default – and only worry about it if something goes wrong.

But as users, we do have the right to push back. We have to realize that opening the full data pipe gives the platforms much more value than we ever receive in return. We’re selling off our own personal data for the modern day equivalent of beads and trinkets. And the traditional corporate response – “you can always opt out if you want” – is simply taking advantage of our own human limitations. The current fallback is that they’re introducing more transparency into their own approaches to privacy, making it easier to understand. While this is a step in the right direction, a more ethical approach would be to take an “opt in” approach, where the default is the maximum protection of our privacy and we have to make a conscious effort to lower that wall.

We’ll see. Opting in puts ethics and profitability on a collision course. For that reason, I can’t ever see the platforms going in that direction unless we insist.

 

 

Thinking Beyond the Brand

Apparently boring is the new gold standard of branding, at least when it comes to ranking countries on the international stage. According to a new report from US News, the Wharton School and Y&R’s BAV Group, Canada is the No. 2 country in the world. That’s right – Canada – the country that Robin Williams called “a really nice apartment over a meth lab.”

The methodology here is interesting. It was basically a brand benchmarking study. That’s what BAV does. They’re the “world’s largest and leading empirical study of brands” And Canada’s brand is: safe, slightly left leaning, polite, predictable and – yes – boring. Oh – and we have lakes and mountains.

Who, you may ask, beat us? Switzerland – a country that is safe, slightly left leading, polite, predictable and – yes – boring. Oh – and they have lakes and mountains too.

This study has managed to reduce entire countries to a type of cognitive short hand we call a brand. As a Canadian, I can tell you this country contains multitudes – some good, some bad – and remarkably little of it is boring. We’re like an iceberg (literally, in some months) – there’s a lot that lies under the surface. But as far as the world cares, you already know everything you need to know about Canada and no further learning is required.

That’s the problem with branding. We rely more and more on whatever brand perceptions we already have in place without thinking too much about whether they’re based on valid knowledge. We certainly don’t go out of our way to challenge those perceptions. What was originally intended to sell dish soap is being used as a cognitive short cut for everything we do. We rely on branding – instant know-ability – or what I called labelability in a previous column. We spend more and more of our time knowing and less and less of it learning.

Branding is a mental rot that is reducing everything to a broadly sketched caricature.

Take politics for example. That same BAV group turned their branding spotlight on candidates for the next presidential election. Y&R CEO David Sable explored just how important branding will be in 2020. Spoiler alert: it will be huge.

When BAV looked at the brands of various candidates, Trump continues to dominate. This was true in 2016, and depending on the variables of fate currently in play, it could be true in 2020 as well. “We showed how fresh and powerful President Trump was as a brand, and just how tired and weak Hillary was… despite having more esteem and stature.”

Sable prefaced his exploration with this warning: “What follows is not a political screed, endorsement or advocacy of any sort. It is more a questioning of ourselves, with some data thrown to add to the interrogative.” In other words, he’s saying that this is not really based on any type of rational foundation; it’s simply evaluating what people believe. And I find that particular mental decoupling to be troubling.

This idea of cognitive shorthand is increasingly prevalent in an attention deficit world. Everything is being reduced to a brand. The problem with this is that once that brand has been “branded” it’s very difficult to shake. Our world is being boiled down to branding and target marketing. Our brains have effectively become pigeon holed. That’s why Trump was right when he said, “I could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose any voters”

We have a dangerous spiral developing. In a world with an escalating amount of information, we increasingly rely on brands/beliefs for our rationalization of the world. When we do expose ourselves to information, we rely on information that reinforces those brands and beliefs. Barack Obama identified this in a recent interview with David Letterman: “One of the biggest challenges we have to our democracy is the degree to which we don’t share a common baseline of facts. We are operating in completely different information universes. If you watch Fox News, you are living on a different planet than you are if you listen to NPR.”

Our information sources have to be “on-brand”. And those sources are filtered by algorithms shaped by our current beliefs. As our bubble solidifies, there is nary a crack left for a fresh perspective to sneak in.