Tuesday, March 23, 2010

When you get to the bottom. Stop digging.

I encountered this description of Growth Model economics while I was researching Paul Romer.

“Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. History teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.

Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. Possibilities do not add up. They multiply.”

I have serious doubts that those at the tiller of the New Zealand economy (the geniuses behind building a cycle track as a pathway out of recession) have the slightest clue about how to grow a sustainable future.

Proposed mining of conservation land makes no sense whatsoever. Indeed mining mineral deposits inherently has no future. The short-term gains, if they eventuate, can only ever be a short term bonanza. Minerals are not renewable. The damage to the environment cannot be undone. Nor can the damage to New Zealand’s ‘clean green’ reputation on which we have invested so much.

The government owned company Solid Energy digs coal out of the ground and either uses it to fire electricity generators or to ships it off to China to power smelters and power stations – the carbon emissions from excavation in New Zealand and exhaust in China belongs on our carbon balance sheet.

The sustainable future for New Zealand doesn’t lie in scrounging about in the muck it should be centred on innovation and the creation of ideas that can be shipped without atoms. A computer game or iPhone application can be sold thousands of times at little or no additional cost. The same can’t be said for a sheep carcass (even one that has been skilfully butchered in to premium cuts) or a Central Otago Pinot Noir – even one with the finest nose.

My idea for Idealog magazine was centred on this philosophy. If the United States, the world’s most powerful economy (still, if not for long), can profit more from copyright (movies, music, books, games, …) than any other export - then so can New Zealand. We need to develop a creative economy - not one based on primary production. Ideas are the currency of the future and we should be investing in them and mining our minds.

At the moment we are simply digging a hole for ourselves by aiming too low.

Tuesday, March 16, 2010

Old School Rules


A group of my colleagues attended the Clemenger Group's digital training academy last week. They returned to the agency abuzz with a 'noobs' appreciation of 'digital'. They've had their epiphany, their road to Damascus moment.
Finally.
No-one preaches like the converted.

Most of the work our firm has done over the years has been concentrated on developing properties that make highly efficient use of television. Most of the products we promote (last year 150 campaigns for some of the 90 of the world's biggest brands) respond well to promotion in our media properties (such as Family Health Diary, Eating Well and Discover. If you live in New Zealand and have never seen at least one of these I'll wager you don't watch very much television).
A 20% lift in sales is a modest result for our clients in most cases.

The market is beginning to shift though, and online video in particular is becoming an important tool that will be used by marketers to reach more niche markets with messages that are more enduring as part of a 'long tail' strategy.
We have developed programes for James Hardie The Drawing Board, Toyota Showroom, and Westpac Bank Talking Money Sense.
Going online means we will have to learn new ways to create efficiencies. If the data reveals that attention to videos lasts for a median 2.6 minutes and that on 16% of viewers stay with a clip until its end, then it makes no sense to leave the purpose of the communication to a vague pay-off.

Creating a complex, obscure gag with a punchline might be a disastrous strategy. It makes sense to be clear from the beginning what the purpose of a communication is. To function in this new environment will not only require the kind of person who is both creative and analytic but also values results over fawning peer praise for 'production values'.

David Ogilvy inspired me to get into advertising via his classic book Ogilvy On Advertising. I have included the classic clip of Ogilvy because if you replace the words direct marketing from his monologue with the word digital or interactive it makes perfect sense today. Digital is almost inherently meaningless now. It simply means distribution without physical form - bits rather than atoms (it is also worth rereading Nicholas Negroponti's seminal book Being Digital which, though it was first published in 1995, will come as a revelation to those of you yet to experience the digital epiphany).

The most obvious expression of the digital era is the fact that messages will be delivered via screens - TV, computer and portable devices. The risk for advertising and marketing communications practitioners is that we imagine that the creation and distribution of messages is the business we are in. That is just the starting point. We have gone beyond the dissemination of ideas that are, effectively, instructions to purchase, to ideas that our customers can make their own and share with their friends.

In the past it would be unlikely that someone would video record a commercial to show to friend. Having no tangible (atomic) form means a clip can be shared with a personal network in moments. This is mother's milk to you, I realise. But it is still not commonly appreciated by even sophisticated marketers.

I still hear advertising people talk about how awards are 'the currency' in the advertising agency business.
They are wrong and getting more wrong with each passing day.
The digital era makes everything measurable. Things you wouldn't imagine
could be measured /will/ be measured as new uses for APIs are developed.
The creative product is going to be a constant iteration and reiteration of ideas. The bits that work will stay. The bits that don't work will be discarded.
Every communication will be a test, not a work of art. Or, if is is art, it will be performance art.
A stand-up comedian doesn't keep telling jokes that don't make the audience laugh.
That's called dying on stage.
If you are measuring the performance of your marketing communications by brand metrics you are sadly out of step.
The key metrics are customer centric.
Brand equity is replaced by customer equity. What matters is the lifetime value of the customer.
Even terms like 'engagement'; liberally bandied about as brand oriented people segue to demi-digitals, are half hearted and ignore the supremacy of conversion.
Did you meet your objective?
If your objective isn't results oriented then you are simply tinkering about.

Does that mean creative isn't important?
Quite the opposite.
It just means that what you create has a very specific purpose and if it isn't fit for the purpose it is modified or thrown away.
The best people in advertising have always felt this way anyway. A willingness to 'kill your babies', the ideas you fall in love with because they are cute - or simply because you worked hard on them has always separated fey prima donnas from successful advertising practitioners.
Does that mean messages shouldn't be skillfully crafted?
No. Again, quite the opposite. But the craft is to hone the performance by degrees.
The day of the magnum opus, the blockbuster, are over Buster.

The old school rules apply like never before.

Monday, March 08, 2010

Welcome to the Particle Culture


There's a line in the movie Crazy Heart that struck a chord with me. Down and nearly out country music legend Bad Boyd is softly playing his guitar while laying on (the character deftly played by Maggie Gyllenhaal) Jeanie's bed as he recovers from the car wreck that is not his life. Jeanie seems to recognise the tune and asks who played it. "I did,…I wrote it just now…the best tunes are the one's you feel you already know." - or words to that effect.

Ironically I have long believed that to be true. Paradoxically people are drawn to novelty, but we are also suspicious of it.

In the marketing classes I taught at Massey University I defined the syndrome as 'New vs. Knew'. We like innovation to progress by degree, more so than by disruption.

There are, of course, apparent exceptions to the rule - the Apple iPod had no obvious design or conceptual precedents, but it was such an intuitive response to the problem of portable music, it simply made sense. It was also so well conceived and executed that there was no reason to be afraid. It was as if the iPod had been missing, in the way that it is hard to imagine life without a new born baby.

Apple may have reinvented 'the wheel' on the original iPod, but it paved the way for the iPod touch easily by continuing a humanistic design metaphor that stretched back to the birth of the Macintosh: pointing and clicking, desktops, trash cans all seem so familiar even though they were incredibly strange by the rustic conventions of the day.

iPhone is successful not because it is a better telephone (I've never heard anyone make a single mention of the iPhone's telephonic quality) but because it continues a conversation that Apple has been having with people since the Apple II - accessible, humanistic design (including the design of its marketing language).

Apple has cleverly constructed a series of platforms from which we can leap to the next level of technology with confidence and ease. Better still, for Apple at least, we are conditioned to anticipate the next level, the same way we eagerly await the release of new songs from our favourite music artists.

Going back to the thought that new music can seem familiar, the rock music of the 50's that so horrified parents was probably more shocking culturally - for its adoption by the newly invented social group 'teenagers' who were shaking off the stiff conventions of their parents for the first time in history - than it was musically. Rock 'n' Roll's lineage extends back through many forms including Blues, Jazz, Big Band, Swing, Rhythm & Blues…In fact much of Rock music sounds so familiar because its structures extend back to the music of the Middle Ages where the Perfect Fourth structure originated. Much of Rock is written in fourths in because of the predominance of the guitar. The instrument is easy (and accessible) to play because the strings are mainly tuned a fourth apart.

Interestingly, when new music discards the melodic structures we have become familiar with its popularity is often limited. Punk Rock may be musically less accomplished than the atonal stylings of Arnold Schoenberg but it conformed to conventional structures and progressions - even harmonies that had been familiar in the past.

The shock of the new often comes with novel packaging but conserves the essence of the past. For novelty to succeed it must, by definition, be new, but it must also refer to what we knew.

It may be apocryphal but I have heard that, when human infants are born, the social convention is often for family members to express with confidence how much the child looks like its Dad. There is usually, post-partum, little doubt about maternity. Most newborns actually look like E.T., having been squished through an astonishingly small birth canal (in comparison to their size), but the recognising the father supposedly protects the child from harm. Even the imaginers of the iPod, share behavioural links that extend back to Neanderthal times and probably beyond.

In many respects I suppose we are still somewhat like monkeys - reluctant to let go of one branch until we have a firm grasp of the next.

For makers and marketers and communicators there are lessons. Creativity is the process of taking existing things and combining them in new, sometimes surprising ways. Technology progresses to find new efficiencies (the internal combustion engine may soon have done its dash, but new technologies will rise to replace it so long has we crave movement at speed across moderate distances).

That said, many technologies will emerge and simply fail, because people don't see themselves reflected in them - a need to be satisfied. Sometimes the timing is simply wrong. Plenty of innovations get a second shot (Xerox invented the G.U.I. but didn't see the opportunity that Steve Jobs did to apply it to a person friendly PC).

The trick is to put people at the centre of innovation, not the product or technology. What do people crave? In the 50's teenagers craved independence and freedom, they rebelled against a culture that cultivated a monumentally destructive war. Hedonism and living for the day was married to the technologies of mass production and surplus. With more time and money on their hands than any generation before them the term 'consumer' embedded itself and endured for the rest of the 20th Century.

The 'known' is, of course a relative term. it is a definition of a personal experience. For an 18 year old today (my son) to be discovering the music of The Velvet Underground there is novelty - much in the same way that Europeans 'discovered' the 'New World' - although said New World had been developing quite happily for thousands of years. The 18yr old is, in fact, discovering himself - following the same tradition of The Velvet Underground themselves - whose influences, circuitously via John Cale included Erik Satie, looking beyond the conventions of the day - today mediated by popular music video channels and in 60's and early 70's by popular music radio. Their shared drive is individualism and rejection of 'the man'.

By virtue of plural access to media by almost everyone the things that drove the sub-cultures of the 60's might well have gone mainstream. The mass culture may have become that of sub culture - or Particle Culture, every individual expressing their wants and needs, their opinions and ideas - an infinite loop of combination and recombination. A train wreck that has already happened. A big bang expansion of the human universe. A post-modern paradise. A classical hell.

It way be a strange, unglued, unhinged time but adopting a humanistic approach seems to me to be your best bet. Put people at the centre of your thinking. The chaos out there will drive us back to embrace the things we have always known, our values and virtues, our fear of the dark, our fascination with fire, rediscovering things through the compound lenses of new technologies and new anxieties, bending and shaping, mashing and rearranging, making and consuming; choosing and choosing not to choose.

It will all be strangely familiar…but all-new at the same time.