Stop and Think: a note to marketing leadership about the digital revolution

I often say I’ve seen more change in the past five years as chief marketing and communications officer of Unilever than I did in the 25 years I was in business before that, and it’s not a statement I make just for dramatic effect.” So said Keith Weed, the chief marketing and communications officer at Unilever, in an article published in Marketing Week in May 2018.

Anyone with any experience in marketing must feel that we are living through a period of rapid change that qualifies as a revolution. It is a revolution in information and communication that is transforming the world of brands (as well as the world of pretty much everything else).

Here is a question. Does anyone really feel they are on top of this: that they have cracked the code?

Rapid change is not necessarily the hallmark of a revolution. It is the nature of the changes, as much as their pace, which is of critical importance. In his brilliant essay about revolutionary change, Newspapers and Thinking the Unthinkable, Clay Shirky defines a revolution as a time when the old things get broken faster than the new stuff gets put in place. My adaptation of this is that a revolution is a time when the new things don’t look like the old things they are replacing (Facebook doesn’t look like a newspaper or news bulletin, despite the fact that for many it has become their principal source of news).

In revolutions new stuff comes along, old stuff starts to break down and critically, this doesn’t just cover stuff and things it encompassed rules, assumptions and business models. New things can usually be tackled with a tactical response or strategic readjustment, but new rules require a strategic rethink.

A strategy is not the collective noun for a bunch of tactics and at no time is it more important to be aware of this than when you are living through revolutionary change.

If you were a man of substance in Paris in 1789 you would have looked out of the window and seen lots of new stuff: riots, executions, storming of prisons and the destruction of the old order. Your tactical response to this might have been to stockpile food, bury your money, stitch a tricoleur onto your hat and put a better lock on the door. However, to prosper in the long-term it wouldn’t be sufficient to simply respond to what was going one, you needed to know why it was happening, why the old order broke down, what type of order is going to replace it and how you can continue to prosper within it.

Likewise within marketing a tactical response to the digital revolution might have been to establish a Facebook/Twitter/Instagram/OtherNewThing presence in the belief that these represented a new form of channel to consumers, fire-up a content strategy to try and fill the new ‘channels’ with stuff; collaborate with all the newthing owners to devise a way of making ads work on their platforms (in order to preserve the relevance of advertising or other forms of sponsored content as marketing’s fiat currency) and use first-party data to develop a ‘mass personalisation’ programme as an attempt to preserve the relevance of mass/audience-based communication in a world of the individual.

Don’t get me wrong, there is nothing wrong with doing any of this. A tactical response is important because it can keep you in the game (stop your house being burnt down by the mob) but at a certain point it runs-out of relevance if it isn’t aligned with a strategy that reflects the new reality. It may work, but in the long-term it won’t work well enough. It is necessary, but it is not sufficient.

In a revolution tactical responses tend to be based on adapting or dressing-up the old approaches in order to preserve their relevance (sticking a tricoleur on your hat to make you look like a person of the masses / sticking some data into an algorithm to make you look like a brand of ‘mass personalisation’). What an effective tactical response delivers is time. Time to work out what is really going on.

So – have we all used the time we have been given to work out what is really going on: what the new reality is based on?

I don’t see the evidence that we have. I think we have spent the last ten years running around developing and talking about a set of tactical responses to what we have called the digital revolution hoping that these might somehow coalesce into an effective strategy. We believe some of these may have worked in terms of whatever metrics we concocted to measure them against but many of them haven’t so we move on. For example, in the early days we thought the answer to Facebook was to make your Facebook page look like your website (we really did and I have preserved the evidence). Then we thought we should try and ‘join the Facebook conversation’, then we declared that organic social media was dead and just paid Facebook to deliver us something that looked like an audience (just like the good old days, but this time with a digital twist). Along the way we talked a lot about brand reinvention and paid a lot of money to consultants or agencies hoping that they could tell us what we should reinvent ourselves as while these agencies just spent their time devising new things to sell us.

Feel free to disagree with me at this point, but I would put forward three bits of evidence to support my opinion.

First, the excellent contrarian Mark Ritson has recently drawn attention to a piece of research done by Peter Field and Les Binet for the British IPA (Institute of Practitioners in Advertising). This shows that since 2012 the effectiveness of UK marketing campaigns has been in decline. Ritson cites the lack of investment in marketing training as a possible culprit. The authors argue that the reason is a combination of short-termism, overly tight targeting and an obsession with tactical activation. My observation would be that this decline matches the time when big brands started to put serious chunks of money into digital assets. I would also note that short-termism and an obsession with tactical activation are indicative of a tactical, rather than strategic response, and also that ‘tight targeting’ is the principal USP of digital versus conventional media channels.

For me this is an illustration of what I call the ‘Enough Problem’. The new things can be made to work, but they don’t work well enough to have confidence that they offer an effective long-term replacement to the old things we were familiar with.

Second, I don’t see any evidence that the people in control of the big budgets in marketing are comfortable with the current state of affairs. Take the heads of marketing at P&G and Unilever – respectively Marc Pritchard and Keith Weed (quoted at the start of this article). Both have scaled back investment in digital assets in recent times whilst issuing challenges to their agencies to change their business models and play a leadership role (for which you could say a ‘tell us what to do’ role). In terms of what these organisations are both doing and saying, they don’t convince me that they have cracked the code. Take Coca-Cola. Back in 2011 it was saying that the challenge was a shift from creative excellence to content excellence. It is not saying that anymore. In fact if I look at Coca-Cola’s recent activities I see an organisation going back to basics and using advertising to focus on its age-old key brand benefits of refreshment and social success whilst driving occasionality. You go back to basics when you know you have strayed strategically ‘off-piste’.

Thirdly (and most importantly) once you understand how the rules are changing, it becomes obvious why we are struggling. The digital revolution is breaking a fundamental relationship that has existed since the printing press between information and distribution. And this relationship has shaped all our assumptions about what a brand is, what a consumer is, what an audience is and what content is (and also, incidentally, about what a society is – but let’s not stray into that territory).

Embracing new assumptions is a really hard thing to do – especially when you have a huge amount of sunk cost invested in the old ones. It is much easier to make denying the future the new strategy where the strategic imperative is defined as finding ways of making the old things work in a new world. This is the point Shirky illustrates so well in his essay. He calls it an inversion of perception where fantasists are hailed as saviours and the pragmatists are disregarded as fantasists (and herded off into innovation departments so they can be ignored en-masse).

Many times over the years have I pointed out that there isn’t a readily available audience ‘out there’ in social media only to find this used as evidence to support the idea that the objective must therefore be to ‘create an audience in social media’. Or failing that to buy something that looks like an audience from Facebook. The alternative assumption is that perhaps we need to work out a way of using social media that isn’t dependent on their being an audience within it. But this assumption is new, uncomfortable and contains no room within it for familiar audience-based approaches. So it is not embraced.

Take even advertising. Advertising was a fundamental structural component of traditional media. Media (especially TV), advertising and marketing grew-up hand-in hand. But advertising does not play the same fundamental role in the digital ecosphere. It has come to play an important role, but that is largely because we have created a role for it in order to preserve its relevance. It is therefore not surprising that we are finding that while advertising can work in the digital space, it doesn’t necessarily work as well as we had hoped, even when we bolt the concept of ‘programmatic’ onto it. It works, but not well ‘enough’.

Marketing as we know it harnessed the power of distribution because distribution was the problem that the world of media was set-up to solve. The digital space, however, is set-up to solve problems of connection. You are therefore not going to be successful in a connection game if you come at it with distribution-based tactics.

Please indulge me why I explain this in a little more detail. Remember, up until now we haven’t needed to understand the fundamental rules of marketing because our strategies have been able to stand upon foundations laid down by decades, centuries even, of trial and error. We know what is likely to work because we know what worked last time. But that doesn’t work in a world where there isn’t a ‘last time’.

So let’s go back 500 years. The printing press gave information a means of mass distribution. Before printing, we had hand-written books but they acted as prisons, rather than distributors, for the information (knowledge and ideas) that lay within them. Access to information was restricted to an elite group of what you could call information prison guards and their main concern was to contain, preserve and interpret the existing set of knowledge and ideas (and borrow from its authority) rather than adding to its stock or questioning its authority. Once books could be printed, ideas and knowledge escaped from the grasp of this elite, the Renaissance was born (and new types of elites were created).

Printing created a marriage between information and distribution and it was the means of distribution (the channel) which was the dominant partner. This is why we described information by how it is distributed rather than by what it is. We called something a TV programme rather than a video programme, because TV is a distribution word and video is an information word. The soundbite coined for this by Marshall McLuhan in 1960s was that “the medium is the message”.

The main reason for the dominance of the channel was its cost. Printing presses and TV networks are expensive. It was always more costly to distribute information than it was to to create it. This is why the media (distribution) budget was always bigger than the creative (content) budget.

The dominance of the channel also gave birth to the concept of an audience. Because the channels were expensive, they needed to have a large group of people that looked and behaved like an audience at the end of them in order to get the numbers to stack-up.

Incidentally, it is also why information, in this channel-dominant world, became known as content. Content is a word which implies containment. Content depends on having a channel to contain it in much the same way that water becomes content only when it is contained within a glass or a pipe or a river. Take away the containment channel and it just becomes a spillage or a leak or a flood. Liberate content from a channel and it becomes information again. Its status as content is entirely dependent on the channel it sits within.

But this channel dominance extended beyond the type of information that sits within media channels, it concerned information about trust and value. Up until this point we have trusted or valued something because of the channel or institution it sits within or brings it to us. We trust news insofar as we trust the newspaper, we trust money insofar as we trust the bank. We have created a world where various forms of channel or institution have become trust intermediaries – be these publishers, banks, universities or governments. The ability to manufacture, distribute and institutionalise trust is probably the defining characteristic of what we think of as the modern world. A brand is also a form of institutionalised trust. And this all stems from the relationship between information and distribution (content and channel) and the dominance of distribution in this relationship.

And now to the crunch. The digital revolution is liberating information from its means of distribution. It is breaking the fundamental relationship that has defined the world we live within. It is breaking the channel dominance. We all now have in our hands or pockets a device that has the potential to distribute a piece of information to almost everyone on the planet. A mobile phone, or the wider network in which it is embedded, is not a conventional channel in that it does not carry within it any inherent ability to reach a given number of people. Its ability to do so is entirely dependant on the information it distributes.

Information, not distribution, is now becoming the dominant partner.

At this point it is important that we recognise the scale of the shift we are talking about here. Something that has been the foundation upon which the modern world was built is shifting. This is a change that is bigger than the industrial revolution. It is clearer much bigger than just marketing, albeit the world of marketing is at the forefront, because of its close and consequential relationship with media and information distribution. Interestingly the music business is ahead of pretty much everyone here because it was one of the first business models to experience the separation of information from distribution. The music business was based on its ability to imprison music on bits of vinyl or plastic discs. The rise of the MP3 broke this arrangement and liberated music (the information) from its means of distribution (plastic disks). As a result we have seen a dramatic reduction in the number of big players, a rise of pop-up artists who have fleeting success and an explosion in the small and niche players. The available revenue in the space has probably not declined, but its distribution has changed dramatically. Music has not gone away, but the music business (which was a distribution dependent model) has been turned upside down. There is much the world of brands could learn from the world of bands.

So the question is what is the likely shape of a world of where channel (distribution) dominance is ended and information (and thus also trust) becomes liberated from the channels and institutions it sits within.

Let’s look out of the window again. We can see all the new things, but in line with the characteristics of a revolution, they don’t look much like the old things they appear to be replacing. What, for example, is Facebook? It can be used as a form of channel and we can use it to aggregate large groups of people that look like an audience (a look-a-like audience as Facebook calls them). But while brands may be able to use Facebook as a channel, it is revealing that its users are not using it this way. They are using it to make forms of connection. In fact, when we look at what is actually going on within all of these platforms, we see that they are driven by processes of connection.

The new things are not really channels, they are better defined as connection infrastructures. Sometimes they behave a bit like channels, in that they can deliver a single bit of content to an audience or segment-sized group of people, but this behaviour can only occur in one of two ways: ‘naturally’ through a process of mass sharing or ‘artificially’ where the platforms have conspired with brands to devise a way to insert sponsored messages, either as sidebar advertising or embedded pseudo content.

It is important to note that sharing is a process that is powered by connection. The users themselves become a form of channel that convenes around a piece of content but in doing this they are acting more like an active community of interest than a passive audience. A YouTube video may get a lot of views, but the viewers are not really an audience in the way we have come to understand it – they are just a large group of individuals.

Facebook needs a lot of revenue to justify its sky-high valuation and in a world where the money believes it needs to find a channel to live within, Facebook has ‘channelised’ itself. But there is a fundamental tension in Facebook’s attempt to be both distribution channel (for brands) and connection infrastructure (for users) which we see in the growing consumer / user disquiet over the way Facebook uses their data. This represents a fault-line in the Facebook business model and it is never a good idea to build a business on a foundation that has a crack within it.

Connection is a process and process is an incredibly important word.

Think about Wikipedia as distinct from Encyclopedia Britannica. We trust an article in Encyclopedia Britannica because we trust it as an institution of expertise comprised of  individual exerts. Wikipedia, on the other hand, is comprised of slightly socially maladjusted niche enthusiasts with a weird definition of what constitutes a good time, but we trust its articles insofar as we trust the process that has produced those articles. Wikipedia is 100 percent focused on process, Encyclopedia Britannica is 100 percent focused on institutionalised expertise.

Uber is creating a process to replace our trust in the institution of regulated taxi organisations. Blockchain is all about replacing centralised institutions with distributed community-based trust processes. An algorithm is a process. Wherever we look we see platforms that are all based on trust forged by communities of process. Facebook is really just a community of process, as is Google search – which is based on the browsing process of the whole community of internet users.

The world we are moving into is not a digital world, it is a world of connection. Digital has always been a simplistic way of defining it, a bit like describing Leonardo Da Vinci as a bloke who could use a paint brush and chisel. This is why digital marketing is the wrong word. We would do better to imagine something called connection marketing in order to differentiate it from distribution marketing and recognise that digital tactics can play a role in both spaces.

The challenge in the world of distribution marketing was all about channel and message, reach and frequency whereas the challenge in the world of connection marketing is defined as a process of real-time behaviour identification and response. Here is what I mean.

A few years back I was giving a keynote address at an advertising awards event in Brussels. I advanced the claim that there are only ever ten consumers who are critical to a brand and that social media can help you find them (how’s that for ‘overly tight targeting’). The catch is that this group is not defined by who they are, or which media channel they are supposedly within – which is how we defined them in the world of the audience or segment. Instead they are defined by their behaviour which tends to be based around some form of active or passive digital identification or request.

After the event a band manager from Pepsico came up to me and said he agreed and that at Pepsico they were now looking at the digital space as a way of communicating with much smaller, more focused groups of consumers. I told him to take care. The consumers I was talking about could not be seen as a fixed, targetable group. Their influence was based on their behaviour – and this behaviour changes. Thus the group of ten is only ever a group that exists right now. Within ten minutes, or an hour, or maybe a day – it is going to be another group of ten people. The people at Pepsico were adopting the classic tactical approach. They had identified an insight from looking out the window at this new world, but then tried to cover it by adapting a traditional approach (segmentation and targeting). A strategic response to this insight would have been based on the recognition that in the digital world the opportunity derives from speaking to much smaller groups of individuals at any one time, but extracting a much higher value from those individual contacts, founded on the probability that the individual will initiate some form of request for contact, to which the brand then responds (essentially the consumer is targeting the brand – or the audience of brands within the category – rather than the other way around).

I think that in the not too distant future, marketing (or at least what we might call connection marketing) will be defined as a real-time 24/7 information management process. This is a space where listening to consumers and listening to data about consumers will combine in a process that delivers real-time behaviour identification and response.

But I am getting ahead of myself. Now is a good time to get a cup of coffee and think about which of the following applies to you.

  1. This is vaguely interesting stuff, but basically I just don’t buy it. I am as certain as it is possible to be that my brand strategy going forwards is going to consolidate or advance my position within the current competitive set or against competitors which might emerge in the medium to long-term.
  2. There could well be something in this, but I am going to stick to a strategy that is designed to roll with the punches in the belief that at the end of the journey, wherever that end is and whatever that journey involves, the fundamental strength (or agility) of my brand will mean that we are going to be one of those still standing.
  3. I get the idea that a revolutionary change requires a strategic response that involves identifying and rethinking the fundamental assumptions upon which the success of my brand to date has been based. I have a sneaking suspicion that much of what I have been doing thus far in the digital space has amounted to little more than a holding response, but I can see that this idea of the shift away from the world of distribution and channel dependency into a world that harnesses the power of connection might be the key to creating a long-term strategy.

If number 1 applies, then goodbye, but thanks for reading thus far. If number 2 then carry on reading, but only if you have some spare time (but you might like to remind yourself of the Kodak story and also remember that headless chickens are pretty damn agile in the brief time before they become pretty damn dead). If number 3 applies – drink coffee and carry on.

In the next section I can’t promise answers, but I can help identify at least a starting point that will help you define the answers for yourself and your brand.

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Speaking at the Cannes Golden Lions awards festival in June 2018, Marc Pritchard, head of marketing for P&G stated that marketing faces a challenge of mass disruption. He used the term ‘mass’ to reference and connect two concepts: the concept of mass marketing and also the scale of the disruption. “Mass marketing is being disrupted and it’s being disrupted on a mass scale, so the focus and the challenge we have is how to reinvent, how to build our brands really fast,” he said. He then went on to say “we’re reinventing media from mass blast to mass one-to-one, we’re getting advertising from less push to more pull.”

Mass disruption is fair enough, and no-one is better placed than he to have a view of the scale of the challenge. I also think that the idea of a shift from push to pull is relatively uncontroversial. However, what I would question is the idea of a shift from mass blast to mass one-to-one. If you follow what I have been saying thus far, the issue is that marketing has operated in a world of mass but the shift is into a world where mass itself is losing its relevance and power. And that’s the problem: how to operate in a world where distribution (mass) is no longer the primary source of competitive advantage?

In his speech, Pritchard talks about the need for a complete reinvention, but the one thing he is is not prepared to reinvent is the idea of the pivotal role of mass. It is a variant of the attitude I mentioned earlier, where the evidence of a lack of an audience in social media is used to frame the objective as being to create an audience in social media – rather than accept that productive usage of social media might actually stem from activities which don’t require an audience. Does one-to-one work when it is mass, or is there a very different, much more effective way of doing one-to-one? Likewise, does ‘pull’ really work, if the only thing available to pull is an ad?

I have talked about a transition from the world of distribution to the world of connection. The good news is that it is a very slow transition. In fact what we are seeing is more an issue of displacement as the growth of the world of connection puts a squeeze on the effectiveness (or share of attention) of distribution-based (mass) strategies. The old stuff works, just not as well as it used to. But this doesn’t mean we need to reinvent the old stuff it just means we need to adapt it. The reinvention needs to occur if we are to devise a way of operating effectively in the world of connection. Marketing needs to understand how to relate to its consumers both as members of an audience and as individuals, recognising that an individual is not just a very small audience.

I well remember a conversation with a former colleague who went to work in content marketing for a global brand. The content stuff appeared to be working according to metrics they were using to measure it. The problem was that there didn’t appear to be a connection between these metrics and metrics such as increased sales or brand affinity. “So how do you move the needle on these” I asked. “TV advertising” he said. I still believe that the most important piece of content a brand can ever produce is a piece of advertising.

Consumers remain open to the idea of being treated as a member of an audience (the mass blast). This is good news, because if this were not the case, this would spell the end of the things we call brands. What has really changed is that consumers now also want brands to recognise the times when they want to be treated as an individual. The big mistake brands can make is to get these things muddled up – to treat a consumer as a member of an audience when they want to be treated as an individual and visa versa.

The analogy I always use here is a Coldplay concert. People go to a Coldplay concert to be part of an audience. If just one person turned-up to a Coldplay concert it wouldn’t work, from anyone’s perspective. If you were the one person who turned-up to a Coldplay concert, you wouldn’t want Chris Martin to sing to you, you would want him to talk to you, share a beer, take a selfie. But the reason you would value this is because it was a conversation, beer, selfie with ‘Chris Martin Lead Singer of Coldplay, rather than ‘Chris Martin, 40-something white male’.

One of the problems of the current tactical responses to the digital revolution is fragmentation and subsequent loss of brand identity. Brands are breaking up their audiences by exploiting what they perceive to be the micro-targeting opportunities the digital space provides (mass one-to-one), but having broken them up they are continuing to treat them like an audience – targeting them with messages rather than genuinely responding to them. We find ourselves in a position where we see the creative / message challenge as a volume one where creative work is now called content inventory. We have abandoned the universal simplicity of deciding that the idea is to ‘teach the world to sing’ (to reference the famous Coke ad) to deciding the idea is to teach the world to sing, dance, bake, go fishing, take up archery, engage in historical costume re-enactments or whatever leisure pursuit takes your fancy.

This approach is a classic double fail. It neither exploits the new opportunities available from responding to consumers as individuals, while simultaneously diluting the proven effectiveness of the traditional audience-based approaches.  As a result, to extend the Coldplay analogy, brands are becoming 40-something white men, rather than rockstars. I don’t think mass personalisation strategies are the answer. These are the equivalent of Chris and the band singing at individuals, when what those individuals want is for Chris to shut-up, put the guitar down, sit down and talk to them. Distribution (channel dependent) marketing, is a show that really only works in front of an audience.

So this is how I see the challenge. On the one hand brands need to enhance their rockstar status and this involves a rethink on our understanding of what an audience is and how you get one. Crucially it requires that brands start to create audiences for themselves, rather than rely on media channels to deliver one to them. On the other it involves defining a totally new relationship with consumers based on their requirements as individuals or members of groups of connection remembering that an individual is not just a very small audience.

At this point I should give a call-out to Adam Fraser, presenter of the EchoJunction podcast. I showed him a draft of this piece and he said “how can a toothpaste brand ever be a rockstar.” Good point. There is a reason why P&G is the world’s largest advertiser and that is because its products are fundamentally boring. Paradoxically, it is this which makes P&G the rockstars in the world of marketing.  What I mean by a rockstar brand is one which can secure mass consumption, without becoming a commodity or utility. Toothpaste brands are going to face the biggest challenges in adapting to the world of connection, because there isn’t a very big toothpaste conversation going on out there. But this doesn’t mean that there isn’t value to be created here, as I shall explain later.

What I am going to talk about next sets out how we might approach the challenges associated with nurturing a new type of audience and creating relationships with consumers as individuals. I am not going to outline a model, or set of five steps, or lay claim to a definitive answer. I don’t have such an answer and in any case, that stuff has to come further down the line.

What needs to happen now is a process of thought and conversation that has to take place within marketing leadership teams. This isn’t stuff for your average brand manager (at this stage). You need to do some thinking before turning it into an appropriate operational model, set of five steps, three Vs, five Cs or equivalent which you can then cascade through brand teams and agencies.

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These are the things you need to think and talk about.

Part of the deal struck between brands and media was that the media, not the brand, delivered the audience. That audience will therefore have been convened around something that has next to nothing to do with what the brand was about. This meant that the contact between audience and brand, when it could be engineered, was a pretty low engagement contact. But this didn’t matter, because it was happening at scale. A brand only needed to use the windows of opportunity that advertising presented to shift perception just a little bit for this to none-the-less have a significant cumulative effect. This is why we have focused so much on reach and frequency.

Despite the fact that we were living in a distribution dominant world, marketing didn’t need to worry about distribution because media was taking care of this problem. The high price of media kept the weeds (small/micro-players) down and while efficient media spend was important it wasn’t critical. No-one got to be a big brand simply on account of their wonderful media strategy. We celebrate the Guinness ‘Surfer’ ad not the buying strategy that sat behind it, despite the fact that this is where most of the money got spent. In this world the main source of competitive advantage lay within the message – which is why creative directors in ad agencies drove Porsches and got the corner office.

Almost all of what we think of as marketing strategy is based around how we construct and refine messages and these messages were created on the assumption that they had to work for the entire audience (or segment of it). They also had to work very quickly, because time and space (media) was very expensive.

This made marketing lazy. We didn’t have to work to create our own audiences and the show we put on was something we could outsource to agency theatre companies. And we developed an unhealthy form of dependency – channel dependency. Marketing directors became a bit like financial asset managers where the task was to determine optimal channel asset allocation to maximise return on available resource.

As a former PR man I was always very envious of the fact that every other marcoms discipline had access to a means of guaranteed distribution. PR, on the other hand, had to work hard to get access to a channel – one of the reasons PR budgets have traditionally been very low with respect to more channel-tied disciplines. PR always had to get other people (frequently journalists) to carry the message to an audience. This is probably why it was PR people and agencies which tended to be first out of the blocks when it came to social media. “At last” we all thought “we are not slaves to the channel any more”. It may also be the reason why, to quote my former boss Lou Capozzi, the new world of marketing is simply “PR with zeroes added to the budget.”

However, the guaranteed access advertising had to a channel was not without its downsides. With an ad it is easy to spend a lot of money failing in front of lots of people. Another reason why creative directors in ad agencies drove Porsches and got the corner office.

This disregard for the creation of audiences explains the current obsession with content and content marketing. Our first reaction, on being liberated from the tyranny of distribution and the costs constraints it imposed on us, was to engage in an orgy of content production, forgetting that the new channels we were using didn’t come with an audience built in, like the old ones did. We didn’t appreciate how difficult it is to convene audience sized groups of people around bits of content – which is an art that media has spent 500 years perfecting. As a result most of the content we produced failed to convene enough people (that word again) to make it a worthwhile exercise – unless we reverted to paying to insert this content into the places or spaces where audiences were being convened (by other people).

This has to change. Brands now need to create audiences for themselves on their own account. This ability to convene an audience (not just target one) is probably going to become the critical competitive requirement that defines brand success in the next ten to 15 years. This doesn’t mean that we have to abandon the channels we have used to date, but rather we have to adjust the approach so a brand strategy becomes something that defines the channels it sits within, rather than being something that is defined by the channels it sits within. The channel (distribution) can no longer be the boss.

A couple of years ago I was running a workshop with a TV network and I raised with them the issue of the soft drinks company Red Bull and in particular the fact that Red Bull didn’t just sponsor a Formula 1 racing team (distribution strategy) they became a Formula 1 racing team. I also drew attention to the many other properties that Red Bull has created, many of which have been turned into TV concepts which this particular TV network had then bought. So I said to the group, “a few years back Red Bull paid you large amounts of money to rent a 30 second window in your channel in order to present themselves to an audience you have assembled for them. But now you are paying Red Bull large amounts of money to give them a 60 minute window to present themselves to an audience that in large part they have convened, but which you have still largely assembled for them. So – who’s the boss in this relationship?” Cue some slightly uncomfortable looks.

I believe there are two concepts which are key to creating brand strategies that are liberated from channel-dependency and can define, rather than be defined by, the channels they operate within: stories and ideas.

Stories are important because they are not channel / distribution dependent. A story can be told in many different ways. Interestingly, the story was the main form of information distribution technology before the printing press was invented. If you encode your message within a story, it makes it much easier to spread – something that religions always understood. Now that we are seeing the end of distribution dominance and channel dependency, the story is re-emerging as way of conveying information.

We have been talking about the importance of stories in marketing for many years now, but most of our approaches have been misplaced in that they have focussed on how brands can access the power of storytelling and/or become storytellers, rather than how the brand itself can be encoded as a story. In much the same way as we rented access to other people’s audiences we have tended to rent access to other people’s stories or issues. Unilever / Dove’s much lauded Campaign for Real Beauty is a good example of this. But this campaign was successful largely because it created an excuse to make ads. It wasn’t fundamentally connected to the story of Dove as a brand within a multinational corporation. In reality its success was mostly based on its ability  to divert attention away from this fact.

I remember doing some work with P&G after it acquired the Iams pet food brand. At this point Iams had a great story that encompassed its founder, his ‘magic’ product formulation and the engagement with the veterinary community. It made the brand ripe for picking by an organisation, such as P&G, which could then add its mass distribution and communication expertise: P&G being one of the masters of channel dominance. Unfortunately, the brand story got burnt in the process, mostly because it couldn’t fit into 30 seconds. But this didn’t really matter because distribution was the name of the game. Stories were seen as things that were important for small brands as a route to success that didn’t depend on an ability to compete in the distribution game, but which could then be disposed of as a condition of making the transition to a mass brand.

The great thing about stories is that they are natively adapted to work in the world of connection – stories are readily communicated by word of mouth in a way that a message is not, (as the game of chinese whispers proves). But they can also be adapted to work in the world of distribution – as the Red Bull example shows. The challenge for brands is moving from using stories, to becoming stories. This is why encoding your brand as a story is no small task.

To return to the P&G and the Iams example, retaining the Iams story was simply not possible within the type of business structure that P&G operates. If you go to a P&G office (unless they have radically changed since when I last went into one) you will see the names of the brands displayed in the reception area (probably) – but beyond that is an office full of desks and people. There is nothing, other then perhaps some samples of ads or promotional materials, to tell you where the Head and Shoulders brand ’lives’ versus the Pampers brand. That is all these bands really are, brand managers, ads, promotional materials and ppt decks. There is a remoteness between the brands and the people that work on them, and people that buy them. I know of one large fmcg company that talks about sending its people on ‘brand safaris’ to give them an understanding of the consumer. What revealing language. An expedition into unfamiliar territory to hunt down and target strange and exotic creatures in their familiar habitat, creatures that one would otherwise not encounter other than in a zoo (focus group).

Brand stories have become empty spaces that need re-populating, not just because of the ability this gives to rise above channel dependency and also operate in the world of connection where the consumer is in greater control of the channel, but also because consumers now have the tools at their disposal to interrogate brands and their claimed brand values. It comes back to the shift of trust from institutions into processes again. Brand propositions and messages worked when you could dominate the channels, but now these claims need to be supported by transparent processes of behaviour.

Nestlé’s Purina brand claims to be ‘Passionate about Pets’. This was fine as a mass-blast tag-line that helped establish a minimal level of differentiation between themselves and a Mars pet food brand. But now that claim can only really stack-up if the brand itself does something to justify it – an almost impossible thing to do not least because whatever level of passion Purina might be able to conjure-up, its purported passion for pets can never equal the level of passion an individual pet owner feels for their own pet (the ‘enough’ problem again). We also all know Purina’s real passion is for profits. Purina is actually renting access to consumers’ passion in much the same way as it rents access to their attention. It would be far better to establish a much lower order of claim, which can be credibly supported by actual brand behaviour.

The brand story has to be a credible narrative, stipped of the superlatives that pimp-up many brand propositions.

Re-populating your brand story is hard and it is not a quick fix. It will involve changing the structure and culture of an organisation. However, there is a form of short-cut and this the brand idea. The Red Bull F1 example is a good example of this. You can see how this might have played out. All the traditional consumer research, lifestyle segmentation, brand proposition blah blah will have produced a big pointy arrow that said F1 Is a perfect match for a brand association. But then someone said “Let’s not simply sponsor an F1 team, let’s become an F1 team.” Sponsorship is a distribution-based idea. It is a process of renting access to an audience’s interest, in much the same way as you rented access to their eyeballs via media. But by becoming what it is that is sponsored, you totally change the game. You become the thing, rather than using the thing as a channel. You convene an audience around the brand itself and break the channel dependency.

Ideas define the channels they sit within, messages and content are defined by the channels they sit within.

I believe that a focus on brand ideas can also provide a way of re-defining the relationship brands have with their agencies, as well as the structure of agencies themselves. An idea can be the creative brief and the task of creativity is to bring that idea to life. Agencies are horribly channel dependent, mostly because they have nailed the concept of creativity to particular channels (because that was a way of attaching what they deliver to where the money was). It is no good for clients simply to tell their agencies to become more integrated, you have to provide something for them to become integrated around, in much the same way as a brand has to create something to convene an audience around, if it wishes to preserve the relevance of audience-based marketing.

Now at this point, Adam said that picking Red Bull was not a fair example. Red Bull is an exception, a toothpaste brand could not do a Red Bull. Fair enough, let’s apply the toothpaste test and imagine how you might convene an audience around a toothpaste brand.

Here are three things you could do (and these all come from a blog post I wrote back in 2014).

First: stand for something rather that then stand behind something. What should a toothpaste brand stand for? How about the importance of cleaning teeth in oral healthcare. A toothpaste brand needs to demonstrate that it knows more about cleaning teeth than anyone else out there. It should have an R&D department that creates innovations that are genuinely based on improving dental care, rather than spurious innovations designed to create an excuse to make a new ad or product variant. It should be available to answer pretty much any question a consumer might have about what goes on in their mouths. It will need to have relationships with the dental hygiene profession that extends beyond buying endorsement and creating ‘white-coat lab-ads’. It should create campaigns that encourage regular teeth cleaning, run workshops in primary schools to teach kids good brushing techniques.

Of course many toothpaste brands are already doing some of this, but it is not centre-stage. It doesn’t command serious money and much of it is done as part of corporate social responsibility rather than marketing. If I have my way, we would never see another toothpaste ad that had some attractive, rented medical expert posed in a fake lab environment ever again – all the ad budget would go on promoting the actions of the brand and the campaigns it runs. The key to success here is achieving what I call credible back-fill: building a credible brand story based on actual brand behaviours. Dove’s Campaign for Real Beauty shows the way, but ultimately it was insufficiently connected to a credible brand story to have any real longevity.

If I was a marketing director, I would call this a process of ruthless authenticity.

Second: ‘clubify’ the product.  Another way to convene an audience is to start to see consumers as participants. This provides a reason why they may want to actively ‘target’ a brand as distinct from being targeted by a brand. A brand becomes, in effect, a bit like a club that you join when you sign-up to a product category. Giff Gaff is a good example of a brand that is at the leading edge of starting do this. If you want to play tennis, you join a tennis club and if you want to do mobile, you join the Giff Gaff club. The key to this is the ability to have a much greater choice over what you get and the ability to join with others to create new options, albeit within the framework of clearly defined club / brand rules. Even if you, personally, don’t want to become hugely involved, you can gain reassurance from the fact that there are consumer members on the club committee so that you can have confidence that this is a brand / club that is being run with your interests at heart.

This was an idea I raised four years ago. Since then, of course, we have seen the Dollar Shave Club. Could it work for toothpaste? I might be tricky, but there may well be some higher order of benefit within the oral healthcare category that has the potential for either club or community formation (community, after all, could very easily become the new media).

Third: amplification of individual consumer relationships. This is an area that is closely linked to what I talk about in the next section when looking at relating to consumers as individuals and also the issue of reverse influence.  Rather than trying to garner positive comments in social media and then simply shouting about them, (or worse still using advertising to falsely dramatise the fact that there is some sort of consumer conversation going on in social media), brands can promote the fact that the brand is available to talk to consumers in the social space. In such a way a brand can speed the process by which it creates for itself a reputation as being a brand that listens and responds to individual consumers, without having to rely on each individual consumer to have experienced this. Rather than focus on promoting the brand, you promote the way by which people can engage with the brand when, and if, they want to. Inviting advocacy is probably more powerful (and more achievable) than actually creating it. The focus is on actual brand behaviour, rather than (unrealistically dramatised) product characteristics.

(Note: it is possible to imagine that future qualification for consideration as a brand, as distinct from a commodity, will be dependent on consumer perception of brand behaviour rather than the ability to drown-out the competition with messages about product performance or availability. This scenario becomes more likely if you consider that one of the things ‘the internet’ is doing is exposing, and thus eradicating, poor product performance and dramatically increasing product availability. In the old world a ‘brand’ was primarily a quality mark, but if finding quality is no longer a problem a brand has to become a mark of something else).

This is not so much about convening an audience at any one moment in time, but more about convening a mindset within an audience. It is a form of latent engagement that can be triggered when the consumer requires it (a bit like insurance).  Perhaps we should call this approach creating a brand insurance policy.

The first step here (for a toothpaste brand) is simply tuning into the toothpaste conversation in-so-far as it exists. Social listening is a hugely under-utilised technique, especially for low-interest mass brands. This is because the toothpaste conversation is not big and therefore it is assumed to be of little value, according to the distribution dependent mindset the equates value creation with mass. However, probably everything you ever paid a market research company to find out is already out there somewhere in the toothpaste conversation, if you could be bothered to find out about it by either joining it or convening it in the first place.

There is more to be said about this, but this itself needs to be a conversation. The key point is that brands need to preserve the idea of an audience (if they wish to still be a brand / rockstar) and this has to involve a shift away from seeing audiences as things other people assembled for us and which we could hunt-down and target, towards becoming things we convene for ourselves based around credible forms of behavior, encoded as ideas which can become the building blocks of stories. And this isn’t an idea I have pulled out of thin air, I have built it from hard theory based on an understanding of what is driving the digital revolution.

***

We now need to look at ways of managing relationships with consumers that are not dependent on having first herded them together into an audience or a segment.

The key issue here is one of value of relationship. Within the distribution world of audience-based marketing, we became accustomed to the idea that the value of any relationship or contact with individual consumers was very small – but this didn’t matter because we were doing contacts at scale (mass). That is why we are so insistent that if we do personalised marketing, it has to be mass personalisation. Mass is how we created sufficient value and the assumption is that if we lose mass, we lose value. But mass is a concept from the world of distribution and within the world of connection, the concept of mass loses its power: It is very hard to do mass in the world of the individual in much the same way that it is very hard to have a conversation with an audience.

Value in the world of connection is created by having much less individual contacts or relationships, but extracting from them much greater value than was either possible or conceivable in the high reach, low engagement world of distribution-based mass marketing. This is where the problem emerges if you start to use distribution tactics to play a connection game – you are unlikely to create relationships that are valuable enough (that world again) to compensate for the fact that you have had to compromise the ability to do mass.

The relationships you need to create in this world have to be based on listening and response: both listening and responding to your actual consumers or listening and responding to data about your consumers. And the key thing is that whatever that response is, it probably should not be one that comes from the world of distribution (and therefore is adapted to work effectively only when presented to a mass group).

This is where I have my questions about the relevance of something like programmatic (algorithmic) advertising. Undoubtedly data driven, algorithmic approaches have a huge potential significance for shaping how brands understand and respond to their consumers. Likewise, advertising still has a relevance as a way of communication with consumers when they can willingy be brought together into an audience. But why programmatic advertising? I think that for programmatic to work it has to be linked to something that delivers greater individual consumer benefit than delivery of a message. I have seen programmatic advertising described as the brokering of messages in a biddable environment, but should we not be brokering something more valuable than simply a message about the product? Could we not be brokering even the product itself?

I am not the expert here, but it would seem to me that there are so many more productive things we can do by listening to data in order to meet the main challenge of value creation in the world of connection – this challenge being behaviour identification and response. And, by definition, this is something that has to be initiated by the consumers’ behaviour.

This is not to say that advertising in the digital space has no relevance, but when you start to understand the challenge as behaviour identification and response, rather than reach and frequency, it can help shape an advertising strategy. This is why product led advertising on say Amazon or Google (which is based on real-time consumer behaviour) is generally more effective than digital advertising based on traditional segmentation (which is defined by who or where a consumer is).

I also believe that there is a fundamental contradiction inherent in almost all digital advertising in that the more tightly you can target someone, the less receptive they are to the idea of being targeted (or the more receptive they become to the idea of being targeted with something other than an ad). If you are going to target anything in the digital space, you should target behaviours not people. Incidentally, this is why mobile is so significant. A mobile should not be seen as a channel (distribution thinking), it should be seen as a behaviour detection device (connection thinking). A mobile, via the technology of augmented reality (AR) is also a mechanism for inserting an (your) algorithm between a consumer and the real world. This is going to be astonishingly important and the reason why AR is so much more important the VR.

Likewise content. A content strategy in the world of connection should really be defined as an information management strategy designed to ensure that consumers have 24/7 access to the questions for which your brand is an answer. Most content strategies are not this, because they are trying, and failing, to play a reach and frequency game. It only takes one single piece of ‘content’ sufficiently socialised, to register in a Google search. This is why I always advise organisations to spend less than 10 percent of a content budget on actually making the content and at least 90 percent on creating a process (that word again) to socialise that content such that it becomes an effective answer to a known consumer question.

Likewise influencer marketing. Most current influencer marketing campaigns are a waste of time and money – but that is because they view influencers as nodes in a form of distribution network meant to spread brand messages to an audience of consumers. Influencers here are being used as a proxy channel in a reach and frequency game.

The problem is that while influencers may be more influential than your average citizen, they are rarely influential enough. This isn’t to say you should abandon the idea of an influencer, but it should shape how you use them. For example, small groups of people who are active in talking about a particular subject can be very helpful in socialising relevant content (relevant being the key word). Alternatively, you can use reverse influencers – so rather than see these as people who represent your brand in the world of the consumer, these people become the group that represents the consumer in the world of the brand. You might even be able to recruit these types of influencers as brand collaborators who can do tasks such as answering questions in customer service communities. I know of one individual whose value through participation in a customer service community was calculated at $250,000 per year – far greater value than could ever be created on the back of a message based strategy, or through purchase of the actual product. But that is because in the low engagement world of audience-based marketing, we set a cap that linked and limited value creation to product consumption.

When entering the digital space and the world of connection, a brand should not simply be replicating the type of relationships we created when we were talking to an audience through traditional media channels. This space presents both the opportunity and requirement to create individual relationships of far greater value. Imagine that 10 years ago you instructed your brand teams or agencies that they couldn’t do anything in this space unless they could prove not just how much value it was going to create, but how it could be used to deliver relationships of hugely greater value than that being achieved to date through conventional marketing activities. And now imagine how much money you would not have wasted.

So, in summary.

  • There is revolution taking place that is going to require a strategic rethink based on an understanding of the new world this revolution is creating.
  • Traditional marketing created value by harnessing the power of distribution, but the revolution is breaking that power and creating a new space – the world of connection, which operates in a very different way.
  • Marketing – for the foreseeable future –  has to play in both worlds, which correspond to the world of the audience and the world of the individual. Don’t make the mistake of mixing up the two and bringing distribution tactics to a connection game.
  • If brands want to continue to succeed in the distribution game they need to rethink their idea of the audience, reduce their dependency on renting channel-based attention and increase their ability to convene an audience around their brand on its own account, based on repopulating the empty space that used to be the brand story.
  • When playing the connection game, the value of individual relationships or contacts is critical: these relationships have to be an order of magnitude more productive than those you were creating in the distribution game. This has to be be based on identifying, harnessing and/or responding to consumers’ behaviours (not consumers’ personalities). Data has a critical role here as does genuine social digital contact.

None of the above constitutes a strategy, or even an answer. But I hopes it provides the basis for a rethink. If I were to give one piece of do-it-now advice it would be to do this: stop and think (or convene a stop and think group in your organisation). We need to remind ourselves and rethink both how marketing used to work (and make adjustments) and develop a totally different approach that harnesses the opportunities associated with creating connections with consumers as actual individuals. This is a whole new discipline that may not even be called marketing, once we have worked out how to do it.

This is going to involve a level of commitment. We have to end the tactical patch-up job we have been engaged in and start to address the fundamentals, unless we are happy to dismiss the idea that we are living through a revolutionary shift. It is a process of starting a conversation: within brand teams, with agencies with consultants and, crucially, with academics. We need to develop a new set of marketing theory as the foundation for a whole new lot of practice. There is lots of work to do here – and therefore lots of opportunity.

The question is – are you willing to be a part of this story?

If so you can:

  • Send this piece to someone else (email it with a personalised message rather than just share on social media)
  • Write your own take or critique (LinkedIn is probably a good place to post it) and tweet about it
  • Convene your own Stop and Think session
  • Use #brandsat

 

A politician who understands the world of the algorithm

Thanks to Jeremy Epstein (go-to for all things blockchain) for drawing my attention to this Wired interview with Emmanuel Macron. Here is a man who understands the world of the algorithm. There are three reasons you can tell this. First: he doesn’t talk about trying to lock-up access to data – he talks about making data open (with conditions attached – primarily transparency). Second: from a regulatory perspective he focuses on the importance of transparency and shows he understands the dangers of a world where responsibility is delegated to algorithms. Third: he talks about the need for social consent, and how lack thereof is both a danger to society but also to the legitimacy (and thus ability to operate) of the commercial operators in the space (I was  7 years ahead of you here Emmanuel).

As an example, he is opening access to public data on the condition that any algorithms that feed on this data are also made open. This is an issue that I belive could be absolutely critical. As I have said before, algorithms are the genes of a datafied society. In much the same way that some commercial organisations tried (and fortunately failed) to privatise pieces of our genetic code, there is a danger that our social algorithmic code could similarly be removed from the public realm. This isn’t to say that all algorithms should become public property but they should be open to public inspection. It is usage of algorithms that require regulatory focus, not usage of data.

This is a man who understands the role of government in unlocking the opportunities of AI, but also recognises the problems government has a duty to manage. It is such a shame that there are so few others (especially in the UK where the government response is child-like, facile and utterly dissmisive of the idea that government has any role to play other than to let ‘the market’ run its course whilst making token gestures of ‘getting tough‘).

 

Facebook, the STASI, KitKats, the NSA and a digital caste system: defining the privacy problem

The GDPR (as played by King Canute) and the rising tide of data (as played by The Sea)

Mark Zuckerberg’s appearance before Congress is a good example of the extent to which politicians and regulators have no idea, to quote The Donald, of “what on earth is going on”. It is not just them, this lack of understanding extends into the communities of thought and opinion framed by academia and journalism. This is a problem, because it means we have not yet identified the questions we need to be asking or the problems we need to be solving. If we think we are going to achieve anything by hauling Mark Zuckerberg over the coals, or telling Facebook to “act on data privacy or face regulation”,  we have another think coming.

This is my attempt to provide that think.

The Google search and anonymity problem

Let’s start with Google Search. Imagine you sit down at a computer in a public library (i.e. a computer that has no data history associated with you) and type a question into Google. In this situation you are reasonably anonymous, especially if we imagine that the computer has a browser that isn’t tracking track search history. Despite this anonymity, Google can serve you up an answer that is incredibly specific to you and what it is you are looking for. Google knows almost nothing about you, yet is able to infer a very great deal about you – at least in relation to the very specific task associated with finding an answer to your question. It can do this because it (or its algorithms) ‘knows’ a very great deal about everyone or everything in relation to this specific search term.

So what? Most people sort of know this is how Google works and understand that Google uses data derived from how we all use Google, to make our individual experiences of Google better. But hidden within this seemingly benign and beneficial use of data is the same algorithmic process that could drive cyber warfare or mass surveillance. It therefore has incredibly important implications for how we think about privacy and regulation, not least because we have to find a way to outlaw the things we don’t like, while still allowing the things that we do (like search). You could call this the Google search problem or possibly the Google anonymity problem, because it demonstrates that in the world of the algorthm, anonymity has very little meaning and provides very little defence.

The Stasi problem

When you frame laws or regulations you need to start with defining what sort of problem you are trying to solve or avoid. To date the starting point for regulations on data and privacy (including the GDPR – the regulation to come) is what I call the STASI problem. The STASI was the East German Security Service and it was responsible for a mass surveillance operation that encouraged people to spy on each other and was thus able to amass detailed data files on a huge number of its citizens. The thinking behind this, and indeed the thinking applied to the usage of personal data everywhere in the age before big data, is that the only way to ‘know’ stuff about a person is to collect as much information about them as possible. The more information you have, the more complete the story and the better your understanding. At the heart of this approach is the concept that there exists in some form a data file on an individual which can be interrogated, read or owned.

The ability of a state or an organisation to compile such data files was seen as a bad thing and our approach to data regulation and privacy has therefore been based on trying to stop this from happening. This is why we have focused on things like anonymity, in the belief that a personal data file without a name attached to it becomes largely useless in terms of its impact on the individual to whom the data relates. Or we have established rights that allow us to see these data files, so that we can check that they don’t contain wrong information or give us the ability to edit, correct or withdraw information. Alternatively, regulation has sought to establish rights for us to determine how our the data in the file data is used or for us to have some sort of ownership or control over that data, wherever they may be held.

But think again about the Google search example. Our anonymity had no material bearing on what Google was able to do. It was able to infer a very great deal about us – in relation to a specific task –  without actually knowing anything about us. It did this because it knew a lot about everything, which it had gained from gathering a very small amount of data from a huge number of people (i.e. everyone who had previously entered that same search term). It was analysing data laterally, not vertically. This is what I call Google anonymity, and it is a key part of Google’s privacy defence when it comes to things such as gmail. If you have a gmail account, Google ‘reads’ all your emails. If you have Google keyboard on your mobile, Google ‘knows’ everything that you enter into your mobile (including the passwords to your bank account) – but Google will say that it doesn’t really know this because algorithmic reading and knowledge is a different sort of thing. We can all swim in a sea of Google anonymity right up until the moment a data fisherman (such as a Google search query) gets us on the hook.

The reason this defence (sort of) stacks-up is that Google can only really know your bank account password is if it analyses your data vertically. The personal data file is a vertical form of data analysis. It requires that you mine downwards and digest all the data to then derive any range of conclusions about the person to whom that data corresponds. It has its limitations, as the Stasi found out, in that if you collect too much data you suffer from data overload. The bigger each file becomes the more cumbersome it is to read or digest the information that lies within it. It is a small data approach. Anyone who talks about data overload or data noise is a small data person.

Now while it might have been possible to get the Stasi to supply all the information it has on you, the idea that you place the same requirement on Google is ridiculous. If I think about all the Google services I use and the vast amount of data this generates, there is no way this data could be assembled into a single file and even if it could, it would have no meaning, because the way it would be structured has no relevance to the way in which Google uses this data. Google already has vastly more data on me than the biggest data file the STASI ever had on a single individual. But this doesn’t mean that Google actually knows anything about me as an individual. I still have a form of anonymity, but this anoymity is largely useless because it has no bearing on the outcomes that derive from the usage of my data.

The KitKat Problem

Algorithms don’t suffer from data overload, not just because of the speed at which they can process information but because they are designed to create shortcuts through the process of correlations and pattern recognition. One of the most revealing nuggets of information within Carole Cadwalladr’s expose of the Facebook / Cambridge Analytica ‘scandal’ was the fact that a data agency of the like of Cambridge Analytica working for a state intelligence service had discovered a correlation between people who self-confess to hating Israel and a tendency to like Nike trainers and KitKats. This exercise, in fact, became known as Operation KitKat. To put it another way, with an algorithm it is possible to infer something very consequential about someone (that they hate Israel) not by a detailed analysis of their data file, but by looking at consumption of chocolate bars. This is an issue I first flagged back in 2012.

I think this is possibly the most important revelation of the whole saga, because, as with the Google search example it cuts right to the heart of the issue and exposes the extent to which our current definition of the problem is so misplaced. We shouldn’t be worrying about the STASI problem, we should be worried about the KitKat problem. Operation KitKat demonstrates two of the fundamental characteristics of algorithmic analysis (or algorithmic surveillance). First, not only can you derive something quite significant about a person based on data that has nothing whatsoever to do with what it is you are looking for. Second, algorithms can tell you what to do (discover haters of Israel by looking at chocolate and trainers) without the need to understand why this works. An algorithm cannot tell you why there is a link between haters of Israel and KitKats. There may not even be reason that makes any sort of sense. Algorithms cannot explain themselves, they leave no audit trail – they are the classic black box.

The reason this is so important is that it drives a cart and horse through any form of regulation that tries to establish a link between any one piece of data and the use to which that data is then put. How could one create a piece of legislation that requires manufacturers or retailers of KitKats to anticipate (and otherwise encourage or prevent) data about their product being used to identify haters of Israel? It also scuppers the idea that any form protection can be provided through the act of data ownership.  You cannot make the consumption of a chocolate bar or the wearing of trainers a private act, the data on which is ‘owned’ by the people concerned.

KitKats and trainers bring us neatly to the Internet of Things. Up until now we have been able to assume that most data is created by, or about, people. This is about to change as the amount of data produced by people is dwarfed by the amount of data produced by things. How do we establish rules about data produced by things especially when it is data about other things? If your fridge is talking to your lighting about your heating thermostat, who owns that conversation? There is a form of Facebook emerging for objects and it is going to be much bigger than the Facebook for people.

Within this world the concept of personal data as a discrete category will melt away and instead we will see the emergence of vaste new swathes of data, most of which is entirely unregulatable or even unownable.

The digital caste problem

A recent blog post by Doc Searls has made the point that what Facebook has been doing is simply the tip of an iceberg, in that all online publishers or any owners of digital platforms are doing the same thing to create targeted digital advertising opportunities. However, targeted digital advertising is itself the tip of a much bigger iceberg. One of Edward Snowden’s Wikileaks exposures concerned something known as Operation Prism. This was (probably still is) a programme run by the NSA in the US that involves the abilty to hoover-up huge swathes of data from all of the world’s biggest internet companies. Snowden also revealed that the UK’s GCHQ is copying huge chunks of the internet by accessing the data cables that carry internet traffic. This expropriation of data is essentially the same as Cambridge Analytica’s usage of the ‘breach’ of Facebook data, except on a vastly greater scale. Cambridge Analytica used their slice of Facebook to create a targeting algorithm to analyse political behaviour or intentions, whereas GCHQ or the NSA can use their slice of the internet to create algorithms that analyse the behaviour or intentions of all of us about pretty much anything. Apparently GCHQ only holds the data it copies for a maximum of 30 days, but once you have built your algorithms and are engaged in a process of real-time sifting, the data that you used to build the agorithm in the first place, or the data that you then sift through it, is of no real value anymore. Retention of data is only an issue if you are still thinking about personal data files and the STASI problem.

This is all quite concerning on a number of levels, but when it comes to thinking about data regulation it highlights the fact that, provided we wish to maintain the idea that we live in a democracy where governments can’t operate above the law, any form of regulation you might decide to apply to Facebook and any current or future Cambridge Analyticas also has to apply to GCHQ and the NSA. The NSA deserves to be put in front of Congress just as much as Mark Zuckerberg.

Furthermore, it highlights the extent to which this is so much bigger than digital advertising. We are moving towards a society structured along lines defined by a form of digital caste system. We will all be assigned membership of a digital caste. This won’t be fixed but will be related to specific tasks in the same way that Google search’s understanding of us is related to the specific task of answering a particular search query. These tasks could be as varied as providing us with search results, to deciding whether to loan us money, or whether we are a potential terrorist. For some things we may be desirable digital Brahmins, for others we may be digital untouchables and it will be algorithms that will determine our status. And the data the algorithms use to do this could come from KitKats and fridges – not through any detailed analysis of our personal data files. In this world the reality of our lives becomes little more than personal opinion: we are what the algorithm says we are, and the algorithm can’t or won’t tell us why it thinks that. In a strange way, creating a big personal data file and making this available is the only way to provide protection in this world so that we can ‘prove’ our identity (cue reference to a Blockchain solution which I could devise if I knew more about Blockchains), rather than have an algorithmic identity (or caste) assigned to us. Or to put it another way, the problem we are seeking to avoid could actually be a solution to the real problem we need to solve.

The digital caste problem is the one we really need to be focused on.

The challenge

So – the challenge is how do we prevent or manage the emergence of a digital caste system. And how do we do this in a way which still allows Google search to operate, doesn’t require that we make consumption of chocolate bars a private act or regulate conversations between household objects (and all the things on the Internet of Things) and can apply both to the operations of Facebook and the NSA. I don’t see any evidence thus far the the great and the good have any clue that this is what they need to be thinking about. If there is any clue as to the direction of travel it is that the focus needs to be on the algorithms, not the data they feed on.

We live in a world of a rising tide of data, and trying to control the tides is a futile exercise, as Canute the Great demonstrated in the 11th century. The only difference between then and now is that Canute understood this, and his exercise in placing his seat by the ocean was designed to demostrate the limits of kingly power. The GDPR is currently dragging its regulatory throne to the waters edge anticipating an entirely different outcome.

P.S. I am talking about this post on the excellent Echo Junction podcast, hosted by Adam Fraser

 

 

 

 

Cambridge Analytica, Facebook and data: was it illegal, does that matter?

For the last year Carole Cadwalladr at the Observer has been doing a very important job exposing the activities of Cambridge Analytica and its role in creating targeted political advertising using data sourced, primarily, from Facebook. It is only now, with the latest revelations published in this week’s Observer, that her work is starting to gain political traction.

This is an exercise in shining a light where a light needs to be shone. The problem however is in illuminating something that is actually illegal. Currently the focus is on the way in which CA obtained the data it then used to create its targeting algorithm and whether this happened with either the consent or knowledge of Facebook or the individuals concerned. But this misses the real issue. The problem with algorithms is not the data that they feed on. The problem is that an algorithm, by its very nature, drives a horse and cart through all of the regulatory frameworks we have in place, mostly because these regulations have data as their starting point. This is one of the reasons why the new set of European data regulations – the GDPR – which come in to force in a couple of months, are unlikely to be much use in preventing US billionaires from influencing elections.

If we look at what CA appear to have been doing, laying aside the data acquisition issue, it is hard to see what is actually illegal. Facebook has been criticised for not being sufficiently rigourous in how it policed the usage of its data but, I would speculate, the reason for this is that CA was not doing anything particularly different from what Facebook itself does with its own algorithms within the privacy of its own algorithmic workshops. The only difference is that Facebook does this to target brand messages (because that is where the money is), whereas CA does it to target political messages. Since the output of the CA activity was still Facebook ads (and thus Facebook revenue), from Facebook’s perspective their work appeared to be little more that a form of outsourcing and thus didn’t initially set-off any major alarm bells.

This is the problem if you make ownership or control of the data the issue – it makes it very difficult to discriminate between what we have come to accept as ‘normal’ brand activities and cyber warfare. Data is data: the issue is not who owns it, it is what you do with it.

We are creating a datafied society, whether we like it or not. Data is becoming ubiquitous and seeking to control data will soon be recognised as a futile exercise. Algorithms are the genes of a datafied society: the billons of pieces of code that at one level all have their specific, isolated, purpose but which, collectively, can come to shape the operation of the entire organism (that organism being society itself). Currently, the only people with the resources or incentive to write society’s algorithmic code are large corporations or very wealthy individuals and they are doing this, to a large extent, outside of the view, scope or interest of either governments or the public. This is the problem. The regulatory starting point therefore needs to be the algorithms, not the data, and creating both transparency and control over their ownership and purpose.

Carol’s work is so important because it brings this activity into view. We should not be distracted or deterred by the desire to detect illegality because this ultimately plays to the agenda of the billionaires. What is happening is very dangerous and that danger cannot be contained by the current legal cage, but it can be constrained by transparency.

It’s time to talk about Blockchain

Presentation1One of my big ‘things’ about the social digital revolution is the fact that it is changing the nature of trust, shifting it from institutions into (often community-based) transparent processes. This has enormous implications, given the importance of trust in creating both brands and societies. If you look at platforms such as Wikipedia, Ebay, Uber, Trip Advisor, Amazon, Airbnb and even Google (search) itself their operation and success all have roots in forms of community-based processes.

Therefore, when I first came across Blockchain a couple of years ago I realised it had the potential to change the world – simply because Blockchain is all about process-based trust. In fact it has been labelled a trust engine. I therefore knew it was going to be important, before I knew how it was going to be important.

In the intervening time I haven’t been able to delve sufficiently deeply into the technology (mostly because I don’t really understand it) to get a handle on how Blockchain is going to change the World. Neither, I suspect, had many others. However, this is now changing, and smart people are starting to work-out the Blockchain applications.

Which brings me to Jeremy Epstein. My faith in the significance of Blockchain was re-inforced when I heard that Jeremy had moved from Sprinklr, one of my favourite marketing technology platfroms, to set up Never Stop Marketing – a consultancy focused on helping busnesses understand Blockchain. Jeremy is someone who has always been at the leading edge of digital change and who ‘gets it’ in terms of understanding its core principles. As a rule, if jeremy is on to it, it is worth getting on to. He has just released an e-book “The CMO Primer for the Blockchain World“. I have read this once and need to read it at least two more times. It contains some reassuring endorsements of the Blockchain concept from some leading marketers, but the most important bit is the section in the middle, where Jeremy starts to map-out potential practical applications of Blockchains in marketing, backed up by many linked examples.

I would thoroughly recommend this e-book as mandatory summer reading. I am going to use it as my staring point for, finally, getting my head around Blockchain.

Deception, Deflection and Disruption: the new rules of political communication

This is a post I have been meaning to write for at least 18 months. When first conceived it was in part a prediction. Recent events have conspired to make that prediction a reality, which has encouraged me to get it out there. It is post about the three Ds of modern political communication: Deception, Deflection and Disruption.

Deception

It all started with Deception. Many people have accused UK Prime Minister Tony Blair of being a liar. In truth, he was far too clever to deserve this label. Calling Tony Blair a liar is a bit like calling a successful poker player a liar. What Tony Blair and a successful poker player have in common is that the practice of deceit is fundamental to their success. Indeed the whole New Labour project was built upon deception. There was, of course, the grand deception designed to create support or justification for the Iraq war but at a more prosaic level there was the deception that New Labour was a party that was going to deliver on any of its promises, when in fact all they were doing was kicking the can down the road – just another variant of TINA (There Is No Alternative) politics. Labour confused being a party of opposition with being a party in opposition, a problem which exists to this day – but that is another story.

The Conservative-lead government of David Cameron learned a lot from New Labour. Continue reading

Gaming democracy

Not far short of three years-ago I published a piece on the Huffington Post which suggested that humans had moved from the age of the sword into the age of the printing press and were about to move into the age of the algorithm. The reason, I suggested, for why a particular form of technology came to shape an age was that each technology conferred an advantage upon an elite or institutionalised group, or at least facilitated the emergence of a such group which could control these technologies in order to achieve dominance.

This is why the algorithm will have its age. Algorithms are extraordinarily powerful but they are difficult things to create. They require highly paid geeks and therefore their competitive advantage will be conferred on those with the greatest personal or institutionalised resource – billionaires, the Russians, billionaire Russians, billionaire Presidents (Russian or otherwise). There is also a seductive attraction between algorithms and subterfuge: they work most effectively when they are invisible. Continue reading

A focus for marketing in 2017

I notice that I last posted in June last year and that this wasn’t even a proper post, just a reference to a speech I had given in Istanbul that was conveniently YouTubed. In my defence, I have been busy doing other things such as building a house and involved in an interesting experiment in online education. Interestingly, my blog views haven’t decreased dramatically over that time, which I think says something instuctive about the whole content thing. It suggests that content is not a volume game, where frequency or even timing of posting is key, rather it suggests that content is a relevance game that is not driven by the act of publication, but driven by the act of search. This is why content socialisation is far more important that content publication. As I have said before, spend only 10 per cent (or less) of your content budget actually producing content and the remaining 90 per cent on socialising that content. Socialised content is the gift that carries on giving. Once it is out there it will carry on working for you without you having to do anything else. And this socialisation has to start with an understanding of what content (information) people actually want from you – identifying the questions for which your brand is the answer. Remember, the social digital space is not a distribution space where reach and frequency are the objectives, it is a connection space where the objectives are defined by behaviour identification and response.

Here endeth the predictable critique of content strategies.

Given that it is still January I believe I have permission to resume posting with a 2017 prediction piece. I was prompted to do this by reading Ashley Freidlin’s extremely comprehensive post on marketing and digital trends for 2017. This is essentially a review of the landscape and it its sheer scale is almost guaranteed to strike terror into the heart of every marketing director. Perhaps because of this, Ashley’s starts with saying that the guiding star for 2017 should be focus, so in that spirit I shall attempt to provide some basis for focus. Continue reading

Success in the digital future: talk at Digital Age Summit 2016

IMG_6708A few weeks ago I was in Istanbul speaking at the Digital Age Summit. A video of my presentation is now on YouTube and I have finally got around to posting it.

See also below the summary slide, which pretty much covers what I said. Some other soundbites include, why a mobile is not a channel but is a behaviour detection device, why consumers don’t want content, why marketing has been in the Ice Age and why the algorithm is the most powerful instrument of social control invented since the sword.

Digital Age 2016 minus video

Also – check out the presentation by Matt Wallaert from Microsoft for a new way of thinking about your business / market and competition.

I especially like the idea of creating value by reducing levels of engagement, given the senseless chase for ‘engagement’ in social media. It correspond to my idea of a brand as a waiter – just tell me about the specials, take my order, bring my drinks but at all other times just stay out of my life – don’t think that because you are a waiter you have a right to ‘join my conversation’. (I don’t think I got into this in my presentation – there was probably already too much in there).

The content delusion: why almost all content marketing strategies are a waste of time and money

This excellent piece by Mark Higginson has galvanised me to write this post. I have done many posts previously on this, but they have tended to be too long, too short or just dealing with a specific aspect. So here it is – my shot at the definitive post that punctures the content delusion.

1. Consumers don’t want it

Find me the consumer who is saying “what I really want right now is another piece of content from my favourite brand”. That consumer does not exist. Ask consumers what they want from brands and they will certainly give you a list – but content will not be on that list. Don’t believe me here, believe the global PR agency, Edelman. They asked consumers what they wanted from brands and they came up with a list of 8 things. In essence what consumers were saying is “we want information (not content), we want responses, we want answers to questions, we want you to listen to us and give us an opportunity to be heard, we want you to demonstrate to us that you actually strand for something other than marketing b*** s**t.

2. The value creation model is fundamentally flawed

Let’s look the theory first. We have an industry that has been around in excess of 500 years that specialises in turning content into cash. This is the publishing and media industry. The model this industry has developed for doing this most efficiently involves creating revenue in two ways: subscription/purchase or advertising. Neither of these options are available to brand ‘publishers’ and in any case, this model is dying on its feet. So, as a toothpaste brand, if you think you can do a better job at creating value from content than the guys who have been doing it for 500 years, without recourse to the two most effective tools these guys have developed and in the face of an economic environment within which the ability to create value from content is collapsing – go ahead: make my day (and clean my teeth).

Now for the practice: it just doesn’t scale. Continue reading