The real story of democracy (stopping the rich and powerful taking the piss)

Here’s the thing. In any functioning democracy there will always be a party whose primary role is to represent the interests of the rich and powerful. I don’t say this with any sense of grievance or throw-back to outdated ideas about class struggles, workers versus bosses, capital versus labour. It just stands to reason. Why would the rich and powerful not want to have their interests represented? Such a party cannot, of course, position itself as ‘The Party of The Rich and Powerful’ because if it did, it wouldn’t be elected. Instead it will have to create a story designed to persuade people that if you look after the rich and powerful, everyone will benefit. 

There are two basic elements to this story. The first is the idea of trickle down: that wealth magically appears at the top and then trickles down to feed the rest of society and thus to interfere with the interests of the rich is to cut off wealth at its source, to the detriment of everyone. The second is the idea that the rich and powerful are a special breed of people, whose wealth and power has been given to them as a reward or birthright alongside a commensurate responsibility to maintain the framework of the nation and populate its institutions. This ‘Establishment’ element has more recently been expanded to encompass the super-rich who have emerged following the explosion of speculative wealth generated within the banking and financial services sector. We call these people wealth creators, which sounds much better than speculators. This label also encourages the idea that super-rich financial speculators are genuine entrepreneurs or innovators and to interfere with them through regulation or taxes will therefore risk damaging ‘the spirit of enterprise’ upon which economic prosperity depends. (Ironically, it is the dysfunctional, speculative, financial services sector that is probably the greatest inhibitor to true entrepreneurship and innovation, through its inability to provide access to capital and finance on sensible terms – as any genuine entrepreneur will tell you).

Neither of these ideas stand up to any serious analysis, but that doesn’t really matter because they serve a purpose, which is to provide a cover story. This story has the added advantage in that it can easily be incorporated into the much broader story of political conservatism. You don’t want to change the rules of the game you are winning. Keeping things the same (i.e. conserving the status quo) is therefore very much in the interests of the rich and powerful, in most instances. This is why conservative political parties are almost always the parties that the rich and powerful will adopt. 

Conservatism is a good story. It has an emotional appeal that extends way beyond – and can in fact disguise – the more rational and narrow agenda of preserving wealth and power. And as we have seen recently, conservatism provides an easy route into nationalism and populism and then further into the quasi-religious territory of conspiracy and the creation of belief, based on delusion and denial of reality. Powerful stuff, as Josef Goebells was well aware.

I don’t have a problem with the rich and powerful seeking to represent their interests. It is an inevitable, possibly even a necessary part, of a functioning democracy. But the reason democracy works is because it creates a space for people to oppose the exclusive interests of the rich and powerful and thus establish a balance. The rich and powerful are still allowed to maintain a large part of their money and influence, but – to put it crudely – are prevented from taking the piss.

Neither do I have a problem with the rich and powerful trying to take the piss. I suspect it is often a necessary part of what it takes to become rich and powerful in the first place. Having a concern for the greater good of society is not usually high on the list of requirements for achieving or maintaining wealth and power. Nor should we expect it to be. 

The critical concept here is one of opposition. It is very important to avoid confusing the idea of being a political party OF opposition with being a party IN opposition (i.e. not in government). A party that genuinely represents the interest of those who are not rich and powerful has an incredibly important role to play in a functioning democracy, irrespective of actually being in power. In fact a party of opposition will tend to spend more time in opposition, because it will have to contend with the soft emotional power of conservatism as well as the harder power of money and the influence money can project through ownership of the media and control of establishment institutions more generally. But this is fine because if an opposition party is doing its job properly within a functioning democracy, both in and out of power, it will provide the necessary balance and stop the rich and powerful from taking the piss.

I think that the problems we face as a society and democracy today result from the fact that for many years now, the parties of opposition have not been doing their job properly. They have confused the idea of being a party OF opposition with being a party IN opposition and elevated being in power to a primary and exclusive objective and have thus become, in no small part, either seduced by the holders of power and money or cowed by the influence these interests possess. 

Why has this happened?

It has happened because of the emergence, over the last half century, of a new ideology that has never actually presented itself for democratic approval, but has instead eaten away at the functioning of democracy, both devaluing it in the eyes of much of the electorate and depriving the forces of opposition of their ability to operate. 

This story, which you might call the alternative story of conservatism, really begins in 1947 with a meeting that took place at the Swiss lakeshore resort of Mont Pellerin.  In attendance were economists who, at the time, were very much at the margins of economic thought. Their notional leader was the Austrian, Fredrick von Hayek and this meeting was the founding of something called The Mont Pelerin Society – which still exists to this day. The ‘thing’ of the Mont Pellerin economists was a rejection of the arbitrary and authoritarian power of the state and it’s attendant collection of unpredictable, incompetent or authoritarian players and its replacement by an international order based around the promotion of individual rights and freedoms with the messy democratic process replaced, controlled or overseen by a logical and rational framework of ‘free’ markets. 

You could understand their grievance. The previous 50 years had seen two devastating global conflicts which could easily be seen as clashes between rival versions of state power. This period had also seen the emergence of socialism which, despite its initial focus on the rights and freedoms of individuals, had evolved into just another form of state-centric authoritarianism.  In fact, the Mont Pellerin group were of the view that the second world war was a victory for socialism, not just in the Soviet bloc but across the west as well, where even conservative governments were now enslaved to the centralised power of the state. 

It is perhaps not surprising that these ideas struggled to find a place in post-war mainstream political debate. In fact, while this ideology, which became known as economic neoliberalism, went on to become the dominant social and economic ideology of the late 20th century, it never established itself as a widely recognised ‘ism’ in the same way that socialism or capitalism did. No-one ever wore the t-shirt or waved the placard for economic neoliberalism. The reason for this is that its main supporters were some of the world’s most wealthy, and often secretive, individuals. These people saw democracy as something that was inherently threatening to their interests and should thus be controlled or side-lined, not engaged with. And these were the people who adopted and sponsored the Mont Pelerin economists and their ideology to the tune of billions of dollars. The reason they did this was their attraction to the central idea of limiting, disempowering or appropriating the powers of the state.

Think about it, if you were a billionaire industrialist or banker, the single biggest roadblock to increasing your wealth were governments that taxed you, created regulations that added costs to your business or prevented you from buying-up your competitors. Any political ideology that proposed attacking the power of government was a good thing, especially if its proposed replacement was something as intangible, ill-defined (and as easily rigged or manipulated) as ‘free’ markets. 

To cut a long story short, the plan for these wealthy individuals or organisations had three elements: first pour cash into academia, such that promotion of neoliberal ideas became the only game in town worth nailing a career (or departmental budget) to. Second, establish a network of think tanks and foundations that could turn the output of academia into a platform for political lobbying. Third, enter the political sphere directly only under the cover provided by sponsorship or creation of grassroots, populist or religious movements. The Tea Party in the US was an early example, being in large part funded by donations from the Koch brothers – billionaire industrialists from Kansas.

It wasn’t really until the 1980s that neoliberalism emerged out of the academic closet and established an identity within mainstream politics. The platform for this was the Chicago Business School and its leading light, Milton Friedman.  Friedman was the economic inspiration for the political revolution wrought by Ronald Reagan and Margaret Thatcher. His ‘thing’ was also never branded neoliberalism, it was initially called monetarism or supply side economics and represented a new theory about the relationship between inflation, unemployment, demand and the money supply. 

At this point, the world was ready for a new theory. The 1970s had been a tough time for traditional economics. The rise of stagflation (rising inflation and unemployment) and the shocks provided by the oil crisis engineered by OPEC suggested that the old models largely based on the theories of the economist John Maynard Keynes, had run out of steam. Thatcher and Reagan were able to present themselves as leading a revolution that would re-energise moribund state-centric and bureaucratic government, invoking a new political language peppered with words like freedom, liberty, and the rights of the individual. In-so-far as there was a political strategy behind this it was crudely simple: cut taxes (especially at the top end), privatise state assets, expose public services to market forces turning what had previously been government responsibilities into profit making opportunities and reform the ‘supply side’ of the economy – code for abolishing regulations and driving down real wages (also known as improving labour market flexibility). A lightly or self-regulated ‘free’ market became the answer to almost every problem – and if there wasn’t a market solution that meant there wasn’t a problem to be solved. 

And these policies worked, or at least they seemed to be working in the short-term. Economies and business practices did need invigorating. There did seem to be some truth in Thatcher’s assertion that socialism had failed working people. Deregulation, especially in the City of London, sent a wave of money washing through the economy and many parts of the economy experienced a boom, with GDP growth peaking at 5.7% in 1988.

The problem, of course, is that there were both hidden (or ignored) and longer-term consequences. The economy became de-industrialised, but without an accompanying strategy, other than ‘market forces’, to create a new source of long-term sustainable growth. The mantra of creating a flexible workforce passed as a cover story for driving down real wages and job security. The state was not actually rolled-back – it was just contracted-out. Two new classes of people emerged: on the one hand the super-rich and on the other, the working poor. By super-rich we are not (just) talking about the billionaires and oligarchs who came to London to take advantage of lax (deregulated) financial transparency, but also the fact that previously well-paid or professional work, often associated with the financial services industry, now became super-paid, bonus-inflated work, such that hitherto comfortably-off partners in accounting and legal firms could now afford to take private jets when going on holiday. 

The financial services sector and the City of London are symbolic and symptomatic of the changes that the introduction of free-market neoliberalism introduced. There is a direct line that stems from the Big Bang of financial deregulation in the 1980s to the financial and economic collapse of 2008. The financial services sector no longer exists to support the creation of value in our economies, instead it has become a massive exercise in value extraction to the enormous benefit of a small number of people. 

This has an extension into areas well beyond the ambit of the City or Wall Street as the example of social care in the UK illustrates. Here a toxic combination of the withdrawal of state responsibility and the intervention of financial opportunism has created a system that is clearly, to coin a popular phrase, no longer fit for purpose. Social care in the UK has not just simply been privatised or commercialised, it has been financialised, such that it has become an asset whose owners have no regard for what it is the businesses they own are charged with delivering. Numerous social care providers have been acquired by financial institutions, many overseas-owned, who can load them with debt and securitise their income streams, confident in the knowledge that government, in the form of the local authorities who now rely upon them, provide a form of income guarantee.

There are many other examples, but to summarise, the last 30 years have seen a situation emerge where the rich have, to refer back to the point made earlier, taken the piss with the financial services sector as the driving force and principal facilitator of this exercise. 

Which brings us back to the question of opposition. While it was conservative governments that introduced neoliberal policies, left-of-centre, or non-conservative, governments have been in power during much of the time that this ideology established its grip. How and why did they let this happen?

There are two reasons. As noted earlier neoliberalism did not present itself as a political idea subject to transparency or democratic scrutiny. Instead it was a richly funded economic ideology that targeted and ultimately colonised academia. It therefore controlled the space where ideas and policies are first created and was able to choke-off the development of any competition. The supply of ideas to opposition parties was therefore cut off and the boundaries of what was considered acceptable debate were drawn tightly inwards into a sterile discussion about the virtues of variants of essentially the same idea. A new form of democracy was invented: free market democracy, or liberal democracy – a form of democracy that was ultimately subservient to free markets and neoliberalism. Democracy became an outcome, not  a process, and to challenge this orthodoxy became tantamount to challenging the notion of democracy itself.

Second, excluded from the territory of political ideas, the parties of opposition created a new way to differentiate themselves: they created value politics. Rather than get people to vote for them based on what they were actually going to do (which was not very different from what had gone before) they sought to position themselves as being different based on who they were and what they stood for. For a time they tried to give this approach a name calling it ‘The Third Way’ albeit this had insufficient substance to last much longer than the average soundbite. They also adopted terms such as ‘pragmatic politics’ as a way of diminishing the attraction of anything that was even slightly radical or different. The concept of big political ideas was also debunked, replaced with the theory of ‘retail politics’: the assertion that people don’t want to buy big ideas, they just want to select from a range of individual policy ‘baubles’ which must be served up to them only at the last minute, with maximum fanfare, as part of a calendar of staged events designed to culminate in a general election. At all other times the strategy of opposition was to criticise the other side while spouting meaningless guff about vision and values.  

Politics differentiated by values rather than substance also spawned a new approach to political management based on marketing and communications. Just as Coca Cola and Pepsi Cola have to spend big marketing dollars to convince the public that they are both very different products, the left-of-centre variant of neoliberalism created the role of the spin doctor and highly centralised and controlled messaging to promote the idea that it was significantly different from ‘nasty’ right-of-centre’ neoliberalism. Political debate also became more heated and personalised as a means of disguising the lack of fundamental substance or difference. 

Right-of-centre neoliberals meanwhile promoted TINA politics (There Is No Alternative) to force acceptance that the political or ideological debate was now over and globalised free markets had won the argument. One US economist, Francis Fukuyama, even went as far as talking about the end of history.

The result was the slow death of democracy under an assault on two fronts. On the one front the neoliberal right, opposed to the very idea of the state, conducted a form of low intensity warfare against all forms of government, the public sector and the civil service. For the right, state failure became the objective in order to clear the way for the private sector and ‘the market’. The subsequent public disillusionment with politics, politicians and the state of the state simply reinforced the story. The playbook here was to make continued cuts to public service funding often in the name of creating efficiencies, thus weakening the system of universal provision, leading to increased examples of failure. Such failings were highlighted by creating targets, rankings and league tables, thus supporting a narrative of an ineffective, inefficient state – ripe for ‘invigoration’ by competition and market forces. The responsibilities of the state were then contracted out and turned into profit making opportunities for the private sector.

One the other front, the enfeeblement of the politics of opposition deprived the public of any meaningful political choice, further increasing the sense of disillusionment. “They are all the same” has become the enduring mantra. TINA politics had won. Stripped of actual political choice, democracy became simply a game about power, attracting politicians who only want to win the game. Winning is all that matters, not what happens once you have won, other than winning again.

Within the politics of the right a culture of incompetence and ‘do nothing’ government emerged. The very idea of a plan or strategy becomes demonised as interventionist, conveniently removing the need for right-wing politicians to have, or be capable of creating, any plans, policies or strategies other than to insert competition into everything and let the market sort it out. Decades of inactivity have produced a generation we could call the ‘Do Nothing Tories’: politicians with no concept of the idea that government is there to actually govern, or what governing actually means. 

At the same time, the requirement to have at least some policy framework has been outsourced to think tanks and lobby groups, funded in large part by the same, often overseas-based, players who have bankrolled the neoliberal project from its inception. These think tanks and the so-called ‘dark money’ that drives them now play the same role in the nurturing of right-wing politicians that the Trades Union movement used to play for politicians of the left. The dark money interests obviously don’t want principled politicians who think for themselves and have their own ideas: in fact we have seen purges of such politicians from the parties of the right in recent years. They have been replaced by those who are dim, unprincipled and ambitious and thus sufficiently malleable. Their role is purely to take the white papers the think tanks produce and turn them into white papers for presentation to Parliament. 

Almost every single cabinet minister in the (current) Liz Truss government has direct links back to such groups, having either worked for them at some point, received campaign funding from them or fronted their parliamentary representation (Liz Truss, for example, was the deputy director of Reform and founded Freer – the parliamentary wing of the Institute for Economic Affairs). Likewise the advisers to the government are almost exclusively drawn from the ranks of think tanks and lobby firms, some even remaining on the payroll of such groups while they act as ‘advisors’, including, incredibly, the Prime Minister’s current chief of staff. 

At a certain point, though, problems start to emerge. This happens when it starts to become impossible to disguise the fact that the rich and powerful are taking the piss. 

The 2008 global financial collapse has been a key catalyst here. Banks and free markets brought the global economy to the brink of collapse. Money that we were told was not there to support public services was none-the-less created to bail-out the banks and support the value of assets the wealthy owned. And the price for this was austerity programmes that hit the poorest in society. It was quite hard to put a positive spin on this.

Also, while economics is almost unique amongst the sciences in its refusal to challenge and thus change and adapt its fundamental assumptions, there comes a point where the total lack of evidence to support the founding claims of neoliberalism and the mounting pile of evidence demonstrating its failures (growing inequality, decline in real wages, low growth and productivity to name a few) cannot be ignored. (Note, economics’ failure to interrogate its assumptions mean it doesn’t deserve to be called a science, it has become simply a story designed to explain why it is OK for some people to have more money than others).

Neoliberalism has therefore lost much of its support within mainstream academic circles, but while it has ceased to be a mainstream economic religion, it has instead degenerated into a cult. The adults have left the room, but they have left behind the crazies, fundamentalists and also the money and the politicians dependent on it. Deprived of any evidence based credibility but also requiring someone to blame for the decades of failure, these politicians turned to a new idea: nationalist populism. 

It is a cruel irony that the disillusionment created by decades of failed neoliberal policies and sometimes deliberately created to undermine trust in government and the framework of the state, is now being used to support the very people and ideas that created the crisis in the first place. We are also presented with a succession of Conservative governments, each of which positions itself mostly in opposition to the Conservative government which preceded it, rather than the actual opposition. Albeit the failure of the actual opposition makes this an inevitability: the need to create an argument to sustain the idea democracy still exists has meant that the Conservatives have had to resort to arguing amongst themselves. 

There is a further irony in that the emergence of value and identity politics designed to create a space for the otherwise emasculated politics of opposition has now been turned into culture wars that both further disguise and promote the agenda of wealth and power. 

In the UK, Brexit was the first and most prominent outing for nationalist populism. It is no surprise that almost all of the prominent politicians supporting Brexit were recruited from the ideological crazies or the DUA (dim, unprincipled, ambitious) brigade within the Conservative party. The Brexit campaign also saw the introduction of new forms of political campaigning, based on the promotion of false narratives that can be nurtured and spread via social media. The false narrative has since become firmly established as the principle campaigning technique for the populist right.

Now that Brexit is supposedly ‘done’ and the power of the EU as the main scapegoat thus diminished, new scapegoats are required. Hence we have the culture wars – the semi-conspiracy theory that purports that all the current wrongs of society can be attributed to something called The Establishment – a semi-secret cabal of lefty intellectuals, civil servants, lawyers and the BBC who have in fact been running the country for many years, supported by an army of ‘woke warriors’, thwarting the noble efforts of those politicians in actual government who have been struggling to promote freedom, liberty and the rights of the individual. Nonsense, obviously, but a powerful story in many quarters.

The key word here is story. 

The disintermediation of media caused by the social digital revolution favours the re-emergence of storytelling. Back in the days before the printing press, the principle ‘technology’ for the spreading of information was the story. Printing turned stories into messages which could be precisely defined and controlled by those institutions or interests which had access to media. It also allowed trust to be vested within institutions – albeit institutions often owned or controlled by the wealthy and powerful. Social media undermines this trust and reduces the power of centralised messaging. We are returning to a world of Chinese whispers, where precise messages (even those we think of as facts) degrade or can become corrupted as they are retold or spun. Stories, on the other hand, don’t degrade through digital word-of-mouth.

Whilst to date this shift has been exploited primarily via the right, this could provide a lifeline for the politics of opposition. Opposition parties don’t have to tell us what precise policies they would put in place to fix social care. Instead they can tell us the story of how social care was turned into a financial asset for the benefit of wealthy people in the financial services sector. 

Brexit was a story. 

The populist right in the UK has a story: Britannia Unchained and Global Britain. This story (currently) says that all this great nation has to do to return to days of former glory is to free itself from the chains and burdens of regulation, taxes and the inconvenient constraints imposed on Parliamentary Sovereignty by the Constitution and the ‘enemies of the people’ who shelter behind it. Other stories may become available. Global Britain, by the way, is the Brexit version of heaven – a mythical place which the goddesses of the free market can bear us away to at some point in the future subject only to our ability to suffer a series of privations (supply side reforms) and catastrophes inflicted upon us by an ideological priesthood in Downing Street as part of period of necessary transition / purgatory. 

The first story the parties of opposition need to tell is the story of what has actually happened to this country over the last 40 years. It is a story, of course, in which they are complicit and which largely serves to highlight their own failure, which may partially explain their reluctance to tell it. It should also be a story that dismisses the tired old political tropes and cliches and presents some genuinely new ideas. It should be a story that re-frames the central challenge for democracy as stopping the rich and powerful taking the piss. A story that exposes the role those currently in power, and the ideology they cleave to, has played in allowing the rich and powerful to take the piss. A story that positions Brexit, populism and the culture wars as just a cover story to allow the rich and powerful to continue to take the piss. It is a story that has to bind the problems we face to those people responsible for them – rather than continuing to allow them to shift the blame and fan the flames of nationalism and extremism.

It will not be sufficient for the parties of opposition to regain power simply because the failure of the neoliberal cult becomes so catastrophic it becomes impossible to disguise. Unless the parties of opposition establish their own story they will not have a strong enough mandate to offer a genuine alternative. A bunch of policy baubles needs a story Christmas tree to hang them on. That Christmas tree used to be socialism – but we can now recognise socialism as just another dead, white man’s ideology.  Unless we have a new story we will just regress to the sterile politics of winning and the idea that simply changing the government is a sufficient alternative when in reality it is little more than changing the baubles on the same old Christmas tree. 

It is time for the opposition to rediscover the politics of opposition and stop the rich and powerful taking the piss. Because that is what democracy is ultimately about.

Call in a beer-strike: another reason why DTC is overblown

Mark Ritson has just published a piece in Marketing Week which skewers a lot of the hype around the so-called direct-to-consumer (DTC) revolution. I have also been brewing some thoughts on this one having read this piece a couple of weeks ago about Heineken’s DTC efforts. This actually presents the refreshingly honest admission that Heineken doesn’t really know what it is doing in this space.

Heineken believes the problem is that it doesn’t have sufficient data on their consumers. My take was that their problem might be that they have failed to find data which supports the idea that their consumers actually want to buy a beer online – because such data doesn’t exist. Personally (and like Heineken I have no ‘data’ to support this view) I can’t imagine a situation where you would ever want to order a beer online. For beer, and most other FMGC / grocery products there is almost always going to be an advantage to operate through some form of intermediary. The digital and data revolution may well change who these intermediaries are and how they operate, but it is unlikely to do away with them.

The only instance where it would make sense to order a beer online is if delivery could be guaranteed within around 2 minutes. If, in effect, you could call-in a beer-strike. So if there was a bar-app that would allow you to order drinks for delivery at your table – great (although in this instance the bar is acting as a form of intermediary). But outside of a bar it is always going to make sense to aggregate your purchases of beer (and many other similar types of products), rather than order them one at a time. Quite possibly you will add them to an voice-activated list one item at a time (or have them algorithmically suggested or added for you), but delivery efficiencies and consumer convenience will always create a system that tends towards towards batching items for delivery within a minimised number of predetermined time slots.

This is not to say that there isn’t a place for DTC in FMCG in the GDF (Great Digital Future), but is likely to be restricted to a relatively narrow range of products – those products that are not naturally adapted to aggregated retailing but have had to accept aggregation because of lack of business model to support individualised distribution. Remember, razors fit through a letterbox, beer bottles don’t.

It comes back to a focus on the big structural shifts that the digital revolution is creating. Shift number one is the separation of stuff from the thing that distributes that stuff – be that the separation of news from newspapers or banking from bankers. This is often a separation of process (finance) from institutionalised delivery (banks) thus supporting a process of disintermediation or emergence of new forms of intermediary (Uber).

Second, and of greatest consequence for marketing, is the shift from the world of the audience to the world of the individual where the challenge is behaviour identification and response (a connection challenge rather than a distribution challenge). Don’t use technology to impose behaviours on consumers, use it to respond to identified (rather than assumed) consumer behaviours. If Heineken can deliver a beer to my hand within 120 seconds and at no significant extra cost – fantastic. But until that can happen, Heineken is playing a game that doesn’t exist.

Question: what is TV? Answer: a form of behaviour

Mark Ritson has recently been stirring the pot on TV – challenging broadcasters to take on Netflix and Amazon and predicting that Facebook will buy Netflix within a year.

These are interesting ideas, but in order to make sense of them I think we first need to ask ourselves the question, what exactly is TV: is it a form of content, distribution, a device (TV ‘set’) a business model or something else entirely? At the moment we are confusing all of these things.

In the past we haven’t had to ask this question, because TV has been a single thing created from a fusion of all of these elements, albeit we have come to understand it primarily as a form of content. This is why we talk about TV ‘programmes’. In reality traditional TV is a form of distribution that has imprisoned a certain type of video content within it, but we have focused on its content because this has been the basis of difference. There hasn’t (until recently) been an alternative (different) type of distribution and thus alternative content or an alternative place where ‘TV’ content can live.

At its heart the digital revolution is all about the separation of information / content from its means of distribution. This marriage, and consequential relationship, between information and distribution established 600 years ago by Gutenberg, is coming to an end. The separation allows us to understand that in many instances this was a loveless marriage where distribution wore the trousers and forced content to take its name and adapt to its formatting strictures – hence TV ‘programme’.

The implication of this divorce for the distribution-dependant business model that was TV is the discovery that much of the content it used to be wedded to can enjoy a life with other distribution partners and also that it has an opportunity to flirt with content that was formerly imprisoned within other distribution media (such as movie screens). It has also meant that Casanovas such as Netflix can establish themselves in the space previously owned exclusively by the business model known as ‘TV’. Imprisoning content is no longer the best or only route to commercial success.

In order to understand what is going to happen to this thing known as TV we need to develop a new way of defining the problem that TV is there to solve and thus reconstructing a business model that is based around providing a solution to that problem, rather than a model designed to preserve as much as possible the confederation of functions and skills that sit within a TV channel or network.

I look at it in two ways. First, TV as a form of behaviour. The fusion of content, distribution technology and device that we know as TV created a form of behaviour: people (often in groups) sitting in comfortable chairs in their own homes, gathered around a screen in order to be entertained (and to a lesser extent informed), primarily between the hours of 8pm and 11pm, watching content that frequently formed the basis of subsequent online or offline conversations.

The good news is that this form of behaviour is not going to go away anytime soon – and to that extent the behaviour we call TV (and thus TV advertising) is going to endure. The less good news, for the traditional business model associated with TV, is that these people now know that they can expect a much greater choice of content (albeit probably within a more restricted range of content categories) than has traditionally been the fare of what we called TV programmes or can be provided by the things known as TV networks or channels.

The form of content that is best adapted to this form of behaviour is where the future lies. It will tend to be based around long-form storytelling, live sports events, mass entertainment that has an element of either real-time audience participation or real-time social currency and, to a lesser extent, news. This is the space Netflix (and Strictly Come Dancing) is addressing and it is growing. This is the thing Ritson has identified in his article as being a ‘third line’ of ‘autro’ viewing that he defines rather confusingly as being ‘on a TV set but not TV’ and sitting between TV and mobile. This is the wrong way of defining this stuff as the rather confusing ‘on TV but not TV’ description implies and it stems from our inability to separate the differing elements that constitute traditional TV, our conflation of distribution and content and our obsession with channel (TV versus mobile) – which in itself is a hangover from the world of distribution dominance. This stuff is better defined as simply content that is adapted to TV behaviour but that isn’t currently produced by TV networks.

This brings me onto another way of looking at the broader video space, which is to define it by screen size, which in itself is also allied to behaviour. There is the big screen that sits in front of the home-based comfy chairs and hosts the type of content referred to above. Then there is the personal screen that we will use when we want to behave as an individual (and currently is provided by the device known as a laptop / tablet).  And there will be a palm-sized screens which we will use when it is not possible to access the other types of screen, or for candy-content (short, sweet, usually consumed ‘to go’).  We have also seen, in Google Glass, that there is a new screen-based environment/behaviour – which I guess you could call the real-time, heads-up screen. The device known as Google Glass has obviously not worked as the device to host this type of screen, but the behaviour associated with it remains valid and will probably first be hosted on a palm-sized screen but this time held in front of the face (and on car windscreens) and associated with augmented reality. And all of these screens will be fed by a variety of distribution technologies and content producers.

Note: I haven’t called the palm-sized screen a mobile because that simply compounds the mistake of seeing mobile as a form of channel, when mobile, as per all the above screen types, is best understood as a form of behaviour. Mobile has a huge significance going forward: not as a channel, but as a behaviour detection device.

Also note: last Wednesday I watched the second half of Tottenham Hotspur’s disappointing performance against PSV huddled around my son’s iPhone in Venice Airport. In all respects a sub-optimal situation – but that was the only alternative relevant to our current situation / behaviour. Which is why we need to understand technology / channel in the context of real time behaviours. Behaviours drive selection of technology or channel, not the other way around. Of course a mobile is not appropriate to the environment or behaviour that is living room viewing, but in some situations it will be the best (only) option.

Having defined the forms of behaviour or environment associated with consumption of video the challenge is to define a model associated with satisfying all, or part of, these behaviours. I think there are four things this model has to address.

First, and of greatest relevance to consumers, there is content aggregation: a mechanism for finding and filtering relevant content. Google is a content aggregator as is Spotify to a certain extent. However, their models can’t be directly imported because the behaviours associated with video consumption are different. Video consumption (at least for the big-screen living-room behaviour that is TV) is more here-and-now and socially relevant. There is a need to watch what everyone else is watching. If you want to work-out how to insulate a loft you don’t need your friends to also watch the video. Likewise if you want to listen to Freebird by Lynyrd Skynryd, this is always something best done alone (and preferably in secret).

Aggregators generally are the future for lots of things in the digital world. Uber is an aggregator. We can also see, if we choose to (and many don’t), that the future of retail will be divided between purchase aggregators and providers of consumption experiences.

Second, there is revenue aggregation. Google became mighty because it started off solving a content aggregation problem but found a way of aggregating revenue around the consumer behaviour it was addressing. The current ‘TV’ models of aggregating revenue are not sufficiently consistent with the behaviour consumers will want from a content aggregator. Revenue and content are currently brought together in a portal model: Netflix is really a portal as is a TV channel – but portals are a sub-optimal from a consumer’s perspective. Portals are a way of getting consumers to pay for content they won’t ever watch, albeit this this provides a way to manage the third problem: management of risk.

Living room content is expensive to produce. You therefore need up-front money tied to some guarantee of future revenue. YouTube is close to being a functioning content aggregator but its revenue aggregation model only works to support content that is cheap to produce and where producers have the incentive to carry the risk. The risk problem is currently solved via the commissioning process which ties distribution to content. The revenue aggregation solution will probably be defined by the requirement for consumers to pay (via subscription or exposure to advertising) only for the content they wish to view, plus the ability to provide some guarantee of future revenue.

The fourth issue, which is linked to risk management, is promotion / social relevance. A video on insulating your loft will always be relevant (with respect to loft insulating behaviour). But this years ‘Strictly’ winner very quickly becomes last year’s ‘Strictly’ winner. If a content producer has access to content distribution, they can use this to promote their upcoming content. They can also restrict access to this content, via release dates and scheduling, to build anticipation.

Effectively it is only social relevance and risk management that currently ties content to distribution because the technology already exists to provide content and revenue aggregation (the barriers here are only ones of economic self-interest). But content and distribution will become separated because this is the way the tectonic plates are shifting and because consumers will demand it.

So – I can’t draw the picture of what the business model that satisfies the behaviour known as TV will look like. But I am pretty sure that the route to finding it will be based around a recognition of the ultimate end-state of content separated from distribution, the connection instead of content directly to revenue via a process of content and revenue aggregation (rather than through an intermediary portal), the ability to manage risk and the need to generate social relevance. And the starting point is to stop thinking about TV as a form of content or a form of channel or a device, and start thinking about it as a form of behaviour.

P.S. My favourite media analyst, Clay Shirky, tells a great story about TV (I think in his book ‘Here Comes Everybody). His young daughter was at a friend’s house and was scrambling around behind the TV. Shirky assumed she was looking for the remote, which he gave to her. She looked at it quizzically and said “no daddy, I am looking for the mouse.” She didn’t care about the device known as TV, to her it was just a screen and a screen which ships without a mouse is broken. A screen without a mouse: that’s not a bad way of summarising the state of the thing we currently call TV. Something that is out of line with consumers’ desired behaviour.

Why the new easyJet digital thingy is all about fantasy

The real opportunity that the digital / data space presents is the ability to target behaviours rather than people. I am not sure that many marketers realise this yet. As evidence I would present the latest initiative from easyJet called Look and Book.

easyJet has a CMO who is 5 months into the job – i.e. about the amount of time necessary to dump the previous CMOs agency / campaign, roll-out a new ad and develop a bright shiny new digi-data thingy. Look and Book is that new shiny thing (the new campaign aired 14 September). In the words of the new CMO “You will be able to take a photograph from, say, Instagram and find that destination on our app and go straight on to booking”.

I give it 12 months tops (3 months to discover that it is not driving sales, 3 months to try and shout louder about it in order to make it drive sales, 3 months of living in denial, 3 months for the CMO to plan how to move-on without losing face).

Why? At one level it is app/data-driven-techno-gizmology for the sake of pretending to be at the cutting edge of app/data-driven-techno-gizmology. At another level it is just about channel-chasing and product placement. Instagram is seen as the current hot channel, Instagram is all about photos, so let’s find a way of bridging across from photos to our product. Simples.

Except that Instagram is not a channel. In common with all the new social thingies, Instagram is much better understood as a form of behaviour. To use it effectively (if indeed you use it at all) you have to align the real-time behaviours of people using Instagram with the behaviours that correspond to the purchase behaviour implicit in your customer journey. This, in fact, is the future of data in marketing – behaviour identification and response, rather than simply using data to craft increasingly ‘personalised’ (fragmented) messages.

This is not the way marketers are accustomed to operating. In traditional marketing we aligned product messages with customer demographics and media location. It wasn’t necessarily ideal, but it was necessary because this was the way the channels were structured – and in traditional marketing the channels were the boss. When people sat in front of a screen watching the The Apprentice their behaviour is “I want to watch some obnoxious wannabees be humiliated by an obnoxious hasbeen” not “I want to buy a car”. None-the-less it made sense for a car manufacturer to interrupt their experience with a message about a car if research showed that these were the types of people who buy this car and that The Apprentice represents a media location where a large group of such people can be gathered together. It is an approach based on targeting people on account of who they are and where they are, not what they are doing.

The digital space presents the opportunity to target people according to what they are doing – behaviours. This is where Look and Book falls down. It is insufficiently attentive to behaviour and grounded instead in the old-fashioned channel-dependant idea of demographics and interruption. Are there actually people out there who will see a photo of some location and think “Ooh, that looks nice, I would like to go there, I wonder where it is, let’s hope that EasyJet flies there and, if they do and I can afford it, let’s get out my phone (having previously subscribed to the Look and Book app), take a screen shot and book it now”? That’s the behaviour this initiative is aligned against – but I suspect it is a fantasy behaviour. In the real world there are just too many reasons why this is not going to happen, primarily that people almost never simply look and book.

Look and Book is actually an initiative designed to make the new CMO look cool, be on the latest hot platform, use data and digital thingies and deliver an ‘enhanced, data-driven, seamless, integrated, customer experience’ (‘cos that’s what you want when you want to go to Magaluf). It is an idea that is defined by the channel it wishes to sits within rather than an idea that defines the channels it could sit within (channel-defining ideas being the future in my opinion – see the Nike Kaepernick campaign).

However, you can easily see how you could make the ad for Look and Book (in fact this may form part of the ‘let’s shout about Look and Book’ component inherent in its predicted demise), but behaviours of people in ads are very rarely the behaviours of people in the real world – which is partly the point of advertising.

By the way, you should check-out the new ad, which is designed to “deliver a big dollop of emotion”. Hmm – looks like just another non-differentiated category ad to me. As part of a new CEO’s inevitable re-structuring easyJet has also recently separated the marketing function from the sales function. Hmm – looks like they might have actually separated marketing from sales to me.

Agile = legitimised panic

The ‘agile business’ is very much of the moment. Wherever you look you find consultants promoting it and business leaders adopting it (or at least exhorting their troops to become it). The need for agility is usually linked to the ‘rapid pace of technological change’ and that other concept du jour ‘disruption’ (the need to either avoid it or become it).

Here is a slightly disruptive thought. What if our obsession with agility is a present day manifestation of the fact that in the past, not enough organisations spent enough time thinking about the future?

Here is another one. Businesses don’t become successful by being disruptive, they become disruptive by being successful.

I wouldn’t disagree with the claim that we are living through a technological revolution, but we have had this thing called the internet for more than 20 years now. For sure, it has caused huge changes – but they have panned-out over that period of 20 years. Most of the fundamental forces that have shaped those changes have been apparent from the earliest times – if people chose to study them. The problem has been that many organisations have spent their time ignoring what has been going on and therefore find themselves now living in a state of perpetual crisis management – a condition which they have sought to dignify with the term agility.

The real problem is that the future is not what it used to be. Dealing with a changing future does not depend on agility, it depends on thinking. In writing this I am reminded of a piece I wrote almost exactly 12 years ago (The future is not what it used to be). This was a series of ten, semi-serious predictions designed to get people thinking about how the digital revolution might change things. Almost none of these have panned out exactly as predicted (or within the time-frame predicted), but I look at them quite proudly because they did a pretty good job at nailing the fundamental direction of required thinking. If, as a brand, you had spent some time thinking in this way 12 years ago, you wouldn’t currently find yourself looking down the barrel of disruption while desperately trying to do the agility dance.

Businesses that think about the future don’t need to be agile. Agility is something we have invented to put a positive spin on panic. It is time we started to Think.

Marketing: it’s just a joke

Following the publication of my Stop and Think (think) piece I have been having an email conversation with Stan Magniant. Stan is Digital & Social Communications Director, Western Europe, for The Coca-Cola Company – i.e. a player. I used to work with him at Publicis when we were both bright-eyed early adopters of the whole social digital thing.

One of the issues we got into was the question of what constitutes an audience and specifically what size an audience is. As Stan put it “ to marketers, an audience is synonymous with scale: as big a group of people as I can expose to my brand, synchronously or asynchronously. I’m not clear, in your argument, whether you invite brands to explore new creative ways to gather large audiences (through paid or earned tactics? Likely both), or whether it’s all about aggregated niche audiences (a more “long tail” approach).”

This was a good question and in trying to answer it I stumbled into the analogy of joke telling. The point I was trying to make is that an audience is not defined by size, it is defined by behaviour and/or context. The reason that, to marketers, it has become synonymous with scale is a question of conventional mass-marketing economics.

If you are telling a joke, the person or people you are telling it to is an audience. This is something that implicit in the nature (behaviour) of joke telling. What is also implicit is that a joke, even if told to only one other person, is based on an element of universal relevance. A joke that only one person finds funny isn’t really a joke, even if you are telling it to the person who is meant to find it funny.

So, the audience for a joke can be one person, or millions of people. However, when it comes to deciding the optimum size of the audience, this is down to the money. If you are a stand-up comedian who has invested time and effort in developing a set, you need to get as many as people as possible into your audience. Brands are like stand-up comedians. Their material (campaigns) is time consuming and expensive to produce – which is why a brands definition of an audience has become synonymous with scale.

The joke analogy also helps explain why the concept of aggregated niche audiences doesn’t work. As a stand-up comedian you wouldn’t tell a series of five jokes, each of which would appeal to only 20 percent of the audience. The only way this would work is if you first dis-aggregated (segmented) the audience into those five groups and put each into a separate room – so that when you told the joke 100 percent of the people in each group would find it funny. An audience of aggregated niches may look like an audience in terms of size, but it doesn’t behave like an audience in terms of how you make it laugh.

As a brand you can have an audience of one, but not if you then try to create a joke that only that one person will find funny – which is essence is what most ‘mass personalisation’ strategies try to do (one reason I view these with scepticism). Mass (joke telling) is important, personalisation is important – but mass personalisation could be one of those things Seth Godin has called a ‘meatball sundae (ice cream)’.

But to be the thing we call a brand, you need to make people laugh. Which is why preserving the concept of an audience remains critical. Most social media campaigns (and many digital strategies) are the equivalent of a stand-up comedian telling their jokes to people one person at a time – i.e. a waste of time.

Anyway – a brand manager, an advertising executive and a consumer walked into a bar …

Lies on the line: why MP Lucy Powell’s bill won’t solve the problem of online hate or fake news

Summary: Institutionalised forms of content regulation rest on the realistic assumption that all published content can been monitored and made to conform. If you can’t establish this expectation, this form of regulation becomes instantly redundant. That is why applying the old, publication-based regulatory model to Facebook et al is a distraction that only serves to make politicians feel good about themselves while actually increasing the dangers of online hate and fake news.

In the UK the phrase of ‘leaves on the line’ is firmly established within the national conversation as an example of an unacceptable corporate excuse. It is an excuse rail operators use around this time of year to explain delays to trains. The reason it is deemed unacceptable is that leaves fall off trees every year and have done so for quite some time and thus there is a realistic expectation that this is a problem rail operators should have cracked by now.

Which brings me to another problem where an expectation is building of a corporate fix: fake news and all forms of inappropriate online content/behaviour. This has clearly become something of big issue in recent times to the extent that governments are under considerable pressure to Do Something. And the Thing they are mostly looking to Do is to turn around and tell Facebook, Google, Twitter et al that they need to Do Something. In essence what governments are looking for them to do is assume a publishers responsibility for the content that appears on their platforms. The most recent example of this is the private members bill just introduced by the UK Member of Parliament, Lucy Powell (of which more in a moment).

You can see why this is a popular approach. In the first instance, it allows government to deflect responsibility away from itself or, at the very least, create an imagined space where established regulatory approaches can continue to have relevance. It is an approach which finds favour with the traditional media, which has to operate under conventional publication responsibilities and resents the fact that these new players are eating their advertising lunch while avoiding such constraints. To an extent, it even plays to the agenda of Facebook and Google themselves, because they know that in order to attract the advertising shilling, they need to present themselves as a form of media channel, if not a conventional form of publication. Facebook and Google also know that, despite all the regulatory huffing and puffing, governments will not be able to effectively deploy most of the things they are currently threatening to do – because the space they are trying to create is a fantasy space.

The trouble is – this approach will never work. Worse than that, it is dangerous. Continue reading

Ritson versus Sharpe and a story about geomorphology (and a tsunami)

I have just received an email with the confirmed line-up for this year’s Festival of Marketing. My first reaction to this was that I can’t believe it is nearly a year since the last one. It also reminded me that the headline event last year was a battle of the professors between Byron Sharpe and Mark Ritson. Unfortunately I missed it, but for those not in the know the basis for said battle is Sharpe’s advocacy of mass communication versus Ritson’s focus on targeting and segmentation. I was also reminded of this conflict because Byron Sharpe was featured on Adam Fraser’s EchoJunction podcast a couple of weeks ago.  I must confess I haven’t read Sharpe’s famous book ‘How Brands Grow’ so was hopeful that the podcast might give me a shortcut. I also availed myself of the opportunity to listen to the Prof. Ritson’s appearance on the same podcast some time previously.

On the basis of the podcasts, I would say I came out more of a Ritsonist. Of course, as Ritson himself has pointed out, it is not a question of either/or. A brand has to be able to address its entire audience and its ability to do this essentially defines it status as a brand. But an audience is not homogeneous, either in terms of attitudes or behaviours over time – which creates the requirement for targeting.

In fact, according to my theory of the future of marketing in a digital world, brands face two challenges: first is redefining the concept of an audience (and indeed a segment of such) and becoming more adept at convening these audiences rather than renting access to them; and the second is understanding how to create value from relationships with consumers as individuals (the world of distribution and the world of connection).

I guess the reason I came out on Ritson’s side was because I very much liked his scathing view of social media and assessment that most marketers have simply been jumping on a series of digital bandwagons, but also because there was something in Sharpe’s absolutist approach that I was uncomfortable with. First was his contempt for the idea of the niche and his dismissal of a niche brand as an unsuccessful brand. We are entering a time when the competitive advantages associated with being big are reducing and the ability to be small is increasing. Many big brands are facing the long-term challenge of death by a thousand niches. Second, while I am all in favour of developing a more rigourous, data driven approach to marketing I couldn’t help but get the feeling the Professor Sharpe was restricting his field of analysis according to the ability to gather or analyse the available data and disregarding evidence outside of this, not because the data was telling him to do this, but because the data was not available (or not available to measure in the way he wished).

It reminded me of a story about data, measurement techniques and assumptions that was doing the rounds back when I was studying for my degree. I studied geography, with a specialism in geomorphology (rivers, erosion and stuff). At the time, geomorphology had a problem in that we could look around and see evidence that erosion had happened, but couldn’t see it, and measure it, actually happening. (This is a bit like the issue of knowing that half of the marketing budget works, but not knowing which half). The assumption was therefore that erosion was a very slow process – water dripping on a stone – and the reason we couldn’t detect it was that we hadn’t had sufficiently sophisticated techniques or equipment to measure it.

Geomorphology had another problem in that it was, at heart, an observational science: knock-kneed bearded blokes in hobnail boots and khaki shorts wandering around with notebooks looking at things and thinking about stuff. This was deeply unfashionable back in the 60s and 70s at a time when computers were becoming established in academia. You couldn’t be a proper scientist if you didn’t run what we then thought of as large amounts of quantitative data through computer programmes.

So an attempt was made to address these two problems by wiring-up a hill slope (geomorphologists were, and probably still are, obsessed with slopes) with all the latest detection equipment, feeding all the data into a computer, pressing the button and finally nailing the causes of erosion. This slope was going to be so closely monitored that an ant couldn’t fart without us knowing about it. Who knows, perhaps farting ants would be revealed as the culprits?

Anyway, the equipment was put in place, turned on, and revealed precisely nothing. A total flatline. No erosion was taking place. And so it continued for weeks on end until after a prolonged period of heavy rain a landslide washed all the equipment away. It was as though the slope was saying “so you wanted to measure me? Well measure this sucker”.

Of course the real issue was one of false assumptions (erosion as a slow process), a restriction of the field of investigation to those areas from which data could be extracted, a desire to use new bright shiny techno things, plus a distaste for conventional, less data-driven, analysis. Geomorphologists have subsequently realised that erosion is often not a slow process, but an an infrequent, catastrophic process. The slight irony is that an old fashioned knock-kneed bloke with a certain level of experience, wandering around with a notebook, looking at stuff, noting slope angles, digging some holes to determine soil depth and composition and sticking a finger in the ground to get a sense of soil moisture levels could actually develop a much more effective functional understanding of what was going on, what had previously happened and what was likely to happen in the future that someone possessed of all the latest measurement techniques and data.

This is not to say that we should eschew evidence-based marketing, but we need to take about what assumptions we make, what evidence we seek and, crucially, not discard evidence simply because it is difficult to measure or crunch through an analysis programme. 

And also, in relation to his dismissal of the niche, I have a suspicion that Sharpe’s book may come to be regarded more as a piece of historical analysis than as a guide to the future. Perhaps it should be renamed “How Bands Grew”.

However, there is a geomorphological post-script to this story which does favour Prof. Sharpe. In relation to catastrophic geomorphological events, we now know that the east coast of Australia was once devastated by a massive tsunami with waves in excess of 100 metres high. Ths was caused by the collapse of one of the islands in the Hawaiian archipelago – a phenomena know as a long run-out landslide. And the bad news is that this is going to happen again in the not too distant future, geomorphologically speaking. So Prof. Ritson in Melbourne could be in trouble, but Prof. Sharpe around the corner in Adelaide should be OK especially if he sets up house up in the Flinders Ranges.


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? Continue reading

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‘).