Friday, September 30, 2005

Thinking outside the idiot box

The current buzz about IPTV (Internet Protocol Television) makes me realize how rapidly some industries are evolving, and how relatively slowly the marketing profession is responding.

In 1998 I engineered an invitation to the Royal Television Society conference, the biennial Cambridge gathering of 200 of UK television’s elite. Much of the conference was spent in presentations, planning, and self-congratulation on the recent coverage of Princess Diana’s funeral. The only two presentations that still stick with me were a history professor’s singularly unpopular assertion that TV was creating news rather than simply reporting it (much hissing from the audience), and a demonstration of WebTV by the now CEO of Microsoft, Steve Ballmer.

At the time a mere VP, Steve Ballmer was actually heckled. From the audience I heard all the superior snickers of disbelief and the whispered dismissals of the very notion that television might become interactive. The leading decision-makers in the industry were so conditioned by their past experiences of television that they could not conceive that any significant change might be possible, let alone desirable.

I had seen WebTV unveiled a couple of years earlier in New York, before Microsoft acquired it, and had been captivated by the notion that you no longer needed a computer to surf the web. In those days I was all about convergence, and would assail anyone who would listen with my predictions that TV, the web, and mobile telephony would collide and facilitate revolutions in entertainment, communication, and education. Of course this was not original thinking – lots of people were working toward achieving that convergence, and it was an uphill battle.

One of the people at the conference who I tried in vain to convert was a producer of Channel 4’s The Big Breakfast, whose resolute position was something like: “The internet is rubbish. I’d rather have my children watching TV than wasting their time online. You can’t get more educational than a television documentary.” The Big Breakfast was at least innocent, entertaining, predictable, and vaguely informative. But, to my mind, it seemed more worthy of the “rubbish” label than much of what was available online.

The singular lack of vision, with an edge of defensiveness, demonstrated among the television cognoscenti at the time was frustrating, but not unexpected. Even highly intelligent and wonderfully creative people have their limiting horizons and their comfort zones.

What is remarkable to me is not so much that attitudes and behaviors have changed, but how rapidly they changed. The technologies have advanced significantly in the past decade, but so too has our willingness to use them. Our notion of what a computer is has dissolved – it is no longer a grey box under a desk connected to the world with cables, but a palm-sized clam-shell on our hip. It has become almost second nature to take and send images and video using a mobile phone. E-commerce is rapidly going mobile – in Japan you can rent a car, or even get a Coke from a vending machine, by pushing a few buttons on your phone. Bloggers proliferate, entertainment and commerce exploit new media, and news coverage and commentary have decentralized and gone real-time. Now, with the imminent arrival of the millions of channels made available by IPTV, convergence is almost total.

But what of marketing? Where are the revolutions in thinking, the exploitation of new possibilities, the creativity and experimentation? I still work with companies, some with seemingly limitless resources, who are slowly “putting their ads online” and trying to catch up with a paradigm that now belongs in the last century. It baffles me why we in marketing are so slow to evolve. Our role in training is to prepare brands for the future, yet we cling tenaciously to the past.

Is it because marketers define themselves too narrowly, and think of themselves in “activity” terms instead of in “outcome” terms? Or is it because companies don’t consider the value that marketing can bring to the organization is sufficient to justify the potential cost of innovation? Or is it, perhaps, that the current generation of management is still conditioned by its own past experiences, and is not capable of seeing that marketing does not have to be that way? I know that we have only recently accepted the benefits of online engagement, but perhaps we should continue to peer over the horizon instead of settling into a new zone of comfort?

If you did not have a website or the capacity to run TV or print ads, but you and all your target customers had web-enabled mobile camera-phones, how would you exploit the technology more efficiently and effectively help build your brands and grow revenues?

Monday, May 16, 2005

Constructive disruption, presence and focus in a wireless world

The other day I was running a workshop to define competitive strategies at a client company. Five minutes after the scheduled start time the first few participants wandered in. Twenty minutes later everyone was there. Were these lapses in discipline clues to their competitive problems, or simply the way it is in business today?

The fact that everyone was eventually there physically, did not mean they were mentally present. Mobile phones vibrated constantly. Blackberries were consulted obsessively. People left the room to take calls. Thumbs compulsively punched out SMS messages. Much of the communication was task-related, with people seeking input from clients and colleagues or remotely accessing data on their desktops; much of it had nothing to do with the task at hand. Yet the work got done, everyone contributed effectively, and the result was better than any had hoped for.

This apparent lack of focus is not a unique phenomenon, nor is it a recent development. But it has become more and more pervasive over the past few years. There was a time when I would ban mobile phones from meetings. Then I simply banned their ringing out loud. I realize that we are living in a radically different communication paradigm to that of a few years ago. We are now able to multitask in a way that was simply not done in the 1980s. Back then, most people did not have the skills or the tools to “parallel process” productively, and if they did, it was something done in the privacy of their own office. Politeness was our way of denying that we were unable to do many things at once without chaos, or apparent rudeness, ensuing. It’s interesting how digital deftness has corroded punctuality and redefined attentiveness, by changing our sense of time, place, and focus.

Our perceptions of what is "normal" behavior are determined by the habits of our most familiar peer groups. Over the years I have done a lot of work in various Latin American and Asian countries, South Africa, and most of Europe. In a business meeting context, the sensitivity to punctuality and attentiveness is always less cultural than contextual, and within that context you cannot make sweeping statements about national cultural attitudes or behaviors because corporate culture plays a major role in guiding those attitudes.

There are a couple of companies that I have worked with in Mexico and Brazil where -- counter to the false national stereotype of unreliability and lack of urgency -- I am always the last to arrive at my meetings, the other participants eagerly glancing at their watches as start time approaches. Conversely, there are companies in the US and UK where -- counter to the false national stereotype of task-focused discipline -- I have given up expecting more than half of the participants to be punctual, and where participants come and go at will (physically or mentally) throughout the meeting. Our concept of appropriate ground rules for interacting in a formal business meeting, no matter what its purpose, is being changed, not by e-learning, but by a growing culture of constructive disruption.

Some of us, fortunate enough to have graduated in the age of Aquarius, are most comfortable with the lava-lamp mindset, where we can endlessly watch things unfolding slowly and elegantly. We were succeeded by the MTV generation, a society of sound/video-bite junkies, who couldn't focus for more than 15 seconds on anything unless it moved dramatically, constantly. Then the post-MTV perpetually-looping CNN mode of communication produced people who assume that there is no beginning or end, believing that they can always catch up no matter where they start or how often they get distracted.

That fractured attention span seems to be getting even more fragmented with the advent of SMS and other remote communication technologies. The latest generation of company recruits thinks and behaves in genuine non-linear random-access modes. This internet generation, the “digital natives” born into a world where personal computers were already pervasive, is a society of text-bite junkies who can't think unless they are thinking about many things at once. To support this, text is making a comeback, fleshed out by a resurgence in cryptic iconography. Instant messaging, SMS, chat-room style communication, ticker-style news highlights on TV. All of it is text, but not as Shakespeare knew it. Text has a new Morse code that evolves and mutates daily. If u hve smthg 2 say, it takes 2 long to cre8 a pic. Or it did before camera phones came along. :-) LOL.

A picture is not worth a thousand words to communicators who can instantly infer complex meanings from cryptic alphanumeric string-sets. A picture is too limiting, too defined, too unambiguous, too unchallenging -- and way too unspontaneous.

Is internet culture overwhelming organisational culture? The digital divide (if we think of it in terms of those who have embraced connectedness versus those who just get by) is just getting wider. True, "smart mobs" can coalesce and disperse with split second precision. But these are funky folks on the fringe, not mainstream people in the workplace. What may become more pervasive, particularly as mobile phones become smarter and Wi-Fi becomes ubiquitous, is a blurring of the line that separates "presence" from "absence". Perhaps technology will be used to inflict punctuality and attentiveness. Or, more likely, technology and parallel-processing mental modes will make these concepts unnecessary, outmoded, and counter-productive.

Tuesday, April 5, 2005

Paid product placement in rap lyrics

The concept of schizophrenic branding is not new. Marketers have always tried to target different messages to different markets using selective media. Of course there is always the fear that one positioning might undermine another. So how do you position luxury brands to the lavish-lifestyle hip-hop generation without turning off your primary staid and conservative markets? Through surgical internet targeting? Too technical. Through product placement? Not repetitive enough. How about through brand name placement in hip hop lyrics? I’m lovin’ it.

Great rockers of old regarded the use of their music in commercials as a sell-out or a breach of artistic integrity, and they stuck with it, at least till they turned fifty and the royalties started drying up. That’s when the Clash backs Pontiac, the Who hypes Nissan, and Led Zeppelin defibrillates Cadillac. Sell out or not, it works.

Rappers have no such qualms. In fact, the bling bling image is all about conspicuous association with elitist brands. Since 50 Cent dropped Courvoisier and Dom Perignon into his lyrics, they have gained recognition and street cred with the hip-hop crowd. Courvoisier has gone from “Huh? Say what?” to simply “Cou.” Jay-Z has had a similar effect on Bentley’s image and recognition, though fewer fans can afford to splash out on one of those. These were brands firmly associated with boring old f@rts, pretentious but effete jet-setters, and industrialists from nations beyond the scope of most peoples’ geographic competencies. Suddenly they are hip, and there is absolutely no danger that their “traditional” markets will ever find out. And it cost the marketing department nothing.

Enter McDonalds, stage right.

Enthralled with the apparent success of their “I’m lovin’ it” campaign, McDonalds has decided that some of that Cou effect would do the Big Mac a power of good. Rappers don’t sing about Big Macs without a little prodding, because a burger does not have the same fabulous decadent cachet as Dom Perignon. So McDonalds is offering a bribe: mention our product in your lyrics, and we’ll give you a kickback for any airtime you get. We’re talking significant money, enough to buy you two Big Macs for every time the product-placement song gets played. If I am not mistaken, that’s a lot more than the record company pays. Five bucks a spin? I’m in.

But will it be a sell out to commercialism? Will fans lose respect for the performers if they know the deal (and they will know the deal)? Will they reject the products pushed, or will they start eating more burgers with their Courvoisier? Now there’s an interesting research project.

Monday, March 14, 2005

Give your supermarket the finger

In September last year I suggested the JIT lattes concept: service businesses like fast-food outlets and coffee shops provide regular customers with RFID cards, so that on walking in the store the kitchen can be notified to prepare their normal order and shave minutes off the time it takes to process each customer.

But that means customers have to carry more plastic in their wallets. You get around this by ditching the card and injecting the RFID chip under the skin of the customer, as some European beach clubs are doing to help members leave their wallets back in the room-safe. But your average store customer is not yet ready to implant a bunch of Cyborgian chips in their bicep. Along comes biometrics, allowing German shoppers to now use their fingerprint to pay for groceries.

It's early days, of course, and privacy issues abound. I can see the CSI team earnestly looking to identify a partial print from a crime scene: "No hits on AFIS. Better try WalMart."

Will people who would go to court to prevent the government from getting their fingerprints on file be willing to let their supermarket have a record of their fingerprints? Of course they will. If e-commerce has taught us anything about consumers, it's that convenience beats out privacy and security every time. It's your finger -- don't leave home without it.

Wednesday, December 1, 2004

Chinese take-away: Asia eats America’s lunch

To some, this was going to be The American Century with the US as the hub of a booming knowledge economy. Lower-paid menial jobs would go, and Americans would upgrade to higher-paid knowledge jobs. George Bush, when asked what he would say to someone who had just lost his job to someone in India, said he’d give that poor worker some money to get a better education in a community college. But many of those losing jobs to offshore companies don’t need community college educations, because they are already graduate engineers or PhDs in computer science. The White House has become an Ivory Tower.

Business Week has a fascinating breakdown of the impact of Chinese competition on the manufacturing sector in the US. But, alarming as it is, the problem is a lot larger and a lot more immediate than this article suggests. The focus of the article is mainly on what damage Chinese productivity and/or economics are doing to the manufacturing sector in the US, and the associated balance of trade issues.

Manufacturers are hurting, at least the smaller ones are. Retailers, however, currently benefit from sourcing cheap goods in China. But they also become dependent on their suppliers. WalMart is doing $18 billion with China this year, getting 70 percent of its stock there. WalMart is China's eighth largest trading partner, beating entire countries like Russia and Canada. It has taken only three years to get to this, and the process is accelerating. You’d think cheap suppliers make for good profits and sweet dreams. But if the CEOs of retailing companies are sleeping well at night they do not know what is going on.

A very high percentage of everything that US consumers buy comes from a factory in China. What happens when Chinese entrepreneurs wake up to e-commerce and disintermediate the entire US retail sector? Why would you pay $500 for a designer suit at Macy's when you can get the same suit from the same factory online for $50? $35 for a blender at Target, or $5 for the same thing online? A couple of Chinese Amazon.coms and a Chinese FedEx could cripple one of the few sectors in the US where employment is currently growing. And it could happen overnight.

One telling quote from the Business Week article: "Can China dominate everything? Of course not. America remains the world's biggest manufacturer, producing 75% of what it consumes, though that's down from 90% in the mid-'90s." Of course not?? If we have lost that much that fast, we can lose a lot more even faster. Disbelief in its own vulnerability is one of Americas biggest obstacles.

That's why I get annoyed when politicians in both camps talk about the slump in the US economy as if it is something cyclical that we will pull out of. It is a one way street. In the interests of achieving quarterly profit targets and pumping up the immediate value of our investments, we are offshoring everything to an Indian-Chinese hemisphere that will be eating our lunch by the time the next Olympics take place, appropriately in Beijing. The US has bigger problems to deal with than terrorism, but the next round of White House cabinet appointments will probably not reflect any of these concerns.

The US is negligently imperiling the future of its economy with a callous disregard that makes Enron seem benign. That may seem like the jingoistic ranting of an extremist, or worse, a Sinophobe. But the facts are these:

The American scientific/engineering base is weakening – enrollments in graduate and post-graduate courses are down by huge percentages
Numbers of foreign students coming to America to study and stay are way down
We are not producing or importing the critical mass of brilliant minds that we used to
China and India produce many more scientists and engineers every year than the US
China and India are capable of innovative thinking and good design, not just sweatshop work

Combine the massive growth in China’s economy with its urgent need for oil, and we could see the US being outflanked in the Middle East, further compounding America’s economic problems.

American retailers are endangered, but do large American manufacturers care? They are investing heavily in having a manufacturing base right there in China to supply not American demand but the enormous demand that is coming from increasingly affluent (relatively) Chinese consumers. They know how the boom years in the 50s and 60s made them giants, as newly-middle-class Americans put refrigerators and washing machines and TV sets in their new homes. They did well out of a couple hundred million Americans -- there are a couple of billion potential consumers in India and China. But the profits will probably not make it back to the US, because financial headquarters are being offshored too, to tax havens.

Corporate America apparently no longer values having brain-power or talent on the domestic payroll – the notion of human capital as an investment is being replaced with the notion of human ingenuity as an expense. If our money, our designers, our R&D, our manufacturing, our management, our business partners, our suppliers, and our major markets are all in Asia, where does that leave the USA?

Figuring out creative ways to survive what will surely become known as the Chinese decade should be a national priority.