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SD#8: price increases, Pythagoras, and meditation

March 06, 2022

Hi friends,

It is difficult to keep your head up in light of events happening in the world right now. Nevertheless, welcome to the eight edition of Seven Dawns, weekly newsletter on marketing, psychology, productivity, and more.

Our seven ideas this week:

1. (Marketing) Before the current crisis in Ukraine has captured our hearts and souls, the main story in the news was that of inflation. With inflation, businesses have a tough decision to make – do you swallow the cost increase like a pelican trying to eat a capybara or do you pass it on to the consumer by increasing your product price? Most businesses hate the idea of price increase as it is usually met with a negative reaction from their customers, trade partners and everyone in the supply chain. Equally, not raising the price means the business could erode most (if not all) of its profits. Marketers usually stand in the middle of this lose-lose situation. However, there are some steps marketers can take to navigate this. Most importantly, don’t try to hide your price increase in size reductions or hazy alterations to the product. Instead, be crystal clear about the change, explain when, well ahead of time, the increase that will occur and why. When you do communicate it, be incredibly open, where possible link the price increase to customer value. Here is a great example from Pret recently from the legendary Mark Ritson article on the topic. I recommend reading the full article if you’re going through it now.

2. (Philosophy) Growing up in Eastern Europe, the notion of philosophy had quite negative connotations. There was a widespread belief that only a certain type of people could be interested in philosophy and thus I never dabbled in it at young age nor was taught it at school. After I had the privilege to live in the UK and be exposed to a completely different understanding of philosophy and great writers referencing it, I feel I was missing out my entire life. I decided to give homage to the early Greek thinkers and start with Pythagoras. I knew him only through his math equations, now I am astounded by how Pythagorean philosophy led to the foundation of many things we count today as basics of philosophy. From those days, no one could argue that mathematical knowledge appeared to be certain and applicable to the world. Math could also be obtained by mere thinking, without the need for observation. This reasoning lead to think that thought alone could give us ideas that everyday senses could not, thought started to be regarded as superior to observation. It started with Pythagoras.
3. (Career) The more time I spend within my profession the more I realise how many things can be transferred not only between industries or professions but even ways of life. As a marketer, I recently learned that focusing on big bets over small ones will lead to significantly higher returns. The same can be applied say within the film industry. Big budget titles do significantly better over small distributed investments. In the mid-2000s Warner Bros with Alan Horn behind was the fourth leading brand in the entertainment industry. Alan and Warner Bros adopted a ‘big bets’ strategy. On the other hand, NBC Universal and Jeff Zucker were market leaders in the entertainment industry at the time and decided to adopt ‘small bets’. The result? Warner Bros’ strategy became the wildly profitable franchise movie strategy we’re now familiar with, whereas Jeff Zucker eventually got fired from NBC. A similar philosophy could be applied to your career, doing big things simply and well could accelerate your impact as opposed to small, distributed actions.
4. (Meditation) Have you ever tried meditation? If so, you probably encountered your mind wandering off and the feeling of guilt/anxiety from doing so, just like the guilt of spending your Sunday watching Netflix but it does not stop you from pressing next episode. It bothered me when I tried meditating. The thing is, a wandering mind is a human mind I later learned. It gave us as a species an evolutionary advantage (and in my above excerpt about Pythagoras lead to a whole new field). It also made us go over and over again on what happened in a meeting yesterday or how the party next week might turn into a disaster. I learned that meditation is not about stopping these through sheer force of will. It’s only to spot when your mind has wandered off one way or another, and then bring it back to here and now.
5. (Psychology) ‘Our conscious mind likes to think that it is the oval office when in reality it is the press office’ – Jonathan Haidt, author of The Righteous Mind. I cannot get over how brilliant this quote is. I’ve previously discussed how we usually have no clue why we made one purchasing choice over another, this quote encapsulates much more than that. If you ever read ‘Thinking, Fast and Slow’ by Daniel Kahneman, you know our brain makes an overwhelming percentage of unconscious decisions or shortcuts that we are not aware of. Our conscious mind likes to think that it is in charge at all times, but in reality, it serves more of a communications function: trying to explain why we made certain decisions and hoping it’s the truth.
6. (Marketing) One of the first things you learn in marketing is the 4Ps (product, price, place, promotion). Around 70 years ago it accurately described most of what marketing was about. What you sell, for how much, where, and how. Sadly over the decades marketing control of the 4Ps has been decreasing. Many departments are reduced to nursing just one of them – promotion. While one could argue that is the natural evolution of the discipline, the reality is that it reduced the voice of marketing in most organisations. If you leave marketing out of pricing, then you’re robbed of insight into consumer needs (as discussed in our first insight). Remove influence over place, and you risk decisions being made based on cost rather than customer experience. Remove marketing from product, and you get innovation for the sake of innovation. Marketers should not sit idly and prove their value in each of these areas.
7. (Business) Businesses use marketing to jump on bandwagons without realising their actions are opposite to their doing. VR, AR, blockchain, crypto, smart glasses, now metaverse –business world crazes that come and go. More often than not, marketing is employed to figure out how the business could present itself within these platforms. Usually to detrimental results. One should stop whether these channels have their customers (in large numbers), how it fits within their overall strategy, and the type of message it would send. Strategy before tactics.

Fun things to click on:

Could it be possible to create a machine that makes any drink in your home at the press of a button? Well, apparently it is real and it’s called the “molecular drink printer”. Web3 is gaining a lot of coverage these days, here’s Ian Bogost’s take.

Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.

Loving this newsletter? Then why not share it with your friends.

Speak soon,

Tom

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SD#7: price promotions, how not to get fired, and seafood restaurants

February 27, 2022

Hi friends,

Welcome to the seventh edition of Seven Dawns, a weekly newsletter on marketing, psychology, copywriting, productivity and everything in between.

Our seven ideas this week:

1. (Business) In 2019 digital ad spending in the US for the first time surpassed traditional media (print, TV). In 2023, it is estimated to take up twp thirds of the advertising space. What surprises me every time I read about it is the share that the big three dominate in that pot. In 2018 I wrote how Google together with Facebook takes around 60% of all online advertising market share. With the addition of the new entrant Amazon in the mix, the three control the majority of ad money digitally. Not just paid search, but all of online paid advertising. Staggering!

2. (Marketing) Price promotions as a strategy very often fail to achieve what they intended to do. Another learning from the brilliant work of Byron Sharp and his Ehrenberg-Bass Institute. A price promotion will often lead to an immediate peak in sales but will have little impact on long term sales & brand growth. The sales increase during promotions is often driven by brand loyalists anyway, instead of new users which should be your main goal. Promotions tend to pull sales forward so you may get a dip in sales post-promotion. It also re-educates consumers into expecting a promotion the next time they’re buying the brand. If your goal is to increase sales and penetration then price promotions do the opposite. However, they do serve a purpose if they’re there to please your retailer relationship and keep your product on the shelves.
3. (Psychology) The best insurance to not get fired is to be conventionally logical in every decision you make. ‘No one got fired for buying IBM’ didn’t start as the official slogan of the company. But when it gained traction among corporate buyers of IT systems, it became what some consider the most valuable marketing slogan in existence. What it shows is that business decisions do not always come down to choosing the best product. It may very well be down to choosing the product that is least likely to be bad. Conventional logic ensures job security.
4. (Social media) Everyone knows there is a considerable amount of fake profiles on social media. However, it always amazes me when I hear the sheer number of them. According to Statista, over 16% of all Facebook accounts are either fake or duplicates. That’s over 400 million user profiles that Facebook identified as ‘fake’ or ‘duplicate’. Can you imagine the real number including those that are not recognised by their detection methods? All of those accounts usually serve a purpose, whether to propagate lies or alternate statistics (number of likes, followers, ad views etc.).
5. (Philosophy) ‘The heart has its reasons which reason knows nothing of’ – Blaise Pascal. The idea that thoughts and feelings are not working in harmony has many implications. Pascal, who was a physicist, philosopher, inventor and mathematician, looked at it from a mathematician’s point of view. But I also love it because it can reinforce what we discussed in previous newsletters – consumers post-rationalising their decisions.
6. (Psychology) Seafood restaurants exist by the seaside not because it is easier to get a variety of fish for your restaurant there, but because fish tastes better by the seaside. If you had to buy a bulk of different fish for your seafood restaurant, you might think that seaside towns are a great source. But in reality, fish wholesalers might only specialise in certain types of fish, the quantities they want to sell might be larger than you need, or the sheer selection available in a single small fishing town simply might not be enough. However, if you went to a fish market in London, you might be able to find every fish you need and buy the quantities that you need for today. So why are there so many seafood restaurants by the sea? Because psychologists have shown that we enjoy fish eaten by the season more than if it was anywhere else.
7. (Marketing) Brands are almost indifferent in the eyes of consumers. Based on long-term research, the much-quoted Ehrenberg-Bass Institute also showed that brand differentiation is not as important as originally thought. In the majority of categories, consumers do not see the differences that brands are trying to communicate via their USPs (unique selling points). Instead, marketers should focus on brand distinctiveness that will make the brand easily identifiable and memorable. Similarly, for brand measurement, brands should focus on measuring how unique and easily identifiable their brand assets are instead of differences in brand image.

Fun things to click on:

Open Zone Map is the world’s first comprehensive attempt at mapping every single Special Economic Zone. Here’s a fun article how Paul Giamatti broke the California wine industry.

Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.

Loving this newsletter? Then why not share it with your friends.

Speak soon,

Tom

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SD#6: innovation, restaurant psychology and Tesla

February 20, 2022

Hi friends,

Welcome to the sixth edition of Seven Dawns, a weekly newsletter on marketing, psychology, copywriting, productivity and everything in between.

Our seven ideas this week:

1. (Marketing) Marketers have a tendency to be extremely short-term focused. There are some obvious reasons for that with stock markets demanding results here and now (i.e. finance pressure), sales having to hit their quarterly goals, marketers being obsessed with optimisation. However, the revolutionary work of Peter Field and Les Binet proved us that marketing needs two types of campaigns – activation (short-term, product focused) and brand (long-term, creative focused). Despite the split, majority of marketers get obsessed with optimising their campaigns right from the get go. The reality is that creative campaigns never work on short term results and thus should never be measured over the short term. Leave them be, optimise later.

2. (Business) It feels like the world is moving at light speed. Our world has changed dramatically in the last four/five decades and we like to attribute technological advancement to that. But if you look at it closely, there has been very few new innovations within these decades, only improvements of what we have already. Faster cars, more efficient planes, better fridges, better computers etc. What’s happening within the blockchain, web3, crypto space is definitely intriguing and you hear talks how it will revolutionise our digital space, but what really excites me are the advances we will find in psychological space. Screens telling us how quickly the next train/bus will arrive have changed the way we look at commuting way more than an increase in the number of trains running per hour. Renaming pilchards to Cornish sardines increased demand for the fish from 7 tonnes in mid 90s to 7000 tonnes in 2018. Making a train 20% faster might cost millions of dollars, while making the train journey 20% more enjoyable comes at little to no cost (e.g. fast Wi-Fi). What other large scale psychological opportunities are out there?
3. (Marketing) Most B2B selling is done not by proving that you are better, but by sowing fear, uncertainty and doubt around alternatives. Brands aren’t there only to distinguish good products, they are there to keep away from the bad ones as well. In the Soviet Union (where my parents grew up), most of the manufacturing was done in brandless way. A factory was given a target for how many shoes need to be made that year. A different factory might have been given the same target for the same shoes to supply the population. If your shoes broke after the first day, there was no way you could complain to anyone as there were a number of factories making the same shoe. Likewise, the next time you went out to buy shoes, you did not know which one to avoid, which one produced the poor shoe for you last time. At the same time the manufacturers didn’t have much of an incentive to improve their products because other factories might ruin their reputation. Brands are there to decrease the likelihood of us choosing a bad product. In a brandless world, we would have no way to reward good companies.
4. (Productivity) Habits of reflection and persistence form habits of success. Humans love habits. Our lives are a reflection of our habits. How fit I am right now is a reflection of my habits. How happy I am is also a result of my habits. What I repeatedly do ultimately forms the person I am. But habits don’t come into our lives easy and forming the good ones can be a challenging task. One of the most powerful habits that I find to incorporate are ones of reflection: finding opportunities to reflect on yesterday’s/last week’s happenings is a habit with a multiplying effect. You’ll notice trends when you succeed implementing other habits or how you could get back on track with them. Combine that with perseverance and you have a recipe for success.
5. (Psychology) Restaurants have been present in our world for quite some time now. All this time has allowed them to learn of psychological tricks that we might not know they’re pulling us. For example, it is known that adjectives in menus such as ‘succulent’ add no meaning to the dish but add how valuable we might perceive it. Removing the pound (£) symbol next to the price increases the amount you’re willing to spend. Placing food in a very large plate (despite the actual food amount being the same) makes us feel like we are eating less. Using small plates makes it feel like we are eating more – note how all-you-can-eat restaurants will give you small plates.
6. (Business) In the 70s, Sony was on the brink of releasing a music player that would change the way the world listens to music. The brilliant product designer working on the Walkman at the time decided not to add a recording button to the player. People were confused, adding the button would come at a fraction of a cost but add additional features to the device. The product designer pushed back with a hard no. A recording button would have distracted users from the main function of the device (to listen to music on the go). By reducing the number of uses for the device, they clarified the purpose of it. Sometimes less is more. Not adding extra functionality to an item can help communicate the main function.
7. (Marketing) Throughout the 2010s, we had a number of entrepreneurs from the tech background grow mega companies (think Tesla, AirBnB, Uber, Instagram). Due to their founder’s tech background they often held the beliefs that companies don’t need marketing, a great product is better advertisement than anything else. Tesla is one of the most common examples of similar-minded people to use. Tesla’s lack of advertising may have defied the odds because of Musk, but it can’t last forever and nor can be adopted easily by others. Uber was another no-marketing policy rebel, but in 2016 realised that word-of-mouth is not enough to spread your product, launched a marketing campaign and hasn’t looked back since.

Fun things to click on:

Wordle has taken the world by a storm, here’s a quick recap of how it happened. If you lack image editing skills like I do, this is going to be your new favorite tool. A collection of 52 essays people loved in 2021 via a Twitter thread.

Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.

Loving this newsletter? Then why not share it with your friends.

Speak soon,

Tom

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SD#5: instincts, statistics, and gratitude journals

February 13, 2022

Hi friends,

Welcome to the fifth edition of Seven Dawns, a weekly newsletter on marketing, psychology, copywriting, productivity and everything in between.

Our seven ideas this week:

1. (Marketing) In one of my previous newsletters, I spoke about brand loyalty as one of the most overused metrics/concepts in marketing. The 80:20 rule (Pareto law) could challenge brand loyalty for that claim. In various conferences, you hear marketing leaders proclaim how the bottom 80% of customers deliver only 20% of the brand’s sales, thus focusing only on that top 20% makes sense. Byron Sharp in his book ‘How Brands Grow’ again proved this law to be untrue. In reality, over long periods of time, across multiple brands and countries, the Pareto share comes closer to 60:20 (over a short period of time it is as low as 40:20). The implications are that, despite most buyers being occasional customers, they still account for over 40% of turnover. Focusing on these light buyers will be the primary source of growth and a huge portion of your revenue for the future.

2. (Psychology) Last time I also discussed how rationality has entrenched the business world into one way of thinking. We discussed the implications of it, but why do we behave that way? Philosophers and social theories have long pondered the place of rationality in human behaviour. While it is still up to debate, one idea I heard focused on how our instincts are inherited but rationality tends to be learned. If we teach ourselves to post-rationalise after making our decisions, that kind of makes sense? Or is this me post-rationalising it myself?
3. (Marketing) One of my favourite quotes of all time comes from the advertising legend David Ogilvy – ‘people don’t think what they feel, they don’t know what they think and they don’t do what they say’. One could write a whole article to deconstruct this quote (should I?), but the main point is that whether we like it or not, we are irrational creatures. We behave spontaneously to minimise required thinking and then post-rationalise our decision if we’re ever asked. These insights are particularly dangerous when marketers employ market research to survey potential clients. Surveys ask us to describe why we did certain things, but all we end up doing is post-rationalising what we think happened. This leads to inaccurate decisions being made following research. People might say they chose a specific shampoo bottle because it seemed like the best value one, or that they liked the smell, or because it had sustainability certification; in reality, our brain made that decision way before we thought any of that. Perhaps our parents had a similar colour shampoo during our childhood, or our last partner had a similar smell. Reasons are many and unbeknown to us.
4. (Marketing) Display advertising could be the most confusing area within digital advertising. There are generally two ways display advertising is bought by companies – via an ad network or programmatic. The two are quite different: going via an ad network means engaging a third party that has agreements with a vast number of websites and buying advertising slots from them. Whereas programmatic is an automated way via algorithm-based technology, almost like an auction, to place your advert where you want and at the best price. Ad network is the one full of fraud, where millions of pounds are lost every year into the overly complicated abyss of display advertising.
5. (Economics) Economic theory has shaped the world we live in today and there is no understatement saying that. That being said the way economics sometimes looks at numbers can be deceiving. It might count 10 people doing 1 thing the same as 1 person doing the same thing 10 times. 10 people purchasing 1 broom might be counted exactly the same as 1 person purchasing 10 brooms. The first scenario is a plausible one, whereas the second might require a check if the person is ok. The real issue appears when we use such counting in large scale business decisions.
6. (Psychology) Keeping a gratitude journal increases your happiness levels. Studies have found a robust connection between higher levels of gratitude and wellbeing, including protection from stress and depression, more fulfilling relationships, better sleep and greater resilience. Simple things, such as writing down a daily list of three things for which you are grateful, can increase life satisfaction, decrease worry and improve body image.
7. (Education) Over the last few decades, the price of higher education has gone up by 1400% but the product has largely remained the same. This sector has one of the highest needs for innovation and shake-up (together with medicine). US Ivy leagues have acceptance rates of 4% to 10%. A university president bragging about rejecting 90% of applicants is tantamount to a homeless shelter taking pride in turning away 90% of the needy that arrive each night. Scott Galloway, one of my favourite entrepreneurs (plus professor of marketing), believes that higher education goals should not be about taking the 1% and turning them into billionaires. Instead, our collective goal should be taking the bottom 90% and giving them a shot to be at the top 10%. We need to dramatically increase admittance rates and dramatically reduce tuition costs. The only losers in this situation would be higher education deans and directors.

Fun things to click on:

Is pineapple on pizza good? Marvel or DC? Is Die Hard a Christmas movie? Let’s settle this. Some crowdsourced advice for when you’re stuck on a project. Pinterest predictions on 2022 trends.

Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.

Loving this newsletter? Then why not share it with your friends.

Speak soon,

Tom

in:

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SD #4: rationality, double jeopardy law, and writing

February 6, 2022

Hi friends,

Welcome to the fourth edition of Seven Dawns, a weekly newsletter on marketing, psychology, copywriting, productivity and everything in between.

Our seven ideas this week:

1. (Business) ‘Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally’ (J. M. Keynes). The majority of marketers (and business) thinking is based on presumptions/logic, rather than evidence. What I mean by that is that majority of meetings happening today are stuck in the prism of rationality. If proposed ideas are logical, then that is accepted as the truth. If they’re not, then you better not even suggest them. So many opportunities are missed because they do not always follow logic. But who on earth would voluntarily agree that their idea is not following logic?

2. (Marketing) Double jeopardy law within marketing – small companies get punished twice, they have fewer buyers and smaller loyalty. In other words, as market share declines, both penetration (awareness) and brand loyalty drop at the same time. It is one of the most important laws laid out by Byron Sharp in his book ‘How Brands Grow’. The implications of this law hold as brands both grow and decline and it showcases that brand growth comes primarily from penetration.
3. (Psychology) I’ve been trying to get better at empathising with people that have different ideas. Something I keep reminding myself is that most of our experiences/ideas are influenced by two things: the surrounding context at the time and our past experiences. It doesn’t come easily, but you start to recognise the power in doing so.
4. (Marketing) There is one metric within marketing that gets way more attention than it should. Brand loyalty. In every marketer’s career comes a life when they are either asked to or decide to work on customer loyalty (think loyalty cards, reward points etc.). The common misconception is that reducing the churn of your customers can be a cheap and efficient way to increase profitability. The reality (based on science from Byron Sharp’s ‘How Brands Grow) is that loyalty programmes are usually a waste of time and resources. 100% brand loyalty does not exist and trying to achieve it is fruitless. Instead, marketers should focus on market penetration.
5. (Growth) At the start of this year, I was looking at what skills I want to work on this year. Then I started looking at how I could acquire those skills. Outside the usual online courses, mentorships, qualifications, one area that gets overlooked is identifying someone in your close surrounding who is good at that skill and learning from them. Near-peer learning solutions are popping up and scholarly articles are increasingly talking about the benefits of it for both students and teachers.
6. (Writing) When I started writing my blog posts a couple of years ago, I’ve become a lot more receptive to how other writers engage the reader. I noticed one thing that good writers do – they describe the surrounding, the context in which things are taking place to a point where you can imagine being in the same room with them. Whether that comes in creative writing or professional, good storytelling goes a long way.
7. (Marketing) Brands often look at the competition and think that if a customer does not choose their product today, they will choose a competitor’s one. The reality is that companies share a significant amount of buyers with other brands and those buyers are incredibly similar to buyers of others. You think Coca-cola buyers are very different from Pepsi? Or that a Pepsi buyer today won’t buy Coca-cola tomorrow? The biggest opportunity for brands is to target these ‘light’ buyers, to increase the likelihood of them choosing their brand today by a minuscule amount.

Fun things to click on:

I am not a big fan of podcasts and I never listened to Tim Ferriss show before but I thoroughly enjoyed his conversation with Balaji Srinivasan on crypto, personal freedom, wealth and warfare (it is slightly outdated but still relevant). Here is a Twitter feed of people selling a mirror.

Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.

Loving this newsletter? Then why not share it with your friends.

Speak soon,

Tom

in:

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SD #3: creativity, Zeigarnik effect, and annual reviews

January 30, 2022

Hi friends,

Welcome to the third edition of Seven Dawns. I hope you will learn something new today. Let me know if there is something you would like to hear more of or if you’ve you learnt something fascinating this week. Now onto the newsletter…

Our seven ideas this week:

1. (Marketing) I spent most of my career doing B2B (business-to-business) marketing and I sometimes get asked why it gets so little attention compared to its B2C (business-to-consumer) sister. The simplest answer is because marketing was born out of B2C. Most of us can recall adverts promoting Coca-Cola, Heinz mayo or Mr Clean. Not many of us can remember an IBM or a Salesforce ad, despite them reaching TVs as well. Marketing was born out of adverts for these big consumer organisations.

2. (Marketing) Creativity in the advertising world has been declining for years now. I’ve written a whole article on it but one of the key issues we face today is that people try to measure creativity the same way they measure other business metrics. Sales, revenue, return on investment, conversion rates – they’re great metrics to use to measure your profitability, but if you attempt to use the same maths for creativity you will run into a problem. Look at creativity holistically, what benefits are you reaping from better creative?
3. (Psychology) People tend to remember and be affected by unfinished tasks, in psychology it is called the Zeigarnik effect. Use this to beat procrastination as once you start something, you will be more inclined to finish it. Once you’ve made a start, however trivial, there will be something drawing you on to end it.
4. (Growth) I admit I only completed my annual review a few weeks into January (I should have used the Zeigarnik method to start earlier), but I was once again reminded of how powerful annual reviews can be, whether in business or personal growth. Plan them in advance and make a tiny start early to be drawn back to it. If you need inspiration on how to get started, try out this template from Ness Labs.
5. (Marketing) In the marketing world, we have a tool/channel called programmatic, which is a fancy way to describe automated bidding on digital banners that you see on most websites. The premise of this type of purchasing has been to make life easier for publications that want to sell space on their website but don’t want to deal directly with every advertiser. An intermediary (Google) connects advertisers and publishers so all of this can happen instantly and a publisher gets paid fairly for selling that slot. In theory that sounds great. In practice, 50-70% of programmatic spend by advertisers does not reach the publisher and it is one of the biggest frauds occurring in today’s world. Billions of dollars are wasted ‘in the abyss’ of programmatic as it became unnecessarily complicated.
6. (Internet) If you’re in marketing or have your own website or a little business on the side, I’m sure you’ve looked at ‘competition’, who your audience might also go to. In the digital space though, we are all competing against ‘desktop’ time for consumers. Amazon shopping competing with Netflix, Tesco online grocery shopping competing with YouTube binging, my little blog site competing with everything else you could be doing on the internet.
7. (Psychology) The rumour that some people are more right-brain or left-brain is a myth. The myth is rooted in a tiny bit of real science. We know that the right and left sides of the brain do specialise in different kinds of tasks, but the divisions of labour in the brain are a lot more complex than left and right. Maths, for example, requires logic and thus is often said to reside in the left brain. But maths is also a creative endeavour as well as a logical one. So a mathematician will not have any dominance of one side of the brain. Neither will a painter or a musician.

Fun things to click on:

The most brilliant essay I have ever read on personal wealth comes from professor Scott Galloway – The Algebra of Wealth. I try to re-read it every once in a while. The power of self-reflection at work. Did you know most private planes can be easily tracked using publicly available information? Well, this Twitter profile tells you the location of Elon Musk’s private plane.

Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.

Loving this newsletter? Then why not share it with your friends.

Speak soon,

Tom

in:

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SD#2: marcomms, peak-end heuristic, next big thing and branding

January 23, 2022

Hi friends,

Welcome to the second edition of Seven Dawns. I hope the first one made you think or taught you something new. If not, let me know how I can improve or what you would like to hear more of. Now onto the newsletter…

Our seven ideas this week:

1. (Marketing) So many plans I hear of in marketing start with the channel (’let’s launch a Facebook channel’ etc.).Communications should only take up 5% of marketing, but it is taking up the majority of discourse. Try to move the conversation towards the other 4Ps (product, place, price, promotion), strategy, research.

2. (Branding) The value created in consumers heads is much more valuable than the physical value of a product. Brand building has so much more value than just contributing to the sales; it can increase the price consumers are willing to pay, it makes your company a more attractive employer and it means your sales team has an easier job getting through to prospects and so much more.
3. (Psychology) Peak-end heuristic – people remember the peaks and the end when it comes to rating experience. Use this in your next presentation, pay special attention to the peak and the end of your presentation that will be most memorised by the audience.
4. (Business) Disruptive things are hard to predict. However it pays a lot more money to talk about them. Jeff Bezos was once asked what he thinks the next big thing in the business world will be. He said a more important question to ask is what will not change. You can build a business on things that will not change, but people are not as excited to talk about that.
5. (Branding) Brand purpose is getting a lot of attention these days and it is mostly black and white. People either believe it is core to any business (ahem Unilever), or they believe it is complete bullshit. The truth might sit just in the middle. If you’ve done your research and see brand purpose as a great opportunity, there are no reasons why you shouldn’t go through with it.
6. (Marketing) I often struggle to get my head around the difference between efficiency and effectiveness. If you’re like me, I found one simple way to look at it through a podcast I was listening to: efficiency relates to ROI and short-term results; effectiveness relates to long-term business results (price elasticity, non-ad buyers).
7. (Marketing) One of the smartest things a business can do during a recession is to double down on marketing. Most companies reduce their marketing budgets during recessions, but those that don’t (or do the opposite) have been proven to reap tremendous rewards through market share gain post-recession. Unilever is a perfect example of this (company that survived many recessions).

Fun things to click on:

A brilliant collection of microhabits to incorporate into your day (don’t attempt all of them at once though). I spoke to the founder of GoMeeta this week, it is a platform that connects small businesses with technology, sales, and marketing experts for short consultancy work. If you are an expert in something you can advertise your work for an hourly fee.

Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.

If you’re loving this newsletter, then why not share it with your friends?

Speak soon,

Tom

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Newsletter

SD #1: branding, angry customers, Dunning-Kruger, and crypto

January 16, 2022

Hi friends,

This is my first edition of Seven Dawns. As promised, every week I will send you seven short bitesized learnings that I found interesting and I hope you will too. Let me know if you have any comments or thoughts after reading.

Our seven learnings this week:

1. Brand is about trust. That is why peer recommendations and reviews are so important, customers need evidence that they can trust your brand. If you can show it in other ways, then that’s an instant win.

2. Following best practices means that you will never be the best and will end up in the sea of averageness. If you do end up looking for examples among other companies, work your hardest to improve the thing you copied. A lot of successful brands nowadays are improved copies of something that did not work.
3. Angry customers are the best customers you can have for feedback. Value every angry customer as an opportunity to improve things others will not tell you.
4. When it comes to consumers making a choice, making the wrong choice in B2C leads to regret, in B2B it leads to blame. If you buy a Pepsi bottle for the first time and don’t like it, regret for making a poor choice kicks in. If you choose the wrong supplier for your business, you will be blamed for the choice. That is why B2B decisions tend to focus on risk-aversion.
5. A little interesting fact from psychology that I did not know had a name – the Dunning-Kruger effect – a known cognitive bias that people with low expertise in a subject massively overestimate their knowledge of the subject.
6. Most items that we have today are improvements of things from around the 60s and before instead of new innovations. Faster cars, more efficient planes, better refridgerators, radios, TVs, computers, you name it. Businesses today have realised that the R&D cost of improving something is much smaller than inventing something new.
7. The key marketing task is to make a brand always easy to buy for every buyer; this requires building mental and physical availability. Well known principle in marketing popularised by Byron Sharp’s book How Brands Grow. Building mental availability requires reach, distinctiveness (clear branding) and consistency. Building physical availability requires breadth and depth of distribution in space and in time.

Other fun things to click on:

I’ve been fairly late into the crypto craze, but this intro into cryptocurrencies has made it a lot easier to understand. Advertising legend Bob Hoffman released this programmatic poop funnel and it is absolutely eye-opening. Having a tough day? Here is a fun joy generator. 

Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.

If you’re loving this newsletter, then why not share it with your friends?

Speak soon,

Tom

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Newsletter

Why your data is failing you

On September 4th 2002, with their team tied 11-11 against their opponents Kansas City Royals, the Oakland Athletic’s manager Art Howe decided to sub in first-baseman Scott Hatteberg.

Hatteberg took a second-pitch ball from Royals reliever Jason Grimsley, firing the ball deep into the night to send the Coliseum and its fans into euphoria as this act meant the Oakland Athletics had won 20 games in a row. 

It was history for the Oakland A’s. It was history for Major League Baseball (MLB).

“How can you not be romantic about baseball?” asks Brad Pitt’s Billy Bean in the Academy Award nominated film ‘Moneyball’.

The Oakland A’s accomplished their remarkable success without the budget of any of their top challengers or predecessors. They achieved it by crunching some numbers and having the guts to stand behind them. None of the earlier MLB teams have attempted to do that. It was ballsy. 

It revolutionised baseball. It revolutionised other sports as well.

One could see the admirable story about an underbudgeted team’s success; others might see the power of data and how it is changing the world.

How can you not be romantic about data?

The International Data Corporation predicts that the amount of data in the world will grow from 33 ZB in 2019 to 175ZB by 2025. With so much data at our disposal, it is difficult for us not to dream about our own Moneyball moments.

After all, if we are gathering so much data, surely we can use it to make better predictions, right?

Bullshit.

We like to think that all data is good data, but the sad reality is that it is not.

In 2019, MIT, GroupM, and Melbourne Business School set out to test the accuracy of programmatic data, focusing on the two most commonly used data points in B2C marketing – age and gender.

They found out that the gender metric is accurate only 50% of the time. In other words, marketers would be better off flipping a coin. What’s worse, it turns out that gender is actually the most accurate metric out of all of them. For age, the accuracy drops down to 25%. The more niche you go, the less accurate the data becomes.

The adtech industry is the crème de la crème benefactor and victim of all of this. Billions are being wasted due to ad tech fraud and poor data being used. When Peter Weinberg, Global Lead of LinkedIn B2B Marketing Institute, asked Dr. Augustine Fou, the world’s leading expert on ad fraud, the simple question: ‘‘If the situation is that bad, is it true that digital marketers are reaching the wrong people?’’ Dr. Fou said “No, it’s much worse than that. The problem isn’t that marketers are reaching the wrong people. The problem is that marketers aren’t reaching people at all.”

A whole essay could be written on the adtech industry and the poor practices there but I won’t delve into that black, fraudulent rabbit hole in this article. If you wish to learn more, Dr Fou and the Ad Contrarian, Bob Hoffman, are great sources to follow.

So what does all this bad data mean?

Well, a study from IBM found that poor data quality costs U.S. businesses just a small sum of $3.1 trillion per year. 

A recent study by Dun & Bradstreet concluded that 19% of businesses had lost a customer by using inaccurate or incomplete information – a loss even higher in industries where customers have a high lifetime value.

According to Zoominfo, 94% of businesses suspect that their customer data is inaccurate. In B2B sales, that poor data quality is responsible for wasting over 27% of sales team time. 

Research by Royal Mail Data Services revealed that organisations believe inaccurate customer data costs them, on average, 6% of their annual revenues. Perhaps more worryingly, over a third were not sure how much it costs them.

Over a decade ago Marsh, R. found that $611 billion per year is lost in the US by poorly targeted digital marketing campaigns and 33% of projects fail due to poor data. That was in 2005 – the numbers nowadays would have only increased.

As a result, it is no surprise that only 12% of marketers trust the accuracy of their data, according to Forrester. 

So businesses and marketers know that their data is bad and that it is costing them money, surely they would have this as one of their top priorities to solve for the coming years?

Not even close.

Nielsen surveyed global marketers for the 2019-2020 Nielsen Annual Marketing Report and discovered that audience targeting, ad creative, and audience reach all ranked higher than data quality in their list of priorities. Brands even valued data quality less than agencies did.

All of that bad data is being used to make decisions and measure results.

The problem becomes even more amplified as businesses use all that data to attract investors and prove their appeal. And once it is used, barely anyone will go back and say that the data they used to attract thousands of investments is bullshit.

Imagine you’re the CEO of a fast growing company. You’ve raised millions of dollars as venture capital using reports that show things like website visits, customer acquisition costs etc. If you suddenly find out that your whole business case depends on numbers that are as accurate as a drunk co-worker trying to prove he is a reigning dart champion, what would you do?

So we know the problem is ginormous and everyone is ignoring it. But say someone wanted to do something about it, what could be done?

Firstly, move your data as close to you as possible. Evidenced by the adtech industry, the further away from the publisher you are – the more the chances are that your data will be a product of fraud. You have to move towards first-party data.

Secondly – and I know this might be a hard one – talk to real human beings. When Amazon was just a book retailer and Jeff Bezos wanted to know how he could grow his business, he did something remarkable. He asked them. He sent hundreds of emails and asked what could Amazon sell them to make their lives easier. He received hundreds of different responses and the answer was evident – Amazon should sell all of it.

He kept that close link to the customer by making his email address public and allowing customers to email him directly. Back when Amazon was small, I am sure he read most of those incoming emails. He did not look at second or third-party data regarding what pisses off consumers, he simply allowed people to tell him.

Thirdly – accept that a portion of your data will become outdated every year. MarketingSherpa found that 25-30% of data every year becomes obsolete. If your lead generation campaign converted 10% of prospects last year and now you are targeting that void, is it a surprise that your conversion rates are dropping?

Lastly, marketers should accept a level of uncertainty. When digital marketing exploded over the last two decades and became an integral part of our communication mix, bringing all the data to our systems, we became accustomed to wholeheartedly trusting that data. 

Sometimes marketing works in the world of the unknown – we make future predictions using the best data and research that we can possibly find. Do your best to gather your research, accept a level of uncertainty, and admit that you are making a prediction with a level of uncertainty.

We all want to find our Moneyball moments and I respect marketers that do. But if you want your bat to hit the baseball, then make sure you’ve checked it is not broken and you know where your opponent likes to strike.

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Business, Marketing

The creativity crisis

“Lucky Strike. It’s Toasted” marks Don Draper to a group of clueless Lucky Strike chiefs in the hit show Mad Men. “We have six identical companies making six identical products. We can say anything we want. Everybody else’s tobacco is poisonous, Lucky Strike is toasted.”

They say the best strategy is one that is simple to explain but difficult to come up with. You could say the same about creativity, the best ideas are the simplest ones once you hear them, but they are the hardest to create. And marketers are becoming worse at it.
 
From 1996-2008 creatively awarded marketing campaigns were around 12 times as efficient as non-awarded ones. Since then, this has fallen alarmingly.

 
Why is marketing (and society) experiencing a creativity crisis?

Peter Field, the above graph’s author, argues that the main culprit of the decline has been marketers’ obsession with return on investment (ROI).

And I cannot blame marketers for that too much, finding and demonstrating the return from your advertising campaigns is an extremely attractive prospect for several logical reasons:

  • It lets you compare your campaigns on a single metric
  • It gives you a chance to present this number to prove marketing’s worth
  • It allows you to optimise your campaign through testing

On the contrary, it also makes you focus on the short term results. As most marketers do not measure their campaigns beyond 6 months, it creates an unintended consequence of favouring those campaigns that perform over the short term.
 
These short term campaigns also tend to be of a certain type more often than not – highly targeted, aimed to pick the low hanging fruit and primarily digital campaigns. 
 
The shift towards these short term campaigns naturally comes at the expense of long term ones that tend to be more emotion-focused and demand marketers to employ creativity in a far greater fashion than the short term digital counterparts.
 
These insights were confirmed by the findings of Media in Focus: Marketing Effectiveness in the Digital Era, which analysed 500 ‘digital era’ case studies of marketing campaigns in recent years, including 120 cases from 2014 to 2016.
 
If long term campaigns are on the decline and these long term campaigns are more likely to demand creativity out of marketers, it is of little surprise that there has been a dip in overall creativity.
 
In many markets, most of this ‘long term’ money is being diverted into search and social media channels. Marketing investment in these digital channels has never stopped growing throughout the last decade, whereas marketing budgets have been way more conservative in their growth.
 
In 2020, online ads were projected to account for more than half of the $660bn forecast to be spent globally on ads this year for the first time. The traditional media was expected to record a growth of 1.5% year to year, its first growth since 2011, but growth on internet advertising was projected to be at 13.2%. 
 
These projections were made before half of the world’s countries went into some sort of lockdown which led masses of advertisers to switch even more of their budgets towards digital. It would not surprise me to see online advertising overtake traditional media by a significant amount in 2020.
 
“It’s a huge mistake,” Peter Field says. “We’re not anti-search. Paid search has been one of the founding stones to improvements to efficiency, but we’ve just gone too far, we’ve put too much money into it.
 
“With the money to fund 25% year-on-year growth in it, that money has got to come from somewhere, it’s not coming from Father Christmas, it comes from brand-building budgets.”
 
And it is not just small advertisers that fall into this trap, who may have fewer resources to track their results.
 
Last year Adidas admitted that it has been over-focusing on ROI and digital metrics and have now started a journey to introduce more brand-building campaigns (long term, emotion led).
 
Five years ago the sports brand didn’t have any econometrics, its attribution modelling was based on last-click and there was no brand tracking. It also focused on efficiency over effectiveness. All of that led Adidas to look at short-term KPIs and how to optimise ROI (i.e. reduce the costs) rather than what was in the best interests of its brands – long term growth.
 
“The reason for that is short-termism because we are trying to grow sales very quickly,” said Simon Peel, global brand director at Adidas to Marketing Week. “We had a problem that we were focusing on the wrong metrics, the short-term, because we have fiduciary responsibility to shareholders.”
 
It is not just Adidas, Gap has initiated a shift back to brand building after admitting it had made the mistake of advertising its discounts rather than its brand on Old Navy and was now seeing the negative effects.
 
Booking Holdings and TripAdvisor have also said they are moving their spend back to brand marketing after realising they were investing too much on performance marketing.
 
All this shows how over-focus on ROI and short term metrics has led brands to shift budgets to digital and marketing overly specialised in optimisation rather than creativity. What makes matters worse is that is only part of the problem – creativity, in general, has fallen out of fashion in marketing and organisational environments. 
 
Creativity used to be the oxygen of marketing. David Ogilvy, Bill Bernbach, Leo Burnett and many great advertising minds of the 20th century defined not only the advertising world during that time, but entire societies that we witness in today’s world (through consumerism).
 
Their ideas about consumers, brands, copywriting, imagery are prevalent until today. Whole hordes of copywriters sought Bernbach’s approval on their work. And arguably it wasn’t just creativity that made these advertising gurus different, but it certainly helped. 
 
Today’s advertising, on the other hand, has evolved to this:

Creativity gurus disappeared from today’s office because it is a lot harder to put the effects of creativity on a spreadsheet. You can measure if your PPC ad leads the prospect to sign up for your newsletter, but you cannot measure that easily if your imagery within the newsletter pop-up leads to that conversion (unless you did significant A/B testing).

And it is not just the brands and the agencies that are to blame. The emergence of digital advertising bullies Google, Facebook and Amazon in the ad space has accelerated the problem.

The advertising supply giants have given the tools for marketers to reach highly targeted audiences with small budgets, which has inadvertently created a pool of marketing talent that is focused on optimising these channels. They know how to optimise their PPC ads that deliver more views, more clicks, more conversions but lack the grounding in how to make the ads elicit an emotion.

Today’s office has also become incredibly rationalised. One of my favourite marketers of the current era, Rory Sutherland, wrote a book on this called ‘Alchemy’ and I would strongly encourage everyone to go and read it.

If something cannot be easily rationalised by the stakeholders it is unlikely to be approved. John M Keynes said worldly wisdom teaches that it is often better for the reputation of oneself to fail conventionally than to succeed unconventionally. One could argue that creative ideas do not always follow the conventional path.

Also, marketers have become too obsessed with media strategy at the expense of creative strategy. Most conferences and marketing sites have been flooded with digital vs traditional, extreme targeting vs mass reach, PPC versus paid social etc. Marketers have forgotten that creative execution is much more important than media selection. And that creative strategy should come before any media is even discussed.

Digital marketing experts estimate that the average American is exposed to around 4,000 to 10,000 advertisements every day. It doesn’t matter if the ads are seen before a Youtube video, in front of a TV set or in your bed while scrolling through your phone – if the advertisement does not catch the attention of the user, everything else doesn’t even matter.

However, marketers these days tend to start their meetings with what channel they might use rather than what content they will put on those channels. This is deeply flawed as plenty of research pieces have shown that the actual creative is more important than the channel.

The creativity crisis is not solely resting in the business landscape though. I would argue that our society has created an environment that is hindering our ability to be creative.

If you think about your most creative thoughts, when do they appear? For me it is most likely on a walk through Hyde Park, on a bus ride aimlessly staring through the window or while waiting in line at the grocery store. None of them occurs while being in the office. None of them occurs while staring into a phone’s screen as well.

They say Ogilvy did not write a single ad in the office. I would also bet he would not write any while scrolling through the phone during these times.

But in today’s society, our minds have become engulfed in multitasking and switching between tasks the same as a supercharged puppy that cannot decide if he wants to chew your shoe or chase the birds or catch his tail.

Our minds are constantly switched on. From our phones to our laptops to our tablets, from one task to a different one, there is no ‘white space’ for the brain to produce any unplanned thoughts. This white space is necessary for us to let it wander aimlessly and in turn train our brain to think outside the usual scope.

And if we are not training our mind to produce these thoughts, it is of little surprise that when we do want to be creative, we are useless at it.

One of the main myths that people have around creativity is that they have to be inherently born with some sort of creative spirit to have it (I used to think so as well). In reality, all of us are creative to a different degree and we portray that in our relationships, our work, our cooking and our hobbies. Likewise, we can train our mind to be more creative just like we can train it to meditate or to play sudoku.

Here are a couple of tips that I will be implementing:

  • Create opportunities for ‘white space’. When we are not working on a specific task, the Default Mode Network activates within the brain (sometimes called the Imagination Network). By letting our mind wander aimlessly, we are giving the chance for the default mode network to do its magic. Find moments to give our brain some ‘white space’, whether it is during a walk or our commute, avoid the temptation to pick up the phone and fill the brain into actively thinking of something.
  • Adopt ideas from other areas. Neil Gaiman, arguably one of the most creative writers of our time, says that much of his creative inspiration has come from outside the world of writing. He credits musicians Lou Reed and David Bowie as two of the biggest influences upon his work, and he says that anything can be used as inspiration for writing. Don’t limit yourself to only the influences in your area of work. Drink from a wide-brimmed glass of creative inspiration.
  • And finally – practice. Rex Jung, a professor of neurosurgery at the University of New Mexico who studies aptitude, intelligence and creativity said “the more raw material you have, the more time you devote to developing a skill set, the easier it is to improvise. It takes expertise to have enough material to draw on to be creative. So find an area that interests you, develop an expertise in that area, and then start creating and develop something extraordinary.”

in:

Creativity, Marketing