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Coronavirus won’t change anything

How many times in the past couple of weeks have you read an article that claimed ‘Coronavirus will forever change the way we work’; ‘Coronavirus will forever change marketing’; ‘COVID-19 will change advertising forever’? In my case, it must be hundreds of times.
 
Businesses do not like change.
 
Change within a business usually requires two things – senior leadership approval and someone passionate enough to carry it out.
 
What does senior leadership care about or listen to? Shareholders. What do shareholders care about? Quarterly results, sales, revenue, year-on-year change and short term gains.
 
Would a shareholder want a business to invest time and money now for potential returns in the distant future? Maybe.
 
Would a shareholder want a business to implement processes or technology that has not been adopted by others? This raises the question… ‘but how do we know it will work?’
 
The story changes on one occasion – when something breaks. As Tom Goodwin (a man that knows a lot more about change than me) said in a podcast “Businesses would rather wait for something to fail than to try to improve it.”
 
If the IT systems fail and customers leave, that gives a clear indication for change. If the local supplier had a bad year and fails to deliver the goods to your warehouse (which in turn reduces your revenue), that gives a clear need for a change.
 
What if we find someone that is really passionate about change or technology and make them carry out the task?
 
Imagine you are in your 20s or 30s, you are an unstoppable idea creation machine, you are passionate about what you do and keep learning about what you could improve in the business.
 
Your passion gets you to slowly climb the career ladder until you finally reach the top table. The place where you can finally present all your ideas on how to change the business for the good.
 
Throughout all those ladder climbing years you also got lucky and now have a spouse. You also have two kids to take care of. Your paycheck has shrunk due to the mortgage for your house and your new car is depleting your wallet faster than your kids’ university fund.
 
Will you put your career at risk to make your business change? Or will you make small changes to keep the company afloat and your family safe?
 
Now let’s say someone is brave enough to say ‘let’s do it’. They do their research, they plan the changes, what the new structure will look like, how the new systems will work, they roll up their sleeves and get to work. This work doesn’t go unnoticed by a different company and they persuade the ‘man of change’ to switch sides.
 
So the original company was just left neither with the new technology in place nor with the previous one. The man that could do the job just left and it might take months to find someone new. Once the new person is onboarded they might decide to take an even ‘better’ approach that will add a new process or system in place.
 
Then you will need to hire someone else that can map all the three technologies together and you are left with a mess. Not to mention all the costs incurred that could have been spent to boost revenue. Will they do it again?
 
Businesses would rather wait for something to fail than try to improve it. And if something unexpected happens, like the COVID-19 or the financial crisis, the government will simply bail the company out. Why should you change for the future when you have government insurance?
 
Now there is a case for an organisation to change when new inventions are introduced and adopted by society.
 
A couple of days ago, in a distant London borough and completely adhering to the social distancing rules, I was taking my bins out and met my neighbour at the doorstep. He is a very smart man, has over thirty years of experience in the shipping industry and constantly travels to various conventions to consult other businesses.
 
We got into a discussion on how things might change after all this is over. He said he experienced how quickly businesses can change: “One day the company said that they are all going paperless and the whole business switched that instance. One day they said they will no longer have secretaries for senior execs, you have to do your own work. And it changed within a couple of weeks. And the list goes on and on.”
 
But this pace of change has dramatically decreased in the past forty years.
 
We often like to say that we live in the age of transformation. Things are changing rapidly all around us and technology is developing at the speed of light.
 
But is it really?
 
If you were living in the 1950s and belonged to the ‘upper middle class’, more likely than not you were able to afford things that most of your neighbours couldn’t – a fridge, television, a car, a washing machine.
 
These things were unaffordable by many and they were life-changing material. Think about what your life would be like without a fridge? Or a washing machine?
 
Now think about all the things that were invented in the last 40 years. Faster cars, more efficient washing machines, powerful computers (some that even fit into your pocket). You can now fly from London to Sydney without transfers and your seats may be a tad comfier than decades ago.
 
But most things that we have now are improved versions of something invented decades ago. The pace of change has dramatically decreased and I could write a whole piece just on that (or you can just read about it from someone that puts their thoughts more eloquently, reference at the end).
 
And with innovation stopping a couple of decades ago, the rest of the world has followed suit.
 
So why do we have all these writers proclaim that ‘Coronavirus will change society forever’, ‘Forget about the way you did marketing before COVID-19’ etc.?
 
Partly because we like to shout about change. Things dying. Things taking over. Blockchain, AI, Voice, Chatbots, VR, AR. Marketers in particular are obsessed with the next big thing. Look up any book, podcast or video by Gary Vee and you will hear about five things dying (TV especially) from an excerpt of twenty minutes.
 
And partly because it pays a lot to say those things. If you went up on stage and spoke about how things are relatively ok now, not much happening but things are moving in the right direction, you would probably see numerous yawning faces in the audience and people on their phones probably checking what their neighbours dog did this time.
 
But as Tom Goodwin said, if you went up on stage, put some rock music on, showed a presentation with explosions and proclaimed that ‘things will never be the same’, you will likely be invited back and get paid huge sums just to do it over and over again.
 
Things are changing but they are not changing fast enough for us to get excited about it.
 
So once it is all over, the social distancing is over, the recession passes, we will go back to business as usual in most things. But I don’t want to end this opinion piece with you thinking I am the biggest cynic there is.

I do think this crisis has shown how communities get close together to help each other.
 
I am fortunate enough to work for a company that fosters the communal spirit within. I have witnessed teams organising virtual drinks, virtual pub quizzes, teams creating videos to uplift other colleagues, and teams organising virtual goodbyes at the end of the day. I believe this brought us closer together.
 
I believe there are many other companies that experienced increased sense of belonging and better collaboration because of the virus. We hear of businesses changing their product lines to provide goods that are needed. We hear of millions of volunteers signing up to help those in need. And we hear about all the sacrifices people are making just to help others.
 
And I do believe that this will leave an impact on our lives when we come back to normality. Business hates change and things change a lot slower than we like to think, but businesses are run by people and people have responded to this crisis with kindness.

For further reading:

Has progress in science and technology come to a halt? – Michael Hanlon in aeon

We need to invent something better than Machu Picchu – Rory Sutherland in Spectator

Tom Goodwin’s site

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Business, Marketing, Productivity

Why marketers are slow to embrace the eSports industry

One month ago, on the evening of 28th of July, a 16-year-old Kyle Giersdorf took home $3 million (£2.4M) by becoming the first Fortnite World Cup champion. It was no easy task for the teenager (in-game nickname Bugha) as the competition attracted more than 40 million players attempting to qualify for it and 99 others making the shortlist for the live tournament in New York.

The World Cup was a major success for the organisers by bringing over 2.3 million concurrent viewers across YouTube and Twitch (an Amazon-owned video game-play streaming service), making it the most-watched competitive gaming event so far. In the backstage of all this, there were also brands trying to cash in from the success. However, despite the huge reach, low cost and highly engaged audience, it was evident that companies are still reluctant to market within the eSports industry.

American food delivery company GrubHub sponsored two teams – Team Liquid and TSM – during the Fortnite World Cup and used the gaming environment to get new users for their app. Instead of being a one-off experiment for the company, the event forms a wider eSports marketing strategy for the company. Speaking to AdAge Jessica Burns, GrubHub’s VP of brand marketing, noted the opportunities they have in the industry “They are sequestered, in a way, with their skills – (food) delivery is part of their lives. When you look at a game like Fortnite, they have so many players and the impression levels are through the roof.” It seems like a natural fit for GrubHub to market in the industry.

If we look at some of the bigger brands, last year Gillette showed that they recognise the growing influence of the gaming community by partnering with one of the most popular Twitch streamers Guy Beahm (Twitch name Dr DisRepect). It is worth noting that Guy used Gillette assets as part of his online identity for a number of years through his theme songs and slogans, but it was only recently that the pair formed an official partnership. It almost seemed as if the idea had difficulties gaining internal approval…

Unfortunately, examples like GrubHub or Gillette, are not that common. Tuning into a channel on Twitch you will be greeted with advertisements for video games, computer hardware or gaming chairs. Regular FMCG brands – those that contribute to an awful lot of world’s digital ad spend – are rarely seen. Why are marketers so slow or reluctant to recognise the potential?

You might say the reach of these platforms is not big enough and that it is not sufficient to attract the big-buck advertisers. Yet, last year Twitch’s concurrent viewership was higher than that of highest-rated US cable channels – CNN or MSNBC. This year the number is slowly approaching the 1 million average viewer count, and has earned a mention in the widely anticipated Mary Meekers Internet Trends Report for a trend to lookout for. Twitch is just one platform – add YouTube Gaming, Mixer, any Chinese streaming service (Twitch is banned in China) and you get the picture. According to Newzoo statistics there are at least 380 million eSports viewers worldwide. If you consider gaming as a whole, the number swells up to 2.5 billion people. For the world of marketing, that is obsessed with millennials, how can we not see the channel as an opportunity?

In my opinion, the big hurdle in getting brands to consider eSports and gaming as their marketing channels is the old stereotype of the industry. The view that most gamers are teens sat in their bedrooms hooked to their consoles with little purchasing power is an old one and incredibly outdated. Looking at the gaming industry as whole, surveys with samples from the UK, US, Germany and France put the gender split of gamers at 50/50 and their age at mid-30s. If we look at individual games, we can find examples where the audience has a larger female audience than male or find games that attract mainly 30+ audience. How can we stereotype an industry of millions of people into one very narrow definition?

This brings me to the second point, which is widely related to the first – there is a lack of knowledge about the gaming industry. Most marketers have little knowledge about the industry and thus might opt to go for something familiar rather than explore something new. I have to partly agree with their approach as jumping into the ship without much research could lead to disastrous results. At the same time, when does an opportunity become too big to miss? One of the biggest risks (and opportunities) when going into this industry is that each game tends to attract a different kind of audience, thus research beforehand is crucial. The same way audiences of football, rugby and tennis are not identical, likewise those of Fortnite, Starcraft and Candy Crush are different.

If I stay in my role of playing devil’s advocate, I will admit that the audience is also notoriously known for being averse to regular advertising and requires a bit of creativity to engage it. Speaking at Advertising Week Europe last year, Yvonne Hobden, consumer marketing lead at HP UK, summed it up that the gaming “[…] audience is so quick to judge. You get it wrong and that’s it – it’s game over. You’ve got to take your time to understand it, don’t rush it.”

But taking the time to understand the audience and engage it can reap huge benefits. Gamers understand the benefits of brands coming into eSports and reward companies that do it right. There are plenty of examples of brands doing it right. Washington Post got politicians to play video games with them live while being interviewed. Snickers put it’s “You’re not you when you’re hungry” campaign to live display by having video game streamers perform worse as they got hungrier only to be saved by a Snickers bar. Red Bull opened the UK’s largest public eSports studio giving an environment to nurture aspiring gamers. These are the brands looking for ways to engage the audience instead of pushing ads in front of their faces.

Luke Cotton, director of consultancy Code Red Esports, on a separate interview to Marketing Week, had the perfect analogy “If you sponsor Manchester United you might get exposure, but nobody loves Chevrolet because they sponsor Man United. That’s different with eSports. The fans appreciate that brands enable them to get a load of really high quality free content…”

Last hurdle that is keeping marketers from this industry is gaining internal buy-in. Translating the data of gamers to the top executives is a tough task and one that requires time for perceptions to change. Last year Ford did something that no previous automaker has done. They launched their new car at a gaming event. While Ford and racing might seem like a natural fit, speaking to Marketing Week Ford Europe’s executive director of communications and public affairs Michael Baumann admits that it was no easy task to convince the idea internally “At first people have this impression that gamers are teenagers and therefore not relevant to our target audience. But when you look at the data, you’ll find gamers are much older than you think. When we started to present more of the data […] we could convince people internally a bit better.”

One of the ways to achieve that buy-in is to showcase the opportunities that are non-existent elsewhere. If you take Twitch as an example, the platform gives you a chance to see live reactions to the advertisements being played or communicated via influencers. It is a source of organic feedback at a time when other data sources are under increased scrutiny for their validity. Combine that data with analytical tools and you will have a unique source of feedback from the community that will save you thousands of pounds in market research. The highly segmented audience of different games also gives an opportunity to reach a targeted audience without micro-profiling people through Facebook or Google that gets such a bad reputation for advertisers these days.

There are plenty of opportunities for marketers willing to experiment in these channels, despite the lack of investment within the industry so far. The key is doing your research beforehand and understanding the segments within the industry… As with every marketing channel.

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Business, Marketing

Has CSR fallen off marketers’ radar?

In September 2015, the United States Environmental Protection Agency (EPA) discovered that Volkswagen (VW) cars sold in US had a software programmed to activate emission controls of its diesel engines during an audit.

From 2009 to 2015, VW sold about eleven million cars worldwide installed with the software. During those years, it launched many high-profile marketing campaigns promoting the small emissions of their diesel cars. It also won several environmental awards, including Green Car of the Year awarded to the 2009 Volkswagen Jetta. Its Corporate Social Responsibility policy claimed: “As far as Volkswagen Group is concerned, bearing its social responsibility has long been at the heart of our corporate culture.”

Despite it being just two and half years since the scandal broke out, if you search for articles about corporate social responsibility (CSR) among traditional marketing sources, you get results that date back between 3-5 years.

So why has CSR fallen off marketers’ radar?

Some would say CSR never managed to convince Chief Executives of the value it can bring to the business. Despite numerous attempts by researchers to show that CSR has a clear and direct impact on consumers’ choice, there were always echoes of organisations saying it’s nothing more than a luxury, which is too costly when people’s jobs are at stake and it’s a gimmick with no real substance behind it.

With CSR, there have always been struggles to convince the customers that what your company is doing is genuine. In 2013, Unilever’s chief marketing officer, Keith Weed slammed “posturing” brands that develop CSR initiatives simply to sell more products and services”. Similarly, in 2016 Pernord Ricard CEO, Alexandre Ricard warned companies that consumers can sense when CSR claims are “bullshit”. It has been a recurring theme throughout and a problem that was addressed by the Harvard Business Review in their article “The truth about CSR“. The authors argue that companies should instead refocus their initiatives and “align company’s social and environmental activities with its business purpose and values”. Deloitte’s Head of Corporate Responsibility, Bob Thust, had similar thoughts: “When woven into the fabric of an organisation, CSR can be a powerful force in winning customer trust and building a stronger brand and business”. Yet companies continue to launch marketing campaigns that claim to be on a mission to save the world, when all they’re doing is selling coffee.

It could also be argued that CSR has become deeply embedded into company culture and there is less of a novelty or need to boast about its initiatives. 10 years ago there was a need for articles like this to convince brands of the importance of CSR. 5 years ago, Sainsbury’s was given a lot of praise for being the first FTSE 100 company to place the same importance of its CSR committee as all other plc board committees.

However, later studies have shown that consumers, especially millennials, take large corporations being involved in good corporate citizenship for granted. It has become common practice that most large organisation should have CSR programmes in place and have webpages or resources dedicated to its commitments (the question whether they fulfil everything they claim to is a different story).

Lastly, it is evident from news sources of your choice that marketers have been overwhelmed with other priorities recently. I am referring to the digital world, especially media agencies and their murky practices that I’ve touched upon in my last piece here. Over the course of 14 months, we had 2 CMOs from the largest advertisers – P&G and Unilever – make 3 speeches about media landscape and the need for transparency. It is no surprise that CSR has moved down the list of priorities.

Despite its potential to influence consumers’ choice, CSR continues to be pushed down the list of priorities – partly because companies do not believe its return on investment and partly because consumers (righteously) have stopped believing in what companies are saying. Unless organisations take a step back and align their initiatives with business purpose, we should not expect CSR to make a comeback anytime soon.

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Marketing

The growing influence of the ‘digital duopoly’

According to eMarketer, Google and Facebook accounted for about 63% of the digital advertising market in the US; 49% in the world. MediaPost suggests their market share could be between 60% and 70% in the US using data from various sources. Scary numbers?

A GroupM presentation at the UBS Global Media and Communications Conference in New York stated Google and Facebook will end 2017 with 84% of digital media investments (excluding China). How about now?

Still not scary enough?

Enders Analysis estimates that Facebook and Google accounted for 89% of all growth last year. Not only they are growing fast, the rest of the industry is actually retracting. If you take out these two companies from the picture, the digital market witnessed a negative growth and the duo are rising at the cost of other players in the market.

Wherever you look, the point is clear that the two technology giants control the majority of the digital space and their control is only growing.

Why should this concern us?

Their growth threatens the existence of media agencies. Yes, that is a bold statement, and you might think that’s a good thing, considering all the transparency issues media agencies have been having in recent years (if you haven’t read already, Marc Pritchard summed it up well). Murky communication with their clients, no set standards on reporting and a complete loss of trust is forcing media agency clients take their services in-house.

Crucially, the vertical teams at Google and Facebook are capitalising on the damaged relationships between media agencies and their clients by approaching the big buyers themselves and completely skipping the middle man. I mean, why shouldn’t they? Increased profit margins and higher influence in client relationships sounds pretty good to me.

Also, if the media agency methods are so questionable, why should we care about the existence of the media agencies? Any economy professor could tell you that duopoly is bad for consumers (or clients in this case). With only a small number of companies to choose from, prices stay high and influence remains unchecked. Despite how murky media agencies approaches have been in the past they still, carry the voice of their clients and keep the big two in check.

Okay, I’m still not convinced that we should care about the two, you say.

As the power of the duo grows, we can expect even more measurement errors and brand safety scandals. They’ve repeatedly reported wrong numbers to advertisers and directly or indirectly affected the money that companies give to them. In other words, they’re marking their own homework and charging the teacher for the amazing grade they’re getting. As the great Ad Contrarian, Bob Hoffman, put together “They make shit up, imbeciles at agencies believe it, dimwit clients fund it, and – bingo – more ad money.” Surely, you’d think, as they grow they will be able to invest into better digital measurements and reporting but the reality is that they simply do not care enough about making them right, because no one is pressuring them to change.

Last September, an analysis by Guardian revealed that Facebook claims to reach more young people than exist in the UK, US and other countries. The error was not in the hundreds, but in the millions! And what was the response from the marketing community? Non-existent. Have a look what WPP boss, Sir Martin Sorrell, had to say. And if a company, marketer, government or a local drunkard decides to finally say something, Facebook and Google can point to their involvement in the many organisations (e.g. Coalition for Better Ads, The Interactive Advertising Bureau etc.) that speak a lot about transparency, yet do so little to tackle the buried transparency or privacy issues. It is safe to say as Google and Facebook continue to grow we can expect even more ‘careless’ errors.

Lastly, the GooBook (Google and Facebook) continue to grow their influence over news, yet sway away from any responsibility of being a publishing agent. More than two-thirds of American adults — 67% , to be exact — “get at least some of their news on social media,” according to data released last year by Pew Research Centre. Social platforms including Google, Facebook, Snapchat and Twitter monetise, host, distribute, produce and even in some cases commission material, but continue to deny being a publisher. As the revelations continue to unravel about Google or Facebook’s role in distributing fake news, political ads from Russian operatives or racist ads, it becomes clearer that they need to be recognised as publishers and adhere to the same accountability of spreading information. Yes, I will admit, I did welcome Zuckerberg’s recent New Year resolution of ‘fixing Facebook’ this year, yet it makes me think how many times we’ve heard this before and nothing happened?

As a strong competitor entering the space looks further away than ever, there is little chance that the duopoly will be broken any time soon. Thus we, the marketing community, need to acknowledge  the growing power of the two and demand accountability for their increasing influence in news, digital metrics and advertising space.

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What’s next for social media marketing? Rumours and changes for 2016

As we approach the second quarter of 2016, let’s take a step back from the craze around Virtual Reality and look at what revelations are shaping around social media this year.

Facebook

Starting off with the big giant Facebook.

Last year Facebook gifted us with Dynamic Product Ads and Lead Ads that brought increased engagement and lower costs for many businesses. This year Facebook focuses around the launch of Oculus Rift, but by no means marketers should expect to be abandoned on their journey to reach customers’ hearts.

Last month Facebook changed their News Feed Algorithm (again) and based it on the probability the user will interact with the post.

The same month company released Canvas Ads – a feature that sets to battle slow loading speeds of mobile websites. Why mobile? Mobile e-commerce is an area that brands are yet to take advantage of (only 2% of purchases are from mobiles right now, according to Emarketer) and slow loading speed is the top reason people abandon a website.

And for advertisers that want to engage with more than just an image, Facebook plans to release Live broadcasting feature. With Periscope mounting their user base to 10 million last year, Meerkat accumulating 2 million users, Twitch having 500,000 people watching live streams at any given moment, and Snapchat having 8 billion video views per day, it is no surprise that Facebook is investing into the Live video industry.

Twitter

The 10 year old Twitter is facing challenges left and right at the moment. After the recent announcement of the first ‘growth-less’ quarter for the company, CEO Jack Dorsey is looking for ways to engage users, get back on the growth path and please increasing demands of advertisers at the same time. So what changes can we expect from Twitter?

Twitter, just like Facebook, redesigned its timeline algorithm to show relevant content as opposed to most recent one. Thus, you might have to reconsider your Twitter campaign if its only goal is to post several times per day. Quality over quantity.

With Twitter Moments released last year, we are yet to experience the monetization of the feature. The big update allows users to look at any big events or news happening around the world real time. While brands are yet to be able to take advantage of the update, it is wise to keep those Real Time marketing strategies nearby in case the change does happen.

Character increase from 140 to 10,000. This is a big one. The beloved feature of many users is set to be changed. The news has produced a lot of criticism already, however, Twitter’s CEO Jack Dorsey assured that the company wants to give people “… more utility and power.” What does this mean to marketers? It means that Twitter could become the next blog website. Or it could become the medium for all the storytelling creative…

More ad options. The launch of ‘Conversational Ads’ last year was praised by many marketing executives, however, the social media giant is still far from the selection of Facebook.

Lastly, we can expect the roll out of ‘Buy Now’ button outside of US, more image/video options in addition to Twitter Camera (only available to celebrities now), and much, much more tweets!

Instagram

Timeline changes. Yes, Instagram as well. Not surprisingly Instagram is following its social media mother Facebook and changing the timeline to display posts based on relevance instead of recency. What does this mean for the brands? Linear storytelling can no longer be used and the quality of content will once again prevail.

More ad options. Instagram has accumulated over 200,000 advertisers after opening up to brands last September. It would be safe to assume that we will see more ad options for the channel and not only in an image format. Guinness launched the first 60-second video ad on Instagram during the Superbowl this year and short videos are producing significantly higher levels of engagement than images. Brands understand the power of video and it is a trend we will likely see for the advertisements.

Messaging Applications

While not necessarily social media sites, the rumours are too big to be left out. It might change the way we see social media in the future.

6 out of 10 most popular apps are messaging apps. 49% of US mobile users use mobile messaging apps (eMarketer). Why does that matter to marketers when there are little to no advertising options?

Last year Facebook launched Facebook M, a virtual assistant set to compete with Siri and Cortana. Integrated into Messanger, Facebook M can help you find a birthday gift or order a meal from a takeaway. It is a hybrid between artificial intelligence and people (handling the difficult demands) making sure your request is fulfilled. Moreover, rumours are saying that Facebook will take a step further and integrate a bot store to Messenger. A bot store would allow customers to download specific programs that interact with Messenger and allow them to order a pizza, reserve a table, or order a taxi by sending a message (Uber has already announced that users will be able to order cars through Facebook Messenger in 2016). The bot store could completely change the game as it would make individual apps meaningless. However, it is a question how open consumers would be to use messaging apps for their everyday purchases. The upcoming F8 conference in April should answer our questions whether the rumours are true or not.

WhatsApp is also rumoured to open up to brands this year. Unlikely in the form of third-party advertising and more as a notification service, nevertheless, brands need to be ready to take advantage of the 1 billion monthly users pool.

Takeaway:

To sum up, there has been many exciting changes to social media recently and even more to come. The trend seems to be that the social media giants are taking control into their own hands over what content to show which leads to improved targeting and personalization. Video and live streaming are slowly stealing the spotlight and with Virtual Reality devices coming out this year, it is unlikely to change anytime soon. The rumours surrounding messaging apps would allow even closer relationships between customers and brands, yet, they are only rumours for now.

What other social media changes and rumours do you know about?

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Marketing