My Brain Hurts by Y&R

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My Brain Hurts by Y&R - Presentation Transcript

  1. THE DIGITAL REVOLUTION IS LEAVING THE CONSUMER BEHIND MY BRAIN HURTS
  2. We must help By: Simon Silvester consumers simon_silvester@eu.yr.com tel: +44 20 7611 6356 understand For new business enquiries, please technology better. contact: Yossi Schwartz yossi_schwartz@za.yr.com tel: +27 11 797 6314 If we do not, the Helen Kimber digital revolution will helen_kimber@eu.yr.com tel: +44 20 7611 6750 fail. For press enquiries, please contact: MY BRAIN HURTS Bernard Barnett Our jobs, house bernard_barnett@eu.yr.com ‘The new net boom’ announces Fortune. tel: +44 20 7611 6425 prices, pensions, the In California, venture capital is flowing. future of our nations The emailable version of this document is After five years in the doldrums, tech is back. all depend on the at pubs.yr.com/brain.pdf And it’s back big time Last time it was only dotcoms, telecoms and computers economic growth Podcasts and video podcasts to accompany that boomed. this book are at pubs.yr.com/podcasts that digitization is Today virtually every industry on Earth is experiencing rapid change. bringing. Hollywood is digitizing. Airlines are digitizing. Helping consumers Fast food service is digitizing. to grasp technology Soon, with the arrival of radio ID chips on every package in every supermarket, the humble food and drink is thus the defining industries will digitize too. issue of our time. But But as the world again gets excited by all things tech, perhaps we should pause. MY BRAIN HURTS 1
  3. And remember how things ended in 1999/2000. When a trillion dollars of technical development crashed into a mountain of user indifference, and tech entered a depression. Millions of people lost their jobs and their pensions. And it could happen again. How could it happen? Digital technology gets twice as powerful every eighteen Lest we forget the months. 2000/1 dotcom bust. And it’s predicted to keep doing so for the next two decades. No industrial change in history has happened as fast as today’s digital revolution. As this happens, we tend to forget that there is one part of the digital world that hasn’t gotten any more powerful. Not just in the past few years. But in the past ten thousand. The mind of its user. Strain on the brain Each year, consumers are presented with new, more complex digital products and services. But each year, their ability to understand them does not rise. Twenty years ago, a phone was a simple device, with one In 1980, televisions had dial. a few buttons and a volume knob. No longer. Many of today’s phones are packed with complex, badly understood functions. How many of these commonly used tech symbols do you recognise? Do you know the precise meaning of any of them? 2 Y&R ADVERTISING
  4. IMAGINE IF ALL MARKETING WAS Twenty years ago a television had one dial and a volume knob. Today’s AV systems have tens of each. LIKE TECH MARKETING: The technology is leaving its consumer behind. ‘Hi honey, I’m home!’ And it’s getting worse Meanwhile, technology keeps moving on at high speed. ‘That’s great dear! I’m cooking Digital devices will be ten times faster and more capable XRC-30 tonight.’ within five years, and perhaps one hundred times within Twenty years ago, phones were simple. ‘’Mmmmm – is that with quad- ten. band 3G CDMA and a level 2 There is already a gulf between what technology can do and what consumers - both young and old - can make it cache?’ do. ‘Yes indeed – and would you like As technology surges ahead, this gulf can do nothing a little 802.11g on the side?’ else but grow. ‘I’m licking my lips!’ Not funny ‘Now you just settle We may laugh when consumers fail to understand the full capabilities of their phones, TVs and computers. down with a nice But the consumer’s failure to grasp technology is not bottle of XC-L30K trivial. and I’ll have it on It leads to the vaporization of venture capital. the table shortly.’ It is the issue that is increasingly holding back the whole ‘That’s great digital revolution. honey, I can’t Global growth, and the fate of nations depend on rapid adoption of new technology. wait to taste that It is thus the decisive issue of the early 21st century. delicious SD- RAM!’ MY BRAIN HURTS 5
  5. THE DARK SECRET OF DIGITIZATION The human mind’s inability to assimilate technology is the dark secret of the tech industry: • Research by consumer electronics manufacturers reveals that consumers never touch most of the buttons on the remote controls in their living rooms. • Washing machine manufacturers report that however many programs they build into their washing What does the button with two circles on it What exactly does ‘chaos defrost’ do? machines, consumers rarely use more than two of do? them. • Software companies keep building extra commands into their programs, but quietly concede that consumers refuse to use more than a small fraction. • Banks offer a wide choice of funds in online investment supermarkets, but find that most people don’t even browse beyond the basic options. The consumer simply doesn’t use most of what In the 21st century, you technologically advanced companies build into their need a degree in rocket products. science just to iron a shirt. The consumer holds things back for decades The inability of consumers to understand a piece of technology can hold it back not just for years but for decades. Today, consumers marvel at how they can collect shows What do ‘SysRq’ and ‘Scroll Lock’ mean? Digital devices can get twice as fast - or as confusing - every eighteen months. 6 Y&R ADVERTISING
  6. Consumers only use a couple of on their digital video recorder (like TiVo or Sky+) to play buttons on back later. their remote controls. TV schedules no longer dictate how they use their leisure time, and they love the freedom. But this isn’t the first time digital technology has made this promise. It was already promising time-shift viewing back in 1980 with the invention of the video cassette recorder. It’s just that no one over fourteen could program a VCR to record the right channel at the right time. It took twenty-five years for the electronics industry to design a time-shift viewing device that ordinary consumers could actually use. This pattern is repeated in many other industries. It is thus the pace of consumer comprehension, not the pace of technological change, that will determine the Even teens have litte idea pace of the digital revolution. what most of the buttons on their phones, Consumers struggle with new concepts too computers and Consumer confusion also slows the introduction of new audiovisual equipment do. technological concepts. Sure, consumers can tell you they prefer HDTV to ordinary TV, but when it comes to evaluating really new technological ideas, they struggle: • When the telephone was first invented, many of its early users thought its main use would be to broadcast orchestral concerts. • When email first became popular in the mid 1990s, many CEOs responded by putting an email terminal in their telex room*. • When television first arrived, early viewers thought its Even since the beginning of the century, digital technology has sped up dramatically. Computer chip speeds are already ten times faster. Download speeds are already thirty 8 * Telex was a key business telecommunication system before the arrival of fax. Y&R ADVERTISING times faster.
  7. biggest audiences would go to the newsreels they Time for a change had seen in the movie theater, not to game shows. This booklet challenges the way tech companies 1010 TRANSISTORS do things. THE BURSTING OF THE • And as Henry Ford put it in 1910, ‘if I’d asked my 109 PER DIE: LOG INTERNET BUBBLE customers what they’d wanted, they’d have asked SCALE It argues that they should put the consumer first, 108 DIDN’T STOP for a faster horse.’ not last. 107 TECHNOLOGY The consumer absorbs new technological concepts 106 It uses Y&R’s intensive program of qualitative and Since the internet bubble burst in slowly, and with difficulty. 105 quantitative research, consumer observation and 1999/2000, technology hasn’t 104 analysis to set out some of the keys to successful stopped advancing. Even young consumers struggle 103 communication. Many digital devices are now ten ‘Don’t worry about complexity’ say some tech times better than they were then: 102 SOURCE: INTEL None are intuitive. companies, ‘we’re targeting digitally literate 17 year 2000 2006 olds.’ 1970 1980 1990 2000 2010 Few are reflected in current marketing thinking on the web, in consumer electronics or in telecoms. Typical 300KHz 2000KHz Crap. MOORE’S LAW MEANS DIGITAL processor The keys reflect the ways in which humans have speed Young people may absorb tech concepts faster than TECHNOLOGY GETS BETTER responded to technological advance since time old people over 30, but they still struggle with how to FAST Typical home 56Kbps 2000Kbps immemorial. download make things work. If a technology is digital, that technology speed obeys Moore’s Law. As such, they risk being ridiculed by those within • Y&R’s qualitative research has yet to find a Typical number 22 22 the technology community who regard any solution teenager who knows what all the buttons on their Moore’s Law, first proposed by Gordon of peanuts in a Moore of Intel back in 1968, states that that is more than six months old as being out of Snickers* phone do. the number of transistors on a silicon date. * control • Few can explain even a quarter of the functions of chip, and therefore the speed and abilities of computers double every two But the eternal is eternal for a reason. their parents’ DVD, TV or VCR. years – since revised down to every eighteen months. And genuine marketing insights are no more abundant • And Virgin mobile phones sell because they have today than they were in the dotcom boom. the only pricing plan 17 year olds (or anyone else) Chips have obeyed that law for the past can understand. thirty-five years – and show all the signs Without an understanding of their consumer, of continuing to do so for the next twenty. technologies will struggle. Even amongst young people, it is the pace of Put simply, anything digital can get twice consumer comprehension, not the pace of as good, or as fast - or as unintelligible - The companies responsible for them will stumble, and technological change, that will determine the pace of every eighteen months. industries will die. the digital revolution. And they will do so however good their engineers, But the tech industry has failed to acknowledge this. however smart their manufacturing - and however much money they spend on their marketing. It needs to rethink its attitude towards its consumers and do so fast. 10 Y&R ADVERTISING MY BRAIN HURTS 11
  8. Even in high science, good names are vital. The ‘relativistic gravitationally collapsed massive object’ was discovered in 1916. But it didn’t grab the popular imagination until someone renamed it the ‘black hole’ in 1967. THE 17 KEYS TO CONSUMER UNDERSTANDING Names need to work across cultures: The 1967 worldwide media frenzy around black holes was subdued in France because ‘trou noir’ was French slang at the time for ‘asshole’.
  9. ‘When I listen to music, I like to hum along and tap my feet’, they told him. ‘If other people can’t hear the music I’m doing it to, they’ll think I’m a psycho.’ Simplicity acts like a To communicate the idea, he needed a product missile into the that could be understood in one way only. consumer And that meant it had to have one function only. The consciousness. record button and radio had to go. 1. THINK SIMPLE So he overruled the engineers. And his one-function press and play device went into production. If you want to get inside the Because his new product could only be used in one way, consumer’s head, simplicity young people were forced to take Morita’s intention is the key. seriously. This forced the Walkman into the public consciousness, In the late 1970s, Sony was developing a new consumer and made it a worldwide hit. electronics device. The device would allow people, for the first time ever, to Which means carry round music easily and listen to it anywhere ‘The ideal A device that does one thing well is a much stronger without irritating others. consumer proposition than a complex multifunctional The device was designed to do this – and nothing else. consumer offer, no matter how advanced its specification. ‘But they will still want a record function’, said the electronics So if you want to get inside the consumer’s head, think simple. engineers, ‘and how about a radio?’ But Akio Morita, the founder of Sony, knew that he had device has only 1. Simplicity gets remembered a serious communication problem on his hands. one button.’ In the 1960s, offices flooded with new technology – At the time, young people always shared music, AKIO MORITA, duplicating machines, golf-ball typewriters, telexes and Even government can be wandering around in groups with throbbing ghetto- FOUNDER OF SONY more. simple. Clinton’s 1992 election blasters. But the only machine in that office with one-button team pinned these words to He was asking them to wander around listening to simplicity was the photocopier. their hotel room doors. music that no one else could hear. He knew they would Most companies that made office equipment in the find the concept weird, and would resist the idea. 1960s are now footnotes in history. 14 Y&R ADVERTISING MY BRAIN HURTS 15
  10. Not so Xerox, the inventor of that photocopier. 2. Simplicity builds loyalty Most tech products are so difficult to learn, that those that are easy inspire great loyalty from their users. Nokia gets the highest loyalty amongst mobile phone brands because their 2006 models work without your having to read the instruction manual – and in exactly the same way as their 1996 models. Similarly Canon’s Digital Ixus cameras inspire loyalty because their current seven megapixel model works in When they rent a car, most people can start But most new tech appliances do not work exactly the same it up and drive it without problem. without reading an instruction book. way as their two megapixel model from 2001. 3. Simplicity solves complex problems Even when a product is complex, it still pays to market it simply. When Microsoft was launching the latest Word upgrade a few years back, their engineers A $30,000 car needs an instruction unveiled a product with many new capabilities. book no more than 9mm thick. So why does a wireless router need one It had amazing mail merge, a 3D text graphics engine 30mm thick? and web integration. But Microsoft’s marketing didn’t mention any of these. They focused all their efforts on communicating Most people who use a computer less than The same is true of camcorders – many once a month forget how to use it between families simply forget how to operate theirs. sessions. 16 Y&R ADVERTISING
  11. something quite simple – its ability to make simple • Most national railway automatic ticketing machines spelling corrections like ‘ist’ to ‘its’ and ‘hte’ to ‘the’ as you have simple dialogues – but leave consumers typed. thinking they could have got a better deal elsewhere And the world went to their IT helpdesk and asked for if only they’d known the system better. To satisfy the upgrade. customers, you have to be transparently simple. • Moore’s Law means that software can get twice as 4. You can never be too simple complex every eighteen months. Message to For years internet search engines prided themselves on software designers: making it so is a bad idea. their simplicity. The MP3 player market was flooded Whilst other portals added complex offers and with multifunction devices that played confusing navigation, the search engines stuck to one FM radio and told the time as well as page. played music. Then Apple came in and took 80% of the market with a But all were trounced by Google with its one fill-in box, device that did only one thing. and otherwise blank screen. So So if you want your technology to fly, think simple: • Mobile phones are increasingly easy to make voice calls on, now their software has been simplified. But their airtime packages are still complex. Service providers think they are providing ‘choice’ and ‘freedom’ by offering 25 different price plans. They might attract more customers if they just offered just one good one. • Most online banking sites are simple – security fears make banks keep the functions to a minimum. Not so online share dealing sites. Some don’t display vital information if your monitor isn’t large enough; others are drenched with obscure finance-speak. If online dealing is going to break into the mainstream, these sites need a fundamental rethink. 18 Y&R ADVERTISING MY BRAIN HURTS 19
  12. As mankind’s first lunar module approached the moon’s surface in 1969, its main computer crashed. Today’s electronics consumer is far less tolerant of failure. 2. THINGS THAT DON’T WORK, DON’T WORK Marketing money is wasted on unripe technologies. In 2003, millions of people were captivated by the picture messaging campaigns of mobile service providers. And they upgraded their mobile phone to a camera phone. Then they charged up their phone, took a picture, and sent it to a friend. Very few of those friends ever saw the picture: • The majority of the pictures were sent to phones unable to display pictures. • The networks hadn’t agreed common technical standards, so any picture which crossed networks disappeared. • Many people who did receive the pictures never saw them, because they didn’t know how to open them. 20 Y&R ADVERTISING
  13. As a result, picture messaging failed in 2002/3. So Compare that with the previous great mobile messaging So make sure your technology works before you market technology, the SMS text: it: • Mobile service providers didn’t advertise SMS, as • Is the home wireless network ready for the mass they saw it as a competitor to their lucrative voice consumer market yet? Most routers require a PhD in calls. computing to set them up. • As a result, text messaging grew organically. • Internet telephony is also not quite ready for the ordinary consumer. Congratulations to Skype, who • Young people checked whether their friends had 2G When home networks break are continuing to allow their service to spread virally, down, how do you fix them? phones or not, and only sent texts to those who did. rather than pushing it at an unprepared mass market. • As compatibility grew in the mid 90s, text messaging Networking computers • We’re still waiting for it – the video editing application exploded all over Europe, Africa and Asia, with together can still stump for the common man. billions of messages a year being sent by 1996. even the geekiest of • Within a few years, texting was providing a new consumers. revenue stream of 7% of revenue for mobile service providers. Picture messaging failed, despite hundreds of millions of dollars of marketing because it wasn’t ready. Text messaging succeeded, despite any marketing, because it was ready. Technology producers need to think Sites like eBay and further about this, making sure their Craigslist are hitting technology is ready before they set newspaper classifeds out to market it. hard in the US. Before a technology is ready, no In Russia though, lower computer ownership amount of marketing will make it means that classified happen. advertising is still going Afterwards, not even silence can strong. stop it. 22 Y&R ADVERTISING MY BRAIN HURTS 23
  14. When watches ran fast and slow A similar thing happened with timekeeping in the late 1960s. At the time, everyone had clockwork watches, many of which lost or gained five minutes a day. Daily conversations revolved around the correct time, and adjusting watches and clocks. 3. WHAT WORKS NO LONGER MATTERS ‘Do you have the time please?’ was a standard pick-up line. Then digital quartz crystal technology arrived, When a technology finally promising precise timing. delivers on its promises, The accuracy of clocks and Precise timing caught the popular imagination. watches was a popular topic marketers should watch out. The dialogue of 1960s TV series reflects the of conversation for the two hundred years upto the invention of quartz The late 19th century was a great time for farmers. widespread belief at the time that ever more precise digital watches. Nowadays, it’s New technology – in the shape of traction engines, timing was the way of the future: just not an issue. harvesters and milling machines - was arriving on farms, ‘Negative, captain, the shuttle is landing in 24.8 making them more productive. seconds.’ Farming journals spoke of a new ‘golden age of farming’, ‘You have eight minutes and three seconds to of new heights of food production and of farming at last live Mr. Solo.’ becoming an important, economically vital industry. ‘Arrival in two point three eight six minutes But that’s not what happened. affirmative, Virkar.’ Over this period, agriculture fell from 60% of GDP to But by 1980, everyone had a super-accurate quartz under 3% in some industrial nations. watch, everyone knew the precise time. Farmers lost their power to affect change. Farming And the timing issue – and with it the craze for precise became a small part of the economy. timing - disappeared. Once the problem of adequate food production was The ungrateful consumer solved, it ceased to be an issue. When the main benefit of a technology is delivered, 24 Y&R ADVERTISING MY BRAIN HURTS 25
  15. consumers stop being grateful to companies for providing that benefit. And simply forget that that benefit exists. So watch out Consumers stop being grateful fast: • Mobile network service providers were the darlings of Europe in the 1990s as they let consumers talk to their friends anywhere, any time. But now that call quality is perfect, and everyone has a mobile phone, European mobile service providers are rapidly becoming perceived as little better than the state landline companies that preceded them. • In the 1920s, managing a steady flow of electricity into factories was such a critical issue that most companies had a main board electricity director. Once electricity supplies became secure, he disappeared. Does the same fate await CIOs, now that corporate PC and email systems all work? • With 24/7 global email and intranets, information flow within companies has now become so fast that information is no longer the critical factor holding them back. So are we now in the middle of the information age – or are we watching its end? Mobile phones which read barcodes on the bottom of ads will shortly be the wonder of the West. But they are already taken for granted in Japan. MY BRAIN HURTS 27
  16. 4. BEWARE THE COUNSEL OF NERDS Winning technologies are those that appeal to ordinary people, not just geeks. When Kodak introduced its point-and-shoot Box Brownie camera in 1900, American photographers laughed. They wanted better pictures – and that meant more sophisticated cameras. Kodak’s new offer was little more than a box with a hole at one end. But Kodak had inspired the average American to think that perhaps he could now take photographs all by himself. As there were a lot more ordinary Americans than there were photographers at the time, the brand rapidly came to dominate its market. Tech company employees often Similarly with AOL in the 1990s regard mainstreamers as dinosaurs. Throughout its early days in the mid 1990s, the online community laughed at AOL, with its no-brainer sign-up Some nerds choose to carry a selection of pens in their shirt pocket. Corporate health and safety manuals warn that this habit can be lethal in the event of an automobile accident. 28 Y&R ADVERTISING
  17. process, and cutesy low-tech imagery. As an AOL user you were regarded as pond life in chat rooms. An AOL email address was social death. But AOL had inspired the average American to think that perhaps even he could take the on-ramp to the cyberactive infobahn thing everyone was talking about. And as there were many more ordinary Americans out there than wired people at the time, AOL rapidly became the main dial-up way of accessing the internet. Ten years later, AOL remained attractive to many millions of ordinary Americans – and one of the biggest money earners on the web. Your audience loses its brain What AOL and Kodak understood, and what most tech brands don’t, is that as a market develops, levels of Not all software is designed by nerds for other nerds. On the understanding, and comfort do not rise. On the contrary, computer map on Virgin Atlantic they fall. flights, a dancing Elvis appears First come the nerds, with love of technology, and their as you fly over Greenland. intuitive sense of how it works. Then come the early adopters, excited by the technology, but with slightly less knowledge. Then the mainstream flood in, with their fears and ignorance. Jeff Bezos at Amazon focused firmly on the But a year later, when online purchasing became Finally come the laggards, who just don’t want to feel left mainstream. mainstream, suddenly Bezos’s planning bore fruit. out. When he first launched Amazon in 1997, he Unlike at most other online retail sites, the Over time, as the market floods with new, less tech savvy included a phone number for people who didn’t feel mainstream knew when they had placed an order at confident about transmitting their credit card Amazon. They knew they had an alternative if they consumers, the average level of understanding in the details online, together with rapid email didn’t want to transact online. And they knew when market falls rather than rises. And amongst advice- confirmation that an order had been accepted, was to expect the package. hungry new entrants, the level of tech savvy is even being processed and had been mailed out. And so whilst all other online retailers were losing lower. None of the geeks and nerds who were Amazon’s the mainstream’s trust with their bug-ridden first customers used the phone number; most payment processes and chaotic fulfilment, Amazon found the emails a nuisance. gained it. 30 Y&R ADVERTISING
  18. Companies need to tune their offer to these successive waves of less and less techy consumers. As time goes on their marketing has to get more basic, not more sophisticated. So: • Online banking portals worked fine for their first users in the 90s. But the sort of people who are trying online banking for the first time now aren’t that comfortable with software interfaces. They need to be simplified to cope. • Similarly with microwave ovens. They worked fine Mainstreamers are different: when they were bought by tech-savvy early-adopter In the early days of video in the housewives in the 1990s. But now they’re 1970s, cash-strapped mainstreamers mainstream. Brief to microwave designers: come up plugged their new VCR into their old TV set. with a microwave as idiot-proof as a regular oven. And the real benefit of a VCR to them • Vodafone are currently marketing simplified-interface was that they could, for the first time mobile phones aimed at mainstream people over in their lives, experience the luxury of changing channel without getting out forty. Could such an approach pay off in the digital of their armchair. camera market too? Are you a mainstreamer or some other type of person? Find out in our online personality test at http://4cs.yr.com/diys MY BRAIN HURTS 33
  19. 5. THINK INFECTION How fast a technology passes from person to person is decisive to its success. Between 2004 and 2007, two new devices appeared in the living rooms of the world: the flat panel TV, and the DVR. The flat panel TV rapidly became a must-have item across the world, despite its high prices. But the DVR grew much more slowly over the period - despite the fact that most DVR owners say that it has revolutionized their lives, and despite the fact that any satellite TV subscriber given a DVR never gives the service up. The reason flat panels have a much higher consumer-to- consumer infection rate: • In 2004, the flat panel TV was the high status item in early adopter homes. He talked about the amazing The most successful technologies spread virally from person to person. 34 Y&R ADVERTISING
  20. picture quality; she endorsed its The DVR is growing much more slowly because no one minimalist lines and space-saving can express quite why it’s so good. ability. So And they repeated their sell to every If you want the world to accept your device quickly, visitor to their home. concentrate on making it more infectious: • By 2005, the world was sold on flat • The iPod spread fast because even if you put yours panel TVs. Mr Average was inviting inside your jacket pocket, your white headphones his friends round to watch football on were still visible to everyone around you. Other MP3 it, and extolling its virtues to them. Photography only took off when player manufacturers need to think up a similar people learned to ask their audience Compare that with DVRs over the mechanic. to pose and say cheese. period: • It was the ‘my friends are’ section of the homepage • In 2004, the first TiVo and Sky+ At airports, retailers, and that made MySpace spread like wildfire through owners were amazed by their devices, and found nightclubs plasma schools and colleges. Everyone went out and asked themselves suddenly no longer watching live screens are spreading like wildfire. their friends to sign up and link to their page, television. because otherwise it would be obvious that they • They tried to communicate their experience to their were simply not popular. friends, but couldn’t. Their friends just thought they • The Blackberry spread fast because every email it had a digital version of a normal video player. sent included ‘sent from my wireless BlackBerry • In 2005, DVRs had become more mainstream. But handheld’ by default. Why don’t other again, owners struggled to rave about them to their communications systems brand their output? friends. ‘It lets you pause live TV.’ was the best they could do. ‘How often do I want to pause live TV?’ came the reply. Today, in 2006, DVR owners continue to struggle to articulate what the DVR has done for them - despite the fact that they have moved into a completely new world of on-demand television. The flat panel TV succeeded rapidly because consumers found it easy to infect their friends with the need for one, 36 Y&R ADVERTISING MY BRAIN HURTS 37
  21. THERE’S NOT THAT MUCH GOING ON IN THE WORLD APART FROM BEX TM THE DIGITAL REVOLUTION, SAY Google 99.8 ECONOMIC HISTORIANS TiVo 99.7 We still drive around in automobiles, Nike 99.4 invented in 1899, fly around in jumbo jets iPod 98.6 from 1968, and worry about atomic Starbucks 96.8 weapons invented in 1945. 6. BUYING IS ONLY THE BEGINNING Our best scientists spend their time exploring Einstein’s theory of relativity PlayStation Crate & Barrel 92.3 88.0 from 1915 and the theory of quantum JetBlue 87.2 Successful technologies are mechanics from the 1920s. Ben and Jerry’s 87.1 Because not much else fundamental is Gap 86.7 those that consumers happening in the world today, digital rethink their lives around. technology brands are some of the most Subway 85.6 energetic brands in the world, when Mini Cooper 85.0 Most tech marketers advertise and promote heavily to measured on Y&R’s global BrandAsset Target 74.7 get their consumer to buy their products. Valuator study. Louis Vuitton 71.0 Once that consumer has left the shop, they see their job But not all tech brands are equally Staples 68.4 as done. successful. Some tech brands are less energetic than McDonalds 65.8 But the success of tech products relies massively on others, and the thing that drags the also- Samsung 64.1 whether consumers adopt the product for everyday use rans down is often consumer confusion. BlackBerry 61.2 or not. Imperfect marketing drags tech brands’ Banana Republic 59.6 No tech product succeeds long term if the consumer energy levels down in three key ways: The Body Shop 56.6 buys the product, takes it home and puts it in a drawer. • Lack of consumer understanding of Heinz 54.7 where a tech brand is heading in a Whether they integrate it into their lives is what separates philosophical sense drags down its level MasterCard 52.8 a successful tech product from the rest. of VISION. Chipotle 52.0 • If consumers do not recognise and Domino’s Pizza 51.9 Integrating the video camera respond to a brand’s innovation For instance, most Americans or Europeans using a Sierra Mist 43.8 activities, this drags down its level of video camera will stand motionless, zooming in and out, INVENTION. Blockbuster 43.5 producing boring video. • If the brand doesn’t exude a sense of Amtrak 41.8 buzz, this pulls down its level of Delta Air Lines 40.1 Give that same video camera to a young Japanese woman, however, and the reaction is completely DYNAMISM. Tostitos 32.7 On the right are energy levels for 30 J Crew 32.2 brands in the US. Google is top of the pile. 38 Y&R ADVERTISING Source: BAV USA Jan-Dec 2004
  22. different. Many will start narrating as they use the video camera, interviewing people as they film them, and producing their own personal documentary. The result is much more compelling and shareable. And so video cameras have become a much more central part of young Japanese life than they are in the In Japan, young women integrate technology West. into their lives much more readily than in the Integrating the homepage West. It’s also the difference between ordinary homepages and the homepages people create on social networking sites like FaceBook, Bebo and MySpace. The web homepage has been around for years, but never became a vital part of anyone’s life, because, after the first few hits, no one’s friends could ever be bothered looking at it. It was only when MySpace decided that homepages were a social networking tool – and fifty million teenagers realised that they would never get another date without looking good on theirs - that the idea took off. So Many tech brands should think harder about how The period 1900 to 1940 saw the appearance of the automobile, the airplane, electricity, they want people to use their products. radio and many other technologies. Then they should publicise their ‘usage These technologies changed our grandparents’ instructions’: and great-grandparents’ lives out of all recognition. • Computer manufacturers need to articulate better how their modern In the period 1980-2006 there has been much less change. media-centric computers can change Apart, that is, from the rapid development of their users’ lives. They currently say digital technology. 40
  23. ‘Store hours of TV’. It’s not enough to persuade non- owners to buy. • YouTube.com is attracting a lot of people who want to share the movies they’ve made with their webcam or MP4 recorder. But it has not yet defined how non movie-makers should use its site. They need to sell the ‘YouTube evening’ 7. THE SECOND GENERATION USES as a more compelling alternative to TV. • Camcorders are getting smaller and more robust. DIFFERENTLY Congratulations to Samsung on positioning their latest tiny camcorders as extreme sports recording The true impact of Extreme sports devices. camcorders: technology on a society may Cooool. take a generation. When mobile phones first became popular in the early nineties, the first generation of consumers to use them found they were a very useful part of their social lives. If they were late for a dinner appointment, they could call their friends and apologise from their car. If they made a mistake in an arrangement, they could call the other person and find them. The second generation are different But the next generation to use them do so differently. They no longer make plans in advance, because they don’t need to. They know that all their friends can be contacted at any time because they all have mobile phones with them. And so they just arrange their evening by phone on the go. 42 Y&R ADVERTISING MY BRAIN HURTS 43
  24. For the first generation of users, mobile phones were a helpful aid to their existing social lives. For the second generation, mobile phones have redefined their social lives. Similarly with PCs A similar change happened with PCs. When the first generation of companies bought PCs in the 1980s, they regarded them as a better form of typewriter, and put them on their secretaries’ desks. But the next generation of executives in the 1990s were First generation corporations used all computer literate. email to allow their managers to communicate better. And so their companies gave them the PCs, and gave the secretaries pink slips. When digitization hit, first generation But then Britain’s Arctic Monkeys made Similarly with email musicians called their lawyers. themselves famous through MP3 downloads. First generation CEOs used email to improve communications across their management structure. Next generation CEOs used the improved information flow to flatten command structures, cutting out the layers of management that were no longer necessary. With both PCs and email, the first generation of companies used them to make their existing structures work better. The second generation redefined their structures around Second generation corporations the new technology. eliminated the managers. So Watch the way the second generation use technology for the way it will really impact the world: • Current TiVo users still do most of their viewing live, And singer Sandi Thom made it through Today, savvy record companies use CDs as a webcasts. medium for selling ringtones. 44 Y&R ADVERTISING
  25. as they have TV schedules etched into their brains. But no one will remember TV schedules if they don’t have to. And so the next generation are likely to use their TiVos differently, collecting most of their viewing to watch when they want. Classical ad industry watch out. • Current drivers use satnav as an aid to the mental maps they already have in their 8. CONSUMERS LEARN ONLY heads. But who will bother to memorise a map if they don’t need to? Expect the next generation of motorists to THROUGH DOING be completely lost when Like the generation of schoolkids who forgot how to their satnav breaks down. Every tech device or service today comes with an add one and one to get two because they were instruction manual, which can be up to five centimetres allowed calculators in their math exams, expect the thick. next generation of motorists to be completely lost when their satnav breaks down. Tech manuals are so incomprehensible that some manufacturers pray silently that someone will write a ‘for Dummies’ book to explain how to use their new device. But the problem goes beyond this. Observations show that most consumers never read the instruction book, no matter how well written. The only way most consumers learn is by handling a Instructions for using payphones in South Africa device and trying to make it work. The only way most are visual, because South consumers learn is by doing. Africans speak eleven ‘Plug and play’ was therefore never a manufacturer different languages. Other telecoms companies could strategy. It is just a consumer reality. learn from this. 46 Y&R ADVERTISING MY BRAIN HURTS 47
  26. Consumers fear the confusing What’s more, consumers know they don’t read instruction books. So when they look at a new device and they don’t understand how it works, they tend not to buy it. This means that one of the most useful roles of technology marketing is to explain what a thing does in advance. If consumers feel they understand a device before they buy it, one of the biggest fears they have is removed. This is why tech stores like CompUSA and Germany’s Saturn chain allow consumers to ‘play’ with their wares so freely. Consumers aren’t just playing with them – they are working out how to use them – and thus significantly increasing their likelihood to buy. Similarly with games – giving away the first few levels for free creates a huge market of hooked users, who simply have to finish. So: • The vogue for ‘usability testing’ – rooms full of students surfing to websites and exploring the user- friendliness of their navigation and payment systems happened too late in the internet boom to make a difference to the companies that used it. Usability testing needs a revival. • Most DV camcorders have a ‘demo mode’ for use by retailers. The camcorder cycles through demonstrations of its main features to the delight of browsing customers. All well and good – but a demo 48 Y&R ADVERTISING
  27. mode for use by forgetful owners would also be useful. • And not just in audiovisual equipment - a demo mode would be massively helpful in office phone systems too. • The latest camcorders have ‘easy’ mode buttons that allow users who have never read the manual to use them. More consumer electronics devices, from 9. PRICE DICTATES PERCEPTION satellite receivers to microwave ovens need such a button. Consumers value things according to their price. ‘If the car had developed at the same speed as the computer’, say Silicon Valley geeks, ‘Today you’d be driving from Los Angeles to New York in under four minutes. And the car would cost you less than twenty cents.’ The boast reflects the flipside of Moore’s Law: that digital technology tends to halve in price every couple of years or so, and keep doing so for decades: • $3000 plasma panels from 2003 sell for $500 today in 2006. • $1000 camcorders from 2003 now sell for $300. • $300 DVD players from 2002 now sell for less than As PCs become cheaper, they are the cost of the cable that connects them to the TV. increasingly being sold by hard Coping with such price falls, and resulting changes in discount food outlets. consumer expectations and perceptions are amongst the most difficult issues in tech marketing: • Consumers who bought a state-of-the-art computer 50 Y&R ADVERTISING MY BRAIN HURTS
  28. in 2002 have difficulty accepting that their machine today is virtually obsolete. • Indeed, consumer expectations of price falls are often the biggest barrier to sales today: many consumers say they didn’t buy a 42 inch plasma to watch the 2006 World Cup on because they thought that plasma screens would halve in price by Christmas. In Ridley Scott’s Blade Runner, 2019 Los Angeles detective • On the other hand, consumers are often so Harrison Ford interviews an exotic good at finding uses for cut-price technology dancer who performs with a snake. that marketers need to be careful: ‘Is that a real snake?’ asks Ford. The Mercury 1-2-1 mobile phone company thought The snake is an artificial living they were doing their customers a small favour copy. when they offered them unlimited free evening calls ‘If I could afford a real snake,’ between their mobiles in the late nineties. replies the dancer, ‘would I be dancing here?’ What they didn’t expect was for their network to be jammed by customers who chose to go out drinking for the evening, leaving one phone permanently on in their baby’s cot at home as a baby monitor. So The speed of falling prices are of massive importance to any tech based marketer: • Lexus built its reputation around the many electronic devices and features which were fitted as standard in its vehicles. Today though, Airtime is so cheap in 2006 the cost of these features has fallen dramatically, and that mobile phone many are now fitted as standard on mid range companies can saloons. Lexus needs to develop new reputations – offer free airtime to and to do so fast. couples without risk. 75% of the cost of running a newspaper lies in its distribution: printing, delivering and chopping down trees. Digitization is allowing newspaper proprietors to cut all of these costs - but the indications are that consumers value news they receive for free less. MY BRAIN HURTS 53
  29. • As average voice revenue per user continues to fall for mobile phone companies, they need to encourage ‘Talk for hours, people to spend more time on the phone. Young women already rate their boyfriends by how not minutes.’ frequently they call and text them; Perhaps marketers HEADLINE, should start to suggest to them that the ultimate sign HUTCHINSON WHAMPOA of commitment is the always-on relationship – where ‘3’ MOBILE PHONE AD an (exceptionally besotted) couple agree to sleep, eat and work with an always-on phone connection 10. THE VISIBLE WINS between them. • ‘Information wants to be free’, said internet Consumers place little value visionaries in the nineties. They may as well have said on things they can’t see. ‘Information wants to be worthless.’ When Karl Benz’s first automobile hit the roads in 1889, people called it ‘the horseless carriage’. Every previous form of road transportation they had seen had horses in front. The striking thing about this one was that it didn’t. Similarly when the radio first appeared. Unlike gramophones and telephones, it had no wires attached. So people called it the ‘wireless’. But the names didn’t last. After a while, the lack of horses and wires faded from the public memory. As wireless devices become commonplace, And people started calling the wireless a radio. consumers will forget And the horseless carriage an automobile. that wires ever existed. Over time, consumers stop valuing, and eventually don’t even remember, things they can’t see. It’s a lesson technology-based companies have often failed to heed. If consumers can’t see your product or 54 Y&R ADVERTISING MY BRAIN HURTS 55
  30. service, it stands a much lower chance of long-term success: • Consumers can’t see satellites. So they failed to get hooked by satellite phone technology. In the late 1990s, the Iridium consortium had a network of forty satellites orbiting the earth, allowing phone coverage across the whole planet. It was a pretty cool idea. But the consumer didn’t buy - because all they saw was a handset the size of a brick. • Mobile network service providers suffer from being invisible. As a result, mobile handset manufacturers became stronger brands than mobile service providers across the world. The smart mobile service providers in the nineties were Orange and Vodafone, who insisted on putting their logos on phones connected to their networks. France Telecom paid $45 billion for Orange in 2001. That’s how much that brand was worth. • The Blackberry wireless handheld device took the corporate world by storm in 2003. But the Harman/Kardon took an Blackberry’s marketers were careful not to market invisible ingredient brand - the computer speaker - their device as a ‘wireless network technology’. They and turned it into a simply sold it as a handheld device called a desirable object in its own Blackberry. And the question on the lips of owners of right. all other PDAs was not ‘How do I get my PDA to connect?’ but ‘Why can’t I have a Blackberry?’ So make yourself visible Digital marketers need to work out how to make their activity visible to the consumer, and then brand it: Breaking into your neighbour’s unsecured WiFi network is the yuppy game of the mid 2000s. But WiFi is invisible. As it becomes more widespread and more reliable, people will forget that it exists. MY BRAIN HURTS 57
  31. • Can you see WiFi, GPS and BlueTooth? Don’t bank on these brand names being in perfect health in 2010. • Congratulations to Dolby Labs for getting their logo on every piece of hi-fi equipment for the past thirty years. But surely they could have done more with such a famous brand? • Digital technology means consumers use ATM networks to withdraw money from banks nowadays, so no one goes into their branches any more. In the 19th Century, banks spent a fortune on a good visual appearance, decorating their branches with marble and other fine stones. Today, they need to spend some money making their ATMs look a little more special. • In today’s online world, the one visible thing a bank offers is a credit card. And the logo that guarantees acceptability of these cards is that of Visa, not the bank. Visa is thus the world’s strongest financial brand, and could play a powerful role in cross-selling the insurance and investment products banks are currently struggling with. ATMs are banks’ sole point of contact with their customer nowadays. They need a design upgrade. Airlines make their frequent flyer schemes visible through cards and luggage tags. Tech companies need to consider how to make their offerings more visible too. MY BRAIN HURTS
  32. 11. CONVERGE WITH CARE Today, analysts, consultants and engineers have convinced themselves that consumers want ‘convergence’. By which they mean any device that has aspects of television, computing and telephony built into it. But do consumers want convergence? Convergence devices usually offer a range of benefits. And consumers gravitate not to those that offer a range of benefits, but those who promise just one good one: • Most business executives choose to carry both a mobile phone and a mobile email device – when each device can both make voice calls and send email. • Most people also continue to wear a wristwatch, when their phone tells the time perfectly well. • They also continue to buy separate VCR players, DVD players and TVs, when combination devices are widely available and cheap. Convergence isn’t good marketing Indeed the history of marketing is the opposite of convergence. With converged cameras and camcorders, you either get a good camera or you get a good camcorder. Rarely both. 60 Y&R ADVERTISING
  33. When scientists invented synthetic detergent in the 1940s, they saw it as an amazing product that would clean clothes, hair, floors and cars. But smart marketers recognized that consumers want different products for different needs, and launched separate shampoos, laundry detergents, floor cleaners and automotive foams based on synthetic detergent. Still think convergence is a good idea? Try washing your hair in laundry detergent. Convergence failed in the past It’s an idea has been with us for a very long time. In the 1920s, manufacturers put optional small nozzles and a reverse switch on to their vacuum cleaners so that you could also use them as a hair dryer too. The basic principle of convergence wasn’t attractive to consumers then, and it is no more attractive now. Where consumers are buying videophones and portable email devices, they are buying them because they offer them real, tangible benefits, not because they offer convergence. So So tech companies beware. You need to ensure your convergence concepts are driven by consumer need, not technological dreaming: • Do consumers really want a converged digital hub in their living room? Parents may like the idea of controlling all digital feeds in their home from the living room – but the last thing most sons want is In the late 1990s, mobile service providers invested upwards of $100 billion dollars in 3G phone licences. The research said that everyone wanted to see the person they were talking to. But the research forgot to ask whether they wanted the other person to see them. 62 Y&R ADVERTISING
  34. parental oversight of the online sleaze they’re looking at in their bedroom. • At the time of writing, telecoms companies across are excited by the concept of triple and quadruple play – they idea of bundling broadband, landline, mobile and other services into one package and selling them to the consumer. There is a clear benefit to the telcos – they get to sell more. But what exactly is the benefit to the consumer? • Mobile telecoms companies have been bitterly disappointed over the past few years by the low take- up of all their new 3G technologies. Perhaps they 12. CONSUMERS DON’T ALWAYS would have done better to think better about the core need mobile phones deliver to their core 16-24 WANT VERSION 2.0 consumers – social networking – and work out how to enhance that instead. They may want what they In South Korea, SK Telecom has done that, by linking had yesterday. social networking webspace to users’ mobile phone accounts. And the users are paying real money to From the 1920s to the 1960s, the aviation industry furnish their virtual living room, or ‘minihompy’ to focussed on producing better, faster, more comfortable impress their friends and dates. passenger aircraft. First came the twin-propeller planes, then the seaplanes, then the jets. Transatlantic flights ceased refuelling in Newfoundland and Ireland, and flew direct to Paris and London. Then in 1968, Boeing launched the 747. The 747 flew 400 people from New York to Europe in The 1920’s aviation If she really wanted convergence, about seven hours. she’d be washing her hair in laundry industry was driven by the dream of ‘an airplane in detergent. And then… every driveway’. Most And then nothing. consumers were happy with a car. 64 Y&R ADVERTISING MY BRAIN HURTS 65
  35. Faster, better competitors failed. 1977’s supersonic Concorde today no longer flies. Other concept planes never left the drawing board. 38 years later, in 2006, the main vehicle for crossing the world remains the 747. As the futurist Tom Morton put it in the Financial Times, ‘The assumption is that because tech companies live for change, their customers should do also.’ Many tech companies’ sales depend on there being a version 2.0. The consumer is often happy with version 1.0. In 1840, trains carried you at 30 miles per hour, and covered you So in soot and rain in open carriages. • Phone handset manufacturers should be But by 1890, the train could careful with the assumption that the take you at almost 100mph in consumer always wants the latest phone elegant surroundings whilst you handset. Today in 2006, many are happy enjoyed fine food and wine. with the one they already have. They haven’t gotten much better • The digital camera industry has already since. reached this point: the mainstream consumer appears to be perfectly happy with a six megapixel sensor on their digital camera, and struggles to find a reason to upgrade to a ten megapixel model, or a digital SLR. Not every technological rainbow has a pot of gold at its end. MY BRAIN HURTS 67
  36. In the digital revolution, The photographic industry is heading for a slump. technology develops so fast • Desktop publishing software needs a new big idea because the publishing industry remains comfortable that even industry insiders with ten-year-old software releases. find their visions surpassed. Surely such software ought now to be taking advantage of the amazing flexibility modern The history of computing is commercial digital printing now offers? littered with overcautious • What can the consumer do with four gigabytes of predictions from producers: RAM and a terabyte of memory on their laptop? The PC industry needs an answer fast. ‘The world market for computers’, said Thomas Watson of IBM in 1943, ‘will be about five units.’ ‘Everyone’ said Bill Gates in 1982, ‘should be happy with 640K of RAM’ But the rule still stands. Consumer needs do not follow Moore’s Law. MY BRAIN HURTS 69
  37. 13. EVERYTHING NEEDS A KILLER APP Industries are an illusion. Consumer needs are what matter. In his 1960 article that defined the word ‘marketing’, Professor Theodore Levitt of the Harvard Business School argued that the oil industry didn’t actually exist. All there was, he said, was a series of overlapping consumer needs: In the 1890s, people need to light their homes. That meant kerosene lamps. The kerosene came from oil. But then electric light replaced kerosene lamps, and the market for lamp fuel collapsed. Fortunately for oil companies, a new need – of personal transportation – took over. The new automobiles needed gasoline, and gasoline too came from oil. Industries are an illusion, argued Professor Levitt. Consumer needs are what are real. 70 Y&R ADVERTISING
  38. Then in the 1950s, consumers wanted to fly. Planes needed aviation fuel, and guess where aviation fuel came from. And as aviation matured, the plastics industry became more important, and that too depended on oil. There was no oil industry, said Levitt. There was just a series of growing and declining consumer needs, and oil just happened to meet them. And the fortunes of oil companies lay not in their drilling, refining or pumping, but in their ability, or the ability of others, to find uses - or ‘killer apps’ for their product. Killer apps are vital in all technological products: • When CD players went mainstream in the mid 1980s, their killer app was the Dire LCD panels are used for both Straits CD Brothers in Arms. Music aficionados all information and TV in this Tokyo subway carriage. Expect bought a copy to check out their new digital sound many more uses for them to capabilities. appear in coming years. • In 1999, large numbers of consumers went out and bought a copy of The Matrix to marvel at its high definition computer graphics. It was the killer app for that year’s new DVD players. • Apple’s success from 1987 through to the mid 1990s was driven by a killer app: desktop publishing. As the publishing industry moved from pasteboard and glue to PageMaker, QuarkXpress and Adobe Your next camera may well embed GPS satellite information into every picture you take. It’ll tell you where you went on holiday - in case you forgot - but what exactly is the killer app? 72 Y&R ADVERTISING
  39. InDesign, they needed the computer these apps were designed for: the Apple Macintosh. Many more technologies and devices languish because no one has yet found them a killer app. So: The most important role of marketing in the digital world is finding and defining that killer app: 14. CONSUMERS HAVE THEIR OWN • If the mobile phone industry had recognized before the 2000 3G licence auctions that the killer app for AGENDA the mobile phone was voice, it could have saved itself a hundred billion dollars in licence fees. ‘48-hour internet outage plunges nation into • What’s the point of having a GPS positioning chip on productivity’ screamed satirical online weekly The Onion a laptop? The computer industry need an answer in the late nineties. quick. The observation reflected reality. The internet had made • And what’s the point of having a GPS chip on a digital employees more productive – but at shopping, banking, camera? The engineers are already starting to build gossiping and flirting at their desk more than working at them in. Is there anything more to it than reminding it. you where you went on holiday? And none of these new productivities showed up in • If you can’t find a killer app for your existing product Department of Labor productivity statistics. or service, spend a lot of time with your consumers, Similarly, much of the additional RAM capacity in the and see what uses they’ve discovered for it. They may 1990s was eaten up, not by better office surprise you with their ingenuity. productivity software, but by screensavers and instant messaging programs. And the pressure on IT departments in 2000-3 to upgrade Patients rarely take their pills exactly corporate networks was driven less by the way their doctor tells them the size of spreadsheets circulating to. Should we expect them to around those networks and more by operate digital home medical employees trading illegal MP3s. devices correctly either? Put simply, consumers use technology the way they 74 Y&R ADVERTISING MY BRAIN HURTS 75
  40. want to use it, not how its manufacturers - or their employers - intend it to be used. The selfish consumer What’s more, consumers are relentless in their self- interest. Electrical retailers moan that they can’t sell single region DVD players any more – because consumers want multi-region ones so they can watch the DVDs they buy on market stalls. And legitimate DVD producers find they can’t sell their legitimate DVDs in Asia. Not just because the pirates are releasing blockbusters faster – but also because the pirates are creating and including valuable extras like Videophones allow British teenagers to Chinese language commentaries in their versions. share their unprovoked ‘happy So slapping’ attacks on Smart manufacturers and services must recognize that strangers with their consumers act in this way: friends. • In the 1990s, mobile phone manufacturers recognised that they needed to give their users a choice of ringtones so that consumers would know when their phone was ‘The streetcar is the future: it is clean, safe and available to ringing, rather everyone.’ proclaimed civic leaders in the 1910s. than someone Many rich families put their entire fortunes into streetcar else’s. stocks. But the consumer wanted wheels of their own. 76 Y&R ADVERTISING
  41. But why did mobile service providers not offer to extend that range through downloads? Today the ringtone market is larger than the CD singles market –and is dominated by independent companies like Jamba and their Crazy Frog ringtone range, not by Verizon or Vodafone. Mobile service providers have sacrificed a vital revenue stream. • The test of a good corporate intranet is: are 15. THE AWESOME POWER OF employees still using pinboards to sell their car/announce a baby shower/run their sideline How many baby showers are VIDEOGAMES advertised on your businesses? If they are still using the pinboard, the intranet? Recently, murder suspects in several countries have intranet isn’t working properly. defended themselves by arguing that when they killed • Many phones today are equipped for video they thought they were in a video game - and therefore downloads, but few people are interested in the should not be held liable for their actions. boring ones offered by mobile service providers. They The ‘Matrix Defense’, as it is called, is not accepted in ought to partner with the innovative two-minute video most parts of the world. producers showcased on YouTube before someone else does. But that’s because judges in most countries are old, and have therefore never played video games. • Electronic home medical appliances is a huge new area for digital technology. Today’s video games can be powerful, mind-altering experiences. Our experience working with pharmaceutical companies though is that patients rarely comply fully The fear you experience as a ruthless and methodical with treatment regimes once they leave hospital, and SWAT team hunt you down can be real. sometimes stop taking prescribed pills completely. So if provocation from the real world - perhaps from Electronics companies entering the medical area finding your lover in bed with someone else - is an need to take on board the complex issues of patient accepted defense, perhaps provocation from the virtual world ought to be too. Television is losing its young male psychology if they want their devices to be used audience to videogames because effectively. Awesome power videogames are much more compelling than TV. Videogames are so compelling that they are eating 78 Y&R ADVERTISING MY BRAIN HURTS 79
  42. heavily into the time young men spend watching television. Why watch the opening sequence of ‘Saving Private Ryan’ over and over again the way young men used to do in the nineties, when you can experience landing on Omaha Beach yourself in ‘Medal of Honor’? Connect with the almighty through And indeed, why watch an action-adventure movie, your Nintendo. when you can hunt down terrorists yourself in Tom Clancy’s Splinter Cell? So Innovators in other fields should think further about exploiting the intense immersive power of videogames: • Many people like to read books on philosophy or religion to guide them through life. But wouldn’t this role be much better performed by software? Armed with a smart mobile phone, they could receive situation-specific twenty-four-seven spiritual guidance. • A prediction: the next big religion to impact the world will be software, not book based. • Guidance in other areas could also be better done by game-like software than by a book. A diet that read the RFID chips on the food you ate, and told you what to eat and what exercise to do next could be ten times more compelling than any conventional diet program. Expect electronic entertainment to become increasingly immersive. MY BRAIN HURTS 81
  43. on the telephone as men’ say landline telecoms execs. ‘They are our core customer.’ • Observational research shows that women also like to communicate in media-rich ways, using their eyes and hands. This means that long term, women are likely to be better customers for all technologies driven by communications. 16. TO COMMUNICATE IS FEMALE This vital observation is lying in wait for mobile service providers, who, facing stagnating average revenue per user are desperate for ways to stimulate calls. As fixed ‘You can ball my wife if she wants you to, Ralph,’ says Al line companies have discovered in the past, the key lies Pacino in the gangster classic Heat. with women, and female behaviour patterns. ‘You can lounge around here on her sofa in her ex- It’s also important for picture messaging. At a dollar a husband’s dead-tech post-modernistic bullshit house if pop, it’s currently expensive for many women. But you want to.’ women will be the eventual main users of it. If men want to celebrate a football score, they will happily do it with ‘But you do NOT get to watch MY television set.’ a one-line text. When a woman wants her friends to see Men can develop very strong attachments to the tech her new hair, only a picture will do. Men are obsessed by machines devices they own. This is rarely the case with women. and always have been. And for the future of mobile communications, check out On the other hand the average woman has more friends, Women are more attracted the Japanese school girl and her i-mode phone. Mail and communicates with them more often: to the communications Medical researchers are possibilities of broadcast services allow them to wish their entire class starting to regard autism as an • As many shocked girlfriends have found, the address technology. at school goodnight, and waves of goodnight texts flash extreme form of maleness. book of most men’s mobile phones usually contains across Osaka and Tokyo every night. Communications devices are more than 50% women, whereas their own contains therefore skewed female. far fewer than 50% men. This is not (always) Network effects because their boyfriends are being unfaithful to them. Because women are more focused on communication It is because women have greater social networks than men are, the way they adopt technology is different: than men. If you are the first person in the world with a video • ‘The typical woman spends three times as much time camera, no problem. It doesn’t matter that no one else has one. 82 MY BRAIN HURTS 83
  44. But if you are the first person in the world with a fax machine, you have an issue. A fax machine is only useful if there is at least one other fax machine in the world, and even then it’s not very useful. The usefulness of a fax machine only rises as large numbers of other people buy them too. (an effect known as Metcalfe’s Law) As women are about communication, their use of technology is similar. The Some games manufacturers attractiveness of a technology rises as worked out more people they know adopt it. some time ago Women therefore adopt later than men, that women didn’t get off on but then adopt in crowds. killing things the way men do. But So: most still have not • Social interaction between worked out how to groups of young men in bars connect with women. can be so perfunctory that there is little quality difference between their conversation in that bar and their conversation within broadband network games. So in the future, expect many to put on a headset and rest a can of beer on their keyboard instead. Phone calls initiated by women last three times as long as phone calls initiated by men in some cultures. Women should therefore be regarded as the key consumer of mobile telecoms. MY BRAIN HURTS 85
  45. • The games industry has always struggled to attract women to their product. The insight some companies are still missing is that unlike men, women don’t like killing things: Those gaming products that take this insight on board, like PS2’s SingStar, where singers get rated for pitch and accuracy do well amongst women. Watch also women’s choices in video arcades. In 17. THE FUTURE LIES IN EMERGING Japan and in China, it’s not the shoot-em-ups, but the ski machines that are popular. MARKETS • Check out also the games that swept East Asian nightclubs a few years ago, where participants gain Technology isn’t just a rich country thing: points for dancing on pressure-sensitive dance mats. • Wander into a village shop in Pakistan, and the Young women like technology when it does stuff they shopkeeper will add your bill up using an electronic want. calculator. • Documentary crews working in the last unexplored parts of the Amazon basin are sure to take AA batteries with them. Because the young people in those villages demand batteries for their Walkmans Increasing in return for being filmed. numbers of global corporations run • Go to any poor, remote village anywhere in the world, their global and the one piece of modern equipment they are computer systems guaranteed to have is a TV connected to a satellite from Malaysia. dish. • Economic research shows that high mobile phone ownership can push up the GDP growth rate of poor rural areas by upwards of 1% a year. The poor like technology just as much as the rich do. And as a technology saturates rich countries, and its 86 Y&R ADVERTISING MY BRAIN HURTS 87
  46. price continues to fall, it becomes more and more affordable to ordinary people in emerging markets. By 2010, that Pakistani village shopkeeper will also have a $5 mobile phone. So Marketers of technology who look to the future need above all to understand better the way poorer people live and think. MOBILE PHONE The poor are not just rich people with less money: • Incomes are rising so fast in China that ordinary USERS home appliances have become fashion items. In small towns, the fashion item of today is the air conditioner. The inflight computer displays on aircraft from Islamic The internet has now reached the remotest places on Next comes the VCD karaoke machine. countries show you how to face Mecca at prayer. Earth: Siberian Airlines bookings are now mainly web- driven. • Why are people in Asia flocking to buy plasma and LCD panel TVs as fast as rich Americans? Because their homes are one quarter the size and house 177M 363M thirteen family members, that’s why. • What’s the appeal of the web to teen Tunisian girls? USA CHINA It’s the breakout from parental control. In Tunisia, neighbourhood internet cafes allow teenage girls to Source: Morgan Stanley 2005 listen to the Arabic language stars that their fathers stop them listening to at home. They also get to flirt ‘The future of the computer is with boys without going through the strict process of the mobile phone.’ says The parental approval. Economist. And that future is happening in China more • Throughout the emerging world, most people’s first than in the United States. and only phone is a digital mobile. Why don’t they have a landline? Because thieves keep digging up the wires for the copper content, so there aren’t any. GameBoys are a vital teen male accessory - even for A mobile phone airtime vendor in Kerala, India. monks, and even in Tibet. MY BRAIN HURTS 89
  47. Above all of interest: that the bank will actually pay them for The most important issue is that looking after their money. poor people don’t follow the same • Producers of photographic film watch out: many upgrade path through technologies emerging countries will go straight to digital. that the West experienced: • Similarly with TV: as prices fall, most of the rural Third • Western European companies World is going straight to satellite. slipped up in the early 1990s when they tried to sell their obsolescent Windows 286 and 286 machines to companies in Central and Eastern Europe. Poles and Hungarians weren’t buying - they went out and bought the latest kit instead. Europe’s most advanced e- • Similarly, most emerging market government is in Estonia. Rich, technically literate countries like bank customers go straight to Germany are years behind. the smart debit card, missing out the paper check book and pen. SatNav is arguably of more use on the chaotic road • And most mainland Chinese accountants went systems of India and China straight from a wooden abacus in the nineties to than in the West. Excel today. So When projecting the future of a digital technology brand, think poor: • Most of the words banks use: credit, debit, mortgage, withdrawal - are used only by banks. When you’re marketing to new emerging market people, remember they may never have heard of the concept 90 Y&R ADVERTISING MY BRAIN HURTS 91
  48. electrifying effect on consumer mentality, clearing minds, and changing the way consumers think. 8. But a technology must work for it to be able to do this. So many - like mobile phone picture messaging - were launched when they didn’t. 9. We must also be conscious of the fact that SUMMARY consumers are rarely grateful for the changes tech brings to their lives. Once something works, they Successful technologies forget it exists. are simple technologies. 1. Digital technology gets twice as fast, and as capable, and as powerful every eighteen months. 10. We must also be careful not to listen too closely to 2. Meanwhile the mind of its user has not gotten any nerds - the early adopters who buy tech when it first more sophisticated in the past ten thousand years. comes out. Their thoughts are not those of the general population. 3. One result is a widening gap between what technology can do, and what its users - both young 11. We should think more about how technology and old - understand it can do. spreads from person to person in the population. The resulting infection rate will determine how fast 4. The other result is a growing confusion amongst a technology takes off. consumers, as they lose touch with how their phones, computers, DVRs, VCRs, TVs, SatNavs, 12. We must recognize that whether consumers fit a GPSs, home medical equipment and MP3 players technology into their lives or not is the true measure work. of success - and that the real impact of a new technology on a society may take a generation. 5. As consumers and technology diverge, there is a growing risk of a crash. And as digitization is now 13. Consumers do not read instruction books. Period. critical in all industries and all parts of the economy, Tomorrow’s tech launches need to recognise this. that crash would be economy-wide. 14. Digital equipment also can get twice as cheap every 6. Helping consumers understand technology is not Podcasts discussing two years. For the consumer, price is a positioning easy. They struggle with the demands modern issues covered by ‘My tool - and something that costs next to nothing can Brain Hurts’ are at also be perceived as being worth next to nothing. devices and software make of them, and fail to pubs.yr.com/podcasts absorb new tech-based concepts. 15. Consumers are also visual creatures: after a while, 7. The key need is for simplicity. Simple devices and they forget that invisible technologies - like WiFi - software that do one thing, not several can have an exist. 92 Y&R ADVERTISING MY BRAIN HURTS 93
  49. 16. At the moment, the tech world is buzzing with words like ‘convergence’. But beware: convergence devices do not necessarily contain a strong consumer benefit. 17. Beware also of the conviction within tech companies that all technologies need to keep developing. True for the company that makes them. Not necessarily true for the consumer. Consumers struggle 18. For a tech device to fly, it needs a valuable use, a to connect with new ‘killer app’. Watch out for consumers developing concepts: ‘If I’d asked the their own - unexpected and often unwanted - uses consumer what they for a technology. wanted,’ said Henry 19. Study videogames carefully - they are taking Ford, ‘they’d have asked for a faster consumer time away from television because they horse.’ are much more compelling than television - just as compelling television took share away from passive radio and press in the 1950s. 20. Watch out particularly for women. They are increasingly the key consumer of communications technologies. 21. Watch out also for people in emerging markets. There are four billion of them, and they often use technology more effectively than people in richer countries. ‘A rose’ said William Shakespeare, ‘by any other name would smell as sweet.’ But call it an XTY 667 J35 version 1.2 firmware 5.6, and who would care? MY BRAIN HURTS 95
  50. CONCLUSION As digitization proceeds, technologies that humans do not understand will fail. Software that humans do not understand will fail. If humans fail to understand and want the capabilities of their next generation phones, the telecoms industry will fail too. The emailable version of this document is at Our choice is to follow where technology leads, and pubs.yr.com/brain.pdf leave the consumer behind. Podcasts and video podcasts to accompany this book Or to make technology work for humans, not against are at pubs.yr.com/podcasts them. Choosing the second path is not easy for any company. If you liked this booket, you might also like other Y&R It means going against the tide of the industry. EMEA booklets, downloadable from emea.yr.com And it is hazardous, because the consumer is a fickle friend. Permission to store and display the PDF of this publication on corporate intranets is freely given, But it the only sure way to long term success. provided it is not modified in any way. Permission to quote extracts from this publication is also freely given, as long as such extracts are clearly attributed to Y&R Advertising. BrandAsset Valuator and BEX are registered trademarks of Young and Rubicam Brands inc. 96 Y&R ADVERTISING
  51. Y&R EMEA, GREATER LONDON HOUSE, HAMPSTEAD ROAD, LONDON NW1 7QP

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