Ben Kunz Mediassociates speech to Boise Ad Federation


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Greetings -- I hope you enjoy this exploration of the history of human networks, how media can best use them, and the ethical conundrum we now face over how far to take personal minds in our marketing. For more information, ping me at 203 506 7269. Cheers. @benkunz

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Ben Kunz Mediassociates speech to Boise Ad Federation

  1. 1. “How can you get more ROI from my $10MM budget?”
  2. 2. “How much does advertising cost?”
  3. 3. “I’m Joe, a boxer in Alaska, and I have a great media idea for you.”
  4. 4. $100,000
  5. 5. It was tempting. Think of the splash. But should humans be treated this way? My thesis for today is simple: Advertisers and marketers face a unique temptation in how we use human networks. And if we’re not careful, we’re going to do something dangerous.
  6. 6. SolarCity to IPO and 3x market share
  7. 7. CDC to digital and 2x awareness
  8. 8. Gulfstream to international digital lead gen
  9. 9. +400% +300% +200% +100% 0% -100% Astrum Solar -61% in CPL Black & Decker +4x in conversions Cessna Aircraft -28% in CPL Gulfstream -51% in media costs CDC +124% over-delivery HHS +290% imps SolarCity +300% market share SNHU +400% revenue in 2 years Varian -77% in cost per response Basically, we think of how to connect media to results
  10. 10. So who am I? A guy very interested in media.
  11. 11. In 2007 I started writing a marketing blog called ThoughtGadgets. It got noticed by Rachael King, a reporter for Businessweek, and I started writing columns there.
  12. 12. In December 2009, I got lucky … reading patents and supplier news, I guessed Apple would launch a tablet and call it the iPad. Businessweek went with the story online and in print, and Steve Jobs announced it a few weeks later on Jan. 27, 2010.
  13. 13. My main interest is human networks, and how media is starting to use them.
  14. 14. Network
  15. 15. Net-work
  16. 16. Iron net-work
  17. 17. James Gleick recounts in his book “The Information” that when wires began being draped over the world, they freaked people out.
  18. 18. Gleick has a fascinating story. When Europeans arrived in the African Gambia River in the 1700s, they saw men and women carrying carved wooden drums, each making two tones. It was nice music. What they didn’t realize was they were witnessing the fastest form of communication on Earth.
  19. 19. alambaka boili_ _ _ _ _ _ _ Many African languages are “tonal languages,” where the rising or falling pitch carries meaning. This Kele phrase means either “he watched the riverbank” or “he boiled his mother in law.” Two-toned drums can carry much of the meaning.
  20. 20. For perhaps thousands of years, African culture blew away European society in the speed of communications. People could run… Pheidippides was the “marathon man” who died in September 490 B.C. He did more than run from Marathon to Athens -- in the week prior, he ran 147 miles in two days to share news of battle, then fought in the battle of Marathon, and then ran 26 miles to deliver news of victory. 173 miles total in a week.
  21. 21. By the 1790s, the French were building telegraph towers in visible lines north of Paris. One of the first “station lines” was 120 miles long. Each tower had jointed arms that were pulled by ropes, and could take seven different angles and create 98 different visual signals. Across a network, only 2 of 3 messages arrived successfully in a day.
  22. 22. But the Africans had an information system that could travel from village to village, 7 miles down the river in each leg, up to 100 miles per hour, outpacing racing horses or running men. Detailed news of storms, fires, childbirth, fighting, and village life all fit into this system. Europeans didn’t understand for hundreds of years.
  23. 23. Most networks are created before we know what to do with them.
  24. 24. fragments THE CHALLENGE OF MEDIA
  25. 25. This is my office – where I wrote most of this speech.
  26. 26. 1 2 3 4 5 6 7 It has seven different communication systems (not counting my camera, No. 8).
  27. 27. Phone Cellphone Voicemail (work) Voicemail (cell) Text messaging Fax Mail Email (work) Email (Gmail) Facebook Facebook messages Twitter Twitter direct messages LinkedIn Instagram Vine Snapchat Instant messenger (Google) Instant messenger (Yahoo!) Whiteboard (office) Word Excel PowerPoint Keynote Tableau Pages Numbers iPhoto Scratch paper Notebooks CRM system iMac Dell local Company server Google Docs Desk folders Office safe GPS (TomTom) GPS (Google maps) TVs (home) Radios (home) Radios (car) Stereo (work) Stereos (home) iPod iPhone apps Turntable Pandora Sirius Books iPad 1 iPad 2 Netflix YouTube Hulu Newspaper Whiteboard (home) PostIts (kitchen counter) Bathroom mirror 59
  28. 28. If a rocket scientist were teleported here from the 1950s, he’d say:
  29. 29. WTF?
  30. 30. The CueCat is my favorite failed dongle. The idea was you’d see a print ad, you’d scan a code with this tethered to your computer, and it would boot up a website, where you could read more information.
  31. 31. Lena is another gadget – that monitors how much you talk to a baby.
  32. 32. The device tethers to a computer, so dads and moms can track if they are speaking to children enough to spur intellectual development. Think of it as Nike+ for parents who want their children to get into Harvard.
  33. 33. iTunes Amazon Netflix Google search
  34. 34. Hardware. Media. Data. Advertising. Facebook Google Apple Amazon Paper Netflix Instagram Skype Credits Banking Macs Apps iTunes iPads Nike+ iWatch Cloud Kindle Fire Star Trek Prime Free Shipping G+ Hangouts Android Glass YouTube Chromecast Docs Android TV
  35. 35. Hardware. Media. Data. Advertising. Facebook Google Apple Amazon Paper Netflix Instagram Skype Credits Banking Macs Apps iTunes iPads Nike+ iWatch Cloud Kindle Fire Star Trek Prime Free Shipping G+ Hangouts Android Glass YouTube Chromecast Docs Android TV
  36. 36. And honestly, human psychology kind of likes it.
  37. 37. In the 1960s, anthropologist Edward Hall and psychologist Robert Sommer discovered three distance fields in which humans take in communications. Intimate (18 inches), personal (18 inches to 4 feet), and social (4 to 12 feet).
  38. 38. Today’s three major forms of gadgets fit perfectly into these distance fields. And because human needs different at each distance, gadgets will never converge. We can’t combine the privacy of our intimate space with the entertainment of our social space. This is why you don’t log on to your TV.
  39. 39. And more media gadgets are coming…
  40. 40. Apple tends to signal major hardware upgrades with a pre-release of OS redesigns. The first releases of OSX 12 years ago had a plasticky window to match the white plastic Apple computers. The OS switched to metallic in 2002, and soon aluminum was used in most Apple computer hardware.
  41. 41. In 2013, Apple rebooted its mobile operating system, focused on parallax 3D type imagery with layers floating on layers.
  42. 42. And there’s this. In November 2010, Apple patented a 3D large screen system that would propel holographic images to differentpeople in the room (without goggles). The sensors would also pick up ambient lighting, to cast realistic shadows on any image floating before the screen.
  43. 43. Amazon is already there. An upcoming Amazon smartphone: Holographic interface, 6 cameras – 1 back, 1 front, and 4 for gesture control?
  44. 44. Holographic screen Siri AI simulation Database of your mind?
  45. 45. In Businessweek in 2011, I predicted someday soon you’ll have an Eternity App: A doppelganger clone who will carry on conversations long after you’re dead … or at least while you’re out of the office. It simply would require combining voice recognition software, a database of your past conversations, and Siri-type AI responses.
  46. 46. Google just patented a system for “Automated Generation of Suggestions for Personalized Reactions.” It would pull data from all your social networks and email accounts to predict how you would respond, and draft customized messages. Eventually, it could be set to take actions for you, such as approving projects from coworkers. “Thanks for emailing. I’m OOO until Friday.”
  47. 47. Google just patented a system for “Automated Generation of Suggestions for Personalized Reactions.” It would pull data from all your social networks and email accounts to predict how you would respond, and draft customized messages. Eventually, it could be set to take actions for you, such as approving projects from coworkers. “Hey Jane, the plan take over the Idaho agencies’ accounts looks great! Let’s do coffee Friday.”
  48. 48. Gadget fragmentation drives media response rates down to a consistent mean.
  49. 49. 130 channels per U.S. home. Viewers ‘tune’ to only 18 per year. Sources: Arbitron; Nielsen; Mediassociates
  50. 50. Sources: Arbitron; Nielsen; Mediassociates 0.06% average banner CTR in U.S. 4 hours and 38 minutes average use per day. 130 channels per household – only 18 used 6,600 TV ads per month per person 0.05% average response rate (if 3 products purchased per month) 1 hours and 23 minutes per day per person 2,500 minutes of ad exposure per month 750 spots on average per user per month 0.13% response rate (if 1 product purchased per month) $320,000 for 50 GRPs (26 boards NYC region) 28.2 million impressions $200 cost per sale requires 1,600 sales @ 20% conversion, 8,000 respondents 0.03% response rate Digital 0.06% TV 0.05% Radio 0.13% OOH 0.03%
  51. 51. Response rates are low across all media … Sources: Arbitron; Nielsen; Mediassociates Regressing to a mean of 1 in 2,000
  52. 52. networks THE CHALLENGE OF HUMAN
  53. 53. “Meme” was coined by Richard Dawkins as a play off of mimeme, Greek for “something imitated.” It is a unit of culture that spreads like a virus. It is every marketer’s dream.
  54. 54. Religion is perhaps the strongest meme in the world. There are just over 300 religions in the world today, and members of each one believe they have found truth. Yet they share remarkable similarities: One God, stories of human beginnings in Eden, and what Joseph Campbell called “The Hero’s Journey.” Bonus point: If someone ever argues religion with you, tell them with 300 options in the world, the odds are only 0.33% he or she is right.
  55. 55. You don’t work in marketing. You’re a meme propagator.
  56. 56. Sometimes marketing memes work well.
  57. 57. Sometimes they feel deliberately manipulative.
  58. 58. And sometimes, yikes.
  59. 59. US Airways paced at 35,000 tweets a day – beating news of the Pulitzer Prize by 3x.
  60. 60. Sometimes going viral works as planned.
  61. 61. A shocking user-gen video is the top hit for the candy brand “Skittles” on YouTube with 8.7 million views.
  62. 62. The Stussy brand tried to do the same thing, but ended up at 21,526 Likes … and stalled there. Three weeks after the campaign ended, the brand’s Likes had edged up only 23 a day. What happened? Why not 8 million?
  63. 63. There’s a mathematical formula for going viral.
  64. 64. V = (M – A) * C
  65. 65. V = (M – A) * C Viral propagation = (message generation rate – absorption rate) * cycle time There’s a formula for going viral. For a message to propagate across any network, the passalong rate has to be higher than the absorption rate over any given period of time. Anti-virus companies such as Symantic use these types of models to predict how computer viruses spread.
  66. 66. Marketers love social networks because they play to the promise of network theory. Robert Metcalfe posited that networks grow exponentially in value for each node added. Credit: Serge Bloch, Metcalfe
  67. 67. 3 nodes = 3 connections
  68. 68. 4 = 6
  69. 69. 5 = 10
  70. 70. 6 = 15
  71. 71. YEE-HAW!
  72. 72. But what if networks don’t scale? Robin Dunbar has become famous in Silicon Valley for suggesting humans have an innate capacity for only 150 relationships. Credit: Serge Bloch, Dunbar
  73. 73. Not everyone on Facebook has the same value to you.
  74. 74. And some of the people you want to connect with … don’t want to connect to you.
  75. 75. Networks then start to look like this.
  76. 76. The picture gets even worse if you add in a guy named Zipf… Metcalfe + Dunbar + Zipf
  77. 77. George Zipf was a linguist who discovered in any series of resources, such as the English language, each item is used in decending order of about one-half frequency. (Before him, French stenography Jean-Baptiste Estoup discovered the same thing, but gets little credit.) The same goes for French. Trivia bonus point: if I could learn 89 words in French, I would be able to understand 50% of French language.
  78. 78. The be to of and a in that have I Source: Analysis of 1 billion words in the Oxford English Corpus, Oxford Dictionaries, facts-about-the-language 7.0% 3.5% 2.7%
  79. 79. floccinaucinihilipilification This is the least-most used word in the English language. It means “estimating something as valueless.”
  80. 80. If you put Metcalfe and Dunbar and Zipf together, human networks begin to look like this. Missing links. Partial connections.
  81. 81. frequency THE CHALLENGE OF SOCIAL
  82. 82. Frequency, after targeting, is the most important media lever to control.
  83. 83. This is a classic response-frequency curve.
  84. 84. In basic media planning, 3x frequency per week is required to optimize response rates across a media outlet. How did Facebookdo?
  85. 85. “Facebook is not a publisher. Facebook is a platform … (it) enables frequent interactions with consumers over time … real consumer connections become the new impressions.” — Ian Schafer, CEO, Deep Focus, March 2012
  86. 86. avg. frequency0.6in 1 week (brands – politicians)
  87. 87. “Well thanks to the new Facebook Algorithm, all this has now changed…” — Jay Bowen, director of digital content, DaviesMoore
  88. 88. native THE TEMPTATION OF GOING
  89. 89. In December 2008, blogger Chris Brogan gave paid posts a real push – he was given $500 in gift money to shop at Kmart and promote it on his blog. Brogan had 180,000 blog readers at the time.
  91. 91. The same year, tech blogger Robert Scoble was offered a similar deal for Sears. While he has written extensively for technology as a sponsored author, he turned down the $500. I called him to ask why.
  92. 92. “Blogging started as a pushback against committee- based marketing. The danger (of paid posts) is you’ll see a lot more ads on blogs, like listening to talk radio. “What I really liked about blogs initially was I was getting unfettered opinions from people, and now I have to filter opinions. That adds a level of complexity to reading blogs that hasn’t been there before, and that will retard their popularity.” — Robert Scoble
  93. 93. Now, everyone is going “native.”
  94. 94. And it can confuse people.
  95. 95. Is this the world we want to live in?
  96. 96. information A MODEL FOR FLOWING
  97. 97. Media planning is at core a strategy for treating people differently.
  98. 98. Let’s take one brand, a financial services company.
  99. 99. Some of its clients have high value.
  100. 100. And some are penniless.
  101. 101. Other brands have customers who want basically the same thing, and who have basically the same value to the firm.
  102. 102. She wants M&M’s…
  103. 103. So does he.
  104. 104. If we plot a basic communications framework, you can reach a “few” people or “many” people at any time … FEW ≈ MANY INBOUND ≈ OUTBOUND ≈ Engagement Research Mass mediaPersonalization
  105. 105. You want to engage customers if their value is different. If not, use mass media. FEW ≈ MANY INBOUND ≈ OUTBOUND ≈ Engagement Research Mass mediaPersonalization
  106. 106. In 2010, PepsiCo slashed ad spending nearly in half, down to $20 million, and focused on a massive social media initiative. It killed Super Bowl advertising, and instead fund $20 million in grants for positive community projects. Up to 32 ideas could be selected each month for grants from $5,000 to $250,000. $20 million… …for social buzz
  107. 107. In 2010, Pepsi for the first time in decades fell from No. 2 to No. 3 behind Coke and Diet Coke in market share. The news broke in March 2011.
  108. 108. Pepsi was here… FEW ≈ MANY INBOUND ≈ OUTBOUND ≈ Engagement Research Mass mediaPersonalization
  109. 109. … when it should have been here. FEW ≈ MANY INBOUND ≈ OUTBOUND ≈ Engagement Research Mass mediaPersonalization
  110. 110. Pepsi had screwed up, focusing on social media, which was the wrong tool for a commodity brand. “After years of attention, interest and fanfare, earlier this year Pepsi let its much-vaunted social impact initiative, the Pepsi Refresh Project, quietly fizzle away... For marketing geeks, this is a big deal. A powerhouse brand that broke new ground in cause marketing—bolding stepping away from Super Bowl ad spending and redirecting millions to fund positive change—has reverted entirely to full-bore, all-about- me marketing.” — Media Post, “Why Pepsi Canned The Refresh Project,” Oct. 29, 2012
  111. 111. Pepsi quickly announced it would boost 2012 ad spending by 30%. “We need television to make a big, bold statement.” — Pepsi executive to the Wall Street Journal, March 2011.
  112. 112. The more your customers differ the more you need to treat them differently.
  113. 113. Needs differ? Personalization Needs relatively same? Mass media Valuation relatively same? Research Valuation differs? Social engagement
  114. 114. media A NEW METHOD FOR PLANNING
  115. 115. Most media plans look like this.
  116. 116. But it’s time to move beyond swim-lane marketing…
  117. 117. Identification Synchronization To break out in a world of clutter, I suggest we focus on two vital steps: Identifying customers and synchronizing media touchpoints.
  118. 118. HUMAN BEING EMAIL IP ADDRESS DEMO PROFILE Addressable TV Addressable TV can serve different houses on the same street different ads, even as they watch same program. Magazine, newsprint Remnant and package programs can reduce ad rates 90% below those of going publisher direct. Digital ads can hit all devices at a location Retargeting extends impact … Social media (Facebook, Twitter, LI) Numerous targeting & retargeting options build frequency … An example…
  119. 119. HCP PHARMA CONFERENCE ATTENDEES EMAIL IP ADDRESS DEMO PROFILE IP targeting of conf center & hotels Escalator rail wraps, Segway teams Retargeting Email match to Facebook FBX retargeting Direct mail Track My Mail coordinates date of mail delivery with outbound email Email IP targeting of offices Retargeting Retargeting Another, from a recent Mediassociates plan
  120. 120. HCP PHARMA CONFERENCE ATTENDEES Media efficiency: From $14 to $3.50 CPM. Frequency: From 2-3x to 12x controlled.
  121. 121. Media synchronization allows you to control frequency.
  122. 122. request SO, A SIMPLE
  123. 123. Media is at core a strategy for treating people differently.
  124. 124. Social is at core a strategy for spreading memes.
  125. 125. When networks fail, we are tempted to buy human minds.
  126. 126. This is the most famous photo image in the world. Used as background desktop for Windows XP in 2001, it’s been seen by 1 billion people.
  127. 127. It’s not CG. It was taken by Charles O’Rear in 1996 as he drove through Napa Valley. (Image credit: Nick Stern/UK Daily Mail)
  128. 128. You can find it on a map.
  129. 129. Today, it looks like this.
  130. 130. This is our dilemma as marketers, agencies, media planners. How do we reap the yield from the human network while not spoiling it?
  131. 131. @benkunz 203 506 7269