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Spotlight

  1. 1. SPOTLIGHT JOHN DEIGHTON The Fundamental Things Apply John Deighton weighs in on social platforms, the ongoing publishing revolution and software engineers I N T E RV I E W BY G O R D O N W Y N E R J ohn Deighton is the Harold M. Brierley direction of social platforms, whether to crowd- Professor of Business Administration at source product development, to digitize word of Harvard Business School in Boston. He is mouth or simply as platforms for brand-building the executive director of the Marketing Science and game-playing. But the challenge to every- Institute, a board member of the Direct Marketing one—from Apple’s new leadership to Mark Zuck- Education Foundation and a director of the erberg of Facebook—is not to let the methods Berkman Center for Internet and Society at become unhinged from the fundamental things Harvard Law School. He received the Greenhill of human nature. If Zuckerberg and Apple don’t Award for outstanding service to HBS, where he respect the way their customers balance the op- has been on the faculty since 1994. posing pulls of privacy and self-promotion, they will be vulnerable to competitors who do. Where is marketing headed? You often speak about the “publishing revo- I once interviewed professor Ted Levitt of lution.” What do you mean by this? Harvard Business School on the future of mar- keting. Levitt, who had the gift of speaking in The revolution in publishing, from music to epigrams, said, “The future of marketing will be newspapers to books to television, started with more like its past than anyone imagines.” Despite digitizing of content, accelerated with the the fountain of innovation that marketing has birth of the search engine—and is now in new seen the last decade, there is a sense in which he orbit with the use of social and mobile media. was right. If marketing is thought of as the hinge Businesses have fallen and new claimants have that links human nature to business methods, emerged. The power to shape tastes, always the then it isn’t heading anywhere. As the song from key to industrial prosperity, is not with the old the movie Casablanca, “As Time Goes By,” puts publishing empires. it, “The fundamental things apply.” Marketing Before the revolution, publishers pushed hinges business methods to the enduring prin- their product to markets. After the revolution, ciples of human nature, and those principles are the tricky job is not to find a readership for a not going to change. published product, but to publish what people However, if we look at the other side of the are already looking for. In the old world, editors hinge, at the set of business methods operating tried to anticipate curiosity; now Google makes now and in the future, we see a lot of change. curiosity manifest, and the editor role has with- Business methods manifestly are evolving in the ered. In the old world, the great authority brands4 | M A R K E T I N G M A N AG E M E N T | S P R I N G 2 012
  2. 2. like The New York Times and Encyclopedia Britan- unique visitors per month comes from threenica decided for us what knowledge was; now we sources. First, in a self-referential circle, ittell each other, with the help of Facebook, gets traffic from the same search engines thatTwitter and blogs, what we think is knowledge. produce the ideas for articles. An article needs to A model for digital age publishing is Santa appear prominently among the organic (un-Monica, Calif.-based Demand Media, which paid) results returned by search engines, suchhas grown to serve the same digital audience as as Google and Bing, when a consumer enters aThe New York Times in just search term into the searchfive years. Demand Media engine. Second, it receivesis a publisher of a number some traffic from consumersof content sites—including who have developed a brandanswers to commonly asked preference for one of its prop-questions, health advice, erties, and therefore enter itsbeauty articles and humor— Web address directly. Third,and it generates content by a it receives a part of its trafficdifferent process. Its business from inbound links frommodel begins by gathering other websites or contentdata from Google and other that social media users postsources on what queries to social media sites and theirare being searched on the comment streams.Internet or discussed There is a differ-on social media. Next, ence between the kindit uses algorithms to Vita Deighton of “useful” content thatestimate the advertis- Executive Director, Marketing benefits from search- Currenting revenue that could Science Institute engine optimizationbe earned if answers to techniques to ensure Harold M. Brierley Professor ofthese queries are posted Business Administration, Harvard that it ranks well into the Internet, comput- Business School response to searching a lifetime value for queries, and the kind of Director, Berkman Center forthe query to allow it to Internet and Society, Harvard “fun” or “entertaining”filter out topical, but University content that propa-ephemeral, questions. gates virally across theFinally, it outsources digital social network.the most valuable of 2005- Editor, Journal of Consumer Thus, as the volume 2011 Researchthese queries to a stable of Internet traffic onof more than 10,000 1998- Founding Co-editor, Journal of social media increases,writers, copy editors and 2002 Interactive Marketing the kind of contentvideographers—with 1987- Associate Professor of Marketing, that Demand Media’sinstructions to produce 1994 University of Chicago algorithms propose forthe articles and videos at 1982- Assistant Professor of Busi- production will change.a fixed cost. 1987 ness Administration, Amos Tuck Cheezburger.com, a Demand Media’s School, Dartmouth College network of online hu-traffic of 75-million mor sites, illustrates a S P R I N G 2 012 | M A R K E T I N G P OW E R . CO M | 5
  3. 3. SPOTLIGHT JOHN DEIGHTON Interview title twist on the post-revolutionary publisher model. It crowdsources content creation, with viewers supplying it. Visitors to the site submit 18,000 visitors. Revenue comes from advertising sold by ad networks. Another twist to the new publisher model unsolicited submissions daily, of which Cheez- is found in the case of New York City-based burger publishes only 1 percent. The entire Gawker Media. Its audience research is driven John Doe is deciding whether, when and how to conduct produce publishing enterprise is, therefore, driven by by a dashboard. This gossip-based digital media segmentation depends on the business context. user-generated content. It is user-sourced and company is a collectionJ OaboutF12 A N K BY of H N R content user-filtered, and the staff of 40 employees does sites, organized around topics much as a stable little more than moderate it. The only form of magazines would be organized, from tabloid- of acknowledgment users receive for submit- style news to gadget reviews to automotive ting material to the network is the opportunity news, but sourcing much of its content from to receive on-screen credit. However, many artfully recrafted stories from other publica- submit anonymously and cannot be credited. tions. A team of 50 writers work in a room The company makes submission of humor- dominated by displays of specific stories, their ous material easy for site visitors, by supplying traffic counts and whether readership is trend- templates that put uncaptioned photographs ing up or down. The writers do almost no and captioning technology in the hands of site original reporting, but spend their days online, FIRMS FIND CUSTOMERS FIRM WITH FIRM BROADCAST ADVERTISING CUSTOMERS CUSTOMERS FIND FIRMS FIND FIRMS WITH SEARCH WITH SEARCH ENGINES ENGINES CUSTOMERS TALK TO EACH OTHER WITH SOCIAL MEDIA M E T H O D T O T H E M A D N E S S : As business methods evolve in light of social platforms, the challenge for leadership teams has become not letting the meth- ods become unhinged from the fundamental things of human nature. If they don’t respect the way their customers balance the opposing pulls of privacy and self-promotion, they will be vulnerable to competitors who do.6 | M A R K E T I N G M A N AG E M E N T | S P R I N G 2 012
  4. 4. scanning for under-recognized appeal in the power. The Dove brand repositioned itself to getnews stories of others, tweets and Facebook dis- beyond functional claims, and become “a brandclosures. Almost as soon as an article appears on with a point of view.” The firm noticed thatthe website, editors start rewriting its headline to many buyers of personal-care products sharedmatch the search terms that readers are entering a distaste for the beauty industry. They felt itsto find the article. advertising taunted them with images of unat- tainable perfection. Dove therefore became aWhat can firms that are not publishers learn publisher of print, billboard and video contentfrom the publishing revolution? that said nothing about particular products and why they should be bought. Instead it showedIn a word, everything. We are all publishers solidarity with those people whose self-esteemnow. When I try to put a collective noun over was under attack. “The Campaign for Realthe many words that describe the new business Beauty,” viral videos showing what it took tomethods of the new century, I can’t think of a transform a natural person into a beauty icon,better one than “publisher.” The core skills of and its self-esteem workshops for pre-teen girls,publishing are content creation, curation, dis- were elements of a publishing fervor that openedsemination to an audience, mapping the audi- a national debate. For perhaps the first time, itence’s path through the curated content and, was a brand, and not a politician or an article orfinally, monetization. a film, that played the publishing role. Once publishing was a thing apart: Oth-ers built media empires, and corporations paidfor the right to look good in them. Now the “When I try to put a collectiveinformation age is rolling over those empires.New ways of building a reputation are being noun over the many wordsborn. Digital and social media allow direct ac-cess to markets, regulators, users and partners. that describe the newThere is a race to create and spread the contentthat shapes your industry, which defines your business methods of the newplace in the industry. How can a firm claim that century, I can’t think of arole in its industry? One way is to build a digitalcommunity around the interests that the firm better one than publisher.”and its customers and prospects share. Firms vie Vita Iwatato become the nucleus of the communities ofshared interest that govern their industry. More recently, the Ford Motor Company 2008 Becomes IBM’s termmarketing David By shared interests, a SVP, I owe to launched a car in a similar fashion. It recruited and communicationsAaker of marketing consultancy Prophet, I don’t 100 bloggers to do its publishing: It recruitedinclude reasons to like a firm’s offerings. That’s not car lovers, just lovers of social media. They 2002 no one likes being sold to.selling, andNamed SVP, communications When were citizen journalists with a talent for attract-a firm starts to think of itself as a publisher of ing an audience, and Ford gave each of them a 1995 Named VP, corporate communicationscontent, it should go light on persuasive mes- Ford Fiesta for six months. They called themsaging and look rather for content that solves 1989 Moves to IBM corporate Fiesta Agents. Collectively, the agents had beencustomer problems or resonates with the values reaching 12-million fans a week (each agent had 1984 Begins hisof customer groups. IBM career at a research about 120,000 followers) before the campaign Early infacility in Silicon Valley showed the ef- this decade, Unilever began—on YouTube, Facebook, Twitter andfect of publishing content that had this resonant their blogs. They took the cars on adventures S P R I N G 2 012 | M A R K E T I N G P OW E R . CO M | 7
  5. 5. SPOTLIGHT JOHN DEIGHTON Interview title and wrote about their experiences. and marketing is not simply a crisp division Clearly, Ford had between skill at making given up control of and skill at selling. John Doe is deciding whether, when and how to conduct produce the brand mes- When making a segmentation depends on the business context. sage to the Fiesta BY J O H N F and deliver- product R A N K Agents, but results ing the service that more than justified surrounds the offering the risk. Overall the is a matter of writ- campaign achieved ing code, it’s not the a prelaunch target marketer who shapes awareness level of the customer experi- 56 percent among ence, it’s the engineer. those who intended It’s obvious that an to buy in the cat- author writes the egory, at a cost reader’s experience, of about $5 million. not the bookseller. But The industry norm it is less obvious to a for awareness cam- classically trained mar- paigns for cars with “Six firms with a market capitalization of a keter, schooled in the the sales potential distinctions that apply trillion dollars—Apple, Google, Amazon, Facebook, of the Fiesta was to consumer packaged about $75 million. Microsoft and eBay—were founded by software goods markets, that the engineers. In many cases, attempts to transfer usual division of labor How should leadership to business or marketing people were not will ensure that by the students and entirely successful. Could it be that code writers do time that marketing young market- gets its hands on an a better job of marketing than marketers do?” ing professionals iPad, a search engine, prepare for the an operating system environment or a social network, they will experience in the next few years? engineers have already made most of the marketing decisions. It takes a personality like Apple’s Steve Six firms with a market capitalization of a tril- Jobs to get the customer into the design process at lion dollars—Apple, Google, Amazon, Facebook, the front. Microsoft and eBay—were founded by software The collision between two supremely powerful engineers. In many cases, attempts to transfer engineers and a nice but modest marketer is de- leadership to business or marketing people were not scribed in the book, I’m Feeling Lucky: The Confessions entirely successful. Could it be that code writers do of Google Employee Number 59 (Houghton Mif- a better job of marketing than marketers do? Even if flin Harcourt, 2011) by Douglas Edwards. In one the evidence does not support so strong a conclu- exchange, co-founder Larry Page explains patiently sion, it seems inescapable that many young mar- to Edwards, “Marketing likes to lie.” In another, keting professionals will be pursuing their careers Edwards describes the importance of branding and in firms dominated by engineers. And they may a clear positioning statement that differentiates the find that the division of skills between engineering offering from its competitors. Page responds, “If we8 | M A R K E T I N G M A N AG E M E N T | S P R I N G 2 012
  6. 6. can’t win on quality, we shouldn’t win at all.” Win- on a wrinkled napkin in blotchy ballpoint.”ning by marketing is deceitful; he goes on, because Of course no person who understands market-people have been tricked into using an inferior ing with the balance and wisdom of, say, marketingservice. guru Peter Drucker, would side with the engineers Later he warns that he never wants to see a on any of these disagreements. Even truth, after all,product launch delayed for the sake of marketing. needs to be sold. But many young marketers will beAnd Sergey Brin, Google’s other co-founder, an- practicing their craft in the service of code-writingnounces at another point, “I have a good idea. Why engineers whose world is one of binary states, truedon’t we take the marketing budget and use it to and false, efficiency and inefficiency. They need notinoculate Chechen refugees against cholera?” only wisdom, but charisma and political adroitness. In the world of technicians, something either In conclusion, to return to Levitt’s argumentworks or it doesn’t. Edwards observes that with that marketing will change less in the future thanmarketing there’s more gray area. Truth is bounded, anyone thinks, the Edwards’ parable reminds us thathe says, by a slippery slope, at the bottom of which things are more complicated. New business modelslies a cesspool of intellectual dishonesty. Edwards pose new challenges to the application of market-is offering us an account of why it’s so hard to do ing’s enduring principles, yes. But new businessthe work of marketing in a firm dominated by rich leadership also poses challenges. We have learnedand powerful engineers. All too often, they don’t to sell the story to the finance-oriented businessunderstand why truth needs to be sold. Edwards re- leaders who dominated the old industrial econo-counts, “Larry even hated the stiff black cardboard my. Now we have to learn to sell it all over again,the agencies used to present creative campaigns. To this time to the breed of software engineers whoLarry, a good idea was self-evident, even if scrawled dominate the new information economy. MM BLOGGERS SPREAD SENTIMENT TO THEIR FOLLOWERS CONSUMER SENTIMENTI N T E R N E T A G E : Digital and social media allow direct access to markets, regulators, users and partners, helping to spread the content that shapes everyindustry. One way for a firm to become, and remain, relevant is to build a digital community around the interests that its customers and prospects share,spreading sentiment and generating interest. S P R I N G 2 012 | M A R K E T I N G P OW E R . CO M | 9

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