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understandingmarketsWhy it’s essential to put the‘market’ back into marketingWe need to rethink how to engage with new kin...
ADM Oct 15-17 Thomson+Bentley.qxd         9/15/2009      12:17    Page 16      understandingmarkets     ested actions of a...
ADM Oct 15-17 Thomson+Bentley.qxd                  9/15/2009    12:17     Page 17                                         ...
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Social Networks and Marketing


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Scott Thomson, Naked Communications, and Alex Bentley, University of Durham on social networks, markets and marketing

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Social Networks and Marketing

  1. 1. understandingmarketsWhy it’s essential to put the‘market’ back into marketingWe need to rethink how to engage with new kinds of consumer markets, say ScottThomson, Naked Communications, and Dr Alex Bentley, University of DurhamS INCE LAST YEAR’S SEISMIC col- lapse of financial markets, there has been an audible rustle of head-scratching by economists who didn’t seeit coming. The unforeseen and unpredicted scaleof the crisis has since been more thanmatched by the expression of loud andvociferous opinion, sometimes from thesame people, about how governmentscan, or should, intervene in future. There is now an ongoing reappraisal ofnational approaches to managing andinfluencing increasingly interconnectedglobal financial markets; and the rules onhow we now navigate uncharted fiscalwaters are being written as a direct resultof this largely unexpected change. In Melanesian culture, the donor of a gift gains competitive status at the receiver’s expense However, when it comes to the worldof marketing, where consumer habits keting practices based on correct assump- ic ocean, not merely to obtain ‘stuff’ fromhave been transforming dramatically for tions about how a market can be influ- hundreds of miles away but to make per-some time, there sometimes seems to be enced and grown?’ Or, put simply: sonal connections, marriages and alli-less of an apparent ‘rethinking’ of rules of ‘Where is our understanding of the ances, and other ‘phatic’ exchanges.the road, and more of a forced ‘rebooting’ nature of ‘markets’ and their dynamics in There is a lot of traditional anthropo-of established approaches. everyday modern marketing?’ logical thinking that revolves around Marketing planning meetings occur 1) The nature and value of social net- ‘gift-giving’ as not just being a seasonaldaily with phrases and language that works as ‘markets’. Amid the current kindness, or an economic exchange, butsometimes reflect a mismatch of old and craze over social networks, it can a highly competitive means of boostingnew, such as: ‘identifying influentials’ sometimes be easy to overestimate their the status of the gift-giver at the expense(who may not exist) (1), ‘targeting com- short-term significance (and underesti- of the indebted receiver. When we allmunities’ (who may reject such militaris- mate their longer-term impact) on mar- engage in this ‘status competition’ attic analogies and approaches), and ‘pro- keting practice. once, what often emerges is not chaos, asducing virals’ (less something that can be What is not in question is that their might be expected, but elegant marketsmade than something that happens). success is based on some fundamental that are often, importantly, not apparent There is nothing wrong, per se, with human traits that have been around for to any one individual.‘segmentation’, ‘targeting’, or ‘position- some time – if we forget that, we are in In his classic study of Melanesian soci-ing’, but some of the old language doesn’t danger of missing the mark – and unlock- ety, Argonauts of the Western Pacific (1922),fit so well with a planning world now ing their potential value. It is the concept Bronislaw Malinowski famously notedobsessed with ‘collaborative communi- of ‘markets’ themselves that is key. Only that the “extensive, complicated, and yetties’, ‘networks’ and ‘propagation’. This by examining the true nature of markets well ordered” Kula exchange systemmismatching can, at best, become oxy- can we sort the valuable marketing wheat across the southern Pacific was the resultmoronic (is it right to ‘segment’ a com- from the social chaff. of no conscious design or institution.munity?) and, at worst, may lead us down Markets mean trade, which in turn More recently, Stephen Lansing hassome fundamentally flawed paths. means survival, but they also help us described how traditional Balinese water In a similar fashion to the ongoing re- define who we are as a community. We temples feature water goddesses whoappraisal in the global financial world, we don’t just trade things – we ‘exchange preside over a finely-tuned ‘market’ ofshould be reassessing how to analyse and words’, and ‘trade places’, and the origin irrigation water. Without consciousinfluence new kinds of connected con- of culture itself lies in different degrees of design, the water temple system hassumer markets, which can operate inde- ‘value exchange’, whether that value is evolved over centuries of worship, andpendently of any brand influence, and tangible or intangible. yielded optimal rice growth and controlwhere good and bad news travels further Market exchange, in its essence, basic- of pests.and faster than ever. ally serves to maintain human relation- These anthropological cases mirror We have to ask ourselves a number of ships. Thousands of years ago, the first Adam Smith’s ‘invisible hand’ of marketsdifficult questions, such as: ‘Are our mar- Melanesians risked the treacherous Pacif- being made up of the collective self-inter-© World Advertising Research Center 2009 October 2009 • Admap 15
  2. 2. ADM Oct 15-17 Thomson+Bentley.qxd 9/15/2009 12:17 Page 16 understandingmarkets ested actions of a multitude of individuals industry in the analysis of networks, who know their own motives but have no or the simulation of markets by model- knowledge of the total outline of any of ling the activities of many individual their social structure. agents. But this may be misplaced since 2) The misplaced cult of the individ- such ‘agent-based modelling’ only shows ual. If the important stuff related to us that it is very difficult to assess the understanding markets comes out as a behaviour of specific individuals without result of individual actions, but often gauging the context of that behaviour, bears no direct relationship to individual which is basically what the rest of the motivations, why is our marketing cul- market is doing. ture obsessed with the reported attitudes If we accept all the above as fundamen- and actions of those individuals? Why are tally true, then why, as an industry, don’t we more preoccupied with the ‘physics’ of we regularly make the market, and not the individual actions than with the ‘chem- individual, the starting unit of analysis istry’ of collective outcomes? and planning? Why don’t we learn from People have never been autonomous academics studying complex ‘systems’ as ‘individuals’, as market surveys will often that complementary starting point? treat them, since our brains have evolved Even if we conclude that things are too to be social, and social exchange is the key complex to be predictive, we should not (2). Humans are the only primate species just hang our hats on other planning where mothers regularly share their own methods that offer the comforting myth ple, announcing he was deciding whether newborns with members of their group of predictability. We would better practise or not a firm of this stature was good (an act of immense trust), and the instinct proper ‘due diligence’ in the knowledge enough to get a loan.” to share and exchange is so basic that that full, unfettered predictability may Cayne knows all too well that, while scholars such as Sarah Hardy and Haim be unattainable. the bailout money may have come his Ofek (3) argue that, more than a million 3) Markets: a competition to co-oper- way, prestige definitely went the opposite years ago, our pre-human ancestors only ate. Online social networking is nothing way, towards the giver. managed to survive through mutual more than a market for information Much in human society reflects a form exchange of hunted meat for gathered between individuals, with the continual of ‘prestige market’, where each social roots or nuts. production of new ideas. The goal for interaction effectively changes the status Fast-forward to a knife-crime-ridden many is to have as many people as possi- of two individuals (5). We learn who is council estate in Glasgow in the 21st cen- ble notice your information, and so the important from other people, so when we tury, or a part of London where fighting process can paradoxically be seen as a see Jim deferring to Susie in the board- dogs are a fashionable accessory, and we competition to ‘co-operate’, in the sense room, we know that we should listen see the ongoing need to have the ability to of a race to be credited for sharing the more to Susie than to Jim – at least on that assess the potential benefits and risks of most information. particular issue. Jim has effectively just interacting with strangers. We have bas- If this is true for modern day com- transferred prestige to Susie, in a ‘prestige ically evolved to be great predictors of the munities, the same has always been true market exchange’. Susie might then like behaviours of others, if only because our of their predecessors and, if we are to to see people deferring to Jim, because survival used to depend on it, and some- leverage their true value, we cannot then they will defer to her by association, times still does. ignore all the legwork done in trying to so she collects a bit of value – a ‘retainer Assessing risk, reading others, and understand these ancient equivalents of fee’, if you like – from an interaction trading and exchanging are at the heart of modern communities. involving two other people. This kind of what makes us human. These social func- Just as the Melanesians’ Kula system social transfer happens constantly in tions are so inherent to our functioning was a competitive means of boosting the online social networks. that, on brain scans, for example, the status of the gift-giver, the recent financial The best a brand can hope for in enter- regions where physical pleasure registers bail-outs can be seen in more than money ing such a domain is that they likewise are the same places where social accept- terms by considering the revised statuses gain prestige value from an interaction ance lights up (4). of ‘giver and receiver’. This sheds light on between two other people. The worst that Government policymakers are on to comments made by Jimmy Cayne, former a brand can do is undermine the prestige part of this, with new initiatives such as chief executive of US bank Bear Stearns, of market participants, which can, unfor- the ‘Social Brain’ project at the Royal Soci- regarding Timothy Geithner of the New tunately, be the case with much misguid- ety of Arts ( York Federal Reserve: “The audacity of ed branded content development. In parallel, there is a growing cottage that prick, in front of the American peo- Achieving the most popular page in 16 Admap • October 2009 © World Advertising Research Center 2009
  3. 3. ADM Oct 15-17 Thomson+Bentley.qxd 9/15/2009 12:17 Page 17 Scott Thomson is global head of evaluation at Naked Communications and founder of the marketing analytics unit Naked Numbers. Alex Bentley (far right) is reader in anthropology at Durham University, where he is co-founder of the Centre for the Coevolution of Biology and Culture. which they consider your brand as a valid constituent part of their chang- ing market, and how your brand exists in terms of ‘market prestige’. d) Forget the myth of the silver bullet for targeting, but instead map and quant- ify market propensities for brand trac- tion, uptake and spread. e) Forget over-prolonged but diligent planning projects leading to ‘large in- formed punts’, and instead put in place accountability frameworks that get an immediate read on any gained market traction, and then scale up investment accordingly. f) Do more innovative stuff more quick- ly, and learn fast. 5) Put the ‘market’ back into mar- keting. It is all too easy after big market events, such as the recent financial crash, your community is not a fuzzy, feelgood The Balinese water temple system is a finely- to grab for the lexicon of natural disasters, moment, where everyone likes you; it is tuned ‘market’ of irrigation water, which has describing the events as a ‘tsunami of neg- the acquisition of economic influence in evolved over centuries of worship to yield ative sentiment hitting markets’, or as an exceedingly competitive online mar- optimal rice growth and control of pests ‘earthquakes shaking the foundations of ket. The only difference with online mar- the world economy’. As clichéd as these kets is that we can see the network con- aiming for a particular point of impact. metaphors may be, they do, however, cap- nections that once were implied or inter- Instead, we should look upon it as ture the unexpected nature and the scale nalised in our memories; if Jim defers to more akin to a game of pinball, and recog- of some market events. Markets, just like Susie, we can often tell pretty easily, nise that once we set the ball in play, we the shifting patterns of tectonic plates, because Jim, with 20 friends, posts a blog have limited but crucial points of influ- may be too complex to be predictive and, link to Susie, who has several thousand ence, but that there are ultimately other if we accept this as the true state of affairs, other followers. market forces at work. the implications for modern marketing 4) Marketing is like pinball, not ten- This is not to say we cannot maximise practice are clear. pin bowling. This might lead us to think the chances of investment success, as First and foremost, we need to put mar- that network analysis is the key to it all. If there are some clearly emerging ‘new kets, and our understanding of markets, we can ‘map’ these interactions online, we rules’ we can adopt to help our chances: back into marketing. can see how the world works. Well, prob- a) Understand markets by focusing the ably not, if only because each part of our totality of market changes. Make the 1 A Bentley and M Earls: Forget influentials, lives represents a different network, and system as a whole the core bit of analy- herd-like copying is how brands spread. that network changes – often radically - sis, not the individual or the network Admap (Nov) 2008, pp19-22. every day. of individuals. We should aim our tools 2 RIM Dunbar and S Shultz: Evolution in the The constant communication among and technology here, moving away social brain. Science 317: 1344-1347, 2007. so many people is essentially impossible from, for example, the analysis of indi- 3 H Ofek: Second Nature: Economic Origins of Human Evolution. Cambridge University to track meaningfully and learn from at vidual attitudes towards incorporating Press, 2001. that individual level. Yet this is precisely social and market ‘frames’ of reference. 4 MD Lieberman and NI Eisenberger: the point: markets emerge from messy b) Forget researching individual self-per- Pains and pleasures of social life. Science interactions and, as market planners, it is ception, but do collate individual per- 323: 890-891, 2009. better to read the ebb and flow of overall ceptions of others/wider market 5 J Henrich and F Gil-White: The evolution of market conditions than it is to hunt trends, and our perception of what prestige. Evolution and Human Behavior 22: for silver bullets. We have to recognise those ‘others’ are up to. 1-32, 2001. the limited degree of influence we have c) Make people your partners, make your in this context. We should no longer look own prestige markets and build com- more on understanding at marketing investment as analogous munities of competitive-creation (not markets at to a well-thrown ten-pin bowling ball just co-creation). Check the extent to © World Advertising Research Center 2009 October 2009 • Admap 17