Lots to talk about this week.
As always you can get this content on Tuesdays by subscribing to MarketingBS.substack.com.
If you read just two things this week check out the Reactistan videos and the Matthew Ball essay on the history and future of audio.
On with the show!
- Hunter Biden: The NY Post published a story that was poorly sourced at best and completely fabricated propagandaat worse. It turns out that the Post had challenges finding a reporter who would put their name on it. Twitter and Facebook algorithms both flagged the article within hours. Twitter blocked it completely and even banned follow-up stories from the NYP. Facebook partially shadow-banned it to reduce viral spread. The left was generally supportive of the social networks decisions while and the right was incensed. Both networks clearly did it because they are hyper-vigilante about being blamed for being part of anything that could swing the election and then later proven false. But that was not the reason they gave. Instead both tried to appeal to their standard terms of service. But if they followed those standards as written, for example, “blocking non-verifiable sources” (Twitter), then any NYTs reporting based on anonymous sources in the White House would be blocked. It is NOT obvious what the right answer is for how these networks police content. Who decides what the truth is? Do we really want it to be Jack and Mark and their minions? Meanwhile, if the piece is illegitimate, shouldn’t the heat be put on the NY Post for publishing it rather than the decisions made by the the networks where it was shared? These are hard questions, but rather than thoughtful discussion of the deeper questions, most pundits are using it as an excuse to argue their previously held beliefs. Meanwhile the blocking likely caused the stories to take on more significance (and conspiracy beliefs) than if they had just been left to alone with rebuttals spreading as fast as the initial story. Maybe. Some links: The right-wing publication “The Dispatch” ignored the story the first day due to concerns with its validity, but then commented on the coverage of the coverage. Stratechery’s free weekly post is a good summary and analysis as well.
- Disney: The company announced a reorganization to focus the P&Ls around streaming.Some argue the changes are almost insignificant (just some reporting structure changes), but it is HARD to change a culture, and this is what Bob Chapek (Disney CEO) is trying to do here. If Disney releases a movie on Disney+ it will cannibalize movie theater sales (or sales to Netflix if that was the alternative), but there are so many long term synergies to “owning the customer” that the company believes that will often be the right thing to do to take that short term hit. But it is one thing to have the CEO say “focus on Disney+” and another thing to be an individual executive trying to hit their own personal metrics to make the hundreds of daily decisions the CEO doesn’t see. So Chapek changed the metrics and the ownership. Even so, the changes may not be enough to change the culture, but he is putting his at least putting his money where his mouth is. (Disney had seven (and a half if you count Spiderman) of the top ten grossing theatrical releases in 2019. It is going to be very hard to walk away from that to build something new)
- Motel-6: Stan Richards was the CEO/founder of The Richards Group, a large creative agency. In an internal meeting discussing a multi-cultural ad they were building for Motel-6 (their client), he said that the current version of the ad was “too black” and that it would offend Motel-6’s “white supremacists customers”. His employees in the meeting leaked the comments to Motel-6, who leaked it to the press, and fired the agency they had worked with for 30 years. As the news spread other clients jumped ship including Home Depot, Cracker Barrel, Dr Pepper, H-E-B, and the Salvation Army. Richards apologized. Then apologized again. Then wrote a detailed explanation of what happened. And then “fired himself” to save his company. His full explanation:
“Last week, we were reviewing creative for what was to be a multicultural campaign for one of our clients. Two of our creatives, both white, presented a direction I thought was not multiculturally inclusive enough. I misspoke and commented using words I greatly regret, including three I never should have said: ‘It’s too black.’ To be clear, though, I have never used racial slurs about any ethnic group nor tolerated it from anyone around me. Those words were said innocently, but they were hurtful to members of our staff. I have apologized for that, as I should have. Having spent much of my adult life fighting prejudice, I should have known better.”
While no one at Motel-6 would want a brand that appealed to white supremacists, it is likely that Motel-6 customers ARE more prejudiced towards African Americans than the employees of Motel-6 (or the Richards Group). Richards words were clearly inappropriate, and his conclusions may or may not have been wrong, but his concerns about creating an ad that appealed more to the employees of the business than their customers is a common problem in many businesses. Unfortunately for Richards had two significant gaps in his understanding (in addition to his problematic vocabulary):
- He did not understand that marketing to employees is often as important (or more) as marketing to customers.
- He did not understand that running a successful agency is often more about customer service than it is about driving impact. The output of creative agencies in particular are very difficult to measure, so the quantified cost of switching to a new agency is very low (and may even be a net benefit to get new eyes on the problem - i.e., this may be a good excuse for Motel-6 to do something they should have done anyway).
- Powered By: A new newsletter “ZeroToUsers” read through all 483 founder interviews on IndieHackers and quantified which marketing channels they found most effective. These are new small startups trying to get traction, so conclusions are not generalizable to established businesses, but he found the top channels were SEO, ProductHunt, Marketplaces, and Reddit, but next on the list was “Powered By” - creating and offering a tool or widget and listing “powered by” in the corner of the tool. This is the best type of viral marketing - your product gets advertised as it is used (This type of marketing was “invented” by Hotmail. And note: This newsletter is “powered by” Substack)
- Kanye: The presidential candidate released his first (only?) campaign ad last week through Twitter (since deleted - but still viewable on his campaign site). The ad is young people saying they will vote for Kanye. For a creative guy the ad is… not creative?
- Anti-influencers: A new group will pay for performance when social media accounts achieve specific metrics while attackingspecific brands. It’s a nice gimmick, “man bites dog”, but the pay is underwhelming - they only pay after achieving specific milestones, and then only a maximum of an effective $2 CPM. That’s a pretty great deal for anyone… Anyone want to promote Marketing BS for $2 CPMs?
- Reddit: You can target your Reddit advertising by keyword and subreddit, but research tools are few and far between. This new tool lets you find keyword search volume by subreddit. I have never found Reddit advertising to be very scalable, but you can find pockets to get pretty good ROI. This tool may help.
- TikTok: The platform has produced some idea on what brands should takeaway from the OceanSpray viral sensation (I shared in last week’s briefing). This reeks of “obvious after the fact”. Best advice is to NOT read this stuff, focus on the basics, and if lightning strikes, then by all means film your CEO doing a copy-cat TikTok video.
- Batman: Brand consistency is very important. Brand logos are changed far too often - usually more for the brand manager’s ego and resume than any real need in the business. Catherine Lavery created an infographic of the Batman logo over time. Changes were made, likely too many, but it has been very consistent since its introduction in 1940.
- Figs: The medical apparel company produced ad with female DO doctor holding a “Medical Terms for Dummies” book upside down. Unclear what the company was thinking. Their audience (including many woman and many DO doctors) were upset. The company apologized and said they never meant to be sexist and that they were “founded by women”. But customers were still mad saying, "women can be sexist too". So they apologized a second time. But doctors are still mad and boycotting the scrubs. Sometimes these things are NOT about marketing to employees. If you have a commodity product that is winning a category based on inertia, and it is very easy to switch to a “just as good” competitor, it is totally possible to mess it up by offending your customers.
- Audio: Matthew Ball’s essay on the history and future of audiois the best thing you will read this week. I give you permission to stop reading this briefing and go and check it out now.
- Good Enough: The Economist shows how engineers not drivers are what determines a win in motor sport. Clearly the drivers matter (I was a passenger in an Indy car once and I found just sitting their stressful on my body), but once a metric gets “good enough”, the deciding factor often switches to something else - in this case the engineering.
- Zoom: Zoom grew by being very low friction. It was extremely easy to switch from whatever video conferencing solution you were using. That is great for a challenger. But now that they are the incumbent, they need to find a way to make the product sticky, so that someone else doesn’t come along and do the same thing to them. Last week they launched:
Once developers start building add-ons to Zoom accounts (and customers start using them) it makes it much harder to switch to the next thing to come along. Meanwhile OnZoom trying to be the Expedia for online events (on the Zoom platform). No guarantee either will work, but the right idea to solve a potentially existential problem.
- Google Travel: When I was at Expedia in 2009-2011 I raised the concern that the long term threat to the business was our current largest source of traffic - Google. I was fairly alone in my concerns. Most did not believe Google would give up the massive revenue dollars they were generating from travel. In the ten years since Google HAS begun to cannibalize that revenue and made larger and larger inroads into travel. The WSJ last week profiled a smaller German travel company called GoToHome that has seen their traffic from Google decrease 75% YoYas Google provides “new ways to display search results to satisfy users’ desire for quick access to helpful information.” Channel conflict is not a new thing, but Google has taken to an all new level.
- Marketplaces:Summarized take rates by marketplace:
- Google Analytics: Google announced new "Machine Learning" capabilities for tracking marketing attribution. Using the new features will improve tracking for most companies, but will likely still be worse than the most sophisticated companies. Google’s bet is that better ROI tracking will get the median advertiser to realize they should be spending more. They are likely right.
- Google Search: An exploration of how Google Search is improving based on their machine learning investments. As it gets better and better for users it will mean less and less reasons to actually click on any links (which will be bad for websites, and drive more efforts to regulate the search engine). Love that they can now identify a song title by a user “humming”.
COVID and the New World Order
- Tony Awards: COVID did a number to Broadway this year. Only four shows have qualified for Tony Awards. In the lead actor category there is only one nominated, and even so, he is not even guaranteed to win. If more than 40% of voters do not check his box, the category will not be awarded to anyone. This has happened before but never in the lead actor category.
- Google Productivity: Both self-reported data and tracking of “number of changes to the code base” shows that the productivity of the company’s engineers has dropped significantly since March. More on this in next week’s essay.
- Freshman Enrollment: The data is in and public four-year college freshman enrollment is down 14%.
- College Enrollment 2: Overallundergraduate enrollment is down 4.0%, but that drop is significantly worse for men (-6.4%) than women (-2.2%), another example of COVID accelerating existing trends.
- Refrigerators: Hard goods like refrigerators are the next national shortage
- Furniture:Furniture sales are up so much that Wayfair has seen a tripling of their stock pricesince January. Vox reports that used furniture sales are up as well, with Facebook marketplace +100% since April and NextDoor +28%.
- Madison Ave Retail:Retail real estate on Madison Avenue is down 80% (!) from its peak.
- Cycling: Strava fitness data estimates that cycling miles are up 50-100% YoY or more (depending on the city) across the country. We aren’t just buying more bikes, we are actually using them.
- Chromebooks: Sales are up 90% YoY
- Adversity: Alexey Guzey quotes Applied Divinity Studies: “It’s not a coincidence that [SpaceX is] ranked #1 for both stress and sense of meaning.”, and follows upwith a quote from an Esquire piece on war, ““What people can’t understand, is how much fun Vietnam was. I loved it. I loved it, and I can’t tell anybody.” When I was starting at business school a second year student said to me, “Find a way to do a project with people. You become long term friends by working together on something, not just by having dinners and drinking together.” Another example of short term vs long term thinking when building a career. Go to (metaphorical) Vietnam together. Be stressed. Have fun.
- Mile High Labs: The manufacturer of bulk cannabinoid ingredients is looking for a Chief Commercial Officer based in the Denver/Boulder area. Focus is on building a growth strategy and execution
- Genius vs Butterflies: FS’s blog argues that organizations get aheadby
- Creating good ideas
- Disseminating good ideas across the organization
They quote from the book, “The Secret of Our Success” to show that, for groups, being 10x more social (in sharing ideas) results in 5x more organization-wide ideas than being 100x more genius. They argue we hire too often for IQ and not enough for the ability to socialize ideas through an organization. I’m not convinced, but I expect the right answer depends on the size of the organization. On the margin I expect smaller organizations have more need of geniuses and larger orgs more butterflies.
- Comedians: Bill Grundfest created the Comedy Cellar in NYC in the 1980s. He ended up coaching and developing comedians like Jon Steward, Ray Romano and Bill Maher. This is a fantastic Twitter thread on his story and how he helped those particular comedians find their unique strengths.His conclusion, “You have to find your own rainbow to follow. There is no gold at the end of somebody else’s rainbow.”
- Reactistan: Videos of Pakistani tribespeople trying western food for the first time. It’s hard to describe just how good this is. Wholesome. Hilarious. Enthralling. Enlightening. Some of my favorites are Italian Food, Mexican Food, playing Donkey Kong, Sashimi… But really you can’t go wrong with any of them.
- Not Obvious:When I was growing up there was a trend to give teenage girls fake babies to take care of so they could internalize how hard it was to raise a child. The idea was to reduce teenage pregnancies. Researchers put in the effort to run a randomized control trial in Australia to measure the magnitude of the impact.They randomized the treatment condition on 13-14 year olds from 2003-2006 and then checked back in on the pregnancy rates seven years later. The results: Those given the treatment had 2x the chance of having a baby (8% vs 4%) - taking care of a fake baby didn’t scare the girls, it sold them on the idea. This is why we test things.
- The Future:A 30-minute timelapse video of the future history of the universe. I came across this while trying to understand why I generally enjoy reading non-fiction more than fiction, and yet still enjoy fictional movies more than documentaries. I didn’t answer that question, but found this documentary that is pretty different than anything else out there.
- New Chinese Words: Mandarin has not added new characters in hundreds of years, so when a new “thing” comes into existence, they need to make a word for it by combining existing characters. Some examples:
- Turkey: FIRE CHICKEN
- Giraffe: LONG-NECKED DEER
- Dolphin: SEA PIG
- Penguin: BUSINESS GOOSE
- Kangaroo: POUCHED RAT
- Hippo: RIVER HORSE
See if you can guess what these characters represent:
- ELECTRIC BRAIN
- ELECTRIC VIEW
- ELECTRIC SHADES
- FIRE CARS
- COWBOY PANTS
- STUDY OF CHANGE
- BEAR CAT
- SMALLER BEAR CAT
- DUCK MOUTH BEAST
- OCEAN PANTHER
- CAT HEAD EAGLE
- GLASSES SNAKE
- DRAGON SHRIMP
(Answers at the link)
Keep it simple,