Monday, 16 December 2013

Growth Hacking and Marketing: All I want for Christmas is a sense of perspective

With a week to go until Christmas the silly season is now in full swing – the annual prize fight between the big British brands for the best Christmas TV ad has already been won by John Lewis (in my opinion), and the remaining contenders for the Christmas single steeplechase are putting in their final sprint to the finish. But in the Techtopia, the world looks a little different, and a couple of things that appeared in my Twitter feed last week have prompted me to do some thinking. The first has been the growing buzz around the concept of Growth Hacking and its impact upon Marketing in general, and the second, seemly disconnected, was this absolute (Christmas) gift from Canadian airline, Westjet.

Firstly, let’s talk about Growth Hacking, where did it come from? The fact it arose was pretty understandable – start-ups are small and agile and out of necessity marketing tasks often fall to an engineer. Given this, and the engineer’s comfort with data, the focus on user analysis to affect marketing is a logical outcome. Techtopia, though, can have a pretty blinkered world view, and it carries a prejudice against “traditional” businesses. In this context, a data driven approach to marketing must have seemed incredibly new and revelatory. Attach a label to it (including the inevitable use of “hack”), attend a few conferences, and bingo, you have a new ‘disruptive’ force to take on the business world.

As you may have guessed, I am something of a sceptic about the rise of the Growth Hacker. Initially my scepticism arose mainly because the term was poorly defined and the actions undertaken by self-proclaimed practitioners – essentially heavy use of data to identify and acquire new users, and to improve product – were really just plain old marketing. Non-tech companies have been conducting data-focused customer acquisition for decades – examples such as customer loyalty programmes, sales data generated by register receipts and market research – are nothing new. The really clever marketers, such as FMCG giants Unilever were doing the same for product development by blending the techniques above with product and consumer behaviour research. Ironically, if there’s anywhere that has had a “traditional” divide between product and marketing, it’s the Tech world itself. The other main difference is that in the online world customer and user data is ludicrously easy to come by, Marketing departments of even 15 years ago would have given their eye-teeth to have the data that we can get from online analytics. But it doesn't mean they weren't trying to do so – frequent flyer programmes weren't created to give you free flights.

However, as Growth Hacking has evolved, it has become something more substantial than a slide deck at a tech conference. It is more defined, and is now crucial to some pretty impressive actions which I’d argue go beyond just analysis and display genuine creative thinking, such as the Air B’n’B case study in Andrew Chen’s article from the link above. I’d be willing to agree that Growth Hacking is indeed a new marketing discipline – folks like Patrick Vlaskovits are pretty bullish and compelling on this point – and this is genuinely quite exciting, but it doesn't change the fact that Growth Hacking still sits firmly in the realm of Marketing.
So why does this matter? It matters because the underlying assumption that Growth Hacking is somehow different to Marketing betrays a glaring lack of knowledge of how businesses outside Tech actually work. It is a classic case of that tiresome Techtopian tendency to appropriate something from other areas of business, sometimes out of ignorance, then claiming it as unique to Tech – like a Bolshie teenager who claims his favourite artist is unique despite them sampling everyone from The Beatles to John Lee Hooker (you can Google him). It’s actually a bit embarrassing to see it happen so often.

More important though, it matters because at its essence Growth Hacking is a tactical discipline – it is based on a series of actions that aim to address current problems and it prioritises short-term growth (hence the name) above all else. Because of this it is not strategic, and as your start-up grows, Growth Hacking alone will not be enough to build long term market value. Having a strategic understanding of the relationship between your company and its customers must become the priority. In his article about Growth Hackers, Ellis admits this much – seeing the role as a necessary hybrid until a company grows to a certain level. At this point, the Growth Hacker assumes a role amongst a wider team of Marketing disciplines, a specialist role certainly, but part of a team. Returning to Vlaskovits, his belief that the best Growth Hackers use a medium that is as disruptive as the message itself is straight from the traditional media buyer’s playbook. But this is where I take issue with Chen’s view of Growth Hacking as well as anyone who refers to the “death” of Marketing.

Growth Hacking is not disrupting the marketing team because that assumes that Marketing is somehow a stable place. Marketing as a function constantly evolves to take advantage of new opportunities to reach audiences and sell them new products; in the last century we've gone from the telegraph to the Internet, picking up radio, cinema, television, colour television, cable television, the Web, social media along the way just to name a few. We've gone from push marketing to pull marketing where customers (and therefore marketers) have much more say in the product development process. Each of these changes brought new challenges, new forms of measurement and new opportunities, as well as new specialists disciplines into marketing. But through them all, the basics of marketing remained the same.

Which brings us all the way back to that viral gem from Westjet. At the same time I was reading about the death of marketing at the clammy hands of the Growth Hackers, my Twitter, Facebook and LinkedIn feeds were lighting up with the story of a flight of normal people who saw their Christmas wishes appear on a baggage carousel. My friends talked about the general awesomeness of the idea and the film; my business contacts talked about the genius of the business itself; and my marketing comrades shook their heads and just said “I wish I’d done that”. But the point is this – one Marketing department did do that (with the help of a very clever ad agency) and probably at surprisingly little cost. As a result, the people on that flight will probably remain loyal to Westjet, and all around the world people who have never heard of Westjet may just think about doing so if they’re ever in Canada.

That, right there, is a growth hack from a traditional Marketing department.

Many thanks go to Peter Thomson for his feedback and advice with this post.

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Tuesday, 30 July 2013

OmnicomPublisaurus - Adland spawns a big new beast

So the big merger has returned to the ad world. The merger of advertising groups Publicis and Omnicom will see the formation of a $35bn new entity that assumes the number one spot from the $30bn incumbent WPP. With so much interbreeding between adland and the tech world over the last 15 or so years, what will be the ramifications for tech?

Firstly let's look at what sort of a beasts we're dealing with. To start with, neither Omnicom or Publicis (nor WPP, Havas, Interpublic, or the handful of other players) are ad agencies as they are sometimes erroneously referred to in the tech world. Instead they are large portfolios groups comprising a full array of subsidiary marketing companies, who individually and collectively provide a range of marketing services to clients. The parent groups are constantly acquiring and divesting portfolio businesses as they seek to fine tune their offering to clients. The enmeshing of tech into their offerings in the last decade or so was part of this development. (It was also one of the drivers behind the development of tech in Silicon Roundabout).

Competition is fierce at every level - amongst the groups, between the portfolio companies and within the portfolio companies. Portfolio groups typically grow organically via acquisition of new clients either at a high level (WPP itself) or at a portfolio company level as the subsidiaries pitch new accounts. Though every so often a group will merge, the current Omnicom-Publicis merger is by far the largest in years.

Since the development of search advertising, tech has become ever more intrinsically combined with adland. Acting initially as a media channel (think search words, banner ads etc), tech has gradually moved backwards up the adland food chain and now comprises an existential threat to many ad companies and possibly ad groups, though as I've written before, I don't believe tech claims that advertising is dead. It is this threat that is one of the justifications (£) behind this mega-merger. But the $35bn question is whether this will work. Certainly "marriages of equals" have a mixed history of success at best (think AOL - Time Warner), and as the Financial Times tells us (£), investors remain unconvinced. Sir Martin Sorrell, CEO of WPP is displaying his usual sangfroid in the face of the merger.

However ultimately it is the tech world that will make or break this deal. This merger is all about using scale to provide efficiency and safety against the new species of competitors. But if recent developments in tech have taught us nothing else, it is that scale is within reach of many businesses today. A agency of just a handful of experts can do the same sort of work that required a global agency network as little as 10 years ago. Moreover, the merging of two big dinosaurs to create an even bigger dinosaur still results in a big slow lumbering animal that will spend the next few years trying to figure out which parts of itself are vital and which are redundant (let alone which side of its brain will come to dominate). A lot will happen in those few years, and with talented staff and dubious clients now eyeing the exits there are many opportunities for the clever and nimble. As Darwin taught us, it is not the strongest that survive, but the ones most adaptable to change.

Wednesday, 15 May 2013

Windows taught the difference between UX and UI

<This article has been reproduced in Tech City News>

So it seems one of the bravest – and possibly most reckless – user experience (UX) changes in recent years has failed; Microsoft has announced that it will reinstate the Start Button to its desktop layout.
The announcement is an acknowledgement that it has failed in its attempt to migrate desktop users from their familiar Windows to the tiled layout first seen in Metro for mobile devices and later developed for all devices and called Windows 8.

On some levels this failure is a shame

The rationale for behind this migration was solid – Microsoft had seen the future of devices and knew that the majority of activity would be on mobile devices. Microsoft reasoned that it was vital to bring its vast desktop user base into contact with this new mobile world.
They certainly had a product that worked well for mobile – the tiled interface Metro (later Windows 8) was elegant and helpful, superior to the static layout of Apple’s iOS and cleaner than Android whilst just as dynamic.

It also made a lot of sense for Microsoft as they’d only need to focus on a single product rather than parallel one. If Microsoft could bring the market to their way of thinking, they would become the standard for mobile just like they had for desktop. It had always worked this way when they had made changes to Windows in the past.

So they ‘bet the company’ on the change.

Unfortunately for Microsoft things didn’t work out quite howthey had hoped. We can be sure Microsoft had expected some resistance to the change – given their 30 year ubiquity in desktop user interface (UI) there could be few companies with such experience in customer resistance to change. But this time the change was not just evolutionary – it was a total break from the past, a parallel with the change from MS DOS to Windows itself.

As it turned out, users hated this change even more than predicted; all their menus had disappeared, the Start Button was gone, and the tiled interface that worked so well with stubby fingers made no sense when using a mouse. In their rush to deliver the future, Microsoft had forgotten ubiquity comes with a price; most people don’t like change.

Lurking beneath the surface of this problem for Microsoft was the concept of Skeuomorphism – the transference of practical design elements from one application into another where their use is superfluous. Classic examples of this are the Qwerty keyboard and wood panelled cars.

Skeuomorphism may seem a pretty abstract subject area, but for designers it’s vitally important as changes in technology and consumer products mean changes to the how we interact with objects. Design luminaries like Jony Ive of Apple hate skeuomorphism, as they are forced to add largely unnecessary elements they believe unnecessary.

However as I’ve argued before, for the ordinary user, skeuomorphic design matters – it creates familiar connections to unfamiliar technologies. A Qwerty keyboard allows the user to make an intuitive connection with a device; wood panelled cards provide cues as to the premium quality of the product (no, seriously); showing a reel-to-reel tape rolling whilst recording on a digital device provides a fun connection with the past even for those too young to have ever used reel to reel.

In this way Skeuomorphism creates emotional connections to products every bit as valuable as the clean simple lines of the product itself. In my previous blog post I advised that those pushing for change would be advised to see how consumers responded to Windows 8 which was a break from a skeuomorphic past.
This, perhaps, is where Microsoft went wrong. Windows Metro and Windows 8 were beautifully designed for the new mobile medium. The people who bought these devices were early adopters, by definition predisposed to like change and difference. But the majority of Windows users are not like this; they want familiar, it helps them to navigate the constant blizzard of new technology. In returning the Start Button, Microsoft has been forced to acknowledge that they too have created their own skeuomorph and like it or not, for the time being, they’re stuck with it.

Their consumers have spoken, and to their credit, Microsoft have listened. The design world would be wise to do the same.

Friday, 5 April 2013

Facebook Home: Clearly someone wasn't thinking

Honestly, you can't blame Facebook for thinking new Facebook Home is going to change the world... for them it probably seemed like an excellent idea (for them)... just think of all that wonderful data they could capture by being permanently on a user's home screen... all... that... data. It's the stuff Facebook drools itself to sleep about.

But there's just one problem. What's in it for the user? Facebook's promotional materials say we'll have a constant stream of our friends fab photos and posts... how cool is that?! But they clearly haven't thought this through because Facebook Home dramatically fails the 'real world' test.

Let's be clear, my friends are an awesome bunch of people, that's why we're friends. They have some interesting views, do cool things and they are kind enough to want share them. Some of my friends are also keen amateur photographers, but most of them are like me and... well, the stuff we post on Facebook wouldn't win any prizes, it's just there to capture a moment... sort of like a Monet painting, but without use of light, or composition, or the ponds or bridges, or the artistic merit... and it's mostly shit.

So the though of a steady stream of such photos filling my screen is really rather horrifying. Added to that there will be all the comments that come with such shots and you have a ready-made way to pollute my phone with stuff I really don't want to see... ALL THE TIME.

On the other hand, like many people though, I am lucky enough to have friends who are pretty good at photography. Naturally, when composing shots, they tend to like a range of formats - landscape, panorama landscape, portrait... or square format as used by Instagram. They don't shoot in the highly idiosyncratic tall portrait format that would be demanded of Facebook Home, so even their wonderful shots will be ruined as well. In fact, with the release of Facebook Home, Facebook has just effectively screwed Instagram (and I'd just gotten good at composing square photos!)

So there it is, Facebook Home, the more I think about this, the more I think they weren't thinking at all!

Thursday, 4 April 2013

Advertising is dead; long live advertising

Whilst watching TV last night I saw something pretty special, it was this ad from Southern Comfort. Now I'm a little slow off the mark here - the ad was released last year, but after just one viewing I was hooked. This extremely simple ad displays what advertising does best - in the course of delivering a commercial message it is simultaneously insightful, humorous, soothing, self-fulfilling and above all, highly charismatic. The direction of the ad is a spot on; the deliberate lack of pace, the lingering shots, the rich colour palette, the brilliant casting... it hit the mark on all counts. This is what advertising does when it really does its job. It's also the reason why advertising (and yes, even TV advertising) will remain a vital tool for marketers for a long time to come.

This last statement may come as some surprise to the tech community which is told on a very regular basis that advertising is being disrupted in all sorts of ways and is (figuratively) lying in hospital on life support. Some of these beliefs are almost true - driven by technological development in three key areas and interestingly they have done so by moving backwards along the development process. Firstly, the "distribution" aspect of advertising (what people in the ad industry call "media planning and buying") has been under a sustained assault for more than a decade now as clients look for efficiencies with their media spend. Secondly, as technologies have allowed scale, other "back-end" aspects of the industry - production, printing, image retouching etc - have also come under attack and experienced radical change. Again, these changes were driven by clients seeking cost reductions. The third major area of change has been what ad people refer to as "insight generation", basically getting to know your audience. In recent years the advance of technology and widespread adoption of social media has seen the generation of phenomenal amounts of consumer data - purchase patterns, preferences etc. All those social media interactions generate information that allows marketers to know you just that little bit better. Some of it of course feeds into the media planning and buying process, but as you'd hope, it also feeds into other areas of marketing like product development and for ad folk, the development of genuine insights about audiences that help to make better communications.

The impact of digital has seen a entire new class and discipline in the industry that didn't exist 15 years ago. Large marketing portfolio companies like WPP and Omnicom are acutely aware of this and are constantly merging, divesting, and investing in start-ups that improve their offering to these clients.

However, for all the benefits technology has provided in the the one area that has proven impervious to "disruption"*, it is the bit that requires human input, the bit that asks for humans to communicate with other humans, and which is therefore the most important. In advertising it is referred to as the "creative"; interestingly (and a little depressingly) in tech is prosaically referred to as "content".

The tech industry has always had an ambivalent relationship with marketing and its subset, advertising. When not confusing marketing with sales, and advertising with media planning and buying, or indulging its obsession with trying to disrupt the industry, tech companies are sometimes forced to make faltering attempts at marketing for themselves. The result of these attempts is evident all around us, and almost universally terrible - from betting apps, to cash for gold, to insurance services, to payday lending sites to name but a few. Marketing propositions are generally weak and undifferentiated, execution is poor - an over-reliance on A/B testing means that whilst the better creative (not content, thank you) runs, it is the lesser of two evils rather than something of true quality like the Southern Comfort ad**. Compounding the creative problem, many tech advertisers opt for media strategies that are either based on saturation bombing the mainstream media or the mistaken belief they will produce the next viral hit and won't need media spend at all. The former strategy DOES work, but is highly wasteful; the latter, driven but a misguided unwillingness to spend, is hugely unreliable and largely luck rather than good management. For companies who are using venture funding for these campaigns, it's a dreadful waste of precious funds. For companies who are generating revenue, it's slightly less of an issue because this approach will often increase the volume of sales, but does so at risk of damaging your brand and driving the commodisation of your market; both are bad in the long term.

At this point you may likely point to businesses like Facebook and Google who got where they did without advertising. You would be correct to do so. If you are the next Google or Facebook, please feel free to ignore this article, as I clearly have nothing to teach you. However if you are like pretty much every other business, at some point you will need to market, and eventually that will mean advertising.

So what can be done about this? I believe there are three things that tech companies and investors should start doing. Firstly, understand marketing is not sales, as an old marketing professor of mine used to say, the objective of marketing is to make selling unnecessary. Look no further than Apple for evidence of this, their whole product development cycle is run as a marketing exercise, marketing enables them to develop products so desirable their advertising merely needs to say "here it is". Secondly, we should realise that whilst you do need to spend money on marketing, you don't need to spend beyond your means. Marketing should be based on doing the very best with what you can afford. Some examples of this are worth highlighting:
  • The excellent awareness campaign that Hailo have undertaken - realising that their audience is just as much the drivers as the passengers lead them to focus on bus shelter advertising and strongly branded taxis. 
  • Wonga, love their TV ads or hate them, they have delivered a strong message ("We give it to you straight") and their execution is differentiated in a crowded market place
  • Returning to Apple. To steal a phrase from football, their approach of "Total Marketing" is something to which every tech company should aspire.
Finally, and most practically, as we try and forge a new tech powerhouse in East London (indeed across the UK) we should not forget that the UK is already a world leader in marketing services, and particularly advertising. There are firms across London and the country who are more than capable of supplying the sorts of services that tech companies need to take on each other, and eventually, the world. Most tech start-ups in the UK already have branding that is far superior to that of their contemporaries worldwide - mostly because most tech founders have contacts in the design industry. But services go far beyond that. Tech City co-exists with a hotspot of marketing services firms, global creative powerhouse Mother, sits at the heart, and new hotshops like Fearlessly Frank can be found within a short walk of Hoxton Square. Whilst the announcement of Tech City saw an influx of potential entrepreneurs, the area has long been the home of advertising creatives (particularly). Whilst many creatives are already employed full time or as freelancers, given the chance, many would be interested in doing something unusual that isn't for a multinational pharmaceutical company or manufacturer of pet food (which honestly is pretty dull work). It's just a question of networking and making a deal.

Best of all, this can all happen, now. The resources are already there. All that is needed is an introduction, an exchange of ideas, and (honestly) for tech companies to understand that as awesome as their product is, no one will buy it if they don't know about it.

* Interestingly, Disruption is the title of a very widely read advertising book by Jean-Marie Dru, the founder of the TBWA group. Dru took the management theory of Schumpeter and adapted it to advertising. The book was published in 1996.
** If you're of a more quantitative persuasion, you'd say that most of this advertising sits at the middle of the distribution curve, where as the truly excellent work is off to the right where it doesn't have to fight to stand out.

Tuesday, 15 January 2013

Listen Facebook, just take my damn money!

When Facebook purchased Instagram last year part of the rationale was that Facebook was lousy with mobile and the acquisition would help. This was no frivolous thing, with mobile uptake and activity on Facebook outstripping browser-based action, and a majority of ad revenue coming from its browser-based activities Facebook could see writing on the wall.

So the question is, how are they going? Unfortunately if recent developments are anything to go by, pretty damn poorly. The challenge of course with mobile, is finding a way to out ads in whilst trying to adhere to that basic principle of advertising - try to avoid excessively irritating your users. There's a fine line between ensuring you get your message across (heck a company has to make money, I get that part), and driving users to the point of homicidal distraction. The Facebook's browser ads fall into the former category.

The contrast with the experience of using mobile couldn't be bigger. Recently, Facebook has started including full page "sponsored posts" on its mobile app. Or should I say in my case, and some others I know "a single sponsored post, repeated over and over again". Mine is for a trading app (see right), a friend of mine is persistently haunted by gambling app whenever he uses FB mobile. That the same ad comes up repeatedly and exclusively, in my case since before Christmas, is intensely irritating.

Now I should repeat at this point I do not have an objection to advertising on Facebook mobile - the company is trying to build revenue, and I'm getting what I believe to be a valuable service. My objections are these: Firstly, don't fill the whole screen, you wouldn't have an automatic pop up that fills a browser's screen, so don't do it on mobile. I'd happy accept if the ad came further down the News Feed. Secondly and more importantly, Facebook knows more about me by now than pretty much any other entity, human or otherwise, it has the capability to target me as a consumer to the point where I should be clicking without a second thought. So why does keep hitting me with the same ad that I've previously ignored? (repeatedly) This is getting back to the basic part of marketing - it turns me against both the advertiser (whoever they are) and the medium (that's Facebook). It makes my experience less enjoyable, it turns me onto other services like Path. If you Facebook really wanted to test the efficacy of the advertising why not include a "Dislike" button... it's certainly controversial, but both Facebook and the advertisers would start getting solid feedback on the quality of content, as opposed to the inferred response now: Click through = good; inactivity = ??

But here's the real kicker. I use Facebook a lot, and for all my gripes I find it a very useful service. In fact I'm getting to the point where I would certainly pay money to use it... because I've realised it's utility. So if Facebook were to offer me to pay a subscription (say £5 a month to be rid of such advertising), I'd seriously consider it... very seriously. There's an opportunity here for Facebook. I'm not suggesting they force people to pay a subscription, but given the choice between this sort of intrusive advertising and £60 a year... at this point I'd likely take the latter. Facebook would have a novel new revenue stream, users, and perhaps since *I* am paying Facebook rather than advertisers, they might start to show me a bit more courtesy.

So, Facebook, do the right thing, just take my damn money!

Thursday, 6 December 2012

Quit whining, Instagram are a business

The response to the news that Instagram have changed their integration with Twitter has me puzzled... really puzzled. I'm not puzzled as to why Instagram chose to do so, as they see it, they want more control of the data and user experience for themselves. I'm also not puzzled that Twitter have done similar things in the past, for example to LinkedIn. No, what really puzzles me has been the response from the tech community... the community normally so enamoured with the idea of being an entrepreneur and making a truckload of cash (and possibly saving the world in the process).

From articles like this though, they've forgotten that they're dealing with business and assume they're dealing with charities instead. As I see it there's a lack of understanding about how businesses make money, or more fundamentally that businesses need to make money at all. Let's not forget, neither Instagram nor Twitter charge users for the services they supply - of course these companies derive economic benefit from access to customers' data, but it's not quite the same - so no one can claim to have been "screwed" out of anything. Instagram are acting in what they see as their best interests. If a business decides it's in their best interest to close off or change aspects of their service, they're entitled to do so. The flip side to this is that customers are entitled to act in their best interests - if they're unhappy with the business they can stop using it or switch to a competitor. If you don't want to stop using it, then stop complaining about something you get for free.

Part of the argument (the "breaking the spirit of Web 2.0" part) is that these businesses may build their systems on the back of open platforms. As Instagram has admitted, at the start they didn't have a presence and frictionless integration with Twitter made sense - in marketing we do this all the time to help build awareness, it's called "sampling". But these things can't last if the company wants to make money as they must. The same thing can be said of everything Facebook has been doing since it started.

So this is the part that has me genuinely puzzled. The tech community is suffused with entrepreneurship and lauds entrepreneurs. It tracks their rises and falls, it worships the most successful of them, and it advocates for them to anyone who will listen. Yet, from the evidence on display over the last day or so, the tech community has forgotten the most basic precept of businesses is to make money, and that business/customer relationship is a two way street.

Personally I think Instagram are making a mistake, but then again, that's their choice. As a customer I have a choice in this too. I won't be exercising that at this point. But if people feel strongly enough about it, they should stop whining and exercise that choice for themselves.

>>> Update: What on earth were Instagram thinking? They've properly screwed their users now. Appropriating user data is one thing, but unilaterally claiming ownership is on a completely different level! Photography like any intellectual property has economic value (I'm guessing they know this bit). This doesn't just mildly annoy users, it's theft. It's like iTunes unilaterally deciding that all the content on iTunes is now owned by Apple.

Worse still, Instagram turned a what could have been a really useful revenue stream - sale of user content from a potential win (if the rights were shared with users) to a massive own goal.

User data is pretty abstract, you wouldn't expect much of a backlash, this is something a bit different.