Marketing BS Briefing: At Long Last Edition

Branding Hackers, Gymnastic Difficulty, Amazon Advertising, Star Trek Redshirts and more!

It’s been a while since the last Briefing so lots of good stuff to share. If you get a chance let me know your relative preference for essays vs briefings. Now that I am only doing one per week, I can adjust relatively easily between the two. Just reply to this message.

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Follow-up

  • Degrees of Difficulty: Last week’s essay explored how difficult it is to determine the degree of difficulty when judging performance. I was remiss in not including the recent gymnastics news. Simone Biles was the first female gymnast to attempt the “Yurchenko Double Pike” in competition. She argues that the judges have given the move a far too low difficulty rating. One potential explanation is that because the move is so dangerous the “raters” do not want to give it a score that would tempt other, less skilled, gymnasts to attempt it. A reminder that “difficulty ratings” are not really about ranking difficulty, they are about shifting incentives.

  • Merchant Advertising: In “In Praise of Advertising” and “Platform Economics” I wrote about how advertising on platforms allows those platforms to collect more of the value created by making suppliers reveal their true willingness to pay. Last week Instacart revealed that it will hit $1B in revenue next year from it’s in-ap ads.

  • Stories: In “Everything becomes the same thing” I argued that platforms need to start out different to get to scale, but then begin to become more and more similar to monetize their customer base in every way possible. Case in Point: UberEats has added “stories”

  • Auction Economics: The morning I published “Platform Economics” Byrne Hobart at The Diff quoted from the piece and expanded on the idea. The post is behind his paywall (Do subscribe. It is excellent!), but here is the gist:

    • The Expedia model generated cash flow upfront, while Booking.com took in cash on a delay. While some customers didn't care about this, many of them did—but switching models would mean a huge cash flow hit, which would be hard to justify.

    • Expedia negotiated rankings one-one-one with hotels; Booking just let hotels choose how much of their margin to bid, and ranked them accordingly.

    • The first concern is the kind of strategic limitation that turns a temporary constraint into an indefinite one. If a growing company has negative working capital, any switch to a positive working capital model has a cost that __grows__ over time. If the switch doesn't happen, it gets harder every year. The second concern is also one embodying temporary tradeoffs. Every auction-based ranking mechanism initially leaves money on the table; it takes time for ad buyers to structure their business model around arbitrage opportunities. So auction-based systems are easy to start with, or easy to switch to early on, but hard to justify later.

Marketing

Marketing to Employees

Privacy

Analytics and Prediction

AI/GPT-3/Machine Learning

COVID and the New World Order

Careers

  • Career Inheritance: The NYTs ranks careers by how likely one f your parents had the same occupation. Unsurprisingly children of doctors and lawyers are 19x and 27x more likely to have the same job as adults, but the most over-indexing occupations tend to be blue-collar work: Children of Textile Machine Operators are 415x more likely to grow up to be operating their own textile machines. Other jobs that are likely to be passed down through the generations include Boilermakers (275x), fichers (275x), drywall installers (136x), cabinet makers (127x). Another example of the power of awareness.

  • Marketing roles: I have had a few CMO roles come across my plate in the last couple of weeks and at least one Marketing Director role. The market is hot. If you are looking right now ping me with what you are looking for and I am happy to make introductions.

Fun

Keep it simple,

Edward