Marketing BS Briefing: May the Fourth Be With You Edition

Now that I am down to one post (plus a podcast episode) per week it has been a while since I have done a briefing. Since the briefing are not happening every week, trying to cover “breaking news” seems a little disingenuous. So today’s briefing will have a bit of stuff that happened last week, but a broader collection of “evergreeen” stuff I have found interesting. This breifing hit the maximum length before I pushed out all I had to share, so I will try and run these more often in the future. Enjoy!

News

• Paid Podcasts: The war is brewing. Apple is finally making a play for the podcast space and offering paid podcasts for creators (30% cut the first year, 15% on renewals). Spotify countered immediately afterwards and is only charging transaction fees until 2023, and then 5%. The bigger difference is that Apple’s model is far easier for the user (monopoly much?), is closed to alternatives, and does not allow the creator to “own” any user contact information. Spotify will allow third party paid feeds and will allow creators to own the user relationship (Apple wants to own the experience. Spotify wants to own audio). Nothing here is tempting me to leave Substack as my podcast host - for both Marketing BS or for Super Serious (Super Serious is free. If you haven’t checked it out and you have even a little bit of a geek in you, I (self-)recommend it.)

Marketing

• McDonalds: The QSR has decided its loyalty program test was a success. They are planning to roll it out more broadly. I expect this program was based on Starbucks’ model, which means it is less about loyalty and more about financial engineering. But the rhetoric is still all about increasing loyalty and visit frequency. Sometimes marketers believe their own BS, which would be too bad for McDonalds’s shareholders.

• Influencers: Overrated. Influencers are a channel like any other. You should measure ROI on the spend and effort you put into it. What this tweet is saying is that Influencers do not scale as well as traditional advertising, so they can look good if you aren’t spending, but they are a rounding error when you are.

  Rob Henderson @robkhenderson

  “when advertising is exactly zero, it looks like whoever has the most connections matters..but in instances where there is even a small amount of advertising, there’s virtually no difference word-of-mouth between influencers and everyone else for virality”

  

  podcasts.apple.com‎Razib Khan’s Unsupervised Learning: Gabriel Rossman: the sociologist who tells you that influencers are overrated on Apple PodcastsGabriel Rossman is a sociologist at UCLA. The author of Climbing the Charts: What Radio Airplay Tells Us about the Diffusion of Innovation, Rossman takes a deeply analytic toolkit to questions such as why 2005’s “My Humps” became a viral hit. The last 1/3rd of the podcast is devoted to discussing a…

• Airport Perceptions: This is kind of what marketing is all about, yeah?

  Paul Craven @CravenPartners

  Changing perception often a better solution than trying to fix a problem! Houston airport kept receiving complaints about the wait time at luggage collection for one of their routes, so they switched the gate to make the walk there five minutes longer and the complaints stopped.

• Customer Acquisition: As I say again and again, this is the hardest and most important part of marketing. Kieran Flanigan has a nice summary of different CA techniques from a wide variety of companies.

• Ethical Limit: Charter’s competitor, Windstream, went bankrupt. So Charter’s marketing team sent a direct mail to Windstream’s customers inferring that Windstream would no longer be able to provide service. And then provided the steps needed to move to Charter (Note: Windstream was bankrupt, but still able to provide service under new, recapitalized, owners). The envelope was labeled "Important Information Enclosed for Windstream Customers”. The text read:

Windstream Customers,

Don't Risk Losing Your Internet and TV Services.

Windstream has filed for Chapter 11 bankruptcy, which means uncertainty. Will they be able to provide the Internet and TV services you rely on in the future? To ensure you are not left without vital Internet and TV services, switch to Spectrum. With a network built for the future, Spectrum is here for the long haul.

I’ll bet the ROI on the marketing campaign was off the charts. Unfortunately the court found the whole thing shady and Charter is now on the hook for $19MM in damages. Risk taking can be risky. But I would hire the marketing leader that thought of this…

• Dollar Tree: The retailer has become the latest to launch their own ad buying network. Essay coming on this trend in the next few weeks.

• Fundraising: I don’t think this tweet needs extra commentary

  Gokul Rajaram @gokulr

  $1m ARR co. Tried to raise bridge round at $30m cap. Little interest. Changed “bridge” to “pre Series A”, raised cap to $60m, waited a month to ensure metrics still strong, went to raise again. Oversubscribed 2x. Never underestimate the importance of narrative and confidence.

• Market Research: Never trust what a customer tells you. Only what they do.

  Ben Thompson @benthompson

  Yet another example of revealed preference > stated preference

  

  Rebecca Ballhaus @rebeccaballhaus

  A shrinking percentage of Americans are expressing reluctance to get a Covid-19 vaccine: 17%, down from 22% in January. Vaccine hesitancy is declining in most states. https://t.co/J4vzluVzFb https://t.co/tnRZ96CJNR

• Media Reach: For all the talk of the death of traditional media, it still has more extensive reach than “new media”. While tracking is very important, reach is still the most important metric.

  

Marketing to Employees

• Mike Pence, VP and Author: “Simon and Schuster says Mike Pence Book Will Proceed Despite Employee Petition”. Employees are the only ones that care, but sometimes revenue will still trump employee satisfaction.

• BaseCamp: The Basecamp co-founders tried to duplicate what Coinbase did earlier this year - tell their employees that they can’t talk about political issues at work and just focus on doing the job. Like Coinbase they offered everyone generous severance packages if they chose to leave. Unlike Coinbase, a significant percentage (~1/3rd) of the company took them up on it. Why the different result? I think two things:

  • Basecamp (unlike Coinbase) had a policy of not paying employees with equity. So walking away with six months salary into a hot market, where you had an easy excuse for leaving, was likely the economically rational choice (unlike Coinbase where it meant leaving extremely valuable equity options on the table)

  • Basecamp was traditionally a very “socially aware” company. The founders have large social media presences focused on left-wing issues (unlike Coinbase). Which means the core employee base was likely quite different.

  Thinking the same tactic would lead to the same result at the two companies is kind of like thinking your company should implement Netflix’s unlimited vacation strategy without any of the other elements that go into how Netflix works… Now many of the folks who left Basecamp are posting their availability on Twitter. Casey Newton has a good write up on the details behind the scene on what happened.

• Marketing FROM employees: Junior bankers at Goldman complained about their “crushing hours”, but rather than go through traditional channels, they built a Powerpoint deck in Goldman Sachs Standard Format and released it to the world. It went viral (within the financial community), and has (apparently) caused internal changes as a result. Sometimes you can get more done by going outside the usual channels (When I was at McKinsey some analysts created a powerpoint deck called “Rajit’s Laptop” exploring the implications of an email that was sent to the entire firm and resulted in hundreds of “reply alls”. There is something funny about using a professional format to explore an outside the box topic). Goldman analysis in Star Wars format or Star Wars analysis in Goldman format could both go viral. Call it Chimera marketing?

Business/Strategy

• Adding vs Removing Bias: When asked to improve things, subjects almost always ADDED things rather than took things away, “…when an incoming university president solicited ideas for improvements, only 11% involved getting rid of something. In an experiment that involved making patterns out of colored squares, only 20% of the participants removed squares in order to achieve a pattern, even though either option was equally viable… When asked to improve a travel itinerary, only 28% of the participants did so by eliminating destinations. Essay improvements led to an increase in word counts in all but 17% of the cases.”

• Chasing Metrics: Why it hurt Twitter for many years. They optimized for Monthly Active Users, so they started doing things like partnering with telcos in Africa to send SMS to their subscribers. This was “instant MAU” - but not in the way the metric was designed for. More at the link.

Good Enough

• Car Accidents: Low IQ people get in far more car accidents, but once you IQ is 100+, more IQ doesn’t seem to help. Tweet is from Nassim Taleb quoting Charles’ Murray. Taleb protects his tweets (and has blocked me), but maybe you can still see it?

Privacy

• Business Insider: In January Axel Springer (CEO of Business Insider) wrote an essay arguing the web should be “totally private” and companies should not collect data on users. Which is a reasonable argument, but…

  • The page he published it on (which he owned) had 68 ad trackers.

  • His company has now joined an anti-trust lawsuit against Apple because Apple is restricting access to tracking on its platform

  I saw somewhere on Twitter (sorry I lost the link), “Personalization for me. Ad tracking for you. Illegal trust violations for them.” and conversely, “Privacy for me. Lack of transparency for you. Antitrust violations for them.” In most cases privacy is a tool for regulatory influence and public relations, not a moral principle. H/T Benedict Evan’s excellent newsletter.

• Israel Vaccinations: Why did Israel vaccinate so much faster than other countries in the world? One reason is they agreed to share medical data with Pfizer and ignore the resulting privacy concerns. “Privacy experts say the agreement shows how far Israel lags behind European nations in protecting confidential personal data”. I am sure the vaccinated Israelis are upset that they cannot trade places with France right now (sarcasm). Privacy has real trade offs, life threatening edition.

AI, Machine Learning and GPT-3

• Doctors: Who is better at diagnosis, humans or machines? Unclear. But we now know doctors are pretty bad at basic math. This study asked doctors what the probability of a disease was after a positive or negative test result. Doctors over-estimated under every evidence condition. Example:

  • Cardiac ischemia Pretest chance—EBM 1-4.4%, median answer 10%;

  • Post stress + ECG—EBM 2-11%, median answer 70%;

  • Post stress - ECG—EBM 0.4-2.5%, median answer 5%

  Good thread here if you don’t want to read the actual paper.

• Image “Zoom”: Google has developed a technique that allows the camera to zoom across the landscape of a single image. Impressive (Video at link). Related: Adobe now has a tool that can enhance the resolution of images using machine learning. “Computer, zoom around the corner and enhance the image” is now a thing…

• Thinking, Fast and Slow: The best selling book came out before the “replication crisis”. Now the Replication-Index (a site focused on the replication problem) has gone back and looked at the claims in the book to see how well they hold up. Spoiler: Not well.

• GPT-3 powered Aps: Open-AI has a blog post summarizing many of the apps that are using the GPT-4 API. I continue to remain bullish on this. Related: Fable allows you to interact with a GPT-3 powered Avatar on social media platforms.

• Baby Names: Want an original name for your baby, that still sounds like something reasonable? There is an app for that.

• Kid books: Epic is a digital reading platform for kids books. Because it is digital it knows what kids read, how much time they spend on each book, and completion rate. Just like Netflix they can run algorithms to figure out what elements make a book successful with different age groups and demographics. We can assume most of their knowledge is kept confidential, but they did share with the WSJ that generally,

  • Owls > chickens > hedgehogs

  • Volcanoes > tsunamis > earthquakes

  • Unicorns > mermaids

  • Titanic > cowboys

  • Pizza > cake

  • Science > art

  • Poop > everything

  This all seems impressive, and likely is behind the scenes, but I expect most of insights they have publicly shared could be had by anyone who spends a little time with kids this age (Apart from pizza > cake, I think I would have predicted every result)

• AI Debater: A handful of researchers led by Noam Slonim have created an AI tool that debates humans relatively successfully, “Backed by its argumentation techniques and fuelled by its processed data sets, the system creates a 4-minute speech that opens a debate about a topic from its repertoire, to which a human opponent responds. It then reacts to its opponent’s points by producing a second 4-minute speech. The opponent replies with their own 4-minute rebuttal, and the debate concludes with both participants giving a 2-minute closing statement.”

Careers

• Job Satisfaction: McKinsey has published a detailed report on management and job satisfaction. Key takeaways:

  • Autonomy leads to happiness

  • Your manager in the most important driver of happiness

  • Satisfied employees correlated with other good stuff (customer satisfaction, low staff turnover, profitability, and employee productivity)

  Be careful with this type of data though. The last point might “explain too much”. Perhaps rather than employee satisfaction driving company profitability (and all the other good stuff), it is a company doing well which drives employee satisfaction (and all the other good stuff). At least that would be my ingoing hypothesis, which McKinsey’s data does nothing to disprove.

• Career Disruptions: The failure of Lehman Brothers was a great experiment to see what happened to the careers of bankers at the company compared to similarly credentialed bankers at similar banks. This study finds that for junior employees, their long term prospects did not change at all. But for VPs and managing directors, they were more likely to have long term unemployment or to have left the financial industry entirely. This runs counter to the data showing that graduating in a “bad year” has lasting negative impact on your entire career. Potentially it is a case that your early employment matters a lot, but the time in the middle matters a lot less (first and last impressions…)

Fun

• Most Popular Superheroes by country: (Have I mentioned my “other” newsletter/podcast about the early Marvel Universe? You should check it out. Episodes are all less than ten minutes. How many times am I allowed to promote it in a single briefing?)

Joshua Miller 🏦🗽⚖️ @Joshua_Z_Miller

Is Canada ok?

• Photogenic Birds: There is a scientific study on everything. This one looks at which bird images get the most likes on Instagram. The link has the full list. Winner is the Frogmouth

• Malaria: In case you missed it, there now seems to be a 70% effective Malaria vaccine. There are over 200MM Malaria cases per year and over 400K deaths (mostly children). Curing this thing is a huge win for Africa and the world. More and more it seems we are entering another biology portion of our technological advancement as a species.

• Airlifting rhinos: Apparently the healthiest way is to ship them hanging upside down from a helicopter.

• Donald Duck’s Nephews: Their names in different countries across Europe

Keep it Simple,

Edward