Thanks to Byron Hobart who called out the Sam Heath (Tim Hortons CPG Lead) interview in his Saturday newsletter. I think roughly fifty of you subscribed to Marketing BS over the weekend. Welcome onboard. Tuesday’s posts shift between essays and briefings. This week is a Briefing - and it is a little more marketing heavy than the median. Enjoy!
Facebook Substack: Facebook has launched a newsletter platform called “Bulletin”. Unlike other Facebook platforms this one allows you to “take your list with you when you leave” (with the exception of payment processing, which is through Facebook Pay). The social network has lined up an all-star group pf writers to kick off the project. The advantage vs Substack seems to be “no fees” (for a few year anyway), and “Facebook augmented distribution”. The last COULD be very valuable, but likely won’t be for most writers for very long (if ever) given FAcebook’s history. So it is really a trade off of lower cost vs ownership of payment processing. I expect most writers (who do not receive large upfront payments) will opt for the status quo.
Why Bad Marketing Exists: Marketing Week has a feature on “How bad incentives ruin good marketing”. I am glad more and more people are realizing this is a problem and speaking up. My only counter is that the authors are too optimistic: Incentives are definitely big reason bad marketing exists, but they are not the only reason. My book has eight more that are just as insidious…
Political Ad: RepresentUs, an anti-corruption NGO, has created a satirical ad: “If only all politicians were this honest” (It’s funny. You should watch it). It feels like something from Saturday Night Live, but it serves a purpose of advertising the work that RepresentUs does. It is usually more difficult to be “against something” than “for something”, but the advantage of being against something is you can parody the thing you are against to create attention.
Brand extension fail: When launching into a new category you generally have two choices: A new brand, or a brand extension from a related category. It is not always an obvious decision. P&G, a CPG leader in these choices, has done both very effectively - sometimes competing with themselves (Febreze was launched as a new brand into the “air cleaner” category, but now makes laundry detergent that competes with Tide, Gain and Cheer). In the alcoholic beverages category, the biggest innovation is years is the growth of “alcoholic seltzers”. White Claw (a new brand) created the category and leads with 58% market share, but existing alcoholic brands have been attempting to make inroads. Smirnoff (a vodka brand) is the fourth leading brand at 4% share. But beer companies trying to branch into the category have been less successful. Adage reports than Molson-Coors is killing their “Coors Seltzer”. You have to try, but sometimes the brands just don’t extend.
Consideration: I am a big believer in Byron Sharp’s description of the buying process: Attention, Consideration, Purchase. Influencing consideration is the most interesting, and, when I explain the concept, I usually use the “McDonalds creating consideration for breakfast” as my example. Claire Strickett has written a good essay on Medium with some other good examples of “consideration influence in the wild”: Deliveroo and Spotify. Both companies attempt to tie their product usage to specific “category entry points”. Good read to drive this concept home.
Roku: The streaming platform is building more and more advertising tools. The demise of advertising-funded television has been greatly exaggerated for years, but it is is clearly happening (and 2020 accelerated the trends). But high fidelity 30+ second television ads are very very good for brand building. Something will replace them. Ad-supported digital video is a fair contender. (Also see “New Media Habits” below).
Stadium ads: Redditor u/erivaldoff shares a cool video of the same game on different stations - each station shows different ads on the perimeter walls. Combine this with personalized television and you have something that competes with Facebook. Until then it is just a way to shift who sells the ads (do we really believe the most efficient result is viewers on one station seeing Coca-cola ads and another station seeing Enterprise?)
Psychology: Marketers love to talk about using psychology to better understand (and manipulate) their customers. But recently, most of what was taught in first year psychology has been shown to not be all it was cracked up to be. Gleech.com has created an index of “well known” psychological phenomenon that has either failed to replicate or been “reversed” through additional experiments. Maybe check this before you decide to drop your knowledge about “paradox of choice,” “Implicit bias,” or “Priming”…
Marketing to Employees
Cutting emissions: Companies often make commitments to cut their emissions (to who? Employees! No one else cares), but they are not succeeding. So now they are pushing the cuts onto their customers (who don’t care to take on that “responsibility”). From the WSJ: "To decrease emissions, L’Oréal is selling a solid shampoo bar that the company says needs 25% less water to rinse off than regular shampoo. Colgate, which says consumer use makes up 87% of its emissions, has focused on asking people to turn off the tap while they brush their teeth through product messaging, social media and in-store displays. And Unilever got consumers to use cold water with its laundry detergents by reformulating the products and pitching the benefits in energy costs. It has had less success getting people to take colder showers.” Getting customers to cut their useage clearly does not work, but maybe it will make the employees happy that they are “trying”.
Business and Strategy
NFL Live Audio: The NFL will host 20 live “Twitter Spaces” during the 2021 season. Last March in my essay on “Clubhouse and Convenience” I argued that one of the more powerful use cases for live audio is commentary during live sporting event. Smart of the NFL jumping on owning this, rather than ceding it to entrepreneurs (and interesting they chose Twitter over Clubhouse or LockerRoom (owned by Spotify))
Marketplace Pricing: Follow-up on “Online Travel Agencies and Platform Economics” Daniel Kyne (a reader) reminds me that Doordash allows restaurants to choose 15% or 30% to get different service. This is not dissimilar to Booking.com allowing hotels to pay the % they wanted to “choose” their sort position, Spotify allowing artists to collect smaller fees in exchange for promotion, or Google paid ads, or.... Allowing, rather than forcing, your customers to pay you more money turns out to be a better way to find their utility function.
Gaming and Fraud: The Atlantic has a piece on how “gamers are better than scientists at catching fraud”. The positioning is that gamers are particularly good at this, but it might just be that scientists are really bad. This study shows that papers that do NOT replicate get more citations than those that do — even after non-replication has been demonstrated. One sees this same pattern in many situations: Google search- once you achieve strong positions, even if achieved in an underhanded way, it is fairly durable. CEOs- once you “achieve” CEO you can fail many times, but still get new CEO opportunities.
Facebook Lift Tests: The hardest part of marketing is smart attribution. Generally in digital display the choice is measuring clicks, views and timing of purchase events (i.e., “last touch”, or “Any view”, etc.). The “right” choice is to measure true lift through A/B tests with a “holdout group” (i.e., run ads for your product to 50% of your audience and ads for something else to 50% of your audience and measure the incremental purchases from the group that saw your ads). This is often hard to do in practice, but Facebook HAD a product that would do it. Unfortunately they will discontinue it as soon as Apple begins enforcing the new iOS 14 requirements. Privacy has a cost…
Ad Free Search: Neeva is a new search engine by a bunch of former Google executives. You pay $5/month for a “private”, no-ads search engine. People, even very smart people, continue to believe that other people care about privacy (reminder: they don’t). Who is going to pay for a (worse) search engine that doesn’t have relevant search ads at the top? I hate making predictions, but this seems very likely to fail (Also: See my February essay “In Praise of Advertising”)
COVID and the New World Order
New Media Habits: COVID caused a lot of changes. The next question is often: “Will these new trends continue, stabilize or revert?”. The Economist looks at media usage and finds the biggest change was increased time spent “gaming”. And they argue that “unlike other lockdown hobbies, it is showing no sign of falling away as life gets back to normal”.
AI, Machine Learning and GPT-3
Co-pilot: Github has announced “co-pilot”, an AI that allows you to spell out what code you want written, and then have the AI produce the code for you. I am not a developer, but from what I have read this is very similar to the world of “centaur chess”. It makes good developers better, primarily by taking away some of the drudgery, but it doesn’t replace them. If anything AI like this will make the output of any given developer more valuable, not less.
Seattle Healthcare SaaS CMO: Sub $100MM ARR Seattle-based company is looking for a CMO. I know the team well. Great opportunity.
DTC Ready-to-Eat CMO: One of the top players in the ready-to-eat space is looking for a CMO. Based in Southern California. Please reach out to me if interested in either role.
Voltaire: “Doctors are men who prescribe medicines of which they know little to cure diseases of which they know less in humans of which they know nothing”
Howard Skipper: “A model is a lie that helps you see the truth”
Keep it simple,