Marketing BS Weekly Briefing: Mulan and Disney Employees, Pay Localization, Tour de France Incentives, Witness Protection Program

What Third Way CMOs need to know this week

I am considering adding an additional section to these briefing with updates from readers. If you have anything interesting with the group, let me know and I may include it in next week’s briefing.

Followup

News

  • TikTok: Bytedance rejected Microsoft and has come to some sort of arrangement with Oracle that is decidedly NOT a divestiture. With the algorithm still under the (effective) control of the China Communist Party, it’s not clear how this “solution” helps at all. Chinese media is first to confirm that TikTok is definitely not being sold (which drives home the point). It all seems more like what American companies are often required to do to get access to markets like China and India... But it may placate Trump, which may have been the whole purpose of the exercise. What a mess. Worst of all possible worlds. Welcome to 2020.

  • Roam: Roam is to writing what Excel is to math. Very simple, but also ridiculously powerful. I purchased a five-year membership and have never regretted it. They just completed their first raise - a “Seed round” valuing the company at $200MM

  • Facebook: Announced the Launch of Facebook Campus, taking the company back to their origins. You will need a .edu email address to access the product and it will have no ads. Critics claim it is a play for data. That’s BS. Any data from this is overrated. It’s really a way to keep students engaged, preempt a new competitors in the space, and eventually integrate with ads - Facebook just needs to build the audience first.

  • Outbrain/Taboola: The merger of the two “native advertising” companies has been called off. Outbrain claims the details are all confidential. Taboola says (my paraphrase), “we tried to acquire Outbrain, but when we looked under the hood we needed to cut the price we were willing to pay, but Outbrain would not budge”. These ads are ugly. >50% of people do not know they are ads. They sit under real content trying to trick the worst part of your psyche into into clicking on headlines like “What [famous actress] doesn’t want you to know,” or “What [celebrity] looks like now”. The hard part for marketers is creating a slimy enough tag line to get the click, but then find a way to turn that visit into an actual customer for your product. Ancesty.com is the only legitimate company I have heard of that pulled this off (using an ad about a celebrity’s ancestry), but it took them thousands of iterations for ONE ad that worked, and it was never more than 1% of their marketing spend. Most of these ads are arbitrage plays that get clicks to sell more clicks…

  • Mulan: The film credits include a thank you to the local authorities in Xinjiang, where on the order of a million Uighurs have been forcibly imprisoned in “voluntary education centers”. The situation in Xinjiang may be the worse humanitarian crisis happening in the world right now, but it has been largely ignored in America, and is not high on the list of concerns for progressive Disney employees, so missteps like this happen. I expect nothing significant will come from the talks of boycotts (which are focused on the film, and not on Disney proper). Separately (and I do mean separately) the film has not performed particularly well - either as a premium offering on Disney+ or in theaters in China.

Marketing

Strategy and Business

  • Investor Memos: BVP published their original investor memos for companies like LinkedIn, Pinterest. and Shopify. Hindsight bias is dangerous (Everything is obvious once you know the answer), so interesting to read why BVP thinks they invested at the time. But these are all “true positives”. It would be even more interesting to read these alongside why BVP passed on companies that became equally great (true negatives), and why they invested in companies that failed (false positives).

  • Incentives: The economics of the Tour du France - total prize money is only $2.7MM but between 1992 and 2014 the average pro cycling team’s budget has increased from $3.6MM to $15.5MM and some individual riders command salaries of $6MM+/year. Teams pay for all this through sponsorships. While the sponsors would love a win, they are truly paying for exposure, which causes cyclists to attempt to maximize visibility during the race like breaking out of the pack even if it is not strategic for winning the race: “The entire Tour is about getting eyes on the company on your jersey, because if the sponsor isn’t happy and cuts funding, your team is probably shit out of luck.”

  • Discounting: Modern Retail has a piece on how “Direct to Consumer” brands have rethought their “never go on sale” rules and have started discounting. This will have a short term positive effect and then end badly.

  • Replication Crisis: Those who care about this stuff were abuzz last week when Alvaro de Menard published an analysis of over 2500 science papers and estimated their odds of replication. The most interesting findings was that the number and quality of citations had no impact on odds of replication. Interesting for marketers because Google based their (much better) search engine on the academic citation model. Links are still one of the most important components of SEO, but Google haas iterated and there are now LOTS of other elements used to ensure sort order isn’t filled with spam. Meanwhile in the academic world citation signals have become less useful (useless?) in measuring quality.

COVID and the new world order

Careers

  • Capital Vision Services: The company manages 600 optometry practices. They are looking for a new EVP of Marketing in the Washington DC area

Fun

Keep it simple,

Edward