(Updated) Um, Facebook, This isn’t Great

Engagement with brand content is evidently dropping  pretty dramatically. As a guy that went all in on Facebook when i was in a seat to influence a lot of media spend, this is concerning. For brands, it’s obviously bad. For consumers, it’s probably a win of sorts.

These numbers are even more striking when you consider engagement is significantly down even though brands are almost certainly spending more money to promote their posts to combat plummeting organic reach. Facebook’s ad revenue reached $2.27 billion in Q1 2014, up 82 percent from Q1 2013.For brands on Facebook, these are dark days. They can choose to spend more money to reach fans they had already accumulated in the past, but Facebook will likely decrease branded reach even further.

But, this also speaks to challenges in the FB ad model from the brand perspective. It seems like Facebook is  resorting to limiting organic impression supply (by tweaking the algorythm to lessen brand reach), making it more important for brands to pay to get the exposure.  The main reason i believed Facebook was a great platform was the  combination of organic and efficient paid reach. With the constant tweaks to the organic reach black box, that mix (of organic and paid) gets less attractive and FB becomes just another paid ad platform.

UPDATE 6/18/14: I think i buried the lede here. The point i was REALLY trying to make is that it looks like Facebook is losing one of the aspects that made it so attractive in the first place: It enable brands to build deeper relationships (that’s good) while also building a more modern media mix, one that delivered a beneficial combination of owned and earned media and paid. The less organic reach a brand can generate, the more they have to pay to get the reach, the less attractive the original value proposition is.

via New Report Reveals Just How Drastically Brand Engagement is Plummeting on Facebook | The Content Strategist, by Contently.

Lessons For Marketers in the NYT’s Leaked Innovation Report

The New York Times 2014 Innovation Report is an extraordinary document. Extraordinary in that it  exists at all, for one thing. But, also extraordinary for the honesty and candor in the analysis provided by the authors.

We’ve all watched the news business getting transformed over the years by blogs, the web, Google, etc. Now we can read the report from inside a pre-eminent news organization, written by a handpicked group of leaders given the mandate to tell the truth to power (well, their bosses).

But, at the same time, it’s an exceptionally useful document for marketing leaders who are struggling to thrive in a time of rapid, seismic changes. Digital, however you want to define it, is creating almost unlimited opportunities to create new growth, reach new audiences, and work in different ways. Call it creative destruction, transformational innovation, or just reinvention; we’re all going to have to deal with it. The news business is at the front of many of these changes, but eventually all business, from cars to cereal will have to deal with them. So, we can learn a lot about what to do (and what NOT to do) by reading this report carefully.

While it was unfortunate that this document was leaked, we nonetheless have it as a story of a great organization at the mid-point of a life-or-death struggle. Here are just a few lessons  brand builders can take away.

Be Honest With Yourself, First – One of the more remarkable things about this document is that it doesn’t seem to hold many punches. It calls out specific projects, departments, etc. Its a seemingly honest assessment of what’s working and not working. Not self-flagellating, but also not overly optimistic about what’s really going on. Marketing leaders should take on this kind of assessment every other year, at least. A hard look, done by trusted mid-level leaders, those with enough understanding of how things really work on the execution level but also have a broader strategic sense about what the organization can be and needs to get there.

Understanding how Disruption Works is the First Step to Disrupting Yourself - With everyone talking about innovation all the time, you’d assume everyone understands what “Innovation” really is. But, wisely, the writers spend a couple pages outlining Clay Christensen’s Disruptive Innovation process. And, they even provide a cheat sheet for their new competitors. As leaders, we should understand that disruptive innovation actually is kind of predictable and it will hit every industry at some point. Get your teams to understand this, and it’s the first step to creating the kind of innovations that disrupt the business on your terms vs. waiting for someone else to do it to you.

Reconsider What You’ve Always Taken For Granted – The report advocates a recommitment to audience development strategy, to re-examine how they are getting the news in front of people.  For generations, the Times could assume an audience existed, was reachable in a predictable way, and cared about the product. But, that audience is easily swayed, distractible, and, in the end, not so easy to reach. Now, the Times has to re-learn how to reach it’s audience, weaving a news set of skill into the newsroom. All leaders should be rethinking the parts of the model they’ve always taken for granted.

Digital First is Much More than a Buzzphrase - For the times, it’s a flip from “a newspaper that also produces a rich and impressive digital product” to “A digital publication that also produces a rich and impressive newspaper”. That’s over-simplified, but that mental model flip is one that most marketing organizations need to make if they haven’t already made. A mobile, digital way of building the brand that is amplified at scale by traditional media is  “digital first” for most marketers.

Culture Change is a Mofo - This is really a document describing wrenching culture change in slow motion. The capabilities, the technology, the tools will all be relatively easy to update. But, the talent, the leadership, the skills, the mindset needed to thrive in a digital-first world at the Times will be incredibly difficult to weave into the organization. The leaders will have to remake their culture from the inside without losing the best of what got them there.

Finally, the real story here is that the leaders of this organization recognized they were out of synch with their times and they turned to 8 trusted insiders to figure it out. That’s courage. We can all learn from them.

There are dozens and dozens of smaller nuggets in the document. It’s so rare for a business leader to get a peek into another organizations’ strategy development process that i imagine this will be a document i go back to and re-read multiple times.

Here are a couple other great writeups:

Stay Golden, kid: Meet The 20-Year-Old Millennial Making A Living Off Facebook

I love stories like Koby Conrad who is hustling and growing his hemp business on Facebook (uh, it’s growing like a weed?). There are so many good, smart little businesses grinding it out and supporting jobs. I wish more of the business press would focus on this kind of story (a la “Bootstrapped and Profitable” from 37Signals.)

He’s a kid with limited technical expertise, who is using the Internet to build a fast-growing, small business.

He’s the kind of hustling, hard-working person the experts say doesn’t exist in his “millennial” generation.

“Everyone always tell you to be scared,” he says.

“Be scared of things going wrong, be scared of things not working, be scared of the people you meet online, but no one ever tells you that it could all actually work.”

via Meet The 20-Year-Old Millennial Making A Living Off Facebook – Business Insider.

True Big Data / The Atlantic Wins Journalism

If you want a good example of what “Big Data” really means, it’s this. “Big Data” isn’t just “shit ton of data”, it’s “amazing and proprietary insights that could only come from very creative analysis of a shit ton of data that only we can get our hands on”.  So, stop referring to your little facebook data project as “big data”.

And, for what it’s worth, the Atlantic just showed you what’s possible when you cross a curious journalist with a hacker’s mindset. So very cool.

 

Using large teams of people specially trained to watch movies, Netflix deconstructed Hollywood. They paid people to watch films and tag them with all kinds of metadata. This process is so sophisticated and precise that taggers receive a 36-page training document that teaches them how to rate movies on their sexually suggestive content, goriness, romance levels, and even narrative elements like plot conclusiveness.

They capture dozens of different movie attributes. They even rate the moral status of characters. When these tags are combined with millions of users viewing habits, they become Netflix\’s competitive advantage. The company\’s main goal as a business is to gain and retain subscribers. And the genres that it displays to people are a key part of that strategy. \”Members connect with these [genre] rows so well that we measure an increase in member retention by placing the most tailored rows higher on the page instead of lower,\” the company revealed in a 2012 blog post. The better Netflix shows that it knows you, the likelier you are to stick around.

via How Netflix Reverse Engineered Hollywood – Alexis C. Madrigal – The Atlantic.

Where I’m Going Next: Unlocking Innovation for Modern Brands

Though the digital revolution really began in the early 90’s, we’re just beginning to get our arms around what’s possible for brands and marketers. Meanwhile, the future of brands, of brand building, of marketing is being invented, right now, every day.

For instance, as I write this post, the digital marketing headlines center around the founders of Snapchat turning down an acquisition offer from Facebook, holding out for a better offer.

It should be noted, they have no revenue.

Snapchat didn’t exist three years ago (and, if you are reading this in 2017, Snapchat may not exist anymore). Yet, some observers agree they may be worth more than  the rumored $3 billion dollar Facebook  offer.

Has the business world gone crazy, or is it truly possible to invent, design and grow disruptive, innovative businesses that fast?

For those of you not living in the digital space, the pace of change may seem disorienting. But trust me, it will never be slower than it is right now.

Unlocking Innovation: The Next Phase of the Digital Transformation

I’ve been involved in the digital business in one way or another since 1995 when I was teaching classes on “What is the Internet” or “Understanding the World Wide Web”. I’ve done a lot of the jobs required to bring web and mobile experiences to life, from coding and designing to advertising and promoting. I’ve lived through a couple boom and bust cycles.

I’ve seen Web 1.0, Web 2.0 and whatever Web 3.0 was supposed to be. But, based on my experiences, I believe we’re in the early stages of the most important cycle for most businesses: Accelerated innovation through new products and services.

In today’s landscape, smart business leaders see the massive opportunity for innovative products and services that weren’t possible even 5 years ago.  Bold, modern marketers are recognizing that there’s never been a better time to build brands through useful, helpful services and content.

So, they are looking for ways to reinvent, to unlock new ways to grow.

In almost every category, I’m seeing examples that should appeal to the soul of modern marketers who recognize growth can come by re-examining all aspects of their business in light of the digital transformation hitting them: their business model, their go-to-market strategy, their consumer communication model, the products, services and content they offer and their brand, overall. Just a few examples of bold innovation I’m seeing.

  • GoPro has built an incredible business and brand in a space that should have been owned by Sony, without much paid advertising (marketing model innovation)

  • RedBull has become one of the largest providers of action sports programming (media model innovation)

  • SpecialK has built and delivered a diet plan around their cereal brand (brand building innovation)

  • DollarShaveClub.com is working on disrupting the men’s grooming accessories business through price, brand and distribution (business model innovation)

Brands Need a Different Kind of Partner to Spark Innovation

To unlock real transformational growth and innovation, smart marketers need partners that aren’t satisfied merely to work on this year’s campaign materials. As a matter of fact, I’m seeing some of the most exciting ideas happening when companies work with smaller, more experimental firms at the front of the change.

Fortunately for marketing leaders, there is a growing number of great firms out there. The marketing service companies that support the brands (i.e. the ad agencies, PR shops, design shops, management consultancies) are going through their own, difficult transformations, too.

As a result, new kinds of firms are emerging, focused on dreaming up new businesses, inventing whole new products or services, or planning out alternative marketing models; Firms that are purpose-built, designed from the ground up to be agile, fast, data driven and iterative.

The agency disruption is leading to the kind of collaborators who help marketers answer that age old strategic question, “what business are you really in?” and then bring those new ideas to life, in market, to drive growth.

These new model, smaller firms are alternatives to legacy agencies which are trying to compete on strengths (scale, global network, heavy investments in “creative”) that aren’t as valuable anymore. And, in many cases, the operating models and cost structures of legacy firms make it almost impossible to move quickly and to work with the best collaborators available across the globe.

An Amazing Time to Build Brands and Businesses

Disruptive innovation is hitting just about every industry. New collaborators arising to help marketers win in a changing landscape. Has there ever been a better time to be in business?

So, marketers, we have a choice: are we going to wait and watch and react when it hits your category? Or are we going to drive the change. I don’t know about you, but I want to be a driver.

My Next Phase: GoKart Labs

I’ve recently left one of America’s great brand building companies (General Mills) to join a company not many know yet. GoKart Labs (gokartlabs.com) is a small, stealthy company that builds real businesses and drives remarkable innovation. We build our own businesses (Sophia, Kinly, a couple in the pipeline). We build them with our partners (BringMeThenews.com). And, we will use our business building chops to grow yours.

Your ad agency can’t do what GoKart does.

We’re built to invent new products and services, help you find and grow your customer base or help you generate whole new business models. We’re designed for market acceleration, not conference room creative conversations. Then, we’ll help you design, develop and deliver the digital experiences that build your brands. And, finally, our growth hackers can help you find customers through the truly agile marketing we use to grow our businesses.

Now, as I buckle up for this next phase — both mine and the web’s — I couldn’t be more excited. I’m excited to bring what I’ve learned working with some of the best marketers and brands in the world.

I’m excited to learn from the many entrepreneurs and business leaders in and around GoKart Labs. And finally, I’m excited to be part of a crew of collaborators inventing new businesses, products and innovations. I’ve got my foot on the gas and I’m ready to drive.

All Commerce is E-Commerce

“Retail has become a blur. And the blurring is 100 percent driven by technology,” says Tige Savage, a partner at AOL founder Steve Case’s investment company, Revolution, which is investing in new online retail startups. “Are you at the store? Or is the store at you? And then there’s mobile, the store is in your pocket. The game is to satisfy demand wherever and whenever it is.”

Good article from the MIT Technology Review on the pervasiveness of technology in commerce. Part of a well timed focus this month on the growth of multi-channel commerce.

 

Clients Take the Reins on Programmatic | Digiday

As more and more clients like Kimberly-Clark become more savvy about the ad tech world, they are demanding transparency about what, exactly, they’re paying their agencies for – and how their data is being used.

via Clients Take the Reins on Programmatic | Digiday.

In my experience, agencies and brands are learning at the same pace as each other, and often times, brands and internal digital teams know as much as the agency folks. Plus, the media landscape is so complex, that the smartest brands are working on how to get in *front* of all the change, and start driving their *own* change. If they do, there is very real, very large upside for companies to take their programmatic buying in-house. Financially, for sure. But the most strategic value will come from the data and insights they gain from direct oversight of their trading. Insights about the performance, but also about their brands, their consumers. And, brands will need this info to help them understand the industry evolution.

Smart agencies will stop stressing about lost media planning fees, embrace their future as media strategists and analysts, and figure out how to help brands bring stuff in house. There will still be plenty of work for agencies to do as brands bring it in house, including analysis, larger scale efforts, and media operations. And, in some cases, an experimental, innovation focused “media lab” of sorts.