s2e12: On Advertising. Again. 

by danhon

0.0 Sitrep

Thursday, 30 July, 2015. My computers are telling me that other computers think it is going to be 102 degrees fahrenheit in Portland today, which in celsius is 38.9 degrees and in English is known as “too hot, stay inside”.

I’m heading down to San Francisco and then up to Sebastopol for Foo camp this weekend – if you’re going to be at Foo, say hi! – and then back in the office in SF for a couple days on Monday and Tuesday before heading home.

1.0 On Advertising. Again.

Three things to kick this strand off. One: the amount of money spent in the UK on advertising in the first quarter of 2015 hit a record high of GBP 4.7 billion[0], of which GBP 0.5 billion was in mobile advertising  was . Two: Marketing Week thinks brands should “[focus] on the benefits of investing in digital technology rather than simply pushing money into digital advertising”[1]. Three, and this one just happened to be the most recent “traditional ad agencies are dead” article in my line of fire: why the traditional ad agency is a dying breed[2].

The first piece on the amount of money spent on advertising is just an anchor to remind myself of the sheer amount of money that’s spent on advertising (4.7 billion GBP!). In the US, just *digital* ad spending is projected to hit USD 60 billion in total this year[3]. To put *that* figure in context, a back-of-the-envelope guess for a lower bound of US government technology spending (you know, for all those mediocre digital services), is around USD 80 billion (it’s probably a lot, lot more).

In other words: lots of money is spent on advertising, and lots of money is spent on marketing. Let’s just agree that. And the amount of money that’s being spent is, broadly speaking, going up. Some people think that this is good news: in a quote that says exactly what you’d expect it to say, Tim Lefroy, chief exec of the Advertising Association says that a growing advertising spend is “to the benefit of our digital economy, creative industries and UK plc.”[0]

The problem is, or, I guess, the *opportunity* here is that all that money spent on marketing and advertising (and specifically advertising and its associated media cost, I guess) is money that *isn’t* being spent on making better products.

Which is where I sheepishly just point back to Russell Davies’ 2013(!) tantalising teaser that one of the implications of what’s been achieved by the Government Digital Service was this concept of The Product is the Service is the Marketing[4].

The broad thinking behind this is made up of a few pieces. First, for the last fifty years or so, the western world has been mainly focussed on making products and then making sure that they stick out – that they’re differentiated so you can tell the difference between them – using marketing[4], which has ended up with a sort of Red Queen race to win your attention so that you’ll notice the products in the first place.

There were two things going for this approach. At the start, coming up with good products was relatively hard (not that it doesn’t continue to be hard, but I’d argue that it’s become somewhat easier in part because of the side-effects of globalization and that technological progress has lowered the barrier to entry in most areas over the last fifty years). But it wasn’t that hard to differentiate using marketing: hell, popular consensus now is that Don Draper walked into a room, smoked something, drank something, made an astute observation and the client left with a new-founded appreciation as to how their cigarettes were awesome because they were toasted. In other words, with a naive audience *and* limited avenues for attention, it was pretty easy to get those marketing messages through *and* for those messages to be acted upon.  The sheeple would see a Burma Shave outdoor ad on the drive home and then magically buy Burma Shave.

And then slowly and inevitably, everything collapsed. Attention can’t really be bought now because it’s shattered and splintered and you can’t just buy it from one place. On top of that, fifty years of ruthless capitalist progress and competition (of a sort) has honed the art of creative advertising to the extent that it’s quite hard to do something really new that will create culture, or even worse, that it’s as easy for *anyone* to do something really new that will create culture because technology only went and democratised and lowered the barrier to audiences while  you weren’t looking at what the kids were doing with YouTube. What’s worse is that because of those YouTubes and Twitters and Facebooks and the fact that it’s easier than ever before for culture to speak unto culture, and now subculture to speak unto subculture, you can’t even borrow, steal or beg from one group of people and transfer it to the other as easily as you could before because *people will notice* and won’t stand for it, or will just see straight through it these days.

So: all this money is going into marketing and advertising. And thanks to digital, it looks like even *more* money is going into marketing and advertising because now there are way more ways to market and advertise! And they promise data! Sometimes that data is real! And sometimes it isn’t! But anyway: got to keep differentiating. Got to keep that edge. And marketing is easier from a business’s point of view because you can always blame the agency if the marketing doesn’t work. Easier to just switch agencies, right? Or easy to blame it on the shifting media landscape and blame the media partner. Or easy to blame it on Facebook. Or Google, for those text ads. Or YouTube for not having a rich enough advertising platform.

But then there’s all these upstarts. These silicon valley companies with their Facebooks and their Googles and their Apples who, a few years back, started scaring the shit out of formerly unassailable companies that were used to sitting in the top five of charts of brand recognition because they’d spent the last thirty years spending a lot of money and time on making sure that they were the coolest on the planet. And these companies were scared shitless because some dicky *computer* company that made a *website* was suddenly *cooler* than they were. Or if they weren’t cooler, they were within spitting distance of being equally cool. I mean, they didn’t even have celebrity endorsements or superbowl ads!

Because this is what happened: at some point, there was a discontinuity and digitally distributed technology thanks to the cheap net reached enough people. A sort of minimum-viable-userbase. We didn’t quite have it in the late 90s. We started getting it in the mid 2000s, but even then it wasn’t clear because the way that most people were getting online in the mid 2000s was through computers, and computers were totally still a middle class thing and not essential, not like having a phone. Until computers got cheap enough and powerful enough and – crucially – usable enough – to hide inside a phone and before you know it, everyone who had a phone ended up with a computer in their pocket connected to a giant worldwide network. Oops.

And the reason why Facebook was cool was because it served a need and it did it well (or, rather, it continues to do it *well enough* – I’m not entirely sure you could get people to agree that Facebook is “so good that people prefer to use it”, if only because there aren’t any viable alternatives) and that it turns out that a) twentysomethings are pretty social, plus they’re totally legally allowed to do all the sex and the drinking and b) by and large, the rest of humanity is pretty social and loves talking to other people as well, even if they’re younger than twentysomething or older than twentysomething.

And it turned out that there were a bunch of things about how the world was set up that were, well, just not as great. Or, rather, not as simple, or clear, or fast as they could be. Sometimes this was just down to choice: you had to go down to the record store and then see if the album you wanted was in stock and then you had to buy it and then you had to go home to listen to it and then you couldn’t really listen to it whenever you wanted. Turned out digital technology let you make it simpler and faster to listen to whatever music you wanted, whenever you wanted. You wouldn’t even have to get out of bed. And this kind of stuff happened slowly: at some point, people realized that *in some cases* it actually *is* quite convenient and nice to be able to order a physical book from your bed and have it just turn up at your house *and* for it to be a bit cheaper than going to the store. Sure, you could go to the store and get it *right now*, but you’d have to stand up! And look for the car keys! Here was a brand new option that you’d never had before and the book would still turn up tomorrow. And then it turned out that a few years later it got cheap enough for you to get an electronic copy of the book in a special electronic book reading thing. And you could read whatever you wanted *straight away*! How convenient was that?! And you could *still* get a hardback copy if you wanted.

There’s nuance here. No one is saying that there’s nothing nice or that there’s no value in browsing a bookstore and serendipitously finding a book and being able to pick it up and leaf through it and then look at the cover and then wander over and buy it and start reading it straight away. But in some cases, where you know what you want, it’s pretty simple and fast to “get a book” using a digital service, starting from the first delivery service that Amazon launched with.

I don’t know how many more ways there are to say it, but software *will* eat the world, in part because people are lazy. That’s not to say that they’ll never go to the shops anymore, for example. Just that going to the shops will become a bit like, I don’t know, sport. Or going to the theater. Or opera. Maybe in five years people will dress up to go for shopping  and there’ll be special restaurants near shops so you can have a nice meal as well. But it’s not just shopping: there’s a whole bunch of stuff that we do, that we *have* to do, that could be easier, that could be simpler, that could be faster, now that we have this stupendous network pervasively floating around us and that is getting cheaper and cheaper to access.

Digital is a brand new opportunity for companies – and governments and non-profits and, well, everyone – to deliver better products and services. Because digital is immediate, mostly doesn’t care where you are (or can care where you are in quite a lot of detail) and works in both directions, it is easier than ever before to find out what people want (and what they really want, because you can find out all sorts of things about *how* things are being used) and then to deliver it to them. You don’t even need to be delivering bits. You could just be delivering glasses. Or healthcare. Or, christ, just about anything. The point is: we can do better.

Some companies realise this. They tend to be younger ones because they can see it already and they’re not dealing with 16 different kinds of inertia[6]  – remember, inertia is a property that accrues to things that are already moving. You don’t have any when you’re not moving. They tend to be the ones who can say: you know what, we’re going to take advantage of all this digital stuff to make something that is better and then we’re *also* going to take advantage of all this digital stuff to keep making the thing we made better. And then make it better again. And just keep making it better.

Because you know what? Part of the reason why software keeps eating the rest of the world is because in a lot of cases, the rest of the world is just a bit shit. Software wouldn’t be eating the world if it didn’t offer more choice or better choice. It would just be there. Borders would still be around and we’d still be helping them lose money by reading their books and drinking Starbucks coffee and then not paying for the books.

Some companies are, though, trying hard to make better products. But the problem is even worse for them! Because if they’re trying to make better or more innovative products and they don’t also get digital basics right, they’re going to have *their* lunch eaten by another company that can just copy their innovative product *and* get digital basics right! Look, here’s Russell Davies again with a pretty innovative product from Sony[7] that came out a couple years ago (and I should know, because the product was part of a very swanky, expensive, award winning brand campaign that I creative directed) but where the innovative product is shot in the face by a complete failure of execution in the digital space. This type of thing kept coming up and was *obvious* to us when working on Sony but they still wanted to tell a great story that would help differentiate the brand and explain how Sony was totally different from Samsung (and I do believe they are, apart from how useless *both* of them are at software) instead of fix things like their website.

Look, there’s this quote at the end of the Marketing Week article that recommends that maybe, just maybe, “brands” should spend money on digital tech instead of digital advertising. It’s from Alistair Macrow, the CMO of McDonald’s UK and Northern Europe and he says:

“If we can find ways of using the technology that people carry with them to help enhance their McDonald’s experience then that’s exactly what we’ll do.”[1]

to which I would say: please stop sounding like someone who’s out of touch, because no one wants their McDonald’s experience *enhanced*, and it’s not about just using the technology that people carry with them. It’s about the opportunity that all of digital has to make everything that McDonald’s does for the people who use their products and services *better*.

In other words, the whole phrasing of Marketing Week’s article (“Should brands be focusing on digital tech rather than digital advertising?”) completely misses the point. The *opportunity* is for digital tech to help massively improve the quality of their products and services, not to focus on digital tech for digital tech’s sake. This whole idea of switching from digital advertising to digital tech makes it super easy for a CMO to say: oh, we’re doing digital tech now! and not use that technology in service of figuring out what their customers want and being really good at giving it to them.

[0] UK adspend reaches record high in Q1 – Campaign
[1] Should brands be focusing on digital tech rather than digital advertising? – Marketing Week (registration wall, I’m afraid)
[2] Why the traditional ad agency is a dying breed – Mashable
[3] US Digital Ad Spending Will Approach $60 Billion This Year, with Retailers Leading the Way – eMarketer
[4] A unit of delivery – Russell Davies
[5] The strategy is delivery – Transformation Beyond Technology / London Strategy Unit
[6] Bits or pieces?: A pet favourite – Inertia – Simon Wardley
[7] Death to innovation  – Russell Davies

It’s 11:27pm and I’ve got a cab taking me to the airport in about six and a half hours, so I’m not going to write any more tonight. But, there is a thing that’s still knocking around in my brain that I’ll probably get around to tomorrow about how I’m slightly scared that it’s more lucrative to just point out problems in software than it is to actually get that software fixed. Or, in a more apparently-attributed-to-Buckminster Fuller quote, “you never chance things by fighting the existing reality. To change something, build a new model that makes the old model obsolete”. Which is just a fancy way of saying that writing a newsletter isn’t going to change a damn thing, going out and actually building better stuff will. Which was part of why, toward the end of my time at Wieden, while I was looking at a whole bunch of close friends in different organisations – not just GDS, thank you – actually delivering and building *better* stuff, and I was busy making comms for things where I could see *stupendously obvious avenues for massive improvement but could do nothing about them*, I knew that things really weren’t going to work out.

Anyway. Send notes. Please. I really like it when I get them, even if they’re just “hi”.

Best,

Dan