Irrational Systems

I’ve been wandering around in my postings lately; it’s time to get back to the irrational.

My primary interest these days is the relationship between systems and irrationality. Not too long ago, there was a lot of talk about how systems that really work are “good enough” rather than perfect. The internet has been a frequent poster child for this argument. So have life and the universe, if memory serves.

According to this argument, no working system is perfect. I believe that what has been called imperfection is better defined as irrationality. That is, there is something about every working system that falls outside of the rational (i.e. predictable).

Right now, many marketers are still struggling with the systems known as social media. They’re either behind the curve or having difficulty justifying their investments. And social media proponents are having an equally tough time aligning their answers with business questions.  

As counterintuitive as it may sound, the solution may lie in the irrationalities of social media. Marketers should be asking what and why, rather than how much. What are social media participants actually doing and what does it mean? Those are questions for anthropologists. And why are they doing it? That’s a question for social psychologists and neuroscientists.

These are the questions that need to be answered. Social media are here to stay (at least until they evolve into something else). So how do marketers leverage them? Or, better, where is the business value? That, I believe, is the question behind the questions that marketers are asking.

So far, the best answers social media proponents have been able to come up with add up to, “Trust me.” And that may work for forward-thinking companies or those with deep, deep pockets—in other words, early adopters. Very soon, though, we’re going to hit Geoffrey Moore’s chasm. 

The time to prepare for the leap to early majority businesses is now. And the way to prepare for it is to dig into the irrational.

TV Notes II

A couple of new developments. Obama has written a Viewpoint article for the current issue of Time magazine. Also, he announced his intent to hold a virtual town hall meeting on the internet. So, contrary to my earlier observation, he’s not simply diving into TV, he’s expanding his media palette. He is using using any and every available channel for communicating with his various constituencies. It doesn’t seem random, though. There’s a systematic feeling that I can’t quite define  yet.   

It does point to where I believe marketing is headed—treating media as a system, where each component affects all the others, rather than as a mix. With a mix or integration, the components are still discrete. With a system, the whole is greater than the sum of its parts.  It’s interconnected and interdependent.  It has a life of its own.

TV Notes

Obama’s election campaign has been rightly praised for its pioneering use of digital/social media. Lately, though, it’s TV that seems to be his primary outreach vehicle. In the past week, as far as I’m aware, he’s been on the Tonight Show, 60 Minutes, and C-Span. He does have his blog, but there’s been a definite push toward the tube lately. In fact, his recent use of the medium is—if not revolutionary—at least precedent-setting. Whatever else you may think of our new President, he is definitely media savvy.  

I watched his appearance on the Tonight Show, and he was terrific. Funny, informative, and relaxed, he came off like your extremely smart best friend. Yet, he never seemed less than presidential.

Switching channels, I’m sure everyone has seen the Jon Stewart/Jim Cramer thing by now. You couldn’t really call it an interview.  It was basically an assault on Cramer and his network. Stewart was relentless, and while he got off a few good ones, he started souring on me about a third of the way through. I wanted to shout “We get it. Move on.” Cramer, meanwhile, remained a good sport throughout. How he held his emotions in check under that pummeling, I’ll never know.

The thing is, I agreed with most of what Stewart was saying. By the end of his performance, though, I liked him a lot less.

What’s a Newspaper II

Yesterday’s New York Times ran an article on the state of newspapers, prompting this follow-up to my last post. Here’s a quote:  

“In 2009 and 2010, all the two-newspaper markets will become one-newspaper markets, and you will start to see one-newspaper markets become no-newspaper markets,” said Mike Simonton, a senior director at Fitch Ratings, who analyzes the industry.

We’ve been hearing predictions about the death of newspapers ever since the Internet entered public consciousness, but now it’s getting real. Here’s another quote:

The top papers in many markets, like The Star Tribune in Minneapolis, The Philadelphia Inquirer and The New Haven Register, belong to companies that have gone into bankruptcy in the last three months.

And another:

Other publishers, like the Seattle Times Company and MediaNews Group, owner of The Denver Post, The San Jose Mercury News and The Detroit News, are seen as being at risk of bankruptcy. Many newspapers — from The Miami Herald to The Chicago Sun-Times — have been put up for sale, with no buyers on the horizon.

Circulations, ad revenues, and stock prices are plummeting—it appears that we’re nearing some kind of tipping point.  Meanwhile, we’re seeing danger signs for other traditional media as well.

Is Googlezon coming true?  We’ve gone through eras where the manufacturer was in control, then the retailer, now (supposedly) the consumer. Is digital media next?

Most people who celebrate consumer control assume it’s the end state. But change doesn’t stop.  In fact, it seems to be accelerating.  So consumer control, if it actually exists, may turn out to be a tiny, tiny blip on the timeline.

Then what?

Daddy, What’s a Newspaper?

The latest edition of Advertising Age includes an article about the differences in newspaper circulation between 1990 and 2008. I knew that ad sales had declined precipitously, but I was taken aback by how far the circulations for my hometown papers—the Detroit Free Press and the Detroit News—had fallen.   

The Free Press dropped 53%. The News dropped 64%. They had over a million subscribers between them in 1990. In 2008 they had less than 500,000. I imagine circulation has fallen even further since then.  Can these papers even justify their ad rates anymore? 

Other newspapers around the country can’t be far behind. Boston papers have lost about half  of their subscribers. So have the Miami Herald and the New York Daily News.

A number of newspapers are exploring ways to subsist as digital-only enterprises. I can’t see that model working out either.  Online, people grab their news from here and there; they don’t depend on a single media property. 

Focusing on local news is a possible strategy, but the search engines are already aggregating local stuff on a national level. And on social media, all manner of very localized information spreads like wildfire. 

I haven’t sat down with a newspaper in at least a decade, and I don’t feel the least bit guilty about it. Newspapers simply don’t fit into my life anymore. That goes for the online versions, too.

The bad news for publishers is that I know I’m not alone.

The Paid Blogosphere

My favorite euphemism these days is sponsored conversations.  It means payola for bloggers.  I don’t have a problem with it, but a whole lot of folks are tripping over themselves trying to justify it.  Even Forrester has given it their blessing.  

What’s really going on here?  Is it:

A) The natural evolution of social media?

B) A sellout?

C) That markets really are conversations—paid conversations?

There’s no right answer.  Unfortunately, there’s no wrong one either.  The more social media evolves, the more it acts like traditional media.  And that’s fine.  Just don’t call it new anymore.

Commercial Relief?

Early this week, the New York Times ran an article about commercials and how they enhance TV viewing. According to a couple of recent studies, as we adapt to temporal pleasures (like watching TV), our enjoyment decreases with each passing minute. Commercials interrupt this process and we return to our show with renewed pleasure.

So, if commercials are all that, why do we profess to hate them? Why do we DVR shows in order to skip these moments of relief?

The answer may be surprising to some: We don’t know what makes us happy. We think we know, but we really don’t. There are operations going on in the subconscious that the rational mind has no access to. As Timothy Wilson put it, we are Strangers to Ourselves.  Dan Gilbert also addresses this in Stumbling on Happiness.

Commercials improving the TV experience? Not a lot of marketing grit there. But consumers not knowing what makes them happy? That’s a sandbox worth playing in.

Value and Drives

In this age of ADD vs. information overload, will consumers pay attention to anything that doesn’t have immediately apparent value?  Pointing to value may no longer be enough. Intrinsic value could become the criteria for marketing success.

I can’t remember who said it, but the best definition of value I’ve heard is this:

Value is whatever makes your life better.

So how can marketing make your life better, in and of itself?

Well, it could tell you something you need to know. It could entertain you. It could make you feel good. But what else?  These are things marketing already does (with varying degrees of success). They’re not what I’m trying to get at. How can marketing satisfy our deepest drives?  

In Driven, Lawrence and Nohria isolate four primary drives—to acquire, to bond, to learn, and to defend. Let’s start with those.

I guess coupon and sale ads could fit in the “to acquire” category. They do help us to acquire, but—at least in theory—all marketing does that. Sampling qualifies. But what else? Maybe the problem here is that consumerism itself has its roots in the drive to acquire.

For “to bond”  we have an easy answer in social media. Social networks really do have intrinsic value, which is why social media is growing so quickly.

“To learn” is another easy one. Marketing can be educational. It’s not often so, but it could be.

The toughest nut to crack is “to defend”. The sociology shelves at my local bookstore are full of books telling us of the need to defend ourselves from marketing. But how can marketing defend us? And from what? If you have any ideas about this, please comment. I’d love to hear your take.

A Paradigm in Crisis

Is advertising in trouble?  Probably.  Is it in danger of being rendered irrelevant by social media.  I doubt it.  In fact, I believe that advertising and social media are part of the same endangered paradigm—the “no accountability” paradigm.

I’ve read a number of articles and posts recently that tried to address the idea of accountability in social media.  None of them offers any evidence of accountability on the horizon.  As one writer put it:

So far, the spirit of experimentation has provided a sort of ‘get out of jail free’ card with respect to having to demonstrate the value of digital and social media programs and initiatives.  It looks like 2009 will change all that due primarily to three factors:

- The widespread awareness of social media use in a business
   context
- The economy
- The economy

In a response to a comment he went on to say:

If folks are thinking that social media alone is the answer, then they may well be disappointed.

Of course, traditional advertising has been dodging the accountability bullet for decades.

Non-social digital marketing, on the other hand, is nothing if not accountable.  I’m not sure if the bang for the buck is there yet, but it is accountable.  And, from all indications, it’s only going to get better. 

If digital marketing was a step forward in accountability, social media is a giant step backward.

I do believe that social media is an exciting and a potentially powerful addition to the marketing mix.  Unless it starts proving its worth as a marketing investment, however, it may find itself in an even more vulnerable position than advertising.

Trust Me

I’ve just started reading Animal Spirits by Akerlof and Shiller. Here’s a quote that struck me early on:

The very meaning of trust is that we go beyond the rational. Indeed the truly trusting person often discards certain information. She may not even process the information that is available to her rationally; even if she has processed it rationally, she still may not act on it rationally. She acts according to what she trusts to be true.

Despite my being an advocate for irrational marketing, I haven’t given much thought to trust; I guess I’ve assumed that trust depends on some kind of evidence. Now I see how faulty that assumption was. Trust, like faith, is by definition an irrationality.

And by irrationality, I don’t mean to imply that it’s wrong—just that it’s not a rational process. Blink is about this.  To some extent, so is The Wisdom of Crowds. People can make very good decisions without processing all of the available information rationally.

Or, at least, I trust they can.