Lightning strikes, maybe once, maybe twice February 11, 2010Posted by David Gillespie in business strategy.
Tags: Add new tag, Foursquare, Zagat Survey
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So I went on a wee tear the other day, and in response to Bud Caddell’s pondering if the future needed agencies, posted a series of points on what was and was not going to work for companies who sought to play the kind of role in business agencies have played thus far.
As part of that piece I wrote the following:
Agencies with big technical production capabilities need to send the work out to be done more cheaply, take the best and brightest they have and remake that department as a research & development arm. There is no reason Foursquare could not have been created by Zagat’s; but nobody was working on that kind of problem.
And today we announced a partnership with Zagat aimed at rewarding foursquare users for discovering and experiencing Zagat Rated places in their city. If you’re in New York, San Francisco, Los Angeles, Chicago or Boston you can now “follow” Zagat on foursquare to unlock insider tips about nearby restaurants. And of course, we’ve added a Zagat “Foodie” badge that can be unlocked by dining at some of these Zagat Rated restaurants.
…I’m just saying…
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But I first had to take care of the world I know February 8, 2010Posted by David Gillespie in advertising, business strategy.
Tags: Add new tag, advertising, Advertising agency, Al Ries, business, marketing, Zappos
So nothing like 2 hours in customs and then more hours sitting on the runway because it’s snowing at your destination, but it gave me time to read through this thought-provoking article from Bud Caddell on the future of the ad agency.
First off, it’s great; it doesn’t claim all the answers but it probes in all the right places. And for whatever reason I was thinking about this a lot over the weekend, and you should totally read Bud’s piece first, because this is my take, and there are a bunch of synergies.
1. We do not need more web shops.
Now, I say that with a lot of friends running their own places, so let me qualify that statement. Most companies only need some simple hosting, a WordPress install, and should spend the majority of their money on design. To saddle people with cumbersome, proprietary content-management systems and code re-written from the ground up when someone else’s plugin will do exactly what you want is morally bankrupt.
On top of that, it can be done more cheaply and to a reasonable level of quality for around US$20 an hour. Sad for some, but it is the modern equivalent of the industrial revolution. And the money is best spent elsewhere.
2. This is “elsewhere”.
Content. Content content content. I recently did an audit for a company and came out of it with the exact thing I expected: they didn’t give their customers anything other than coupons, so subsequently that’s all they talked about.
3. Everything gets easier.
This is the biggest truism, and it exists as uch inside the ad industry as it does outside it: everything, I do not care what it is, will get easier. It will happen in manufacturing as much as it will happen with technology, so companies whose existence relies on technology have but one choice: to make problems that are difficult easy for the people facing them.
Agencies with big technical production capabilities need to send the work out to be done more cheaply, take the best and brightest they have and remake that department as a research & development arm. There is no reason Foursquare could not have been created by Zagat’s; but nobody was working on that kind of problem. Not hard enough anyway. The digital shops need to go back to their engineering roots; they need to sit a bunch of curious minds from across the board together and be inventors; that work is far too important to leave to agencies – and they’re not going to do it anyway.
4. No points for second place.
One of Al Ries‘ 22 Immutable Laws of Marketing said it was better to be first in a new category than 2nd in an old one; that is basically positioning but it speaks to a fundamental truth: marketers need to stop inventing problems for products to solve and focus on creating products that get back to the existing ones, which I suppose just echoes what I said in point 1 more generally. And particularly in the CPG space, they need to udnerstand the conversation around the product is always more interesting than the product itself (e.g. baby formula or parenthood? Which is more interesting?).
5. What we used to call digital will lead, and it won’t survive without traditional talent.
Bear with me: it doesn’t make sense to talk about “digital” anymore, it’s too ubiquitous to mean anything. What we’re really looking at is a kind of “curation of connections”, which happen in various places. Great strategists can lead that, but they’re going to need content produced – and occasionally a short, branded spot or a still image. One thing traditional advertising still has over new media is the ability to tell a story in a heartbeat; we’ll always need that sort of eye, but there’s no longer any reason for it to lead, its importance is decreasing by the day.
6. This only applies to the companies that don’t create true value.
Apple, Zappos, and the other handful of brands that create products and services so compelling they don’t need to market the way everyone else does are going to continue to chart their own course. Long term, companies are better off focusing on that than trying to advertise their way into people’s wallets, as that stops working the second the ad stops.
So, in summation: the agency will be replaced by strategists defining touch points and curating content for those points, and that can be a 3rd party or it can be a savvy brand manager. Regardless of who it is, a lot of people currently in agency land are simply not capable of that. It isn’t a sell, it’s leading by being meaningful, and advertising just isn’t good at that.
Web shops who want to remain web shops need to use the cheapest technologies available, and make their own approach more turn-key. If they don’t, they will lose out to overseas suppliers who can do it all cheaper (and likely faster). The whole notion of a “digital” agency needs to be ditched, we’re talking user-experience and connections, regardless of whether that happens virtually or in the real world. The shops who don’t want to do that need to be inventors.
And brands that don’t want to deal with either need to create products so compelling and in-tune with their customer base they largely sell themselves. Advertising was always the price you paid for being boring, and shortly it may not be a price you can pay at all.
I’m gonna take you on a surfin’ safari January 27, 2010Posted by David Gillespie in business strategy, digital strategy.
Tags: Add new tag, Business model, Mass media
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While back home over Christmas, I caught up with your friend and mine Ben Rennie to discuss Digital Strangelove, media business models and a host of other things. This is the first of three videos, I’ll be sure to link to the others when they’re ready (those reading this in email or RSS readers can click here to see it).
Ben is also continuing the good work he started last year with Innovation Forums with a couple events coming up soon. The next is in Melbourne on February 23rd, and there are still early-bird tickets available for a paltry $29!
Ben will be following the Melbourne event with one in Sydney shortly afterwards.
Tell me that you’ll open your eyes January 24, 2010Posted by David Gillespie in business strategy, creativity.
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From the desk of Iain Tait, who wrote about this video simply saying “Best. Lecture. Ever.” My vote there goes to Sir Ken Robinson’s excellent TED talk on how schools kill creativity, but on the proviso I won’t have the chance to repeat childhood and not go to school, then this is certainly the next best thing.
The speaker in question is Professor Barry Nalebuf, author of a book called Why Not?: How to Use Everyday Ingenuity to Solve Problems Big and Small. I only assume the ideas in the book are the same he expresses here, it’s earned a spot on my Amazon Wish List and it’s probably worth a spot on yours too.
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This might offend my political connects January 20, 2010Posted by David Gillespie in business strategy.
I notice a bunch of places where people talk about how they haven’t adopted RSS readers, which I find fascinating and frustrating at the same time. I often will add new sites to my reader and forget about them, often just to stumble back across them like i have done this morning on this post from Clay Hebert on why Conan O’Brien should eschew the traditional TV model and go direct to his audience:
1) Full creative control over his own content
Now he writes a lot of his own stuff but imagine if he wasn’t censored at all. Look out.
2) Not working for Jeff Zucker3) Not working for anyone
5) Never having to worry about ratings again
Let Leno have the “ratings” on NBC. His demographic is not Conan’s anyway, so why try to fight for it. It’s sort of like Newhart and Family Guy jockeying for position.
6) Any format, any device
Conan’s demographic consumes content differently. He could make videos of any length that his audience could consume and stream anywhere. iPhones, iPods, Droids, iSlates, other tablets. Design the content to be snackable and sharable and we will snack and we will share.
7) Watching a show at its original time slot is obsolete
I’ve seen plenty of clips of Saturday Night Live in the last few years, but never on Saturday night. My social network does the filtering and the best and funniest clips bubble to me on twitter and Facebook.
8 ) Your own channel means your own audience and unlimited bandwidth
This idea echoes some thoughts I had while back in Australia over Christmas. I recorded an interview with Innovation Forum’s Ben Rennie which I will link to when he posts it, where I said the traditional TV model no longer makes sense; it is a business setup to sell advertising, not to entertain – in fact the entertainment is the expensive part of what they do! Whereas people like Conan are setup to entertain.
The NBCs of the world may still have a role to play for the time being in helping talented people find an audience, but once that happens they swiftly lose a reason to exist. What we’re seeing is a revolution in ecosystems of value, where the content which has been at the periphery for so long is being pushed back into the centre.
The revolution as we all know will not be televised. But it will be everything else.
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That’s not the shape of my heart January 19, 2010Posted by David Gillespie in business strategy, technology.
Tags: Add new tag, Apple, Google, iPhone, Nvidia, Smartphones
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Interesting video the magic that is The David Report turned me onto, looking at and thinking about the future of magazines. I am somewhat of a junkie for the form and don’t doubt it will continue (in some fashion).
This has me thinking also about devices as a whole, and particularly the arms race that is on in the mobile space.
Everyone is excited to have Google‘s skin in the game with Android, and are touting them as the challenger that can actually take on Apple and their much-loved iPhone. The problem facing Google and its partners is not developer support, of which there is plenty, but control over the hardware environment.
See an iPhone developer makes an app once, and releases it. They don’t need to deal with different specifications regarding screensizes, peripherals, keyboards, cameras, what have you. An Android developer has all of that, plus chipsets from Intel, Nvidia and others. The increased overhead in supporting multiple platforms will, I believe, lead us to a place where apps exist on one Android device and not another, leading to negative user-experiences which will directed partially towards the manufacturer, but more so towards Google. Contrast that with the iPhone, which while it has well-documented flaws, is a consistent experience for every person that owns one.
I’m in the camp of people who think Android is the platform that will challenge the iPhone for dominance of the market, Google to need to invest more in the hardware for this to become a race; right now they’re just running warm-up laps.
When honour is at stake, this vow I will make November 29, 2009Posted by David Gillespie in advertising, business strategy.
Tags: advertising, Facebook, Google, Internet service provider, Microsoft, Umair Haque, Value chain
I’ve been thinking a lot about The Three Musketeers – my framework for business models which places them (perhaps overly simply, but simply none the less) into two baskets: All-For-One (self-serving pursuit of value) or One-For-All (pursuit of value for an ecosystem). The former is business as usual up until the advent of Google, at which point things seem to turn, and we see more and more businesses cropping up and being successful by creating value
I had, for the longest time, felt uneasy about Facebook. My sense was that it was founded with All-For-One principles, and I have a hard time viewing it as a business that seeks to create value for an eco-system; it is, to my mind, the second coming of Microsoft rather than the second coming of Google.
I say that, but I also now can’t help but acknowledge the market they have developed for small and local businesses to target customers, and the platform they have provided for brands to interact on a more personal level with fans. In some ways, it lessens the role of the ad industry, which to my mind has a hard time justifying itself as even remotely One-For-All, and so can only be viewed as a good thing.
Once, banks held debt till maturity. The great unnovation was being able to sell it to the next guy, who sold it to the next guy, and on and on and on. What was once a simple, short value chain lengthened to the point of absurdity. Exactly the same value chain pattern is surfacing in media. Ads used to be bought and sold through a short value chain. Facebook ended up serving toxic ads because they were sold through lengthening chains of intermediaries — each of whom shifts the buck to the next guy.
The argument does and doesn’t hold water in places – to my mind it swerves dangerously close in places to the kind of opinion that states ISPs are responsible for their customer’s illegally downloading music. The overall point stands however, which is sacrificing the end-user for the man with money is a short-sighted strategy.
We need to spend more time creating things that user wants in the first place.
That is what One-For-All is all about.
Smoke on the water October 31, 2009Posted by David Gillespie in business strategy, technology.
Tags: Biz Stone, Google, Microsoft, Steve Jobs, Twitter, web 2.0
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At the recent Web 2.0 conference, Twitter search deals were announced with both Microsoft and Google, something I was pleased to see given about a week earlier I had made the prediction in Digital Strangelove (slide 178) that a deal was imminent with one of them – turns out it was both.
Biz Stone has gone on the record saying of all the options they are considering for a revenue model, advertising is the least appealing. My feeling on that statement is this: either they changed their minds, or they’ve done a deal to monetise the most natural part of their business while they think about the avenues they’re truly interested in pursuing. It’s akin to having a field of lavender and making a deal with local photographers to let them take pictures, all the while trying to figure out what you really want to do with all that crop.
I could be over-complicating things, an activity that is a favourite of mine as many an ex-girlfriend will attest. Apple CEO Steve Jobs is famous for saying he had little interest in a feature, such as video on an iPod, before revealing it the next quarter. I can’t help but feel the web is so eager to answer Twitter’s revenue question for them that they’ve jumped on the first clue that appeared and cried “Case closed!”
Call me paranoid, this one stays open in my book.