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Clownvertising, Terrorism, and Candy Cane Briefs

by Walter Naeslund on December 17, 2009

I‘ve always been interested in economics, because economics is a great way to model, measure and understand human behavior. In a TED-talk I watched over a bowl of indian curry (I got stuck alone in the office over lunch), Loretta Napoleoni explains the economics of terrorism and how it relates to the economics of the rest of us. One thing that caught my interest was what she refers to as rogue economics, where politics looses control of the economy, and the economy becomes a rogue force. Rogue economics “always lurks in the background” as she puts it, and “comes back in times of change…such as globalization”. This is not surprising. Politics is a system, and systems always take time to adjust to disturbances. In the meantime, the disturbance affects those affected by the system.

This talk made me think – could this be exactly what is happening in our industry right now? That the system that controlled and demanded relevance and results from marketing spend looses control when the world of communications changes rapidly? Could it be that clownvertising is the rogue economics of the advertising industry?

I sat down with a couple of our industry’s most respected names the other day at Le Rouge and discussed this topic. What they said resonated with my hypothesis. They, like me, also saw campaigns like “The Fun Theory” as irrelevant clownvertising where the client is blinded by the blizzard of change, where the strategists are seduced by the “how can we make it viral”-love potion, and where the creatives watch in astonishment as they receive the most delicious candy cane of a brief they’ve ever seen (“just make it fun, ok?”). I haven’t been in the industry as long, but according to my discussion company at Le Rouge, the blizzard of change that came along with the introduction of television advertising spurred similar epidemics of clownvertising in television. “The Fun Theory” is by no means the only famous clownvertising example. To me, the Cadbury’s gorilla falls into the same category, even though “pointless but fun” is perhaps more relevant to a chocolate bar than a $20 000 vehicle. A smaller but more recent example is “The Wall of Sound” for Brothers.

But anyway, back to the question of rogue economics. Because what we DO know about rogue economics is that the system stabilizes over time. This means that pretty soon, it will no longer be accepted to just “go viral” with irrelevant humor, and that a much more difficult task will be put on the plate of advertising agencies. In this new stabilized system, you will have to be attractive (in the literal sense of the word), sticky (in the Gladwell sense of the word), re-shareable, and effective in terms of what you want to achieve (which at the very least requires relevance). This is not easy. It will place enormous demands on the shoulders of advertising creatives and it will – and this is what I love about this change – place less crap in the lap of the consumer. It’s time to step up the game.

[Edit: Consequently misspelled rogue. Sorry about that. Le Rouge probably threw me off. Thanks Matthieu for noticing.]

Is Spotify the Darth Vader of Music?

by Walter Naeslund on September 8, 2009

As Spotify launched their iPhone app, the crowd cheered. The talented SEO-expert (and comedian) Simon Sundén publishes the follwing graph of Spotify Premium sales that went viral amongst us nerds. Half us us thought is was true, and who knows, it may be.

But even if this graphic joke isn’t true, it illustrates something quiet scary. Something scary that starts with an “M”.

Let me tell you a story to explain:

Chapter 1 – The Music Industry

Think for a minute about how the music industry works. This is an industry that has built it’s entire business model around their monopoly on information distribution. Largely, the monopoly has been built on the control over distribution of plastic circles. In recent years, as silver became the new black in the plastic circles industry, the information started to find other ways of distributing itself over the internet, and the monopoly of distribution started to break down.

Desperately, the record industry tried everything to stop these new an superior modes of information distribution by trying to sabotage them with destructive and inefficient “inventions” like DRM. When that didn’t work (because Darwinistic innovation always gravitates towards the efficient), they cried foul, and tried to persuade their friends “in Washington” to legislate and punish anyone who had the audacity to use these new and efficient modes of distribution instead of using theirs.

Why so desperate, you may ask? Well – this was all they knew. It was not them, but the musicians who created the music. What they, the record industry, had to offer was marketing and distribution. And when their monopolized mode of distribution was suddenly outdated, and marketing was suddenly taken over by the music itself, it’s own viral distribution, communities like MySpace, and crowdsourced services like LastFM, the music industry was suddenly cut out of the loop, unable to provide value. And like the dinosaurs before them, their fate looked sealed.

Chapter 2 – The Innovators

But the file sharing systems, though hugely more efficient than the plastic circles, was not perfect. Billions of redundant copies of the information had to be kept on harddrives where you wanted to access the music, sharing the music meant sending over entire files, and meta-information was incongruent. Instead, thought a group of innovative individuals, one would like to take the route of the semantic web and have ONLY ONE instance of every file, with congruent meta data, stored in ONE place so that we could share it by only sending links pointing to the specific files. Then each of us could have access to all information and create a hugely efficient market for sifting out the very best. A more efficient model to be sure, and as we know, Darwinistic innovation always gravitates towards the efficient. The group of geniuses created and productified this new and superior mode of distribution. And they named it – Spotify.

Chapter 3 – The Cartel

And here, the music industry saw it’s chance. In one of the weekly meetings of The Cartel, the organisation they had set up together “to act for the common welfare of artists everywhere”, one executive stood up and said – “we can’t stop every single individual on the internet, but we can stop one company! We can threaten to destroy their new value, and claim part of it as ransom! We can regain our distribution monopoly by using their own value against them! But we have to act quickly! If more inventive companies emerge and compete, like Chilirec for instance, we will loose this last chance for survival of our kind. Sure, Chilirec will try to sue us, in fact, they already did, but that’s no match for our lawyers. We have our own people in the courts”.

One young assistant’s assistant, who had observed them in silence from the end of the table, mumbled quietly “but what value will we contribute? How will we make things more efficient? Will this not stifle competition and put an end to innovation?”? BE QUIET! Roared an executive at the end of the table. THEY NEED US! THEY WILL SUBMIT OR BE DESTROYED!

Said and done. The Cartel cheered and applauded. “If we all agree to let Spotify use our music, and let Chilirec use none, we can cut any deal we want. They have no chance to do this without us. We can use their new invention to return to the times of the distribution monopoly! We can be rich! Maybe we can even keep all new releases within Spotify and NEVER NEVER NEVER release the files to anyone else! Trying to hack Spotify and batch down these files will be easy enough to stop! We couldn’t control the data on the plastic circles, but we CAN control the data on the Spotify servers! We can even demand to own part of Spotify“! The room went silent as his words resonated through the spines of The Cartel directors like a chilling wind. Own the only source of music… on the planet.

Epilogue

When Apple realized what hit them it was too late. A year earlier, soon after The Cartel’s spirited meeting, Apple had given away their last line of defense and allowed the Spotify client on their iPhone. As the power of the iTunes store faded away, Apple tried in a last attempt to launch their version of Spotify, called iTunes Unlimited. The service was impeccably polished, integrated into their brand new Wild Cat operating system, and could play songs while texting on the iPhone, something that the Spotify client couldn’t. But what was the use of all this if they had no music. Or at least, just enough music not to be able to compete with Spotify. The number of Spotify exclusive songs and artists soared and left the rest of the industry in rubble. A lot of people said that “we should have seen this coming when Spotify restricted the iPhone app to paying premium users”. But now it was to late. The war was over. They won.

At least until the rebels on the far moon of MySpace started their indie music rebellion. But that is a whole other story.

The Hang Glider Theory – How to Survive Disgusting Domino’s Pizza Clips and More.

by Walter Naeslund on September 7, 2009

I love to theorize about social behavior and how it relates to our behavior on the internet. But sometimes I get the urge to be just a little more practical about things. How can we actually use all this theory? Before we dig into what I call The Hang Glider Theory, let’s gossip a little.

The Anatomy of Gossip

It seems reasonable to me that gossip evolved as a tool to manage coordination of larger societies. It was a way to trade the social currency called reputation. Reputation, in turn, was a way to govern collaboration between individuals where you neither had a close enough common interest in genetic propagation, nor first hand knowledge of the individual’s contribution or withdrawal from the common pool of value (stash of nuts, Mammoth meat, whatever), nor a strong enough reason to hurt or kill the individual in question. Gossip was a more granular way to control behavior so that it wouldn’t become abusive. Killing individuals for stealing a banana makes society somewhat unstable, but so does letting banana theft run wild, right? Gossip and reputation worked really well here as a way to make societies more stable, to enable rudimentary trade over time and distances, and support larger scale collaboration in general. Societies using this tool prevailed and individuals mastering social behavior thrived. If this wasn’t true, we wouldn’t be doing what we are doing today. Apparently, those who stayed behind in their caves and didn’t interact perished. Maybe somebody should tell this to marketing execs who don’t think they need to engage in social media.

Positive and Negative Gossip

If this is how gossip evolved, one can imagine why negative gossip is so much more common than positive gossip. It was more valuable to know who not to trust than knowing who to trust, simply because it was more expensive to be ripped off or killed than to miss out on the benefit some good social interaction. This could explain our approach anxiety and also why our reflexes for spotting danger is so much quicker than the mental process of spotting something good.

To this day, negative gossip dominates. Even though I can’t show you any conclusive evidence, I think we know it intuitively from our everyday lives. Just look at a rack of gossip porn… sorry gossip magazines.

Gossip and Brands

This is also true for brands. It’s so much easier to go viral on some negative spin than on some positive one. There are tons of examples, the “Disgusting Domino’s Pizza Clip” being only one.

But wait a minute – if this is built in to our minds from thousands of years of evolution, and the internet makes this kind of gossip ultra efficient, will this not happen to us all the time? Yes, my dear Watson, it will. And for that reason, strategies to handle it will have to be part of our management models, but also part of our strategic communications thinking.

How to build it into our management models is crucially important, and includes things like corporate guidelines, empowerment of employees, etc. It is outside the scope of today’s post, but I promise discuss it further some other day.

Instead, today, I’ll propose a model for building it into our strategic thinking. I call it The Hang Glider Theory:

The Hang Glider Theory

If the domination of negative gossip is human nature, then we have a downward gravity of gossip on our scale from attraction to repulsion. So what if we could do what hang gliders do and use this force of gravity to gain speed and create lift again? To nurture warm upwinds and gain even more lift, eventually ending up turning negative momentum to positive lift?

What EA-Games did to handle a bug i their Tiger Woods ‘08 game is an old but clear example of this strategy. The bug was that you could walk out on water in the game, which created quite a bit of buzz in the gaming community. But instead of doing something boring, like fixing the bug, or just keeping quite, EA put on their hang glider and used the momentum. This it what they came up with:

Now, I’m not saying that creating a funny film will solve your problem, make sure you hear me now. For Domino’s for example, that would probably have been disastrous. But this film is a clear example of the theory at work.

But even for the Domino’s case much could have been done. Cool campaigns could have been created for recruiting 2 new employees (implying that there were in fact only 2 people involved), or you could have taken these two individuals in to help out with improving working conditions at Domino’s (they were obviously the two most dissatisfied employees in the country), or you could have turned the restaurant in question into an institute for food freshness and employee care, making the incident a turn around symbol. Or whatever. Just not this:

…which is boring, and guilty sounding. It’s also very similar to the “a few bad apples”-defense used in the Abu Ghraib trials. It sounds like you throw out and indict two employees without changing anything in the system, thus leading us to wonder if there aren’t a thousand others just like them out there, being just as dissatisfied and disloyal, only waiting to sneeze on my mozzarella sandwich.

So – this is The Hang Glider Theory. Try it out. Tell me what you think of it. Have fun!

Q&A From The BBH Labs Post on Honesty

by Walter Naeslund on September 4, 2009

Yesterday, BBH Labs wrote an interesting post commenting on some of my thoughts on internet transparency and gossip. The post itself, as well as the comments, are well worth a read. Since it’s one of my favorite topics, I naturally wanted in on the discussion myself, but as I started writing a comment on their blog, I realized it would probably be a bit long for a comment, and instead decided to make it a follow up post here.

Q: Is there any evidence of better behavior and less cheating?

A: I think we can see plenty of evidence to support the fact that the breakdown of brand privacy forces brands to behave better. User comments and ratings are in fact the backbone of much of e-commerce, and are really a form of digital gossip. Companies behaving badly are exposed all over the place. Companies behaving well are to some extent rewarded, even though gossip gravitates towards the negative for natural reasons (it’s often more expensive in nature to make the wrong decision than valuable to make the right one). On the individual level, Googling is a standard part of hiring these days, and cheating husbands and wives are exposed all over the internet every day. Just to mention a couple of examples.

Before language evolved, cheaters were easy to spot in small tribes, but not in larger societies. When language evolved, efficiency of gossip increased and we could now crack down on cheaters and reward contributers in bigger groups. Now, with the social web, gossip is made even more efficient, thus making it possible to spot cheaters and reward contributers in very large groups, spread out all over the globe. It’s the same basic psychology and the same economics behind it, but more efficient means of communication enable us to increase scale. The economics of gossip are very much the same as internet economics, or information economics in general: Providing gossip is virtually free, while receiving it can be very valuable. This creates growth. As a fun excercise, you can try applying these economics to the “piracy”-debate.

“Q”: On one hand it all sounds a little Utopian (and some might argue, less fun). On the other, it does sound rather attractive.

A: It may sound utopian, but it’s really not. I’m not talking about perfect transparency with zero transaction and coordination costs (which would be utopian and impossible). Instead, I’m talking about an increase in efficiency, which leads to a more precise control system that is harder to cheat. Harder, but not impossible.

And I really don’t think that it’s a question of attractive or less fun, but rather of us increasing our ability to coordinate as a species. An increase in ability to coordinate enables us to coordinate more quickly, thus becoming more adaptive to changes in our environment. Those who adapt the quickest to change will be the most fit for their environment, and the fittest will survive. If we let this continue without destroying the efficiency with legislation, this is where we will gravitate towards by Darwinistic law. It’s somewhat like asking if life became less fun or more attractive when language was introduced. I can’t answer that, and I don’t know if it’s a relevant question. I do think that it made us more civilized, and I think that the web will have the same effect.

Q: For other societal constructs, such as a nation/regime, hard to say. The world had pretty honest information on the Iran situation, but that didn’t make the regime behave more honestly. On the other hand if
victims in genocidal warfare in Africa had means of disseminating real time information would the world be more inclined to intervene and act more honestly by upholding basic human rights?

A: There are a few different questions involved here, and I won’t go into the specific situation for each country, but on the structural level you can say this: There is a huge shift in power going on all over the world. The monopolies of information distribution previously (and sometimes currently) held by institutions by economic neccesity, are falling apart. And this makes those depending on such monopolies less powerful. For these institutions, the social web poses a threat, and the only way to stop the threat is to stop entire services, and indeed this is what we are seeing in some of these regimes.

Unfortunately for them, this is also very costly in terms of not tapping into the growth engine of gossip and digital gossip that we spoke about earlier, and will leave them with the choice of handing over power by unblocking internet services or loosing out in the competition with free countries. Ultimately, I think and hope that fighting internet freedom is a loosing battle.

What the World Will Look Like in 25 Years

by Walter Naeslund on September 1, 2009

When I went to ad-school I felt that the school was in many respects molding people into replicas of what ad-people were supposed to be. Now I feel that this is perhaps about to change. The other day I got interview questions from Hyper Island regarding digital trends, and today I got another question from Berghs School of Communication regarding “what the world will look like in 25 years“. And despite the fact that a question like that is hopeless in terms of giving the correct answer, I can try to provide some humble thoughts on the subject.

First, the world will be what we make it. That may sound like an empty phrase, but it’s really quite the opposite. It is a way of living, of working, of acting, and of thinking. If you live by this belief, make decisions and take action, this will not be an empty phrase, but the best estimate of the future that we can produce.

But aside from this answer, I will try to give you an answer to your question that is a little more pragmatic. Looking at what communications will look like in 25 years we can try on two scenarios.

In scenario 1 we make the internet asymmetrical. We let legislation rule what can and cannot be sent across the internet. Material which is not permitted (like “pirated” information for example) will move underground and will be sent using stealth technology. Much of the information flow of the internet will be encrypted jibberish, undecipherable for any sense-making technology wanting to make use of it and invisible to human senses that could otherwise have been used for collaborative sense-making and coordinated collective intelligence.

The goals of those wanting to control certain information based on their nostalgia of the times when they had a lucrative monopoly on distribution will not be reached because of ever improving speed and convenience of stealth technology. Instead, the huge resources that will be put into creating these technologies (love of music for instance is a powerful incentive) will be of great benefit to those who have truly evil intentions but smaller resources, notably terrorists and criminals. Since the only way of stopping “piracy” will be to do so at the infrastructure level (service providers can be real and effective gatekeepers!) this is where we’ll eventually end up, banning encrypted traffic altogether. And presto! The internet as we know it is destroyed.

Also in this asymmetrical scenario, we will start charging for the use of bandwidth. Me, being a strong believer in free markets and competition, opposing this kind of asymmetrical access to the internet based on resources may sound incongruent, but it really isn’t. Much in the same way roads and equality to the law are the basis for efficient competition (imagine the transaction costs of paying different prices for different levels of use of different roads), I think that access to the internet should be considered public infrastructure that will benefit competition, production, innovation, and market efficiency. But in the asymmetrical scenario, this will not be true anymore, and instead old business models and old distribution monopolies can be recreated by content companies using their funds to squat certain infrastructure lines and only provide access to their content through these. This may perhaps sound fair, but what will happen is that the abundance paradigm of the internet, the free flow of information, the “to each according to his ability” (the reverse of the famously Marxist slogan), and the rise of man through collective intelligence will stop.

I’m an optimist. I don’t think that this will happen.

In scenario 2 we retain the symmetry of the internet. We treat it like infrastructure in place to make markets and information flow efficient. Like a great system of streets and water pipes. In this scenario innovation will flourish because we can all do what we have always done, build on each others innovations, but we can do it with unprecedented efficiency. We can try and fail to a very low cost, we can learn from the mistakes of others, which boosts human efficiency enormously. This increase in efficiency, just like earlier technology leaps such as industrial farming, will create vast amounts of cognitive surplus that we can use for further innovation and production. Note that even resources that seem to be wasted on chatting with friends and Twittering create value in the form of information coordination and add to the collective intelligence. We can learn how people talk, we can cluster information, we can find new synergies and draw new conclusions.

Gossip will become hugely more efficient in this transparent world of efficient communication. This will lead to vengeance and gratitude being distributed with much more precision in answer to bad or good behavior and will make us all behave better and cheat less.

Digitally replicable products will not be products, they will be marketing for products where there is still tension between supply and demand. Musicians will try to get their music redistributed as quickly and widely as possible in order to fill venues and cut deals with brands, authors will do the same with their audiobooks to get speaking opportunities and sell hardcovers, filmmakers will use their films as vehicles for brand building and profit off of their brand, while also providing vehicles for other brands. Ludicrous legislation regarding this will be laughed at in 25 years. So will the crude methods of product placement of our age. The cinema experience cannot be pirated and we will see huge product development in terms of widening this experience. Their temporary monopoly on the film itself has made them lazy in this respect.

There will not be a difference between our digital identity and our physical one. All interaction with us will be permission based, and we will grant permission to those that we like and receive value from. Interuption marketing will be long since dead. The notion of publicly reachable phone numbers and email adresses will be laughed at as cute relics of the past. Our identity will be our identity and we will call people, not numbers, by whatever means is most efficient at the time, voice, video, text, images. By default our precense in the digital and analogue world will be publicly available. The benefits of this will outweigh the drawbacks. At times we will switch this off, just like we close the door when we want to sleep.

The semantic web will be obvious, and we’ll look back at how the internet was and smile at how we had so many copies of everything and how inefficient everything was. Of course each object will only be available in one absolute, so that any update will only have to be done once. Of course each of these will contain data representations fit for each semantic understanding of that particular data. We will be able to search, deploy scripts to ask questions and make calculations, and switch between real time representations and the historic dimension. This will all be very intuitive.

Since you are asking me to describe what the world will look like in 25 years, it is a bit ambitious to think that one blog post will answer it all, but these are some ideas of how things will be. If that’s what we decide to make them into. Because still, I think that my first answer is the best one – the world will be what we make it.

It’s a War Between Conservatives And Innovators

by Walter Naeslund on April 18, 2009

I encourage everyone to cut out and frame today’s editorial in DN. It’s one of the strangest editorials I have read in a newspaper of a democratic country, and it will probably be worth money some day. Since it was an editorial, I actually considered cancelling my subscription. But then I read this article, which is more balanced and actually shows quite clearly a couple of interesting points.

Henrik Pontén’s quote is, for example, really entertaining. Especially when he claims that this verdict will lead to “reasonable content” on the web.

We can see in this article how this is a war between conservatives and innovators. Researchers are sceptical to these controlling behaviors, while corporations making money off of the old system want to retain the status quo. I guess one can’t blaim them. Humans are inherently afraid of change.

More interestingly, Viasat’s CEO Hans Skarplöth, whom I have discussed here earlier, is in this article as well, calling the false sense of security derived from this verdict and the IPRED-law “naive”. Brand-wise we can now start to see one of the big winners, and I think that Viasat’s moral courage will be in the marketing textbooks and lectures of the future. As will the ruined brand name Metallica.

Fresh Angle From Skittles.com

by Walter Naeslund on March 2, 2009

The new Skittles.com is pretty cool. We’ve all talked about for a while now to aggregate content from different places to a central hub. Skittles takes a different angle and basically turns their .com into a remote control for other locations where they are present. I’m not sure yet how it’s going to work, but it looks cool, and I love the new angle.

Thanks to F&B’s Robert Lund for the heads up.

The Privacy of Evil – Part Two

by Walter Naeslund on November 25, 2008

This is the second part of my idea sketch on privacy and integrity. The first part can be found here. There is also an interesting comment on that post by Michael Dahlén where he talks about information symmetry, a theme that I’ll adress later in this post.

In this second part I will show you two talks, the first of which happens to be one of my favorite talks ever, by the phenomenal writer and psychologist Jonathan Haidt. The second talk is a rather graphic and frightening one by Philip Zimbardo, and I will only present the link here and not embed it since there are some very graphic images in the presentation.

Anyway, I wrote in the first part about how we psychologically maintain moral behavior in a self-regulating way, by rewarding and punishing each other in more or less subtle ways to maintain moral equilibrium. It’s an extremely impressive distributed control system, much like the self balancing control system of a market economy, but much more refined and granular.

In Haidt’s talk, five moral foundations are listed as ones that we have with us from birth. These five are:
1. Harm/care
2. Fairness/reciprocity
3. Ingroup/loyalty
4. Authority/respect
5. Purity/sanctity

If any one of these foundations are challenged, we react quickly to restore equilibrium. At least until we shift the equilibrium by fundamentally changing the rules of the system. There are several ways of changing the rules of the system, but I will focus only on one of these here. The one I will focus on it the introduction of anonymity.

If we remove personal responsibility from the system by introducing anonymity, studies have shown that several of these moral foundations seem to fail. Some of these studies are presented briefly in the talks below. Personally I’m most intrigued by the first two of these foundations. It seems that people can turn evil and cause harm when power is introduced in combination with the removal of personal responsibility. Consider uniforms in war for example, or hoods worn by executioners through all time. And people in many systems seem to loose sense of reciprocity by cheating when individual contributions are unclear. We also seem less prone to do good under such circumstances.

So is this view highly cynical? Well, perhaps not. Perhaps it’s just how civilized group behavior evolved. How else would something like this be governed? The peer to peer equilibrium control system is perhaps the only viable path for evolution to take (Darwin would say that the present state is proof of that. I would too).

This view would explain why religion was a really good idea for keeping up moral behavior. Because even when nobody was watching, god was. But the notion of god created a huge information asymmetry which was quite scary, and often abused throughout history.

But as the internet removes anonymity in a (more) symmetrical way, it is much more difficult to abuse this information. I don’t mean to be bombastic, but I can truly see us moving into a new era of higher moral standards and a better world – simply because we increase communication efficiency and information symmetry. And I would like to encourage you to consider this the next time you read a negative article about the breakdown of privacy.

It also puts a new spin on Google’s “Do No Evil”-tagline, doesn’t it?

Now watch these two amazing talks and consider what I just said:

Talk number 1 by Jonathan Haidt:

Click here for talk number 2 by Philip Zimbardo.

control

Clownvertising, Terrorism, and Candy Cane Briefs

Similar Posts:

Is Spotify the Darth Vader of Music?

Chapter 1 – The Music Industry

Chapter 2 – The Innovators

Chapter 3 – The Cartel

Epilogue

Similar Posts:

It’s a War Between Conservatives And Innovators

Similar Posts:

Fresh Angle From Skittles.com

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