Brazil: Exploring Favela Culture

I’m in São Paulo this week, where more than 2 million people, about 11% of the population, live in working-class settlements called favelas. Global media coverage of the estimated 1,643 favela neighborhoods usually focuses on the negatives: gang violence, drug culture, and lack of infrastructure. These are real and pressing issues that residents and community organizers work daily to address.

There is another narrative that needs to be written about the favelas. They are Brazil’s cultural incubators – vibrant spaces that influence the larger city and with growing influence in their own rights.

The favelas are “alive with sound and movement.” They are unique, walkable spaces with a blend of retail and residential property use; something urban planners strive to create in other cities. Gatherings tend to happen outdoors and create a lively street culture. Living in close proximity to neighbors encourages the exchange of ideas, and “incubates” novel blends of culture and commerce. For example, I saw in my visit many an ad hoc musical performance outside a grocery store, where an enterprising entrepreneur was leveraging that to sell drinks and snacks to curious on-lookers.

Not unlike the far-reaching influence of U.S. hip-hop culture, the expressions and ideas that develop in the favelas trickle out to influence tastes in the broader Brazilian culture. They shape music, fashion, food, and language. Samba, Carnival, and more recently funk carioca all emerged from these spaces.

Brands and Retailers looking to connect with the country’s large, relatively young population would do well to take notice. This is especially true for foreign companies that seek to expand into the Brazilian market and need to tailor their offerings to local tastes.

In addition to sending cultural influences out, recent years have seen new occupants flowing in. Students, artists, expatriates, and middle-class Brazilians are taking up residence in favela neighborhoods – seeking affordable housing and cultural diversity. They bring higher expectations about the rights and services they deserve, and favela dwellers are increasingly finding ways to make their voices heard. In the last few years, they have been empowered by the ability to use social media for connecting, organizing, and problem-solving. Taking notice, Google recently launched a mapping project with the goal of giving Rio’s favela communities visibility and, therefore, louder voices in the complicated politics of the country. By the way, one interesting observation on my trip was the very high frequency of use of waze app by Brazilians to navigate their challenging traffic situation.

Amidst this change and growth, new business models are developing in many favela communities, including tour operators, hostels for young foreigners, and community art projects.

One start-up, Friendly Mailman, is taking on the problem of unreliable mail delivery. Because residences and businesses lack street names, much less physical addresses, it is almost impossible for government carriers to reliably deliver mail within the favelas. The company’s founders used algorithms to create a proprietary digital “map,” which their private carriers use to deliver parcels to customers who pay a modest monthly fee. This is surely the tip of the iceberg when it comes to innovative tech platforms that could serve favela residents in meaningful ways.

I do not wish to detract from the complex history that created Brazil’s favela neighborhoods or the often-difficult conditions of daily life within them.

However, I am enthused to think about how they also embody the power of human creativity and ingenuity. Forward-thinking companies have an unprecedented opportunity to consider new ways to meet the needs of Brazil’s growing working- and middle-classes. I’m particularly fascinated about the potential to use technology platforms to cater to emerging consumer needs and aspirations. For example, could a retailer use a click-and-collect model to improve food access within a larger favela neighborhood?

True, there may be missteps and there is no one-size-fits-all model. However, success in this arena represents the dual opportunity to simultaneously create company value while also bringing value to a currently underserved market.

In a Global World, Think Local

Consumers in the global economy have access to a dizzying array of products from around the world. Shoppers find Mexican spring water in Canadian supermarkets and U.S. fashion labels in Kenyan shopping malls. Goods unavailable at brick-and-mortar stores can be ordered online or even virtually via retail ‘teleportation.’

Paradoxically, in this context of unprecedented availability of global brands, many indicators suggest that shoppers increasingly prefer local offerings.

A simple statistic got me thinking about the trending interest in all that is local. According to data from MasterCard Advisors, U.S. small-business retail sales have risen 5.4% this year, outpacing growth in total retail. The trend is more marked in categories like apparel, where small businesses enjoyed significant growth against a declining category.

CNBC reports that property management companies are following the money by actively pursuing locally-owned concepts – reversing a three-decade trend of favoring national tenants. This shift is a win-win for them and their tenants. Shoppers are drawn to the unique merchandise and dining experiences, the easy shopping formats, and more personal service. Local businesses help landlords differentiate their shopping centers from more homogenous big-box-anchored centers and increase foot traffic.

National companies have started to recognize the trend, too. Retailer West Elm now features a curated selection of locally designed merchandise and supports the makers through community events organized by local store managers.

The increased interest in ‘local’ isn’t limited to retailers. In hospitality, Airbnb offers access to quaint, local residences in lieu of the homogeneity of larger chain hotels. And of course, grocery shoppers continue to express strong interest in local food, which is perceived as better quality, better tasting, more sustainable, and commands a price premium. 

The desire to buy local is not limited to the U.S. Here are a few interesting examples from around the globe:

In Asia, Trendwatching.com observes that “from Asia, by Asia, for Asia” is the region’s hottest consumption story. Regional tech brand Xiami is consistently outperforming global rivals. In China, luxury shoppers are opting for local fashion brands over the
ubiquitous international labels that have dominated the fashion scene for the last decade.

Entrepreneurs throughout Africa are finding ways to use their understanding of local needs and contexts to outperform global competitors in their market sectors. The Ugandan-based service app Yoza connects customers with entrepreneurs who offer laundry and dry cleaning service in their local neighborhood. Kenyan consumers have flocked to the M-Pesa mobile payment system, which has made the Western models of retail banks and credit cards all but irrelevant.

I tweeted several weeks ago about India’s Dabbawalas, a centuries-old food delivery service that has survived – and thrived – in the face of competition from global tech startups.

And, in New Zealand, half of Kiwi consumers recently said they try to buy local brands, both to support the local economy and because these companies better understand their needs and tastes.

These local-focused entrepreneur stories might be interesting, but why do they matter?

The “buy local” movement is driven by consumers’ relentless search for authentic goods and services. In a world where a consumer can have any good, at any time, purchasing a less-available, local item – be that a shirt, a piece of home decor, or street fare from a food truck vendor – becomes a source of pride and distinction. This tendency toward the local is facilitated by technology, which allows small, entrepreneurial players to launch, market, and scale their businesses with speed and success.

In reflecting on all of this, I can’t help but think that the old adage, “think globally, act locally” is as true as ever. Global brands will do well to think hyper-locally in order to maintain relevance with consumers in a glocal world.

UK: New application fills consumers’ baskets while they work, sleep, play…

Couple of weeks ago travels take me across the pond to the UK. While I’ll steer clear of adding my analysis of the Brexit vote, I am felt compelled to reflect on changing retail landscape in the U.K & implications here in the U.S. Specifically what was intriguing was the launch of an innovation aimed at making grocery shoppers’ lives a little easier.

Tesco recently leveraged the power of IFTTT (If This Then That) to create an automated shopping application. While it is powered by sophisticated backend technology, the proposition is simple: shoppers can join Tesco’s IFTTT channel to create “recipes,” or triggers that will automatically add items to their shopping basket at Tesco.com.  Yes, bots will do your shopping & take out the mundane tasks.

IFTT, eloquently described by Tesco Labs, is a “platform for joining together all your different online accounts to enable you to do clever things.”

Consumers sign up for a free IFTTT account and connect it to other applications (think: Facebook, Twitter, email, etc.). Registered users can then create “If, Then” recipes that proactively help accomplish a variety of tasks including controlling home appliances, staying healthy, connecting to loved ones, shopping smarter, or staying current. A tech maven can get an email whenever there is breaking news from their favorite publication. A health nut can receive a text anytime they fall short of their Fitbit goal. (Finger-wagging tone free of charge.)

Tesco’s channel offers a few recipes to get shoppers started. You can add milk on a certain day of the week, get an email if a product drops below a certain price, or even add burgers to your basket if it’s unexpectedly sunny.

Further, users are encouraged to create their own unique recipes. I can only imagine that these user-generated recipes will provide Tesco rich new territory for mining consumer insights and identifying unmet needs. 

This proactive technology is an example of the many “butler/bot” applications that are stepping up to manage the mundane and time-consuming aspects of people’s lives even when they are not actively thinking about them. (See: Google Alerts, Amazon Dash, and Brita’s wifi pitcher). Clearly, it has the potential to help consumers save time and money, and even make more satisfying purchases.

In addition to these consumer wins, I can’t help but think about what this application might mean for grocery retailers and their partners.

One innovation expert suggests that automation disrupts the typical shopping process (make a list, go to store, seek and select products) in a powerful way. It creates new imperatives to get a product into a shopper’s consideration set and basket long before they enter the doors of a store – if they ever do.

Conversely, as shoppers offload the job of shopping for weekly staples, they may enter retail grocery environments with more time and mind space to seek and sample novel products, creating new opportunities for brands and retailers to engage them.

Eventually, cart automation could pave the way for a “predictive grocery basket,” wherein algorithms would allow retailers to understand a shopper’s patterns and populate their basket with the items they want. While this may be a few years away, what a game-changer it will be if consumers can accomplish most of their grocery shopping without a single step, swipe or click.

For more on how Tesco is piloting technology to innovate the retail grocery space, read here.

Image Source: The Memo, 2016

South Africa: The Retail & Brand Landscape

As some of you may already know, I’ll be traveling to Cape Town this week for the 2016 Global Summit of the Consumer Goods Forum. This year’s theme is “Seizing Opportunities in the Face of Disruption,” and I think that South Africa provides a perfect setting for the topic at hand. The South African market is both young and ever-evolving, and I’m excited at the prospects for innovative disruption in Africa’s second largest economy.

South Africa has a tremendous kinetic potential both within its borders and spreading out to Africa as a whole. With its high urbanization rate, both current and projected, and a quickly growing middle class, South Africa is primed for continued expansion. In fact, some of the strongest evidence of this is SA’s 2011 admittance into what is now the BRICS coalition alongside Brazil, Russia, India, and China.

Framing this potential is South Africa’s unique patchwork of traditional and modern outlets, which are ripe for disruption and innovation; especially in the ways we can apply eCommerce and other methods to shift the status quo away from traditional commerce. Through various sources I tried to educate myself on what is happening with retail in South Africa. 

The traditional market is underpinned by the ‘Spaza,’ a uniquely South African concept that originated from the necessity of providing goods to residents dealing with the sprawl of the townships in the country. A small, informal convenience store, generally run from the owner’s home, these shops are spearheading huge growth in SA’s traditional trade sector, leaping from 31,000 outlets to 134,000 in the past two decades. They offer a built-in location convenience that few other outlets can match, and the numbers are clearly bearing this out.

Table Top

Table Top

Besides the growth evidence, studies show that consumers shop at spazas, on average, four times a week. While they’re still using supermarkets for total shops, they generally only do those large buys once a week, showing the huge frequency advantage traditional markets maintain. Also, studies show that the average Spaza consumer, faced with the stores’ often limited selections, tend to decide very quickly on purchases. They are far more likely then, to purchase established brands, which creates a difficult situation for new brands attempting to gain a foothold.

Modern trade outlets are showing steady growth however, with over 4,500 outlets nationally; and 70% of SA consumers using them for larger shopping trips. But close to 50% of shoppers are still using the spazas for small, frequent trips and top-up shopping.

What can modern trade stores and brands do to disrupt this market paradigm and reposition themselves to compete?

We know that modern outlets offer both wide varieties of goods, and the ability to purchase those goods in bulk to deliver better prices to the end consumer. This will always be the case, but it has much more novelty in an emerging market. And while modern outlets will always struggle to compete with the proximity convenience of traditional stores, it’s important to note that SA internet accessibility has increased nearly 4% from last year, making it much easier for consumers to make online purchases and pre-decisions.

It also allows brands a way to create awareness that will translate to sales both in traditional and modern markets, while giving consumers a new way to interact with both the brand and the markets. While only about 52% of South Africans have internet access, this will only increase. These first-time web consumers will be able to take advantage of eCommerce at an ever-increasing rate, while being highly sensitive to novel promotions and concepts that web access can bring.

If modern outlets want to compete with traditional markets, they will have to appeal to this rapidly growing group of shoppers. By leveraging emergent internet capabilities, they can create convenience that rivals the spazas while offering options that can’t be matched by a corner store.

Likewise, the smart play for brands is to utilize the web to get out ahead of established brands that have no presence outside of traditional markets, creating a brand recognition that will literally have consumers asking for them by name, in both spazas and modern outlets.

With such a large potential for growth, there’s going to be plenty of room for both traditional and modern outlets moving forward. However, only non-traditional outlets have the capability or wherewithal to utilize disruption to create a jumping-off point for competitive convenience and focused brand appeal. To miss this opportunity could be devastating.

I look forward to experiencing this ever-evolving market place for myself, and can't wait to hear about South Africa from Zelda La Grange who served in Nelson Mandela's government & the legendary South Africa team's Rugby captain François Pienaarat at the conference.

Era of Chief Marketing Technologist

I recently had the pleasure of reading an interesting article from SapientNitro covering the emergence, evolution and paradigms of Chief Marketing Technologists. I think it’s great to see people diving into this exciting new role, and this article certainly validates the need for the industry to move toward CMT leadership.

As I’ve advocated before, companies who crack the code on merging the roles of CMOs and CIOs into a new super-ordinate CMT role fare far better in our ever-changing marketplace. I think there is lot of synergy in thinking through make-move-sell-market through the lens of this combined office. Having a distinct CIO and CMO role in the future especially in consumer’s goods and retail industry will inhibit success in this digital world.  I would espouse combining both into a CMT role. Also quantifying the qualities that a successful CMT must embody is anything but simple. I love the seven archetypes they’ve created in this article, and as I’m sure you will see, the breakdowns are extremely helpful when evaluating CMT candidates.

These archetypes truly showcase the diversity of backgrounds companies are turning to when looking to fill the CMT role today, and they demonstrate that, currently, there is very little synergy in the backgrounds of CMTs. Honestly, I don’t find this to be very surprising, given that we are merging two areas of expertise that currently have very different degree and career paths. It’s this lack of integration that makes SapientNitro’s new CMT university-level curriculum exciting because it is something sorely needed in today’s education landscape.

I continue to believe that if scoped properly, the CMT has the power to drive disruption in the marketplace by nimbly reacting to the ever-expanding variety of mediums we must operate in, while creating new sources of revenue around brands beyond their own products, such as subscription and content services, all while dramatically reducing the amount of assets required to do so. Most important, CMTs are perfectly poised to harness the true power of consumer behavioral data that we all have at our fingertips and bring it to bear, ultimately liberating us from the flaws of antiquated data-gathering methodologies.

We live in exciting times, and I hope you are as eager as I am to see this evolution of marketing function. Let the of era marketing technologist begin! 

 

The future of fatherhood from the retail level

I closed my last post speaking on potential. If you recall, my recent trip to Mexico was an eye-opening look at the untapped opportunities for growth that exist in a highly competitive market.

Well, I’m here again to talk about potential. This time though — and trust me here, I know it’s a tired term — I’m talking about Millennials. Specifically, Millennial dads. As these young adults are starting to age into fatherhood, they’re once again demolishing paradigms.

Marketers have always viewed women as the decision-makers when it comes to household goods and groceries. It’s an old-fashioned point of view perhaps, but it’s been a statistically relevant one. However, as we often see with an ascendant cohort, the numbers are on the move.

Women now make up 40% of the global workforce, and thus, alongside the rise of Millennials, we’ve also seen a correlating shift in parental responsibility towards equality in the sexes. In fact, over 50% of Millennial dads claim full or partial responsibility for major in-home childcare, as well as slating “being a good parent” as one of the most important things in life.

Of the 40 million Millennial men, 27% of them are dads. There’s that potential I was talking about, as that percentage is only going to increase for the foreseeable future. And these dads are shopping. In fact, 80% of them claim that they’re the primary or shared shoppers when it comes to groceries. That’s 9 million shoppers and an increase of 35% when compared to all dads!

So how do we take advantage of this? Well, we turn to what we know. Compared to women, having a child generally doesn’t change men’s shopping habits, even with Millennial dads, which gives us a solid launch point.

We know that men are more results-focused. The man-on-a-mission mindset still rules — even in the grocery store, where most men will shop the perimeter rather than browse up and down the aisles. Point-of-sale displays must play to this as well, offering an immediate response. Direct-result messaging wins with men every time, so marketers have to make sure we not only get their attention, but also keep them engaged long enough to see that it will fulfill a need.

Millennials have flipped the script once again. Moving forward, we must combine known male shopping habits with new data as it’s accumulated. It’s a wide-open market, and those of us who can apply what we’ve learned working for moms and make it relevant for dads will have an incredible advantage as more and more Millennials age into parenthood.

 

Sources for the stats in this post: 

Demystifying the ads: Crash the Super Bowl

When we recently said goodbye to Crash the Super Bowl with a send-off worthy of this landmark program, along with the emotions came a lot of memories to reflect upon. As we look ahead to introduce a bold, new legacy program for Doritos, one question nags at me: exactly what made the ads from our fans such a smashing success? I could point to any number of things, but arriving at a definitive answer still evaded me. So I reached out to the agency that created Crash, The Marketing Arm, and asked them to shed some light on the ad creative through the lens of behavioral economics. Here is what they had to say…

Advertising has strived to understand why consumers make the decisions they do in an attempt to tap into that mystery and drive preference for our client’s products. We get close, but if we were honest with ourselves, more of our successes have been driven by intuition than lessons learned from actual consumers. 
 
The intuition that we lean into in strategy development and big ideas resides in the same brain space as the intuition that drives consumer choice. The field of behavioral economics has brought a spotlight to intuition and built a framework to rationally explain it. 
 
If you ask any of the winners of the Doritos Crash the Super Bowl ads why they think so many people loved their ad, they would most likely say they just produced an ad they would like to see, or maybe “it just felt right.” But the biases uncovered in behavioral economics tell us that the ads felt right to make because of the unconscious biases that drive us all. And ultimately, we believe, those biases drove the popularity of the winning Doritos Crash the Super Bowl ads. 
 
We reviewed all the Doritos Crash the Super Bowl winning spots in the context of these behavioral economics learnings and identified the biases that most likely led to their popularity, a few of which are highlighted here.
 
Several of the winning ads leveraged the misdirect, a popular advertising framework used even outside consumer-created ads. The power of the misdirect lies within the biases our brains use to quickly classify a situation as safe or unsafe so that it may move on to another one of the 35,000 decisions it will need to make that day. 
 
The first bias that gives power to the misdirect has been labeled in the behavioral economics field as the stereotyping bias. Appropriately named, when we have experienced a type of person in the same way several times, our brain determines all people similar in appearance will behave similarly. 
 
So in Sling Baby (2012), as the viewer recognizes the grandmother and baby, their brain is unconsciously sending a message that these two are innocent individuals being bullied by a Doritos-loving boy. Because you believe this, when the grandmother uses the baby’s jumper as a slingshot, hurtling him to grab the Doritos, the shock of the inconsistent behavior causes your brain to pay attention and reassess the situation. Now you’re actively engaging with an ad that you were just about to ignore.   
 
Misdirection also makes use of the normalcy bias, the refusal to believe that something that has never happened before will happen, and Mouse Trap (2008) expertly demonstrates the power of this bias. After baiting a mousetrap with Doritos and placing it in front of a small mouse hole in the wall, a man watches patiently for what he (and we) believe will be a normal mouse to pop out. However, a giant, human-sized mouse bursts through the wall and attacks the man, stealing his Doritos. “Didn’t see that coming” is the shock-value response delivered by the normalcy bias.
 
We’ve all heard that puppies and babies are solid attention-getters, and many Crash ads leveraged that general principle. But it’s actually how they’re used that made these winners. We are all subconsciously biased to characterize animals as possessing human-like traits, emotions and intentions, a bias that behavioral economics has coined as anthropomorphism.
 
This year’s Doritos Crash the Super Bowl winner, Doritos Dogs, tapped into that bias, showcasing a group of dogs that crave Doritos trying to break into a grocery store to get them. A wily manager catches them every time, until they brilliantly scheme to dress as humans and purchase them like everyone else. If people had not been willing to believe wholeheartedly that dogs crave Doritos, it never would have made the final selection pool.
 
OK, that’s probably all the behavioral economics you want to hear about for now, so we have identified the biases inherent in other Doritos Crash the Super Bowl winners below. You will see that there is some overlap, but thankfully behavioral economics scholars have kept their labels pretty self-explanatory.

Stereotype Bias: Middle Seat (2015)
Normalcy Bias: Pug Attack (2012)
Anthropomorphism: Man’s Best Friend (2012), Goat 4 Sale (2013)
Ingroup Bias: Live the Flavor (2007)
Confirmation Bias: Time Machine (2014)

As usual, I can always count on my friends at The Marketing Arm to shed some strategic light on consumers’ behaviors. Thank you to everyone at TMA who contributed to this post & more importantly to the success of Crash the Super Bowl program for the past decade.

Changing gears without losing momentum

“If it isn’t broken, why fix it?”
 
It’s a common mantra in many industries, but in marketing, this phrase is as good as a death sentence. In my view, you should always be thinking about the ‘next message.’ Consumer tastes are ever-changing, and as marketers we have to evolve alongside them.

I’ve had the pleasure of working with our Lay’s team for three amazing years on the Do Us a Flavor promotion. Along the way, we revolutionized the conversation between brands and their fans, and frankly, took flavor itself to new levels. It’s been an exciting ride, but it’s better to go out with a bang than the whimper of fizzling consumer interest.
 
Throughout the years, Lay’s fans have proven that they know, love and appreciate flavor, so this year we created a new program that would increase their influence from limited-time flavor offerings to actually impacting our core flavors. This evolution is what led to Lay’s Flavor Swap. We worked with our R&D team to develop some incredible new flavors, then we matched them up against four classic Lay’s flavors in a winner-takes-all showdown, leaving their fates in the hands of our fans. The winners will stay on the shelves, but the losers? Let’s just say their time in the spotlight will be fleeting. We’ve also created multiple avenues for consumers to vote, leveraging Twitter, Instagram, and even emojis to pick their favorites in each flavor match-up.

Speaking of emojis, we pushed a teaser campaign on Twitter, using emoji word puzzles to challenge our followers to guess the new flavors before the official announcement. This generated heavy consumer engagement and buzz, which fed directly into our digital campaign featuring the always funny Anna Faris, who lent her comedic talents to illustrate the ‘tough decisions’ our consumers will be making in the coming weeks. On a personal note, Anna was an absolute joy to work with, and committed to our concept wholeheartedly.
 
None of this would have been possible if we hadn’t stepped out of our comfort zone and mixed things up when nothing was ‘broken.’ As marketers, we should always be looking to stay ahead of the game, unafraid to step into uncharted territory. It’s natural to want to cling to the tried and true, but as marketing technologists, we need to keep our finger on the pulse of consumer interests, and never hesitate to rethink even our strongest programs. After all, momentum only works for you when you shift at your peak of power. 

Going out with a bang

Last weekend, Ten years after it first brought consumer-generated content to center stage, Doritos hosted its final Crash the Super Bowl, a program that in many respects shaped the brand in the eyes of consumers. How do you say goodbye to a decade-long program that was responsible for consistently producing some of the best content to come out of the biggest day of the year for advertising? You break world records and leave your name burned into the sky.
 
Although this program is near and dear to my heart, I’ll try not to get lost in the reminiscing about the details and instead just cover a few of my favorite activations.
 
First, Skymoji – a stunt so simple yet so effective that I’m amazed we’ve never done it before. I especially loved the Illuminati chatter on Twitter – rumors that I will neither confirm nor deny.

Second, I loved our war room and in-stadium activation. We redefined real-time marketing by being the only brand to establish a mobile war room for creating content from inside the Super Bowl itself. The team, armed with only phones and iPad minis, created gifs, pics and posts on the fly using fans in the stands, because after all, and what is Crash without our fans? They also managed to literally break Periscope by overloading their server during their halftime livestream. Talk about crashing!
 
Tied to our war room activities was our Crash the Second Screen challenge, which gave fans a chance to earn glory, Doritos and their share of $150K for coming up with the best tweet, pic or video showcasing their love for Doritos. The 5,500 entries were hilarious, the chatter it generated was unbelievable, and our influencers did an amazing job spreading the word and driving entries. 

And last but hardly least; we set three world records to kick off the Bold 50 program including my personal favorite, the Tallest Suspended Football Party. This feat was accomplished with Bold View, an amazing aerial dinner experience overlooking the Super Bowl from 140 feet straight up in the air. I hate heights, but I’d be lying if I said I didn’t want to be a part of that one.

At the end of the day, Doritos came out on top by virtually every single measure. All of these activities came together and sparked conversation about the brand to the tune of 316K tweets, reaching more than 657 million people!  I was floored by the team’s ability to tackle all of these different events and activations without a hitch. Would I have liked to take the top spot on the ad meter? Of course. But even without claiming the coveted number one ranking, I’d be hard-pressed to call our final year of Crash anything but an absolute success. 


Getting "out there" with Super Bowl 50

As a marketer by passion, one of my favorite things to do at this time of year is to hunt for the connective thread across Super Bowl ads. It’s not as if advertisers intentionally co-conspire, but, more often than not, patterns of uniform thinking emerge. Last year, we saw a lot of emotional work — celebrating dads, for example. This year, I think the dominant theme is “out of the box” or “out of the ordinary.” It seems like most advertisers are putting out spots that are a little bit edgier, a little more “out there.” For some brands, this approach is a natural fit, like Taco Bell showing elderly people getting tattooed and sporting bling, or Mountain Dew Kickstart’s pug/monkey/baby creation.

For other brands, this slant is a little more unexpected, like the Apartments.com campaign with George Washington palling around with Lil Wayne or Marmot’s, well, marmot “relieving” itself off the side of a mountain. If you haven’t seen it, take a look here.
  
Marmot is just one of many rookie brands who will take the stage this year. Out of the 41 total advertisers, 14 newcomers are looking to leave their mark, including LG, Pokémon, Colgate, Persil ProClean, Marmot, Amazon, Apartments.com, Shock Top, Bai, Buick, PayPal, SunTrust, SoFi and Quicken Loans. As a fan of Super Bowl marketing, I’m really excited to have some new blood in the running this year.

On the other end of the spectrum, some of the mainstay brands of years past are sitting out this year. Nissan, Ford, VW and Mercedes are hitting the bench. While many speculate about implications, I really don’t believe it’s any indication of Super Bowl ad interest declining. All of these brands had specific reasons to opt out this year. Nissan is leaning heavily into their college sports partnership. Ford, VW and Mercedes simply didn’t have any new news to justify the high price tag.

Will this new wave of far-out humor driven by a new crew of brands win with consumers? We’ll just have to wait until game day to find out. Oh, and go Panthers!

Here’s where my stats came from, in case you’re interested: 
1.    http://www.superbowlcommercials2016.org/blog/all-the-2016-super-bowl-commercials/
2.    http://www.usatoday.com/story/money/cars/2016/01/27/some-big-automakers-sitting-out-super-bowl-ad-game/79395034/

Industrial Revolution 4.0: This revolution will be streamed

(Observations from the 45th World Economic Forum)

"The only thing constant in the universe is change."  

While this is a phrase most notably used in physics, I would argue that it just as accurately describes the reality of our business and marketing landscape. 

As we embark on what’s being considered the fourth industrial revolution, the prescription is clear: don’t just brace for change, embrace it. This shift is expected to bring so much change that even Professor Klaus Schwab (WEF Founder and Executive Chairman) stated in an article he wrote explaining the Fourth Industrial revolution, “business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.”

Perhaps before we go into the Fourth Industrial Revolution and its implications on business and humanity as a whole, we should take a step back to look at the changes the previous industrial revolutions brought:

  • The first industrial revolution occurred around 1784 and used steam, water and mechanical production equipment to drastically improve and increase the use of machines for productivity and manufacturing.  
  • The second industrial revolution occurred around 1870 and used electricity to further increase mass production, resulting in the shift to a division of labor.
  • The third industrial revolution occurred around 1969 and integrated electronics and information technology (IT) to automate production.
  • The fourth industrial revolution is a further evolution of the third, which began at the transition of the new millennium and is characterized by the increasing fusion of our physical, digital and biological worlds.

And while some are scared of technology itself, especially the idea of fusing it directly into our daily lives and possibly even our biology, many people are more terrified of the change it represents.  

Humans vs Machines?

Erik Brynjolfsson (Director of the MIT Initiative for the Digital Economy) commented on this fear at the WEF, stating that “the biggest misconception I’ve heard here at Davos, and recently, is this idea that technology is going to come for all of our jobs and there’s nothing we can do about it.”

This fear is most evident in those whose industries have been affected by the disruptive nature of technology within their established business models. “Black Tuesday” earlier this week in Paris is a prime example. Taxi drivers blocked roads and set fires to protest the disruption to their industry by new entrants enabled by technology.

Of course, nobody likes to have their livelihood threatened, but the reality is that evolution is inevitable, and more importantly the advent of the fourth industrial revolution and digital technology will greatly enhance our lives overall at a societal level.  Sure, there will be growing pains, but ultimately the consumer will win in virtually every aspect, from saving money, thanks to more efficient supply chain management and production schedules, to enjoying highly-customized and more relevant user experiences across more products, services and devices.

Lean management taught us to remove the waste (muda) from our processes and organizations, and the digital synchronization of virtually every piece of machinery, from warehouse equipment to the refrigerator in your home, is allowing us to track, remove, and efficiently refine those aspects of waste that have been occurring in both our industries and personal lives.

The Human Touch

In addition to the technological and innovative side of the fourth industrial revolution and exponential technological advances, the WEF also focused on the human factor, most notably its impact on jobs, society and culture.

Canadian Prime Minister Justin Trudeau delivered a speech in which he stated “we don’t want technology simply because it’s dazzling.  We want it, create it, and support it because it improves people’s lives.”

And to that effect, will the fourth industrial revolution be a net gain or loss to society and humanity in general?  That all lies in the eye of the beholder.  A forum report released at the meeting predicted that by 2020, 5 million jobs will be lost as a result of technological changes.

The driverless car seems to be an emerging technology that many of the biggest brains and brands have their attention focused on, but what will be the unintended consequences?

For we business leaders it seems to be an astounding leap forward, increased efficiency in our shipping times, reduced costs and less need for risk mitigation.  But what about the truck driver who is replaced by a driverless vehicle? Or do we look at the increased efficiency and growth potential as an opportunity to create different jobs, or more jobs in different arenas?

Again, evolution is inevitable. It’s what we do with it that really matters. 

A Marketer’s Dream

For marketers, the digital and informational impact of the fourth industrial revolution is limitless.  

Rather than the old world tactic of putting faith in small focus groups to accurately represent the sentiments of the larger population (which they never truly do based on the law of large numbers), technology is emerging that enables us to gather information directly from the consumers themselves. Want to know what each individual consumer truly wants, likes and, most importantly, purchases? That crystal ball is at our fingertips. 

But the other side of that same coin will be the ability for nearly every consumer to have a customized experience with their goods and services catered specifically to their needs and desires. This luxury once reserved for an elite few will be accessible to increasingly more individuals on the socioeconomic spectrum, and will likely be one day be available to all.

(R)evolution

In the end, we know that it’s poor business practice to stand in the way of progress.  There are countless business school case studies depicting the fall of once mighty blue-chip corporations who thought themselves too essential in their customers’ lives to need to innovate or evolve.  

Maybe they thought the “poorly-positioned” new entrant to their industry was nothing to worry about, or were simply too set in their ways to invest in innovative technologies or to rethink corporate culture philosophies. Whatever their motivation, they are the focus of case studies for this reason: refusing to adapt to evolving technologies and cultural shifts never ends well for a company.

If the 45th World Economic Forum taught me anything, it’s this: the fourth industrial revolution is here, and it’s our job as the business leaders now to increase our output of innovation and thought leadership for the betterment of our future.

What we choose to do with these newfound technological advances is up to us, but we all share the same responsibility: to use them wisely and make the best choices, not only for our bottom lines but also for the good of our fellow global citizens. After all, no revolution happens without the people.

 

Snapchat. Not just an app, a tipping point

Once regarded as simply a platform for teens to share content they would rather not have linger, Snapchat looks to have finally broken out of its adolescent confines to move from niche social network to mainstream platform. Older generations are now snapping away their day, too, making a real impact on Snapchat's growth. “While the service has grown 59 percent in the last year to 40.3 million US adult users (as of November), it has grown 69 percent among people age 25 to 34 according to ComScore. Nearly 27 percent of US adult web surfers this age are on it" (Wired).

Why did teens take to it so quickly while adults took baby steps? Personally, I think that this is due to the fleeting nature of the platform. Our generation is the archive generation. Pictures were something that required an investment of time, effort and money. Remember the ritual of dropping film rolls off at the drug store, and then waiting a few days to pick them up? And paying for them on top of that? I think that commitment to our content has translated to the digital world. We want to save everything, backup everything. But today’s generation? Pictures, videos and other content are created and consumed on demand. Like life moments, they are simply building blocks that make up their day. When my daughter makes brilliantly funny snaps, I ask her if she's OK with them disappearing after 24 hours from her Snapchat Stories. She just shrugs and says “I’ll make more.” 
 
While the thought of losing great content admittedly makes me twitch a little, this is the reality of the next generation of consumers. Content is dynamic; it is on-demand, real-time and completely integrated into their lives. It’s not “online” or “offline” anymore. The divisions are not that distinct. I think it’s time we call it “inline." Technology cannot be separated from the moments that constitute our lives. It is our lives. As marketers, this is the new reality we need to face. We can tap into our customers’ lives as a useful, albeit fleeting experience, or rest on the sidelines trying to divert their attention and archiving our decline.
 

Ad blocking: an opportunity to do better

I recently came upon a post regarding ad blocking, a subject that I have always thought should be shifting how we as marketers look at our role, not just in the marketing landscape, but in the larger scope of consumer culture. It was an interview with a young ad blocking consumer that delved beyond simply “I don’t want to see ads.”

I love the lesson there. Ad blocking is nothing new, and honestly, who can blame a single twenty-something-year-old for feeling resentful that they are forced to watch a 30-second ad about baby diapers when all they really want to do is sample a few seconds of comedy or music to see if they even want to commit to watching a few minutes of entertainment? Think about that for a second. Two minutes is considered a serious time commitment for the ravenous entertainment consumers that make up Gen Y and Gen Z. Is it any wonder that in their eyes a 30-second pre-roll ad stretches on for an eternity? This is the Twitter generation, after all.

Just to dimensionalize what we are up against, ad blocking has grown by 48% in 2015, and Adobe cited 198 million monthly users deploying ad-blocking software. This is a trend that is here to stay, and ad-blocking developers will continue to innovate to shut out the noise of advertising.

It’s not just the time commitment that consumers find upsetting; it’s the total disruption of their online experience by irrelevant ads. Rather than kick and scream or whine about these generations taking content for granted, I think we need to embrace the pressure they are putting on us as an industry to deliver better work. We need to rise to the occasion and deliver content that is relevant and entertaining, which is the goal of any good marketing technologist after all. It’s time to fully embrace the switch to native advertising.

What I love about native and programmatic advertising is that it demonstrates a brand’s compassion for its consumers. By developing quality content and delivering it to the right consumer at the right time in a way that enhances their experience, we will build a stronger, more human relationship with our consumer base.

Google is really leading the charge in this space. They tested their programmatic ads for native content and mobile video publishers with eBay, and like magic, they saw a 3.6X increase in ad engagement with some campaigns delivering click-through rates up to 5%. As Google continues to release native advertising tools, they project that over 52% of all non-search digital ad-spends will be programmatic transactions.

By coupling these tools with real-time data, we have a powerful opportunity to enhance the lives of our consumers so that, hopefully, the desire to block ads will diminish. The key, I think, will be to keep it human, to keep it integrated with what they are seeking, consuming and enjoying; otherwise, we’ll end up back where we started, with consumers feeling like they are being force-fed disingenuous messages by a bunch of automatons. Do we want to continue to be the “necessary evil,” or would we rather be the thing they click the share button on? Not that difficult a choice when you put it that way.

A few of my favorite CES things

Like me, I’m sure you’ve all been following the great innovations coming out of CES. I could talk about emerging tech for days, but I’d rather spend my time experiencing it on the show floor than writing about it, so I’ll limit myself to the three that have impressed me most so far.

First, I have to talk about the Kodak 8mm beta camera. I love this! It’s drenched in the kind of cool that only comes with nostalgic relics of a bygone era. As a film buff, I love seeing the push away from needing to shoot everything in increasingly crystal clear digital formats. There is a magical quality to the fuzz of film, and I can’t wait to see how the Kodak 8mm beta impacts young filmmakers and advertisers.

Next up, the Oculus Rift. I’ve been watching, waiting and hoping for years, and it’s finally paid off. I think everyone feels the same, seeing how the Oculus sold out in 15 minutes, even with the $599 pre-order price tag. VR is surely going to be the next quantum leap in customer experience marketing, and I am excited for what’s to come.

Last, but certainly not least, it looks like my dream car – the Tesla – has been usurped by the genius designers at Faraday Future. The FFZero1 looks like something straight out of science fiction films – like running the Batmobile through a Tron filter. But beyond its jaw-dropping good looks and monstrous 1,000 hp motor, this unrivaled super car is green friendly too. Who knows if we will ever see an FFZero1 on the road, but there’s no harm in hoping.

There you have it! If you’re at CES, let me know what’s grabbing your attention and imagination. You’ll find me tweeting about it all at @ramalytics

E-commerce: The Great Mall of China?

There’s nothing like starting a new year with a fresh perspective. For me, this came in the form of a trip to China over the holidays. While I fell in love with the sights, people and culture, one image from this experience lingers as the most impactful:

Those are e-commerce packages waiting to be delivered. If this was one random storefront, what would it look like if we scaled this by thousands? Is this pace indicative of the nation as a whole? Naturally, I did a little digging on the numbers behind e-commerce in China, and here is what I found.

I don’t think anyone would be surprised that China is an e-commerce titan; however, the degree of the nation’s dominance in this arena is staggering. In 2014, China had already hit US$458 billion, dwarfing the US total of US$297 billion. They've rapidly overtaken the U.S. and other developed nations, becoming the world's largest e-commerce market. Domestically, e-commerce is becoming a shaping force of China's economy, contributing 19.4% of China's GDP growth and 33.5% of China's retail growth (per Kantar Retail 7.28.15).
 
What’s driving this growth? One likely factor may be Chinese consumers’ devotion to mobile, and more recently, their increasing interest in mobile shopping. Alibaba reported that in Q1 of 2015, 83% of all active buyers were mobile buyers, ultimately contributing 51% of Alibaba's total GMV (per Kantar Retail 7.28.15).

And this is just the beginning. As companies are able to expand their distribution to rural areas, they will surely unlock a new level of growth. Companies like Taobao.com are already taking steps to set up rural service centers to handle orders and fulfillment.

Finally, as you know from everything I share on this blog, you never want to leave the human element out of the equation. Beyond the widespread adoption of mobile web browsing, it’s important to consider that e-commerce has been so widely embraced because it is also a natural fit for a savvy consumer base of natural bargain hunters who equally value pre-purchase research done online with in-store experiences.

When we step back and look at the Chinese e-commerce phenomenon as a whole, I am optimistic. Not only because this represents potential and opportunity on this side of the globe, but also because it exemplifies the perfect manifestation of technology enhancing, not replacing, real human dynamics. This is what being a marketing technologist is all about. 

How to hijack with purpose

If a tree falls in a forest and no one is around to hear it, does it make a sound? 

We’re not here to debate the philosophy of reality per se, but this is a question I often ask myself as it relates to brands attempting to “hijack” cultural conversations. The answer I keep coming back to is no. Talking to a packed stadium about Chinese food when everyone’s there to watch a football game is the same as talking to an empty room. This simply doesn’t fly anymore. Gone are the days when brands could merely talk at consumers and call it a day. For your brand to successfully hijack the conversation in today’s environment, you must have a reason—one that feels genuine to your brand. 

In 2013 the London-based retailer Harvey Nichols set out to hijack the holidays—Christmas, specifically—with their campaign “Sorry, I Spent It on Myself.” They humorously advocated giving menial gifts for family and friends so people could spend more on extravagant things for themselves. By finding a way to break through and own selfishness at a particularly generous time of year, they hijacked Christmas in a brilliant way. Their big gift in return? A Grand Prix Lion.

Important as it is for brands to be self-aware and understand how they are perceived and how consumers want to interact with them, it’s equally important to stay culturally aware, to help inform when or when not to engage. Engaging without purpose looks random at best and desperate at worst. You become the fallen tree in a silent forest.

Chester’s purpose

Earier this fall, with the 2016 presidential election approaching, we couldn’t help but notice that the political landscape had become filled with loud candidates making promises in increasingly outlandish ways. The louder the candidate, the more attention they got, irrespective of their platforms. The political system was definitely ripe for some mischief—even a little disruption—to shake things up. Politics had become such a circus, that maybe even a cheetah could win an election. It just so happened that we had just the candidate… a mascot with a huge personality and an even better platform: change for snacks. 

“More pranks in politics.” That was the goal. And who better than our very own Chester Cheetah, to add some mischief into the political mix? 

Since every good politician needs a fitting launch point, we found the perfect opportunity for Chester to enter the political arena: the race for Mayor of Chester, Montana. 

We created a mock campaign that hit all the key areas of a real political campaign to parallel what was actually happening in the world. Chester took to Twitter during the month of October and filled his feed with hundreds of pieces of “Chester for Chester” content, live-Tweeted both the Democratic and Republican debates and even launched his own “Orange party” merchandise store, all with one intention: to win the hearts and stomachs of the people in a meaningful way.

In staying true to the process, we didn’t shy away from the dark side of politics either. We pulled in the real mayor of Chester, Montana, who was running unopposed for re-election and had a good sense of humor, right into a good old-fashioned attack ad battle. The result was plenty of healthy —and hilarious—competition. 

We even rallied folks in the actual town of Chester to become our political (and brand) supporters in the mock campaign.

At the end of the day, this faux political hijacking campaign was an exercise in letting go for everyone involved. A month-long real-time political program involves spontaneity and a relinquishing of control that would make most marketers crazy. Giving Chester a purpose outside of his most famous reason for being—working as a mascot for Cheetos—is a scary thing to do, but embracing this purpose in genuine Chester fashion was critical. There was no teetering on the fence, no dipping our toes in the pool. With hesitation comes confusion and usually an unclear story or reason. If we wanted to truly hijack the political conversation, we had to do it with purpose, shake things up and make a real splash—or crash, in the forest. 

Quotes I am thankful for

We all find energy in great inspiration. For me, that energy is just what I need when building out objectives for the coming year, or rising to the next big challenge. In the spirit of the holiday, I just wanted to share some of the advice and quotes that have meant the most to me in shaping my approach to business. 

Always do what you are afraid to do.
— Ralph Waldo Emerson
To fight fear, act. To increase fear - wait, put off postpone.
— David Joseph Schwartz

Habitually getting out of your comfort zone is incredibly important for consistent success. I encourage my team to always follow a 70:20:10 planning approach that consists of 70% tried and true, 20% proven innovation and 10% new territory. 

Throw off the bowlines. Sail away from the safe harbor. Explore. Dream. Discover.
— Mark Twain
You can’t wait for inspiration. You have to go after it with a club.
— Jack London

Take risks. Test yourself. Innovation is an overused word, but the fact remains that risk taking and new exploration are imperative for achieving it. When something fails, you learn from it, but when it works, expand!

There are times when you have to face your enemies, sit down and deal with it.
— Martin Scorsese

Compete. I believe business is about winners and losers. Be certain that those around you understand your relentless pursuit of greatness. 

What you do is what matters, not what you think or say or plan.
— Jason Fried, Rework
Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.
— Dale Carnegie
An ounce of action is worth a ton of theory.
— Ralph Waldo Emerson
Strategy is a commodity, execution is an art.
— Peter F. Drucker

Execution and implementation within prescribed timelines is paramount to success. Don’t shortchange it. But also don’t iterate until hell freezes over – move on the idea and make it even better by simply executing it.

I do not have much interest in best practices… What we really need is to ask what is the next practice, so that we can become the benchmark companies, benchmark institutions around the world.
— CK Prahalad
Do not wait to strike till the iron is hot; but make it hot by striking.
— William B. Sprague

Speed is key to driving change – you must be faster than your customers and competitors. Don’t miss your moment, as fast actions done well are incredibly powerful. 

If you are honest about helping others rather than showing how smart you are, things are very easy.
— CK Prahalad

I believe wholeheartedly in giving back personally and professionally. Offer help to those who need a chance to succeed, and create opportunities for others along your path. What may be a small boost from you could create a world of difference for someone else.