Over the course of the past twelve months, I wrote several blog posts and articles about the Chief Meaning Officer, a role which I envision as an innovative leader who employs the new social power of marketing – provisioned by Social as a governing principle of all business interactions – to transform his/her organization (Charlene Li also elaborates on this theme in her new book Open Leadership). I presented this concept at some conferences including next in Hamburg, mostly to fellow marketers or representatives from digital agencies, and you can also hear me riff on it in this podcast produced by Dutch brand agency Energize. I received a ton of feedback: encouragement, endorsements, and consent, but also skepticism suggesting that this model might just be another marketing fad.
Invited by BIDC, the Beijing Industrial Design Center, I was extremely grateful to have the opportunity to introduce the idea to a group of Chinese designers at a workshop in Beijing a few weeks ago. It was the first time I shared the Chief Meaning Officer framework in a different cultural and professional context, and it was a welcome reality check.
I was a bit worried that the topic might be a stretch, both because product designers would not really care that much about marketing innovation, and also because I wasn't quite sure how relevant the gospel of the social web might be for a Chinese audience.
The attendees, however, repudiated all my concerns. First of all, meaning seems to be a timely denominator for a generation of digital natives that demands more self-governance, quality, and accountability in its interactions with brands, no matter what the cultural and regulatory parameters are. The appetite for “betterness,” as Umair Haque would call it, is a global phenomenon.
Moreover, because both my audience and I were outside of our comfort zones, we ended up having a very open and animated discussion that nicely bridged marketing and design. One can’t exist without the other. Marketers’ task, you could argue, is to make tangibles intangible, whereas designers make the intangibles tangible. Both orchestrate time and space to create meaningful experiences that transcend a unique value proposition based on scarcity by pointing to a higher mission, a greater cause that is universally appealing.
This is the unique “soft power” – the ability to shape a brand of cultural principles and behaviors – that marketers and designers have in common and that nowadays is mostly facilitated by the mechanisms of sharing and collaborating on the social web. If economic growth stagnates, currencies deflate, and institutional systems fail, this social soft power might be the only power remaining to hold our societies together – in Greece, California, or China.
My talk from the Re:Publica 2010 conference in Berlin is now live. Titled "Innovation By 10," it presented 10 observations, provocations, insights, and questions on the elusive topic of innovation, based on 40 years of frog design and my 4 years with frog design. Note: it's in German.
Here's an example of a traditional marketer proving with a smart Twitter campaign that social media and sports are a natural fit: Sony Ericsson, one of the long-term sponsors of the World Cup, has turned to Twitter to engage fans months before the World Cup begins. The Twittercup collects and counts fan tweets, creating a competition among attending nations. Since its launch in early December it has received over 43,000 tweets.
Our friends from the Norman Lear Center in L.A. have put together a comprehensive primer on the "Business and Culture of Social Media." If you're intrigued by social media as entertainment and want to learn more about the notion of "mass self-communication," take a look at the presentation that Lear Center deputy director Johanna Blakley and director Marty Kaplan gave at the Barcelona Media Center. As brands are in hot pursuit of the ever more fragmented group of content generators formerly known as "the audience," the authors pinpoint an interplay of business economy, gift economy, and attention economy.
For the first time in 23 years, Pepsi Co. has decided to not run any advertisements during the Super Bowl in 2010. Instead, the nation’s second-biggest soft drink maker is plowing marketing dollars into its "Pepsi Refresh Project," an online community that allows Pepsi fans to list their public service projects, which could range from helping to feed people to teaching children to read. Visitors to the site can vote to determine which projects receive money. The program will pay at least $20 million for projects people create to "refresh" communities. Last year, Pepsi Co. spent $33 million advertising products such as Pepsi, Gatorade, and Cheetos during the Super Bowl, according to TNS Media Intelligence, $15 million of it on Pepsi alone. Ad time last year for the NFL championship game cost about $3 million for 30 seconds, on average. Pepsi Co. spokeswoman Nicole Bradley said Super Bowl ads don’t work with the company's goals next year: "In 2010, each of our beverage brands has a strategy and marketing platform that will be less about a singular event and more about a movement." Pepsi's remarkable decision epitomizes the new paradigms of marketing: Online instead of TV; many-too-many instead of one-too-many; engagement instead of advertising; sharing instead of broadcasting; movements instead of events; communities instead of campaigns.
While one of the world's foremost consumer brands has acknowledged the signs of the times and is making the transition away from one-to-many mass-marketing to social marketing with meaning, marketing theory is struggling to catch up and grasp the new realities. An article on "Rethinking Marketing" (by Roland T. Rust, Christine Moorman, and Gaurav Bhalla) in the January issue of the Harvard Business Review (HBR) is the latest example. HBR deserves credit for recognizing the need to reinvent marketing, but the piece turns out to be far less radical than its title would suggest. The authors are putting the onus on the customer, demanding that marketers focus on the customer as the sole parameter of their efforts. In their eyes, this requires a shift from "pushing individual products to many customers" through the means of one way mass-marketing to "engaging individual customers in two-way communications,” building "long-term customer relationships" that provide value beyond one-off product promotions. Consequently, the authors argue, the marketing department needs to be reinvented as a "customer department," with the Chief Customer Officer replacing the Chief Marketing Officer, and "product and brand managers subservient to customer managers."
What a depressing read! First of all, the article rehashes existing concepts but doesn’t really offer any kind of "rethinking." To engage customers in two-way, personalized communications rather than marketing individual products to broad audiences is a no-brainer, and after hundreds of books and thousands of best practices it has already become so commonplace in the field that it is hard to believe HBR considers this to be an original concept. It's like social media never happened. On which analog planet did the authors live in the past three years?
The concept of radical customer focus is not entirely new either and has been well-articulated before (i.e. in the book Chief Customer Officer by Jeanne Bliss in 2006, and most recently, with a more anthropological spin, in Chief Culture Officer by Grant McCracken).
But aside from the lack of originality, I also substantively object to the concept itself. While the authors' emphasis on "customer profitability" rather than product profitability and a long-term view on value creation are in theory good intentions (and a response to the demise of the concept of shareholder value, as Roger Martin lays out in his essay on "The Age of Customer Capitalism," also in the HBR January issue), I don't agree with the conclusion to turn the marketing department into the "customer department." Embracing a naive belief in customer-centrism, the HBR authors downgrade marketing to a discipline of tactical execution when in fact this time of disruptive digital technologies and changing consumer behavior presents a tremendous opportunity for marketing to reassert itself as a key strategic function in the enterprise. An extreme customer orientation, as propagated by the authors, ill-conceives the legitimate and important customer perspective. Of course it is paramount to understand customers' needs, of course companies need to ensure customer satisfaction, and of course CEOs always score when they tout the customer as their company’s raison d'etre. But that doesn’t mean the customer is the measure of all things.
The truth is less simplistic than a "customer happy, all good" approach would suggest. In addition to their customers, businesses have other stakeholders to serve: investors, employees, the community, and the broader public, as well as future generations and other constituents that are indirectly affected by the externalization of a company’s business. In fact, one could argue that the customer's demand is mostly short-term, not to say short-sighted, whereas the corporation can and should pursue a long-term perspective on value-creation that combines individual and social value, even if the latter may at times actually conflict with what customers want. Reducing the role of the company to just responding to customer needs drastically limits the critical role businesses can play in society, and it hampers companies' ability to drive real change. When it comes to innovation and marketing (according to the venerable Peter Drucker, these are the only two basic functions of an enterprise, and – if I may add – in good marketing organizations they are one and the same), companies should be empathetic to customers (that is, "Wired to Care," as Dev Patnaik put it in his book) but not reactive. Innovation – truly disruptive innovation that moves entire industries forward and gives our lives new meaning – never happens by just meeting existing customer needs, nor by anticipating unmet customer desires, as the apostles of customer research would like us to believe.
Don Norman, author of The Design of Future Things, among other books, and a long-time advocate of the business value of design, recently shocked his peers by coming to a similar conclusion. In an outburst of self-criticism, he belittles the impact of observational design research (or "ethnographic research") on innovation. In his eyes, design research may propel incremental innovation, but the only true driver of game-changing disruptive innovation remains technology: "Design research is great when it comes to improving existing product categories but essentially useless when it comes to new, innovative breakthroughs." Design research studies how people live, seeking to unearth unmet needs but Norman insists "Major innovation comes from technologists who have little understanding of all this research stuff: they invent because they are inventors." To support his point he refers to a list of inventions that all occurred without customer research: the airplane, the automobile, the telephone, the radio, the television, the computer, the personal computer, the Internet, text messaging, the cell phone." You might add the iPod and the iPhone, both creations of a company that famously refuses to conduct any customer research. The old Henry Ford line comes to mind ("If I had asked people what they wanted, they would have said faster horses") and along with it the provocative question: Can customers look beyond their individual needs? Can we rely on them to recognize what's good for society? Can we expect customers to dream up future products and services? Can we even expect them to know (or to show, as design researchers would say) what’s good for them now? Unlike Norman, Roberto Verganti would not categorically say no. A skeptical design thinker, Verganti, in his book Design-driven Innovation, emphasizes the need for "interpreters" (who can be designers but also any other species with an interdisciplinary mind- and skill set) to "radically change the meaning of things."
Both Norman and Verganti herald marketing as a creative discipline. If marketing lives up to its mission – creating innovative products and services and finding meaningful ways to make them valuable for customers and society at large – it needs to be a step ahead of customers. Customer research can inspire and validate but it can never replace the inventiveness and ingenuity of excellent marketing. Only mediocre marketers – those who lack fresh ideas and/or the guts to put them into action – rely heavily on research to back up their decisions. They end up as me-too's and yield good enough results with good enough tools. That's fine. But if you set out to "rethink" marketing, you must shoot a little higher.
The rest of the marketing thinkers do not do much better. In a way, the HBR article is indicative of a lack of vision across the industry. Since Malcom Gladwell's Tipping Point, there has not been one single book exerting comparable influence on the profession. CMOs' by-lined articles in industry trades usually play it safe and state the obvious. The myriad social media consultants who have popped up over the past few years, as well as marketing expert bloggers, boutique agencies, and industry outsiders are all preaching the social marketing gospel to the choir (or to those few remaining on the other side of the "new digital divide") in their publications. Even at conferences such as SXSW, next, the Conversational Marketing Summit, or Marketing 2.0, which are usually ahead of the digital curve, marketing thinkers have been beating a dead horse this year, more or less citing the same set of principles, practices, and case studies. At next09 in Hamburg, Get Satisfaction's Lane Becker, who spoke before me, and I were cracking up when we realized that we were referring to the same case studies in our presentations, the usual marketing 2.0 suspects: Zappos, Skittles, Best Buy, Starbuck's My Idea, Threadless, and so on.
As we are entering the new decade, it appears as if the marketing discipline, after undergoing a mesmerizing major transformation in the past two to three years, is facing stagnation. This often occurs when pioneering concepts are fully absorbed by the mainstream: Social marketing is on the way to becoming THE marketing, as social media is becoming THE media (it is always a sign of broad adoption if adjectives are dropped). Authenticity, engagement, meaning, communities, social, conversations, transparency, etc. – they're all accepted across the industry and widely implemented now. What then is the next frontier for marketers? What will be the next big marketing innovation?
I just read a remarkable essay by Venkatesh Rao on “marketing, innovation, and the creation of customers.” It nails the complex relationship between the two functions, examining both similarities and polarities.
Rao opens with what is perhaps the most popular aphorism by venerable management philosopher Peter Drucker:
“Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation.”
Building upon this, Rao argues that “Marketing and innovation define each other in yin-yang ways,” and that they have in common “a love/hate relationship with a downstream partner function (production and sales respectively) that deals in scale and repetition. One design, a production run of a thousand. One user-story, a thousand registered users. One advertisement, a thousand sales calls. Even in the age of mass customization, you can always tell the two sides apart. Production and sales are always repeating something. (…) Marketing and innovation, on the other hand, depend on novelty and uniqueness to add value. This is necessary. If innovation and marketing did not create repetition opportunities downstream, you would not have a business. You’d have a one-off project.”
For Rao, the “customer isn’t a human being.” Neither is he always right, as some like to claim. User-centered designers and innovators in particular won’t like to hear this, but Rao is certain: “Repeat after me: A customer is a novel and stable pattern of human behavior.” Rao’s conclusion is convincing: “Customers need to be created (…) Innovation isn’t about creating novel products or services. An innovation is a stimulus that causes a novel and stable pattern of human behavior to emerge.” As an example, he cites Google, which he considers “a stimulus that creates a novel pattern of information-discovery behavior known as ‘Googling’ that is different from what ‘searching’ used to be before Google.”
And further: “This is why marketing and innovation are deeply linked in a yin-yang pattern. They are both exploring the same uncertainties in free human behavior, and seeking ways to stabilize it into predictable patterns. When both look at uncertainties in human behavior, or uncertainties in potential stimuli, you get similarities and harmonies. When they are looking in different directions (typically, marketing looking at the customer, while innovation is looking at the stimulus), you get polarities. This tension is necessary. If ever innovation became truly “’customer-led’ you’ll be in a universe of faster horses. If ever marketing becomes truly ‘product-led,’ you’ll be in a universe of stuff nobody will buy.”
It is the same point Roberto Verganti makes when he rejects the value of market and consumer research and instead touts “design-driven innovation” as a way to “radically innovate the meaning of products.” Verganti claims that for truly breakthrough products and services, one must look beyond customers and users to those he calls “interpreters” – the experts who see and grasp the unique but repeatable “stimuli that cause a novel and stable pattern of human behavior to emerge” (in Rao’s words). Instead of being user-driven and product-centric, both marketing and innovation begin and end with meaning, and they’re both tasked with its production. It is a creative act, an art not a science, and a story not a process.
If you only see one slide show about the State of the Internet in 2009, "Digital Strangelove (or How I Learned To Stop Worrying And Love The Internet)" by David Gillespie, an Account Director at Maclaren McCann, Toronto, is a good choice: a mesmerizing 256 slide manifesto on the Intention Economy with Data (as the bank) and Meaning (as the currency).
Forrester is about to release a new report on “Adaptive Brand Marketing: Rethinking Your Approach to Branding in the Digital Age,” in which it proposes replacing “brand managers” with “brand advocates.” Advertising Age provides a sneak peek at the ‘new 4 Ps of Marketing’ presented in the report: permission, proximity, perception, and participation. Other core elements include: “embracing an expanded role for consumer intelligence, focusing on strategic brand platforms, and empowering a federated organization."
A fervent advocate of marketing as a cross-organizational catalyst for change myself, I wholeheartedly agree with BBH Labs which believes the Forrester report points to a potentially larger opportunity for the discipline: “It’s not just the marketing organization that needs to reorient itself given the now normal digital age, but the company itself should consider how it reorients itself around its marketing organization. In most progressive companies, it is the marketing function that has most quickly and deeply engaged with the new interactive toolkit.”
This view is really becoming a groundswell, and you will be hard pressed to find anyone these days who would deny the profound change social media presents for all customer relations; the new need for openness, agility, and hyper-sociality; as well as the call for “networked” (or “federated,” as Forrester calls it) organizations. David Armano from the Dachis Group (“Social Business Design”), Francois Gossieaux (Beeline Labs), or Charlene Li and her Altimeter Group are just some of the pundits who have very succinctly articulated these themes.
Upon the 20-year anniversary of the fall of the Berlin Wall, the city of Berlin has launched a remarkable “living” online memorial: the Berlin Twitter Wall.
Using the hashtag #fotw, people can share their thoughts on the Fall of the Berlin Wall and tell the world “which walls still have to come down to make our world a better place.” The Web site scrolls messages along a backdrop of the East Side Gallery, a famous stretch of the wall still standing and painted with murals. By clicking "stop" and "play", older tweets are shown. A click on the cameras up on the wall displays a selection of the domino-artwork that will fall in a symbolic act on November 9th 2009 at the "Fest der Freiheit" (festival of freedom) at the Brandenburg Gate in Berlin.
I love how the Berlin Twitter Wall intersects history and real-time action, memory and instant gratification, gravitas with graffiti, concrete architecture and virtual realm – and make all of that open and social.
It was just a matter of time: “With brands turning into curators of conversations about them and brand value increasingly determined by the value of aggregated content, third parties might be inspired to hijack these very brands by offering curated conversations on their behalf,” I wrote in early July.
And now Seth Godin and BzzAgent have done exactly this. The marketing guru and the marketing agency have launched a portal that aggregates conversations about brands and presents them in a unified public-facing dashboard that gives brands the chance to lead the discussion. Brands in Public translates the Get Satisfaction business model (a portal for public-facing aggregated customer support) into the broader realm of brand management. It aggregates the aggregation, if you will, and centralizes what Modernista, Skittles, and Crispin Porter Bogusky did on their own sites.
The cost of participation for a brand is US$400 per month, and the incentives are threefold: First, brands can publicly demonstrate their commitment to transparency. Secondly, because the portal presents branded conversations just one click away from each other, brands might benefit from an attention spill-over (while of course also having to fear a cannibalization of their feed). Finally, the aggregated conversation tracking comes with some metrics, kind of like FriendFeed and Google Analytics combined. The dashboard view puts brands in control of the conversation, or at least suggests as much.
However, I have a feeling that Brands in Public will fall flat. As with the new Google Sidewiki, one could argue that community dies in the very moment someone tries to “own” it. If it’s true that 'your brand is what other people say about you when you’re not in the room,' how interesting then is what these people say when you’re not only in the same room (any social network feed, i.e. Twitter, Facebook) but actually on the same stage with them (Brands in Public)? The outcome of Godin’s and BuzzAgent’s experiment remains to be seen: It may mark the next stage of the 'conversation economy.' Or the end of the conversation.
