“…the future of business lay in its ability to manufacture customers as well as products.”

That’s a quote from an advertising trade publication from the early 1900′s in referencing mass production and the shift from scarcity to abundance. But it struck me as what’s often missed about advertising.

Marketing and advertising has two central components (that is if you hyper-simplify):

1) To convince people to buy your product when they’re interested in the category (ie. I need toothpaste…hmm…what kind should I buy)

2) To convince people that they should want your product/category when they don’t really. (ie. creating demand where there it inherently does not exist)

When you think about #1, Google AdWords could come to mind. Google makes their money selling ads based on what your perceived intent was. If you searched for “web hosting plans”, you’ll see a slew of offers from companies that offer this service. You could say it’s worked out pretty well for them.

#2, the latter is manufacturing customers. It’s been at the core of so many advertisements for years. It summons the culture of guilt, of playing on insecurities, of keeping up with the Joneses. It’s exactly the world we live in, when you think about how crassly superficial and commercial as a global society we’ve become. But I digress. I’m struck by how few marketers, and more specifically, advertisers think explicitly about this division. (Yes, it is true, that it’s not truly a division. If you create the demand (#2) for the category, then you need to close the deal by getting the business for your brand (#1). But, for our purposes we’re simplifying.)

To close the tangent, I wonder what the Great Disaster of ’08 that the global economies are in will mean for our consumer culture. Will we step back from the age of abundance back to a more rational time of earnings and expenditures being in line and neither falling into excess? Will advertising and marketing as a whole completely change as a result? As long as there is a choice of products, there will always be marketing. But the kind of marketing is dictated by the times.

This runs a straight line through a few of my previous posts, and this thought stream brought me to reading The Age of Abundance which is a lightly-heavy read, but so far quite good (and were I got the intro quote from).

So what would work for the reporting business?

1) Content wants to be free on the web. Or, rather, we want everything to be free on the web, but we also want it to be valuable. That’s why I believe the sustainable future for deep reporting (magazines + newspapers) will lie in the device. This might mean the Kindle and the evolving world of smart subscriptions. Might I pay, say $2 a month, for the NY Times on my Kindle? I say definitely. In fact, I’d probably pay higher. But at the $2 pricepoint, and with an variable distribution cost of near zero, I’d bet that we’re talking many millions of people who would pay that amount. The economics of print– delivery, printing presses, etc are zero’ed out and we’re left with a far more efficient cost structure. This should translate into a more economical cost, which, I would think, will increase the number of people who will opt to pay. Would I pay to read this on my Mac over the Interwebs? That feels tough to me. Would I pay to have the NY Times “delivered” to my Kindle every morning and auto-updated as the day goes on? Oh yes. Now it might not be the kindle. Maybe it’s the iPhone or whatever other device comes next. Which reminds me that I’m baffled why the NY Times iPhone app is free. It is positively insane. Charge a couple of dollars up front or a small recurring charge. The app is pretty damn amazing (it downloads the content locally so you can read from the plane, subway, etc!).

2) OK, so micropayments might actually work. But not the way everyone talks about them (as basically small debit card payments). I think it could work if we give people credit for doing things on the web. Say I take a survey or watch a commercial. This should give me some credit points that I can use on articles or whatever else. This seems pretty damn obvious to me. Why can’t the NY Times offer a choice of 15 second “commercials” on their site, and I have to watch one of them in order to have access to the site for a session? Or credits to use on articles. This is kind of a no brainer to me. In fact, I should go start a company that does this across the web. Why the hell am I updating my blog when I should be working on this idea?…

I don’t think I need to point out why Detroit is in the news. I mean, it’s literally everywhere. And, Albom, who has lived in Detroit for decades has heard just about enough. There are really some choice bits in here:

“…what all Detroit sees — is a nation that appears ready to flick us away like lint. We see senators voting our death sentence. We see bankers clucking their tongues at our business model (as if we invented the credit default swap!). We see Californians knock our cars for ruining the environment (as if their endless driving has nothing to do with it)…”
…
“We hear Congress tongue-lash our auto executives for not matching the cheaper wages of foreign car companies. We hear South Carolina senator Jim DeMint tell NPR that “the barnacles of unionism” must be destroyed at GM, Ford and Chrysler. Barnacles? Barnacles are parasites without a conscience. Sounds more like politicians to us.”
…
“This is why our recent beatdown in Congress was so painfully felt. To watch our Big Three execs humiliated as if they never did a right thing in their lives, to watch U.S. senators from Southern states — where billions in tax breaks were handed out to foreign car companies — tear apart the U.S. auto industry as undeserving of aid, well, that was the last straw.”
…
“Enough. We’re not gum on the bottom of America’s shoe. We’re not grime to be wiped off with a towel. Detroit and Michigan are part of the backbone of this country, the manufacturing spine, the heart of the middle class — heck, we invented the middle class, we invented the idea that a factory worker can put in 40 hours a week and actually buy a house and send a kid to college. What? You have a problem with that? You think only lawyers and hedge-fund kings deserve to live decently?”
…
“To watch these lawmakers hand out, with barely a whisper, hundreds of billions to the financial firms that helped cause this current disaster, then make the Big Three beg like dogs and slap them with nothing? Honestly. There are times out here we feel like orphans.”
…
“Do you think if your main industry sails away to foreign countries, if the tax base of your city dries up, you won’t have crumbling houses and men sleeping on church floors too? Do you think if we become a country that makes nothing, that builds nothing, that only services and outsources, that we will hold our place on the economic totem pole? Detroit may be suffering the worst from this semi-Depression, but we sure didn’t invent it. And we can’t stop it from spreading. We can only do what we do. Survive.”

If you managed to read through the quotes, hopefully you’ll be inspired to read the whole article. It paints an amazing picture of a city, it’s people, and what the passing of time can do.

Empathy. I forgot who said to me, once, years ago, that if I was going to count on the world to have empathy I better prepare for some pain. It might have been my friend Rayford, or it might have just been in a passing conversation. Anyway, empathy is why I associate with Detroit. Why I follow the headlines, and why, even in sports this year, I pulled for the Lions nearly every Sunday. Detroit more than any city could be arguably the most representative of what made America great. An American entrepreneur invented the automobile in Detroit. That same man then transformed the manufacturing world both in terms of process and pay, almost in one swoop, fashioning a middle class and ushering in a new era. It was symbolic of the prosperity of America. Today it doesn’t just hurt. It bleeds, aches, and hemorrhages. And by some logic that escapes me, as a nation we feel like it doesn’t reflect us. That Detroit never represented us and that it’s nothing like us. It’s in this that I think the joke is on us. Detroit was America and, I think we’ll see in coming decades, it is America. I feel for Detroit to my core.

Stories. Everyone loves stories. I’m not sure if it’s the years of watching movies, reading books, or studying marketing that’s made me realize that stories matter. They’re everything. It’s how we make decisions. Decide who to love. Who to hate. What job to take. Who we are. What we think. Who to vote for.

Given the historical inauguration about to take place, let’s talk about politics. The story of John Kerry as an aloof, patrician, out-of-touch elitist was an easy story for people to believe. His features made him look like he should be in a painting, the apparent botox didn’t help either. His overall demeanor played perfectly into a story that actually didn’t match that well with his life story. But no matter, the facts in front of us fit a frame, and so we had our story. One would think that given his background as the son of a former President, a legacy at Yale, etc, etc President George W. Bush would have made a far more natural target for the elitist story. But it came down to demeanor again, and President W had this down home, aw shucks manner. Yale, Harvard, President’s son, company CEO by birth — none of that matters when the facts in front of us, the ones that we can digest with very little work and effort, don’t fit the frame. And so no one cared to look any further. We had our story. And our decision.

And so we’re back to Detroit. The problem with Detroit is the story. Since it seems that most of America gave up on American cars years ago, it’s an easy story to understand and tell. Detroit makes crappy cars and so Detroit deserves this. “Make cars people want!” “Make cars that don’t break down!” These are the facts in front of us, and it’s a story that’s easy to understand. That’s what screwed Detroit. Our financial companies and investment bankers betrayed hundreds of millions of American. We’re still unsure how the deep the damage they wrought on the global economy and America (taxpayer, government, and future?) is. Yet, despite taking practically 100X (or more) more money from us, there’s no convenient story here for us. How the hell does one easily and quickly grasp, with zero effort, a story involving characters called tranches, credit default swaps, collateralize securities, non-government entities, and so on. Clearly you can’t. And no one did. We don’t really even try. But Detroit. That’s a story we know. And we’re all poorer for thinking we understand it.

I’ve long been a fan of Nike’s commercials. For fans of sport– those who love playing and watching, Nike has always tried to capture the essence of the sport we love, and of the individuals we admire. I remember the Jordan/Mars Blackman ads, the “tag” commercial, and the Courage commercial I blogged about a few months back– but the list is kind of endless.

So what if Nike changed how they thought about making commercials? What if instead of spending millions of dollars buying all of that TV inventory to broadcast these commercials, they took a chunk of that money, and hired some extra people to produce a bunch more of these beautiful 60 seconds “commercials”. Produce more by a factor of 5x. Then air them once or twice on TV (if at all), and seed them on youtube, facebook, etc. People like me would totally share them on Facebook and on our blogs. Distribution is free when people want to share your message. Nike is one of the rare companies that, by virtue of the category they compete in, and through really great marketing, have tapped into their consumer’s emotions. People associate themselves with the brand and are excited by it. If anyone should be leading the next generation of marketing, it’s a company like Nike.

Here’s the Lebron James, Candyman commercial which stirred this post. Not surprisingly, I love this commercial. Embedded below:

————–
What is this?
This is part of a regular series I’m writing about companies (online and offline) and ideas that I would execute if I was running them. To subscribe to just these marketing/monetization type what if articles, click here. For all my random thoughts, use this link. To give me lots of money so I can give you more ideas contact me.

Pandora, a site where you can basically create a radio station that is right for you, has been one of my favorite websites for the past few years. But based on everything I’ve read, more revenue streams would be a good thing for them. So here are some thoughts:

I’ll start with what Pandora does now. I think there current graphical advertising is actually pretty smart. They do custom skins around the “radio” that are for specific advertisers. What’s smart here is that they don’t take the lazy way out and just stick a banner ad or a 300 X 250 nearby. They increase recall of the ad message due to the unconventional size/design. And most importantly (and most novel) is they change the advertising skin every time you skip a song, rate something, or change stations. They know this is a natural point of user attention and leverage this to swap ads. As a brand manager, this is a compelling value proposition for my message. So hat tip to Pandora.

What if Pandora became the advertising platform for new artists?

How? Basically, an artist (the advertiser) would pay to have their songs inserted in relevant users radio station by selecting other artists that they feel they sound like/their fans also like. So I’d get 5 “regular” songs based on my tastes, and then the sixth one would be “sponsored”. It’s still music, so it’s not as jarring as an ad, but for it to be effective for the advertiser, it would also have to be a song that the listener would probably like anyway. This way Pandora’s “music DNA” becomes their secret algorithm for ad matching & new artist discovery. There are like 5 other things I have to add to this product, but short of the writing the actual spec, I’ll stop here. Pandora can contact me for the rest :)

Example:
I’m a new band that has our first album and have picked our our singles. I know that our music sounds like & most of our fans also like Bruce Springsteen & E-Street Band and Pete Yorn. I go into Pandora, prepay for 1000 “plays” (a sort of pay-per-click) and pick Bruce & Yorn as relevant tastes. Only users who like Springsteen and Yorn would get this “sponsored” song in their stream. Everyone wins (the sign of a great monetization model): artists have very few venues to get discovered, and users will only get “sponsored” songs that they would probably like and will have a method to discover new music.
/Example

I really like this idea because it would seem in our digital world the record labels are soon to be obsolete. If you’re an artist you primarily need two things a) promotion and b) distribution. iTunes and the like have distribution taken care of. Once any garage band or corner rapper can get their music in front of the right person at a relatively low cost, and distribution is effectively free we have the trappings of a really healthy music eco-system.

———
What is this?
This is part of a regular series I’m writing about companies (online and offline) and ideas that I would execute if I was running them. To subscribe to just these marketing/monetization type what if articles, click here. For all my random thoughts, use this link. To give me lots of money so I can give you more ideas contact me.

I love Google Maps. I have no sense of direction whatsoever, and since the days of Mapquest on my AOL in the late 90′s I’ve been hooked on the category. Google Maps has always been the best for me given how uncluttered it is, the crisp AJAX display, and recently the actual street views! Oh, and for a while there I was using it with the GPS in my blackberry to guide me everywhere. Oh how I loved it.

So what if Google Maps actually got intelligent? Today, if I enter my trip, I’ll get the estimated travel time and a second number for with traffic. Google Maps should tell me how long it will take if I were to leave now. Give me the option to change the time of the trip and then estimate traffic load at that time. Or, if I’m a Google Calendar user, see if this syncs up with any of my appts and take the time from there w/an estimate. Think about how many times you’ve had to factor in traffic, etc in your head. With traffic data becoming so cheap and omnipresent, this is a no-brainer. Photos are cool– this is actionable and would help me be on time more. The question people ask when they get to Google maps are 1) How do I get there? and 2) How long will it take me to get there? This improves the second part of that question.

Full disclosure, this was one of the ideas that I suggested to Google when I interviewed with them in 07. I’ll blog about the second suggestion I had later in the week.

–
Want to subscribe to the full feed of my ramblings? Click here. For just want my marketing “What If…” posts, click here.

McD’s is a brand that’s fed its customers for nearly 70 years and fed 47 million people daily. Both its reach and longevity can’t be argued, and are impressive. McD’s makes food that people really like and sells it for a price that can’t be beat. But it is squandering so many opportunities. I say this as one of the biggest customers of fast food in America. Wendy’s got me through college (it’s what we had at the student center). And since then I’ve regularly indulged on McD’s and the King. And, yeah, I know it’s not healthy and that I need to eat better. Anyway.

1) Make the largest, highest-profile, busiest restaurants an experience to visit. I never understood why the McDonalds’ in the heart of NYC, where millions of tourists stop for their meals are just as dilapidated, and sometimes, dirty, as they are elsewhere in the country. Invest in these McD’s to make them the nicest anywhere in the country. When a tourist, visitor, businessman, whatever, stops to eat there they’re blown away by a delightful experience. Triple the staff that’s cleaning so the place is always spotless. Make all the tables and chairs super-comfortable. Make sure the climate is always perfect. Ensure the smell of the place is of muted tasty food. Have a number system so someone will bring your food to your table avoiding clustering around the counter. Increase the assembly staff so the food is carefully prepared and looks amazing. Sure this eats into margins. But this is the best advertising McD’s could ever get. People having a positive experience, leading to increased repeats or new trial in their hometown. Use these stores as advertisements.

2) Pay attention to the details in all your stores. McD’s can’t make all their stores walking ads, but they can pay attention to the details. I’ve heard that McD’s is remodeling all their stores to improve the decor and seating. I think that’s great. But the fundamentals have always been most important to me: A clean store, counter, and visible kitchen area. A cashier who doesn’t sneer at and/or ignore me. And, finally, a meal doesn’t look like it was thrown together by a blind man. The first two are, no doubt, constant topics of conversation at McD’s headquarters. Better procedures, systems, and pay (duh) should take care of these. A carefully made sandwich though is something that I’ve only rarely seen. And when you get to the detail of having a to bag with the sandwich tucked nicely in with the fries, napkins on the side and crisply closed with a fold, that’s pride in a product. That’s a product that people will value.

3. Your stores are everywhere, so use the exterior to announce your offers. I don’t get why McD’s wastes millions of dollars announcing their latest promotion. They have stores every five feet. Take advantage of this with a consistent outdoor spot where you announce the latest promotion. Entice me as I’m passing by. There’s so much more you can do with less.

Moving out to the Bay and from packaged goods to technology wasn’t hard. Why? Because it’s always been my belief that if the product is wrong, all the marketing in the world can’t save you. Making these changes to the product is the *best* marketing McDonald’s can do. When McD’s (and, honestly, every other fast food chain) starts valuing their food and taking pride in the details, I’m pretty sure they’ll begin to build brand loyalty. Maybe then they can spend all that money on commercials.

—
This is the first in an a series that I’ll be writing about companies (online and offline) and ideas that I would execute if I was running them. Like everyone else, I dream of the day when I can have companies actually pay me for ideas (ha!). Maybe after a 1000 of these, one of the companies will actually approach me :) Here’s the RSS link to subscribe to just articles about marketing. I know there are people who would just want to subscribe to these “marketing” thoughts and not my politics and random other thoughts. (thanks, Ben, for the link!)

And check out the Nike site for a ridiculously cool “timeline” that flows with the video. It highlights who all of the people are while the video is playing, and when you click on the name, they give you the background of why they were selected. This, to be clear, is what good advertising looks like. Though it’s a little easier when you’re marketing a mindset than a utilitarian packaged good :)

P.P.S. Incredible article in Vanity Fair on what went down at Bear Stearns. Ridiculously fascinating read.

P.P.P.S. What the hell is going on with Iran? The New Yorker tells you. And it’s not exactly going to warm the heart.

Life in SF is good, and so that could be why. When you’re running around doing a thousand things, and you’ve broken your regular routine of blogging, it’s easy for that to deteriorate into zero updates.

I’ve spent most of my free time working on the book. I’ve got a what I feel is a great completed outline and structure (which is an awesome feeling!). And I’ve now shifted into a hardcore writing mode. What helps with writing is music. And not just any music, but ideally music without words, but still with powerful energy.

Enter NIN.

If you haven’t checked out Nine Inch Nails’ new album, Ghosts, you have to. It’s amazing. No vocals. Just amazing instrumentation and production. I love the pictures they’ve embedded along with the songs as well. At times, just literally looking at the image and listening to the song will give you goose bumps. Ridiculously powerful stuff. My writing is definitely fueled by this. I can’t recommend it any higher.

To go along with this. NIN is beyond awesome. Why? They’re giving part of the album, and then only charging you $5 if you want to download the whole epic set. $10 gets you the immediate download AND an album in the mail. I kid you not.

Brilliant music. Brilliant pricing. (Breathtaking photos as well, by the way). This is how you build a brand. A brand everyone loves. Based on this experience, I now count NIN as one of my favorite bands.

You, go download it!

Me, going to go back to writing now.