BrandKnew October 2020

Branding matters. Because branding matters.

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10.20#96

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Dear Friends: Considering where we are with the pandemic, it’s not exactly OktoberFest yet! The collective struggle to combat this monster challenge continues for all of us.This edition, as ever, we have put our best foot forward to offer distilled content from the world of branding, marketing, design , advertising, innovation & social media. We have taken a look at the Ten Do’s and Don’ts of measuring CLTV(Customer Lifetime Value). Social Media has been shaping political campaigns and we evaluate that here in this issue. Reflect, retrospect and go back. Nostalgia marketing can be the next big idea for your brand. Understand how. It takes two to tango and we articulate why gaming and entertainment brands should partner together. The youngest are the best. At recalling ad content. Give it to GenZ. Read more in this issue on that. Brand owners and marketers seem to have had too much of a narrative around ‘ generations ‘ and the gap that exists between each. See the enigma being unravelled and busted in this edition. We also feature a primer on how luxury brands can boost perceived differentiation. We also stir a debate on the ‘ feminist voice ‘ used by brands and whether that is a corporate hijack or a revolutionary step for women. If you are a copywriter, here’s your big chance to get it right by using the Ten Persuasive Copywriting Techniques flagged in the feature. Ad Blocking is best addressed by Creating Ads that Customers Trust. Read about it here. There is ample more to chew, think & act on and I leave it to you to soak it in.

Till the next, my very best to you and yours. Stay safe. This too shall pass.

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Suresh Dinakaran @ISDGlobalDubai

@Brandknewmag

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Brand Consultancy | Advertising | PR | Publishing Digital Media | Film Academy For Advertising Enquiries: engage@groupisd.com or call + 050 6254340 All Copyright of the content in this issue rests fully & comprehensively with the respective contributors and/or media platforms at all times, as the case may be.

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Managing Editor: Suresh Dinakaran Creative Head/Director Operations: Pravin Ahir Magazine Concept & Design/ New Media Specialist: Mufaddal Joher Chief Strategy Director: Rishi Mohan Brand Engagement and Outreach Specialist: Anuva Madan Chief Country Man, India: Rohit Unni Brand Trends and Research Architect: Meeta Pendse Revenue Growth Architect: Ritu Dey Country Head, Australia: Norbert D’Souza Country Head, UK: Sagar Patil Performance Marketing Architect: Ryan Govindan Video Content Specialist: Vinayak Sivaprasad

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CONTENTS

How COVID-19 created a new kind of consumer in just 90 days How brands pitch the feminist voice: Corporate hijack or a revolutionary step for women?

How Luxury Brands Can Boost Perceived Differentiation Marketing’s Stupidest Religion When The Magic Happens The power of collaborative advantage Gen Z is better at recalling ad content than older consumers Why nostalgia marketing is the next big idea for your company 15 Persuasive Copywriting Techniques That’ll Boost Conversions Why entertainment and gaming brands should partner 10 Dos and Don’ts of Measuring Lifetime Value How Brands Can Address The Coming Paradigm Shift How Anticipation Warps Our Sense of Time How to Make Ads That Even Savvy Customers Trust Can Tesla Maintain Its Momentum?

How Social Media Is Shaping Political Campaigns Growing U.S. Product Placement: How Far Can It Go? Rewarded Advertising Diversifies Revenue And Motivates Mobile Gamers During Pandemic Gaming Boom Unusual innovations for unusual times Book, Line & Sinker

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How COVID-19 created a new kind of consumer in just 90 days

By BRIAN SOLIS

After two decades of steady growth, the trajectory of digital consumerism went into hyperdrive when the pandemic changed everything—giving us ‘Generation.’

Meet Generation Novel, a growing cross-generational psychographic of digital-first consumers galvanized by the disruptive effects of COVID-19. This emergent and significant customer segment isn’t just digital-centric. It’s also emotionally charged, as pandemic-fueled fear, anxiety, and worry take their toll. With the impact of the novel coronavirus likely to endure, companies must prioritize the study of Gen N. Doing so will help executives understand how consumers’ increased and accelerated use of technology affects their preferences, behaviors, and routines. These insights can guide brand, product, and market strategies to be more timely, relevant, and empathetic at a time when there is no pandemic playbook to follow.

When the onset of COVID-19 led to closures and shelter-inplace rules, the physical normal we knew changed overnight.

The mechanics of life—communicating with loved ones, keeping up with news, working, learning, and shopping— were now centered on digital platforms.

As a result, a new set of digitally influenced norms and behaviors were born among consumers who had been slow or unmotivated to adopt digital in all facets of life before COVID-19. At the same time, digital natives and early adopters found themselves well prepared to live, work, learn, and shop remotely during the waves of lockdowns.

One thing is clear. The sudden and ongoing closures of public life are radically accelerating the digital transformation of consumer habits, markets, and organizations alike.

Companies that track how digital devices, apps, and networks influence consumer decisions and in turn, how those decisions affect companies will be in a better position to ride through waves of disruption and uncertainty.

FROM GENERATION C TO GENERATION N Before COVID-19 and the rise of Generation Novel, I studied how mobile, social, and real-time web trends were shaping a new, less analog kind of customer. I called this ever-growing, always-on customer segment “Generation C (Connected),” and it was at the core of customer experience innovation over the past decade.

Over the years, I learned that customers who lived digitalfirst lifestyles were much more intentional, impatient, and demanding. They were also more efficient in their decisionmaking. They didn’t go through the decision-making journey in a linear fashion like their traditional consumer counterparts.

Instead, they jumped in and out of searches, read reviews, watched videos on YouTube, asked questions on social media, and downloaded apps, all usually from a mobile device.

They expected their experiences to be defined by relevant,

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platform-native choices, mostly for mobile screens. They expected immediacy and convenience. Connected customers also demanded that their digital journey was integrated, seamless, and intuitive. Those brands that didn’t deliver on these fronts were vulnerable to digital-savvy companies.

Now, Generation C is morphing into an evolved next phase of consumerism, Generation N. This is a developing psychographic group comprised of those customers who were previously hyperconnected (Gen C) as well as those who are now fast becoming digital-first because of COVID-19 shutdowns.

What’s more, Gen N is also defined by a powerful somatic marker that’s forging a deeply entrenched emotional bookmark in our lives. This emotional bookmark is shaped by a unifying set of deeply personal and charged emotional ties. With much of the media spotlight on death tolls, infection rates, business closures, and unemployment, this pandemic is overwhelming our mental health.

It’s not just speed that companies need to consider as they expedite digital transformation investments to keep up.

Consumer attention and loyalty is up for grabs right now.

As a result of the prolonged nature of shelter-in-place rules, new consumer sentiment, behaviors, habits, and values are not only forming, but are also likely to stick. Studies have shown that on average, it takes 66 days for new behaviors to become automatic.

As an example, McKinsey also discovered that 75 percent of U.S. consumers have tried different stores, websites, or brands during this crisis. Here’s what matters most. Of those consumers, 60 percent reported that they expect to integrate new brands and stores in their post-pandemic lives.

A recent Accenture report underscores the extent of consumer anxiety: • 64 percent of consumers are fearful of their own health • 82 percent are fearful of the health of others • 64 percent are worried about the impact on their personal job security • 88 percent are worried about the impact on the economy People are thinking, feeling, and making decisions differently.

Added together, Gen N represents a connected consumer, by choice or by default, whose decisions are now also driven by the stressors, feelings, and consequences of a global pandemic.

GETTING TO KNOW GENERATION N As the U.S. woke up to the COVID-19 crisis in March, the trajectory of consumerism shifted, accelerating toward digital experiences at a blinding pace after two decades of steady growth. Just how fast are things moving? McKinsey estimates that COVID-19 served as a great accelerant, advancing 10 years of U.S. e-commerce growth in just 90 days’ time.

While stores across all industries are opening to an extent, the conveniences of digital shopping are enticing consumers and becoming habit-forming for a broader set of consumers.

CONTROL, HEALTH, AND WELL-BEING In times of a global pandemic, digital boasts advantages that customers appreciate such as health and safety, greater choices, flexibility and control, time savings, and overall convenience. Combined, these hallmarks accelerate and solidify digital behaviors and routines.

Today’s trends are all pointing to what the next normal will look like: E-commerce is thrust into the spotlight, turning everyone into connected customers. According to the Q2 Global Shopping Index published by Salesforce—where I am global innovation analyst—as of July 16, 2020, 42 percent of customers were reportedly shopping online as usual with another 39 percent digitally shopping more than usual. Twenty-one percent of customers said that they were spending more on discretionary items in the time of COVID. Customers are choosing to shop at home even as stores open. A study by IPSOS revealed that even though brick-andmortar retailers were opening at varying levels across the country in June 2020, a massive 61 percent of customers were delaying shopping in physical stores for fear of getting sick.

Even with store openings, digital is first in growth. Between April and June, global digital revenue increased in the U.S. by an unprecedented 71 percent compared to the previous year.

Some of the historic growth driving that number includes a 37 percent surge in online traffic, 35 percent improvement in conversions, and 34 percent greater spending.

Contactless engagement is the new standard for engagement.

Over 35 percent of U.S. consumers report that they prefer more contactless shopping and delivery options than before.

Social media is finally, quantifiably, advancing social commerce. Research shows that 17 and 28 percent of consumers are buying products in social media more than usual and about the same, respectively. Purchases from a social channel referral saw the biggest increases in Q2 2020, growing 104 percent across the entire industry.

(physical and digital) through the lens of Generation N. Organize. Create a human and data-centered, crossfunctional organization that prioritizes real-time shopping behaviors and consumer preferences, intentions, and values.

Operationalize.

Assemble

executive

sponsors

and

stakeholders responsible for touchpoints across the customer journey to assess patterns and convert insights into actionable pilots and programs.

Invent. Explore opportunities to add new value to customer experiences, at every step, that align with and enhance customer progression. Take this opportunity to reimagine the customer experience for a digital-first consumer instead of adapting legacy journeys for digital platforms.

Gen N members are becoming more conscious about what they buy and the brands they support. COVID-19 is prompting consumers to question their desire to buy things. In a recent study reported by MarTech, 58 percent of customers stated that COVID-19 had notably impacted their view of brands.

track traditional KPIs. Consider customer-facing metrics that

A GENERATION N GAME PLAN

This isn’t about how B2C or B2B organizations respond in

This is the time for companies to relearn who their customer is: their intentions and aspirations, and what it is they value and why. Those paying attention will source the insights necessary to transform and enhance operational and business models, products and services, and customer experiences.

Observe. Experience the existing journey and each touchpoint

Measure. Do more than just attempt to document ROI or capture sentiment, satisfaction, customer experiences, and resulting performance in digital realms.

times of crisis. It’s about people-to-people interactions and how organizations learn from disruption at a human level.

Brian Solis Is Global Innovation Evangelist At Salesforce.

He’s Also A Digital Anthropologist, Best-Selling Author, And Keynote Speaker. He Studies Market Digital Disruption, Corporate Innovation, And The Evolution Of Markets And Customer Behaviors. Follow Him On Twitter At @Briansolis.

How brands pitch the feminist voice: Corporate hijack or a revolutionary step for women?

By Neeta Dsouza

The gender divide story in India is not new but Neeta Dsouza argues that there’s room for brands, especially brands in India, to do more to elevate women and support gender equality.

A couple of months ago, I came across a static ad that dairy brand Amul released called Favourite all-rounder. I’ve been a big fan of Amul, until this communication. The cartoon shows women juggling their personal and professional life and mastering it.

Amul has never claimed to champion women’s issues or lead a feminist movement but such an unrealistic portrayal of women effortlessly multi-tasking reinforces existing gender stereotypes.

The gender divide story in India is not a new one.

According to the World Economic Forum’s Global Gender Gap Index 2019-2020, which measures the extent of genderbased gaps in economic participation and opportunity, educational attainment, health and survival, and political empowerment, India dropped four places from 2018 to 112.

However, women have come a long way in India. Modern-day India sees women matching shoulders with men, taking on responsibility and newer roles without uncertainty and fear, standing up for themselves and others in various walks. Indra Nooyi, Kalpana Chawla and Priyanka Chopra are just a few among the many names that have made a mark locally and globally. But the recent Netflix series “Indian Matchmaking” sheds light on how women are still arrested by the clutches of an unequal society.

Some of the more sinister statistics that raise questions on whether we have really reached equality as far as women are concerned include: A pay gap of 22% in urban areas and 37% in rural areas of India.

• A dowry death every 69 minutes.

• A forced abortion every 19 hours.

• Cruelty by in-laws every 5 minutes.

To aid the cause of equality among women, many groups have tried to make changes including brands trying to represent this cause. But are brands that claim to champion the feminist movement helping the cause or undoing the work already done in the field?

1. Using feminism as a tool to fuel capitalism, without trying to change the societal structure One example is Dove. The brand represents this idea of real beauty, without editing or filters. They have, since the inception of “real beauty” presented a plethora of commercials aligned with the ideology, from Dove evolution, Dove campaign for real beauty to Dove real beauty sketches.

However, these ads tell us others still see you as beautiful, even if you don’t, as opposed to saying beauty should not be a parameter to be yourself or appreciate yourself. In the case of the body positivity ad, the focus is still on the female body rather than suggesting how your body looks is not important at all.

2. A dangerous relationship between female liberation and female beauty With every stride we make with feminism, the beauty parameters have become crueller and more toxic. Tough representation in media and brands have fuelled unreasonable expectations that have weighed down on women from the moment they were born.

One example of this is Fair & Lovely, recently rebranded to Glow and Lovely, which reinforced the idea that “fair” alone is the key to success undoing any work the third wave of feminism may have done.

3. Normalisation of the “clueless man” Airtel’s Wife Boss ad showed the wife as the husband’s boss, an independent working woman, and yet when she reaches home she’s the one to come home and cook dinner for him, maintaining the stereotype that women are expected to take charge of household chores. This reflects the narrative of a “man who is lost in the domestic space without a woman”, which is deep-rooted in patriarchy.

groupisd.com

15 Adland’s role in public discourse However, there are commercials that lend a real voice to the feminist movement, but are we still just scratching the surface?

1. Positive stereotypes which empower women without belittling men The Always #LikeAGirl campaign which launched in 2014 is an earnest ad that empowers the female consumers, turning a long-standing insult into a change in behaviour. It tackles the anxiety young girls feel at that age and shows them a way to turn things around. The feminine products brand has sponsored puberty education for girls around the world for three decades, and this sustained dedication to women’s issues is what elevates their femvertising attempt above many other brands.

2. Tackling taboos: Showing the very real journey that every girl faces.

Libresse, with its latest commercial #WombStories outlines the fear, shame, anger and pain that women go through.

This highlights how it is not just about the major discomfort women experience during periods but also the many complex emotions associated with it.

When brands claim to champion feminist movements but do not walk the talk, they run the risk of undoing the work that has been done in the field. This tokenism contributes to an illusion of progress and allows the millions of consumers who see these ads to believe equality is closer than it actually is, creating a diversity blind spot and obstructing the progress already being made.

With the ease of access to social and digital media as a platform to express opinions or action a change, women tend to look at advertising and strongly believe that advertising is contributing to a better representation of women, however, it is time for the industry to do more than just communicate a cause.

How brands can do more 1) Promote a positive and happy representation of feminism Why: Many women believe in gender equality but are distancing themselves from the feminist label for fear of being perceived as hating men. They need to be represented in their complex and multiple roles devoid of sexuality, with their personalities on display.

Think about: A more positive and equal representation where women are not portrayed as victims waiting for the brand to rescue them. If it has never been done before, then even a representation of an ideal-equal-gendered-world would work wonders.

2) Use the F-word Currently, advertising steers clear of the use of the terms Feminist or feminism as to not wanting to alienate those who do not identify with those terms.

Why: Currently, advertising steers clear of the use of the terms Feminist or feminism as to not wanting to alienate those who do not identify with those terms. This puts brands

in the performative tokenism space away from actual representation. How will negative connotations surrounding these terms going to change if they are not used in their most accurate forms?

Think about: Social movements are rarely neat, tidy and consumable, so should we stop picking parts to associate with and go all out? This can be done by celebrating female and male feminists who broke glass ceilings to advance gender equality.

3) Create a support platform Why: In an age where a company purpose is being questioned by consumers, creating support platforms helps them walk the talk. It can also open up avenues for business such as Google’s platform HWGO which helps women get internet access, making them more independent and inviting prospective consumers.

Think about: A platform for women needs to help them face various challenges to come together and find support. One avenue brands could go down is providing scholarships or employment support to uplift women from various castes, class, colour and gender to help them pursue their dreams.

Another opportunity is to work with NGO’s which doing work at a grassroots level, could your brand help create opportunities either in terms of employment, income or education?

4) Living and breathing diversity internally as well as externally Why: It is important to change lip service into tangible action.

More female representation brings a varied perspective to problem-solving and provides an opportunity to create a more equal world.

Think about: More representation in the boardroom. When ads are made to uplift women why aren’t we looking at female directors?

Feminist movements have, and will have to, continue finding strategies to promote their gender justice agendas within new configurations of global power and influence. Images of women may not convert everyone to fight challenges women face at every level, but they can influence what women think they need to have or how they need to deal with situations.

According to Forbes: “Women drive 70-80% of all consumer purchasing, through a combination of their buying power and influence.” Influence means that even when a woman isn’t paying for something herself, she is often the influence or veto vote behind someone else’s purchase. Given this is true it only makes sense to elevate the rights of your most valuable consumer.

Inauthentic support devalues the idea of equality for women and that is dangerous not just for the purveyors of business behind this messaging but to the feminist movement itself.

So brands, are you listening?

Neeta Dsouza is a Mumbai-based freelance writer with a decade of experience spanning across communications planning and creative brand planning, covering Insights across the marketing and advertising industry.

HOW LUXURY BRANDS CAN BOOST PERCEIVED DIFFERENTIATION

By WARC Staff

Luxury brands that use less abstract and more concrete forms of print advertising may see a higher willingness to pay among consumers, according to a paper in the Journal of Advertising Research (JAR).

By comparison, “closer” objects are seen as more concrete, meaning there is lower construal. That leads to stronger perceived differentiation - and, the JAR paper argued, a greater willingness to pay.

Francesco Massara (Università IULM), Daniele Scarpi (University of Bologna) and Daniele Porcheddu (University of Sassari) discussed this subject in their paper, “Can your advertisement go abstract without affecting willingness to pay? Product-centered versus lifestyle content in luxury brand print advertisements.”

The paper’s first study featured 300 respondents who were trained to distinguish between product- and lifestyle-centered ads and asked to classify ten pre-tested sentences to see which of those approaches they reflected.

Looking at print ads for luxury brands, they assessed the links between product-based and lifestyle messaging, the impact of abstract and concrete language, and how consumers’ interpretation of a brand shapes willingness to pay.

And the study showed that “lifestyle advertising is more consistent with abstract language and that product-centered advertising is more consistent with concrete language.

“The advertising style per se does not trigger construal levels but rather the language used in the advertisement,” the scholars added.

An in-field study used real ads for luxury brands in categories like clothing, accessories, cars and watches, to test if lifestyleand product-centric ads were perceived to be different in terms of concrete and abstract language.

Next came a pretest with 30 respondents and another study with 170 contributors, who evaluated 35 ads - of which 18 were lifestyle ads, and 17 product-centered.

In a third study, a sample of 200 participants was split in half, with 100 members seeing 18 lifestyle ads from the field study, and the other 100 viewing the 17 product-centered ads.

Drilling down into this topic, the authors explained that “construal” is determined by the perceived “distance” between an individual and an object they are evaluating.

And the overall results, the academics proposed, helped explain some “contradictory findings” in previous research on advertising and willingness to pay by adding construal into the analytical mix.

Objects at a great “distance” are seen as more abstract, or having a high level of construal, meaning consumers pay less attention to concrete features, perceive less variety and underestimate product differentiation.

“The authors have shown … that the link between advertising style and WTP consistently can be explained when construal level is accounted for, and they have offered a new and more solid explanation of the phenomenon,” they said.

MARKETING’S STUPIDEST RELIGION

By Bob Hoffman’s

Among all the dumb things that marketers believe, my favorite is the voodoo of generational uniqueness -- like Millennials, or Gen Z, or Baby Boomers. These groups are often treated as new species of humans who are profoundly individual and have to be explained to us by our industry’s high priests of sociological claptrap.

This idiocy exists because every 20 years or so the research industry has to come up with new fresh and mysterious “generational” horseshit to sell to marketing dimwits. And, of course, we eat this shit up.

Group Cohesion Scores.

And, to the surprise of absolutely no one with their head screwed on straight, the high Group Cohesion Scores among “generational” segments are nowhere to be found.

In fact, people who eat nuts every day have a higher Group Cohesion Score than Millennials. Crossword puzzle doers, and Orangina drinkers have higher group cohesion than Baby Boomers.

As the study concludes, “The truth is that these ‘generations’

As I’ve been writing for years, there is just as much variation within generations as there is between generations. But marketers, too lazy or too stupid to figure this out, accept the existence of these imaginary consumer segments in order to avoid the difficult and esoteric task of thinking.

Recently, BBH Labs in the UK released a study that wonderfully undermines the silliness. It’s called “Puncturing the Paradox: Group Cohesion and the Generational Myth.” Read it here.

As part of their study, they created something called a “Group Cohesion Score.” The Group Cohesion Score calculates the single-mindedness of a group of people. Presumably people whose beliefs and behaviors are similar will have higher

are simply random collections of people who share no special connection beyond being born within two decades of each other.”

When The Magic Happens

By Morgan Housel

Not how, but when. And to some extent, why.

Hopefully you find it counterintuitive at first before it quickly seems obvious. That’s how most important ideas work.

And hopefully you’ll see why 2020, for all the hell its brought, could be the new beginnings of something promising.

Cars and airplanes are two of the biggest innovations of modern times.

But there’s an interesting thing about their early years.

Few looked at early cars and said, “Oh, there’s a thing I can commute to work in.”

Few saw a plane and said, “Ah-ha, I can use that to get to my next vacation.”

It took years and decades for people to see that potential.

What they did say early on was, “Can we mount a machine gun on that? Can we drop bombs out of it?”

Every new invention looks like a toy at first. Adolphus Greely was one of the first people outside the car industry to realize the “horseless carriage” could be useful.

Greely, a brigadier general, purchased three cars in 1899 – almost a decade before Ford’s Model T – for the U.S. Army to experiment with. In one of its first mentions of automobiles, The Los Angeles Times wrote about General Greely’s purchase: It can be used for the transportation of light artillery such as machine guns. It can be utilized for the carrying of equipment, ammunition and supplies; for taking the wounded to the rear,

and, in general, for most of the purposes to which the power of mules and horses is now applied.

Nine years later, the LA Times did an interview with young brothers Wilbur and Orville Wright, who talked about the prospects of their new flying machine: The Wrights had reason to believe this was true. Their only real customer in their early years – the only group to show interest in airplanes – was the U.S. Army, which purchased the first “flyer” in 1908.

The Army’s early interest in cars and planes wasn’t a fluke of lucky foresight. Go down the list of big innovations, and militaries show up repeatedly.

Radar.

Atomic energy.

The internet.

Microprocessors.

Jets.

Rockets.

Antibiotics.

Interstate highways.

Helicopters.

GPS. Digital photography.

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Microwave ovens.

Synthetic rubber.

They all either came directly from, or were heavily influenced by, the military.

Why? Are militaries home to the greatest technical visionaries? The most talented engineers?

Perhaps.

But more importantly they’re home to Really Big Problems That Need to Be Solved Right Now. Innovation is driven by incentives. And incentives come in many forms.

On one hand there’s, “If I don’t figure this out I might get fired.” That will get your brain in gear.

Then there’s, “If I figure this out I might help people and make a lot of money.” That will produce creative sparks.

Then there’s what militaries have dealt with: “If we don’t figure this out right now we’re all going to die and the world will be taken over by Adolf Hitler.” That will fuel the most incredible problem-solving and innovation in the shortest period of time that the world has ever seen.

The 1955 book The Big Change describes the burst of scientific progress that took place during World War II: What the government, through its Office of Scientific Research and Development and other agencies, was constantly saying

during the war was, in effect: “Is this discovery or that one of any possible war value? If so, then develop it and put it to use, and damn the expense!”

The result has been likened to a team of experts combing through a deskful of scientific papers, pulling out those which gave promise of usefulness, and then commandeering all the talent and appropriating all the money that might be needed to translate formulae into goods.

Militaries are engines of innovation because they occasionally deal with problems so important – so urgent, so vital – that money and manpower are removed as obstacles, and those involved collaborate in ways that are hard to emulate during calm times.

You cannot compare the incentives of Mountain View coders trying to get you to click on ads to Manhattan Project physicists trying to end a war that threatened the country’s existence.

You can’t even compare their capabilities. The same people with the same intelligence have wildly different potential under different circumstances.

Militaries are innovation.

an

extreme

example

of

panic-induced

A broader point that applies to everyone is that the biggest innovations rarely occur when everyone’s happy and safe, or when the future looks bright. They happen when people are a little panicked, worried, and when the consequences of not acting quickly are too painful to bear.

That’s when the magic happens.

The 1930s were a disaster.

Almost a quarter of Americans were out of work in 1932. The stock market fell 89%.

Those two economic stories dominate the decade’s attention, and they should.

But there’s another story about the 1930s that rarely gets mentioned: It was, by far, the most productive and technologically progressive decade in history.

The number of problems people solved, and the ways they discovered how to build stuff more efficiently, is a forgotten story of the ‘30s that helps explain a lot of why the rest of the 20th century was so prosperous.

Here are the numbers: Measuring total factor productivity – that’s economic output relative to the number of hours people worked and the amount of money invested in the economy – hit levels not seen before or since: Economist Alex Field writes: In 1941, the U.S. economy produced almost 40 percent more output than it had in 1929, with virtually no increase in labor hours or private-sector capital input. Almost all of the increase in output per hour is attributable to technological and organizational advance [of the 1930s].

A couple of things happened during this period that are worth paying attention to, because they explain why this happened when it did.

The New Deal’s goal was to keep people employed at any cost. But it did a few things that, perhaps unforeseen, become long-term economic fuels.

Take cars. The 1920s were the era of the automobile. The number of cars on the road in America jumped from one million in 1912 to 29 million by 1929.

But roads were a different story. Cars were sold in the 1920s faster than roads were built. A new car’s novelty was amazing, but its usefulness was limited.

That changed in the 1930s when road construction, driven by the New Deal’s Public Works Administration, took off.

Spending on road construction went from 2% of GDP in 1920 to over 6% in 1933 (vs. less than 1% today). The Department of Highway Transportation tells a story of how quickly projects began: Construction began on August 5, 1933, in Utah on the first highway project under the act. By August 1934, 16,330 miles of new roadway projects were completed.

Historian Robert Grodon writes: The 1930s witnessed the construction of multilane engineering marvels, including the George Washington, Golden Gate, and Bay Bridges, as well as the beginning of multilane limited-access turnpikes, including the Merritt Parkway in southern Connecticut and the first section of the Pennsylvania Turnpike. These anticipated, and in some cases became part of, the postwar Interstate Highway System. As of 1940, a map of the principal routes of the U.S. highway system looks virtually identical to a map of today’s Interstate Highway System, except that most of the roads were two-lane with intersections rather than featuring limited access.

The Pennsylvania Turnpike, as one example, cut travel times

between Pittsburgh and Harrisburg by 70%. The Golden Gate Bridge opened up Marin County, which had previously been accessible from San Francisco by ferry boat.

Multiply those kinds of leaps across the nation and 1930s was the decade that transportation truly blossomed in the United States. It was the last link that made the century-old railroad network truly efficient, creating last-mile service that connected the world. A huge economic boon.

Electrification also surged in the 1930s, particularly to rural Americans left out of the urban electrification of the 1920s.

The New Deal’s Rural Electrification Administration brought power to farms in what may have been the decade’s only positive development in regions that were economically devastated. The number of rural American homes with electricity rose from less than 10% in 1935 to nearly 50% by 1945.

It is hard to fathom, but it was not long ago – during some of our lifetimes and most of our grandparents’ – that a substantial portion of America was literally dark. Franklin Roosevelt said during a speech on the REA: Electricity is no longer a luxury. It is a definite necessity. It lights our homes, our places of work and our streets. It turns the wheels of most of our transportation and our factories. In our homes it serves not only for light, but it can become the willing servant of the family in countless ways. It can relieve the drudgery of the housewife and lift the great burden off the shoulders of the hardworking farmer.

I say “can become” because we are most certainly backward in the use of electricity in our American homes and on our farms. In Canada the average home uses twice as much electric power per family as we do in the United States.

Electricity becoming a “willing servant,” – introducing washing machines, vacuum cleaners, and refrigerators – freed up hours of household labor in a way that let female workforce participation rise. It’s a trend that lasted more than half a century and is a key driver of both 20th century growth and gender equality.

A second productivity surge of the 1930s came from everyday people forced by necessity to find more bang for their buck.

The first supermarket opened in 1930. The traditional way of purchasing food was to walk from your butcher, who served you from behind a counter, to the bakery, who served you from behind a counter, to a produce stand, who took your order. Combining everything under one roof and making customers pick it from the shelves themselves was a way to make the economics of selling food work during a time when a quarter of the nation was unemployed.

Laundrymats were also invented in the 1930s after sales of individual washing machines fell – they marketed themselves as washing machine rentals.

Factories of all kinds looked at bludgeoned sales and said, “What must we do to survive?” The answer was often to build the kind of assembly line Henry Ford introduced to the world in the previous decade.

Output per hour in factories had grown 21% during the 1920s. “During the Depression decade of 1930-1940 – when many plants were shut down or working part time” historian Frederick Lewis Allen writes, “there was intense pressure for

efficiency and economy – it had increased by an amazing 41 per cent.”

American invention machine,” Alex Field writes. “If anything, the pace of innovation picked up.”

He wrote again in 1943:

Economist David Henderson writes:

Anybody can understand the basic principle of a fork truck.

But the layman can only stand in awe before some of the complex electronic machines which came into use after 1935 – machines for measuring materials with microscopic exactitude, or for watching the performance of a machine and automatically correcting flaws in its performance. The language used by engineers in talking about them is quite unintelligible to him, as are the processes involved. But at least he can appreciate the miraculous results they achieve.

“Topping” techniques in electricity generation — using exhaust steam from high-pressure boilers to heat lowerpressure boilers — raised capacity by 40 to 90 percent with virtually no increase in the cost of fuel or labor.

Something as simple as quality control sampling massively reduced manufacturing waste and became common in the 1930s. Lewis Allen again:

[Total research and development] employment in 1940 was 27,777, up from 10,918 in 1933.

The workman can thereupon regulate the adjustment of his machine, not by guesswork, but with exact knowledge of just how it is functioning. This [process] – which in many a factory has saved large amounts of money by reducing the number of defective products – has the effect of raising the status of the workman by making him in a special sense his own boss, the informed critic and judge of his performance.

This story was repeated across industries. Productivity growth in the 1930s was not constrained to a few fields, like it was in the 1920s when manufacturing accounted for nearly all the gains. The ‘30s saw huge technical progress in utilities, farming, wholesale trade, retail, transportation, mining, and communication.

“The trauma of the Great Depression did not slow down the

New treatments increased the life of railroad ties “from eight to twenty years.”

With new paints, the time for paint to dry on cars fell from three weeks (!) to a few hours.

Driving knowledge work in the ‘30s was the fact that more young people stayed in school because they had nothing else to do. High school graduation surged during the depression to levels not seen again until the 1960s, according to Field.

One student recalled: High schools had a larger attendance than ever before, especially in the upper grades, because there were few jobs to tempt anyone away. Likewise college graduates who could afford to go on to graduate school were continuing their studies – after a hopeless hunt for jobs – rather than be idle.

All of this – the better factories, the new ideas, the educated workers – became vital in 1941 when America entered the war and became the Allied manufacturing engine.

The big question is whether the big technical leap of the

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1930s could have happened without the devastation of the depression. And I think the answer is “no” – at least not to the extent that it occurred.

one virus. It’s as close to a Manhattan Project as we’ve seen since the 1940s.

And what could come from that besides a Covid vaccine?

You could never push through something like the New Deal without an economy so wrecked that people were desperate to try anything to fix it.

New medical discoveries? New manufacturing and distribution methods? Newfound respect for science and medicine?

It’s doubtful that business owners and entrepreneurs would have so urgently found new efficiencies without the record threat of business failure.

So many important discoveries happen by accident when frantic experimentation uncovers an unrelated quirk of science. In his book How We Got to Now, Steven Johnson writes:

Managers looking at their employees and saying, “Go try something new. Blow Up the playbook, I don’t care,” is not something that gets said when the economy is booming and the outlook is bright.

Big, fast, changes only happen when they’re forced by necessity.

World War II began on horseback in 1939 and ended with nuclear fission in 1945. NASA was created in 1958 two weeks after the Soviets launched Sputnik and landed on the moon just 11 years later. Stuff like that rarely happens that fast without fear as a motivator.

It reminds me of this: HOBBES: Do you have an idea for your story yet?

CALVIN: You can’t just turn on creativity like a faucet. You have to be in the right mood.

HOBBES: What mood would that be?

CALVIN: Last-minute panic.

There’s an obvious limit to stress-induced innovation.

There’s a delicate balance between the economy being thrown upside down, everyone inside it driven into action by necessary panic, while the foundations of the economy itself remain intact, capable of supporting the new ideas and innovations.

My guess is that balance has only happened a few times in modern history.

One was the period from 1930 to 1945. Parts of the Cold War might qualify, though it was concentrated in a few defense sectors.

Then there’s 2020.

The hardest thing about stress-induced innovation is reconciling that positive long-term trends can be born when people are suffering the most. It makes the topic difficult to even discuss without looking insensitive.

But think of what’s happening in biotech right now. Many have pessimistically noted that the fastest a vaccine has ever been created is four years. But we’ve also never had a new virus genome sequenced and published online within days of discovering it, like we did with Covid-19. We’ve never built seven vaccine manufacturing plants when we know six of them won’t be needed, because we want to make sure one of them can be operational as soon as possible for whatever kind of vaccine we happen to discover. We’ve never had so many biotech companies drop everything to find a solution to

Innovations usually begin life with an attempt to solve a specific problem, but once they get into circulation, they end up triggering other changes that would have been extremely difficult to predict … An innovation, or cluster of innovations, in one field ends up triggering changes that seem to belong to a different domain altogether.

This is happening in medicine right now. It’s happening with doctors in hospitals and scientists in labs. It’s impossible to know what it will lead to. But there’s currently so much experimentation, with stakes so high, that you know we’re going to look back in 10 or 20 years at the important discoveries that wouldn’t have been possible without Covid-19. That’s always how it’s worked.

Or think about cities.

I don’t think San Francisco or New York are dead – that’s absurd. But it doesn’t take many companies letting their employees work remotely to take the pressure off one of the biggest social problems of the last generation: affordable housing.

Having so much of the economy’s economic potential clustered in a few cities – a few neighborhoods, really – created $2 million starter homes in cities with good jobs and cheap homes in cities with little economic growth. Even a slight shift to permanent remote work could make cities more livable and rural areas more prosperous.

Or colleges. Student loans are another major social issue of the last generation. Without Covid the college industry would have likely corrected in the coming decades. With Covid it’s correcting in the coming weeks.

When schools say, “Pay full tuition and we’ll teach you over Zoom,” and students and parents say, “Wait, there’s no way that’s worth it,” you realize – quickly, in stark terms – that you’re not paying for an education. You’re paying for a credential and a social experience, which doesn’t need to cost $68,000 a year.

Scott Galloway recently put it: There’s a recognition that education — the value, the price, the product — has fundamentally shifted. The value of education has been substantially degraded. There’s the education certification and then there’s the experience part of college. The experience part of it is down to zero, and the education part has been dramatically reduced. You get a degree that, over time, will be reduced in value as we realize it’s not the same to be a graduate of a liberal-arts college if you never went to campus. You can see already how students and their parents are responding.

It’s not crazy to say that could be the most important developments of the next generation, because student loans have been one of the biggest burdens of the past generation.

On the tech front, Microsoft CEO Satya Nadella said “two years of digital transformation took place in two months,” this spring.

What does that lead to?

Almost every business in the world is now asking how they can work more efficiently, save a few bucks here and here, and do more of their business online.

What does that lead to?

Tens of millions of people who lost their jobs, and hundreds of millions of people who kept theirs but worried, will be permanently scarred into thinking about risk, opportunity, and safety nets differently than they were six months ago.

bleakest.

It might be one of the only silver linings of 2020.

In October, 1933 an Ohio lawyer named Benjamin Roth wrote a diary entry about the economic carnage devastating his town. A quarter of the town was unemployed. Farms were bankrupt. Surviving businesses used new efficiencies to get by with fewer workers, exacerbating unemployment.

Roth tried to remain optimistic.

“I am confident that new inventions and scientific discoveries will remedy this situation,” he wrote.

At nearly the same time he was writing an electrical engineer named Edwin Armstrong introduced a new radio technology to David Sarnoff, an RCA executive struggling to hold together an industry smashed by the Depression.

What does that lead to?

Sarnoff later recalled the conversation, as told in the book Man of High Fidelity:

I don’t think anyone knows the answers.

“Why are you pushing this so hard?” asked Sarnoff.

All we know is that the most important changes of the last 100 years have taken place during upheavals. And we’re currently in the biggest upheaval of the last 100 years.

“There is a depression on,” said Armstrong. “The radio industry needs something to put life in it. I think this is it.”

We know that creativity and discovery surge when people are forced to find, rather than just want, new solutions.

We know that an irony of technology is that economies often make their greatest leaps forward when the outlook is

The technology – FM radio – transformed 20th century communication.

Maybe we’ll be so lucky.

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GET READY FOR LYNX LIVE 5–7 OCTOBER LYNX Live is a digital education, inspiration and networking experience with three days of MENA focused content from 5–7 October. Aired on LIONS Live, the programme will include masterclasses, inspirational talks, messages from the community, debates, interviews and roundtables. Free for everyone.

Explore the programme and speakers at lionslive.canneslions.com/lynx-live

The power of collaborative advantage

Seen in the picture from L to R: Suresh Dinakaran, Chief Storyteller, ISD Global, Santosh Varghese, Vice President, Toshiba Gulf FZE, Sunjeh Raja, Founder & CEO, ICCA “ None of us is as smart as all of us.” - Ken Blanchard Blanchard couldn’t have put it better. In an increasingly commoditised world, with a surplus of goods, services, information and a deficit of time, attention, loyalty and resources, the best way forward for brands to create Green Swan moments is to recognise and respect the true power of collaborative advantage.

Exactly what the coming together of powerhouse brands Kioxia( exclusively distributed by Toshiba Gulf FZE in the MEA region) and ICCA(International Centre for Culinary Arts), purports to achieve. “ We might be functioning as heterogeneous verticals but there is always the opportunity to come together to connect, engage, influence and positively impact a homogenous audience that both stakeholders are seeking to address.

Kioxia, as a brand means to be at the very forefront of research, innovation and new age technologies that positively enhance society and the planet. The legacy of the Toshiba culture over the past 150 years has all been about meaningful innovation and disruption and Kioxia’s coming together with ICCA(International Centre for Culinary Arts), one of the best culinary institutions in the region is a natural follow through, “ avered Santosh Varghese, Vice President, Toshiba Gulf FZE. Upon introspection, this collaboration would come across as being path breaking and redefine business models. Food, as a category, is one of the most widely travelled content especially on Social Media and a top draw memory brand like Kioxia, offers the critical aspect of securely and smartly storing your highly desired content. And one of the best quality food content is created at ICCA. In short, the last mile

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meets the best smile for content creators and aggregators. “ We at the ICCA(International Centre for Culinary Arts) are driven by a single minded ambition of setting the Gold standard in Culinary Training & Media in the region.

Over the last decade and more, that has been reflected in our partnerships with some of the best global brands both within and outside the F&B, Hospitality industry. We respect and recognise the aura, the power and the immense value a mega brand like Kioxia brings to the equation and we look forward to combining forces and competencies to create some indelible memories “, echoed Sunjeh Raja, Founder & CEO, ICCA(International Centre for Culinary Arts).

“Never doubt that a small group of thoughtful, committed people can change the world. Indeed. It is the only thing that ever has.” Margaret Mead

“ Analogous inspiration is at the foundation of our mindset and thinking at ISD Global. That means knowing and responding to the fact that the best ideas for brands come from outside their core verticals. Looking within to understand what one is without. We strongly believe that the best beginning is always a coming together of minds, culture and possibilities. We, at ISD Global take great pride and pleasure in orchestrating this collaboration between two superbrands - Kioxia and ICCA(International Centre for Culinary Arts) and immensely thank the two leaders behind them Santosh Varghese and Sunjeh Raja for being so visionary and supportive. The next, new future for brands and organisations will be all about being ‘ future back ‘(where do we see ourselves already), rather than the conventional ‘ present forward ‘(where do we go from here), and this partnership bears the stamp of that mindset and thinking “, shared Suresh Dinakaran, Chief Storyteller, ISD Global.

Great things in business are never done by one person.

They’re done by a team of people- Steve Jobs Here’s to the team. Here’s to the future.

Gen Z is better at recalling ad content than older consumers

By Warc Staff

Gen Z consumers are often considered to have lower attention spans than older generations, but a new global study has revealed they recall advertising content better than millennials and Gen X, particularly when it comes to skippable video ads that last under two seconds.

In addition, Gen Z consumers record a high rate of brand preference, as measured by their likelihood to prefer one to three brands above others in a given product category, and are attracted by a brand’s reputation on the environment, its customer care and product exclusivity.

These are the key findings from a survey that Kantar Media conducted in April on behalf of Snap, the parent company of messaging app Snapchat, involving 12,000 consumers in six countries – Australia, Canada, France, Saudi Arabia, the UK and USA. Although Gen Z participants – defined as consumers aged 13 to 24 – spent less time with skippable ad and nonadvertising content then millennials or Gen X, they recalled it better. Some 59% of Gen Z recalled the advertiser correctly compared with 57% of millennials (aged 25 to 39) and 47% of Gen X respondents (aged 40+).

And they proved to have significantly higher recall when

shown skippable video ad content of less than two seconds’ duration – 55% compared to 46% of millennials and just 26% of Gen X and baby boomers.

The research also noted that Gen Z consumers are more likely than older generations to believe that brands allow them to express themselves. For example, two-thirds (65%) of Australian Gen Z respondents say they use brands to express who they are, compared to just 40% of Gen X and baby boomers.

And when it comes to selecting their favourite brand, some 60% of Gen Z consumers refer to the importance of recommendations from family and friends, compared to just over half of millennials (52%) and just 39% of Gen X and baby boomers.

Commenting on the findings, Andy Pang, head of international measurement & insight at Snap Inc., said: “This study proves that Gen Z audiences are far faster at processing information than we might have given them credit for.

“This faster speed of cognitive processing means that brands who want to engage Gen Z need to tailor their video creative and focus on communicating brand and product messages as early as possible.”

Why nostalgia marketing is the next big idea for your company

By Mark Schaefer

I was cruising through Netflix and noticed that a series called Cobra Kai is the number one trending show on the popular streaming service. On the surface, this seems like a very improbable scenario.

Cobra Kai is follow-up to the 1984 movie Karate Kid and follows the story of the now middle-aged teen stars of that popular movie.

The original movie appealed to children (and started a karate revolution) but this series with sexual references, drug use, and violence is more aimed at adults.

The show is cheesy and definitely has a 1980s vibe in its music and aesthetic. It’s very predictable and really not that

good.

How in the world is this show number one right now among thousands of highly-rated Netflix choices?

Today I’ll explain why and predict that this is just the beginning of a booming trend based on nostalgia.

Nostalgia marketing is next First, let’s get on the same page about what I mean by nostalgia.

Nostalgia is a sentimental longing for the past, typically for a period or place with happy personal associations.

An example of a company using nostalgia to evoke these

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33 positive emotions would be coming out with a “retro” edition of a product that evokes childhood memories.

conditioning an entire generation with symptoms of posttraumatic stress disorder. I agree with him.

An example: Last year, to commemorate its history, Pepsi reintroduced limited edition retro cans. The can images, which date back to the 1940s through the 1980s, were part of Pepsi’s “Celebrating Every Generation” campaign.

This is a mega-trend with not-so-obvious implications for businesses and marketers. Except for this: The world is going to crave comfort from familiar products for a LONG TIME TO COME.

Recognizing something from your childhood may stir fond memories of what Pepsi meant to you and possibly spur a purchase to recapture that feeling.

We can observe this trend emerging in the soaring sales of comfort foods such as ice cream, breakfast cereal, and macaroni and cheese.

Nostalgia marketing is not a new idea, but it’s not a common one, either. If you search for “nostalgia marketing” there isn’t much available in terms of case studies and best practices.

But I think that is about to change. This is an idea whose time has come because of the intersection of two different trends.

The trend is showing up in this cottage core trend Brooke Sellas and I discussed on a Marketing Companion podcast episode and parodied on a video. People are re-discovering and celebrating the simple comforts and aesthetics of farm life, flowers, gingham dresses, and home-grown vegetables.

Let’s dig in.

Trend One: The golden age of children’s media Up until the 1980s — and the advent of cable programming — there was not a lot of direct marketing to children. I think back to the comic books I loved as a child. What was advertised in the back? How to build muscles, or grow rich selling Christmas cards door-to-door (which was one of my early entrepreneurial efforts!). I’m not too nostalgic about that!

Likewise, most of the early children’s television programming like Sesame Street or Mr. Rogers was on PBS — no ads. And at prime time, most kids prior to 1980 were consigned to watch whatever network programming mom and dad chose for the evening.

So let’s say that the “nostalgia stream” of childhood programming and products was very limited.

People are seeking comfort from the familiar and this value is extremely important for companies to begin to consider and process.

This adds up to nostalgia marketing It’s easy to imagine how the intersection of these trends might mean that people are craving soothing, nurturing emotional connection to happier childhood experiences.

Great branding is about creating an emotional connection between your products/services and your audience.

I think we are about to enter a boom time for emotion-laden products like …

• Retro clothing • Toys and games from the past

Until cable. Then … BOOM.

• Comfort foods associated with childhood

Cable TV introduced fully-dedicated channels for youthoriented cartoons, movies, nature programs, and educational options. This increased exponentially with the beginning of the internet and exponentially again with smart devices when children could watch anything, any time, and anywhere. An entire media ecosystem was created for kids.

• A renaissance in 1980s and 1990s music, TV, and movies

So, starting about 30 years ago, the golden age of children’s’ programming and youth-oriented product marketing began.

The Millennials who grew up in this era have an incredible abundance of media-driven emotional connections compared to any other generation.

If nostalgia means longing for a happy childhood place or experience, you could say Millenials have been thoroughly prepped for it.

• Any sort of merchandise and antiques from those periods — lunch boxes, magazines, trading cards, posters, etc.

I also believe that we will see familiar imagery, fonts, and design trends from past decades come back for a generation seeking the comfort of a happier time.

And this, ladies and gentlemen explains why a rather dumb show like Cobra Kai is at the top of the Netflix charts right now. We want to forget about the sucky world and cheer for the Karate Kid one more time.

Trend Number Two: The world sucks

As I said, nostalgia marketing is not a new idea, but it’s about to become a HOT idea. Keep your eyes open for product launches, re-launches, re-marketing, and design aesthetics that evoke happy childhood memories. I’ll leave you with this:

One of the trends that a lot of people are NOT talking about is the long-term emotional distress covering our world with a persistent vice grip.

Now, I am going to go spend time looking over my old Pittsburgh Pirates yearbooks I collected as a kid. I sort of need that comfort right now.

Nearly every person, in every country, is suffering in some manner and grieving the loss of freedoms, traditions, lifestyles, and human connection.

Mark Schaefer is the executive director of Schaefer Marketing Solutions and COO for B Squared Media.

He is the author of several best-selling digital marketing books and is an acclaimed keynote speaker, college educator, and business consultant.

My friend Martin Lindstrom predicts that the pandemic is

15 Persuasive Copywriting Techniques That’ll Boost Conversions

By Brian Solis

For as long as it has existed, people have been trying to replicate the magic of Silicon Valley, to capture some of its ineffable ability to produce true innovation—inventions that have changed many people’s lives for the better. But despite its real claim to innovation, Silicon Valley has also come to represent something less tangible. Andrew Russell, professor of history and dean of the College of Arts and Sciences at SUNY Polytechnic Institute, and Lee Vinsel, a professor in the Department of Science, Technology, and Society at Virginia Tech, call it “innovation speak.”

The two are the author of a new book, called The Innovation Delusion, that explores the deep problems with the Silicon Valley-inspired mindset that shiny new things can solve all of society’s problems. Instead, Russell and Vinsel advocate for what they call a “maintenance mindset,” which focuses on keeping the technology we already have up and running rather than always looking for the next new thing. Russell and Vinsel run a research network and conference series called the Maintainers, which focuses on values of upkeep, repair,

and sustainable labor.

While Russell and Vinsel believe that we need a place in culture for people to take risks and try new things, they see danger in exporting a fail-fast mentality to places that aren’t suited for it, such as government, traditional businesses, and infrastructure. In those areas, they argue that the aspiration to innovate is simply a delusion.

The following interview has been edited for brevity and clarity.

Fast Company: What is the innovation delusion and how do you think it’s impacting society right now?

Andrew Russell: The innovation delusion is the mistaken notion that the creation of new things, cloaked in the buzzwords of innovation, are the best and only path to resolve all kinds of problems that we face in society, from our personal lives to our businesses or universities to infrastructure at large.

Lee Vinsel: We like to make a distinction between what we call actual innovation and what we call innovation-speak, and

innovation-speak is this way of thinking and talking about technological and business change that’s developed in the last 50 years or so. There’s two problems. The first is that it doesn’t produce results, necessarily. We’re talking more and more about innovation, but there’s no evidence that there is more and more innovation. And meanwhile, it also distracts us from really crucial things in our culture, including just the work of keeping things going and the people who do that work.

FC: So this talk about innovation versus the actual practice of innovation—why is it important to differentiate between those two, and how did that distinction get collapsed?

LV: I think the reality is that the way we’ve come to talk about innovation and technological change is a theory of society that was developed by economists and business-school thinkers and consultants since the post-World War II period.

I think if we don’t make that distinction, we just take it as natural that there’s some kind of tight alignment between the talk and the thing.

AR: One reason why innovation-speak has become so prominent is in part a product of technological change and actual innovation being so successful and having such an outsized impact on people’s lives. The examples that we like to use include medicine, whether it’s things like vaccines or a nonpharmaceutical intervention—standards of cleanliness in the hospitals that are a century old. Innovations or inventions in technology as well, whether it’s electric power, internal combustion engines, airplanes, digital technologies closer to the present—those things have made measurable impacts on people’s lives and society and the national global economy.

But it’s easy also to overstate those things and then just to extrapolate on those positive examples and to say, we have a template for what we should do in all times and places.

A SILICON VALLEY PHENOMENON FC: Where does Silicon Valley fit into this, both on the real innovation side and on the innovation-speak side?

Silicon Valley Is Beautifully At The Center Of Both Actual Innovation And This Way Of Talking.”

LEE VINSEL LV: I think innovation-speak—this way of talking—really heats up in the ’70s and ’80s. Silicon Valley sits both at the hub of actual innovation and innovation-speak. When people start writing books about Silicon Valley in the late 1970s and early ’80s, it’s basically like how-to manuals for local planners to recreate Silicon Valley, because there is so much economic growth and technological change happening there. It’s seen as the bright thing that we should all emulate. And it’s everywhere from the Midwest to New York City with Silicon Alley to Australia with Kangaroo Valley—everyone wants to recreate Silicon Valley.

On the other hand, there’s always been so much hype around digital technology. The technology has never actually lived

up to the hype to the degree that Silicon Valley now is the place where all these new ventures are constantly producing hype about the potentials of their technology. And that’s often couched in terms of innovation. I have a friend who works at Bloomberg news—every press release they get from companies talk about how innovative the company is, you know? So I think that Silicon Valley is beautifully at the center of both actual innovation and this way of talking.

AR: There’s an element of these emulation manuals or the attempt to replicate the special sauce or the secret sauce as people say about Silicon Valley—there’s some huge holes in those stories. We’re trained as historians, and we’re trained on the tradition that looks at technological systems holistically, whether it’s trains or computers or software. The emulation manuals about how to make your own Silicon Valley usually leave out the unsavory aspects of Silicon Valley and the actual keys to its success, which include massive federal subsidies, massive amounts of undocumented labor, huge disparities between the haves and the have-nots, irreversible environmental damage, the list goes on and on. Scholars have written about this. That work tends to get dismissed by people who were looking to get funding or just mobilize people around this vision of just getting the good and not reckoning with the costs.

FC: The book is framed around two visions. On one side, there are these values of “innovation” and progress and growth.

And then on the other side, there’s this other core value of maintenance and the maintenance mindset. Can you talk to me about how these two buckets work in opposition to each other, in particular around growth and the cost of growth?

LV: Part of the reason that distinction between actual innovation and innovation-speak is so important to us is because we’re not Luddites. We like our fancy new gadgets, and we like technological progress. But we are trying to rebalance the way we think about these things. As we build out these modern systems, whether it’s electricity or the internet, or all of the businesses we built on top of the internet, like Amazon Web Services, those are all things that we have to then keep up if we want to keep that quality of life. I think if we focus too much on the shiny new thing, and in that introduction of new stuff, we can easily overlook that important labor.

Innovation And Maintenance Don’t Have To Be Opposites. They Can Work Together.”

Andrew Russell AR: It’s not an either/or but can be a both/and. Some of the firms we’ve interviewed and the people we talked to who work in maintenance really rely on new technologies or innovative approaches, whether it’s using artificial intelligence and predictive analytics and the internet of things—all these terms that are buzzwords if they’re not in context. But they use them for a particular purpose, which is to keep systems going. There can be a kind of resolution between these two concepts. Innovation and maintenance don’t have to be opposites. They can work together. But what’s needed is to

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37 take a step back and think about how they can work together instead of just putting blind faith in the shiny object. And then if that happens to the detriment of everything else, that’s where the problems appear. That’s when you see bridges collapsing, that’s when you see schools or organizations falling apart due to inattention of the basics—not the new stuff, but the basics that keep things going.

A SYSTEM BUILT THROUGH INCENTIVES FC: To your point around how these two pieces can work together, the Silicon Valley software giants, Google, Facebook, Amazon, etc., are actually really good at maintenance. A lot of what they do is just to keep their services running and reliable. But you also highlight some of these companies’ problems with growth and focus on always coming up with something new. How do you square these two? Obviously these companies are huge and so, you know, they contain multitudes. Some of these companies that maybe are the hallmark of the kinds of downsides you were just describing are also really good at maintenance.

AR: They have incentives to behave the way that they’re behaving. I think that’s a big part of the problem. So they have quarterly earnings reports that traditionally have been really the yardstick for how they perform. There’s been some pushback about using quarterly earnings reports in that way.

Those companies have used a playbook that really features new stuff, new stuff, new stuff all the time. I think if they felt that it was a better strategy to attract investment through showing off their good maintenance practices, they would be doing more of that, but the incentives are skewed. I think they’re responding somewhat in a rational sense to the incentives that they have in front of them.

LV: I think your own point about the fact that these are enormous entities at this point is right on. The most profitable part of Amazon for a long time has been Amazon Web Services, right? That’s a maintenance practice. They’re competing on uptime and quality of service. I’ve met a lot of Amazon engineers that are just keeping the ship up, on track, and afloat. But that’s very different than the image we have of Bezos and him being into space and roboticized warehouses and all these things. When you get these very large companies in that way, there’s the upper end, where people are focusing just on the new stuff. And then most of how they’re making money is on these very boring processes.

That’s very different than the startup world. If all you’re doing is trying to create something that you can sell to one of these companies, you have very little incentive to think through the long-term costs or even the maintenance costs of the thing you’re trying to develop. So it’s how these different-sized entities are reacting to incentives.

THE RISKS OF EXPORTING STARTUP CULTURE FC: So this is really fundamentally about changing incentives.

What is a better way of thinking about incentives for a new company, or someone with what they think is a brilliant idea? There’s the incentive of changing the world, which is

cliché and overwrought at this point. There’s being bought by a giant. And I guess there’s growth. How does long-term thinking play into that from a more practical perspective?

LV: I’m actually okay with like the startup world being the startup world. I don’t necessarily want to change that. That’s okay by me that you have this space of like high risk, high reward, people trying out new things.

AR: I agree with Lee that the startup world is going to be the startup world and changing that incentive structure is not what we’re trying to do here. But what we do try and point out in the book is to ask people to answer for themselves the question of what do they find to be valuable and what do they want to preserve. If I was to coach an entrepreneur, someone making a startup, I think the question for the past generation or so has been, what do you want to disrupt? You could imagine a different way of asking the question: What do you want to preserve? It feels like there’s some space there in the goals of people doing startups to ask questions a different way and to try and provide some value for people in different ways.

Ge Tried To Model Itself On Silicon Valley Startups? That Is Just Delusion In The Deepest Way.” Lee Vinsel LV: It’s more of when we start to model other parts of our culture—whether it’s General Electric or universities or government, when you start to model all these other parts of our culture on Silicon Valley startup culture, that’s where we really are running a risk. GE tried to model itself on Silicon Valley startups? That is just delusion in the deepest way. But two years later, their stock was in the garbage and it didn’t work at all. I think that with design thinking and all these things where we’re all supposed to be like Silicon Valley startups, that’s the risk. The risk to the broader culture is that we all think we’re supposed to be like a bunch of 20-yearolds living on pizza who are going to burn out in a couple months.

AR: I think what we want to do is to give [companies like GE] an out in a way, and to say, we really need to pay more attention to the things that people have taken for granted, to long-term strategies. We shouldn’t be distracted by the allure of being what GE tried to call itself: the 124-year-old software startup. We should just recognize that it doesn’t feel right because it’s not right. And it’s okay to just be 124 years old and make really good products and pay attention to the basics and reward and compensate the managers and the staff in the company that create experiences or products that people can rely on. Our book is really trying to make that case, not only for a company like GE, but to say, we understand, we all understand intuitively that [maintenance] is desirable.

We exercise or we try and eat right. We try and keep up with our gadgets and our stuff around our houses, because we

understand that maintenance and upkeep are important. So let’s just extend that knowledge into other walks of life that are, as we try and show, a little out of bounds and skew too much towards this delusion that new stuff and innovation will just save our bacon.

FINDING BALANCE FC: You’ve said that some things are out of balance and skewed toward this delusion. What pushes us back into balance? Is it regulation? You write in the book that the champions of innovation really don’t want to be regulated, and their primary reason is that it will stamp out innovation.

What role do you see regulation playing, particularly within Silicon Valley innovation-speak-land, and with the big tech companies where it’s primarily focused right now?

AR: Regulation is an expression of what the society deems valuable. With companies, typically regulations have been especially effective in trying to force companies to reckon with externalities, things that they just don’t have to deal with.

So pollution is the classical example, but there’s others, like safety. I think we’re not the only ones pointing at some of the cultural damage and societal damage. That’s what you see when you see these guys marched onto Capitol Hill. People are increasingly concerned about those aspects of social media companies, misinformation, all that good stuff. We get

the regulation we vote for in a sense. That’s how the system works. It’s kind of a checks and balances in my view. In the last generation, the way it’s been set up is to let the private sector rip and then deal with problems afterwards. I think we’re in a moment where that is being called into question.

How much state and federal regulators and international regulators change that mode of operation is kind of an unanswered question right now.

LV: I think the other structure is financial. There’s been a lot of chatter about what’s called shareholder value, which is a philosophy that was developed in the ’80s. It becomes a financial incentive in a lot of ways, which is just to maximize the value for stockholders on a quarterly basis. That’s all about growth, right? It’s all about the rush for growth. This is something too that’s being questioned. The Business Roundtable of all places came out and said, “This is not sustainable. This doesn’t work for society.” I think that’s the kind of stuff that has to change. If you can take your foot off the gas a little bit and stop worrying about growth, growth, growth, growth, then you can have some more longterm thinking about what you need to do to sustain things environmentally as well as organizationally. You can also start to reward those people who are doing that sustaining work and not just focus on the bright shiny innovators within the company all the time.

Why entertainment and gaming brands should partner

By Warc Staff

Entertainment brands that partner with gaming properties can generate great PR and a positive halo for the brand in the short term, while also shifting long-term brand perception, says a Havas executive.

In The WARC Guide to Marketing in the Gaming Ecosystem , Funto Debo-Aina, Account Director at Havas Media Group, explains how, done right, such partnerships successfully tap into valuable audiences, who tend to be fans of popular culture in general.

And, he adds, “It can shift long-term brand perception to being less static, more modern and dynamic”.

Crucially, though, marketers need to disabuse themselves of the notion that gamers are a homogenous group. It is only by understanding the variations, Debo-Aina explains, that brands can find the opportunity to integrate bespoke messaging.

“As with film, books and music, genre is a key consideration,” he observes. “There are subsets within subsets – for example, platform of choice. Gamers may use a console (Nintendo, PlayStation or Xbox) or favour the PC.” Then there’s the mindset to consider – hardcore gamer or mid-core enthusiast – in order to strike the right tone of voice.

The games industry itself has long moved on from just making

its money from product sales, as developers have created games which have the capacity to introduce advertising without being disruptive and devised a model that encourages players to perform microtransactions within games – where people spend money on, for example, character or weapon skins.

“It has been a balancing act for the games industry to find the sweet spot with regards to the business models they adopt, to deliver a premium gaming experience without an associated price tag,” says Debo-Aina.

And he singles out Epic Games, the publisher of Fortnite, among other games, as one outfit that is delivering an experience that works for both gamers and entertainment brands – with marketers now able to create skins for their brand to use within Fortnite.

“It’s this model which games publishers can emulate to lead to more powerful brand partnerships in the future,” he states.

Fortnite, he continues, “has tapped into the zeitgeist with pop culture partnerships, embracing its identity as not only a popular gaming title, but an entertainment branding vehicle.

“This allows for far more intimate experiences between entertainment brands and the consumer, building positive sentiment towards both parties.”

10 Dos and Don’ts of Measuring Lifetime Value

By Lara O’reilly

Lifetime Value (LTV) has always been a great tool for prioritizing marketing investments. The concept is simple: imagine you have two customers, John and Dave. John is a frequent shopper, shops high margin items and produces $2,000 annual profit for the company. Dave, on the other hand, shops once in a blue moon, is not loyal to the brand, frequently calls the Call Center and produces $200 annual profit for the company. Having this knowledge, it makes sense to spend more marketing dollars to acquire and retain a customer like John instead of Dave. Customer Lifetime Value is a North Star metric that guides investment decisions for the Chief Customer or Chief Analytics Officer.

One of the most brilliant examples of LTV is a use case from a telecommunications company that uses it to assign “heart” scores to each of their customers based on their LTV. Customers with five hearts are most valuable and get the most attention and care. On the other hand, customers with one heart are recognized as largely unprofitable customers.

The telecommunications company continuously learns from these profiles and avoids wasting marketing dollars acquiring customers with the lowest heart scores. Each customer is scored throughout the life cycle, from acquisition to onboarding to maturity. Churn offers for a given customer are determined based on how many hearts that customer has.

Dos Make sure you have a well-defined LTV metric.

It’s puzzling to see how many companies still look at just “number of new customers” or “cost per account” to determine success for their customer acquisition programs. CPA in absence of LTV is a myopic metric that leads to suboptimal decisions: it only looks at customers at a singular point in time What if a big percentage of new customers acquired churns within first 90 days? Is that the outcome we want to create?

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Make sure the analytic methodology is robust and does a good job of attaching a value number with reasonable degree of accuracy.

You don’t need to use the most sophisticated survival modeling methodologies by customer segment here, but the underlying methodology needs to be robust in differentiating between low value and high value customers.

Use it to drive marketing investment decisions to create impact.

Without action, there is no impact. Make sure LTV project doesn’t end up as a fancy PowerPoint deck on the CEO’s desk.

Develop LTV in a phased fashion.

Get a basic, robust version of LTV out there and start testing it and increasing the sophistication over time through machine learning techniques such as survival modeling for determining expected life of a customer.

Tie the development of LTV to specific use cases that will increase revenue and profits for the business.

The project is almost guaranteed to fail if you run it as pure technical project without strong connection to business problems or use cases that the C-Suite cares about.

Don’ts Don’t overcomplicate it.

I see examples of companies that spend months to arrive at the perfect methodology and miss opportunity to create quick wins.

Don’t just apply to existing customers.

LTV is a concept that could guide the investment decisions across the entire customer lifecycle. Some of the most impactful LTV solutions I have seen were focused on new customer acquisition Don’t put precision ahead of ability to use to make better customer investment decisions.

Who cares if LTV of a given customer $1,400 or $1,405? The reality is, nobody really knows. The ability to use to make better decision and put the customer investment decisions is more important. Using 80% solution creates better outcomes than not using any solution.

Don’t ignore the referral value.

For some businesses, the referral could be quite significant, and this will continue to be an important value dimension for many businesses where word-of-mouth matters so much for expanding the customer base and driving growth. Referral value typically correlates well with direct transactional value.

Don’t forget about the longer-term impact.

Most of the LTV metrics are based on short-term profit potential of customers like the expected spend over the next 12 to 24 months. This is a great place to start but how about if the longer term (downstream) impact of these decisions?

A great example for this is a customer who buys diapers on a multi-category ecommerce site. In the short term, the ecommerce company may not make a lot of profit on the sale of diaper which happens to have low margins but the diaper purchase could be the catalyst of establishing a habit for repeat purchases which could bring lots of profit to the business.

HOW BRANDS CAN ADDRESS THE COMING PARADIGM SHIFT

By WARC Staff

Lockdowns have lasted longer than the 66 days research suggests it takes to form a new habit – so 2020 really will be an inflection point when we witness a paradigm shift.

Writing for WARC, Edward Lee, Executive Strategy Director, OMD EMEA, argues that the term ‘paradigm shift’ – which suggests that life as we know it won’t be the same in future – is applied far too loosely, to the latest tech, or product, or platform.

Yes, there are frequently new behaviours and changes in attitudes, but there is rarely anything that can be described as a fundamental change.

He adduces two reasons: “The first is because we hold entrenched attitudes and behaviours close within us, which in turn defines our identities and so are reluctant to fundamentally change, and the second is that these adoptions are gradual, which does not necessitate a sharp course correct.”

COVID-19, however, has overturned those assumptions, halting much of what we have taken for granted, imposing new ways of living our lives and creating new boundaries.

The new paradigm is uncharted but Lee attempts navigation through an “understanding of human truths and their

associated tensions brought about by the pandemic”.

Lee has previously written about the tensions that are created by the gap between situational change and reality, between what is possible and what people actually do.

Here, he identifies four main tensions that act as drivers of the new world we all face: Economic tension: People are under increasing disproportionate economic pressure but still keen to spend, leading to new patterns.

Attitudinal tension: People want to try new things but also stick to what they know.

Social tension: People have a heightened desire to go out and be social but are anxious about being around other people.

Habitual tension: People want to go back to certain known routines but are embracing new rhythms in our lives.

Brands will need to assess each of these and understand the implications for them if they are to meet future consumer expectations across a range of areas, from user experience to media strategy.

How Anticipation Warps Our Sense of Time

By Derek D. Rucker

Earlier this year, Derek Rucker and his family visited Disneyland. Their hotel was a quick walk from the happiest place on Earth—a trip that took the same amount of time whether they were arriving or leaving. But that’s not how it felt.

“When we were walking to the park, I thought, wow, it’s taking a long time to get there,” Rucker recalls. “When it was time to go home, I remember turning to my wife and saying, ‘Wow, our hotel is really close.’”

Many of us have likely experienced the logic-defying sense of an outbound trip seemingly taking much longer than the same trip in reverse. (This writer vividly recalls the car ride to the SATs—arguably the opposite of Disneyland—stretching on forever, while the trip home went by in a snap.)

The feeling is so common, in fact, that psychologists created a name for it: the return trip effect, or RTE. But they didn’t

know exactly what caused it, and they were curious. After all, the perception of time is an important element of our social environment, and influences behavior in ways big and small.

Will you find time for that workout or doctor’s appointment?

It depends, in part, on how long you imagine it will take.

In 2011 a group of researchers proposed one idea: perhaps the RTE is caused by greater familiarity with our homes as compared to our destinations. Because we know our house and neighborhood so well, “home” seems to take up a greater geographical area in our minds. As a result, it takes a long time to feel that we are away from home and that a trip is well underway.

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Yet, we sometimes experience the RTE even when both the point of origin and the destination are familiar. So something else must be going on, reasoned Rucker and his collaborators—Zoey Chen of the University of Miami and Ryan Hamilton of Emory University.

The (Virtual) Return Trip Effect

The something else? Anticipation. In a new paper, the researchers show that the return trip effect is strongest when people have a powerful sense of anticipation about their destination—whether that anticipation is positive or negative: Disneyland or the SATs.

take longer for participants to arrive at their destination than to return home.

Testing the Anticipation Hypothesis In an initial study, Rucker and his coauthors created a simple survey that recruited 117 online participants and asked them to recall a recent short trip from home.

Participants estimated how long it took to reach their destination and how long it took to return home. Participants also rated how excited they felt about the destination.

Results showed that participants, on average, estimated their outbound trip took 10 percent longer than their return trip. That suggested people experience a modest return trip effect much of time. Importantly however, this discrepancy increased with excitement about the destination: the greater the excitement, the researchers found, the greater the RTE.

Some aspects of the first study made it difficult for the researchers to be certain that anticipation was causing a RTE: maybe it really did

So the researchers found a way to hold the length of both legs of the “trip” constant. In a second study, participants waited to arrive at a virtual destination—a web page.

Of course, waiting for a web page to load is different from in-person travel, but Rucker expected to see the same forces at work. “The return trip effect isn’t really about physical distance. It should be generalized to other situations—any kind of experience that involves waiting for time to pass,” he says.

“[O]ur work suggests that psychological states and environmental cues change how consumers perceive the passage of time.”

— Zoey Chen

The researchers randomly assigned 195 participants to one of two conditions. A “high-anticipation group” was told they would be watching a funny, widely liked video, which ended up being a Saturday Night Live sketch. A “low-anticipation group” was told they’d be seeing a boring, generally disliked video, which ended up being about accounting software.

seconds after it.

Good or Bad, Anticipation Is Key

Both groups saw 15 seconds of an animated spinning wheel meant to simulate a video loading (the virtual “outbound” trip), followed by their video. After watching the video, another spinning wheel appeared for 15 seconds (the virtual “inbound” trip), followed by a survey.

For the final experiment, the researchers returned to their original setup, asking 410 online participants to estimate how long an actual trip to and from an event had taken.

But this time, participants were randomly assigned to recall one of four kinds of events: a positive and highly anticipated event; a positive but not very anticipated event; a negative and highly anticipated event; and a negative but not very anticipated event.

Participants were asked to estimate how long it took for both the video and the survey to load. They also indicated how much they expected to like the video—a measure of anticipation.

All participants were then asked, “Do you feel it took longer to get to your destination or to return home?” They rated their answers on a scale from one to seven, with seven indicating a greater return trip effect.

Not surprisingly, participants who expected to see a funny video rated their anticipation higher than those expecting a boring video. What’s more important, the researchers saw a stronger RTE in the high-anticipation group than the lowanticipation group. The high-anticipation group estimated the “outbound” trip to take an average of 14.81 seconds and the “inbound” trip to take just 10.18 seconds. The difference was smaller in the low-anticipation group: an estimated 12.36 seconds on the outbound journey and 10.46 seconds on the return trip.

The results again suggested that regardless of whether the event is positive or negative, anticipation magnifies the return trip effect. Participants in both the negative and positive highanticipation groups exhibited a greater RTE than their lowanticipation counterparts.

Valence or Anticipation?

But the study left the researchers with a question: What if the feeling of positive excitement participants felt while waiting for the funny video to load explained the result? In other words, was the return trip effect related to valence—the emotional tone of the experience—or anticipation?

“It’s a call for researchers to pay greater attention to how consumers understand or perceive the passage of time in their environment.”

— Prof. Derek Rucker So they designed an experiment that evoked a sense of negative anticipation. The study was similar to the previous one, except that all participants saw the same video—an art film—but were lead to have different expectations. Everyone was told that the video was disliked by others; half were then told the video was boring (low anticipation), and the rest were told it was odd (high anticipation).

Once again, the high-anticipation group thought the loading time was longer before than after the video—even though they were expecting to dislike the video. They estimated a load time of 19.96 seconds before the video and 9.68 seconds after it. The low-anticipation group estimated a loading time of 14.45 seconds before the video and 12.85

About Time The research pins down the role that anticipation plays in explaining a long-observed but somewhat-mysterious phenomenon. More broadly, it offers new insights into how we experience time, reinforcing just how malleable and contextualized our perception of it is.

Given how important time is to busy consumers—whether we’re standing in a checkout queue, waiting for an app to load, or waiting for a package delivery—companies might benefit from thinking about how their consumers experience time and how they prefer to think about time. (For instance, Kellogg operations professor Robert Bray has found that customers prefer to get delivery updates later as opposed to earlier in the delivery process.)

Rucker hopes more research will investigate this topic.

“It’s a call for researchers to pay greater attention to how consumers understand or perceive the passage of time in their environment,” he says.

Coauthor Chen shares a similar view. “We often think of time as objective and fixed—60 seconds is, and should feel, longer than 59 seconds. But our work suggests that psychological states and environmental cues change how consumers perceive the passage of time. More research is needed to unpack and identify other relevant variables that influence time perception.”

Until then, you can plan experiencing long outbound trips— whether to the lake house or the dentist office—and speedy journeys home.

His primary research focuses broadly on the topics of social hierarchy, compensatory consumption, persuasion, and consumer behavior. His work asks, and seeks answers to, what makes for effective advertising and what motives underlies consumer consumption.

How to Make Ads That Even Savvy Customers Trust

By Kent Grayson

People are more skeptical than ever about marketing—but that doesn’t mean they distrust all of it.

Your company is debating a marketing strategy for an

Reports or do you want to remind customers that the sale

upcoming sale. Should the ad campaign stress that your

price will only be offered for a limited time?

products are routinely given high ratings by Consumer

If combating skepticism is a goal, touting your Consumer

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51 Reports rating might be the way to go. New research from a Kellogg School marketing professor and a colleague shows that customers find some marketing tactics inherently manipulative,

but

others—like

third-party

rankings—

legitimate and informative.

This finding is more nuanced than previous research, which has generally espoused a more narrow marketing industry mantra: customers implicitly distrust all advertising strategies, because they know they are being persuaded to buy something.

“What we have done is challenge the stereotype of marketing as being perceived as wholly deceptive,” says Kent Grayson, an associate professor of marketing.

Are Ads Always Manipulative?

So which marketing tactics do people tend to trust?

Grayson and his colleague Mathew Isaac of Seattle University (a former Kellogg PhD student) began their research by asking more than 400 consumers to complete one of two online surveys about 20 different advertising and sales tactics.

In one survey, participants scored these tactics for 12 traits, six of which were positive and six negative. In the second survey, people were asked to pick one word out of a list of 12 that they felt best described a given tactic. The results from both surveys showed that participants considered some tactics positive (scoring them high on words like “helpful”), while they considered other tactics negative (scoring them high on words like “dishonest”). Overall, says Grayson, “we found there are quite a few tactics that consumers trust.”

At the top of the list for trustworthiness were tactics like pledging to match competitors’ prices or allowing customers to return a product for a full refund if they don’t like it. At the bottom of the scale were tactics like comparing a product to an unrelated item, like a precious jewel, or stressing that a product will be on sale for a “limited time” only.

“If you asked these same consumers whether they trust marketers, they might say no,” Grayson adds. “But it is revealing that when it comes to specific tactics, consumers do trust some more than others.”

Keeping an Open Mind about Persuasion Tactics The belief that consumers are innately skeptical of marketing is shared by both business leaders and academics. It is not uncommon for the business press to publish surveys showing that consumers in general (and millennials in particular) distrust companies and disbelieve advertising. In academia, researchers have commonly assumed that consumers have “persuasion knowledge”—that is, a savvy understanding of how marketing can be manipulative and a tendency to therefore be defensive whenever they are the target of a sales pitch.

“Consumers do not just hold beliefs about when and why marketers deceive us. They also form beliefs and ideas about when and why to trust an ad.”

But Grayson and Isaac thought that this common assumption about consumers was incomplete, and that persuasion knowledge might also include an understanding of how marketing can be helpful and informative.

They conducted a series of experiments to test this. But, importantly, they prefaced these experiments differently than previous researchers had done. Rather than reminding participants that they should be skeptical because marketing tactics are designed to manipulate them into making a purchase, Grayson and Isaac instead encouraged participants to keep an open mind about motives.

In one experiment, the researchers showed online participants an ad for headphones. Before viewing, one group was told to consider why a company might have used a particular advertising approach, while a control group was told to simply think about what they look for in a pair of headphones.

When the ads used a tactic that had been deemed credible in the initial experiments, such as quoting positive reviews from industry experts, participants who were told to think about the advertising tactic were more likely to think favorably of the ad than those who were simply thinking about headphones.

But this was not the case for ads that had been deemed manipulative, such as using paid actors to give positive testimonials.

“Our experiments highlight the fact that consumers do not just hold beliefs about when and why marketers deceive us,” Grayson says. “They also form beliefs and ideas about when and why to trust an ad.”

Assume Less Skepticism Some tactics, such as price matching, may be considered more credible because they are easier to verify than other marketing ploys, such as whether a celebrity actually uses a particular brand of coffee, Grayson says.

Simply assuming that every buyer is skeptical could lead to wasted time and money. “If you approach marketing with the presumption that people perceive all your actions with suspicion, you may end up taking an overly careful approach to avoid triggering an effect that is not there,” he says.

Instead, advertising professionals could focus on identifying aspects of their brand or marketing campaigns that buyers find informative and helpful.“Marketers may benefit from having a more sophisticated understanding of the extent to which their target consumer is cynical about marketing,” he says.

Can Tesla Maintain Its Momentum?

By Wharton Staff

Electric vehicle and storage battery maker Telsa and its cofounder and CEO, Elon Musk, have stunned the world with robust performance and a soaring stock price. But they now face the inevitable question: Can they maintain that momentum for the rest of this year and beyond?

consecutive quarters of profits amid a pandemic; meeting delivery targets for cars; expanding manufacturing capacity globally; mastering storage battery technology to lower costs; and advancing the technologies for electric vehicles (EVs) and AVs, the next big promises for automakers.

If Tesla can scale its output to lower costs and fend off competition, the answer is yes, according to Wharton management professor Rahul Kapoor. But the company could hit speed bumps if established automakers grab market share by transitioning their existing customers to their versions of automated vehicles (AVs), or if AV technology becomes freely available, he said.

Tesla’s rise can be viewed through both its stock price and “strategically, the growth trajectory it is on,” said Kapoor, whose current research focuses on crowdsourced forecasting tournaments for the auto industry at Wharton’s Program on Vehicle and Mobility Innovation. He shared his insights on the Wharton Business Daily show that airs on SiriusXM. (Listen to the podcast above.)

Musk has in the past year silenced critics and proven the durability of Tesla’s business model, and also of himself as its leader. Tesla’s stock has risen nearly tenfold over the past year to current levels of $2,000, making it the most valuable automobile company and Musk the fourth-richest man on the planet. Those gains have come on the back of four

One lens is the stock price, which “clearly has an element of exuberance,” Kapoor noted. The other lens is “the strategic side, [where] Tesla has just executed on a promise, despite all odds, remarkably well,” Kapoor said. “[With] the roadmap that Tesla and Elon Musk presented over the years, they have executed in terms of increasing the capacity, launching the

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“While the last 10 years were very much around, ‘Can Tesla pull it off?’ the next 10 years would be about, ‘Can these established automakers pull it off?’”–Rahul Kapoor Tesla has managed to check “all the boxes that analysts or investors or people like me who are observing Tesla have put in front of ourselves,” Kapoor said. “That is a great fairytale as far as Tesla and Elon Musk are concerned.”

“While the last 10 years were very much around, ‘Can Tesla pull it off?’ the next 10 years would be about, ‘Can these established automakers pull it off?’” since the future electrification of cars “is a foregone conclusion,” he said.

Over the next 10 to 15 years, the “vast majority” of the cars will be electric, and many of them will be fully autonomous, he added. “The future is perhaps less about what new things Tesla would be able to do, [but] really about what these big automakers, whether they’re in Detroit or in Europe or in Japan or Asia, could do to push their own efforts around electrification and self-driving.”

Advantage Tesla Tesla has the momentum to continue growing. In a recent opinion piece for CNN Business, Kapoor noted that within a year, Tesla has expanded its global footprint by establishing a new manufacturing base with its Gigafactory in Shanghai, and is in the midst of adding another in Germany and in the U.S. Alongside, it commenced deliveries of its Model Y mid-size SUV; unveiled a new electric pickup Cybertruck “that pulled science fiction into reality”; and has pushed forward with its plans for manufacturing the electric semi-truck.

According to Kapoor, “Tesla needs to play the game of scale,” now that it has earned its technology leadership spurs, especially in battery technology. Scaling up will make it “harder and harder for other players to catch up,” he noted.

Chipmaker Intel did the same in the 1970s and 1980s, when it started with a manufacturing base out of California and scaled up with factories and plants across the globe.

“From a supply chain perspective, it makes a lot of sense,” he said. “It helps to lower the cost, and it helps to get market share. And it makes it much harder for established firms to catch up.”

‘Apprehensive’ Competition Established automakers could transform their companies and compete with Tesla, but they have been slow to make that call. “The established automakers have come across as being apprehensive, taking a bit of a backseat,” said Kapoor. He had seen that approach when he recently visited showrooms to buy a car. While many established carmakers have EVs, “I felt that it’s not something that they are leaning towards

when trying to make a sale,” he recalled. “It’s an option that you can get as a customer, but they’ll still be perfectly happy if you come back buying an internal combustion car, as opposed to a battery-powered car.”

With that “somewhat apprehensive” approach, Kapoor noted, established automakers “have been taking on more of piecemeal strategies: ‘Let’s try this. Let’s try this. But let’s, as much as possible, preserve our core capabilities and core customer base.’ That thinking has to change. They have to be much more aggressive on helping their existing customers who love their brand to transition into these new technologies and new business models.”

“The bigger piece of this puzzle is what the established firms that have been disrupted can do.”–Rahul Kapoor The Waymo Wild Card The wild card in that setting could be Waymo, a subsidiary of Google’s parent Alphabet that is seen as a leader in AV technology, said Kapoor. “Waymo could do what Google did to the smartphone industry, with the launch of the Android and eventually giving an operating system to smartphone manufacturers for free.” The free Android operating system enabled smartphone makers like Samsung and Motorola, and helped to build a huge network of users, he pointed out.

“I expect the same card is still relevant here, where Waymo has been a leader in terms of software and fintech technologies and the self-driving domain,” said Kapoor. “If it can create an autonomous [vehicle] operating system, and it starts giving it to these established automakers, Tesla has a real competition on their hands.”

Tesla may have its own swing card in the persona of Musk, who has a large following on social media. But it could cut both ways, with Musk attracting censure and fines for some of his tweets. “As we have seen in the last year, this could be an asset, but sometimes it could be a significant liability as well,” said Kapoor. “At the end of the day, I think Musk is going to be evaluated through how well Tesla is doing. So far, there is not much of a question mark around that. He gets an A+ from a performance perspective.”

The disruption underway in the auto industry reminded Kapoor of similar episodes that have played out in other industries. “This would be along the lines of what Microsoft has so successfully done with the transition to cloud or what Nestle did with the transition to premium coffee,” he wrote in the CNN op-ed. “Or will [established firms] continue to hold back and pursue piecemeal strategies that are more reminiscent of what Kodak did with digital photography or Nokia with smartphones?”

In fact, established players may have a stronger hand than one might imagine in such disruptions, Kapoor suggested.

“Much of the disruption phenomenon has been centered on what these startups can do,” Kapoor said. “But the bigger piece of this puzzle is what the established firms that have been disrupted can do.”

How Social Media Is Shaping Political Campaigns

By Wharton Staff

In his short-lived campaign for president, entrepreneur and former New York City Mayor Michael Bloomberg spent more than $1 billion of his own money before dropping out of the race in March. More than 70% of that budget went toward advertising.

The extraordinary spend highlights just how much cash it takes to run for public office in America and why it’s so difficult for political newcomers to gain momentum at the polls without connections to influential donors (or in Bloomberg’s case, his own deep pockets). The problem perpetuates through

election cycles, which is why up to 90% of incumbents are reelected in what research calls “the incumbency advantage.”

But social media has changed the game, allowing incumbents and newcomers alike to speak directly to constituents on everything from policy to what they had for dinner. Barack Obama was the first presidential candidate to use the medium, which was still nascent during his 2008 bid, and Donald Trump takes to Twitter almost daily to express himself without the filter of traditional media.

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“If you look at the way that politicians communicate today, it’s very different than the way that they used to communicate five, 10 years ago,” Wharton marketing professor Pinar Yildirim said. “They would speak through the official speakers or they would be on TV. They would be in print or official online newspapers. Today, they are communicating through places like Twitter. And I think that begs a question, why are they doing that? Is there any benefit to communicating on channels like Twitter?”

“This is not about the age of your constituency.”–Pinar Yildirim A new study co-authored by Yildirim offers some answers.

“Social Media and Political Contributions: The Impact of New Technology on Political Competition,” written with Maria Petrova and Ananya Sen, finds that political newcomers can get a substantial boost in support by using social media channels, which cost next to nothing and are easily tapped by anyone with an internet connection. The finding is important because it indicates how social media can help level the playing field in politics, where money and access to formal communication channels pose huge barriers to new entrants.

“Never have politicians been so accessible to the public,” the authors wrote in an opinion piece for The Globe Post.

Yildirim recently spoke about the researchers’ findings during a segment of the Wharton Business Daily radio show on Sirius XM. (Listen to the podcast at the top of this page.)

Raking in the Cash on Twitter The study, which will be published in Management Science, measured support for a candidate based on donations from individual citizens and whether that support increased after the candidate opened a Twitter or Facebook account. Yildirim said she and her colleagues were surprised to find such a significant effect: Within the first month of using Twitter, politicians were able to raise between 1% and 3% of what they would have raised in a two-year traditional campaign.

But that gain flowed almost exclusively to newcomers, not incumbents. And it was amplified when candidates included hyperlinks to more information.

Twitter followers, while U.S. Sen. Elizabeth Warren used her Instagram account to chat live with supporters who made small contributions to her presidential campaign.

Those small contributions – often between $5 to $100 – seem unlikely to move the needle in a multimillion-dollar political campaign. But the researchers said they are an important part of the voting process because they represent hope.

“There’s this idea that if there are many of us just donating in small amounts, eventually that will turn into a sea of donations, and that could help this person to get elected down the road,” Yildirim said. “So, donations are very meaningful in a number of ways.”

“You don’t have to have the big money, big bucks, big fundraisers, big supporters to be able to communicate on Twitter with your constituency.”– Pinar Yildirim In Politics, All Communication Counts If video killed the radio star, as the 1980 pop song declared, will Facebook kill nationally televised debates or news interviews that are the hallmark of old-school political campaigns? Probably not. As Yildirim pointed out, organic coverage from newspapers or television stations is free and reaches a wide audience. And while costly, paid advertising allows candidates to target a specific message to a specific audience. However, so does social media. It cannot be discounted as a low-cost, powerful tool in political competition.

Yildirim made it clear that the advantage has nothing to do with assumptions about age; there is simply more to learn about new candidates.

“You don’t have to have the big money, big bucks, big fundraisers, big supporters to be able to communicate on Twitter with your constituency and tell them about what your ideas are for the future,” Yildirim noted. “You can tell them about who you are, what your values are, and this is typically what we see politicians do. They talk about themselves. They talk about their dog, they talk about their favorite sports team, they talk about their favorite place to go in the neighborhood.

Of course, you can always talk about your policies and what you hope to achieve if you were elected into an office. And you can do this way before you officially declare running for an office.”

“This is not about the age of your constituency. This is not because the political newcomers are somewhat more technologically savvy, or their base is younger and that’s where they can communicate and find those individuals on social media,” she said. “We tested all of these, and these are not the drivers.”

The scholars believe the intersection of social media and politics is ripe for more research, and their paper makes a notable contribution in the field. The finding suggests that, with enough strategy, social media could erase the incumbency advantage and bring American politics back to its grass roots.

Beyond communicating their policy views, new candidates can humanize themselves through their social media accounts, and that helps voters feel more connected to them.

For example, former Democratic presidential contender Pete Buttigieg introduced his shelter dogs to his 2 million

“As political campaigns are becoming increasingly more expensive and the need to reach out to constituencies is becoming more vital, social media will undoubtedly play a more important role in determining electoral outcomes as it gives young politicians a platform,” they said in the op-ed.

Growing U.S. Product Placement: How Far Can It Go?

by Wayne Friedman

Branded entertainment/product placement on TV continues to seek new heights -- as well as potentially new venues, even in this iffy TV advertising marketplace.

Earlier this year, PQ Media said global product placement for all media was up 14.5% to $20.5 billion. In the U.S., which has a 56.5% share of that market, product-placement revenues grew 15.4% to $11.63 billion in 2019.

But the guessing is with a changing marketplace -- including effects of a pandemic. Perhaps there is more for branded entertainment providers to gain, beyond unscripted/reality TV/competition shows, game shows and talk shows.

With the coronavirus lockdown, PQ Media said there have been less brand integration opportunities -- fewer daytime, evening talk shows and less reality TV programs.

Thus, a slowdown this year. But it expects resumption of double-digit percentage gains next year, up 13.8% on stronger economic growth.

TV-video platforms are not giving up -- even less-obvious platforms are looking to see if they can find opportunities.

Fox Corp.’s Fox Nation, the news and information app, are mulling product placement deals for specific shows, according to one report.

A report in Media Village last week: “We’re talking to advertisers about the ability to do product placement within programming,” Jeff Collins, executive vice president of advertising sales for Fox News Media, the business unit over Fox News Channel and Fox Business, told the publication. “We would also have the ability to run (programs with these placements) Sunday night on Fox News Channel to extend the reach for that advertiser, and their message within the program.”

services that could present some ad opportunity.

For example, there is “Mansion Global,” which tours big U.S. mansions. Another show, “Park’d with Abby Hornacek,” surveys national parks. Last year, Fox Nation offered a live NFL-related show, “Super Tailgate,” a pre-show for Sunday’s big NFL games. (The Fox Television Network airs NFL games.)

Other news TV networks -- in fringe and/or weekend dayparts -- also have similar nonfiction/lifestyle programming. For example CNBC airs repeats of reality TV shows, such as “Shark Tank” and “Undercover Boss.”

Much branded entertainment/product placements accelerated with longtime reality-competition shows -- “Survivor,” “American Idol” and the like -- and have now expanded to many broadcast and cable networks in a number of fiction, nonfiction and sports TV formats.

Has anyone dared to throw news-related/opinion programming into the mix? Many would say news is sacrosanct. Still, with digital media creating a wild west of advertising executions -- especially in social media -- are new rules coming?

We can dream, can’t we?

Wondering if viewers would like to see Fox News’ Tucker Carlson take a short nap after a particularly hard night of ranting with a bed cushion from My Pillow -- a big advertiser in the show and the Fox News Channel overall.

Perhaps Sean Hannity could appear in Hawaiian shirt and sunglasses offering a reference to an upcoming vacation at a Sandals Caribbean resorts, which also advertises on Fox News Channel.

The story didn’t elaborate. Fox News Channel representatives declined to elaborate as well when inquired by TV Watch.

In 2018, Shepard Smith, now former Fox News Channel anchor, said of Fox News’ prime-time shows to Time: “Some of our opinion programming is there strictly to be entertaining.”

In addition to news programming, Fox Nation runs some historical/documentary series, as well as other nonfiction TV

So, relax and rest easy. The big news and opinion election season is here. It’s just business, right?

Rewarded Advertising Diversifies Revenue And Motivates Mobile Gamers During Pandemic Gaming Boom

By Peggy Anne Salz

Gaming apps are experiencing their biggest year yet, fueled by record levels of app downloads and consumer spending.

Mobile app usage across all categories grew 40% year-overyear with Gaming apps leading the way, according to data from app store intelligence provider App Annie for the second quarter of 2020. April saw an all-time high of over 200 billion hours. Meanwhile, consumer spending in apps spiked to $27 billion. Games and esports analytics firm Newzoo reckons roughly one-third of the planet’s population—that’s 2.6 billion people—will play mobile games this year. Many are die-hard gaming fans, and many more are part of a new and captive audience forced by global events to practice social distancing and use their downtime to seek digital distractions.

The lockdown also opens opportunities for models and approaches that monetize audience attention, as well as optimizing spend. This is critical at a time when the gaming industry is set to experience both a windfall of profits and the headwinds of a potential global recession. Right now, the “increase in playing time will naturally lead to revenue growth in mobile gaming,” Tianyi Gu, Newzoo Market Lead

– Mobile, told me in an interview.

Once COVID-19 restrictions ease and players shift attention to other pastimes, though, momentum is bound to slow. And lighter wallets will likely depress in-app spending: Full or partial work closures impact “more than 80% of a global workforce of 3.3 billion currently.” Newzoo is cautious. “We expect engagement growth to be much higher than revenues, as it is notoriously difficult to convert players into payers on mobile,” Gu says.

It’s why Fouad Saeidi, Founder & CEO of App Growth Network, a full-service app product marketing agency focused on optimization throughout the funnel from acquisition to retention, is bracing for “a boom” in approaches that incentivize and monetize audience attention. The global pandemic may have increased appetite for gaming apps.

“But it’s also diminishing the purchasing power of users across a number of key regions and growth markets such as Brazil,” He tells me in an interview. To make up for the decline in revenues, he observes companies are doubling down on efforts to “drive organic efforts and growth and

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construct viral loops to acquire and keep users in the app.”

Rewarded advertising gets a refresh Rewarded video, an ad-supported scheme that offers players perks and prizes in exchange for watching or interacting with an ad, has become the standard ad unit to engage and monetize gaming audiences at scale. The ad unit cashes in on an established behavior: watching commercials. The reality is that most game enthusiasts understand and accept that advertising has become an integral part of the games they play.

For publishers looking to reduce their dependence on inapp purchases, rewarded video offers more than an effective monetization tool. It allows publishers to pursue a more balanced business model, diversify revenue sources and dial down the practice of targeting the high spending users (roughly 2% of players, also known as whales) who account for the lion’s share of in-app purchases. Rather than hunt for whales, publishers can double-down on models like rewarded advertising that offer greater value to a wider pool of players. For players, the payoff is the opportunity to gain additional benefits in the game without having to wait or pay.

Data from Playtika, a digital entertainment company that specializes in the development and publication of social games, shows rewarded ads provide better user engagement and increased retention. “Our metrics show that some of our most engaged users in our games are the ones coming in from rewarded ads,” Mark Avidan, Playtika Media Department Lead, told me in an interview. Avidan is

convinced that “integrating the ad inside the game gives a better user experience to the player, and thus leads to better engagement.”

Avidan is particularly bullish about an ad unit called Playtime that rewards players for the time they spend actually playing games, rather than just watching videos. It’s a “win-win” that fuels a positive growth loop, Avidan says.

Creating a publishers

virtuous

circle

for

advertisers

and

It’s a scenario that pays off for all stakeholders. The longer users play, the more engaged and valuable they become to publishers and advertisers. Imagine a typical rewarded video scenario where Emma, an avid gamer, is shown an ad by Publisher A for a game from Publisher B. Emma interacts with the ad and Publisher A benefits because it has monetized effectively. But showing Emma (and millions like her) an ad for a competitor game can also backfire. Emma can be encouraged to try out a new game. But she can just as easily be convinced to switch to the game from Publisher B and abandon the game from Publisher A altogether.

But publishers that deploy the Playtime ad unit don’t encourage Emma to pick a favorite. Instead, she is incentivized to be loyal to both.

In this scenario, Publisher A shows Emma an ad for a game from Publisher B. But playing the advertised game (from Publisher B) is a pastime that earns Emma virtual currency to redeem in the game from Publisher A. More importantly,

the advertised game from Publisher B stays top of mind with Emma thanks to gentle nudges and contextual notifications that remind her to continue playing and earning rewards.

“Here we have a model that adds engagement value to the original game and the destination game, boosting retention and monetization for both,” App Growth Network’s Saeidi explains. “Companies that used to compete for the wealth now share it. And, in the hard times ahead, that’s a real game-changer.”

Playtime is the brainchild of Hamburg-based adjoe, a company with a new twist on a proven model. By allowing users to earn virtual currency for their favorite game through playing third-party games, “adjoe is able to generate highly loyal users for advertisers while increasing the engagement for publishers that use Playtime for ad monetization,” Jonas Thiemann, adjoe managing director, told me in an interview.

“The longer they play the advertiser’s game, the more currency they earn to spend in the publisher’s game,” he explains. In addition to “high three-digit eCPMs,” the ad unit results in “upwards of 10 additional sessions per user for the publisher in the first week after engaging with Playtime for the first time.”

New pathways for mobile app monetization The mix of high revenues and impressive retention rates— particularly early in the customer lifecycle when staying top of mind with players is crucial to driving longer-term loyalty—has paved the way for the company’s success to date. Thiemann says AppLike Group (which adjoe is part of) has “more than doubled revenues for the past four consecutive years.” It’s a track record that has also allowed the company to grow its customer base to include major games studios, including JamCity, Playrix, and Zynga.

Beyond growing its customer base, adjoe is laying the groundwork to “become one of the top players in ad monetization and user acquisition,” Thiemann explains.

While the plan may appear ambitious, it’s a goal well within reach for a company with deep roots in ad tech, and investors with deep pockets. And adjoe has both.

On the tech side of the equation, adjoe is part of the Applike Group, a mobile app marketing platform provider with a top 10 position in the AppsFlyer Performance Index for the past three years. On the cash side of the equation, adjoe benefits from being under the umbrella of Gruner+Jahr (G+J).

The media company is owned by Bertelsmann, the global conglomerate headquartered in Germany, that reported solid earrings on $19.4 billion (€18 billion) in revenues in 2019.

In April, G+J announced an “8 digit investment” in AppLike, a cash injection that benefits its subsidiaries, including adjoe. Thiemann says he will use the funding to “improve the company’s ad monetization technology and double the team from currently 100 to 200 for further expansion.” The next moves are critical and closely watched by G+J, which is counting on AppLike to help it establish a dominant position in the market.

While G+J was quick to move its roster of 100+ premium magazine and newspaper titles to online destinations, the path to monetize mobile media assets has been a rocky one. “As a publishing house, we know how hard it can be to make the shift to digital,” Julia Jäkel, CEO of Gruner + Jahr and member of the Bertelsmann Group Management Committee, said in an email. It’s the main reason why G+J is so eager to “build on the strong momentum” of the AppLike

Group, which, Jäkel says, has “become one of the highestearning digital businesses within G+J.” Jäkel herself joined the management board of AppLike this year.

Driving connection and removing friction While adjoe started out with a sharp focus on more traditional games of skill and chance, it’s receiving increased interest from gaming categories where virtual currency powers virtual in-game marketplaces. A prime example is IMVU, a pioneer in the gaming genre that offers its players a 3D avatar-based social networking universe. “Members [in IMVU] generate value when they spend money to purchase our virtual currency and redeem it to meet people, play games and have fun,” Lomit Patel, Vice President of Growth at IMVU, told me in an interview. But cash alone isn’t the prize. “Members who take part in chat rooms, just being present and being a friend in the community, generate another kind of value–one that benefits the entire ecosystem.”

It’s this “engagement value” that IMVU, home to more than 200 million registered users and 7 million monthly active users, wants to incentivize and monetize, Darren Markovitz, IMVU Head of Monetization, told me in an interview. Markovitz, responsible for “finding ways to monetize our traffic that go beyond driving direct in-app purchases,” was searching for a “differentiated product” and one that complements the other ways IMVU monetize audience attention, like rewarded videos, offerwalls and user surveys.

Today adjoe, which operates only on Android, is a “fully integrated partner,” Markovitz adds. “In terms of performance, they are a significant partner for us now.” The technology was the draw, and adjoe’s parentage is a plus. “The company also has the financial backing of a much larger company [Bertelsmann], which from our standpoint reduced the risk of a partnership of this kind,” he says.

Members appreciate the virtual currency they receive for spending time in games they try during their gameplay in the IMVU metaverse. The bigger bonus, though, could be quality user experience and the lack of friction, Patel says. “It rewards how members interact with the app anyway as opposed to requiring them to stop the fun and fill out a survey or watch a video.” He adds that rewarding members for time spent also gives IMVU more options to shape longer-term player habits and behavior. “It’s about getting people to really love the product, and we know the more time they spend in the product, the more they’re going to end up using it.”

And it’s an outcome all companies, not just gaming companies, should aim for, according to App Growth Network’s Saeidi.

He touts the importance of “revisiting and reapplying” the learnings of Gabe Zichermann, the industry’s foremost expert on gamification, to app marketing. Zichermann’s SAPS framework, based on four powerful motivators— Status, Access, Power and Stuff—helps marketers make the match between the right perk to offer based on the behavior they want to drive. “It’s all about shifting the focus from transactions to interactions and rewarding users for their actions in the app,” Saeidi explains. “It’s an approach that occupies the top tiers of Zichermann’s pyramid, and it should be top of mind in our evolving next normal.”

In the search to build stable revenue streams in these turbulent times, new approaches that reward consumers for time spent while compensating advertisers and publishers are pioneering models that power a virtuous loop and unlock growth.

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Unusual innovations for unusual times

By Martin Lindstrom

While the world came screeching to a standstill and most businesses panicked, a few businesses experienced almost the opposite. Deliberately or not, they tapped the nerve of human behavior in these unsettled, unpredictable times. As a consequence, they’ve achieved unprecedented business success.

No, I’m not talking about the companies that first come to mind, those providing PPE’s, medical equipment, or meeting software. I’m talking about something as ordinary as paint.

But before I explain what I mean, allow me to describe a true entrepreneurial mindset.

Almost every startup has one thing in common. Their founder bumped into a problem, a lightbulb went on, and that sudden inspiration formed the basis of their success.

Consider the two college kids who found themselves in a panic after they inadvertently posted a photo of themselves smoking weed. Oops! Wishing a function existed to delete the photo before it fell into the wrong hands, they invented Snap. Today, users send more than four billion photos via Snap, every single day.

Or how about the entrepreneur who was so annoyed at failing to hail a taxi to Orly Airport in Paris that he created Uber?

What these experiences have in common is something I call “small data,” which I’ve defined as “seemingly insignificant observations made in our daily lives.” My research shows that close to 84 percent of all startups were born from small data observations.

Every day, each and every one of us is exposed to myriad instances of small data. If seized and utilized, they have the potential to fundamentally change a company, an industry, or even the way we live. As Covid-19 ravages our world, opportunities to pick up on behavioral changes through small data have never been more abundant.

As an example, while stuck indoors like the rest of us, a few weeks ago I was searching for paint for my new house.

If you’re a design nut like me, I’m sure you’ve spotted the perfect color in the street environment and taken a photo of it so you can share it with the guy in the paint store, only to realize the color in the photo is nothing like the color in-situ.

The paint guy tears his hair out from frustration, as you try, and fail, to search your memory and find the lost color on a chip.

This was the situation I found myself in, when I serendipitously came across Tint, an Australian startup founded in the middle of the crisis and now revolutionizing the world of paint.

Three university graduates identified the issue: no color in the real world is ever exactly the same on a screen. Setting out to solve the problem, they ended up with Tint . Press a small device right against the color you’ve fallen in love with, and the device captures the color’s secret source. Share that code

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with your local paint store, and they’ll mix a can with your perfect color.

patterns. As I discussed in a recent article, we’ve witnessed the arrival of the first-ever “Eighth Entry Point.”

“We launched Tint in February,” says CEO and co-founder Djordje Dikic from his locked-down home in Melbourne, “and I hate to say this, but had it not been for Covid-19, we wouldn’t have been as successful as we are now.” He is fully aware that such statement, if taken out of context, may sound controversial — as if he’s happy to take advantage of the crisis — but the numbers don’t lie.

Here’s a quick recap: in our lives, we experience entry points, including the first time we go to school, when we get married, our first job, and when we retire. Each of these entry points opens up our world to completely new needs — and thus the need for completely new products or services. When expecting one’s first newborn, you suddenly find you have a need for a baby stroller; when you get married, you suddenly discover a need for bed linens and kitchen appliances that you never before noticed.

I was not the only person locked in my house and going into a frantic renovation mode. People all around the world, stuck inside their homes, spent untold hours staring at their tired old walls and wishing for a new color scheme. Given the challenge of leaving home and visiting the local paint store, Tint came in incredibly handy. It was the perfect device, launching at the optimal moment. It was a lifeline for many home renovators, as they could order the right color online.

Tint tapped into a philosophy I coined, many years ago. I called it “Clicks & Mortar” – the idea of a seamless combination of offline and online.

What makes the Tint concept so beautiful is that it wasn’t born out of a lab, but instead from picking up on small data.

The Tint founders spotted an inherent need in the market and adapted a solution to it.

Right now, we’re witnessing a profound change in consumer

We’ve always had seven entry points, but now, as we confront Covid-19 and its aftermath, is the first time we’ve had an eighth entry point. And now, with the birth of a new, neverseen-before eighth entry point, is the perfect moment to spot small data and turn them into golden opportunities.

So, before you descend into panic, do me a favor. Sharpen your eyes and ask yourself: What gaps have appeared around you as a consequence of Covid-19? What profound behavioral changes do you notice?

Those small data you spot might not only identify a completely new consumer need, but they might shape the foundation for products and services we’ve all been waiting for but had no idea we so desperately needed. Before now.

Martin Lindstrom is chairman and founder of Lindstrom Company - the world’s leading brand, business and culture transformation group.He is a New York Times and Wall Street Journal best-selling author of seven books translated into more than 50 languages and published in more than 70 countries worldwide.

Book,

&

Line

Binge Worthy Branding: Build Customer Loyalty Using AI and Personalization Like Amazon, Netflix, and Starbucks Paperback – June 5, 2020

by Sterling C McKinley Whether you’re a marketing manager or a small business owner, this book will forever transform the way you think about branding and your customers.

Social Media Marketing Mastery 2020:3 BOOKS IN 1-How to Build a Brand and Become an Expert Influencer Using Facebook, Twitter, Youtube & Instagram-Top Digital Networking & Personal Branding Strategies

By Fiona Humberstone

Branded Nation: The Marketing of Megachurch, College Inc., and Museumworld

by James B. Twitchell

Sinker Branding: What You Need to Know About Building a Personal Brand and Growing Your Small Business Using Social Media Marketing and Offline Guerrilla Tactics

By Joeri Van den Bergh In a market dominated by conglomerates, competition between small businesses is at its peak.

Brand Storytelling: Put Customers at the Heart of Your Brand Story 1st Edition

By Miri Rodriguez Written by the award-winning storyteller Miri Rodriguez at Microsoft, this actionable guide goes beyond content strategy and, instead, demonstrates how to leverage brand storytelling in the marketing mix to strengthen brand engagement and achieve long-term growth, with advice from brands like Expedia, Coca Cola, McDonalds, Adobe and Google.

How Cool Brands Stay Hot: Branding to Generations Y and Z

By Joeri Van den Bergh

Branding has become so successful and so ubiquitous that even cultural institutions have embraced it. In this witty and trenchant social analysis, James Twitchell shows how churches, universities, and museums have learned to embrace Madison Avenue rather than risk losing market share.

While the first two editions of How Cool Brands Stay Hot focused exclusively on Generation Y (Millennials), this fully revised third edition looks at both Generations Y and Z. Using new market research to map and quantify the spending power of Generation Z, branding experts Joeri Van den Bergh and Mattias Behrer provide hard evidence on the impact of this generation and suggest ways to market effectively to them.

How to Style Your Brand: Everything You Need to Know to Create a Distinctive Brand Identity

Brands in Glass Houses: How to Embrace Transparency and Grow Your Business Through Content Marketing

By Fiona Humberstone

By Dechay Watts

The right brand identity has the power to attract, engage and compel people to do business with you. But for many entrepreneurs, creating an effective brand can be a challenge.

From mom-and-pop shops to mega brands, from B2B to B2C, one common theme exists: consumers are leading the course of marketing.

Today, successful companies do not talk “at” the customer; they talk “with” them, honestly and humanly.

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Brand Mascots: And Other Marketing Animals

By Stephen Brown

Book of Branding - a guide to creating brand identity for startups and beyond

Mascots are one of the most widespread modes of marketing communication and one of the longest established. Yet, despite their ubiquity and utility, brand mascots seem to be held in comparatively low esteem by the corporate cognoscenti. This collection, the first of its kind, raises brand mascots’ standing, both in an academic sense and from a managerial perspective.

By Ryan Holiday

Branding: In Five and a Half Steps

Identity Designed: The Definitive Guide to Visual Branding Hardcover – January 22, 2019

By Michael Johnson Michael Johnson is one of the world’s leading graphic designers and brand consultants. His studio, johnson banks, is responsible for the rebranding of many notable clients, including Virgin Atlantic, Think London, BFI, Christian Aid, and MORE TH>N, and he has garnered a plethora of awards in the process.

The conversational, jargon free, tone of the book helps the reader to understand essential elements of the brand identity process. Offering first hand experience, insights and tips throughout, the book uses real life case studies to show how great collaborative work can be achieved.

By David Airey Ideal for students of design, independent designers, and entrepreneurs who want to expand their understanding of effective design in business, Identity Designed is the definitive guide to visual branding.

Hello, My Name Is Awesome: How to Create Brand Names That Stick Paperback – September 15, 2014

Zag: The Number One Strategy of High-Performance Brands 1st Edition

by Alexandra Watkins Every year, 6 million companies and more than 100,000 products are launched. They all need an awesome name, but many (such as Xobni, Svbtle, and Doostang) look like the results of a drunken Scrabble game.

“When everybody zigs, zag,” says Marty Neumeier in this fresh view of brand strategy. ZAG follows the ultra-clear “whiteboard overview” style of the author’s first book, THE BRAND GAP, but drills deeper into the question of how brands can harness the power of differentiation.

Creative Strategy and the Business of Design Paperback – June 14, 2016

Logo Modernism (English, French and German Edition) (German) Hardcover – September 3, 2019

By Douglas Davis

By Jens Müller, R. Roger Remington

Remaining relevant as a creative professional takes more than creativity--you need to understand the language of business. The problem is that design school doesn’t teach the strategic language that is now essential to getting your job done.

Modernist aesthetics in architecture, art, and product design are familiar to many. we recognize a time of vast technological advance which affirmed the power of human beings to reshape their environment and to break, radically, from the conventions or constraints of the past. Less wellknown, but no less fascinating, is the distillation of modernism in graphic design.

By Marty Neumeier