2 posts from August 2010

Compelling Advertising and the Technology Trap

A recent Subaru ad clearly demonstrates the power of emotional selling. The ad which features a dad giving his car keys to his young daughter on her first solo drive is simple, interruptive and relevant which makes it memorable to the target market and likely to build sales for the brand.

But, I am not in the target market of young families, which emphasizes the point I often make that to be successful communicating and building a brand, focus must be on customers that companies sell to. Reaching customers not in the target audience is just "spill out" which increases the cost of touching likely buyers, a critical consideration but one rarely considered in budgeting.

In my last post I addressed the double blind trap of technology, specifically the need for companies to selectively exploit technology to be commercially competitive versus the legal risk of using technology, intended or not, to effectively abuse employees or customers. This might be applicable here.

Consider a recently published debate by Wired  about the death of the Internet, namely the end of open source and evolution to "semi-closed" platforms (think Apps) like Facebook, Twitter or Pandora. It is worth reading and thinking. Google and others are collecting massive amounts of data about how people use the web, shorthand for cognitive and emotive behavior. In turn, those data can be intrusive if abused or highly valuable services if applied "properly". That is the trap.

So what impact would the Subaru ad -- and what profit impact would happen -- if the company were able to target families down to the individual with girls pre - driving age, middle income with known behavior patterns that favor safety versus adventure, yet with kids that both respect those values and have a personal sense of self reliance? Algorithms analyzing keystrokes are giving clues to those conjoint behaviors which of course deliver messages to you, email, text or social.

Today, as never before, we have the ability to narrow focus the message with little "spill out" wasted on unlikely buyers. Now if the car ad was about Ferrari, it'd be a whole different story.

Is this a great time to be in brand marketing? Without a doubt.

Technology’s Double Blind Trap

Business publications are by and large optimistic about the contribution of emerging technologies to growing healthier companies, work environments and even countries. For example, McKinsey Quarterly published a stimulating discussion of how advancing technologies are changing business models from linear to multisided ones, in Clouds, big data, and smart assets: Ten tech-enabled business trends to watch . What is important for executives to realize is that technology not only shapes the character of business but also the behavior of its employees and legal consequences that follow.

 

The first technology the authors, Messrs. Bughin, Chui and Manyika, discuss is the mainstreaming of “distributed co-creation” which is essentially the ability of communities to organize on the Internet to develop, sell and support products and services. For example, they cite P&G’s Vocalpoint network of mothers to share experiences with selected products with their peers that enables P&G to significantly increase market share vs. markets without the Vocalpoint network.

 

The authors also examine “making the network the organization” in which the Web forces companies to open the boundaries of the business allowing non-employees to offer their expertise in novel ways. They envision future managements seizing on these flexible networks to help manage volatile demands on assets through peak and trough periods.

 

Again examples are given like Dow Chemical using its own social network to help managers find talent in other divisions, even to external talent pools such as retirees.  Amazon.com’s Mechanical Turk uses online labor markets external to the company to solve business problems. Thus, they conclude, that in the longer term, networked organizations will focus on harmonizing tasks to get things done versus focusing on the “ownership” of workers.

 

We arrive at the first trap new technologies sets:  New technologies need to be understood, analyzed and considered in business plans. To be competitive in an asymmetrical world (where physical boundaries or  historically unrelated businesses gave established companies a natural advantage) all top executives need to define strategies to identify where technology opens opportunities for them to create multifaceted revenues while creating threats that may not have existed before.

 

We get immediately to the second, blind, trap. Gene Killian , Esq. of The Killian Firm, P.C. found that new technology gives birth to new legal problems and, by extension, threats to the business.

 

In a cautionary newsletter (you may have to register to read), Gene questioned: “What happens, for example, if you have a restrictive covenant with a key employee? What if that employee is prohibited from "poaching" your current employees? What if that employee leaves your company? And what if that former employee becomes a "contact" of your current employees on LinkedIn? Or a friend on Facebook?”

 

He cites actual cases where the “what if” happened. Employees left one company for another and continued using social media based conversations to recruit past co-workers, clients and prospects from a prior employee. Digital networks, while a new technology, are also now indigenous to most relationships. Intentional or not, the use of these networks is a constant potential threat to business operations, from employment covenants, poaching employees, damaging brand good will, and publishing company secrets or plans.

 

Gene offers common sense pointers such as it is time to review employment manuals and standard agreements, giving clear rules when it comes to LinkedIn, FaceBook, Twitter and other social media. In the firm’s news letter he mentions Bayer Corp. having a 13-page policy that covers employee use of social media. It reminds employees about confidentiality and proper communication with customers or others online. The company also monitors its online reputation.

 

He says H.J. Heinz Co. has a written policy distributed to all employees. The policy specifically spells out that employees must be transparent when publishing material online that references the company or when speaking with bloggers, and reminds employees about not commenting on confidential company information.It is also important to state that post-termination restrictive covenants may be violated by contacting clients through social media "friend" or "link" requests.

 

So the double blind trap of fast emerging technology is that to stay competitive and grow, executives need to understand and selectively capitalize on technology.The second blind trap is forgetting to proactively manage the technology by understanding the unknown and unthinkable consequences on behavior these technologies create.

 

Future sustainable competitive advantage and wealth comes from the hard work of combining an understanding and the strategic use of technology with leadership that reinforces the legal and ethical values of the company among all stakeholders.