Seeking David Ogilvy

A 30 something year old trying to figure out marketing. In Search Engine Marketing but don't manage campaigns. Follow me on twitter @yang_ers Posts are my own.

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Taking a break

With this wonderful weather outside I decided to take a break on the blog for a while. Hopefully will pick back up soon when I'm not as lazy I find some inspiration.

[seekingdavidogilvy]

#LenovoGate

In this day and age there is no excuse for large companies to not have an emergency social media plan. Like those break in case of emergency that you see littered throughout offices. Where or What is your company’s emergency social media plan?

Just a couple months ago Lenovo Canada must have wished they had one. They had a laptop for a too good to be true price. Was this a price error? A bait and switch? Who cared the Internetz remarked and off they went buying $300 laptops.

A day later, Lenovo began to cancel the laptops. This caused massed confusion as you could still order the laptop for dirt cheap prices. Finally they took down the page and all orders were canceled. I really didn’t know what on earth was going on at the HQ of Lenovo Canada but an image of chickens with their head chopped off comes to mind. Everybody needs an emergency social media plan. Where was Lenovo’s emergency plan when this happened? With this in mind I would like to offer a brief framework on an emergency plan.

Acting Quick

Time is of the essence when something goes wrong. I remember reading a stat that in the Afghanistan War if they can get a casualty to a hospital in under two hours of the injury there is a 90% chance of survival.

When something went wrong at Lenovo the need to act as quick as humanly possible is imperative. Taking down the page to buy that laptop, communicating to customers, heck even shutting down Lenovo Canada’s website something needs to be done. Sticking your head in the sand and hopping it would go away is NOT an acceptable excuse.

  Bad!!! Don’t do this!

 What I would’ve done in Lenovo’s case is take down the page for the cheap laptop, if that couldn’t have been done, I would’ve taken down the entire Lenovo Canada site. Yes the entire site, as the bad PR is too much. For some god unknown reason if that couldn’t have been done I would’ve begun to communicate that the price is a pricing error and that Lenovo will be canceling ALL orders. I would’ve done everything I could to set expectations as low or none at all in honoring the prices that were mentioned on the site as it is easier to exceed low expectations than high expectations.

During the Crisis

Whatever messaging is developed, one should continue to re iterate it on a frequency that matched the reach, 1:Many (once a day), 1:1 (as it arises). In Lenovo’s example they should have continued to message it was a pricing error. Engage with customers, empathize with their frustration, use meme’s, anything to keep the message out there. Also a willingness should be developed to disengage from irrational people (aka the person who ordered 50 laptops). 

After the Crisis

A lot of this will be dependent on “Head Office’s” response. In Lenovo’s case they gave $100 off for any laptop as a make good gesture. They should take that message and begin to run with it. Deal with the detractors with that message and see if anything else can be done for small moments to delight customers.

This phase should be mainly about getting off crisis mode and beginning to get back on marketing message with social media. After a while the crisis should die off and you will be back to business as usual.

After Action Report

Something which I hope that I stress in this blog is that failure isn’t a bad thing. In crisis mode the best decisions are not necessarily made. When it becomes business as usual then would be a great time to learn about what decisions made, were they good or bad decisions? Why or why not? Add any learnings into your Social Media emergency manual.

As of writing this Lenovo’s twitter handle had not made a single tweet since May 28th! The damage they had received by sticking their head in the sand was too much for them to resume their social media campaigns. It is imperative that companies begin to develop an emergency plan. Don’t let what happened to Lenovo Canada happen to your company. 

[seekingdavidogilvy]

Embarrassing Story Time – Failures

The measure of a man is not how many times he gets knock down rather how many times he gets back up

Gather around everybody its story time with Andrew. My last embarrassing story about me working at Google was a great hit but I think that had to do with Google in the title. I wanted to write another embarrassing story and my job where I was a call center rep that pissed my boss off sounded like a good one.

You have to understand I was a bit naïve after undergrad. Engineering sort of puts you in a bubble with how the “real world” works. I had done internships at TSX 60 and multinational companies and I figured if you were going to hire an engineer you would get them to do engineering work. I could not be more wrong. I ended up in a rotational program where you rotated throughout different parts of the company. Little did I know that I would have to start off in the call centre.

It had been 3 months answering the most boneheaded questions and coupled with my engineering personality I was about to lose it in the call centre. Other people in the rotational program who I had started the call centre with had already left. I swear they were keeping me there to punish me. At my 1:1 with my call centre manager she began a conversation.

Manager: Andrew, I want to show something. Pissed Off Millennial: Sure manager, was it understanding where my next rotation will be? Manager: Um nope, here I have the call centre metrics did you want to learn about them? POM: No, not really Manager: <Getting really angry> Well why not? POM: I want to be an engineer, and I’m just waiting for my rotation in the call center to end. I fail to see how this will help me in my future career. Manager: <Gets really, really mad>, Well you see….. <I lost my attention span and just nodded along. She started talking about how important the call center was, and how when the call center went on strike they had engineers answering the phones. And how engineers became better engineers because they understood the call centre.>

Anyways I knew that was bullshit. I had worked with engineers for over 2 years and knew the verbatim feedback of pissed off customers the call centre gave (if they gave them at all) had a small aspect of how things work. They just never had the money to put more towers, were forced to rush products out or countless of other issues that the business made.

I was about to enter in a rant, about how she was all wrong. But I bit my tongue and held off. It was a strange position to be in to tell people the truth and get burnt for it.

Why I Choose Failure as a Subject

I want to talk about failures as too often all we hear is about our successes. We don’t hear any laugh out loud boneheaded mistakes as we create this infallible image of ourselves. As we equate success with expertise. Yet failures are about the most important thing ever. Success can be purely luck or not even attributed to yourself. You can always learn something from a failure even if it wasn’t entirely your fault.

What I did was a big failure. I failed in so many ways, I failed to understand with my statement I just had destroyed this person’s 10 year career with my indifference of her job. I saw the call center as boring, pointless and beneath me. She saw it as providing her with a meaningful career, food on the table, tuition for her children. I did not realize the emotional attachment that one has with their job, I guess you can chalk that up to me being a millennial. 

How I Got Out of the Doghouse

I started to say / do things that my manager wanted to hear. I played on her emotional attachment to the job. I started to say I wanted to learn other avenues of the call center. Doing High Visible Low Impact (HVLI) things like writing Thank You e-mails to other call center reps that I shadowed and CCing my manager. I just pretended that I was an actor and loved everything about being a call center. Slowly I had repaired the damage and when evaluations came I got my average rating. It had worked!

Learnings

I wish there were more business books about failures and how to deal with them. Truly successful people can give some great insights into their failures, how they overcame them and their thought process at that time. My biggest takeaway was twofold. First is ego and the fact nobody gives a damn. Nobody gave a damn that I was an engineer, had worked at all these fancy companies. I had to make them give a damn. Second, was sometimes you just have to tell people what they want to hear. If it doesn’t hurt anybody who cares.

There is nothing wrong in failing, only in not learning from them.

[seekingdavidogilvy]

What is your hashtag strategy?

I stumbled upon this article in Business Intelligence where it took an agency 45 days to publish a single tweet! I should’ve submitted the article to /r/nottheonion on Reddit and reap some sweet, sweet karma. There was a lot of bad decision making for this agency ranging from public perception, not understanding the payoff structure of social media, and the list just goes on. But I wanted to focus on their hashtag failure in pushing #artofcheese.

Side note the nerd in me wanted to call this “Using Logistic Functions in Applying a Hashtag Strategy.” The marketer wanted something more click baity, “The ONE thing you are doing wrong with your hashtags.” I ended up settling for the title you are reading now.

S – Curve

The curve you see below, maps to a lot of aspects in nature. From bacterial and cancer cell growth to adoption of technology.

What does this have to do with social media?

In starting social media for new companies your goal should be to acquire followers. But how do you acquire them? Most “experts” will start rambling off with an Everybody Says Yes Statement (ESYS). Great content! Yes. Engagement with your followers! Yes, Yes!

But what about hashtags?

First what is the role of hashtags? I think it has two usages. First it tags your post in some form of metadata regarding the subject you are writing about. Ie, this post is a #recipe post. The second is that it then allows people to search for that subject and pull all the posts with that hashtag. Which is why blending the frequency of branded hashtags and common subject hashtags based on where your followers are in the growth curve is important.

Understanding that followers have an S-like function, your hashtag strategy should be a blend between common hashtags vs. blended strategy depending on where you are on the S-Curve.

Growth / Hyper Growth Phase

Using President Cheese as a case study the biggest failure was that they went with a pure branding strategy right away. That is bad because you have not built up enough followers to have them interact with the brand yet. Hence their hashtag strategy should be trying to use existing hashtags. Like:  #recipe, #recipeoftheday, #foodporn, #cheese, this way when people that are searching for these hashtags, they may pick up on your posts and begin to follow you.

Maturation Phase

The maturation phase occurs when the rate of acquiring new followers begins to slow.  While this is occurring you want to begin implementing your branded hashtags mixed with existing hashtags. What this does is that it allows you to begin engaging your followers with your own brand thus improving unaided awareness and any messaging you want to get across. But with the existing hashtags, you can still pick up followers from those existing subject hashtags.

Steady State Phase

The final phase is the steady state phase where your have ceased to gain followers. This is really because it gets more difficult to gain more followers as an account gets bigger. Or I like to remark that the elephant is the largest land mammal for a reason. It’s difficult to get big!

At the steady state phase you would focus on brand building and custom hashtags, as you have acquired all the customers you have possibly could. You might still use a generic hashtag but it will be less frequent that the first two stages.

Failure of President Cheese

If one wanted to look at their tweets, you noticed they focused on brand right away even when they were in the growth phase, hence it casts my doubt on their expertise as an agency. Before you embark on social media make sure you understand where you are on the S-curve and plan your hashtag strategy that way.

Happy tweeting!

[seekingdavidogilvy]

Understanding Biases

Man HBO has been on an awesome roll. Like the entire planet I have been watching Game of Thrones. Seriously George R.R. Martin, screw you! True Detective was an epic journey and loved the shout out at the end to one of my favourite comic book authors, Alan Moore. Silicon Valley is laugh out loud funny and sadly I identify with boring business guy Jared.

This article about HBO passing up on Walking Dead caught my eye given how HBO has been producing great shows. I’m not blaming the author for writing a click bait article but there is a massive bias. This got me thinking about biases and how spotting biases are important and can prevent you from making mistakes.

Survivorship Bias

In WWII, an analysis was done on airplanes that returned back. Take a look at the picture below and look at the returned airplanes. If the bullets on the wings were shot up, where you would put more armour?

Source

Most people would exclaim more armour is needed on the wings as that has the most bullets. This is an example of survivorship bias! You looked at the surviving planes, assumed that bullet holes = bad, therefore you want to reduce bullet holes. Yet you need to look at the planes that didn’t survive, the ones that were shot down. When you do that, you noticed that the downed airplanes has bullet holes in the center of the plane. In fact, armour should be placed in the center, not in the wings as bullets in the center were the cause of planes being downed.

Survivorship Bias is extremely prevalent in many business articles and especially in that Walking Dead article. Walking Dead “survived” after being rejected by HBO. To understand why it was rejected, one needs to look at the entire sample of TV shows that were rejected by HBO along with Walking Dead. As such, to truly measure efficacy and reduce Survivorship Bias, one needs to look at the entire sample not just the survivors.

Sampling Bias

A friend of a friend of mine works as a lawyer in one of the seven sister law firms in Toronto in their Venture Capital arm. He remarked that “Man it’s so easy to be an entrepreneur, all my clients are making mad money.” Can anybody see the issue with this?

The lawyer works as one of the most prestigious and I’m guessing the most expensive firms in Canada. So obviously the ones that can afford their services are already successful. This is called sampling bias. When making conclusions based on a set of data, you need to ensure the set of data that you are collecting does not have any bias built in.

Hindsight Bias

Holy crap, did you see the Apple stock shoot up? See when I told you six months ago that the new iPhone would be sick and drive up prices you should’ve have listened to me. You hear this a lot, and a lot of it is hindsight bias, or knew it all along syndrome.

Poor StormTrooper

What hindsight bias does is that it creates a reality distortion field around you. It makes it hard for you to become objective in how you diagnose and solve a problem. With hindsight bias, you may overweight certain factors (your successes), and discount other factors (your failures).

To prevent this bias, when making decisions you should write down why you are making those decisions. Even make a bet (whether elections outcomes, stock pickings, sports) to get some “skin in the game” to make it real. After the outcome write an after action report. See if your initial thoughts match with what happened.

Survivorship, Hindsight and Sample Bias. All biases which somebody “logical” may succumb too. Hopefully with this post you can spot these a lot easier.

[seekingdavidogilvy]

Everybody says Yes Statements (ESYS)

When I was a kid I was in Boy Scouts. We would go camping and the ominous Smokey the Bear would loom over us. We would then go running around stomping out fires and scream, “Only you can stop Forest Fires.”

Along the same lines I feel that way about Everybody says YES Statements (ESYS) and our responsibility to stop them. ESYS, is buzzwords and statements that are thrown around in the office, on twitter and just anywhere to showcase why that speaker is a “thought leader.” They are filled with empty statements like:  “We need to create products that DELIGHT people”, or “Innovation is paramount to everything that we do” and my personal favourite, “Customer service needs to be number one.” They are meant to rally the troops, get people pumped to work harder but after a while just like me eating a bag of chips doesn’t do anything nutritionally, these statements do nothing in trying to improve your company or job.

Understanding Porterian Strategy

I touched briefly on Michael Porter here but will go a bit deeper into explaining why ESYS are meaningless from a strategic perspective. The issue that I have with ESYS is that tradeoffs are not discussed. Strategy is about tradeoffs, if we need to create products that delight people. What are we giving up? If we are not giving up anything, that is operational efficiency. What operational efficiency means is that all your competitors can copy that and then there is no distinguishing factor between you or them.

Let’s dissect this statement some more: “Innovation is paramount to everything that we do.” We all will nod at this statement because innovation is a word that is associated with qualities that we want. Yet, if we begin to execute on this statement we begin to run into issues. Something maybe innovative but it may cost too much and as such nobody will buy it, do we release it? Innovation costs a lot of R&D money and we may not be able to predict if it is ROI positive do we do this or spend money on marketing that is more predictable? What about doing something innovative but alienating our existing customer base? You begin to see the issue with this statement as we begin to dig deeper.

Using Tradeoffs for a Strategy

Another famous 2x2 matrix is the one listed below. What it does it contrasts between going wide or narrow in terms of your location and going expensive vs. cheap.

What I mean about this tradeoff is the following. Harbour 60, a famous steakhouse in Toronto is very expensive but ONLY serves the downtown core. As such the tradeoff for Harbour 60 is to concentrate on Toronto AND to justify why it needs to be that expensive.

Now an ESYS is we want to charge expensive prices and have a wide geographical footprint like Starbucks. Because we all want to charge more and we can make more money with a wider footprint than a smaller footprint. Yet, the next question is how does one go about it? How does one train the staff, create a set of cultures and value, where does one source the ingredients, store location, etc.. the list just goes on. And each on these decisions a tradeoff is made, to align to the strategy of going towards a wide footprint that charges a lot of money.

Hazards of ESYS

Right after I graduated I was forced to work in a call centre as part of a “leadership development” program. It was a horrible experience and will never wish that on even my worst enemy. Even worse than having to deal with the constant drones of phone calls was the ESYS. We must provide great customer service, customer service is our top priority, leaving a great impression starts with you. This is BS and lazy thinking.

Amazon which is a great company which I admire said it best, “Each time a customer contacts you, you have screwed up along the way”. With that mantra they aim not for the best customer service but NO customer service. As contact from the customer is seen as a failure. I believe this shows the deep thought and understanding of strategy that has allowed Amazon to continue to lead in so many areas.

Combatting ESYS

This is the part where I become a grumpy old man. As I’m constant bombarded with Everybody says Yes Statements, I feel there is a need to stop them right in their tracks. I like to poke and prod these statements to invoke discussion. “How do we provide amazing quality? How do we create products that delight?” or asking these people to rank things in order of importance. Nothing stops these statements right in their tracks then asking people how much it would cost to execute.

Just like Smokey the Bear said.....

[seekingdavidogilvy]

Advertising Case Study: Beer Store

I had gotten away from marketing recently and wanted to use this post to get back into it. I saw this commercial a couple months ago and couldn’t help but shake my head at how poorly done it was. For those that don’t know about Ontario’s booze policy. LCBO (government run, wine, spirits and beer store) and Beer Store (owned by a consortium of brewers) are the only places to buy alcohol to consume at home. What this has caused, some would argue, is a supply constraint of alcohol and as such prices are artificially expensive.

This ad has stirred up increased cynicism and anger over the current booze distribution that has been set up in Ontario. I’ve touched upon how to avoid screw ups, in a previous post about using checklists and using a “Derivative” framework in avoiding pitfalls in marketing campaigns. Frankly this campaign was a disaster and the advertising agency which created this should hang their heads in shame. They failed in their duty in protecting their clients and made the situation worse. I want to show case in how using a checklist (do-confirm style) with a Derivative framework, could’ve prevented this gong show.

Ground Rules

As with most of these thing let’s set up some ground rules.

Assume goal is to make people see the value of the Beer Stores and why selling booze in convenience stores is bad

Marketing message from the original commercial can be changed

No crazy marketing budget (ie I can’t hire Brad Pitt and JJ Abrams)

We are the decision makers

Cost of Doing Nothing – Rho (Risk Free Rate)

We have been conditioned to the point of doing something but we should ask ourselves what would happen if we did nothing? Looking at this situation the biggest issues was that there was a provincial election. It’s always easy to run on providing convenience and low cost booze to Ontarians. Now it might be a good idea to do nothing but remembering that elections are based on a populist vote it will be quite easy to sway people to get behind this issue.

Another way of framing this decision is a risk / reward profile. The risk is that the Beer Store would lose their monopoly. For a little price (cost of commercials), they could have a massive gain (continuation of monopoly). So in my mind it makes sense to spend money on a marketing campaign. 

What are you trying to change? – Delta (Rate of Change)

I believe this piece was taken too literally by the Beer Store’s agency. The idea was to change the perception for the need of the Beer Store by pointing out issues in selling alcohol at convenience stores. Personally I think there were better ways around it which I will touch upon what I would’ve done.

The Competition – Gamma (Rate of Change of Delta)

Framing the competitions is obviously extremely important but does a monopoly really have competition? In this example I would argue yes it does. Its competition isn’t really the convenience store lobby, as they are a low margin business and don’t really have a lobby group. Rather it is the politicians that may want to use this as an issue to run on. The key thing is to make sure the ad doesn’t allow politicians to use as a major policy plank to run on. The easiest way to make this happen is to change the public’s perception of Beer Store’s from corporate cartel to a touchy feely organization.

Timing – Theta

Given when the elections were happening it makes sense to run the commercials before the elections while there is an ability to change perception.

What will the Reaction be like – Vega (Volatility)

For me the biggest failure in this campaign was not gauging the potential reaction and not understanding the sensitivity of the issue. The Beer Store campaign touched really on two things: 1) perceived superior morality that the Beer Store has NEVER sold booze to underage kids and 2) anger in alcohol prices. Nobody really likes to be told that somebody is more moral, or better than them in general and that’s what the beer store campaign did. It’s like they are looking down at us from Mt. Olympus and smiting all of us. Finally there is a certain bread and circuses approach to booze nobody likes to be judged no matter how rational the argument is (in this case they didn’t even have that going for them).

What I would’ve done

After going through this framework it becomes obvious that to solve this issue (continued privatization of booze) that one needs to go around it (preventing convenience store from selling it). Instead of creating a “bad guy” (the sleazy convenience store). The Beer Store’s needs to ditch this idea of a rational argument that only they can prevent underage drinking with an irrational one. Marketing is based on irrationality, feelings, image and pointless things have allowed hunks of carbon to be charged at a crazy price.

All they needed to do was make people “feel” that having a Beer Store is a good thing. Once that happens they will continue to cement their cartel. A great commercial is the Microsoft Superbowl commercial. You “feel” good about Microsoft after. Unfortunately not so for the Beer Store commercial.

Now excuse me I need to trek out to get my booze and I can’t buy it at my convenience store which is downstairs.

[seekingdavidogilvy]

Fixing the Search Industry in Canada

BHAG

In the book, Built to Last by James Collins and Jerry Porras, they talk about this idea of BHAG (Big Hairy Audacious Goals). My BHAG is to fix the search industry in Canada.

I was at a digital conference recently and a group of us were talking about how to find “talent” in the industry. The search industry and especially advertising agencies are in a desperate need of good talent. There are literally pages of job postings for Paid Search. We were shocked that a little e.commerce travel site was able to hire 7 search specialists in SEO and PPC (for a reminder on the difference go here)! We were all remarking that with so many undergraduates that could not find jobs that this industry was dying to find people who knew anything about search. Granted the pay isn’t that good but hey a job is a job.

Problem with the search industry

I did my undergrad in engineering so I frame things in problems. The problem is why is it that in an industry where there is a need for search talent (PPC and SEO), none could be found? The answer I believe lies in two things in Canada: 1) Lack of money and 2) Our education system.

Before we go about fixing things what exactly are the needed skills in the search industry? I believe it is two things: 1) rigorous analytical capability and 2) usage of relatively technical programs.

Running joke between my friends is that as a marketer I go, “Make that fish blueish, pink, green”, collect my pay cheque and go home. But unlike most entry level marketing jobs, account coordinators, social media specialist, event coordinators, etc… You need to be very comfortable with large sets of data and use excel in a big data capacity in search. The issue with this is that if you are already highly competent doing Excel you would probably want to become a management consultant or a <gasp> investment banker. The hours are horrible but the at least the pay and future career potential is there. Contrast that with search you are probably making half as much with still some solid hours put in.

In terms of technical ability, you don’t need to be some crazy hacker to work in search but in schools very little is done outside of engineering and computer science degrees to promote technical ability. In search you are working with lines of code, relatively complicated interfaces and working on cutting edge products that constantly change. You can’t teach a person a program because it changes, you have to teach a person how to learn and adapt. Now the degrees that do that the best are computer science and engineering degrees. But just like those with good analytical skills, good techies work at tech companies which pay more and work less!

With the margins that advertising industries run on (15% to 30%), they cannot compete with consulting firms or tech companies at all!

Where do Agencies get talent?

The answer to that question is traditional marketing programs at Universities or community colleges. But the issues with that is that for an industries that has been created in the last 10 years, how to the profs reconcile with what is going on in the real world vs. academia? The blunt answer is they don’t. Therefore, the schools keep on churning out students for jobs which there isn’t a demand. All the while a major gap continues to be unfilled.

Fixing the Problem

As agencies have the most to benefit (cheap, accessible search talent), they need to spearhead and give commitment to this program. They need to lead in two ways. First, is setting the curriculum for what they want the students learn. It could be two full year classes. Where one class is on SEO and another on SEM. Most of that should be simple and the basics could be taught from existing textbooks. Second, there needs to be a commitment to hire these students.  A networking night combine with a promise to hire all junior search specialists from people who take these classes will send the correct signal of how committed these agencies are to building the search talent in Canada.

Now all that is needed is a dashing young prof with an MBA like myself to teach it. :)

[seekingdavidogilvy]

Business Strategy and tensions through the lenses of Apple

A recent article by two really well respected journalist in the technology space went back and forth regarding Apple and their iPhone. Recode’s Kara Swisher, had a scoop, where Yahoo was going to replace Google as their default search engine. Danny Sullivan, from Search Engine Land, gave very good reasons on why he felt this wasn’t going to happen. With all this back and forth what I wanted to do was touch on what is in it for Apple (hint it isn’t about money) and draw my loyal reader’s attention (all 10 of you!) to this piece of tech drama.

Why on earth would Apple want to switch?

When I said it wasn’t about the money. I’m sure some readers are screaming, “Andrew you moron! What do you mean it’s not about the money?  See here, Google makes more money on iOS (Apple’s iPhone and iPad operation system) than Android.” Yes that maybe true and money is always important but what Apple wants to do is prevent the greatest threat to their revenue base (iPhone). Guess who is their greatest competitor? Yup Google with their Android operating system.

If you want to use an analogy, cash is the life blood of a company. As companies generates more cash companies can use that to enter into other areas of business. For Google they are giving away the Android operating system for free (losing money on it) and hoping that they make money via other avenues (Ads). For Google, with their Google Docs, Android, Chrome OS, they want to spread their ecosystem everywhere. Google is literally taking the money that is made from iOS and using that to kill Apple.

This famous Business Insider Chart shows how much Android has taken Apple’s lunch when it comes to the phones. You definitely bet that it wants to stop giving money to Google by switching the default search engine but can it?

Why doesn’t Apple create a search engine?

Somebody might ask with all the profits at stake in mobile, why doesn’t Apple just create its own search engine? I believe it is fool hardy as Microsoft has shown it can get really, really, expensive to create a search engine. Also, after MapGate, Apple may not have the capabilities and resources to make that happen. And if you look really carefully billions were spent creating Bing and maybe only recently it has started to break even. I think what I’m trying to say is that, yes Apple can create a search engine but it needs to be prepared to pump billions with a very small chance of success if you look at Bing’s current perception in the market.

What does Apple do?

After looking at all of this the reality is that Apple has the most of the power in this negotiation. Which is great for them. The difficult decision of switching or not switching is based on what is the maximum they can extract and balancing all those tensions mentioned above. Now going back to Yahoo, Marrisa Mayer wants them to switch search engines to Yahoo. As we are all adults most of us have come to the realization that just because you want something we may not get it.

If I was Tim Cook, I would look at rebranding Yahoo or Bing’s search engine and calling it something Applely. I would also look at the mobile experience on Bing or Yahoo and is it “Good Enough” so that the average person may not know. For me my greatest concern as Tim Cook is not making enough money but rather continuously giving cash to Google to support Android that is being used to kill my cash cow.

Okay I take all of that back now, my greatest concern is now is getting people to pay for overpriced headphones.

Edit: I wrote this blog a couple weeks ago but looks like after Apple’s WWDC this is slowly happening (source).

[seekingdavidogilvy]

How to ask “smart” questions

There is such a thing as a dumb question. Anybody who told you differently is probably dumb. Believe me, I sat through an MBA, I have heard more than my fair share of dumb questions. MBA keeners would pretend to ask questions but really they just wanted everyone to hear their comments.

My personal favourite question was a student who spent the entire class surfing the internet when the professor was talking about real returns on bonds and the need to account for interest and inflation rates. The keener then proceeds to ask why the professor doesn’t buy bonds from his country with 10% interest rates. Professor asks about inflation to find out that it is 12%! Yup that is why our financial system is in such a mess.

For non finance readers, inflation takes away your real purchasing power. In other words, if you bought an orange today for $1, with inflation in one year at 12%, your orange will be $1.12. Coupled that with interest of only 10%, the orange in one year from now, compared to the orange now will be $1.02 (1.12 - 1*1.10 <-- Interest). 

For me I have three go to questions that you can always bust out to ask insightful questions.

What is preventing our competitors from doing this?

For me this question touches upon Michael Porter’s strategy framework and tradeoffs. If competitors can easily copy it (ala cut prices) it may not be the knockout punch one is looking for. The ability to answer this question gives great insights into how well somebody understands their industry, competition and products. Right now in Toronto there is a lot of these delivery order food sites like Just-Eat and Order it. What should be going on in their minds right now is - what is preventing competitors from creating clone sites? What unique advantage do they currently have? How do they exploit these advantages to create barriers or moats to entry? Poking and prodding subsequent answers to this question can unearth how well they know about their business.

Have we seen this before? What happened?

I personally use this when I am investing in stocks. I like looking at the current trend the company is experiencing and determining if this will continue or decline. For me my post on the Oreo tweet is a great example of understanding how realistic it was to repeat the same type of press coverage. This Superbowl (or any sporting event) has not managed to drive the same type of coverage as it had before. The closest thing we had was that selfie which Ellen did at the Oscars. Which again, one could imagine how much money that would have cost for the sponsorship.

Where did you get those numbers / assumptions?

It’s been said that Excel is the greatest fiction writer of all time. Back in my time in China we had a d-bag of a student from the National University of Singapore. Going on exchange means that everybody on exchange is here to chill, drink and meet some cool people. But nooo, not this guy. He wants to be Mr. Big Swinging Dick in class, harassing his team for “poor” work, asking questions to sound smart but add zero value. Pretty much his goal was to be a d-bag when it really didn’t matter. In my favourite class of all time, Business Models: Comparison between China and Multi-Nationals, we all had to present a business case and when it was his turn to present, I made sure he knew that his behaviour was unacceptable. See since our marks didn’t matter, most of us had a gentlemen’s agreement of being nice to each other. But when you force your team to pull an all-nighter for a 15 min presentation, that ain’t cool at all.

So off Mr. D-bag goes on his case about a Chinese website. Now another thing to add was that I was bombed out of my mind in this class. I had a 9am class, then a bunch of us would grab lunch and drinks, then go to class buzzed. But since I’m Asian my face goes bright red and it is super obvious that I’ve been drinking. I was half asleep and then bam he presents a slide with all these revenue projections.

When it was Q&A time I went in for the kill.

Me: Mr. D-bag, where did you get the revenue projections? Mr. D-bag: Uhhh we based it on their competitors <I notice his body language tensing up and he begins to sweat> Me: What are those competitors? <Quickly jumps to a one of those Four Quadrant Diagrams with all these competitors> Me: So you based your entire strategy on 15 competitors that aren’t even relevant to your business. One of them is a video game site! <Mr. D-bag stammers around>

I decided I had embarrassed this guy enough and let off. Also my friends were on his team so I didn’t want them to feel like shit.

But the funniest part happened after class. He walks up to me trying to be all alpha and tries to intimidate me by asking where I’m from. I respond Canada…. He scoffs “That explains it” and walks away. Needless to say this question is great to have in your back pocket.

Simplicity in Questions drive great insights

Three very simple questions to ask that are almost always relevant in any situation or context. Just watch out for any d-bags that may want to smack you around after when you make a fool out of them.

[seekingdavidogilvy]

Experts

I have never been a big fan of people labeling themselves as experts, visionaries, strategic thinkers or any of that nonsense. Here’s looking at you, Linkedin profiles. I’m a very big believer in showing people why you are an expert instead of telling people.

One of my most memorable experiences was sitting beside an unassuming fellow by the name of Bill Hunt who owns an agency called Back-Azimuth. I was chatting with him at a dinner Bing was having for a conference. We go through the usual talks of what do you do, past lives etc… Then he drops that he was a former marine. After his discharge he created a search company. He then sold that to a major advertising holding company. He was a big shot exec, and couldn’t handle it, so he created ANOTHER company. Then after a couple years later he sold that one too. Now he is on his third company. Here is a man that deserves the title of expert and all the awards thrown at him.

Contrasting this to the laughing stock of speakers and experts I see, I can’t help but shake my head at why people and companies pay so much for experts and consultants. I sometimes wonder if it is a CYA (cover your ass) approach that just naturally happens when you work for big companies.

How did Bing gets its name?

There is something to be said for a sexy story that help creates a brand. We all have heard EBay’s story of how a heartbroken engineer needed a way to sell all his ex-girlfriend’s stuff. Or the Ivory soap story of a worker leaving a machine on for too long which lead to the soap floating. These are great stories. They both happen to be complete bullshit, but they’re great origin stories. So what do you do when you have tons of money, no brand name, and you need to go up against Google? You buy the best “brand” money can buy.

I’m not a marketing guy. Again I fell into this. But from people I’ve talked to, Interbrand is the best brand consultancy money could buy and Microsoft went to them to create our Bing brand. Interbrand pride themselves on “Bringing together a diverse range of insightful thinkers making our business both rigorously analytical and highly creative.” After what I assumed was an expensive undertaking they settled on Bing.

One problem is, what does it stand for? According to Interbrand: “We knew the name had to be short, easy to say, and of course memorable. Most of all, it had to be easily associated with search efficiency.”

Others said Bing stood for Because It’s Not Google.

How did an expensive “Brand Agency”, not see this? Aren’t they stacked to the brim with experts? Isn’t this the kind of thing they were paid to anticipate?

When and How to use Experts

In the book Success Equation by Michael J. Mauboussin he broke down this question into a 2x2 matrix. MBA’s you can rejoice! First some definitions and I’m going to use these loosely. Predictability and Unpredictability deal with the fact or use of luck. In chess for example, there is no way I am ever going to beat Magnus Carlsen because luck is not really a factor in chess. But in a game like poker, where you can be highly skilled but random chance is still involved, even I could beat Phil Ivey in a hand if I was super lucky. This is probably why they don’t televise chess championships on ESPN. Rules which are definable vs. undefinable deal with something like Chess (definable rules) vs. Computer Programing (undefinable rules outside of the basic building blocks). Writing a block of code to do something could have millions of variations from defining the variable and using the condition statements.

  Decision Making Items

Going through that little thought experiment, we see things in the top right (undefinable rules, with unpredictable results) that experts aren’t really much use to us. When was the last time an economist ever got something CONSISTENTLY right? I would argue that a lot of what we do in business and marketing come with undefinable rules with unpredictable results. Who would have thought that American Airlines reporting a teenager for terrorism would spawn copycats let alone go viral?

What to do in Unpredictable Outcomes with Undefinable Rules?

So does that mean? Experts are useless? I believe in this situation the weighting that one puts on an expert should not be greater than your own personal opinion. If these “experts” cannot rationally explain to your satisfaction why it would work, call them on it. But what else can you do especially in a creative industry like marketing?

Michael J. Mauboussin recommends checklists. Yup checklists! There are two types: 1) Read – Do (like pilots) 2) Do – Confirm (for creative industries). Do-Confirm checklists are amazing for the creative industry. Spend your time brainstorming a bunch of ideas (Do) and then confirm that you have done it (Not making your name stand for something bad).

How to use Experts

Rely on experts that are “chess like” in behaviour. For those where the rules start becoming undefinable and outcomes are unpredictable a Do – Confirm checklist can help you. Write a bunch of goals you want and confirm that you meet those goals. Finally, be confident in yourself when something doesn’t feel right. Seek and understand the reasons why you are feeling that and look for rational thought processes to help guide you through it. Just because somebody says they are a social media expert may not be indicative that they know what they are doing.

[seekingdavidogilvy]

Why do Streetcars come in three?

Since one of the prominent themes of this blog is that I am an accidental marketer, it may come as no surprise to you that I took ZERO marketing electives in business school. (Well, I took Luxury Brand Management in China but that doesn’t count). I never thought I would end up in marketing so I overloaded on finance and operation classes. The good thing is that now that I am in marketing I can apply concepts that the people who only focused on marketing can’t. For me operations management (production of goods and services) was my favourite course in my MBA program. Learning about feedback loops, bullwhip effects and basic probability was the most enlightening thing about my degree.

Most marketers will thumb their noses at having their “ART” associated with the cold hearted callousness of six sigma’s and complicated mathematical models. I would like to remind most marketers that most CMO’s report to the Chief Operating Officer. And most importantly for the majority of the Fortune 500 companies out there, marketing is really about executing.

This post will be me pointing out some things you may have noticed and putting a marketing angle on it. Oh and the title of this post is from the book Why Do Buses Come in Threes: The Hidden Mathematics of Everyday Life (link).

Why do streetcars come in 3?

If you are a Torontoian you know that the King streetcar is a gong show. Right at rush hour no streetcars come for an hour, then all of a sudden a herd of them come over the horizon. Usually its three streetcars coming one after another. I have also noticed this effect with elevators.

So why does this happen?

Imagine its rush hour:

Many people are waiting for the streetcar

A streetcar arrives, takes a while for people to get on

Other people might see the streetcar, jaywalk like crazy to get on, causes a delay

All of these mini delays prevent the streetcar from moving

Streetcars behind can now go faster because less people to pick up

They then catch up to the first streetcar that is now delayed

This then happens across many stops which causes the streetcars behind to batch up

All of this waiting for the streetcar creates a feedback loop.

The most relevant examples of feedback loops are in social marketing. From positive PR like Domino’s drawing requests on their pizza boxes or Clippy’s twitter account, to bad PR like United’s guitar smashing song, feedback loops appear all the time in social marketing.

How come Target’s shelves are so empty?

Target was recently launched here to much fanfare, but after a while it doesn’t seem to be resonating much with Canadians and the company has lost as much as $1B in their Canadian expansion. Personally I found that Target could never seem to get their shelves stocked. Every time I go there their shelves look more barren than the grocery shelves of Walking Dead.

I personally believe the failure of the Canadian launch was due to not paying attention to their operations. In particular, pricing and keeping popular products stocked. They were so focused on building the brand of Target that they totally forgot the basics. Creating the allusion of bargains and having stuff for people to buy.

The reason why it is still so difficult for Target to stock items is something called the Bullwhip effect. What that is, is the lag it takes to transport product from the Suppliers, to the Warehouse, to the store, to finally stocking the shelves. Now imagine you are a manager at Target. You noticed you are out of chips, you need to call the head office to order more, which then goes to the warehouse (which may be empty), and needs to go to the supplier to get more chips.

At each of the stage there is an unknown of how much inventory to order as you want just the right amount of inventory at each stage. Holding on to excess inventory causes you to spend cash, which could be spent on other things.

Sorry this isn’t a solution

So what can you do as a marketer? Remember it’s about the 4 P’s: price, product, placement and promotion. Though you may be responsible for just one of the P’s, they can be related. Sometimes improving say the Placement (in Target’s example) could then help with the Promotion (Target has stuff you want).

Why am I always last at the checkout lanes?

We all have done this before. We line up to pay our groceries. Pick the checkout line with no old people, no children, just guys buying 5 things. And... half an hour later you regret your decision and exclaim why am I always last at the checkout lanes. Well this one is kind of so simple its basic probability - if there are 8 checkout lanes the odds of you getting the fastest lane is 1 in 8.

For some items like lead generation you can do the good old “everybody is a winner” to gain sales. An example of this is those drawings at restaurants where you drop your business card in a fishbowl. Instead having just one big winner (lunch free) make everybody a winner (free appetizers when you buy a main).

There you have it, feedback loops, whiplash effect and probability, three operational tools to help you out in your marketing campaigns.

[seekingdavidogilvy]

Being a Great Marketer

“Sell me this pen” -Matthew McCaughey, Wolf of Wall St.

How do you get a person to read an 8.5 x 11 advertisement in Times New Roman size 12 font? David Ogilvy posed this question in his book “Confession of an Advertising Hitman.” It reminds me of the amazing scene in Wolf of Wall St. where Matthew McCaughey takes Leo DiCaprio for a lunch where he does that chest thumping song. And at one point he says to Leo, “Sell me this pen”.

In my MBA negotiations class, we did all these live negotiation cases where we got to act to our hearts content as wannabe alpha i-bankers. We were the Wolves of Bay St. It was a sad sight to see. Acronyms and buzzwords were thrown around: BATNA, opportunity cost, blah, blah, blah. Talk about a stark contrast between academia versus practitioners, ivory tower publish or perish versus boiler room penny stock models and bottles lifestyle. At the heart of it, Leo’s character understood more in that scene than academics who have been studying negotiations. It isn’t you or your ego that you need satisfy, rather what are your customer’s needs that you are trying to satisfy.

Marketers NEED to understand and constantly FAIL to realize, any form of marketing needs to answer what is in it for their customers.

Applying this to a job search

Some of my readers are not marketers, but for me the one thing coming out of an MBA is that marketing is a MUST for the job search. Not marketing in an annoying Ambulance Chaser ad sense, but in an intelligent manner about what you can offer. You have a product you need to sell, yourself (remember you have debt) and you need to get a customer (your future employer) to buy it.

MBA students come and talk to me asking for a job because I have worked at fancy companies. They have failed miserably as a marketer because they answered what is it that they want (fancy job at a fancy company) and not what I want (get more people to use Bing). Still some of them listen to me ramble for an hour, I politely remind them what you pay for is what you get and right now you are paying nothing. The fact is people make 3 big mistakes:

1)     You need to sell yourself. Making you sound like everybody else is not going to help. Focus on what makes you distinct. Not what pointless degree you have.

2)     “You lack experience”, is code for you don’t understand the job. But Andrew, how do I get the job experience if they won’t give it to me. You need to find what experience you currently have and position that as closely as you can to that job. If you can’t describe the job in “common language” you don’t have an idea for what is required of you.

3)     It’s not about you, it’s about them. How can you make your future bosses and colleague’s lives easier? They don’t care about your degrees (to the extent that they are ass covering, if you turn out bad). They care about whether or not you are able to have their backs and if you can understand what you need to do to make them look great.

Again, the customer when applying for a job is not YOU! But rather your future boss. I sometimes tell people that if you are the next Mark Zuckerberg, you better do your own thing rather than work at big companies. Sometimes what is best for the company (creating the next great hit) isn’t what your boss is judging your performance on (i.e. faster TPS reports ala Office Space).

Applying this to Marketing Campaigns

In paid search we are blessed with tons of data and sometimes we go overboard with data. Some things are done in the name of “big data” analysis. Nothing wrong with this approach but we need to constantly ask who is the customer that we are trying to reach and what is in it for them. The issue is that sometimes there is misalignment between what the agency wants (winning marketing awards) vs. what the company wants (selling more stuff). Brilliant campaigns, like Dove soap having more moisturiser, stand the test of time. Personally, even though Dove’s more recent ads may have been more “prestigious,” their moisturiser ad (created by David Ogilvy) is what still resonates with me.

How to get somebody to read a 1 page ad

Like Leo DiCaprio’s character, David Ogilvy had the smarts to know that it was always about the customer. To get somebody to read a 1 page text ad, you make it about them! “This is why <insert name> is brilliant” in the title with as big sized font as you can. Then fill the one page ad all about them and why the product is for them. That is why I respect David Ogilvy so much. Even 50 years later making your marketing campaigns about the customer is still the best path to success and even avoiding jail!

[seekingdavidogilvy]

No Post this week

Sorry guys been busy with the Toronto Wing Festival.

If you don't know what that is, its all you can eat wings in Toronto. Its the largest chicken wing festival in Toronto! Its happening this Sunday on May 4th. Still tickets left here: http://torontowingfestival.com/tickets/

[seekingdavidogilvy]

Understanding the Ecosystem in Technology

Internet Explorer is the butt of a lot of jokes.

It’s universally mocked by younger, savvier internet users as the browser of choice for their grandparents to install 15 toolbars on while checking their AOL email accounts. It’s spawned countless memes like the one above. Even Microsoft has made fun of it. So why bother to support it when other people feel that other browsers like Firefox, Chrome, or Opera are better? The one word answer is Ecosystem.

Sometimes I get asked why Microsoft continues with certain products that make no money whatsoever. Like what’s the point of Internet Explorer, OneDrive (Cloud Storage), or random other apps that Microsoft creates. This is usually a good question to ask from a first order of knowledge, but as you dive into the Technology sector even further this idea of an ecosystem appears. Those from a retail landscape may find this idea is similar to a loss leader, but not quite. This example doesn’t just apply to Microsoft but also Apple, Google, and other tech companies.

Microsoft is moving a lot of the productivity over to the cloud. So much so that Office 365 is a $1B business. Now imagine this billion dollar business that is dependent on the internet browser and your developers have been optimizing it for all these non-MSFT browsers. You launch it and all of a sudden there are these browser updates that now make your features broken. What do you do now? You’ve dumped tons of resources, put an entire business model at the hands of your competitors, and they can take you down with one stroke. That is why it is so important that major technology companies have an ecosystem and control major important assets.

A really good example is the whole youtube app for windows phone. A major complaint of Windows Phone is the lack of the apps in the ecosystem. What happened with Microsoft is that they began to create a Youtube app for Windows Phone. After tons of development time, joint agreement, etc… the app was launched and then Google decided to block it. Regardless of the politics, you can imagine the business ramifications this has on the Windows Phone ecosystem. Taking this idea even further to other parts of Microsoft’s business lines, you can see the need for creating your own experiences.

Pick One but Not All Three

This idea is not just on the app (services) front, but really across three pillars in technology: Services, Hardware and Software. Major companies need to control (to a degree) all three of these pillars. From a strategy perspective, most of the successful companies have chosen to make ALL their profits on one of these three and forfeit the profits on others.  For example: Google makes all their money on services (search), Apple on Hardware (highest OEM margins) and Microsoft on software (Windows and Office). In other words: pick one of them and do it really, really well.

Profiting in all pillars of Services, Hardware and Software is nearly impossible. History is not very kind to companies that try to do even two of the three. Blackberry is the most relevant example where they wanted to profit across hardware and services, and they failed miserably. Nintendo might be a good example of a company doing decent across two pillars with their highly successful Wii system. Yet the failure of the Wii U reinforced the idea that achieving success in more than one pillar is rarefied air.

The Idiocy of Sell-Side Analysts

This is why I roll my eyes whenever some brilliant Wall St. analyst says Microsoft needs to focus just on software. The era of Microsoft just selling pure software to make profits is over. You have Apple with beautiful hardware, Google with integrated cloud services, all attacking Microsoft from a different pillar. Strategically from a technology space is a bit more complex and difficult to predict than other industries. You can’t think from P&L line items on financial statements, rather 2nd and 3rd order thinking needs to be applied. If I do or don’t do this, what will happen with my competitors, users and my own company all need to be reasoned through. Hence the need for Microsoft to get into hardware (Nokia, Surfaces, etc.) and services (Bing, OneDrive, etc).

In the meantime does anybody have anymore glue?

[seekingdavidogilvy]

See Investor Reports are Cool!

This article (http://recode.net/2014/04/16/yahoos-96-million-fired-man-and-three-more-dudes-for-the-board/) caught my eye because of what I posted today. A grand total of $96M freaking dollars for 15 months of work! How did Kara Swisher find this out? Yup... Investor reports.

Below is the breakout for salaries only of Yahoo's executive team.

Now I hope you will excuse me I've been tasked to find some tissues.

[seekingdavidogilvy]

Nerd-Alert: Using Annual Reports to Understand a Company

Brace yourself: this post is going to be nerdy.

And not nerdy in a cool way like talking about video games or Star Wars or something. I’m going full business nerd in this post. But I think even the non-nerdy among you will find this stuff pretty interesting.

The idea behind this post is that most people don’t know that publicly traded companies have something wonderful called Annual Reports. Annual reports are for people that invest in a stock market to get public information about the strategy and financial information for an investor. As a marketer, it is a great way to get a glimpse at how the company views themselves and to cut through the bullshit that you hear people tell you about their company. Let’s put it this way: if a company doesn’t mention a product in their annual reports then either a) its top secret or b) it really doesn’t matter.

Accessing an annual report is easy. Just use your favourite search engine of choice (mine is Bing because they pay me) and look up “XXXXX Annual Reports”. This usually takes you into a company’s investor relations page. Here you can find the filings of their stock information, any conference calls the CEO has done, and annual reports. For this example I’m using Publicis which is one of the big four advertising agencies and can be found here.

The first part is usually the Chairman or the CEO’s letter. By reading that you get an idea of what is the “tone at the top.” In page 2 of the 2012 Annual Report, Maurice Levy says that his two pillars of a winning strategy are digital and emerging markets. Another interesting aspect is that they break out their executive teams and you find some interesting tidbits. Like Publicis is so dependent on P&G as a client they made a CEO just for P&G!

I want that shirt!

Another great aspect of annual reports (especially with agencies) - you know who most of their major customers are! And what all the companies that they own are. Publicis does a great job of breaking this out in their annual reports and in some of their award winning campaigns. What I found interest reading this (and yes I really do find this stuff fascinating. I told you this was a nerdy post) is although there is a push for digital in Publicis, Search (paid or organic) is only mentioned twice. I don’t know if this is deliberate, but for a business that has 33% of revenue classified as digital it does have me wondering what that digital split is.

Finally comes the dreaded (for some) actual financial statements of the company. You don’t have to be an accountant to enjoy reading them, but just scan through them for interesting facts. For one- if you work for a Publicis agency you would note that, “Personnel costs reached 4,076 million euro in 2012, up 12.8% from 3,615 million in 2011….” and “Strict control of staff costs remains a main concern….” (emphasis mine). Another interesting part is looking at how Publicis divides up their regions. Though the CEO mentioned a need to grow in emerging markets, Europe and North America still make a majority of their revenue.

Organic growth in Europe has declined in 2012

Now for the really juicy stuff. If you want to delve even further you can look into how much certain executives make! For American listed companies you want to look at something called the 10-K’s. As Publicis is French they have something called “Registration documents” which can be found here. On page 77, they give the break outs of the pay and the CEO made 2.7M euros plus 16M euros in deferred compensation, for grand pay cheque of 18.7M euros! Not too shabby if you ask me. Let’s hope he can get some snazzy shirts like Mr. Emsley.

So there we have it. Just a simple analysis of an agency. Let me know if you want me to delve into any companies further. Actually, even if you don’t let me know I’m just gonna do it anyway. I told you, I’m a nerd like that.