THE HELICOPTER WORLD OF MONETISATION

The occasion: The London Business School Summit on Technology and Media 25/02/11
The speaker: Dr. Bobby Rao, ex Vodafone Marketing Director, now founding partner in Hermes Venture Partners.

We’ve all had that moment. One of sheer unbridled hatred of the cleverest boy in the school. Who gets all the prizes; who gets all the girls. That’s Bobby. The coolest and most suave presenter I’ve seen.

1. We are living in the midst of a game where we are all asking “where’s the ball?” Because there’s been a collision of three markets: the internet; media; consumer electronics - between them worth $3 trillion.  And the legs of each has been kicked away.
   
2. Historically media has thrived on scarcity – now through digitisation, high speed Broadband and the low price of storage, scarcity is over.
   
3. You can fight scarcity by focusing on live events. Or you can go for quality (iPad and iPhone). Or you can monetise the new usage occasions there are.
   
4. But recognise this is a new personal market meaning advertisers must really understand individual people. So who has got the best information? That’s why Facebook is valued at c. $70 billion.
   
5. Yes that’s what Bobby used to see what was going on in Egypt via live video in Tahrir Square as it happened. BBC didn’t have a chance against what they now call “pro-sumers” (producers and consumers.)
   
6. To monetise all this  we must charge people in the right way and the right amount. It’s not about how many eyeballs any more it’s about whose eyeballs and what’s going on behind those eyeballs.
   
7. Yet marketers - an “avoid-failure”, in-transit-between-jobs bunch - are conservative and lagging behind the changes that have happened already.
   
8. And of course we are living in the middle of a valuation bubble (what was later described by James Bromley CEO of Mail Online as descending from the “peak of inflated expectation” phase into the “trough of disillusionment”).
   
9. But be aware that this $3 billion game will not be played on the small market Euro stage (let alone the tiny market UK stage.) It’ll be played out between Asia and the USA.
   
10. It’s about customer knowledge, customer experience and a scale of population big enough to pay for the weaponry the big guys need. It’s a good time to be a customer and a spectator watching them - Apple, Amazon, Google, Microsoft, Samsung, Omnicom and WPP. But remember - no one knows where the ball is yet.

Thank you LBS.

I’m off to look for that ball.

ALL THINGS MUST PASS

This was George Harrison’s song, quoted wistfully by Phil Redmond at a recent conference, “The State of the Arts”, as his lament for the cuts in arts’ funding by the government. Ed Vaizey, Minister for the Arts, tried the brazenly stoic “we are where we are…let’s move on” approach which from the prime culprit is a great try-on… use it yourself when arrested for drunk driving….”let’s move on Officer.”

“All things must pass”. Do you feel as though you were living in truly seminal times when the demolition of all we knew is changing? Tunisia, Egypt, Bahrain, Libya, Yemen – hallo tube…hallo toothpaste. Yes, just you try getting it back in.

And it’s not just the Middle East. It’s that naked King. Suddenly like Hans Christian Andersen’s little boy we realise that “he’s in the altogether – as naked as the day that he was born.” And it applies to everything.

Lying and calling it diplomacy, selling arms and praising it as  our export drive, supporting dictatorships, placing expediency over principal, pretending command and control works…all stark naked nonsense.

And this applies to our jobs too. The employee and consumer will no longer simply be told what to do. They are beginning to realise they actually are much more in charge than they thought and that the big corporations are scared stiff or should be….not of the Unions or Which magazine but of…people.

It’s time to tell it like it is.

Gavin Stride Director of that interesting creative centre Farnham Maltings, said at the Arts Conference I mentioned, and to general dismay:

“I don’t believe in partnerships…they are generally between people who don’t like or trust each other just to get something out of someone else…in the Arts it’s usually money out of the government. But I do believe in friendships.”

He also said:

“Under the previous government Arts Organisations were stabbing each other in the back. Now under this government they are stabbing each other in the front.”

At least the front feels more open and honest. At least it’s a change. You still die but you know who killed you.

All things must pass. All things must pass away. Don’t be sad or nostalgic. Be excited – we are entering new times and new times mean new opportunities.

HOW TO JUDGE THE POWER OF ADVERTISING IN THE DIGITAL AGE

When I was in advertising the word on the street meant more to most of us than Millward Brown tracking studies did because the loudest word was the word of our knowing and, hopefully, envious peers. Now the word on the street includes everyone.  All the punters out there are our colleagues too.

Twitter and You Tube have instantly changed the game. Now everyone’s point of view counts and is counted. No event or conference is a proper conference without a constant Twitter flow. Ditto advertising campaigns...instant judgements are made.

What’s interesting is that these qualitative reactions are being weighed more carefully than the more ponderous quantitative stuff. Welcome back to the real world…and I’d feared the researchers had hijacked advertising. Here’s what the guys in the business are saying:-

"The dialogue around Super Bowl ads has changed--it literally used to happen at the water cooler, and now, the minute an amazing ad hits, the Twitter world goes crazy," says Tor Myhren, chief creative officer of Grey New York. "I personally believe the YouTube view count is the single most important factor in judging the success of a Super Bowl ad."

"It used to be that you'd watch the Super Bowl spots played on TV and in the news right after," says Jill Beraud, chief marketing officer of PepsiCo, which monitors chatter on Facebook and Twitter to measure an ad's success. "Now, the longevity of these Super Bowl spots is endless between YouTube and all the digital tools that are available."

Jason Peterson, chief creative officer at Euro RSCG's Chicago office, believes a Super Bowl hit is more than just YouTube views or Twitter tweets. The most successful ads, he says, will not just be watched again online, but be reimagined. In other words, they'll not only go viral--they'll become Internet memes.

"The next level is: How many parodies are you getting? How many people are getting off their asses, getting video cameras, and actually interacting with the work you put out there? Parodies, to me, are the biggest gauge of whether an advertisement is relevant with the market."

Interactive, engagement and really getting into it…this new world of marketing is getting more emotional and it works.

KNOWING ME KNOWING YOU - the value of being in a network.

I thought some of you might find this podcast interesting.  It was recorded at a recent Brighton and Hove Chamber of Commerce event I attended.

THEY DIDN'T ACTUALLY KNOW WHAT GOOD WAS...

John Neill Group CEO of Unipart described this as the main failing of British Management in the post-war years. Peter Lederer, Chairman of Gleneagles, said this was why he left Britain in the 1970s. No good.

But now we’ve got adept at knowing what good is and as adept at hiding our lights under bushels.

Britain is world class at restaurants, retailing, the arts, building brands, hospitality and creative industries (and just for fun I’m including investment banking in this category.)

World class. The Royal Opera House. Glyndebourne.
World class. The Tate. Royal Academy. National Gallery
World class. WPP. M&C Saatchi. Sedley Place. Barclays
World class. BBC. Pinewood. Hat Trick. Talkback Thames
World class. Gleneagles. Hotel du Vin. Browns
World class. Selfridges. John Lewis. Fortnum&Mason. Foyles
World class. Fat Duck. Ivy. Galvins. Wolseley
World class. Simon Rattle. Kate Adey. Jamie Oliver
World class. Canary Wharf. O2 Dome. St. Pancras. London Eye
World class. Football. Rugby. Cricket. Golf. Cycling. Sailing

Yet we persist in doing three crazy things.
i)     selling our brands to anyone, anywhere with a bit of cash
ii)    outsourcing what we should do ourselves to high inflation economies
iii)    failing to improve what we do and make every single day…because good is never good enough

We have the choice of becoming third world class – Primark, Poundland, Charity Shops - or working our balls off to be best.

I was watching Jeremy King at the Wolseley the other day, chatting up his staff and walking the floor that’s what leads to world class. That’s why sensible CEOs should live in their reception feeling and seeing the face of their business. Why Sir John Hegarty, founder of ad. agency BBH said you could never take your eye of the shop for a second.

Stop for a moment just trying to be big or get rich. Start trying to be better. Start to change the game (that’s why I call Kate Adey world class – she changed the way we saw women broadcasters forever.)

World class takes perspiration, focus, trial and error and a withering disregard for anything that takes your eye off great customer service.

It takes pride, ambition and a willingness to be measured against the best, smartest and most competitive.

Welcome to New Britain….and not a minute too soon.