If you would ask any client or any research provider to choose between boring known information and exciting new, none of them would have to think about it, there seems to be no dilemma here:
And now for the real school board dilemma, lend from Poppers idea about formulating interested hypothesis. This is the research and marketing dilemma right away. Who dares to have the consequences of uncertain interpretation?
And now for something interestingly different: mathematics & truth. Always an interesting combination (even more so since Gödel). I remember as a child (first lessons on high school) I was fascinated by the logic rules we learned, especially the rule a leads to b, where the assumption a did not nead to be true and still could lead to b, being yet a true consequence. I could not buy that at all.
Now, I know it to be very true, and see the workings of it in marketing and research often: an idea or insight or finding that is not true, can lead to wonderful valid consequences. Or, otherwise put, bad ideas can (and often do) lead to good marketing.
Let me explain that at the hand of quantitative research, where reality is boiled down to a two axis system (the preferred language in marketing). I have seen this presented in boardrooms, where the board made decisions on the position of their brand in relation to other brands on the quadrant. Typically this is irrational behaviour if you understand the math of it. The brands are all taken from a multidimensional space, maybe more than a 100 dimensions. Calculations are made to adjust this to a two dimension space. If you understand how much information is lost if you translate the 3-dimensional space (the earth) to a map, you can understand what is lost in this excersice. There is an exact measure to express the amount of information loss: the ‘Eigenwaarde’ (I only know the dutch word for it, sorry). Each axis has its own ‘eigenwaarde’. For this kind of research 0,18 is a rather high value and beyond 0,25 is very difficult to go. This means that 25% of the original information is maintained on that axis. That means that 75% is lost.
This is how decisions are made in the boardroom. But …. as I explained, it can be very usefull to do. There are various reasons for that. I won’t dive in it right now, but I would like to highlight one rule: the rule of focus. No matter the value of the information, if it leads to a focus, and if this focus leads to action, often something goods comes out of it. The action leads to positive energy in the organisation, everybody is happy and this is an important aspect of good marketing.
I really do not mean this in a cynical way. I most certainly don’t want to argue that we don’t need good research anymore (we do), or that we shouldn’t fight bad research (we should). I only want to explain that there is some robustness in the research and marketing process. It is like disentangling a very difficult clotted piece of wool: you just start plucking somewhere as long as you do that with some attention you will get there.
Interesting phenomenon: the war in banners. In the NRC of today an interesting page is written about this in the economy part of the paper: there is a war going on in banner world (’De banner zit niet stil in een hoekje’). Banners are less and less clicked upon. Click rates diminished from ‘a few percents’ to ‘ tenth of a percent’. Surfers on the web become blind to the advertising. I see this attention war going on in a lot of environments. Typically the war leads to similar solutions: competitors use the same benefits, even use the same language in advertising. Whereas all marketing laws stress on ‘being unique’ we hardly see that in reality. The uniqueness is almost always found within ‘details being different within the same system of signs’. All of the wariors can be judged on the same benchmarking system. The war tends towards one solution that is to be enlarged and inflated. The online advertisers are fighting back along the same line: with expandable banners (’layered add’) that take over the whole homepage for a while (’homepage takeover’). This is a fight they will lose. The solution is size and attention by screaming out loud as opposed to ‘relevance’. This type of advertising will be succesful in the short term but of course the consumer won’t take it in the long term.
Van Lierop, from www.nu.nl (’now.com’, the Netherlands most popular news site) describes a tension between ‘advertisment’ and ‘news’, both struggling for attention. I guess this quote is quite revealing, if you look at it from the point of the reader, who loves to be tempted by the news but is not seeking the attention of the ads at all.
Funny if you take into consideration that I often hear consumers claiming to like the ads in a magazine. They even like the ‘better’ ads on tv. But no one seems to like banners at all. I moderated a group op youngsters lately that were definintively into online. But they said: if you want my attention, don’t advertise on the web. Use tv.
When giants fall, their history is to be researched by journalists. This gives us the opportunity to look what happens in boardrooms. After the collapse of Ahold a few years ago, all of the boardroom meetings has been covered. The journalists are often helped by the fact that the collaps of a giant causes a lot of collateral damage: fired and therefor unhappy top managers, or others that seek salvation by confess (in order to reduce the chances to be accused of mismanagement themselves). Now Fortis is being examined.
This morning I read in the FD (Financieel Dagblad december 1st) an interesting insight in the Fortis files. Two really interesting points. One is that the board had no idea what the consequences would be in the market from their idea to raise 8 billion extra. In their opinion this was a ‘technical financial’ valid action. Even after the protest of three very important investors, they still valued their idea as rational behaviour. In the market their action was percieved however as the last desperate action of a bank out of control. A very interesting gap in view on the world and selective blindness to signals from outside (from their own perspective these were weak signals, all the rest of the world would consider them as Screaming Out Loud signals).
The second interesting point, related to the first, was the role of little things. The bank had a strong tradition within the french speaking elite of Belgium. The rich all had a very strong position in the bank. All together 15% of stock was in hands of this subgroup. They were however neglected. Their role in the board had been vanished, exchanged for a more international view. Lippens, being one if their lot, should have been aware of the importance of this group, but did not communicate with them. When they were confronted with the new emission they had not been consulted on, they started a ‘revolution’ and tried (in an indirect way as Belgiums normally like to act) to get rid of the complete board.
Clinton used to write on his desk ‘It ’s the economy stupid!’. The fallen big firms and institutions could all engrave on their grave ‘It is the little things that make you fall, stupid!’
