It’s the end of the world as we know it

eat

And I feel fine.

Why? Shouldn’t we be scared? BofA and Citi completely insolvent (Don’t trust one word of their CEO’s: Both institutions are dead in the water. The only question is how their shells will be propped up for a while.), the government clueless how to deal with these ongoing massive, financial tsunamis, Detroit basically done and unemployment increasing to scary levels. And, even worse, the real pain is still to come. 

So, why am I fine? Because this is not a typical recession. Or even depression. It’s a global shift in everything the capitalistic world believed in for the last decades. This can only be compared to the Continental Drift: an event that will transform us and our world for generations to come. And it will take at least one generation to adjust to the changes and come to grips with the idea that this transformation is permanent:

  • Large, decentralized corporations will disappear. These organizations were built for overconsumption, price pressure and cheap production. Micro-production is the future. Goodbye Detroit. Welcome to thousands of small car companies.
  • Destruction will be replaced with collaboration.We won’t destroy competition, nature or other nations to achieve our goals. It’s too costly, not efficient and goes against everything humans are wired for. Goodbye Wall Street. Hello Main Street.
  • Strategy will be replaced by mini-experimentation. Wars needed strategy. The 21st century economy needs mini-initiatives, mini-tests that continually evolve businesses. Goodbye Accenture. Hello lab operation.
  • Faking value will be replaced by real value. What’s the difference between Crest and Total? Exactly. But there’s a huge difference between an Apple and Dell experience. Goodbye advertising. Hello value creation.
  • Productivity will be replaced by creativity. We’ve had dumb growth for too long. We need sustainable, resilient growth. Goodbye China. Hello new world.

The 20th century was about consuming stuff. The 21st century will be about consuming ideas. Consuming stuff is too hard on the planet, laborers in the 3rd world and our wallet. Consuming ideas will still create a value chain but a value chain that’s more adjusted to changing the business world. Slowly, we see these idea consumption models popping up: Think Nike Plus. Think Twitter. Think Wikis.

We’re at Ground Zero. Things will get worse in the next few years. Much worse. But out of this destruction will come a new world. And the world we now know will be gone and in a few decades we’ll shake our heads and think: How did we ever believe these were the good times?

Hang in there. And create new ideas.

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Location, Location, Location: The future of mobile advertising

I’ll be moderating a panel at SXSW about mobile advertising. Good group of people on the panel, see the description below:

Most people groan at the thought of advertising on their mobile phone and rail against the idea as 24/7 marketing. But is it possible that mobile advertising could be something that consumers enjoy? the panel will explore this dichotomy, what it takes to ‘get it right’ in this burgeoning industry.

Room C

Tuesday, March 17th

3:30 pm 4:30 pm

Sam Altman CEO,   Loopt Inc

Bud Caddell Strategist,   Undercurrent

Denny Reinert Dir IA Ad Sales,   Navteq

Tina Unterlaender AKQA

If you’re interested, mark it on the SXSW calendar

Denny’s – The bridge from traditional to new media

dennys

Today’s clear Superbowl Ad winner was Denny’s. Not because their commercial made me laugh. Not because their commercial was so commercial. Not because I admire Denny’s and love everything they do. No, they won because they will make the country talk. Talk about their free breakfast on Tuesday. Tapping into the mood of the country and understanding that brands have to add value. Lend a helping hand. 

Last year this wouldn’t have worked. Too many people walked by Denny’s just thinking they’ve outgrown this rather unhealthy food. But today? A free meal goes a long way. For everybody. But, they better execute this well. The staff better be prepared for major lines and they need to execute flawlessly. Looking at Denny’s SEM strategy (none), their IT strategy (Site crashed, as we speak, Denny’s is looking for a new IT vendor), their Facebook strategy (none, they market the AllNighter) and their Twitter strategy (Still promoting that AllNighter) I’m concerned that a good advertising campaign leads to ultimate disappointment. 

Everybody can have a great idea. Only a few can turn great ideas into great executions.

Twitter and VRM

Positive light A0

I was always intrigued by the idea of VRM: Providing customers with tools for engaging with vendors in new ways. Or as Doc Searls describes it in the Project VRM blog:

“VRM is Vendor Relationship Management. It’s how customers manage relationships with vendors. (Or with other individuals, or with organizations of any kind — such as churches or governments.)”

Basically, VRM allows people to create their personal RFP: Going on a business trip to Austin tomorrow? Send out an RFP to airlines, hotels, rental car agencies, restaurants communicating your travel dates and budget. It saves all of us a lot of aggravation because it will cut down on research times, brands won’t need to waste their money on irrelevant campaigns and a new form of partnership between buyers and sellers will be formed.

While I was preparing for the Twitter panel at OMMA Social, discussing possible business models for Twitter, I was starting to have doubts about my initial proposal:

“Charge each company in the CPC model: Each visit to a corporate Twitter site and each corporate tweet should be charged just like a click.”

Sure, we know that CPM models or contextual ads won’t really work on Twitter. They will be ignored and spell doom for Twitter since the platform would have to rely on traditional advertising to support itself. And that’s the last thing you want to do in the economic environment and the rapidly declining value of display advertising. The CPC idea was intriguing since Twitter has become my personal Google, it’s a self-regulating ecosystem that will punish brands that don’t behave and it’s an amazing opportunity for small, local businesses to connect with people: Get your message out to followers and each click outside of the Twitter Universe to a commercial message goes right into Twitter’s pocket. Mildly intriguing but not a real game changer for Twitter. At the current valuation of $250M, Twitter would have to work with hundreds of thousands of small businesses to be able to sustain this price tag. Sure, a wine shop would pay Twitter $20 for 20 clicks to their special offer. But you need a lot of wine shops to get to $250M. And here comes VRM into play. Doc Searls wrote in the ProjectVRM Blog:

“VRM is about providing customers with tools that make them both independent actors in the marketplace and better equipped to engage with vendors. Those tools are in development. We need to get some of them out there before we can even begin to have arguments about whether or not they’ll work. Fact is, they will or they won’t. But they deserve a chance before we go salting the soils in which they need to grow.”

Do we really need to build new tools? Or is Twitter almost there to be the tool to issue personal RFP’s and become the VRM hub? When you use Tweetdeck, you have basically four streams: Main Stream, Replies, Direct Messages and Groups. You could easily add another column for your personal RFP’s. Brands would gladly pay a fee to receive leads and, whoever, wins the pitch, will pay a sales fee as well. It could go like (the % is my symbol indicating a personal RFP)

%Los Angeles Hotel Rental Car Flight Leaving Austin 1/28 am Returning 1/31 pm 3 Star and up close to Beverly Hills

People would to be able to engage brands on their own terms, could take the first offer or decide to negotiate, become a real partner and not just a target. Project VRM and Twitter should involve the early-adopter crowd that’s still dominating the Twitterverse and let them participate in the product development process, helping all parties to work out the kinks. I’m not sure building new tools is the answer. We have a great tool that aches to expands its capabilities. And the time is ripe for a new way to deal with markets. Why not strike while the iron is hot?

What do you think?

Microsoft missed an opportunity

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Last week, Microsoft posted a profit for Q4 2008 and to celebrate this occasion they laid off 5,000 employees. A post-industrial reaction to an information age problem. While other companies are proposing pay cuts to share the pain and save jobs, Microsoft chose the easy and lazy way out.

Instead, they should have used this unprecedented financial crisis to transform the company:

  • Engage every employee to improve financial performance, make everybody responsible to save money and, at the same time, jobs.
  • Use all available tools (Wikis, Social Networks, etc.) to encourage conversation and an open discussion how to transform Microsoft as a company and, possibly, change the overall mission.
  • Change the focus of Microsoft from sucking up to Wall Street and start delivering superior service by empowering each employee and allow them to transform the company one social interaction at a time.
  • Communicate this new focus to the world and change Microsoft’s image from a dark, gray monolith to a lively, personable, caring company.

These are tough times. Even for companies that hoard billions of cash on the sidelines. How you deal with the crisis and adjust your brand to the new reality is the game changer. Some get it. Microsoft clearly doesn’t.

There’s no Social Media

alliwant

Image courtesy of Swiss Miss

Dictionaries define media as a means of mass communication. Slapping a ‘Social’ in front of ‘Media’ doesn’t make it less of a means of mass communication. That’s why these boring debates about monetizing Facebook are pointless. And this mass communication mindset leads to dead brand pages on Social Networks with no engagement opportunities. Twitter profiles as RSS feeds. Or media departments being tasked to develop ‘social media campaigns’ because media belongs in media. 

Yeah, I know, it’s the Wild West out there: Everyone claims to be a Social Media expert – Strategists, Account Planners, Media Folks, Brand Managers. And so we end up with people being euphoric about 10,000 ‘friends’ of their brand. Or Twitteratis counting down to their 7,000th follower. In reality, this all makes no sense because they apply old metrics to a new reality. It’s questionable if marketers can move away from doing something to people and convert into a mediator role: Helping others with their social interaction. 

Who knows if Facebook and Twitter ever become profitable ventures. Frankly, I couldn’t care less. There’s a lot of data to be mined, new spread sheets to be created, data centers to be kept busy. All this data mining might be very insightful and help the balance sheet of these companies. Somebody will become rich.

But what these tools really do is make us visible to the world. The richness of this experience has nothing to do with numbers. It has to do with new forms of connections and interactions. With new ways to communicate with each other. A new form of humanity. 

Calling it Social Media makes it more vulnerable to the madness of targeting, relevancy and data centers. Let’s find new words for this experience. This is too important to let the vultures take over. Again.

Fear Economy – the world’s oldest profession

fear

Image by Kenn Munk

Traditionally, we leave the part of the apocalyptic prophet wandering through the landscapes of urban post-modernism to homeless bible-thumpers. But since the credit crisis has taken hold of our attention, intellectuals, politicians, columnists and even friends have turned into doom prophets. Thomas Friedman wrote in an NY Times piece:

“I go into restaurants these days, look around at the tables often still crowded with young people, and I have this urge to go from table to table and say: “You don’t know me, but I have to tell you that you shouldn’t be here. You should be saving your money. You should be home eating tuna fish. This financial crisis is so far from over. We are just at the end of the beginning. Please, wrap up that steak in a doggy bag and go home.”

Noel Roubini supplies you with a daily dose of gloom on his RGE Monitor:

“The global financial pandemic that I and others had warned about is now upon us. But we are still only in the early stages of this crisis. My predictions for the coming year, unfortunately, are even more dire: The bubbles, and there were many, have only begun to burst.”

And even Dr. Hope Obama uses the doom metaphor to get Congress approval for the stimulus package. 

These stories of doom and impending catastrophe are not new. Seven chapters into the Bible we read about Noah’s flood, people in the Middle Ages believed comets would destroy the earth. And if that didn’t pan out, we always had a ghastly virus to kill us all: Bird Flu, Black Death, Flu Virus. Over the years, we’ve become more sophisticated and came up with new threats that surely will take care of the apocalypse: Third-hand smoke, over-population, global warming, global cooling, Anthrax – the list is endless.

The world’s oldest profession is not what you think; it’s the business of fear. The Attention Economy has forced us to change those doom scenarios quickly, otherwise we’ll get bored quickly and instead of moving on to the next threat, we might move forward with our lives. We’re attracted by doom scenarios: Daily life can be fairly boring and pedestrian. Regular politics are mind-numbing, just like the business world. But doom scenarios are interesting, raise your blood pressure and get us all excited. All the doom sayers have the same mindset: We have sinned, we made huge mistakes. Now is the time to pay for it. Or, if there’s a chance left, we need to change everything. The way we live. The way we do business. The way we make decisions. There’s no gray. Just black and white.

Behind these scenarios is a longing: Humans should change radically. A crisis is a normal part of the human life cycle. We can work through a crisis by making rational decisions. Catastrophes are events we can’t control. A crisis asks us to work harder. To evaluate all options, to be diligent, to deploy small changes to avoid a repeat. Catastrophes need big gestures. Saviors. And it makes the individual feel small. And helpless. That’s why people love Al Gore: He’ll save us from a catastrophe none of us can fix. Or the Dalai Lame: He’ll save my battered soul. Or Hank Paulson: He was supposed to be the savior. What happened?

The economy of fear was always used to keep people down, to remind us that there are forces out there bigger than us. But, it seems, the doomsayers try to be bigger than us, try to tell us to change our way of living, our thinking, our whole existence. Or! They only focus on poverty, consumerism, our cheap plastic culture. Walmart! China! McDonalds! And they forget responsible entrepreneurs, improved living conditions, national parks, improved air quality/life expectancy and all these other improvements our rotten society has developed throughout times. 

We’ve been expelled from paradise a long time ago. And we won’t find our way back by proclaiming new doom scenarios every 2 minutes. We won’t be able to create a better society by believing in utopian ideals of no conflicts and a world without the possibility of a crisis. So, let’s work through this. Everything will change and nothing will change. Advertising is not dead. Advertising is changing. Media is not dead. Media is changing. It’s going to take a lot of work, dedication and passion to adjust brands, businesses and agencies to the new reality. It’s going to be ugly, glorious, amazing and disappointing. It is what it is. All it takes from all of us is smart thinking. And a lot of work.

Humans are a weird bunch. We’re not perfect. We’re not meant to be perfect. Every time we try to create a perfect world we create one thing: Hell on Earth.