Category Archives: Marketing

…and gravy

John Gruber replies to my gentle spoofing of his post about Larry Page’s statements with a measured and considered piece which highlights his key point: That Page was simply being hypocritical:

“What major tech giant has Google not pitted itself against? Whose mashed potatoes do they not seek to take? Apple, Microsoft, Yahoo, Oracle, Facebook, Twitter, Amazon — Google has made enemies of all of them. The difference between Google’s predatory rapaciousness today and Microsoft’s of yore is that Microsoft wore it on their sleeve, they owned it, celebrated it. What rankles about Google is their hypocrisy.”

There’s an element of truth to this (it is, as John puts it, when referring to the likes of Ive’s comments on not caring about making money, “truthy”). Google as a company has always had the kind of “why shouldn’t we?” arrogance that you’d expect when the founders are a pair of Montessori-educated certified geniuses rather than a couple of drop-out hippies. They’ve had no fear about going up against much older and (initially) far better resourced incumbents. If they decide they want to do something, they really don’t care who gets rubbed up the wrong way.

From the outside, I can see how this looks like “predatory rapaciousness”. But John positions these actions as being driven by greed:

“Page was telling the I/O audience what they wanted to hear, that Google is something other than a ruthless, greedy competitor… The drum I’m trying to bang here is not that Google is a greedy competitor, but rather that Google is a greedy competitor that presents itself as anything but — as a sort of peaceful, whimsical, happy-go-lucky techno-futurist corporate utopian — and that rather than see this pose as absurd, many people, Googlers and Google users alike, buy it.”

(My emphasis) This is where John and my opinions diverge. My experience of Google and Googlers is that they really are something other than a ruthless, greedy competitor, just as my experience of Apple and Apple-folk is something other than a ruthless, greedy machine to vacuum up all my spare cash (something they’ve been remarkably effective at).

Yes, they are ruthless and arrogant. But they are not only that. If they were only that, they wouldn’t be a company capable of producing great products.

The myths that a company tells about itself aren’t just for public consumption: they are the method that you use to set who you are and what you do apart. The statements that Jobs and Ive made about Apple being at the “intersection of technology and the liberal arts” and “our goal isn’t to make money” are exactly this kind of myth. And they are, undoubtedly, genuinely and whole-heartedly believed – because without that kind of belief in a purpose beyond simply making money, creative people find their creativity shrivelling up and dying.

The myths that Google tells itself (and the outside world) are the same: genuinely, wholeheartedly believed by the company from the top down (probably with the exception of some hard-nosed finance people in both cases – but they are a breed apart). This isn’t just a question of marketing or spin. In order to do the work they need to do, they need to believe those myths.

All the truly great companies of our age begin and grow with a fundamental tension at their heart, pulled by two strands which, if the founders are not careful, will pull it apart. On the one hand, they want to build a business, to be a machine for making money; on the other, they want (to borrow Steve Jobs’ phrase) to put a ding in the world, to change it, for the better. Google and Apple are both cut from this cloth, and both have this tension at their heart.

Even Microsoft began with this tension. Microsoft’s founding mission was “A computer on every desk and in every home,” something that was crazily radical in 1975. But even then, Gates knew that building the money-making machine was the only way to achieve this vision: the mission statement added “…running Microsoft software”.

Microsoft’s problem is that the first part of its vision was achieved, and nothing ever filled that void – leaving it with just the money-making part. The visions of Apple and Google, on the other hand, still remain unfulfilled, which is why both of them will continue to make great products for many years to come.

John is absolutely right that Google is perfectly happy to take all the mashed potatoes. But like Apple, it also has the gravy of a genuine, heart-felt desire to change the world for the better, to make amazing stuff which enriches people’s lives. And it’s that, rather than the mashed potatoes, which defines who it is and what makes it great.

Bradley Horowitz smacks Facebook, makes little sense

Google+ head honcho Bradley Horowitz, on the different approach that his product has to ads compared to Facebook:

“Jamming ads and agendas into user streams is pissing off users and frustrating brands too,” he said. “That’s not the way the world works.”

Rather, in the real world, there has to be intent. When a person’s hungry, he or she goes into a restaurant. Seeing an ad for a sandwich when they’re not hungry or looking for it isn’t very effective. But being able to search for a lunch place when hungry and finding recommendations from friends is much more effective.

“It turns out these are very valuable to users to have recommendations by the people they trust,” he said. “Instead of sandwich boards… we revert back to the fundamentals of fulling the need the user has.”

Horowitz added that Google doesn’t “have to make payroll by jamming users with ads” on Google+.

Of course Google+ doesn’t have ads plastered all over it. It’s cross-subsidised by another business: search. Or rather, it feeds its data into another service (search) in order to add to the quality of that service’s ability to sell information about you to advertisers.

The fact that Google places the ads it builds on top of your social data on a different site is not some kind of intrinsic superiority. And given how much space of Google’s search results pages can now be given over to ads, and the fact the Google Products (pure search) got turned into Google Shopping (paid placement) it’s pretty clearly a case of pot calling kettle black.

In the real world, away from the corporate dick-waving, Facebook has actually done a pretty good job of avoiding falling into the trap of plastering intrusive ads everywhere. Paul Adams has stood up in front a conference full of agencies and told them that the interruptive model of advertising that they make their bread and butter from is dead.

I’m yet to hear anyone from Google do the same. Maybe Bradley Horowitz and Paul should have a chat about it some time. I’d love to listen in on that debate.

What’s interesting is that in terms of how they’re used by users, Facebook and Google+ differ. On FB, I mostly connect with real life friends and family  - a couple of hundred people. I don’t really connect with people I don’t know.

On G+, I follow and converse with a much wider range of people. In that sense, it’s more like Twitter, where you end up having conversations with people that you have little relationship with – it’s more like a public forum than private connections.

Where the two are alike is in the fact that they both leverage social connections and stated interests into a money-making opportunity. For Google, that’s all about improving the relevance of search results and advertising, both on its own properties (search) and in the wider world (AdWords on other sites).

Up to now, Facebook’s use of the social graph data it gathers has only been on its own property. That Bradley Horowitz has gone on the offensive at exactly the same point when Facebook is rolling out a contextual advertising programme to third parties is surely no coincidence.

Owning the subscriber relationship isn’t really about selling the data

I think John Gruber is wrong about the motivation for the FT’s desire to retain its subscriber relationship and not hand everything over to Apple:

“Not a word of complaint about the 70/30 revenue split. Their complaint is solely about access to customer information, which they profit by selling. And remember: it’s not Apple that controls that information with App Store subscriptions: it’s us, the users. What the FT is arguing here is that they don’t want their subscribers to have any control over their customer privacy.”

First, simply because the FT doesn’t publicly complain about the split doesn’t mean they’re privately happy about it. But more importantly, the idea that the FT “profits by selling” subscriber data is… well, not entirely wrong but not entirely right either. It’s much more nuanced than John, in his rush to pitch Apple as “pro-consumer”, is making it.

Having worked on a magazine which had a higher-than-normal subscription base, I know a thing or two about the value of subscribers. And the value you get from your subscription list largely doesn’t lie in selling that data directly to third parties.

In fact, quite the opposite: The big money is in using the demographics of the overall set of subscribers to sell highly-targeted advertising in the magazine (or, in the case of the FT, newspaper) to a highly-responsive, affluent audience. Selling the “raw” data is much less valuable, as it means you no longer “own” the channel for the ads.

To put it another way: Selling a mailing list so a someone can mail out a piece of DM is much less profitable than getting them to either buy an ad or put an insert in your magazine. Setting up a co-marketed service (like, say the one that the FT does with Berry Brothers for wine) is much more profitable still.

On MacUser, we had (in my day) a subscriber base of something like 70% of the readership. Because of the surveys we did of subscribers, we knew they were mostly involved in design and print, and spent a lot of money on new IT equipment (I think it was something like £10,000 per reader per year).

This meant we could charge companies who wanted to reach that audience premium rates for ads, so much so that a magazine which peaked at around 35,000 readers was massively profitable. It also meant the ads were more effective, because that audience were interested in buying that kind of stuff. And for the audience, it meant ads were relevant – it was stuff they were interested in buying.

(This is the bit that people often forget: If advertising is to be successful, like any piece of content it has to be useful to the audience. And the more you know about the audience, the more you can target the ads so they are useful, rather than just cheap filler.)

That’s where the money was, not in selling the subscriber list like it was cheap data. Selling someone a tipped-in insert in the magazine was massively more profitable than selling them data to do a mail out.

That’s not to say you never sell the data: You do, where people have opted in (and it’s legal to do so). But it’s not where the big money is. A single page ad will make far more money for the newspaper than selling the entire database, and will probably get better response for the advertiser too.

The more you know about your readers, the more valuable your ads. The problem with the Apple model, which the FT is correct in highlighting, is that it effectively breaks the relationship you have with subscribers, which lets you increase the cost of your ads.

For a publication like the FT, where you’re reaching a high-value, affluent audience, this is doubly-true. And when you consider that direct online channels will ultimately allow you to target ads which are personalised to individual subscribers (and thus get higher response rates and higher value), it’s easy to see why the FT wants to hold on to that subscriber relationship.

iPads only selling to the Apple faithful? Only if you count anyone with an iPod as “the faithful”

In search of a headline, Marketing Magazine cites a YouGov survey as showing that the iPad is only “reaching out to the converted“:

“In the two months since the iPad launched in the UK, YouGov has found that 96% of the 713 iPad owners surveyed owned products such as an iPod, iPhone or Mac.”

Why would this be a surprise? Given that Apple utterly dominates the MP3 player category with over 70% market share, it would be a surprise if most people surveyed hadn’t owned an Apple product. When you’ve sold over 225 million music players alone, you’d be hard-pushed to find anyone likely to buy something like the iPad who hasn’t bought an Apple product.

Marketing Week Live goes all iPhone AR crazy

I’m pretty skeptical about augmented reality applications in general, but there are some occasions when I think they’re actually quite useful. Events, for example, are a particular case where AR makes sense. The location is relatively small, but there’s usually a large amount of information surrounding particular areas within the event – seminars, press releases, and so on.

Add in an audience which actually needs to get to grips with the technology of communications, and it’s obvious why next week’s Marketing Week Live 2010 has an AR iPhone app associated with it. And judging from the pictures I’ve seen of it, it looks pretty good.

There’s the usual AR features: hold the phone up, and the app layers useful information on top of it (I’m hoping this information includes the location of bars and toilets, which are the kinds of things that journalists are always after). Perhaps more useful, though, is the image recognition function: point the app at the logo of a company on a stand, and it will recognise the company and list information that’s relevant, including the option to book a meeting with them if they’re taking meetings.

The app was put together by Yuza Mobile, and it looks like a nice piece of work, balancing out the obvious need for an app that’s a bit of a showcase for marketers of what AR can do with stuff that’s useful for people attending the show.

I’m going to be along at the show at some point (and if you’re going to be there, give me a shout) so I’ll probably be running around taking pictures of people pointing their iPhones at logos and swearing about the data connections being swamped. But kudos to MWL2010 for creating something that looks both interesting from a technology perspective and actually useful to its audience.

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