uber

This is a (slightly extended version)of a book review I have just published in Market Leader (the Marketing Society’s quarterly journal :

It all started with such high ideals. The web was created as a kind of commons with the promise of a radical democratisation of power. As Rushkoff puts it – The distributed nature of the web, with its decentralised connectivity and ad hoc social activity seemed to augur an equally distributed marketplace. Markets were no longer going to be dominated by the best sellers and the big distributors. Instead an almost infinite market of makers would be able to find and sell to almost infinite market of buyers

This was the dream of “The Long Tail” set out by Chris Andersen in his book of the same name . The web would be essentially decentralising and empowering.

Rushkoff is vehemently against how it most of it turned out. Power Law dynamics took over. Tech start ups went public, went for growth to satisfy their shareholders, achieved positions of market power and decided to go into the advertising business big time. The Web turned out to be a winner takes all endgame fuelled by greed.  Californian Hippy idealism ran up against Madison Avenue and Wall Street.  As for the best sellers – well they remained the main sources of revenue on the likes of ITunes.

Rushkoff identifies are some honourable exceptions this trend – like eBay and  Etsy. These are examples of the many to many marketplace in action – what you might call genuine “digital bazaars”, which are essentially “anti-industrial”

Web idealism resurfaces in ideas like “the sharing economy” -but Rushkoff is dismissive: It’s not really sharing it’s selling…. encouraging people to engage in freelance versions of previously regulated industries. Technology is reducing the numbers of jobs and is now AI is hollowing out those of middle income folk. Left unchecked it will just make the rich few even richer. There will not be enough income around to buy the products of a consumer society. And that could lead to a big shock.

The solution? Rushkoff sees it as a kind of third way between unregulated markets and socialism. Called Digital Distributionism, it will have the following characteristics: Sustainable prosperity, platform cooperation, P2P and Bitcoin currency, crowdfunding, collaboration, communication via networks, land and resources held in common and value exchange. Government intervention will set wages and redistribute wealth to the underemployed.It sounds like Rushkoff has never really lost his idealism and is looking for get back to first principles and re-present them today.

Rushkoff addresses the increasingly apparent ills of our age-addiction to the mantra of growth, that depletes our resources, and the increasing evidence that Capital is doing much better than Labour. Is he hopeful? Not really. Digital Distributionism sounds at best difficult to implement and at worse very naïve. But, as the American elections show, disaffection produces surprises. When the middle classes are suffering there is trouble ahead and politicians will need to reach for new ideas. This book is packed full of them. Some of them might work.

 

 

‘Tis the season to hear the rousing voice of Noddy Holder in a retail environment wishing us a Merry Christmas and for marketers to opine that this year, as in all previous years, change is getting quicker and quicker. If this was true then by now change would be so fast that our eyes would be popping out of our heads and life would feel like a blur in which you have barely a moment to catch your breath

Here is just a cross section of this kind of talk from last weeks Marketing Week

“The pace of change in all industries is only intensifying with technological progress”

“Developments come fast and furious driven by factors that are out of our control”

“We are now seeing three dimensions of change: complexity and sophistication:sheer breath and range and staggering velocity”

This from a survey of 152 C-suite executives and 56 senior marketers.

I would like to suggest an alternative explanation using some principles from Behavioural Economics

Availability Heuristic. We overestimate the importance of the information available to us. These are types of folk that are overwhelmed by their email inbox and have spotted that communication is speeding up (which it has ) and have extrapolated from this that the world is speeding up.(which may not be true)

Cui Bono: these are also the types of people who receive regular presentations from media agencies,business school academics and big tech companies saying that the world is speeding up and that they should  buy their services to help them with cope with this change. AI has super heated this talk by fuelling the ideas that we are all about to loose our jobs to machine learning ( I am only slightly exaggerating)  Beware – the change merchants have something to sell

Social norming/Bandwagon Effect: All senior execs say that the world is speeding up so it becomes normal to say that the world is speeding up. Everyone is breathing everyone else’s exhaust fumes

Fear: it sounds complacent to say “things are much the same” and nobody wants to be seen as that. Likewise nobody ever sold out a conference by saying that nothing really big has changed/is about the change.

Role models. Big Tech are the darlings of our age ( big profitable growing and successful) and so marketers tend to look to them as role models. And in big tech change is constant. Look at the apps on your mobile (the ones you use regularly) and it becomes clear why. Google, Facebook, Twitter, Pinterest, Uber etc are in a life and death struggle to keep you in the habit of using their service many times a day. That is their business model. Fear and opportunity stalks big tech-once you drop out the habit they are dead in the water – the next Myspace ( remember that – it was not so long ago) And so change in big tech is fast and the winner is the one that constantly innovates its service to keep users hooked. It is the most Darwinian of all the markets and also the most salient- it therefore distorts our view of the world.

The Uber effect:Bits of markets are changing fast:they are highly visible to us and so we overestimate their importance. Senior executives use Uber in London and the USA and so get  excited by the Uberizing or AirBnBing of many markets through the creation of Peer to Peer markets and networks.(see below). These “disrupters” will grow but at different paces in different sectors and are unlikely to be anything more than niche in for example banking

Screen Shot 2015-11-18 at 5.16.22 PM.png

Get out of the office and look at the real world

A useful corrective would be to visit your local Tesco (still with us ) and have a look at the aisles. There is change – but some of it is slow and the cumulative effect of years of innovation ( think Cider and Snacks). The success of Aldi and Lidl is not sudden but the product of prolonged recession ( ie the slowing down of markets) and decades of building their reputations for quality. Amazon is trying to be the winner takes all in e-commerce (with some success) but that will slow down change. In some markets change will slow as there is consolidation on the supply side ( think Beer). Your Iphone 6 is much like your iphone 5 with a few bells and whistles. The apps you use are the same that you used a few years ago ( Google, Facebook, Twitter, Youtube ) and will be the same in three years time as all in a well funded arms race to keep you in the habit. When it comes to “user behaviour”  a different picture emerges . Some change is constant and some slow.

Counter trend to small and slow: Market consolidation (a bit trend in USA at the moment)  and the market strength of the big brands will have the effect of slowing change. Much change will be a reaction to this and take the form of a counter trend towards small, niche, personal and craft- and therefore rooted in our un-changing humanity. Slow change in other words


Last year The Cannes Awards saw many examples of brands trying to “do good business by doing good”. I expect this year there will again be many awards entries that aim to engender brand loyalty by being good corporate citizens. Aurora commissioned me to write a piece about this undoubtedly  big trend.

I have taken an historical perspective to explain why brands adopted “higher purpose branding” covering- 19th century philanthropy, challenger brand thinking courtesy of Adam Morgan and finally looking at the influence of big tech and social media. Brands covered include – The Body Shop, Dove, Google, Microsoft and Uber

A word doc is here which may be easier to read  HPB final

 

 

Page 29

 

Page 30

I used to work on the Amex account at Ogilvy and during the 1980s Ogilvy and Amex invented many of the new rules of database and promotional marketing.

One of the perennial  winning offers was called Member Get Member– if you introduced five new members you got a case of wine. Wine was always the winning offer ( rather than whisky which also we tried out) because you could share the spoils with the friends you had introduced to membership.

I see this basic idea come up all the time in different guises. This latest is from Uber- who have come up with a fresh spin on it

BTW- feel free to use my code and get a free taxi ride with Uber

Screen Shot 2015-03-25 at 11.47.38