Thursday, May 24, 2012

Believe in Digital, not Facebook

In my own modest way, I'm something of a digital evangelist: I think marketing, even in conservative areas like healthcare, will be fundamentally a digital activity by the end of the decade. And what does it mean for marketing to be digital? Simply that it is targeted to the point of personalization, highly measurable, and allows a big role for customer interaction and feedback. I think a lot of people who would basically agree with that description look at Facebook, and its over 1 billion users, and believe that they're looking at the future of marketing. And yet I think Facebook is ultimately way over-valued and will be a small part of most brands' marketing budgets. So how can I believe in digital and not in Facebook?

Now, lots of people don't like Facebook. Some of it is jealousy: you can't make $100 billion in your IPO without bringing out the haters. (Of course, some people are upset because it now seems their initial valuation might have been based on withholding some more negative forecasts.) But I am on record as hating Facebook before it was cool, writing about how Facebook may not be able to live up to the hype back in 2010, and last year speculating that Facebook's brand will not allow it to become a place where people buy things. My dislike is grounded not (just) in jealousy, but it real questions about their business model.

If I were to break down the logic that has made so many people think Facebook is worth so much, it is this: they have gotten a billion people to reveal tons of information about their lives, which will let companies conduct personal marketing at scale, reaching millions of relevant customers with exactly the right message. But one of my favorite authors, David Goldman (aka Spengler) makes an interesting point challenging that assumption:
No one is likely to learn much about anyone else by reading their Facebook page, or, indeed, by becoming their Facebook "friend". A Facebook page is constructed to maximize our appeal and white out our warts. We learn as little from the pages of Facebook "friends" as prospective employers learn about job candidates from a resume.
Later, he crystalizes the central paradox of Facebook:
[Facebook] attracts hundreds of millions of users by providing them with a platform for narcissism and the means to lie about themselves more persuasively, but it hopes to make money by learning what it is that they really like, the better to show them advertisements. Sadly, the system is worth a great deal of money, but not 100 times earnings.
I said earlier that digital marketing has three pillars: personalization, measurability, and interactivity. Facebook superficially seems to offer those things, but does it really? As people worry more and more about what their Facebook profiles are telling marketers (and family, and potential employers) they are likely to curate their digital selves more and more, stripping out a lot of the quirky or embarrassing details that would help marketers understand them as individuals. So much for personalization.

But Facebook is certainly measurable, right? Well, you get a lot of data from marketing on Facebook, which is good. But unlike search marketing on Google, for example, there isn't a clear answer for the question, "How much is a Like worth on Facebook?" People who really get it know you can probably define the value of that relationship for your brand if you're willing to crunch the numbers, but what people want is someone to say, "It's $8!" so you can build some assumptions into a marketing plan. But I would contend that since any marketing activity on Facebook (for most brands) is going to be geared towards generating goodwill and brand equity, rather than a direct response sale, measuring the value of Facebook marketing is going to be as squishy as measuring other forms of brand-building tends to be.

Finally, interactivity. Surely Facebook wins here, right? Well, for some brands. Brands that can take a point of view and be controversial, or have a large enough "cool factor" that those folks using Facebook as a personal advertisement want to associate with it. But there's a catch: the more brands that are in the conversation, the less attention there is for each brand. And unless you can define a unique audience segment you want to talk to and be consistently relevant and interesting, you're likely to be talking to yourself. So while some brands may develop a cohort of engaged followers, Facebook can't guarantee followers the way TV can guarantee eyeballs or Google can guarantee clicks.

Maybe so maybe there's a reason that a lot of companies, most recently GM, are saying that their Facebook ads aren't working. Of course, it might be that they don't know how to use the platform, but if a large and sophisticated company like GM fails on Facebook, we should expect a lot of other marketers will, as well. That hardly makes it a universal platform, and calls into question whether it will ever live up to that huge valuation.

I believe Facebook can be a tool to help you find your audience in the digital world, but it is hardly the only tool, and it frequently may be the wrong tool. It has fundamental limitations that will keep it from being a one-stop shop for marketers. But digital is much, much bigger than Facebook: it includes everything from online video to search and display ads to niche social media to this humble blog, and within those multitudes is a solution to most any marketing challenge. So go ahead, doubt Facebook along with me if you'd like, but don't let that stop moving you towards the digital future.

Tuesday, May 8, 2012

Is Your Decaying White Matter Making You Afraid of the Unfamiliar?

If you write about the inner workings of the brain, you soon find out that we don't actually know all that much about how it works. Sure, we have a reasonably good theory of how the brain processes sensory information, and we think we're starting to understand which parts of the brain do what, but how the elements of the brain interact and how all those processes lead up to consciousness is still largely the province of informed speculation.

So it is good to be humble when we theorize about the brain. Especially since we're still finding out things about its function that surprise us. For example, a recent study found out that the white matter of the brain, long treated as the unimportant part, seems to be the basis for the brain's overall "processing speed" (I use the quotes because we should also be careful with the mind-as-computer metaphors) and attention span. Thus, say the researchers, the increasing degeneration of the white matter in the aging brain can lead to, among other things, trouble coping with unfamiliar situations.

The prevailing theory of why people become, in common terms, stuck in their ways in old age is that we develop hard-to-change habits of mind. I've read a number of articles that imply that repeated behavior strengthens neurological pathways that lead to habitual processes, sometimes called "chunking". In other words, the brain forms habits to aid cognition, and sometimes we create bad habits through the same process of repeated behavior. And while this study doesn't undermine that theory, it does offer a complement to it: degeneration of white matter might make it harder to form new habits and leave us more reliant on the old.

Think, for a moment, of what that implies: your mind may inhibit you from comfortably doing something different from what you've done before as you get older. That's somewhat different, and more negative, than the idea that habits are hard to break. It also has implications for marketing: when targeting an older audience, the disruptive techniques that work so well to get the attention of the young might actually be upsetting or disorienting. Not a fun notion for those of us advertising to the baby boomer audience.

The good news, at the individual level, is that scientists believe that cognitive training may help resist white matter decay. But this study provides sobering evidence to support the notion that aging societies (and most societies globally are aging) will be more resistant to what's new and more uncomfortable with change. Which doesn't bode well for those of us who believe some pretty profound changes are necessary.