Your Eroding Network (Effects)

Current Mood (Click, Play Loud)

 "I know I believe in nothing but it is my nothing." - "Faster", Manic Street Preachers

If you are unfamiliar with a network effect, it's when the value of a product, service or platform increases just because the number of users has also increased. Examples include influencers getting new traffic because they already were already showing traffic spikes, e-commerce sites gaining market share from word of mouth by past customers, or delivery and transportation services becoming more effective for providers and customers when there are more providers and customers. 

Network effects aren't new to the digital age. When the majority of people have a weekend or holiday off, that's a network effect for travel, hospitality, and so on. When brands achieve mass awareness, the chance of a franchisee having success in a new market is higher; so are the fees. Religious faiths are much more likely to gain tolerance from governments when they are mass, not niche. Any network effect that you have become used to, like any other privilege, seems like second nature or the rules of the road.

But the roads are changing, sometimes faster than you might guess.

As a marketer, you are always looking for clients that can scale without sacrifice, because they allow you to fully realize wins without customer service issues. There are few things in this career worse than having to pull back from a winning practice due to forces beyond your control, so the past 20+ years of marketing life has been mostly in the service of digital enterprises. 

But the pursuit of these goals has caused the end of other network effects, and that's only speeding up with the advent of worldwide economies and artificial intelligence. Marketing campaigns that used to be able to rely and benefit from offline channel brand awareness increasingly, well, can't. Live events are cut and shared on the preferred schedule of the individual. Songs are not as well known, movies not as well seen, stories don't resonate, and so on.

What this means to the society is incredibly wide ranging, and the challenges it leads to are equally varied. If everyone's cultural intake is tailored to the individual, it's a small step to only seeing the "news" and opinions that one already has reflected back to them, because anything that isn't that won't work on the math. Since new things are harder to like than old, nostalgia plays dominate, or at the very least, inspire highly derivative ones. Intellectual humility and doubt -- I might be wrong and it might be good news because that's where learning and growth occurs -- are seen as untenable. Pushback to a time with stronger networks existed can lead to rises in nativism, because nativism and nostalgia are often closely linked.

Backing this up to real world implications for marketing and business people... I used to work in retargeting for an adtech company. What most vendors wanted to do was to simply show the customer the individual SKU(s) that they had previously viewed for as long as the cookie data would allow, which was typically 30 days. We'd do tests in which we'd run these repetitive stalking ads against other plays, and the other plays would do better on engagement... but not direct and proven sales. So instead of doing the complicated and human thing, clients would often just stay simple and mechanical. Similar efforts to optimize spends to short-term payoffs led to rises in search and email programs, and cuts to branding and sponsorships.

What this misses is plain to anyone who has had to try to restock a funnel after a rush season; no mid to long-term leads in the funnel. That may be fine for products with a short buying cycle or fast exit plan, but that's not the majority of human endeavors. 

I used to think that this was a market opportunity, and position mid-funnel metrics and awareness as a fertile ground for insights. Perhaps it still will be in a time of mature, rather than nascent, AI. But while we wait and hope and continue to strive to add value beyond all or nothing outcomes, the engines of this change seem focused on, well, all or nothing outcomes. Often tied to consumer categories that don't seem to drive any benefit to anyone but the owner of the category.

Keeping this on the positive, what it means is that your strong practices -- dayparting, frequency, execution -- need back testing more than ever. Seasonality assumptions may no longer be correct, if they are known at all. 

And intellectual humility, which is often missing from junior marketers and the technology they are overly reliant on?

The strongest practice of all.

Provenance and AI

Recently, we had a client in the fine arts space, so the assignment required a kind of copywriting that ties to journalism in an interesting way. This is because when you have a collectible, you have a single piece of physical media, and when it has a backstory, that backstory may impact the value. The shorthand term for this is provenance, which is quickly defined as the history of ownership.

From an economic standpoint, provenance is hokum, fluff, spin, or worse. You bought a painting; the idea that your experience of it may be worth more or less based on who handled it before you seems like, at best, nonsense. And yet, provenance may color a surprising number of purchases in your life, because branding is like that.

The wine is local? Provenance. The band records live to tape with no editing? Provenance. The house was owned by a history of happy families? Provenance, or feng shui, or not on disputed lands or close to environmental concerns? That song you like is suddenly loved by people you don't? Whoops.

Now, it's clear that commodity purchases have little impact from provenance, but how many pure commodities does the average consumer actually buy now? Gasoline has detergents and octane and corn supplements, electricity comes from fossil fuels or sustainable ones, and so on. Making a commodity into a service is a time-honored way of making a profit, and provenance is all margin, after all.

Until, well, it isn't. 

If the provenance of the painting involved murder and theft (and yeah, the Nazis stole a lot of art), you'd have to be a pretty special kind of outlier audience to think that made it more valuable, rather than something that should just be donated in an act of reparation.

We don't really know why we attach values to objects, and maybe not even when we do. Provenance threatens to supersede that judgment, lay it bare and open for all to see, and change the way we value items in our world. If you are in the proper head space for provenance (i.e., not distracted by something more urgent, trusting of the source of information, looking to assign or impose a resale value), this is all welcome information. If you are not, it's chaff. 

So getting the tone of this requires effective storytelling, a connection to a shared humanity, and the ability to tell the user not just what they want to hear, but things they don't. 

Or, shorter... why would you value the output of any LLM or AI, when you know the provenance is so relentlessly mundane, for anything other than, well, commodity work?

10 things we've learned since the last full-time gig

Making the nut as an independent agency is never easy, but in a time of (shh!) clear and emerging economic recession, it's particularly challenging. Here's what M&AD has learned in the past year.

1) Tariffs and the threat of tariffs create misery. A promising DTC client went completely dark after its supply chain was cut, because when you are in the start-up phase, any seismic shock will spook your investors. Uncertainty around things that used to be certain is not advisable.

2) SEO keyword seeding continues in copywriting, more by habit than need. You already knew that AI was eating search, but that doesn't mean that the disciplines and tactics used in the last few decades are just going to cease and desist. 

In the long term, we believe this will lead to more interesting and spontaneous content, but in the short, seeding your copy is still going to happen. If only to show clients due diligence.

3) AI "works" because it tells people what they want to hear. You don't have to be a particularly diligent student of history to know this doesn't end well, or that humans are very bad at resisting this. Just because the propoganda is coming from inside the house doesn't make it any less dangerous. In point of order, more so. (For the record, yes, we use AI. Sparingly, with great care, only at version zero, and from multiple sources. We're not anti-tech. Just pro-human.)

4) Working from home also means ghosting is easier. Every agency endures summer lulls and contact issues from vacationing personnel, but the frequency of such events is definitely on the uptick. Some of the things we've seen in the last year are real howlers, and unprecedented in the decades that we've been doing this.

5) Loyalty is increasingly seen as insecurity, or a failure to negotiate. If your client is talking about exit strategies and make-or-break KPIs, that's a red flag. And if a manager is very enthused about AI, you may want to start wondering why they aren't as enthused about developing their personnel. We don't recommend a direct ask on this, unless you've already got your next full-time gig lined up.

6) We're in a global sea change due to political forces. Regardless of your opinion of any of the governments in play, long-standing alliances, manufacturing centers, and supply chains are increasingly in flux. "Plus-one" diversification strategies fly in the face of efficiency, but add critical risk mitigation, which is non-negotiable. 

Whether or not declining populations with work forces that have been trained to value white over blue collar work can be made to pivot is an open question. So is the appetite of younger people for buying in to past dogmas about work meritocracies, money equalling speech, and embracing any form of nuance. Add management that's enthused about technology replacing employment, and you can understand their cynicism.

7) Bad actors are gaining by being early adopters. T'was ever thus, but criminals are taking advantage of job seekers, crypto, deepfakes and AI to step up their operations, and the field is also taking on more of an industrialized military approach. All of which leads to grist for conspiracy mills, and the next point, which is...

8) People want real conversations, but are afraid to have them. We've had clients beg for candor, then punish when it's been given. We've had others dictate the output to the point where pranking seemed to be on the table, all while professing very different ideals. It's your call whether this is reticence or self-censorship, but what is beyond debate is that it is sand in the gears of productivity.

9) The old ways of marketing give you greater share of voice, and still work. When you take in a podcast, TED talk or effective presentation, there's really nothing going on here that wasn't at work centuries ago, just without the modern-day trappings. We've seen strong wins from long copy, direct mail (ye gads), and even honest-to-God telephone calls in the past two quarters, if only because the channel is increasingly free of traffic. Marketing and advertising teams that only do what's comfortable, or what management or the bots approve, are doing their organizations a disservice. But they are, alas, retaining their clients.

10) Your morale is your personal choice. Reading all of these at once may lead you to believe that the past year at M&AD has been a struggle, and since we deal in truth here, that's accurate. Challenging management that needs its own opinions fed back to itself has always been a hard way to make a living. We've never been good at keeping quiet when a client was about to do harm to their operation, which isn't always conducive to retention.

But we remain steadfast in the belief that if/then, rather than a/b testing, is critical to driving not just temporary gains, but sustainable ones. We also believe that when data drives, you should pay attention, that single KPI thinking is for bad actors, and that those who do not love the journey and work of marketing are not the people you will see later on down the road.

We also love what we do, and are getting back to it. Forward!