Why Brands Should Think Like Technology Startups

Not long ago, Marc Andreesen—the co-creator of the first commercial web browser and now a prominent investor—proclaimed “software is eating the world.” What he meant, in all his foresightful wisdom, was that there was no industry invulnerable to being disrupted by software companies and the digitization of everything under the sun.

His phrase caught on instantly inside the major tech corridors—Silicon Valley, New York City, Boston, others—for it was in those places that the digitization credo was first advanced. But, there’s a second, and perhaps more powerful credo which came out of tech and has also been eating the world: an approach to product development where failing is desirable… in the early stages of development, in particular.

Unfortunately, not every industry was gobbled up at once by the world of lean product development. One of the biggest markets that’s still on the banquet table? The world of brand advertising, which, for a variety of reasons, is largely still operating according to antiquated rules.

The Right Culture

The old rules wouldn’t be so bad actually, if they still worked. The trouble (for brands still operating under the old rules, that is) is that a number of quicker-to-adopt brands are approaching traditionally high-risk activities (like developing creative content in 2017, for example—especially video) with a smarter, more effective approach. Based on what I have observed, in my work for some of the world’s most thoughtful brand managers, there are three things these brands are doing different.

The first, is that they’ve adopted the culture of technology startups which defines failure not as an end state but as an interim state in the process of discovering what works and what doesn’t.

Case in point: Kawasaki, which my colleague Tod Loofbourrow recently wrote about in a blog post for Medium. For a recent campaign, the Japanese motor company decided to run an experiment with a series of videos with seven different creative concepts. They distributed the videos in different contexts and took measurements of KPIs such as brand interest, brand affinity, and purchase intent via an inside-the-video-ad-unit sentiment survey. The company then prioritized the selection, distribution, and editing of the videos based on real-time customer feedback. In other words, the original videos were never seen as the end products, but rather as tools for creating the end products. It was a breakthrough in experimentation in an industry that’s often loathe to truly experiment. Loofbourrow noted:

There was a time when the only kind of experimentation a brand marketer could hope for is A/B testing. With the right set of conversational tools, Kawasaki reset the bar for creative advertising with A/B/C/D/E/F/G testing, and won big as a result. The company saw a 23% overall lift in purchasing intent, the key metric for its campaign. And it did that primarily by listening first to its customers before investing bigger with distribution.

The Right Technology

In case you’re wondering, one reason Kawasaki was able to adopt this approach is that the marketing team had already adopted the right attitude toward experimentation, which actually required that they listen to the customer. In contrast, I have been present at meetings with brands where members of the marketing team were too shy (scared, polite, or indifferent) to criticize a video that was under review. Forget about the “voice of the customer”; at some companies, the voice of the employee or trusted consultant is often unheard.

But I suspect that if more brands had the right technology, the right behavior would follow. As the Kawasaki case study shows, the team there used—among other tools—an inside-the-video sentiment survey. It’s just one of many new tools that all brand marketers can avail themselves to capture the voice of the customer. But while none of these tools, in and of themselves, is remarkable, what is remarkable is that this category of technology—let’s call it conversational (two-way) media—is finally available to the creative professional. In the mid 2000’s, when marketers first began to embrace social media, marketers began to capture the voice of customer in text (first on blogs, wikis, and news comments; later on networking platforms like Twitter, Facebook, and LinkedIn.) In the realm of online video, comments have long existed on platforms like YouTube. But comments of this kind are after the fact, i.e., after the video (the product) is made. The capability of listening to the customer before and during the creation of the final set of products & strategy—which is perhaps the number-one rule in the technology startup world—is now available to the brand marketer.

Further, with the right tools (and data that it allows us to capture), no longer is genuine candid feedback or critique of a creative concept a personal attack on another’s creative prowess. Instead, those around the table can point to objective data provided by thousands of others in real-time in the creative and strategy decision making process. Suddenly, shyness becomes irrelevant and so becomes unblocked an opportunity for progress.

The Right Metrics

This leads us to the ultimate way brands might emulate technology startups: You have to get real about the metrics that matter. I noted earlier how I’ve had the opportunity to sit in on internal marketing meetings where everyone was too “shy” to criticize what was obviously a very bad video creative. This happens all too often, actually. Maybe it’s bad because it was the wrong approach. Maybe it’s bad because it was the wrong approach for the audience in question. Or maybe it’s just plain bad for any other number of reasons.

And what encourages marketers to continue with the pretense? Metrics that serve as false indicators of success. I’m thinking of one experience where the marketing meeting focused on the success of an obviously bad video because the video nevertheless got so many “hits,” also known as “impressions” in the ad world. But was that the right metric? Because the goal of the video was actually to get viewers to fill out a form to learn more about the product, hits was not even remotely the right metric to focus on. It would have been better to look at registrations, purchasing intent, sentiment (via feedback surveys), and other indicators that customers actually liked what they saw and heard on the video. In other words, it would have been better to capture, yes, the voice of the customer—not just clicks on the video, which even a bot can do (which the recent Methbot scandal has so vividly illustrated).

To paraphrase Benjamin Disraeli, it was another instance of “lies, damned lies, and false metrics.” But if more brands followed the practices of tech startups—which cannot hope to succeed if they fall prey to such self-deception—they’d develop better and more effective creative in an increasingly competitive marketplace.

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