Ben Kunz Mediassociates speech to Boise Ad Federation

“How can you get
more ROI from my
$10MM budget?”

“How much does
advertising cost?”

“I’m Joe, a boxer in
Alaska, and I have a
great media idea for
you.”

It was tempting. Think of the splash. But should humans be
treated this way?
My thesis for today is simple: Advertisers and marketers face a
unique temptation in how we use human networks. And if we’re
not careful, we’re going to do something dangerous.

SolarCity
to IPO and 3x
market share

CDC
to digital and 2x
awareness

Gulfstream to
international
digital lead gen

+400%
+300%
+200%
+100%
0%
-100% Astrum Solar
-61% in CPL
Black & Decker
+4x in conversions
Cessna Aircraft
-28% in CPL Gulfstream
-51% in media costs
CDC
+124% over-delivery
HHS
+290% imps
SolarCity
+300% market
share
SNHU
+400% revenue
in 2 years
Varian
-77% in cost
per response
Basically, we think of how to connect media to results

So who am I? A guy very interested in media.

In 2007 I started writing a marketing blog called ThoughtGadgets. It got noticed by Rachael King, a reporter for Businessweek, and I started writing
columns there.

In December 2009, I got lucky … reading patents and supplier news, I guessed Apple would launch a tablet and call it the iPad. Businessweek went with
the story online and in print, and Steve Jobs announced it a few weeks later on Jan. 27, 2010.

My main interest is human networks, and how media is starting to use them.

James Gleick recounts in his book “The Information” that when wires began being draped over the world, they freaked people out.

Gleick has a fascinating story. When Europeans arrived in the African Gambia River in the 1700s, they saw men and women carrying carved wooden
drums, each making two tones. It was nice music. What they didn’t realize was they were witnessing the fastest form of communication on Earth.

alambaka boili_ _ _
_ _ _ _
Many African languages are “tonal languages,” where the rising or falling pitch carries meaning. This Kele phrase means either “he watched the riverbank”
or “he boiled his mother in law.” Two-toned drums can carry much of the meaning.

For perhaps thousands of years, African culture blew away European society
in the speed of communications. People could run…
Pheidippides was the “marathon man” who died in September 490 B.C. He did
more than run from Marathon to Athens -- in the week prior, he ran 147 miles
in two days to share news of battle, then fought in the battle of Marathon, and
then ran 26 miles to deliver news of victory. 173 miles total in a week.

By the 1790s, the French were building telegraph towers in visible lines north of
Paris. One of the first “station lines” was 120 miles long.
Each tower had jointed arms that were pulled by ropes, and could take seven
different angles and create 98 different visual signals. Across a network, only 2 of 3
messages arrived successfully in a day.

But the Africans had an information system that could travel from village to village, 7 miles down the river in each leg, up to 100 miles per hour, outpacing
racing horses or running men. Detailed news of storms, fires, childbirth, fighting, and village life all fit into this system. Europeans didn’t understand for
hundreds of years.

Most networks are created before we know what to do with them.

fragments
THE CHALLENGE OF MEDIA

This is my office – where I wrote most of this speech.

1
2
3
4
5
6 7
It has seven different communication systems (not counting my camera, No. 8).

Phone
Cellphone
Voicemail (work)
Voicemail (cell)
Text messaging
Fax
Mail
Email (work)
Email (Gmail)
Facebook
Facebook messages
Twitter
Twitter direct messages
LinkedIn
Instagram
Vine
Snapchat
Instant messenger (Google)
Instant messenger (Yahoo!)
Whiteboard (office)
Word
Excel
PowerPoint
Keynote
Tableau
Pages
Numbers
iPhoto
Scratch paper
Notebooks
CRM system
iMac
Dell local
Company server
Google Docs
Desk folders
Office safe
GPS (TomTom)
GPS (Google maps)
TVs (home)
Radios (home)
Radios (car)
Stereo (work)
Stereos (home)
iPod
iPhone apps
Turntable
Pandora
Sirius
Books
iPad 1
iPad 2
Netflix
YouTube
Hulu
Newspaper
Whiteboard (home)
PostIts (kitchen counter)
Bathroom mirror
59

If a rocket scientist were
teleported here from the
1950s, he’d say:

The CueCat is my favorite failed dongle. The idea was you’d see a print ad, you’d scan a code with this tethered to your computer, and it would boot up a
website, where you could read more information.

Lena is another gadget – that monitors how much you talk to a baby.

The device tethers to a computer, so dads and moms can track if they are speaking to children enough to spur intellectual development. Think of it as Nike+
for parents who want their children to get into Harvard.

iTunes
Amazon
Netflix
Google search

Hardware.
Media.
Data.
Advertising.
Facebook
Google
Apple
Amazon
Paper Netflix
Instagram
Skype
Credits
Banking
Macs
Apps
iTunes
iPads
Nike+
iWatch
Cloud
Kindle
Fire
Star Trek
Prime
Free Shipping
G+
Hangouts
Android
Glass
YouTube
Chromecast
Docs
Android TV

And honestly,
human psychology
kind of likes it.

In the 1960s, anthropologist Edward Hall and psychologist Robert Sommer discovered three distance fields in which humans take in communications.
Intimate (18 inches), personal (18 inches to 4 feet), and social (4 to 12 feet).

Today’s three major forms of gadgets fit perfectly into these distance fields. And because human needs different at each distance, gadgets will never
converge. We can’t combine the privacy of our intimate space with the entertainment of our social space. This is why you don’t log on to your TV.

And more media gadgets
are coming…

Apple tends to signal major hardware upgrades with a pre-release of OS redesigns. The first releases of OSX 12 years ago had a plasticky window to
match the white plastic Apple computers. The OS switched to metallic in 2002, and soon aluminum was used in most Apple computer hardware.

In 2013, Apple rebooted its mobile operating system, focused on parallax 3D type imagery with layers floating on layers.

And there’s this. In November 2010, Apple patented a 3D large screen system that would propel holographic images to differentpeople in the room (without
goggles). The sensors would also pick up ambient lighting, to cast realistic shadows on any image floating before the screen.

Amazon is already there. An upcoming Amazon smartphone: Holographic interface,
6 cameras – 1 back, 1 front, and 4 for gesture control?

Holographic screen
Siri AI simulation
Database of your mind?

In Businessweek in 2011, I predicted someday soon you’ll have an Eternity App: A doppelganger clone who will carry on conversations long after you’re
dead … or at least while you’re out of the office. It simply would require combining voice recognition software, a database of your past conversations, and
Siri-type AI responses.

Google just patented a system for “Automated Generation of Suggestions for Personalized Reactions.” It would pull data from all your social networks and email accounts
to predict how you would respond, and draft customized messages. Eventually, it could be set to take actions for you, such as approving projects from coworkers.
“Thanks for emailing. I’m OOO until Friday.”

Google just patented a system for “Automated Generation of Suggestions for Personalized Reactions.” It would pull data from all your social networks and email accounts
to predict how you would respond, and draft customized messages. Eventually, it could be set to take actions for you, such as approving projects from coworkers.
“Hey Jane, the plan take over the Idaho agencies’ accounts
looks great! Let’s do coffee Friday.”

Gadget fragmentation
drives media response rates
down to a consistent
mean.

130 channels per U.S. home.
Viewers ‘tune’ to only 18 per year.
Sources: Arbitron; Nielsen; Mediassociates

0.06% average banner CTR in U.S.
4 hours and 38 minutes average use per day.
130 channels per household – only 18 used
6,600 TV ads per month per person
0.05% average response rate (if 3 products purchased per month)
1 hours and 23 minutes per day per person
2,500 minutes of ad exposure per month
750 spots on average per user per month
0.13% response rate (if 1 product purchased per month)
$320,000 for 50 GRPs (26 boards NYC region)
28.2 million impressions
$200 cost per sale requires 1,600 sales @ 20% conversion, 8,000 respondents
0.03% response rate
Digital 0.06%
TV 0.05%
Radio 0.13%
OOH 0.03%

Response rates
are low across
all media …
Regressing to a mean
of 1 in 2,000

networks
THE CHALLENGE OF HUMAN

“Meme” was coined by Richard Dawkins as a play off of mimeme, Greek for “something imitated.” It is a unit of culture that spreads like a virus. It is every
marketer’s dream.

Religion is perhaps the strongest meme in the world. There are just over 300 religions in the world today, and members of each one believe they have
found truth. Yet they share remarkable similarities: One God, stories of human beginnings in Eden, and what Joseph Campbell called “The Hero’s Journey.”
Bonus point: If someone ever argues religion with you, tell them with 300 options in the world, the odds are only 0.33% he or she is right.

You don’t work in marketing.
You’re a meme propagator.

Sometimes marketing memes work well.

Sometimes they feel
deliberately manipulative.

US Airways paced at 35,000 tweets a day – beating news of the Pulitzer Prize by 3x.

Sometimes going viral works as planned.

A shocking user-gen video is the top hit for the candy brand “Skittles” on YouTube with 8.7 million views.

The Stussy brand tried to do the same thing, but ended up at 21,526 Likes … and stalled there. Three weeks after the campaign ended, the brand’s Likes
had edged up only 23 a day. What happened? Why not 8 million?

There’s a mathematical
formula for
going viral.

V = (M – A) * C
Viral propagation = (message generation
rate – absorption rate) * cycle time
There’s a formula for going viral. For a message to propagate across any network, the passalong rate has to be higher than the absorption rate over any
given period of time. Anti-virus companies such as Symantic use these types of models to predict how computer viruses spread.

Marketers love social networks because they play to the promise of network theory. Robert Metcalfe posited that networks grow exponentially in value for
each node added. Credit: Serge Bloch, http://spectrum.ieee.org/computing/networks/metcalfes-law-is-wrong
Metcalfe

But what if networks don’t scale? Robin Dunbar has become famous in Silicon Valley for suggesting humans have an innate capacity for only 150
relationships. Credit: Serge Bloch, http://spectrum.ieee.org/computing/networks/metcalfes-law-is-wrong
Dunbar

Not everyone on Facebook has the same value to you.

And some of the people you want to connect with … don’t want to connect to you.

Networks then start to look like this.

The picture gets even worse if you add in a guy named Zipf…
Metcalfe + Dunbar + Zipf

George Zipf was a linguist who discovered in any series of resources, such as the English language, each item is used in decending order of about one-half
frequency. (Before him, French stenography Jean-Baptiste Estoup discovered the same thing, but gets little credit.) The same goes for French. Trivia bonus
point: if I could learn 89 words in French, I would be able to understand 50% of French language.

The
be
to
of
and
a
in
that
have
I
Source: Analysis of 1 billion words in the
Oxford English Corpus, Oxford Dictionaries,
www.oxforddictionaries.com/words/the-oec-
facts-about-the-language
7.0%
3.5%
2.7%

floccinaucinihilipilification
This is the least-most used word in the English language. It means “estimating something as valueless.”

If you put Metcalfe and Dunbar and Zipf together, human networks begin to look like this. Missing links. Partial connections.

frequency
THE CHALLENGE OF SOCIAL

Frequency, after targeting,
is the most important
media lever to control.

This is a classic response-frequency curve.

In basic media planning, 3x frequency per week is required to optimize response rates across a media outlet. How did Facebookdo?

“Facebook is not a publisher.
Facebook is a platform … (it)
enables frequent interactions
with consumers over time …
real consumer connections
become the new
impressions.”
— Ian Schafer, CEO, Deep Focus,
March 2012

avg. frequency0.6in 1 week (brands – politicians)

“Well thanks to the new
Facebook Algorithm, all this
has now changed…”
— Jay Bowen,
director of digital
content,
DaviesMoore

native
THE TEMPTATION OF GOING

In December 2008, blogger Chris Brogan gave paid posts a real push – he was given $500 in gift money to shop at Kmart and promote it on his blog.
Brogan had 180,000 blog readers at the time.

PAY 6 HIGH-
PROFILE
BLOGGERS
THE BROGAN-KMART SOCIAL MEDIA SEEDING
CONTEST: PLACE A COMMENT, LIST SKU
OF WHAT YOU WANT, SUBMIT EMAIL,
REBROADCAST ON TWITTER
ACCELERATE WITH
100s OF OTHER
BLOGGERS TO
‘SPREAD WORD’
The plan was to cascade. Did it work? Yes: 2,556 retweets and 3,089 blog comments

The same year, tech blogger Robert Scoble was offered a similar deal for Sears. While he has written extensively for technology as a sponsored author, he
turned down the $500. I called him to ask why.

“Blogging started as a pushback against committee-
based marketing. The danger (of paid posts) is you’ll
see a lot more ads on blogs, like listening to talk
radio.
“What I really liked about blogs initially was I was
getting unfettered opinions from people, and now I
have to filter opinions. That adds a level of complexity
to reading blogs that hasn’t been there before, and
that will retard their popularity.”
— Robert Scoble

Now, everyone is going “native.”

Is this the world we want to live in?

information
A MODEL FOR FLOWING

Media planning is at core
a strategy for treating
people differently.

Let’s take one brand, a financial services company.

Some of its clients have high value.

Other brands have customers who want basically the same thing, and who have basically the same value to the firm.

If we plot a basic communications framework, you can reach a “few” people or “many” people at any time …
FEW
≈
MANY
INBOUND
≈
OUTBOUND
≈
Engagement Research
Mass mediaPersonalization

You want to engage customers if their value is different. If not, use mass media.
FEW
≈
MANY
INBOUND
≈
OUTBOUND
≈
Engagement Research

In 2010, PepsiCo slashed ad spending nearly in half, down to $20 million, and focused on a massive social media initiative. It killed Super Bowl advertising, and instead
fund $20 million in grants for positive community projects. Up to 32 ideas could be selected each month for grants from $5,000 to $250,000.
$20 million… …for social buzz

In 2010, Pepsi for the first time in decades fell from No. 2 to No. 3 behind Coke and Diet Coke in market share. The news broke in March 2011.

Pepsi was here…
FEW
≈
MANY
INBOUND
≈
OUTBOUND
≈
Engagement Research

… when it should have been here.
FEW
≈
MANY
INBOUND
≈
OUTBOUND
≈
Engagement Research

Pepsi had screwed up, focusing on social media, which was the wrong tool for a commodity brand.
“After years of attention, interest and fanfare, earlier
this year Pepsi let its much-vaunted social impact
initiative, the Pepsi Refresh Project, quietly fizzle
away... For marketing geeks, this is a big deal. A
powerhouse brand that broke new ground in cause
marketing—bolding stepping away from Super Bowl
ad spending and redirecting millions to fund positive
change—has reverted entirely to full-bore, all-about-
me marketing.”
— Media Post, “Why Pepsi Canned The
Refresh Project,” Oct. 29, 2012

Pepsi quickly announced it would boost 2012 ad spending by 30%.
“We need television to make a big,
bold statement.”
— Pepsi executive to the Wall Street Journal,
March 2011.

The more your customers
differ
the more you need to
treat them differently.

Needs differ? Personalization
Needs relatively same? Mass media
Valuation relatively same? Research
Valuation differs? Social engagement

media
A NEW METHOD FOR PLANNING

Most media plans look like this.

But it’s time to move beyond swim-lane marketing…

Identification Synchronization
To break out in a world of clutter, I suggest we focus on two vital steps: Identifying customers and synchronizing media touchpoints.

HUMAN
BEING
EMAIL
IP ADDRESS
DEMO PROFILE
Addressable
TV
Addressable TV can serve different
houses on the same street different ads,
even as they watch same program.
Magazine,
newsprint
Remnant and package programs can
reduce ad rates 90% below those of
going publisher direct.
Digital ads
can hit all
devices at a
location
Retargeting extends impact …
Social media
(Facebook,
Twitter, LI)
Numerous targeting & retargeting options build frequency …
An example…

HCP
PHARMA
CONFERENCE
ATTENDEES
EMAIL
IP ADDRESS
DEMO PROFILE
IP targeting
of conf
center &
hotels
Escalator rail
wraps,
Segway
teams
Retargeting
Email match
to Facebook
FBX retargeting
Direct mail
Track My Mail coordinates date of mail
delivery with outbound email
Email
IP targeting
of offices
Retargeting
Retargeting
Another, from a recent
Mediassociates plan

HCP
PHARMA
CONFERENCE
ATTENDEES
Media efficiency: From $14 to $3.50 CPM.
Frequency: From 2-3x to 12x controlled.

Media synchronization
allows you to control
frequency.

Media is at core
a strategy for treating
people differently.

Social is at core
a strategy for spreading
memes.

When networks fail,
we are tempted to buy
human minds.

This is the most famous photo image in the world. Used as background desktop for Windows XP in 2001, it’s been seen by 1 billion people.

It’s not CG. It was taken by Charles O’Rear in 1996 as he drove through Napa Valley. (Image credit: Nick Stern/UK Daily Mail)

This is our dilemma as marketers, agencies, media planners. How do we reap the yield from the human network while not spoiling it?

Ben Kunz Mediassociates speech to Boise Ad Federation

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