Has The Tipping Point Tipped?

February 7th, 2008

Ever since its publication, The Tipping Point, by Malcolm Gladwell, has captured the imagination of marketers and PR people all over the world. Basically, the book argues that ideas are spread by different groups of people, and that some have more influence than others in helping an idea to spread.

For marketers and PR people, the book basically argues that there is a formula for success; just feed your client’s idea or product into this ecosystem, and you can come up with a very predictable result. It’s almost like a software engineer’s dream: given a certain input, then a process, there is a predictable outcome. The marketer/PR agency can argue that the amount of money spent forms a direct correlation with the input, and if a project fails to take fire, it’s because the client didn’t spend enough money. As a result, the right connectors could not be influenced, and the project failed.

This is known as Influentials theory and forms the backbone of much marketing practice.

All clear and simple, right?

I have always had my doubts about it. For one thing, the model fails to take into account what is a good idea and what is a bad idea. And it fails to explain how people decide what is a good idea worth transmitting to one’s network, and what is a bad idea which should be immediately dismissed or ignored. If you were a Google engineer, how would you write an algorithm to describe how these very human and subjective individual judgements are made?

It seems to me that it is impossible to write an algorithm to describe them. What an engineer can do though, is plot how ideas are spread in a time when we are bombarded with more and more information, making our attention spans progressively shorter.

Wouldn’t there come a point when influence becomes almost random, when Influentials lose most of their influence? And doesn’t this coincide with the breakdown of the “mass market”, a concept which has collapsed with the rise of the social networking phenomenon and the long tail?

I had long suspected this, but I had never been able to prove the thesis. However, the results of some serious research by Duncan Watts supports this thesis. In this article published in Fast Company, his experiments suggest that the success of many fads has become, for all practical purposes, random. The article is an excellent read.

For one thing, I believe that The Tipping Point was written too long ago, and it described a world vastly different from ours in 2008. When it was published in 2002, the book described a time when people still read paper newspapers and books and before blogs. You may remember a term then called the “mass media”.

Now, ideas spread much faster, and within smaller groups which may appear random. It is also very likely that products/services/ideas will be served to much smaller groups of people.

One example is the gaming industry where the shelf life of titles has become progressively shorter, almost to the point where the marketing industry has trouble keeping up with the shorter time cycles. Hollywood movies have to prove their box-office success in their opening weekend in the US. These two industries have yet to adapt to lower production expense models which fit in with the lower shelf-life of their titles.

Basically, they need to downsize their costs.

If you boil it down to essentials, it means that you will have to market your ideas/products/services yourself, since you know your own audience best and understand how to pitch it to them. If they like what you have to say/sell, then they will become your connectors, and push it beyond your immediate circle, creating a breakout phenomenon.

In the end, the Internet empowers smart generalists who understand technology and keep the human touch in their marketing. Dumb messages may have short-time entertainment appeal, but they are unlikely to be profitable unless there is something behind them.

And marketing cannot buy credibility.

How Facebook Screwed Up, and How The User Can Control Advertising

December 2nd, 2007

Mark Zuckerberg of Facebook

Scott Karp had an excellent article about how Facebook’s Beacon messed up and created such a reaction from Facebook users.

My explanation for Facebook’s policy re Beacon is that all the press, plus a 15B valuation on a company which does not have significant cash flow will get management to adopt all kinds of dumb user-privacy violating tactics to justify the valuation in the hope that the company can garner significant ad revenue.

In short, Facebook’s Beacon policy of spying on users’ activity across the Internet was a panic move…

Some hokey marketers get so wrapped up in the data that they can garner that they forget a lof the information is, frankly, useless.

“Look! We can target albino 16-year old Chinese boys who play more than 20 hours on the PS3 in Nome, Alaska during the winter and who had the Nintendo Wii recommended to them on Overstock by a friend in Wichita, Kansas!”

Now, many have put forward basically a Bill of Rights for users, and user control of their own data. Dave Winer has said that the user should be able to control how his/her data is used, right down to being able to to keep a copy for him/herself.

Giving the user control over his data? What a revolutionary idea! (There I go again…)

I think that there is a simple and elegant solution which will take some hard work and years to perfect.

Here it is: Why do consumers have to give their data for free to advertisers and be only consumers? Why can’t consumers be advertisers too? And why can’t they be credited or paid for advertising products/services they like? In return for being paid/tracked, they would give up their anonymity. Should they want to become anonymous again, they can do so, and they would not be tracked. But they would not be paid. If they wanted to become tracked/paid again, they could do so. Anytime. Anywhere.

In this scenario, the user would control what ads he wanted to receive in his user profile in real-time; this could be done with a system of checks or tags or something else. To opt out of “auto ads”, just to use an example, all he would have to do is uncheck it.

Basically, the user is selling his attention information to the advertisers. I look at it another way; the user is selling his time to advertisers to get data; relevant advertising data will be deemed useful and passed on, while irrelevant data will not be used and will not be passed on, and will be treated by the user as spam. In return for passing meaningful data to another prospect or customer, the first consumer should be reimbursed with money for exposing his data, and making a meaningful referral which eventually results in a sale.

And so on and so forth. Here is the trade: Give us your name, identity and user info, and let us follow your activities, and we will pay you. You can opt out anytime, and you will not be paid.

Simple.

I have always wondered why consumers are always treated by advertisers as consumers, when in real life, people have multiple roles such as father, husband, son and manager, or mother, wife, daughter and VP, just to use a few examples. So why should people only be consumers? Ask people for their data, then pay them for it.

That’s what I call a fair trade.

Now, if Facebook did that, that would be really something. And if Facebook doesn’t, then I hope that someone else does.

If they do, they’ll have my business.

Whatever Facebook does, let’s cut the spyware bullshit. That’s a real business killer. Those guys just dug themselves a big one with Beacon, and I’m wondering how they’ll get out.