Monday, April 13, 2009

London Interview

The following is an edited transcription of an interview I gave to Hugh Mason in London back in January of this year. As we were talking in a bar over a few pints of beer, the transcript wasn't entirely clear -- from the background noise, not the beer! But the conversation ranges over a number of topics I have written about elsewhere about what brands need to be doing to adapt to the social marketing imperatives of our new mass connected media environment.

I have kept the back and forth format of the interview and in most cases simply deleted confusing sections rather than trying to correct them -- in a couple of cases this may seem like I am not answering Hugh's questions... and maybe I didn't :-)

Hugh Mason: OK, so it's the 4th of January. I am with Ted Shelton who is Chief Executive of The Conversation Group. Ted, people are interested in the concept of conversation. There are plenty of websites, there are plenty of blogs, there are plenty of podcasts out there talking about what conversational marketing is. Can you give us your kind of 30 second elevator pitch?

Ted Shelton: Conversation is a dynamic between members of a marketplace about the things that are important to that marketplace - so it could be two customers or it could be a customer and a member of the company, it could be a customer and an analyst, a customer and an investor, investor and... Any two participants in a marketplace can be having a conversation about something that's relevant to that market.

Hugh: So that sounds pretty conventional, so this concept of conversational marketing – why is that a new concept?

Ted: Well, actually, sorry, so I actually hate the phrase conversational marketing. The phrase conversational marketing was invented by Peter Hirshberg when we were trying to sell advertising on the Technorati website and - so the idea was, gee, we need to sell ads on this thing that aggregates conversation in a way that it's relevant to brand. The brand sponsors that aggregation and so we'll aggregate the conversation and call that conversational marketing because it creates a value for the community while drawing attention to the brand. It's not entirely a bankrupt concept but in the end, it's very stupid. In the end, it's not what brands need to do in order to be successful in engaging with their markets.

Hugh: That makes complete sense. If we can re-wind this several levels, something that I have heard you say goes back to the history of the way human beings talk to each other. That what some of the social media technologies we've suddenly become expert in the last few years is actually re-invention of something very ancient about the way the people talked to each other. Can you tell us about that?

Ted: I don't think it's a re-invention. It is a re-insertion of a persistent human pattern of behavior into the mainstream of a intention in transactions. So, if you look at transactions before the industrial world, the way in which people came to decision about a transaction they might enter into of virtually any kind was through a consultation with people who that person felt were peers or trusted. It could be that they were experts, it could be that they've had authority but those people were known to the person entering into the transaction.

It was really an interesting aberration of the 20th century that we enter into transactions based upon an intuitive sense of what our peers might want us to believe about a given product -- a sense being created by advertising. I think the way this probably can be understood best is to look back at the beginnings of advertising, for example here in England, the place where the industrial era took off. This was one of the first places where goods could be mass manufactured and sold in a region much larger than the producers had a personal reputation. The way in which a producer would reassure a customer about a product would be through say the endorsement of royalty, "this is the queen's butter." So the queen says this is good butter and even if I live miles and miles away from London, I can trust that it's good butter because the queen says it's good butter. So advertising sort of kicks off from there. You say, gee, what if I take a class of people and employ that class of people to help spread the idea that you will be sexy if you drink Budweiser or at least that you get to hang out with sexy girls. So that can create aspiration, a sense of association with a peer group that I want to participate in, and then maybe I'll buy the product.

The thing about the Internet is that, by entirely disrupting the one-way communication model of mass media, you fracture the ability of a message broadcaster to control the definition of the aspiration and so suddenly, you have all these kids talking to each other and saying "this is really stupid that the beer company says that if you drink beer you can be with sexy girls because sexy girls think that beer is stupid." The beer company is trying to manipulate you and when this becomes apparent through peer discussion the advertising becomes ridiculous.

Hugh: So the Internet is allowing us to be more authentic, more real?

Ted: It's not that we are more authentic or more real. I would argue that the internet just allows us to express our authenticity in a public form. I think a really good example of this is the way in which customer service has gone from being a private act to a public act. So when you had a problem with your cell phone provider and you called up the cell phone company, you had a private interaction with the customer service department of a cell phone company on the phone. So you might have been very authentic and very real but it was a private act of authenticity instead of a public act. Today when you have a bad experience with a company, you write about it on your blog or you twitter or in many many other ways it becomes a public knowledge.

So if you think about the way in which knowledge is shared between individuals, if lots of people have the same experience but don't have any connection to each other, you have shared separate knowledge of the experience and it doesn't ever actually provoke any of those individuals to take further action but if then you make those private acts public and so, you have shared knowledge which is then mutual knowledge so that each participant in a transaction knows that every other participant is experiencing the same problem, then you actually engage people to take things to the next step to say, well, let's organize against this cell phone company.

There are already examples where individuals might say, you know what, I'm really mad at the government but if I know this only in isolation, then I might not do anything. But when it becomes mutual knowledge that I and all of my neighbors are all mad at the government, then we might as a group of people organize to do something. That's the incredible power of the Internet that it actually takes things which could be shared knowledge but is shared private knowledge and makes them mutual knowledge.

Hugh: You've given some examples of negative experience with customer services. Are there positive experiences too, other examples that you've come across where a community working together having a conversation that might have been private but is now public and shared, has created something new, has been a positive thing? Is this always a kind of combative dynamic?

Ted: Sure like Linux. I think it's easy to come up with the examples that are well recognized examples of collaborative or collective intelligence. When you look at Wikipedia for example. Yeah, Wikipedia. So certainly the broadest known example you can - even probably more than Linux. Jimmy Wales, the founder of Wikipedia tells a great story (TED talk - Jimmy Wales on the Birth of Wikipedia) about how at one point in the evolution of Wikipedia, a group of skin heads had decided that they were going to deface pages related to African-American History. But it's very hard to keep secrets online and so people within the Wikipedia community become aware that these bad actors were trying to organize and, according to their own accounts, 20,000 skinheads were going to all descend upon Wikipedia at the same moment to try to deface the site. Of course, as Jimmy Wales says, one of the things that is always true about fringe groups is that they always think that they have 20,000 people but really actually are a couple of hundred people. But what was fascinating was that the community having been alerted to this dynamic, when the attack actually came, there was a large number of people undoing the vandalism. So these people had done enormous amount of work, hours and hours of creating false entries to defame people like Martin Luther King. They came and they had uploaded these changes and within seconds, these changes were reverted and so what took this sort of attempted organized opposition to the mainstream collectively 100s of hours to create could be undone in seconds by the broader community working together. And so that's actually I think an example of how Wikipedia rises above the possibility of vandals or bad actors. There are certainly examples where things have been created or changed that persist for days or weeks or months but ultimately, Wikipedia and mostly well functioning social communities are self moderating and so not only do they get created through the good will but they are also protected.

Hugh: Can you give us a sense in terms of if I were a brand, how does all this dynamic work? I'm thinking of some kind of established consumer brand, how does this stuff affect me. Is it purely in terms of the way I do my marketing or is there broader impact?

Ted: Well, there is a thought provoking metaphor that Jeremy Bullmore wrote about a few years ago. He wrote an article about how brands are not about the head but about the heart, and hence what people feel about the brand won't change overnight. People's definition of brand builds over time -- he likened it to a bird building a nest - a bird will take a twig here and a piece of string from there and slowly build it up and the nest becomes a very stable object which is hard to change. In the 20th century, brands and marketers could assume that most of those twigs and pieces of string were somehow under the influence of the brand -- they could buy advertising, they can control experience in a store with a product, they can influence perception through communications and so most of the touch points for the consumer building that brand nest would be influenced, if not controlled, by the brand. What's happening today as we all become media -- as the experiences that each of us have with brands are instantaneously being transmitted to our networks -- is that those twigs and those strings are coming from many-many-many more places today and they're coming from our peers. So they are coming from very powerful sources of authority, people that we respect in and can connect with. And so we are building our nest out of materials that the brand has very little control or even influence over and so it really dramatically changes the world for the marketer. The marketer now has to say, gee, it's not about how I use media as a lens through which consumers will perceive my brand but rather how do I actually enable my organization, how do I become a facilitator for my organization to have a genuine and authentic interaction with that audience that creates more compelling engagement, a more compelling sort of, if you will, sticks and straws and strings. That's the world of marketing, entirely dramatically shifting.

Hugh: I'm really interested to explore that on two levels – one in terms of what the impact for an organization that has say brand or a message and I'm also interested to understand how this kind of change in terms of communication is affecting different sectors, different demographics, even different parts of the world. You live in California a very networked place. Here in the UK, there are parts of this country still fairly well at the end of piece of string in terms of broadband, so on. Can you give us a sense of - first of all in terms of the impact or the different sectors that have seen more activity driven in a new direction because of this phenomenon, are there different demographics, are there different phases through which this is going to impact the way that brands have to change and work?

Ted: So I think – in answering your question, the first thing that I would raise is a question back to you and to people that are considering this question -- would you consider Californians an outlier and their behaviors irrelevant to the rest of the world? Or instead, are they early indicators of a behavior that is sweeping through society. I think that what we're seeing happen in the most network active places is a ground zero and that what we're seeing happen in that market is in fact going to sweep through the markets in every industry, in every demographic, in every geography throughout the world as these trends become more widespread -- because I thing the trends are driven by human nature, because they are driven by this core sociology that's wiping out this aberration of the last 50 years of controlled media. So our evolutionary traits are going to win out over that sort of temporary technological state that existed in what we called mass media.

So, as we then look at what these trends are, we say, the trends will be toward more individual participation, more expression of likes, dislikes and more collaboration within communities around both intent to purchase and actual activity - search, aggregate buying or aggregate usage. I think what we'll see is that brands that are going to remain relevant are going to have to be participatory in ways that those communities form their opinions. In order to do so, they actually have to create quality and provide value and be transparent. It will no longer work to have a crappy product. You'll be found out. Crappy products will rapidly – the news of a crappy product rapidly spreads within a community and customers will trend toward quality.

Communities often will have better information than the companies themselves and be more informed about their options and all about the pros and cons of different products. One of the things that I think is really core to our practice is going to companies and saying to them, the most important asset that you have in your company is your own employees because if your employee is doubtful about what you are doing, you need to re-examine what you are doing. If your own employees don't believe in it, then your customers are certainly not going to and when you customers become the most important proactive voice in the marketplace, for or against your value proposition, then you fundamentally have to listen to the advice of the customer in a way that today we give a lip service to but have not ever fully committed to. So your employees become the test bed, if your employees believe in what you're doing, they can then not only validate but become the megaphone to the marketplace. They can be that string for convincing - explaining to a marketplace why the proposition that you offer makes sense, is relevant to particular communities. The role of the marketer then is to really support the customers becoming champions of the value proposition that the company offers.

Hugh: So there is a change due for organizations as well. Can you talk us through what the implications are, it's not a simple question of simply buying in a technology to do a blog, buying in the technology to have a bunch of people talking to customers online on behalf of your brand, but something much more profound here. Can you just talk us through the kind of cultural changes that you've seen organizations having to make?

Ted: Blogs are really interesting for communication, they are very valuable but yes, they are just one part of a much larger communications space that companies need to address. So if you think about the kind of communications human beings have evolved in the real world, we have different communications for different kinds of information. We have a verbal conversation, people chatting over coffee with very short period of value and requiring presence versus a book which can, in the case of Bible, be available and valuable for thousands of years. And everything in between, so you have a variety of forms of persistence. You have a variety of forms of immediacy of the interaction so in some cases, it's really important that people be present together in order for the interaction to occur, in other cases, that doesn't matter at all. And then you have changes in scope of the interaction, so you have conversations you want to have privately, conversations you want to have with a particular group, a larger group, the whole world

So what you need to do is think about the kinds of communications that a brand needs to engage in, according to all this different communications channels. Some channels are about persistent data that needs to exist in the marketplace and somebody from the company doesn't need to be present. Some do require an employee be present. In some cases there is a need to broadcast to the whole world and in some cases the message is just to customers, or just to a specific customer. So the different online technologies that companies use define sufficient space within that communications queue to be able to address set of problems that that particular brand has in explaining and supporting its products at marketplace.

Hugh: So we've got a whole range of thing and what is required. One thing I'm interested to explore is the ways -- OK, you hire a bunch of agencies to do this for you. But that still isn't the end of the story. It doesn't result in changing the culture within organizations, once you start having a conversation that's much more honest. Can you talk a little bit about that?

Ted: Well, so you started out by saying, OK, let's go hire a bunch of agencies who do the communications. I think that the most successful companies are going to be ones where the employees of the company recognize then important part of succeeding in doing their job function within the company is engaging directly with the market, so whether you're developing a product or you are marketing product or selling a product, supporting a product or recruiting employees or all that kinds of things that a company does -- that a part of your job is going to be about having a conversation and having a direct interaction. Agencies can be helpful in educating and supporting organizations but ultimately, organizations have to make this a part of their core mission. So I think it is a lot about the traditional marketer or communicator in an organization becoming the facilitator of the organization.

Nicholas Carr in his book The Big Switch, talks about the electrical grid as an analogy for information technology and he talks about the history of the evolution of electricity in American manufacturing environments as a model for thinking about how IT will actually evolve from corporate center IT departments to services that IT organizations will tap in to the way we might connect with electric grids. And so, one of the things he talks about is the activity gap when electricity was first being installed in manufacturing facilities that were multi-story buildings. They were built that way because that was an efficient way to centralize the distribution of power when power was distributed by belts and pulleys. When electricity came into those factories, they simply tore out the belt and pulleys and replaced it with electrical wires. This really did very little to change productivity within the factories because the source of productivity in the factory was not the type of power. It was the way in which the production was organized and the production was organized in a way that satisfied requirement of power distribution via belts and pulleys but once you were freed from that limitation of belts and pulleys and you could actually design a factory to be on a single level where your products could move in a linear fashion on a single level through that factory. So suddenly something was possible once you have electricity as a way of distributing power and when that was implemented you had an enormous increase in productivity.

I think the Nicholas Carr actually misses the really important story that he actually otherwise is drawing a good parallel to, which is that the means of and systems of production need to be transformed within companies in order to achieve a real productivity increase from this change in information technology. Once you say, IT is about this very distributed connectivity and computational capability, what you're also saying is – I don't have to limit production to being inside my company. I can actually take the production to the market. How can I distribute production – how can I take production and say, hey, you know what? There's a group of people who are actually really smart about this particular aspect of the problem, and they can solve that problem and contribute.

IT technology, like electricity, changes production, in this case, changing it from linear single level (inside a company) to social -- distributed social production that's extremely powerful.

Hugh: So finishing off this conversation and as a proposition, The Conversation Group is not just about implementing a bunch of strategies or advising people on what particular communication channels to implement or whatever, there's a more profound mission, there's a more profound service. That TCG is offering.

Ted: For the chief executive who is considering how his or her business is going to not only remain competitive but rise above the other companies in the fields, the challenge is to not think about what is the incremental improvement. David Cushman has a great example in high jumping. High jumping was a sport in which people ran toward the pole and leaped as far as they could straight up into the air and then kick, put one leg up and then the other over the pole. And then someone came along and backed up to the pole, actually ran up to the pole and turned his back to it and flopped over and was able to achieve a height much beyond any of the people doing. So I think similarly, companies today simply look at incremental improvements in productivity, "how do I get a little bit more a lift."

But they could look at these technologies and say, how do I really transform and create improvements in a non-linear fashion that can allow my company to rise above my competitors. And in every industry, there will be a company that chooses to follow that path and chooses to see these technologies as a way to unleash employee productivity improving morale, improving ingenuity that's coming from those employees and then in turn increasing employee engagement externally with a marketplace... So every CEO in the world needs to be thinking about how can they inspire their organization to seize the opportunity that social technology offers and that's I think the thing that TCG more than anything also is able to help an organization do. We're there to support change agents and providing the understanding, the insights, the best practices, case studies of other organizations and also the really hands-on strategic in which a particular organization can adapt themselves to these new market opportunities.

Hugh: One final question. If I'm a well established marketing agency, why would I consider working with TCG? What would be the attraction for becoming part of this movement and how could I do that?

Ted: As an established marketing organization, you suffer from success. The flaw of any organization, of any person is embedded in their strength. Marketing companies today have had great success with the techniques that made sense in the context of the last 50 years. And they are married to those - that methodology, that process that had been successful. It's very hard for them to un-think, to change the way that they do business. So the most important reason for you as a marketing organization to try, to become a part of the movement with TCG is to really see some daylight, to see what is at the other end of this tunnel.

And the opportunity is to see that the future of marketing is about being the inspirational enablers and leaders of a whole new generation of business people who are going to be deeply engaged with their markets and you can learn how to be that sort of enabler when you work with us.

Hugh: That sounds very inspiring. Ted, thanks for talking to me.

1 comment:

David Cushman said...

Really enjoyed this Ted. Wish I'd been in that pub.
Interested in your thoughts on my latest missive: cheers dc