Trump, Morality, and Business Taking the High Road

Who would have thought that taking a stand against neo-nazis would spark an outcry in 2017 America? But it did. After repeated refusal from Donald Trump to outright condemn the beliefs of the White Nationalists (aka Nazis) who gathered in Charlottesville, Virginia, numerous CEOs who belonged to Trump’s Strategic and Policy Forum decided to disband the group.

In a statement from Jamie Dimon, Chase Chairman and CEO, he explained how Trump’s reaction to events do not fit with his values or the values of his company. As he stated, “There is no room for equivocation here: the evil on display by these perpetrators of hate should be condemned and has no place in a country that draws strength from our diversity and humanity.”

As someone working for an organization that has worked closely with Chase for more than a decade, I say, “Hell yes.” But it begs the question, why did so many companies and CEOs respond to Trumps call in the first place? CEOs like Elon Musk (who would eventually decide to stop advising the President after Trump backed out of the Paris Climate Accord) said he joined the Presidential Advisory Forum “…to provide feedback on issues that I think are important for our country and the world.” Being the voice of reason became a driving force for many of those who joined the effort.

The cynic might say it was just “good business?” After all, Trump won half the country’s vote. You don’t want to turn your back on half of America if you own a business. But it would seem now that “good business” is taking a backseat to “good.”

Only time will tell if this will affect their businesses. However, if one were to listen to the “loud” voices on social media, you would think it would be the latter. After 30 minutes of Chase posting Jamie Dimon’s statement on Facebook, 80% of comments were negative against Jamie Dimon and Chase.  That’s right, 80%. But the “like” response tells a different story from the comments. 95% of the clicks were likes and loves. Only 5% hate.

This is the world that CEOs are facing today. Ambiguity is the norm. And what should be a simple decision has become more complicated for business owners. Some businesses, like Nordstrom, who took hardline stances against the Alt Right from the beginning, saw increases in sales. However, sites like grabyourwallet.org who list companies who they believe you should boycott due to their anti-trump views are surprisingly popular. In February of 2017, this site had more than one million visitors.

So, you would think what Jamie Dimon and other business leaders did today would be easy. It was not. It was brave. It was just. And it could very well affect their business in the near future. The great thing is that ultimately they didn’t care. The hope is that, in the long run, choosing to support all people will lead to more customers choosing to do business with you.

 

 

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The Rise of eSports

Since the advent and growth of eSports giants like Dota 2 and League of Legends, the gaming community has called for mainstream recognition regarding legitimacy. Take Colin Cowherd’s 2015 rant against esports for example. There are undeniable similarities between professional gaming and conventional sports, but the arguments have generally been ineffective in dispelling traditional beliefs formed by the collective generations of sports fans prior. While it is easy to dismiss playing video games as anything resembling an athletic endeavor, it is more complex than just noting the relative lack of physicality and declaring  as non-sports.

At their very essence,  are video games played in a competitive environment. Sometimes the games can be played one-on-one, other times, teams will square off against each other. But the key point in all of this is that  are competitive events. They are all about opposing players or teams doing battle in a real-time competition.

What’s In A Name? The traditional definition of professional sport is: all forms of competitive physical activity which, through organized participation, aim to provide entertainment to spectators and provide an income for the athletes, who in turn devote time training to increase their skills and experience to modern levels of achievement. But physicality alone cannot be the mark by which we measure “sport”. After all, look at poker. Poker is frequently broadcast on ESPN and other networks. This is equally true for chess and the National Spelling Bee. Is there anything remotely physical about playing poker? Or chess? Or a spelling bee? No.

And yet, all of these events are considered sporting events by probably the most recognizable sports network on the planet. Furthermore, players of  employ a strategies that play to their strengths while exploiting the weaknesses of their opponents. If the game being played is a team-based game, then teamwork is essential. Like any other athlete, players have tremendous reflexes, dexterity, and problem-solving skills. So, what exactly accounts for how we define “sports” and what does it mean for marketers?

The Conceptual Breakdown. Judging another culture solely by the values and standards of one’s own culture is termed ethnocentrism. People born into or surrounded by a particular culture begin absorbing its values and behaviors and build a worldview centered around these principles as the norm. Within the context of , this concept explains the psychology behind a lot of mainstream dismissal. Quite simply  don’t fit easily into our cultural definition of what sports should be. We do the same thing with other cultural categories all the time. For example, people in the U.S. struggle to classify crickets as food even though they are healthy, tasty, and plentiful. So, the struggle, whether it’s crickets or esports, is a reflection of cultural norms.

While ethnocentrism lends to maintaining the cultural status quo, generational gap is a concept referring to the differences between people of younger generations and their elders. It is the conflict between these groups which has catalyzed a lot of recent cultural change. This allows for members of the younger generation to form their own identities and cultures outside of older and mainstream influences. This is important to the development of  because despite its young age, its rapid growth foreshadows a change in the mainstream attitude towards it. The younger generation is growing up participating in and watching , thus making them part of their cultural norm. Within the next five years, there will be enough members in the community to challenge the mainstream dismissal of  and even gain the respect of the older generation regarding its legitimacy. And that should have everyone involved in marketing thinking.

Going Mainstream. Regardless of how you view , they are growing in popularity every year by leaps and bounds. Esports are on the verge of breaking out of their niche communities into mainstream focus. According to Newzoo, a company specializing in esports analytics, it’s estimated that the global esports economy will grow by 41% by the end of this year to $696 million and reach $1.49 billion by 2020. Keep in mind that includes more than the game itself, it includes media rights, advertising, sponsorships, merchandising and ticket sale. Like any other sport, it means reach extends well beyond the game.

The numbers speak for themselves, but also consider this: The renowned IMG Academy, an elite boarding school and training program in Florida geared for athletes in basketball, football, and other traditional sports, recently added an esports training program that includes physical, mental, and nutritional aspects. In other words, one of the most successful and prestigious sports-focused schools in the country believes so much in the future of esports that they have developed a training program around it. The outcome of generational gap is something IMG has identified and they are betting on significant changes in how we think of sports as a society.

Legitimacy also continues to be added as traditional sports team owners such as New England Patriots owner Robert Kraft and the organization that runs the New York Mets, Sterling Equities, have begun to make multi-million dollar investments in esports leagues. Cities like Washington D.C. have even outfitted their professional basketball arenas for live esports taking a well-calculated gamble that esports are here to stay.

That growth and investment around esports has started catching the eye of big-name brands including Arby’s, Coca-Cola, Audi, and Gillette to name a few. That’s because they see an opportunity to reach a demographic sweet spot, namely males between the ages of 21 to 35. They have cash, they’ve grown up gaming, and they are increasingly hard to reach via traditional advertising. Newzoo estimates the current global  audience at 385 million people, including 191 million enthusiasts and 194 million occasional viewers.

It’s estimated that the global eSports economy will grow by 41% by the end of this year to $696 million and reach $1.49 billion by 2020. Keep in mind that includes more than the game itself, it includes media rights, advertising, sponsorships, merchandising and ticket sale. Like any other sport, it means reach extends well beyond the game.

The numbers speak for themselves, but also consider this: The renowned IMG Academy, an elite boarding school and training program in Florida geared for athletes in basketball, football, and other traditional sports, recently added an esports training program that includes physical, mental, and nutritional aspects. In other words, one of the most successful and prestigious sports-focused schools in the country believes so much in the future of esports that they have developed a training program around it. The outcome of generational gap is something IMG has identified and they are betting on significant changes in how we think of sports as a society.

Spending by eSports still falls decidedly short of traditional sports. Enthusiasts will spend an average of $3.64 per person following the sport this year, according to Newzoo. Compared against basketball, on which fans spend an average of $15 each, and the short-term gains aren’t there for many brands. But like all things with esports, the numbers don’t tell the whole story. One reason for the discrepancy is that esports content is largely available for free and the money spent on merchandise remains relatively small. But spending is rising and expected to reach $5.20 per fan by 2020. Another reason is that eSports are drawing a younger crowd with less disposable income – for now. And this is where thinking about the long game becomes important. Building brand affinity and share of culture means building connections that last a lifetime. The earlier you bring a population into the fold, the sooner you become essential to the deeper cultural conversation. You aren’t reacting, you’re creating.

In the end, it doesn’t matter if eSports are seen as sports. People in the industry can identify similarities and use conventional sports as an example to adapt and grow the eSports culture. Growth in target audience involvement is currently more important than acceptance of members outside the base. And for brands hoping to remain relevant, having a presence in the eSports environment is extremely important.

 

 

AI, Advertising, and Culture

In an ever-increasingly connected world, artificial intelligence is beginning to find its way into every aspect of our lives. We are “on” 24/7and we rely more and more on our  devices, particularly our mobile devices, to help us make decisions. That rapid increase in computing power has done more than help the user. It has equipped companies with an unprecedented capacity to automate processes that previously required hours, days, and weeks of human effort. AI has allowed companies to target, adjust, and adapt at an unimaginable pace. In the same way that Siri acts as a personal assistant for its users, marketing companies are now tapping into AI to act as a personal assistant in the creation of highly effective marketing campaigns.

Currently, agencies (and their clients) use AI to sort Machine-Learning-AI-in-Finance-11-04-2016-A-1200x1200.jpg
through assets to determine and/or refine the target audience, to gather data about how to best position a brand in various contexts, and to create varied advertisements intended for a wide variety of mediums, including everything from billboards to social media. The final piece is still largely in its infancy, but will no doubt continue to grow and evolve as AI become faster and smarter. Today, the goal of AI in advertising is to optimize campaigns by placing ads in front of the right customer at the right time. As technologies evolve, advertisers will be able to limit their ads on the basis of a huge array of parameters, most of which we’re all familiar with. Targeting an individual will be based on hundreds of parameters and actions, all quantified and measure in the blink of an eye. And creative (and its placement) will adapt in near real-time. In other words, they’ll be able to micro-target at a faster pace than we can imagine.

All of that makes sense, but humans are more than individuals, we are part of broader cultural systems, which means context and cultural cues matter. Yes, each customer is unique and therefore each customer journey is unique. However, there are broader social, symbolic, and cultural forces that guide our behavior depending on the situation at hand. So, the question is, can AI account for those cultural patterns and processes?

Considering the rapid developments in machine and deep learning, these systems will become increasingly capable of teaching themselves to make more precise and effective decisions based on a broader set of inputs. Ultimately this means that for AI to be truly move beyond transactional relevance, it will need to have a more balanced approach, which is to have a robust understanding of people’s aspirations, interactions with each other, and social connections. What are they trying to get done, what are the barriers to that, how do they create a sense of belonging, etc.?

We create culture, interact with it, are affected by it, and can even be destroyed by it. Culture applies its own logic, has a memory, endures after its makers are gone, can be repurposed in supple ways, and can induce action. Because culture can do things we cannot do as individuals, like fostering collective action or making life easier by providing unspoken assumptions on which we can base our lives, AI will need to evolve to do more than react to clicks.

 

 

Inspiration and Venice

It’s been a while since I was in LA, and while I’m in Venice-Beach-4.jpg
Culver City today, my mind keeps being drawn to Venice Beach. In 1905, Abbot Kinney imagined a “Venice of America,” a coastal replica of Venice, Italy, down by the ocean in west LA. Of course he did; in a city built on dreams and dreamers, anything should be possible if you imagine it hard enough. And Kinney’s imagination was strong. Over 110 years later, many of the canals he built remain today. Like the rest of LA, the community has changed, is always changing. But that’s Venice, a very particular blend of sea air and freedom that stays in your skin however far away you travel.

What this city always reminds me of is the human ability to imagine other worlds and ways of being that don’t necessarily fit what people already see in front of them. Whether in Venice or anywhere else, you never have to stop imagining. The trick is letting creative inspiration come to you freely, whether you’re a chef, a banker, or a mechanic.

AI Marketing: Can the Matrix Buy Milk?

AI is the continued topic of discussion in 2017 and will no doubt remain so for the foreseeable future.220px-HAL9000.svg.png Enabling machines to learn, make decisions, and adapt to circumstances without input from people (rather than simply obeying pre-programmed instructions) is the reality of the post-modern world. And while it presents tremendous advantages to society and businesses, there are just as many disadvantages. Being a product of a certain generation, I can’t help but conjure up memories of Terminator and The Matrix with self-aware, self-programming machines running amok.

But there are probably more people who subscribe to the more optimistic view that applying a more restrictive, less autonomous form of machine learning to the wealth of data could help identify correlations and patterns that were impossible for humans to see before. And the potential advantages are limitless – new ways of treating illness, quicker response times for emergency services, etc. From a business standpoint, offers will become more personalized, more relevant, and potentially involve less direct interaction (imagine your home being able to order groceries based on what it has learned about your tastes, habits, or medical needs). Imagine HAL 2000 with a heart of gold.

That said, there was quite a stir last year about customer service chatbots last year, but most of these were actually very limited, merely guessing the most likely answer to fit the question. Impressive to a point, but hardly the breakthrough we’ve all come to expect from SiFi. Real AI, underpinned by natural language processing, neural networks and machine learning, will understand how humans think, talk, and categorize concepts, making it smarter and easier to interact with. It’s simply a matter of time and processing power. And the more we use it, to depend on it, the better it will become. So we will no doubt see a proliferation AI buddies in the year to come, such as Alexa, Google Assistant, Cortana, etc. .

With AI, we have the opportunity to build decision-support systems that see, hear, understand and collaborate with us to help make decisions faster, more relevant and better informed. Which brings up an interesting idea: to whom do we market? Human beings are the obvious, unchanging element in the process, but are we on the verge of having to think about how to market to the machine? And if so, what does that look like?

If AI has the potential to act without our involvement and on our behalf, then we need to be ready to “sell” to the machine. And if AI can learn to make judgements about our personalities and those things to which we have an emotional or culturally grounded response, then our virtual assistants will be targets for marketing. For example, milk is more than a commodity. My assistant will be able to discern that I have a taste preference for glass-bottled, clover-fed milk. But it will also know that consumption aligns with my workout schedule, that I need to reduce my fat intake due to my age, and that I have a dinner party coming up where milk is likely to be used in cooking. It will have to weigh all of these variables, just like I would, and make decisions about what to buy. And that’s just milk. Now apply that to a car, a medication, or a vacation. The implication is that we will need to consider the possibility of marketing to a device that is weighing the same sorts of variables a human being would way, but which has a very different way of conceptualizing, categorizing, and responding to the world. Welcome to the brave new world of marketing to machines.

 

Nativism and the New Innovation Landscape

The U.K.’s vote to leave the EU and America’s election of Donald Trump have both been credited, in part, to a rising tide of nativism, anti-immigrant fervor, and the belief that excluding people will boost the economy. Many native-born voters believe foreigners will (or have) hurt them economically. And with manufacturing on the decline in the US, their pain, though largely unfounded, can’t be ignored. But exclusion won’t bring back blue-collar jobs in an increasingly innovation-centric economy. The emergence of nativist sentiment across the so much of the globe (including Germany’s right-wingAfD party, French politician Marine Le Pen and Turkish president Recep Tayyip Erdoğan) is ultimately going to backfire.

Indeed, the United States’ more welcoming, pre-Trump immigration policies are why Silicon Valley is in California and not elsewhere. A central reason the U.S. has been so successful, so entrepreneurial, is because there are so many immigrants here, bringing not only new perspectives but the drive to create.  And that is precisely how a country should act, actively seeking out the smartest people, the most entrepreneurial people, the most creative people. If a government doesn’t understand that, we have a big problem.

The growing propensity for nativism stifles innovation, leading to new opportunities for countries. Not that I begrudge then that. Far from it. The point is that isolation breeds stagnation and countries need to be aware of this. Countries will, in the near future, compete for the best talent the way companies do today. Smaller countries such as Estonia and Portugal could easily disrupt the large ones that turn away newcomers. Ireland has already been extremely successful in this regard.

Small countries don’t have anything to lose and everything to gain. Returning for example to Portugal, the nation has largely been dependent on tourism for ages. But increasingly they see that technology is a springboard to economic development. Boarders and nationality mean nothing, and attracting talent is a matter of providing an environment that encourages innovation, the sharing of ideas, and the inclusion of a wide range of perspectives. They have beautiful, inviting cities, nice beaches where people can work, and a welcoming culture, so why not create a hub there for startups? Why not position Portugal (or Argentina, or Costa Rica, or anywhere else for that matter) as an innovation hub?

Ultimately, as nativism takes hold, the traditional centers of innovation run the risk of seeing much of draw eroded. They will by no means crumble into ruin, but they will lose out on economic growth as their status as welcoming environments wanes.

 

84 Lumber and the Power of Brands

By now, everyone is discussing the 84 Lumber ad that ran during last night’s Big Game. For the few unfamiliar with the ad, a Mexican mother and daughter, who appear to be on their way to the United States, survive the perils of migrating from their home and ultimately come across a depiction of an imposing border wall, reminiscent of the one Trump has discussed since he burst, again, into the limelight so many months ago.

Fox rejected the spot not because of violence or nudity, but because it depicted a fairly accurate visual of what Trump’s wall would look like (if anything, it actually sanitizes the process). Not surprisingly, Fox appears to support the concept of the wall but censors any visual portrayal of it.

According to Rob Shapiro, the chief client officer at Brunner, the agency that worked with 84 Lumber to come up with the ad, “If everyone else is trying to avoid controversy, isn’t that the time when brands should take a stand for what they believe in?” I couldn’t agree more.

The reality is that brands have become political, perhaps they always were. That’s true because brands carry meaning. They are symbols that reflect not only a company’s vision, but the shared beliefs, practices, and values of the people who engage with them. Granted, some brands are innocuous, but those brand that really resonate take a position on more than their products, they take a position on their role in the world. They tell a story about who they are and where they fit into the world. And this is exactly what 84 Lumber, and indeed Brunner, chose to do. They chose to take a stand against the vagaries of The Wall and show in the cold, hard reality of what it implies. And in doing so they chose to articulate the simple truth that they will not willing be part of it.

Which, in turn, brings us back to what it was Fox took issue with. Was it the message of compassion at the end they were rejecting? Was it the entire spot and its portrayal of the journey? Was it the little girl with a flag she’d made along the way? Was it simply the door? My suspicion is that we’ll never know. Or, if is likely, Fox does provide an explanation, it will be a convoluted mix of half-truths and baseless accusations.

Regardless, this ad reflects precisely what good branding does. It brings a story to life, it drives interest, it provokes, and draws us in. And for that, both 84 Lumber and the agency should be extremely proud.