So, I sat on a digital marketing panel for the Utah Chapter of the American Advertising Federation (AAF Utah) last night. With some illustrious local advertising experts:

Jason Bangerter, Founder StruckAxiom

Dave Nibley, Creative Director Rain

Craig Aramaki, Chief Digital Officer Richter7

Ian Barkley, Business Development Rastar

And Me, Shawn Butler, Digital Strategy Saxton|Horne

Here is a photo of the panel:

 


Here is a photo from the panel:

 


(Notice the conspicuously empty front row)

One of my favorite moments of the night was a discussion on social media marketing. We identified that sites like Facebook, Twitter, YouTube and even MySpace are vehicles for tactical execution of an overall strategy. Craig mentioned that social networking is not new, that it was a part of human nature to give word-of-mouth referrals to our peer groups. And I shared my illustration that we are simply using technology and the facility of social media platforms to augment a behavior that has been occurring since the days of the cave men: A Twitter post that says “I love the burritos at Cafe Rio” is our modern equivalent to “Hey, Og, eat there! That bush has good berries.”

I though it was a clever analogy, and it apparently struck a chord with some audience members!

It was a great conversation in a room full of smart people. And says GREAT things about the future of digital and creative advertising in Salt Lake and the Mountain West area. For more fun quotes, you can search Twitter or go to the Utah Ad Fed’s FB Page.

I found this amazing video of a guy biking through the song Prisoner of Society on Guitar Hero World Tour. (If that made no sense to you, then you need to take 3 and a half minutes and watch this video.)

For more on the video, you can read this guy’s comment. As many of the nearly 1 million viewers noted, this video is good… a little TOO Good. Many YouTubers were immediately suspicious. Well, I first learned about the ad from Creativity.com, who was praising the work of Droga5, the agency that created it. So, yes, it was created by professional Ad Men. No, it was not shot by a group of GHWT loving kids in Indiana with a lot of free time on their hands, as we were deliberately meant to believe… but is that dishonest?

Another example is the band Boyce Avenue. The story is cliché and inspiring– three brothers in Florida start recording cover songs on YouTube, quickly gather 3 million views and 1 million fans, then start recording their own stuff and now they are releasing multiple platinum-selling albums and going on a national tour. I saw the video. These guys are good… a little TOO Good. You be the judge.

The inventor of Murketing, Rob Walker points out that today’s consumers assert they are not influenced by the messaging of “the Man’s” corporate broadcast media nor the silver-coated brand imaging of Mad. Ave’s Ad Wizards. But all our consumer data reports that we are buying MORE than ever before and our purchasing is (even more) based on Branding and Perceived Value.

So, in conclusion, today’s consumers want to buy, they just don’t want to be sold to.

What this leaves us is companies manufacturing “Homemade” advertising. Professional advertisers and marketers are now turning their talents to making messaging that looks like it came from amateurs. That it was made by your peers. I add my own word to the marketing lexicon-

Promateurs. noun. def. – The ad agency that made Bike Hero, the recording label that created Boyce Avenue, the makers of LonelyGirl15, and others. Antonym – Amfessionals. def. – The makers of the Doritos Super Bowl commercials.

We arrived at the world headquarters of Alibaba.com in Hangzhou to a fanfare of music–music that could have come from the soundtrack to the original Super Mario Bros. Across the less than 1,000 sq. foot office floor, the 115 employees stood inside their 4×4 ft. cubicles and stretched their arms in the air. Then, in unison, the entire mass of twenty-somethings began doing jumping jacks. They continued their group exercises while our group of MBA students was escorted past the cube-clusters into a large meeting room.

The calisthenics are but a small, visible piece of the unique corporate culture of Alibaba Group, an English language web-based business-to-business eCommerce and eAuction service specializing in connecting international buyers and small- to medium-sized Chinese sellers. Our guide quickly made us aware that the company knew it was unique. “For most companies,” he said, “employee culture is like a cliché or a joke.” Well, it is not that way for the employees here. “Everybody is happy,” he continued. “It is our environment.”

We were then given a rough translation of a company joke that concerned a stubborn donkey in a mill that refused to work for his master. The master enticed the donkey to do his work at the mill by threatening to send him to work for Alibaba.com. “Here we all work like donkeys!” he announced as the punch line. Indeed, the word “work” actually appears in 2 of the 6 points of their printed company motto. So, are hard work and teamwork the strong points that make Alibaba such a successful company? Or is there more to this unique start-up’s corporate culture?

The lobby of HQ is decorated in orange scarves and bright orange hanging plastic fruit. And one other ubiquitous decoration—photos of company founder, Jack Ma. Ma is the poster-child of the New Chinese, the modern entrepreneurial self-made success story that this newly-capitalistic nation adores. And he is on posters. Giant reprints of the man’s photo adorn 2 out of every 4 walls in the building and line the staircase up to the top floor. In ’88, Ma was an English teacher fresh out of college. 11 years later, after a visit to Seattle and a crash course in computers, Ma was founding his own eBay-esque business. Then, 8 years later, he took his company public on the HKSE to raise $3 billion USD and become the IPO with the greatest increment in stock price at first trading in 2007.

Jack Ma’s influence is everywhere and his success is a model to the employees of his company. “He has us call him Kwai Chang, from the TV series Kung Fu,” our guide told us. During our tour, every action and idle quip of the 43-year-old founder was revered as holy writ, and even offered as justification for the “spirit” that prevailed there at the company. When asked what he thought Alibaba would do to maintain its growth and close the gap on rival companies Google and Baidu, our guide’s response, stars nearly visible in his eyes: “I can’t answer that. I’m not Jack Ma.” –Shawn Butler

In spite of Thomas L. Friedman’s best efforts to claim otherwise in his newly revised The World is Flat: A Brief History of the Twenty-First Century, Release 3.0. Just as in his previous books, Friedman showcases his journalistic forte for information gathering, analysis, and insight-laden extrapolation. He supports well his own previous arguments for free trade, market specialization, and classical economic theories regarding absolute and comparative advantage. (Smith, Ricardo, … Reich)

I’ll pause here to acknowledge that I, too, am a strong proponent of globalization. I have seen first-hand the dissolution of geographic and political barriers to trade and the ensuing benefits to the local economy. I find no fault in Friedman’s historical observations, including his 3 eras of globalization, his 10 flatteners, and even his recommendations for new hybrid fields of study he calls “Mash-Ups.” These ideas are spot-on in our global economy of increasing convergence.

But why all the doom and gloom, Mr. Friedman? Instead of telling your readers how the new “flattened” world will make lives better—spurring the economy of our New America into a greater leadership role as the birthplace of ideas and a nation of entrepreneurs—he focuses on the bad. Friedman follows the M.O. of Lou Dobbs, crying wolf over foreign theft of US jobs and a general disappearance of the American middle-class. Rather than pointing to the strengths of our human capital as inventors, creators, and brand builders, he tells readers that the American sky is falling in competition with Indian and Chinese ITs and engineers.

Friedman leans toward the dramatic, but what do you expect from an Opinion Columnist? He opens with this quote from an Indian software CEO: “The global playing field is being leveled… and the US is not ready.” This is followed by other sensational statements of hyperbole. “Today, people in China and India are starving… for your job!” he warns his children. But then, you are given to flights of the inflammatory if you are to make your living as an op-ed writer. The Title The World is Friendlier to International Business because of Improvements in Technology and Transportation doesn’t sell books.
–Shawn Butler

In the years of Thomas Edison, the business model of the motion pictures industry was vertically integrated and tightly controlled among a very few. The original inventors of the technology joined together and created a single trust called the Motion Picture Patents Company (MPPC) in 1908. From this time up until the Paramount Decision of 1948 when government regulatory forces broke up the tight vertical integration between content production and distribution, the industry was dominated by a few giant corporations exercising oligopolistic powers.

The Value Chain for this industry was a closely controlled, proprietary vertically-integrated monopoly. All the components: production, distribution, and exhibition were under the control of the studios themselves. This allowed them to engage in several practices including block and blind booking before these were deemed illegal in regulatory decisions by the federal government.

The introduction of Television had a powerful effect on the Business Model of the Movie Industry. Initially, television broadcasting was seen as a threat to the Movie Industry and its programming was a new competitor for the already declining attention of the film audience. However, by the early 1950s, the film studios recognized that the new technology was benefitting them. Past opinions aside, they did not hesitate to take advantage of a secondary market for their products, selling their extensive libraries for Television exhibition.

The arrival of the Videocassette Recorder (VCR) created another lash of retaliation from the Movie Industry. The technology, both Betamax and Video Home System (VHS), was met by a vehement lawsuit which, although taken all the way to the Supreme Court, proved ineffective. The Betamax Case of 1984 essentially paved the road for the introduction of new distribution technologies that were to come. As with television, the existing industries quickly realized that rather than fighting the technology change, they could have been profitting from it. Again they had found themselves in a legal battle against an alternative, and lucrative, new distribution channel. Direct sales of films to VCR owners quickly gave way to video sales to Rental Stores, creating the two-tiered pricing system that is still utilized with the introduction of DVD technology. With a 40 to 60 percent split of the rental revenues, the Home Entertainment category is now the most profitable segment for the Motion Picture industry.

The internet was met with similar trepidation. As though struck with the same inexplicable amnesia that repeatedly appears in their plotlines, the Film Industry completely ignores their history and continues to view technological advancement as a threat. The big 6: Disney, Sony Pictures, Paramount Viacom, Fox News Corp, NBC Universal and Time Warner, joined together to form the Motion Picture Association of America (MPAA). In an organization that bears the very same traits that led to government antitrust intervention a century ago, the major Hollywood studios have again united to create closed standards that hinder competition. Together with a similar organization in the music industry, the Recording Industry Association of America (RIAA), the MPAA exerts a concerted effort to find and prosecute internet-based piracy and file sharing. In place of embracing these technological advancements and evolving complementary technologies to generate greater profits, like the billion dollar online film business being operated by early-adapter Blockbuster.com, the motion picture industry is again seeking legal insulation against the natural progress of their industry.

I see two possible scenarios for the Motion Picture Industry in the next 5 years. One, it will succeed as it has never before in controlling the distribution and exhibition of its products. This will undoubtedly follow a multi-year court hearing and perhaps several appeals that will be costly not to the media corporations, but to the consumers who are subpoenaed for testimony for or against the practices condemned. Afterwards, movie industry products like HD DVD and Blu-ray will have multiple layers of encryption to prevent copyright infringement. Movie theaters will be equipped with state-of-the-art biometric security to prevent movie-goers from “movie hopping” within the theater. Blockbuster will require a password, DNA sample, and a large cash deposit prior to releasing any media for rental. The internet will be laced with information-eating viruses that seek out unlicensed copyrighted materials on civilian computers, erasing it and signaling the Ministry of Truth to prevent any further crimethink. Meanwhile, independent filmmakers will capitalize on the benefits of unsolicited word-of-mouth product marketing facilitated by a peer-driven audience base of information sharers to create the future blockbuster films with zero dollar marketing budgets.

Or the second scenario, where the lessons of cooperation and compatibility push the Motion Picture Industry to adapt to a digitally enabled consumer society. They evolve their product offerings into a format that takes advantage of the rapid file sharing capabilities of the continually broadening internet. The MPAA will pioneer the technology of degradable digital, where all digital files have a shelf life before evaporating into zeroes and ones. This becomes the new standard format for movie viewing, people watching degradable digital on their cell phones, ipods, laptops, and home theaters. Independent filmmakers and Hollywood studios both make giant amounts of money from the now much larger consumer pie as we watch the multiplex theater go the way of the opera house, becoming a quaint experience where parents take children for a night of nostalgia and pay premium prices. A new market of Film Viewing Houses emerge after the pattern of IMAX theaters, targeting the Audio/Videophiles who are seeking the “Ultimate” in film-viewing experience. Formal Standard Setting becomes secondary to a spirit of innovation so that the “Best” technological advancements can come to the forefront, with the understanding that the whole industry will benefit from an increased interest facilitated by an improved customer experience. Movie-making will follow in the direction that television and internet are now going. The consumer, not the seller, determine the content and usage practices.

These ideas may be a little far-fetched, but they stem from lessons that history has taught in the areas of electric current, telecommunications, and long-distance trav
el. Businesses that will continue to succeed are businesses that focus on the benefits they are providing to customers and which are capable of adapting their own business model to follow the advancement of technology as it realigns itself with that overarching goal. Media and delivery channels will continue to change, but creating a relationship of trust with your customer base will assure financial success and maximize long-term shareholder value. –Shawn Butler