Should you be advertising fish sandwiches?

As part of my arts marketing teaching at Leeds University, I've been reading a variety of marketing manuals and textbooks recently. We get so preoccupied by the 'latest wisdom' that it's useful to revisit marketing classics from time to time. It reveals that 'new' ideas are often just a rewrapping of old ideas. It also lets you test their theories and case studies against what you know happened next.

One I've enjoyed recently is Reis and Trout's Marketing Warfare. Beyond gems such as them complaining about Coke abandoning the slogan 'the real thing' (don't worry guys, it came back!) and discussion of different types of strategy, they also made the following nice distinction:

Every marketer has three types of products: one kind of product to advertise, one kind to sell and one kind to make money on.

It's wasteful to advertise a product just because you can sell it and make money on it, even if you can make big money on it.

Would a motion picture theater advertise the popcorn it sells? No, you advertise the movie and you make money on the popcorn and the drinks.

Automobile dealers advertise a car at its stripped price and hope they don't sell one that way because they make their real money on the automatic transmission, power breaks, AM/FM radio, and the other accessories.

Conceptually, a burger chain advertises the burger, sells the french fries along with the burger, and makes money on the soft drinks. That's the pattern that will drive profits down to the bottom line. If the kids drink enough of your 90 cent Cokes, you can almost afford to break even on everything else.

The obvious parallels in the arts would be advertising a theatre production, selling the show with an after-show talk, but making money on beer, ice-cream and programmes. Or advertising a special exhibition, selling entrance to the whole museum or gallery, but making money in the café and gift shop.

Of course, we're unlikely to make the mistake of advertising the ice-cream rather than the show. But perhaps we're not always as quick as we might be to take advantage of the 'peripherals' where the real margin is to be had. I suspect it was recognition of this that prompted the takeover of Crucible Corner and the opening of Crucible Café by Sheffield Theatres (and of course at their 40th birthday they made a point of encouraging people to stay and use the paid bar for as long as possible!), as well as the well-stocked bar at Square Chapel in Halifax.

The distinction between what you advertise and what people buy is a more interesting one, perhaps. In Oliver Uberti's engaging lunchtime talk from the National Arts Marketing Project Conference, he shows (at 36:07 in) items from the gift shop of the Museum of Unnatural History: bottles of 'formaldehyde', 'semi-formaldehyde', 'informaldehyde' and 'businesscasualdehyde'. It's a great gag, and relies on the full range for its full effect (it's also selling a story – of the joke and the amazing, fun place they discovered it in – rather than the product per se). But of that range, which ones are likely to sell? They're all $7, but I'd guess you'd go somewhere else to meet your everyday formaldehyde needs. And 'businesscasualdehyde' perhaps feels a bit laboured on its own (though you might get it if you were buying a whole set). I'd guess that 'informaldehyde' is the main one they shift (albeit as a novelty), with the others just being advertising. But if you put a bottle of 'informaldehyde' on a shelf on it's own, I doubt it would sell as well.

I suspect that there are a range of shows that are advertised in theatre's programmes that add value as much by their contribution to overall market positioning as to sales. This is generally discussed in terms of artistic mission ('I know it's not going to be as popular, but it's the sort of thing we're here to do') but could also be seen as market positioning: the difference between what you advertise and what you sell. If you are seen to be putting on creative and edgy work, then it adds a bit of spark to the 'mainstream' works, which is really where the game is won or lost.

This suggests that rather than just treating them as 'good things in themselves, but of little practical consequence', the 'small-hitters' (the studio shows, the minor temporary exhibitions) should be seen as an active and important part of the advertising for the 'big hitters'. This makes the relationship between the two (by developing the profile of actors/artists for later, greater things, or tailoring the reputation of the venue) as potentially being as important as their short-term sales.

Reis and Trout emphasise the need to (in their militaristic analogy) 'attack on as narrow a front as possible'. Following on from the previous quote in discussing the 'Burger Wars', they say:

The biggest mistake companies make is confusing the product they sell with the product they should advertise. it doesn't matter so much what you sell to a customer once that customer is in the store. But advertising the same item might be a big mistake if it undermines your position.

Selling fish sandwiches is one thing; advertising fish sandwiches is another. Especially if inclusion of that product undermines your hamburger position.

However, in the arts (in many cases; within reason), diversity and innovation strengthens, rather than distracts from, the core offer. Creativity is our 'hamburger position'*. That may make the more appropriate parallel for 'supporting' product concept cars and/or rally cars, that emphasise the qualities that people then buy in their production model equivalents.

That said, unless the different products do support each other in a coherent market position, arts organisations need to beware diversifying their offer too far. Too often, arts organisations act (and are encouraged by funders to act) as if they are the 'market leader', who can afford to have multiple product lines, rather than as 'guerillas', who need to find a patch of territory that they can make their own and hold. The next couple of years are likely to be particularly difficult for organisations that are over-extended. Gaining clarity about what you need to be advertising, selling and making money from is an important step in avoiding this risk.

*I'm trusting you to know I can tell the difference between making art and flipping burgers!

REVIEW: The Cult of the Amateur, by Andrew Keen

Andrew Keen has recently announced that his new book, Digital Vertigo, is due out in May next year. In the mean time, I've been reading the book that made him the 'Anti Christ of Silicon Valley'...:

A N Wilson in the Daily Mail, the cover announces, considers this ‘a staggering new book… Andrew Keen really knows his stuff… His book will come as a real shock to many. It certainly did to me’.

The first paradox of many: Wilson praises the book whilst simultaneously announcing he doesn’t know much about the subject, and yet this is the quote used to sell it. And again, the implicit argument is: ‘the Daily Mail rates it, so it must be true’. Not the most convincing argument. It is a satisfying ironic twist that it was word of mouth recommendation and comments on social media that actually made me want to buy the book: it seems amateurs do have a use. These may incidental points, but in a book about authority and how amateurs are ‘killing’ our culture, the reliability, integrity and authority of the professionals it references are, necessarily, relevant.

But it gets stranger. The book is framed by two ‘confessions’. The opening of the first chapter states that Keen, whilst a nineties internet professional, was a member of the ‘cult’. The second, tucked away between the endnotes and the index in the acknowledgements, states that despite advocating for professional culture producers, he is himself ‘as a writer, a bit of an amateur’. Not, in itself, a contradiction. But it’s curious at least, in a book that differentiates professionals and amateurs (and their interests and status) so strongly.

Of course, what he says is more important than his role, status or professional supporters (although this rather contradicts the book’s central premise). And it’s a worthwhile, interesting and challenging message: that an ideologically driven misinterpretation of ‘democratisation’ is, through web 2.0, undermining the property rights and business models of cultural producers (including music labels, newspapers and film studios), and that this is resulting in a ‘levelled down’ cultural landscape which is less reliable, lower quality and in many cases, personally damaging. In short, that web 2.0 is ‘killing our culture’.

There’s much that Keen says that seems to me to be true and several areas that have the potential to be especially rewarding seams of enquiry: 

•  The difference between traditional ‘democracy’ as participation through choices, and so-called ‘democratic’ participation through production; 
• How a ‘distributed’ model of production changes the relation between culture and capital, with as yet unclear consequences (it isn’t necessarily the case that more people with less capital will produce better results than fewer with more, despite web evangelists’ claims);
• What effect ubiquitous cultural production has on producers’ ability to make a living and the long-term effects this could have on culture;
• The creation of billionaire elites who own supposedly ‘social’ networks (and the tension between social and libertarian values that reveals).

However, Keen does not follow these implications up, since he asserts and illustrates his points, rather than systematically arguing them.  Different instances are used to indicate a single general trend, rather than a trend used to illuminate its differing implications for different media, groups of individuals or contexts. As a result, he is more successful in showing that the ground is shifting in our culture than why it matters. Many of the most alarming stories he tells (such as social media’s use in schools shootings and child abuse) mistake the use of social media for an issue specific to its form (speech can be used in the same ways, but is rarely considered in itself a social ill).

Key to Keen’s case is the idea that cultural production by amateurs is necessarily worse.  But T H Huxley’s image of infinite monkeys with typewriters who can eventually write Shakespeare, used several times by Keen, is in fact an illustration of how such an approach is at least theoretically capable of matching the highest standards (it also hints that the key challenge is selection, not production).

The book pins responsibility for ‘killing’ old media on its new replacements, rather than its own failures that allowed them to succeed: the mediocre programming, the recycling of press releases and spin as news, the crimes and cover-ups, the crassness. Many of the authorities that Keen cites have failed, over many decades, to uphold high values (whether in terms of morality or quality). One thinks again of the Daily Mail, but also the Hollywood studios, major music labels and newspapers owned by New International. They are, in many ways, responsible for their own downfall.

When something familiar is replaced by something new, the loss is often keener than the anticipated gain. What we are losing is far more obvious: we can already see it, we are already emotionally attached. But Keen says little about any possible upside to web 2.0: the new ways to access the highest quality work; the value of multiple perspectives; of interactivity, autonomy, devolved power; the talent that finds a way to express itself that would not previously have been possible (perhaps we shall find out that is it not talent that has been rare, as he asserts, but opportunity?).

Nor does he give sufficient credit to the nuanced ways in which those that he uncharmingly calls ‘monkeys’ consume online content. He apparently believes that people treat every Wikipedia entry and every blog post as gospel truth. I believe that most people recognise that both amateur and professional sources can be inaccurate, partisan and incomplete. To claim otherwise is to create a ‘Cult of the Professional’.

But if professionals can no longer assume authority as a right, neither should amateurs. Instead, it is ‘authority’ itself that is being redefined. And whilst Andrew Keen is surely right to assert that there is much at stake in this debate, for that very reason it is a debate in which we should all have the right to participate.

Data-driven segmentation: a caveat

Data-driven segmentation offers to provide hidden insights into audiences and reveal the most cost-effective ways of tailoring the offer and communications to meet their varying needs. It’s a reasonable claim. There clearly are hidden patterns in audience data and statistical techniques will, by definition, be better at identifying statistical differences than alternatives. Consequently, data driven segmentation can reasonably claim to provide segments that are ‘more different’ than alternative approaches.

However, any cluster segmentation is dependent not only on the differentness of its segments, but on the reliability of ascribing those segments to subsequent samples. These can only be based on a probability of ascribing records to the right category and depend for that reliability on the number of ‘golden questions’ used to do so.

The additional differentiation has to be offset against the ‘fuzziness’ of accurately ascribing the segments and the usability of however many ‘golden questions’ are needed for that level of accuracy.  There is potentially also another layer of ‘fuzziness’ when trying to implement actions based on the segments, since they have not been designed to align neatly with communications channels or categories of audience information. It’s easy to see how this could quickly offset the additional sharpness of distinctions from the original statistical model.

In some cases, this will be the case, in others not. But often, a combination of clusters and ‘hard’ definitions (based where possible on ‘natural’ breaks in distributions of data) will give clearer, more usable results, whilst still reflecting the differences revealed by close attention to the facts. This is the approach TGI Kantar used on the Arts Audiences Insight segmentation. Whilst it’s less ideologically rigorous than approaches that focus solely on the facts in hand, it’s often a more efficient and effective approach. Fewer 'golden questions' can mean less 'gold' expended.

What's the competition?

Much discussion about competitors is based on the idea that it's about the intersection between one arts organisation and others, largely based on their product and its intrinsic qualities (what they put on, how good it is, what the service is like etc). I think it's more helpful to think of it as a three way intersection between audiences, types of need and venues, with recognition of the role of factors that are extrinsic to the product.

Since it's individuals' decisions that we're interested in, it makes sense to start from the individual when thinking about competition. There are different distances that individuals will travel for different product. This can be because some product is more 'special' and worth the trip, but it could also be that localness is itself a draw, whether because of local paintings (see the popularity of the 'local' room in The Hepworth, for example), or because of a local community, or the wish to support local organisations.

Whatever the reason, different categories of product will attract audience members from different radiuses from the venue. These different categories will therefore have different sets of competitors.

Venues need to be really honest with themselves about how far people are really prepared to travel for particular product. It can help to use mapping of audience data, which in many cases shows three quarters of audiences coming from within half an hour.

It can also help to list all the costs that going to an event or exhibition creates for the audience member: time, ticket price, costs of refreshments, the frustration of dealing with a different town's one way system, the price of parking (and more frustration finding parking), the opportunity cost of all the other ways they could have used the time, and so on... All of these are balanced against the perceived benefits of the event. It quickly becomes clear that increasing these costs (more travel time, more unfamiliarity, more expensive train tickets) could quickly tip that balance and make the journey not worth making.

Competitors can be from within anywhere less than twice the distance people are prepared to travel for a type of event (since people could travel that same distance in the opposite direction). Nonetheless, for many events put on by funded venues, there may be few organisations putting on the same types of events that their local audiences could go to instead.

But audiences aren't necessarily looking for particular product, so much as particular needs being met. There may be a wide range of local competitors who could meet those needs, through very different products and services. If people are looking for relaxation, they could go to the golf club or spa instead. If they are looking to socialise, they can go bowling, go to a restaurant, or the bingo. If they want to immerse themselves in an engaging story, they can read, watch TV or catch up with friends.

There are a few things that follow from all of this:

• Organisations should devote intense attention to the most local venues and worry less about those further away (but learn from whoever they can, of course)
• Collaboration with other cultural organisations that give a comparative advantage against other competitors are likely to provide more benefit than risk (e.g. benchmarking projects)
• Competitor analysis should differentiate competitors by product (or, better, audience need) and include non-cultural competitors
• There is potential for competitor analysis to link closely into audience segmentation (if audiences are segmented by types of use, or needs)
• Spatial geography and travel links need to be looked at in detail, as well as which venues offer similar art forms
• There is particular benefit for the organisation in catering to audiences whose needs are defined in specifically cultural terms (there will be many more competitors for those who want a 'big night out' than for those 'who've gone far too long without seeing any Puccini'), where those needs exist in sufficient volume
• There are therefore particular benefits for the organisation in encouraging audience members to develop needs defined in cultural terms (and so a commercial rationale for Education teams' work).

It's debatable the extent to which needs can be cultural, rather than being other, more basic, needs expressed through culture (do people want Puccini, or something they get from Puccini?), but that is perhaps another debate... What do you think?

Is your marketing strategy a pastiche?

You're in a life-drawing class, walking round behind the artists to see what they're doing. You're careful not to disturb them, but as you look over their shoulders, you soon see the differences in the artists' work. Some are doing a full length study, others just a portrait of the head. Some are flamboyantly expressive, others meticulous and detailed.

But one catches your eye in particular. The artist is working quickly, with a vivid style and confident strokes. The result, taking shape before you, certainly looks impressive, like a proper professional drawing you'd see in a gallery.

Something, though, isn't quite right. It looks strangely familiar, but as you look longer, you have to admit that you'd not necessarily recognise the model. The shape of the face isn't right and the shape of the torso looks more like the generic figure of an anatomical diagram. In fact, this picture could be of almost anyone, 'though you'd have to change the hair a bit, maybe, or the shape of the chin or length of the nose. After a while, the model gets up to leave. But this artist, without looking up, keeps drawing...

There are lots of marketing strategies that feel like they were done by that artist. Accomplished, professional, well-trained even, but totally disconnected from what's in front of them. Far too many feel like they've filled out a form, with sections labelled 'Mission, vision, values, objectives...' etc. It's far too easy to produce something that looks like a marketing strategy, but which is actually an entirely context-independent pastiche.

Or worse, they become a type of fold over Monster drawing game. The head is some generic corporate mood-music that noone could disagree with. Then the body is a formulaic situation analysis (the sort of SWOT and PEST that list 'our people' as a strength and 'the internet' as an opportunity). This body is then balanced wonkily on a 20 page action plan, with little obvious connection to the first two (or sometimes worse, only obvious connections). This marketing-strategy-by-template approach is surprisingly widespread, given that it's got little to do with marketing and nothing to do with strategy.

There is another way to do it and it's clearly described in Richard Rumelt's 'Good Strategy, Bad Strategy'. It doesn't pull it's punches when describing 'template style strategy':

This template style planning has been enthusiastically adopted by corporations, school boards, university presidents, and government agencies. Scan through these documents and you will find pious statements of the obvious presented as if they were decisive insights.

and

...consultants have found that template style strategy frees them from the onerous work of analyzing the true challenges and opportunities faced by the client. Plus, by couching strategy in terms of positives - vision, mission and values - no feelings are hurt'.

Instead, he describes strategy as made up of a kernel made up of three elements: diagnosis of a challenge, a guiding policy for dealing with it, and a set of coherent actions that are designed to carry out the guiding policy. The whole strategy is built around some key insight (or insights) that address a critical challenge and focus activity on a few levers that will have most impact on that challenge.

Does that sound like your marketing strategy, or did you recognise the pastiche or the monster drawings more?