Short Term vs. Long Term Metrics

Silicon Valley has replaced Wall Street as the preferred destination of fresh graduates. The pursuit of short term wealth on Wall Street in the 80s is replaced with other short term data points which, when pursued with a singular focus, can skew one’s moral compass.

“If Google’s primary weapons are relevancy and speed, then Uber’s are cost and speed.” What I didn’t say: They are fairly similar in their inability to deal with consumers at a human level. That is the challenge of our times.

– Om Malik, Technology and the Moral Dimension

In this data-driven world we must keep in mind what is being measured and remember that organizations instinctively optimize for those metrics. During this Thanksgiving break, think of alternative, long term metrics such as Lifetime Customer Value, Renewal Rates, and Net Promoter Score as important KPIs for your business’ success in the long term.

Contextual Dissonance

Contextual Dissonance – When clearly commercial content is offered during a time when I’m not in commercial mode, it just feels off.

John Battelle nails that feeling you get when you notice a brand trying a bit too hard to insert themselves into a conversation. To advertise at scale on the web brands resort to algorithms. But trying to algorithmically insert an ad unit into a newsfeed [rarely] [ever] [works].

Conversations require you to listen and respond. If you aren’t really listening, you’re just talking at someone. That is the value of a media property, they aggregate an audience around a topic and host the tone and theme of that conversation. Because they play the host, they are that much better able to match the advertiser to their audience.

This matchmaking is why advertising on a media property is so much more effective than on a social media site. For several years the conversation has moved away from media sites to social media sites and the advertisers followed. But I feel the pendulum is swinging back the other way as brands realize that they are more effective in getting their message across on media sites which share their audience and interests.

This is not to say advertising on social media sites is in danger. There will always be room for diversions of entertaining snippets sprinkled throughout. But substantive marketing pieces that inform engaged readers will only work on vertically-focused media sites.

Comanche, the new kid in town

Photo by Onne Van Der Wal
Photo by Onne Van Der Wal

In the world of sailing, the big boats are the Super Maxi class ocean-going racers. Netscape billionaire Jim Clark has commissioned Comanche, a 100 foot vessel that only a nautical architect with unlimited resources could dream up.

Comanche

Built in Maine for a cool $1.4 billion, it is currently on a ship enroute to Australia where it will compete in the SOLAS Big Boat Challenge in Sydney Harbour on December 9th, followed by the Rolex Sydney to Hobart race after Christmas.

Designed to win races and break records, it boasts an 11,000 square feet spinnaker.

h/t to my colleague Eli who sails the San Francisco Bay

The Sharing Economy

Joi Ito

Joi Ito gave a brief preamble to a gathering at Digital Garage in San Francisco today, Unlocking the Power of Japanese Content in Worldwide Markets.

He spoke about the history of remix culture and differences between Japanese and Western commercial attitudes towards fan fiction and derivative works. Historically, the act of reproducing someone’s work required the manifestation of that copy in a physical artifact which required an investment. If you made a mixtape you had to purchase the cassette and source the original music. If you shared a film, you copied it onto a VHS tape along with the scary FBI warning.

FBI warning

The act of copying something in the pre-digital days was a “trigger event” that could be codified into law and enforced.

When you had to pass around physical media, it cost money. Because of this cost, you needed to create a business to support duplication and distribution. When works became digital, the distribution costs went to zero and the need for a business to manage duplication and distribution went away.

In this new world, the enforcement of the trigger event became ludicrous. Joi reminded us that every time you browse a web site, your browser is making a copy of everything on that page. The act of copying something is fundamental to the infrastructure of the internet. Ownership is hard to enforce and, when done so, threatened the very relevance of the institutions that tried.
The software that runs a majority of the internet, was developed through commons-based peer production where no one institution owns the software.

Linux is not on anyone’s balance sheet. It is not part of anyone’s GDP.

Joi’s work with Creative Commons was an attempt to resolve this incongruence by simplifying the licensing contracts and baking it into the structure of the internet. What was interesting to him and the topic of the afternoon was the difference in corporate attitudes towards ownership of content between Japan and the United States. While Japanese manga culture welcomed derivative fan fiction works produced by their otaku followers, traditional US comic houses heavy-handedly squelched any adoration, killing off their core audience.

Walt Disney is famous for their enforcement of their copyright. I  knew someone in Hong Kong who spent all their time touring the markets in Hong Kong and China serving notices to violators who sold unlicensed reproductions of Disney characters. Marvel, and DC Comics are no different. Copyright law is written in such a way that lack of enforcement can lead to forfeiture of rights. A publicly listed company has a fiduciary responsibility to its shareholders to enforce their copyright.

But the times have changed. Otaku and fan fiction culture is winning. Publishers that allow their fans to remix their brands enjoy a halo effect that is helping market them on social media channels. A stiffly isolated character is less likely to go viral than one that has been remixed to blend into an environment in tune with the context of its surroundings (more on that tomorrow).

Japanese law is written very strictly to enforce copyright but the honne of Japanese society looks the other way when a publishing house slips rough cuts to its fans to allow them to extend the storyline. The rest of the world is catching on and understanding the commercial benefits of a rabid fanbase.

This week’s news of Taylor Swift’s removal of her entire back catalog from Spotify is significant in that she is probably one of the last acts that will be able to do this and drive record commercial sales based on artificial scarcity. In the digital age it is not the artifact of the recording which drives revenue, it is the performance, either in live concert or in the contextual packaging of that recording with other works.

The mp3 is just meta-data to the (live music) event.

The Japanese have known the value of the otaku community for a long time. Pokemon started as a simple video game but grew into a media franchise through its community which it embraced. Western creators such as J.J. Abrams with the Lost TV series have benefited from large fan bases that carry their narrative far beyond the original creation. Wikia (Craig Palmer, CEO, was also a speaker at the conference) is positioning itself as a platform for these communities.

While original media from Japan may be limited to a fringe collection of weird game shows and cos-play conventions appreciated only by those outside Japan that can break through the difficult language and cultural barriers, the concept of remix communities as an important part of a brand’s success is taking hold in the West and driving commercial success to those that embrace it.