Posts tagged with marketing




Summary: skip to the pictures after the <big> text under heading 2.

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Since 2009, pundits have concerned themselves with economic inequality. Robert Reich’s infographic about the US I’ll treat as a summary.

Let me dummyise the opinionscape into three camps:

  1. John Galt. The etymology of aristo-cracy is “rule by the best people”. The market rewards output fairly. Tax the best people and you will drive them out of France and into perfect stateless seasteads. Lose them and you’ll be sorry.
  2. Maximilien de Robespierre. F—k the rich. They inherited their way to the top. Connections, luck, brown-nosing, and false confidence determine incomes more than "merit". The middle manager is no better than his underling. The applicant who got the job is no better than another applicant who was ignored. Guillotine the superfluous gentleman, the role will still be filled; the new girl may even do it better.
  3. Vilfredo Pareto. Hey—if the rich aren’t actively making the poor worse off, what does it matter?

The third view is the one I want to challenge just now.

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When I see a manual farmer being destroyed by Nature, I feel:

  • privileged
  • guilty
  • sorry for the farmer
  • the longer I spent thinking about their suffering, the sorrier I feel
  • Why doesn’t somebody do something? They don’t need much. They just need a little help.
  • This is so unfair.

And somehow, gut reactions are part of real morality and ethics.

 

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So here’s my challenge to the Paretians. Which image galls you more:

  1. a farmer suffering from drought, with the whole community destroyed—families crying into each other in solidarity as they all lost pretty much everything
    http://upload.wikimedia.org/wikipedia/commons/5/54/Lange-MigrantMother02.jpg
    , or…
  2. next to the damned farmers weeping on their knees, stands the Monopoly Man, laughing, swirling a flute of champagne and recounting the fable of the grasshopper and the ant.

http://newsimg.bbc.co.uk/media/images/45437000/jpg/_45437836_farmerindiaafpgetty466.jpg
http://rootsblog.typepad.com/.a/6a00d834520e4069e2010534c9b759970b-pi
http://www.jesus-is-savior.com/Reaching_The_World/homeless_man.jpg
http://i182.photobucket.com/albums/x119/xofferson/monopoly_man-13539.jpg

http://www.tehelka.com/wp-content/uploads/2014/03/img26.jpg
http://slwakes.files.wordpress.com/2011/01/4209433153_f9c6877925_o.jpg?w=295&h=300
http://www.thiscantbehappening.net/sites/default/files/images/Officer%20Deprimo.jpg

To the extent that these gut reactions translate into legitimate morals, the Robespierreans win over the Galtists and over the Paretians.

http://24.media.tumblr.com/tumblr_m90j5qEmAd1rb86ldo1_400.jpg

Envy exists. From this one infers that when the rich get richer but the poor don’t, that their individual utilities can still drop. But let’s go beyond society-as-a-collection-of-independent-individuals.

http://theeconomiccollapseblog.com/wp-content/uploads/2010/03/Rich-Getting-Richer.jpg

The image of the Monopoly Man merrily dancing next to the poor (or even indifferently ignoring their plight) curdles the blood. Gucci little piggies go first against the wall for a reason.

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Maybe she’s born with it. Maybe it’s Maybelline. Maybe the second line has to be sung in such a sweet voice because the underlying consumerist message is so ugly. The first line is whispered, like gossip, something women are known to do all the time; it’s actually genetically selected for by evolution. Maybe she’s born with that butt. Maybe it’s plastic surgery.




Eros and Magic in the Renaissance took magic seriously as a system of psychological manipulation that used the cravings and desires of its target—the “eros” of the title—to shape human behavior. It suggested on that basis that modern advertising, which does exactly this, is simply the current form of magic, and that contemporary Western nations are “magician states” governed by the magical manipulation of public consensus.

None of these ideas were new. [Ioan] Culianu got most of them from the same place he got much of his magical training, the writings of the renegade Dominican sorcerer Giordano Bruno, who ended a colorful career by being burnt at the stake for heresy in 1600. Bruno’s writings on magic describe magic in much the same way Culianu did, as a system of manipulation that casts out lures for nonrational desires.
John Michael Greer, Grand Archdruid of the Ancient Order of Druids in America

(Source: thearchdruidreport.blogspot.com)




You know what I notice when I watch street performers?

image

Besides the feats of superb human achievement, I mean.

I notice the way they handle crowds. The way they maximise their take for the same performance.

  1. The first principle it seems like they’ve learned is that a crowd attracts a crowd. If you can tell jokes or tease audience members or otherwise keep people drawn in and interested long enough to stand around and see what’s about to happen (see Ramit Sethi’s “dark secrets of long text” or “weight loss — just one more tip”) then more people will want to see “What’s everybody looking at? That must be interesting.”

  2. Of course, the larger the crowd, the larger the payoff—regardless of the skill or entertainment value of the performance per se.
    Fringe street performer
  3. The second principle it seems they do is to make the audience value the trick. If you’re going to ride a 10-foot unicycle and juggle torches at the same time,
    image
    you don’t just hop up and do it. You first pretend like it’s really hard for you to do some smaller trick, like riding a 4-foot unicycle.
    image
    After the audience has seen you struggle to get on and ride about, then they’ve realised how difficult it would be for them to do even the easiest version of unicyclery. Then you let on that you were just kidding and start doing some fancy tricks on the 4-foot unicycle, showing how smooth you are at it. A slow build until the final big trick—probably related to Kahneman’s findings on pain rememberance—will leave the audience with a better rememberance of the act and greater willingness to pay.
  4. Draw attention to yourself.
    image
    image
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    Obviously. No one’s going to pay you any heed if you’re just being normal.
  5. Ask for the money. 
    image
    Actually demand that people give you money. Make them admit this was pretty f***ing fantastic and they should, in fact, give you a few quid each. Don’t let people sneak off or if they do then publicly shame them. If you can make a “chute” where people exit in single file through just one way-out and it passes by the donation hat—or if you can put donation hats or smiling collection agents at every one of the finite exits—again you’ll increase your take, for the exact same performance.
    image
    The economics of this part aren’t hard to understand: people have just received something for free and they may be able to excuse themselves for getting an eyeful without reaching into the pocket.
    image

Not only do these successful street performers really have their economics down, they undermine the frequently repeated business advice or economic viewpoints “Work hard and you will succeed”.
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According to this professional you need to be wily to survive in the real world (3:30), to keep your head above water (5:50):

We can measure the success of these street performers by their paycheques and we can measure their hard work by the fact that they perform impossibly hard feats.

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Talent doesn’t sell itself. Skill doesn’t sell itself. Value doesn’t sell itself. Beauty sometimes sells it self, but not for the maximum profit that could be achieved by branding it well or tying it to something else that’s being sold.

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That’s why when people equate hard work with money, I don’t see it.

You could easily do all of the training to

  • ride a 10-foot unicycle
  • swallow fire
  • contort yourself into a pretzel
  • trick people with legerdemain and psychological distraction
  • prove the twin primes conjecture

and never make any money from it.

Some people create a lot of value without receiving a reward.

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And some people receive a lot of reward without creating value.

File:BernardMadoff.jpgFile:Ponzi1920.jpg
File:Pietro Longhi 015.jpg

Some people realise that becoming the CEO of a $30B company doesn’t actually require a technical college degree; it requires doing a lot of other stuff, trust in background being necessary but the background itself not being necessary.

image

We could argue philosophically about the definition of “value" and of "work”, but the street performers make it clear that you can do something really hard, be excellent at it, and make drastically more or less money—not based on your talent or skill, but based on your ability to extract dinero from a situation.




Perception is reality. Any beer drinker who is surprised that Guinness has a unique and excellent taste and PBR tastes exactly like Budweiser needs to switch to Guinness because your taste is objectively awful.
That&#8217;s why Guinness&#8217; branding is a seal with a ball and Budweiser needs to use bikini babes.

There&#8217;s something much deeper going on here, though: a fundamental problem with utility theory and hence, with economic theory. Kahneman &amp; Tversky pointed out that it&#8217;s wrong to think of preferences as being read off of a master list. But not only are they constructed in the elicitation process, they&#8217;re constructed before as well. You&#8217;re looking at experimental proof.

I tried to write about this before in the context of the famous Pepsi/Coke fMRI experiment, but it&#8217;s too hard. I want to tie in sardonic Don Draper quips, the invention of diamonds, and my own experiences of my desires and wants and dreams being formed by outside (and therefore, sinister?) forces rather than from truly &#8220;within me&#8221;  &#8212; whatever that might mean. Why do I want what I (think I) want? Even Doug Hofstadter treads tenderly around the topics of free will and one&#8217;s own true desires and self-determination and such.

I have no idea what my subconscious wants
— Cameron Guthire (@thiscameron)
June 27, 2013

Even though I feel that these things all belong together, I don&#8217;t understand it all well enough to put forward a thesis explaining the inchoatia. But even with just the few experimental examples we have, it&#8217;s clear that desires can be manufactured, and that there&#8217;s a lot of money to be made in doing so. So just with that basic knowledge the Lagrangian model of utility that underlies all of the Edgeworth boxes, welfare theorems, and so on is missing a crucial quality.  Namely, &amp;sym;1% of the global economy is spent on making people want things. That doesn&#8217;t bear on &#8220;utilitarian&#8221; products like oil, shipping, &#8230; but it definitely bears on aspiration and retail. I&#8217;m talking about circularity in the definition of value. If you can logic that one out, let us know.

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Perception is reality. Any beer drinker who is surprised that Guinness has a unique and excellent taste and PBR tastes exactly like Budweiser needs to switch to Guinness because your taste is objectively awful.

That’s why Guinness’ branding is a seal with a ball and Budweiser needs to use bikini babes.

http://farm5.static.flickr.com/4050/4434090263_b8d52dcc74_o.jpg

There’s something much deeper going on here, though: a fundamental problem with utility theory and hence, with economic theory. Kahneman & Tversky pointed out that it’s wrong to think of preferences as being read off of a master list. But not only are they constructed in the elicitation process, they’re constructed before as well. You’re looking at experimental proof.

image

I tried to write about this before in the context of the famous Pepsi/Coke fMRI experiment, but it’s too hard. I want to tie in sardonic Don Draper quips, the invention of diamonds, and my own experiences of my desires and wants and dreams being formed by outside (and therefore, sinister?) forces rather than from truly “within me”  — whatever that might mean. Why do I want what I (think I) want? Even Doug Hofstadter treads tenderly around the topics of free will and one’s own true desires and self-determination and such.

Even though I feel that these things all belong together, I don’t understand it all well enough to put forward a thesis explaining the inchoatia. But even with just the few experimental examples we have, it’s clear that desires can be manufactured, and that there’s a lot of money to be made in doing so. So just with that basic knowledge the Lagrangian model of utility that underlies all of the Edgeworth boxes, welfare theorems, and so on is missing a crucial quality.  Namely, &sym;1% of the global economy is spent on making people want things. That doesn’t bear on “utilitarian” products like oil, shipping, … but it definitely bears on aspiration and retail. I’m talking about circularity in the definition of value. If you can logic that one out, let us know.

http://2.bp.blogspot.com/-grpfwNrz4dc/T_doHNKdxHI/AAAAAAAAFH8/QbIK0HTkiQU/s1600/Perception+is+Reality....jpg

?

(Source: ocw.mit.edu)


hi-res




[I]t is … anachronistic to apply the term artist with its modern connotation to Leonardo [da Vinci]. Artists in the sense that we understand and use the word, meaning practitioner of fine art, didn’t exist in Leonardo’s time. It would be more appropriate to use the word artisan in its meaning of craftsman or skilled hand worker.

In the historical literature ∃ a perfectly good term to describe Leonardo and his ilk, Renaissance artist-engineer, whereby one can actually drop the term Renaissance as this profession already existed in the High Middle Ages before the Renaissance is considered to have begun.

[T]he artist-engineers were … regarded as menials. An artist-engineer was expected to be a practical mathematician, surveyor, architect, cartographer, landscape gardener, designer and constructor of scientific and technical instruments, designer of war engines and supervisor of their construction, designers of masks, pageants, parades and other public entertainments oh and an artist.

The … polymath … that everybody raves about when discussing Leonardo … actually … perfectly normal … any Renaissance artist-engineer—the only difference being that Leonardo was better at nearly all of them than most of his rivals.

As far as his dissections and anatomical drawings are concerned these belong to the standard training of a Renaissance artist-engineer—the major difference here being that Leonardo appears to have carried these exercises further than his contemporaries and his anatomical sketches have survived whereas those of the other Renaissance artists have not.

Having denied Leonardo the title of artist I think it is only fair to point out that it was the generation to which Leonardo belonged who were the first to become recognised as artists rather than craftsmen and in fact it has been claimed that Raphael was the first artist in the modern sense of the word….

[an exhibition on da Vinci] emphasises the few occasions where Leonardo drew something new or unexpected whilst ignoring the vast number of scientifically normal or often incorrect drawings, thereby creating the impression that his anatomical drawings were much more revolutionary than they in reality were. Also whilst the drawings published by Vesalius in his De fabrica in 1543, i.e. a couple of decades after Leonardo’s death, are possibly not quite as good artistically, as those done by Leonardo, they are medically much more advanced.

Thony Christie (@rmathematicus)

(Source: thonyc.wordpress.com)




[I]t is incorrect, anachronistic and ahistorical to call anybody a scientist who lived and worked before 1834 when the term was first coined by William Whewell. It fact it is dodgy using it for people before about 1870 when the term [scientist] first really came into common usage.
Thony Christie (@rmathematicus), citing Rebekah “Becky” Higgitt

(Source: thonyc.wordpress.com)




sellthenews:

In May the Financial Times reported that Derwent Capital, the hedge fund that partnered with Johan Bollen and Huina Mao to trade the “Twitter Predictor” Strategy “shut down”. The official story is that Derwent’s Capital Markets’ Absolute Return fund opened for investments in July 2011, and…The official story is that Derwent’s Capital Markets’ Absolute Return fund opened for investments in July 2011, and shuttered after a single month, with reported returns of 1.86%.

There are a few oddities here:

  1. Why is the FT reporting in May 2012 that a hedge fund closed in August 2011?1 It would seem this is no longer news. To confirm this is not an error on the part of the Financial Times, I quote a ‘weekly sentiment email’ sent by Derwent Capital on June 6, 2012: “Some of you may have read about our Hedge Fund closing last year in press articles this week.” What? I just caught up on the news of this ‘moon landing’, and now you’re telling me there are more events happening in the world?
  2. As late as the end of March 2012, Derwent was posting performance numbers for managed accounts on their webpage. The reported performance was generally positive, but not consistent, with the spectacular performance promised by Johan Bollen. This period of Derwent’s existence has gone down the memory hole.

You can follow @shabbychef on twitter as well.




The Nielsen PRIZM groups people into 66 “demographic and geographic market segments” for the purpose of advertising to them.

Each of the segments has a nice description to go along with it. It’s the kind of story you want to hear as a marketer: it uses relatively in-depth knowledge of Americans, plus stereotypes or shallow summaries, to draw a character with enough roundness that you could pitch to him/her. That is, you could write copy or film a creative spot that you believe could speak to members of this cohesive segment.

As I read more deeply into the Nielsen-Claritas PRIZM, however, the 66 segments started to sound like perhaps they were generated by a simple formula. From their slideshow I learned that they divide the US population by:

  • affluence
  • population density
  • kids/no kids + age

Rather than use continuous on the implied cube (3 dimensions above), they lump various ranges together. They also lump the interaction terms unevenly—for example, (suburban & income) is lumped more finely and (urban & income) is lumped more coarsely. Specifically,

  • 4 totally -ordered levels of urbanity (measured by population density per zip code) urban  suburban  second city  town & rural
  • 14 levels of Affluence Groups (so they consider finer gradations of wealth & income within suburban and low-density zip codes and coarser income gradations in cities and second-cities)
     
  • Three life-stage categories, accommodating both those who do and don’t raise children at some point. {youngish && no kids, kids, oldish && no kids at home}.

    Younger folks (this is under-35’s or under-45 DINKs) are less graduated by affluence than families or older folks (over-55’s or over-45 DINKs).

    By the way, over-65’s are outside PRIZM’s marketing groups. I guess it’s assumed that they won’t buy big-ticket items or change their ways much unless the Monday lima-bean special becomes 25cents cheaper at Lida’s Diner than Bill’s Diner. Then you’ll see the entire community switch to Lida’s.

Like the MBTI, it assumes that: People fit in rectangles.

Unlike the MBTI, rather than using four sliding scales [0,1]⁴, the PRIZM uses discrete, totally ordered sets—something you could build with the letters and combn functions in R.

I started to wonder: is it really true that members of segment 26 are “urbane” and “love the nightlife” — even the empty-nesters and older homeowners of the segment? Is there really a “laid-back atmosphere” to segment 25? Or are these merely colourful papier-mâché rudely draped over a box?

Mostly, of course, I’m concerned with segment 31, the well-known Urban Achievers:

And proud we are of all of them.

HOW I SEE IT

When I look at a painting, I’m tempted to glance quickly and pass on. In order to appreciate a piece, I imagine the strokes and colour choices that make up the painting. I imagine myself painting the same thing. What would it have felt like to be inside Cy Twombly's hand while he painted Apollo 17? That gives me a better feeling of the art.

When I look at the Nielsen Prizm the same way — try to get inside the heads of its creators — I sense that they adopted the [0,1]⁸ rectangular structure simply because they’re not aware of alternatives. MBA’s do plenty of mathematics, but I’ve never seen any business mathematics cross over into CW-complexes, 3-tori, arborescences, or Lobachefskyan geometries. It could be that the people who designed the Prizm simply didn’t have anyone on their team who had heard of this stuff. All the quants were working on Wall Street rather than Madison Avenue. (Wacker Drive rather than Michigan Ave.)

The ribbon-farm guy (Venkatesh Rao) is a rocket scientist who crossed over into marketing, but so far I haven’t read enough of his stuff to say if he dove into algebraic geometry—it seems he did more functional analysis, optimisation / control theory, and differential geometry. Which is what I would expect rocket science consists of.

I will admit that the PRIZM’s use of two “matrix” presentations with colour-coding, pictures, defined ranges, and toss-away combinations is quite clear. Probably works better than when I tell clients “Just picture a 5-dimensional manifold, I won’t say the norm because I think it’s spaced differently in the center than the edges—and let’s not get into the interaction terms yet”. But—the bones of their model are really just [0,1]³. They’ve dressed it up and they’ve done more than that (segmenting and dropping). But a cube is the underlying architecture.

Is the Prizm simple or oversimplified? I feel it’s the latter. Not that I object to mathematical models of behaviour, emotions, or any human thing—but the hypercube metaphor just doesn’t fit my presumption of the shape of the space.

  • Does consumer space have 8 corners to it?
  • What’s the best interpretation of “distance” in the consumer space?
  • Do all of the lines really cross at right angles, in a hyper-grid? Was that supposed to be implied?

WHEREUNTO

I don’t want to carp about somebody else’s work without at least offering constructive criticism. What are some potentially better ways to think about the space of all consumers—potential buyers of houses, cars, vacations, DVD’s, washers, ‘n’all that?

Mathworld’s picture of a few topological objects gives one starting point:

One thing I noticed pretty quickly: you remember playing Star Fox battle mode? Or any video game where there is a lower-right thumbnail of you on a limited square map—such that when you go leftwards off the map you appear on the right, and when you go upwards off the map you appear on the bottom? As a kid I thought I was flying on the surface of a planet, but in fact it was the surface of a torus. (Why? If you go up to the top of the North Pole you don’t come out again at the South Pole. See the picture of the sphere with B ≠ C, i.e. N ≠ S.)

In other words, a torus (donut) is the product of a_loop × a_loop. Whereas a sphere (ball) is the product of a_loop (east/west) × a_line_segment (north/south).

GEOMETRY

Following from this short lesson in topology, one alternative to multiplying only “linear” dimensions of characteristic attributes would be to multiply lines with loops. For example a_loop × a_loop × a_line_segment. I’m not sure what the name for that shape is, but you can imagine it — like a cylindrical torus. And it’s logically possible that there are two circle-like dimensions in marketing. Something like, as politics goes further and further left, it starts to resemble the far right more than the middle. But relevant to marketing.

A second alternative then might be to consider, like in the image above, the endpoints of some line segments from the 3 dimensions of Nielsen. What if some of them were identified rather than left distinct? What kind of shapes could you create with that and would that resemble the consumer space more than a rectangle?

Some other ideas of things to question:

  • How do angles meet up? (inner product)
  • How do distances work? (norms)
  • Look through an algebraic geometry book, or Solid Shape. Are there any shapes—umbilics, furrows, biflecnodes, dimples, trumpets—that have an analogue in the space of all consumers?
  • Is backwards just the opposite of forwards? Or does that wrongly assume commutativity?

I don’t know if that would result in a better model. I don’t know if thinking about things this way would reduce wasteful ad spending. I don’t have data to test these ideas on. I just wanted to share this thought.