Tag Archives: innovation

The Rise of The Conversational Commerce

Last week I was speaking in Seoul in Digital Marketing Conference for 400 marketing leaders. My topic was around conversational commerce: a topic that I have been writing about a lot.

conversational commerce

Speaking about Conversational commerce in Seoul 2017

I was trying to find an answer to three burning questions that are keeping me awake at night:

  • Why Conversational commerce is happening right now?
  • What it actually means?
  • How your brand should act?

1)Three big trends enabling conversational commerce

a) Mobile-first world

Messaging apps have already surpassed social media apps in popularity. Our audience is not mobile-first, they are increasingly mobile-only and becoming messaging only. WeChat has already shown the future of messaging-first digital ecosystem.

Our audience want the service and content in the platforms they are using.

b) AI-first world

Aptly in the same city I was having my presentation around conversational commerce, Alphago Go-robot beat the hell out of Lee Sedol, the world´s best (human) Go player. It was not even close match, not to mention that apparently in 37th move in second match Alphago did a move that had not been ever done in Go history and was called the most beautiful Go move ever.

Artificial intelligence will enable machines (or robots, if I may) to emulate human-like traits and behavior.

c) Digital platforms will become assistants predicting your needs

There will be more virtual assistants than humans in 2021. All the big digital companies (Apple with Siri, Samsung with Bixby, Google with Allo and Home, Amazon with Alexa and Echo) are building the assistive layer to their products.

Because of mobile platforms and evolved AI, companies are able to predict what you need and provide you personalized service.

2) What Conversational commerce actually means?

 I would define conversational commerce as “enabling people to interact with brands with way that is natural to them”. Interaction is limited to customer service or selling products. There is only handful of brans that people would actually want to have conversation with and the odds are your brands is not one of them. The natural way to communicate means two things:

  • The style you communicate: Whether it is with Emojis and Slang with text or using voice
  • With what device you are communicating with: It can be either chat (with human), chatbot (with robot) in messenger or using internet-of-things device (currently Google Home, Alexa devices. In the future whatever device you will think of).

The benefits of conversational commerce for user are:

  1. Convenience: Use whatever method and device you feel comfortable.
  2. Personalization: You save time (not necessarily money) as you get recommendations suitable for you.
  3. Decision support: Conversational commerce helps you to do decisions easier by learning from your behavior and predicting your next move.

3)What it means to your brand?

There are five key considerations you need to take into account when considering your conversational commerce –strategy:

1. Don´t get caught by hype

Conversational commerce is bigger thing than Chatbots. Chatbots have been one of the first trials on making it work. And they have not been particularly successful yet. Facebook bots have had failure rate of 70% so they were able to get to 30% of requests without some sort of human intervention. That does not mean that people don´t want good service through their messaging apps. They don´t necessarily want it through chatbots.

2. Choose your pilot market wisely

Compared to social media landscape, messaging landscape is much more fragmented especially in South-East Asia. This means that you might not be able to replicate your activities in one market to another.

3. Find the right partners

You don´t necessarily need to create every algorithm from the scratch. There is already quite developed ecosystem around conversational commerce that you can tap into.

4. Provide value and make life easier for your consumer

Like I said earlier, majority of the people do not want to have a conversation with brands. They want to have value whether it is through buying products or getting good consumer service. While you might be interested in creating the most witty Chatbot ever, it might be more wise to first ensure that you are providing straightforward utility first and then start extending to more human-like interactions.

5. Be fun and natural

That being said, the great opportunity with conversational commerce is ability to humanize otherwise transactional brand-human relationships. When you have ensured that you are providing value and clear benefit to the user, the personality of your chat can be a true competitive advantage.

We are living in the peak of hype cycle with conversational commerce and there will be round of iterations when it will truly live to its promise. My point is however clear: it is not question about will the conversational commerce happen, it is how and when it will happen?

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The MAYA Principle: The Most Advanced, Yet Acceptable

“Making the strange familiar and making the familiar strange, again”

– David Foster Wallace (about realistic novels)

Reading the book “Hit Makers” reminded me about Raymond Loewy´s MAYA –principle. Raymond Loewy was one of the most iconic industrial designers of the last century. Among his works are Lucky Strike package (logo on both sides to maximize the visibility), Coke vending machines, Air Force One livery and Skylab space station (with window to look back to Earth) to name a few. MAYA-principle means:

“The Most Advanced, Yet Acceptable”

To sell something familiar, make it surprising. To sell something surprising, make it familiar. This is one of the most important things to understand about human beings. The battle between familiarity and discovery shapes our whole lives. We want to feel safe, but at the same time we enjoy the thrill of challenge. The conflicting forces of safety and excitement explains why we resonate and like things that are familiar enough but also have something new in them. Loewy´s theory (which worked in practice) was also later proved in academic research.

Humans don´t want the same old thing all over again, but they also don´t want totally new thing. They want the same thing with slight twist. That is why Spotify´s weekly playlist works so well, it exposes you to new music but at the same time plays songs you are already familiar with. “Let It Be”, “Don´t Stop Believin”, “Can You Feel The Love Tonight” and “No Woman, No Cry” are built on the same chord progression. However, it would be ludicrous to say that these songs sound the same. There is lot of innovation in these songs, but it is innovation with boundaries. Innovation is not about thinking outside the box, it is about rethinking the box.

The secret to create things that resonate with popular audience is to embrace the conflict in the humans. It is not choice between neophilia (curiosity about new things) and neophobia (fear of anything too new), it is about finding the balance. This dualism is crucial in our industry as we quite often fall into the trap of going after whatever is new and shiny. Or we are too lazy and just do something that has been done before without adding any of the magic. Both are equally bad approaches to talk to the masses (which is the main goal for advertising). You have to find the balance between typicality and novelty.

The secret to popularity is to add slight hint of danger but still maintain the feeling of safety in your audience.

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Blocking The Ad-Blocking

Ad Blocking is nothing more than someone saying your advertising sucks.

Sharon Napier, Partners & Napier

NBA: New York Knicks at New Orleans Pelicans

Ad-blockers are changing the digital advertising landscape drastically. Already quarter of Internet users in US are using ad-blockers and about 50% more is considering to start using them.  If digital advertisers are left with audience who is just incapable of using the ad-blockers, it does not sound like particularly lucrative target audience. We already know that people who are clicking banner ads are not necessarily the sharpest pencils on the drawer. Already in 2011, it was 279.64 more likely that you would climb Mt. Everest and reach the summit than to click a banner ad.

Facebook has started to force ads even if you are using ad blockers in desktop. Publishers are testing different ways to battle ad-blocking. But essentially it will a game of cat and mouse. People have already made their statement: majority of them don´t want to see your spammy ads.

So if you can´t beat em, join em:

  1. Brands should do their own ad-blockers

Maybe Amazon could this. Instead of getting non-relevant harasment, you would get personalized recommendations based on the content you are watching. Essentially Google ad network could already provide some of this level, but many of the advertisers are still quite lazy to utilize all the possibilities. New cognitive ads from Watson could provide interesting alternatives to changing the adspace from intrusion to utility.

It could be also strong statement from brands doing constantly good advertising. For example I would rather see Nike ads all the time than majority of other brands (see D&AD Ad Browser filter)

There are already some ad-blockers who are selling ad space (which sounds a little contradicting, but what the heck). The logic is that you replace the annoying and ugly ads with acceptable and beautiful ads.

  1. Reverse ad-blocker

This could be an interesting art project.

When we are flooded with fake news, actually the ads are only thing we can rely on. So I don´t actually want to block the ads, I want to block the horrible content I waste my time on. Think about it if you could block all the Facebook updates, irrelevant Whatsapp messages and biased online commentary. You would only see the good old marketing communications aimed to make you buy more instead of fake news messing with your head.

Blocking is a part of good defense, but great blockers keep the ball on court.

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Never Think Outside The Box

One of the most annoying cliches in advertising is the”thinking outside the box”. This term is usually used by people, who are not usually known for their thinking at the first place. ”Thinking outside the box” means totally useless brainstorming for hours and random ideas you cannot use anywhere.

Not too fond of brainstorming either. Workshops have to be very tightly defined and organized to be useful. Instead of huge committee circle-jerking half-boiled ideas, it is usually more productive to force people to write ideas alone.

The first problem is not that we don´t think outside the box, it is that majority of people don´t think, period.

Second problem is that we just don´t know what our box is.

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The Difference Between Start-up Event and Marketing Event

Last week I was in Slush Singapore and the event was awesome. It was also breath of fresh air from traditional industry events, where you usually end up when working in marketing. What was also refreshing that I had to really explain what I am doing for work as the majority of people were not familiar with the weird acronyms we have as our “brands”. Can you truly explain what you do?

When I was talking to start-ups, pretty much every single one of them was explaining how their product, innovation or service is making the world a better place. Of course everyone wants to be a unicorn and get big fat investing rounds, but that was not the first thing you heard from them. The sense of purpose was something that came across first. Therefore I had really interesting discussions there and exchanged way more cards than in typical marketing event.

When you go to advertising seminar, the dialogue goes like this:

AD WANKER #1: ME ME ME ME $$$$$$*

AD WANKER #2: ME ME ME ME GREAT WORK**

AD WANKER #1: ME ME ME ME GREAT WORK

AD WANKER #2: ME ME ME ME $$$$$$

AD WANKER #1: ME ME ME ME “INNOVATION”***

and this continues as long as there is free booze.

We are only talking about ourselves. We preach our clients how they should be consumer-centric and communicate that way, but we are not practicing what we preach. For masters of branding, we truly suck on it. To be able to make your client interesting, you have to be interesting as well.

Talking about the cobbler´s children are the worst shod.

So what is the main difference between start-up event and marketing event?

First ones are interesting and inspiring. Latter ones are just painful waste of time.

I love marketing, but our industry is standing on burning platform. The talk about changing our ways has been mostly just smoke and mirrors for majority of agencies. We have taken some buzzwords from start-up world and put it to our presentations and think that we are innovative.  Current advertising is only relevant to advertisers and agencies. Advertising is not shaping popular culture anymore. Some could almost argue that we are not even part of popular culture.

Marketing is more important than ever. This was also obvious when talking with start-ups. They need help on how to break through clutter: how to be noticed, how to create memorable brand and tell interesting stories. They are in desperate need of agency expertise, but bureaucratic processes and archaic ways of working make collaboration almost impossible. Agencies are slow, the most interesting future clients are not.

Luckily it is not only gloom and doom and there are some awesome initiatives towards right direction (and luckily in firm where I am working for). Evolution does not save us, we need revolution.

* Way less money than any start-up is getting on their financing rounds.

** And that great work is categorized by fellow ad guys not the general public

**** In reality just some scam project

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Being Pioneer is Not for the Faint-hearted

Quote about Robert  “Fastest Knife in the West End” Liston, pioneer surgeon from 17th century:

Although Liston was renowned for his success stories, he also developed a reputation for the flamboyancy of his surgical failures. For instance, his joy at amputating a patient´s leg at the thigh in less than three minutes was hindered greatly when he realized he had also inadvertently sawed of patient´s testicles. 

And perhaps, most famously, another leg amputation performed in less than three minutes had the unfortunate result of killing three people: the patient (who survived the surgery but died of gangrene several days later); his young assistant (whose fingers he accidentally sawed off during surgery and who would also later succumb to gangrene); and “a distinguished surgical spectator” whose coattails Liston also slashed. The man, who found himself surrounded by geysers of blood, was so convinced that the knife had pierced his vitals that he immediately “dropped dead from fright”. It was later described as “the only operation in history with 300 percent mortality rate”

Cristin O´Keefe Aptowicz: Dr. Mütter’s Marvels: A True Tale of Intrigue and Innovation at the Dawn of Modern Medicine

Robert Liston gives us good guiding light how to approach anything new:

  1. There is no framework when you are developing something from the scratch, you have to pave your own path.
  2. You cannot always avoid mistakes, but you can always be fast.
  3. If you experiment, it is better to saw other guy´s testicles than your own.
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Anatomy of An Insight: Cornetto Commitment Rings

cornettocommitmentrings

My wife and I seldom quarrel, but when I started to watch Orange is The New Black alone without her, there was a heated exchange. Therefore this is brilliant execution tapping into current life of target audience:

Insight: The biggest time commitment you make in this digital world is the 10+ hours you decide to invest to a TV series. You should want to share those moments with your loved ones, but quite often the temptation to be the first trumps the consideration for your other half.

I am not exactly sure whether Cornetto exactly the right brand to do this, but idea is rooted on a true insight.

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Anatomy of An Insight: +46 771 793 336

swedish number

Insight: When thinking about travelling to other country, you don´t necessarily know how the people are like. What if you could talk to the people before you are booking your holiday? In the spirit of being the first country in the world to ban censorship Sweden enables you to have unfiltered conversations with swedes, just because they can.

That number above works, but it is regarded as international call so you might need to pay for the privilege. Thus far there have been already over 150k calls and callers from 182 countries. As a Finn, cannot say anything else but Swedes beat us again (luckily we were better in ice hockey this year).

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Bots and The Rise of Conversational Commerce

Messaging is the new browser and bots are the websites.
Mike Roberts, Kik Head of Messaging and Bot Experience

Bots have been all the rage last weeks. Whether it has been the NSFW Microsoft bot (not only racist, but also encouraging pot smoking in front of cops) or the ability to build chatbots on top of FB messengers.

Why sudden interest in bots?

They are not really a new phenomenon. Eliza was already created in 60s (test it here) and Siri has also been around for a while (test it in your phone). The main reason for the chatbots to gain importance especially now is because of the changed digital landscape. For majority of users, messenger is their digital starting point. Users don´t want to use messaging over Internet, they want to access their Internet to from their messenger. Therefore ability to help, serve and sell to users within messenger is paramount. Short text message (or emoji) is the default way of communicating, should it be also the way to communicate with the brands?

“Conversational commerce is about delivering convenience, personalization, and decision support while people are on the go, with only partial attention to spare.” 
Chris Messina

We are still having long way for the bot economy and below are the core things to fix before chatbots will evolve from novelty to actual user behavior:

1. The bots need to understand normal talk
“They aren’t taking natural language; they are taking menu names,”
Bruce Wilcox,the author of Rose, the winner of the most recent Loebner annual chatbot competition.

Many of the recent Facebook bots are still quite clunky in terms of discussion. People are more casual when they are thinking that they are conversing with real person. The challenge is for the robot to be casual but at the same time providing the transactional value. Current examples have not been particularly promising as they are either pushing you products in unnatural way or trying to be funny but not providing any value:
poncho

2. The bots need to become more predictive and fast
Going back and forth with your bot to order a pizza is tedious process. Getting weather details in an hour is just ridiculous. They need to become way more intuitive to use to really rival Google for getting your fast answers. The novelty factor will wear off quickly. If bots are not able to give you solutions fast, they will not be used.

3. Bots are not a destination but a way to enhance the existing discussion
E.g. instead of going to separate weather bot, you should get the weather details when you are chatting with your friend and need that info. Mark Zuckerberg raved about bots as replacements for apps, but with the current experience, it is actually just easier to go to that weather app and get your answer. Ideal situation would be that your messenger would recognize opportunities for commercial interaction from your discussions, but how to build that experience so that it is not creepy?

We are living in the early days of conversational commerce. Using messenger for repeated purchases (like pizza delivery) seems like a no-brainer, but will people actually start browsing products within messenger and asking help from the chatbot?

That depends on the user experience. If AI behind the chatbot actually would know your taste and it would be effective and enjoyable to chat with, messenger economy could become true game changer. Opportunity and potential demand is there, but building a good recommendation engine alone is difficult not to mention that you have to add enjoyable interaction with a robot on top of that. And the core question is, will people want to interact with bots?

Time will tell.

One thing is for certain. Bots will not kill the web, but they will permanently alter it.

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Marginal Gains vs. Changing The Game

“The difference between stupid and genius is that genius has its limits”
– Albert Einstein

We have limits as humans.

Luckily we have not yet reached them in majority of things. But for example, baseball pitcher cannot throw faster than 100 MPH. Although pitcher could get stronger, his tendons and ligaments would just snap throwing it faster.

Throwing the baseball is one aspect of baseball, so that is why there will be plenty of evolution in the baseball. Scientists have calculated that even in other sports the pace of development has slowed down and we are approaching the limits. Actually in some sports like long jump we are getting worse.

Being an optimist, I take there is a still lot to improve for us in humans: whether in sports or in life in general (I don´t know why anyone would make a separation between those two). These developments will happen by either tweaking the small details or reshaping the big picture:

 1. Aggregation of marginal gains

aggregationofmarginalgains
“The marginal gains philosophy requires you to look at every single aspect of what you do so you can try and improve it. It looks at every aspect of performance, and tries to improve each a little bit— even just a tenth of a percent . If you find a training technique that makes an athlete that tiny bit stronger , it alone might not have a huge effect on a race. But if you can stack those very small improvements on one another, finding a bit in tires and a bit in the wheels and a bit on the track surface and a bit in nutrition supplements— well, soon those marginal gains begin to add up to big gaps between you and your competition.”
Dave Brailsford on aggregation of marginal gains

Dave Brailsford started as the general manager for Team Sky (Great Britain´s professional cycling team) in 2010. He had the concept laid down in the quote above: if you improve every area related to cycling by just a little bit (most commonly is used 1 percent), then those small gains would eventually add up to bigger improvement. These improvements ranged from the obvious (training, nutrition) to more surprising (every cyclist had their own pillows when they are travelling). The results were outstanding. Brailsford was wrong in believing that Team Sky could win Tour De France in five years. They did it in three.

This works when the competitive field is already mature. Cycling itself is quite established sports, so there is not necessary that much innovation (doping excluded) to be done.

The difference nowadays between agencies is not in the actual ideas, but in the craft. Similar ideas have gotten totally different reception in marketplace and also in award shows. When we essentially are doing the same things, the difference comes in small details.

Has our industry then just become minor improvements and tweaking in quite predictable playing field?
Not necessarily.

2. Disruptive leaps

Disruptive thinking has radically altered the sports. Quite often the change is driven by technology, but sometimes it is also about the different way to approach the challenge in sports.

a) Technology disruption
golfevolution
“I think the players, I put in the book for example that we should go back to wood rackets, probably they laughed at me, I’m a dinosaur, but I think that you see these great players, have even more variety and you see more strategy, there’d be more subtlety.”
John McEnroe (last player to win major tournament with wooden racket)

Technology has played huge role in certain sports, especially in golf driving distance. We are not talking about marginal gains in here; these technologies have truly revolutionized the sports.

Internet has changed the whole ball game in our industry. Either you have digital capabilities, or you are like a guy trying to play with wooden racquet in tennis court. Not only you look stupid, you will also certainly lose.

b) Approach disruption
vstyle
I adapted an antiquated style and modernized it to something that was efficient. I didn’t know anyone else in the world would be able to use it and I never imagined it would revolutionize the event.
Dick Fosbury (inventor of Fosbury Flop)

Not always you need a technological breakthrough to change the game. V-style jump in ski-jump or Fosbury flop in high jump are examples when smart individuals outsmarted the competition. They looked the problem from a different angle and found a totally new and more effective way to solve it.

Currently every agency is jumping with the old style, where the room for innovation is limited. When the playing field is the same for everyone, the only way you can win is to search for marginal gains. I truly believe that we could approach our business truly differently and take the whole agency business model to the new heights. It is time to rethink the whole jump.

(Full disclosure: These sports anecdotes were mostly lifted from the great book I just read. The book is done by Mark Mucclusky and is called “Faster, Higher, Stronger. Highly recommended reading)

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