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bandwidth provided by Recursive Squirrel Interactive. Transcription services provided by Transcribeme.com. Visit them on the web at Transcribeme.com/beamcast for up to 25% off. That's Transcribeme.com. Episode 489: Harder than a Press Release.
For Monday, March 26th, 2018. It's time for this week's edition of the Beamcast. A weekly discussion about the news and issues facing marketers today. I'm your host Bob Norp.
Thanks for joining us. Just in case you haven't been paying attention recently, Facebook has a few problems. In the fallout over Cambridge Analytica accessing user data has many consumers of brands rushing for the doors. Just how bad is it? Tonight, we'll discuss. Also, the perils about being too digitial. [Inaudible] is going all out on management consulting-- whether brands can stay neutral. Plus, this week's [At Phil 5?]. That's the lineup. Let's meet tonight's pound. Thanks for joining us for this week's Beam Cast. I'm Bob Norp, and with me on the panel for this evening, we start with the founder of Convince and Convert, author, speaker, Mr. Jay Bear. Hi, Jay.
Bob, how are ya?
I'm well, so glad to have you back on the program. Now, next up, we have our good friend, founder of the Idea Integration Company, Mr. Saul Cold is back. Hey, Saul.
Hey, Bob. It's really exciting to be on the show. Now that the intros are out of the way, let's get started [laughter].
We've got more intros. We've got more [laughter]. Also joining us, we have the CMO of RPA advertising, Mr. Tim Leake. Hi, Tim.
Hi, Bob. Very honored to be back, thanks for having me.
Yep, you're welcome. And finally, we welcome back the EVP of Audience Science at Viocam, Mr. Julian Zilberbrand. Hello, Julian.
Hey, Bob. Thanks for having me back on. And by allowing me back on, I now have all your data [laughter].
And all my friends' data, apparently [laughter]. Well, let's get right into that topic because we knew this was going to be the first topic for this evening. Of course, our lead story tonight is the situation with Facebook. Now, the facts are clear. Cambridge Analytica harvested the information of over 50 million Facebook users, nearly all without consent. I think the number was-- they had permission from 25,000 users or something and ended up with 50 million users' information. Adding to fuel to calls for the social network to face more government oversight-- a call that was already happening in the halls of Congress-- but the big question as I see it, Jay, is has the internet as a whole become a kind of Pandora's box? And is Facebook even the heart of the issue anymore that we need to face? What's your take on this?
It's interesting, I look at it from one perspective as a marketer, and from another perspective as a consumer and a citizen. As a marketer, this has been going on now for what, six, seven years when they first built out this app exchange where you can pull data from friends and friends of friends. And as marketers, we only-- not only do we know that this is happening, but probably everybody here on the Beam Cast has tapped into this capability at some point for some client in some set of circumstances. So to feign surprise now seems a little but it's ingenious. As a consumer we want relevancy, and we want personalization, and we want [crosstalk] we don't.
Let me clarify that first. So who's feigning ignorance right now? I mean, is anybody feigning ignorance because I think even Facebook owns up to it and addressed it back in 2015. I mean, it's not like anybody was hiding the fact that this was going on. It's just that now suddenly consumers have become--
Like a purple.
--painfully aware of it [laughter]. And it's become a huge issue. It doesn't seem like anybody was finding it.
And that's the part that's so strange about it, right? Is that this has been happening in one way ship or form for quite a long time, and in this one particular incident the combination of actors involved in it, and the circumstances, and politics has mixed in as frosten as well, creates this very volatile cocktail that all of a sudden now everybody is shocked and outraged. But as you said Bob, "This is not new news." This capability and frankly these circumstances have been present for a long time and it's fascinating to see the kind of trouble that Facebook is in now. And of course, I think to some degree it's a suicide not a murder. I don't like they handle this very well [laughter]. But you think about, Yahoo had three billion user accounts compromised a year ago, two years ago, including social security numbers and passwords, and this feels like at least right in this moment almost a bigger deal into the level of outrage and it's perhaps not quite the same thing.
Well, I mean, I think, the outcome is the difference here because I mean, when Yahoo gets hacked- and there was a terrible hack- and a lot of information that was important to users was stolen. But most people didn't experience identity theft right directly. Most people didnt have that experience of saying, "My data's been lost and suddenly I'm in bad straights." Whereas everybody sees the outcome of data manipulation and manipulating societal norms using Facebook advertising. Everybodys is painfully aware of what happened during the election. Everybody's painfully aware of what's happening in advertising and marketing and it's becoming a much bigger issue for consumers. It's much more in your face. I heard Soros tried to have jumped in. So you have everything on?
So there's the old saying, "If you're not paying for it, then you're the product." This is a classic example of it. So Olivier Blanchard wrote something really interesting and surprising, and if you've read it on Facebook about Facebook [laughter] that his thought was that, that Facebook can survive this, and no company can survive very long without its customers and its users trust. You look at banks, you look at insurance, retailers, hotels it doesn't matter, and Facebook has certainly shuttered that trust. Mark Zuckerberg has personally shuttered that trust, and this is again what he's saying, "Facebook will not get that trust back unless it takes drastic measures to earn it again." At this juncture the only things that may yet save Facebook or Zuckerberg accept a complete rebuild of Facebooks data security apparatus and the introduction of user data bill of rights as a company core value. So I think this is brilliant. I think Olivier is brilliant. I think he's off a little bit. I don't think anyone's is going to care in six weeks from now [laughter]. And so it's sort of sad to say because that's what the pattern has always been. People get outraged. People get crazy, and then they just go back because that's the place where they have those cool 60 second videos on how to make a cake and stuff like that.
Are there enough alternatives out there though? I mean, Tim what's your take on that? Are there enough alternatives out there for people to turn to in order to get the same experience? I mean, even Facebook properties, can people get the same level of interaction and contentment by looking at Instagram as opposed to looking at Facebook, and obviously they're still opening themselves up to all kinds of potential [laughter] take the leads. But do they even know that Facebook Facebook owns it.
[crosstalk] invitation so we could all sign up for that and [laughter] give that one a try.
Yeah, the thing that I thought was most interesting about all of this, nobody's actually-- everyone's tying this back to the Cambridge Analytica, but nobody's making such a big deal that there was an article three or four days ago that Facebook has been collecting all of your call records and SMS data for years, directly for all people using Android phones, and it was only discovered by the Cambridge stuff that drove people to start downloading their histories to see what was going on. But, no one seems to be really crying foul over the fact that Facebook listens to your conversations and delivers you ads based on what you're saying on the phone, which, we can all play dumb and say, "They can't do that." But, I guarantee no one's ever read the terms and conditions of a Facebook account. They probably can do that. They could probably sell your house if they wanted to because the terms and conditions are so ridiculous, but--
I think that the key thing that's different about this is, this wasn't a hack like the stuff we were-- with Yahoo or whatever. This is how Facebook is supposed to work, for the most part, it was just--
Yeah, they built this.
--I think that's arguably what's freaking people out more.
Well, this was how they were supposed to work, right? And, in all fairness, they have done what they've had to do to button up some things. I think the reality here is, is that the data was used for political purposes, and the data was used for influence purposes, and then the heightened times that we're in right now, that's as much of an issue as anything. The irony is, is this is nowhere near an Equifax hack, right? That has all of your credit card records and everything you've ever done in your life from a credit perspective. This is not the same, it's not quite on the same level. And I agree with the point that the news cycle's going to shift, and people will move on. But, the reality is here is this has now political ramifications, and when you bring in politics into the equation, well then the news can hold on to this a little longer. The cops, and the feds, and the European Commission, and everybody's going to start getting evolved, and it's going to drag on longer. And this is slightly unfortunate for Facebook, although again, Jay said it, they brought it onto themselves by not kind of talking about it sooner. But, unfortunately, this a dangerous situation for them, because, at the end of the day, the data was used to move and influence minds, more so than just to steal your money.
See, I take [crosstalk]. I take umbrage a little bit to the whole, "This is why Trump won the election", and--
No, no, no. That's not what I said, that's not why.
Okay, because I know that isn't the platform for this show, but I think it's a much larger conversation about voter suppression and--
Nothing to do with that, I'm just saying it was used as influence. Influence, not necessarily decision making.
[crosstalk] Bob, you asked a specific question--
--Oh, I should say, Bob had asked a question, and I don't think we've quite answered it, about whether there is anything else besides Facebook, or Facebook-owned properties to turn to. And that is one of the things is, there is potentially an opportunity here, although I don't know what platform it is yet. Since the politics took over Twitter, I've noticed a tremendous increase in Crate content and thought leadership on Linkedin. So I never would have guessed that that's where some of that conversation would shift to. I don't know where we'll go besides Facebook, and I think that's one of the things. It is difficult to give up. I don't want to give it up. I [crosstalk].
I don't think it exists.
Well, the new data that came out from Edison Research, just two weeks ago, I wrote it up on the Convince and Convert blog, shows that even before all of this, Facebook usage went down in the US for the first time ever, in history. So, there is already some fraying of the fabric before this Cambridge Analytica thing was announced, and the sub-position there is that Facebook is highly negative, and people tend to get into arguments there and in ways that they don't in other social networks. And so the data show in the last year, Facebook usage slipped three points amongst Americans 12 years or older. Instagram picked up that slack, as did WhatsApp, as did Pinterest. So Twitter flat, LinkedIn basically flat, Facebook down, Instagram up. And my take is Instagram and Pinterest are places where you can go to get into more of an escapist behavior, right. Here's a pretty picture, and another pretty picture, and a wishlist. And it's not people yelling at each other about their favorite politician. And you're starting to see some shifts in consumer behavior, and again, that all happened before this announcement.
I wonder how much of that is agile, right? Your 13 year old is [more than likely?]--
Some of it for sure.
--a lot of it has to be--
There is an interesting--
But why? The only way you're having weird arguments on Facebook is if you don't curate your own feed with the people that you actually want to talk to. So social media gets used as a bubble. I know I like to keep a light on the show and slip in the dick joke whenever I can [laughter], but let's get a little plain [old?] thoughtful for a second. I don't have any arguments on Facebook because I'm only seeing people I care about because I actually curated my follower list. I just don't open it up because I don't really care how--
Yeah. But [odds?] are people you care about--
-many followers I have.
--[crosstalk] that don't agree with you.
That would put you in the minority. That would put you in the very [laughter], very small minority of people who take--
None of the [crosstalk]--
--the time to curate.
--extended family is there [laughter].
An interesting thing that was pointed out to me by one of listeners in England was the-- I mean, let's face it. We all agree, I think, that Facebook handled this very poorly. But he pointed out, and this is Marcus Fox, I mean, he pointed out that GDPR or GPD, I always get that wrong.
GPDR, the General, whatever. We'll get to that rather, but GPDR--
GDPR. General Data Protection.
GDPR. Right. GDPR.
I forget what R is [laughter].
Right. So General Data Protection Regulation, that's what it is, that's about to go into effect. And with the enactment of that legislation in the European Union, a company is liable for 4% of their operating revenue in any given year for data violations. And by them coming clean, that's not retroactively so-- that's not retroactive. So actually, this whole timing may have been orchestrated to avoid the paying of a huge fine for the regulations coming out. I mean, Julian, what's the likelihood that this whole mess is not a mess? It's just a calculated move on the part of Facebook and Cambridge Analytica to avoid possibly being hit with a huge fine at the end of this year.
I mean, anything is within the scope of reality. I do find it slightly unlikely that Facebook would want to kind of get in or bring out any potential violations at this point in time just before a law is supposed to drop. The reality is everybody's read all about the stories and read it from six different ways from Sunday as to whose fault it is or whatever it is. But they've made a lot of the regulatory changes that they would need to, to address issues within GDPR. I think the reality is again, it was what happened before, who had access to it, and how was that access then given out to third parties. And the issue is that they didn't do the right thing to actually validate that the questions that they ask of Cambridge Analytica, and of that professor from Cambridge, was actually a fact, right. Did they actually scrub that data? Did they not sell it to any other people? Are other applications that had certain capabilities to this personality app, what was the process from there? Did they sell any of that information? There's no way for them to kind of manage against it. So I don't know that there's a direct tie-in with that to a law being passed, and I don't know that they can remove it retroactively. But I do think that they have to be very, very terrified of what that potential find is, because I know every company is and should be. And that should make it that much more realistic that they're putting in hundreds of millions of dollars of resources to ensure that these kinds of things don't happen again. And I believe that they are going to do that, because they're not insane.
Well, you're kind of making my case. Yeah, I mean, it's just like-- I mean, the whole idea of $60 billion of your valuation being wiped away is nothing compared to 4% of your total revenue over a course of a year. I mean, it's potentially devastating to a company to be hit with this fine.
But more potentially devastating-- this has to seriously hurt their ambitions to move into China. So I can't imagine they did this on purpose, because this actually affects a lot of what they're hoping Facebook looks like in the coming years.
Well, he does highlight just how we are bereft of any sort of privacy protections in the United States. While GDPR is certainly onerous and complicated to set up for brands-- any brand that has customers in the EU needs to be in compliance in the next 60 days, I believe it is. And that's not easy, but it certainly is a stark contrast to what we have here in the US, which is the wild west, quite literally. And so I do wonder, although it makes you-- I question it somewhat just based on the composition of the current Congress. But it does make you wonder if the one lasting outcome of this Cambridge Analytica scenario in the US will be a move to adopt some sort of GDPR-esque regulations in the United States.
So we've had them in Canada for, I think, the last two, maybe three years, and the big shift was you just had to throw out all of your mailing lists and get people to opt-in again. Once you had everyone opted in again, everything was kind of like the good old days. So you certainly had an out to get off a whole bunch of mailing lists. You were actually scrubbed from a whole bunch of mailing lists, and you had to re-opt-in. But once you've opted in, it's like every other day. You still get emails from the Gap every six hours.
So I mean, in terms of Facebook's handling this, whether or not it was intentional or whether or not it was just them fumbling along trying to do their best, I think for me, the thing that stood out as being the worst offense was when Mark Zuckerberg went on that television interview and said that Facebook would do everything possible to enforce legislation to manage and protect consumer data. He wasn't taking responsibility for his company. He wasn't trying to say that his company needed oversight. He was saying that Facebook would do everything possible to enforce the data provisions that would be enforced upon other companies. And it seems like Facebook is not interested in any kind of regulation for itself, so is that answer enough for consumers in the long run? I mean, it's just like-- I know that we believe that consumers are going to come back in another six weeks when all the news cycle moves through its paces, but--
I think you're being hard on him, Bob. He only had five days to write that comment.
Yeah, I mean, the delay in actually responding was also part of the problem. But Jay, from a PR standpoint, it seems like this was handled so piss-poor early from beginning to end. There was no comment, there wasn't even the typical, "We're working on a statement." There was just dead silence from them for days.
Yeah, its I think three sort of big mistakes there. One, they didn't acknowledge that there was an issue and they didn't say, as you mentioned, Bob, "Hey, we will have a statement. We're working on it." So they didn't throw that buffer out there. And the second thing, they never really sufficiently explained, in a way that the average user could understand, exactly what happened and what the circumstances and ramifications of that are. And so I feel like one of the challenges they have today is that most of your rank and file Facebook members still don't really know what happened and don't really understand what that means for their own data or what has been happening, and so there's a level of confusion there, and perhaps that is intentional. Certainly the time delay was not helpful either, but what's interesting is that I read an article just a couple of days ago that said that it's had some sort of fairly significant concerns internally as well. That Facebook employees speaking off the record have said, "This doesn't make us feel very great about the organization either." And there is some perception that perhaps that's going to hurt them in the very significant talent wars that of course take place between them, Google, Uber, Apple, and companies of that ilk. So that has a serious long-term implication if in fact they start to lose talent because the bloom was off the rose, so to speak.
You know, before we move on to the next topic, I need to address something that kind of festers in the back of my mind. Because it's very easy, Julian, to blame Facebook, but it's harder to look at ourselves and say, "What's our level of complicitness as marketers and the fact that we were taking advantage of this data?" We were using services like Cambridge Analytica. We were out there, maybe not so egregiously scraping data, but we were taking full advantage of all the opportunity that Facebook provided. So do we have any level of complicitness that needs to be addressed?
I mean, I think every marketer will have to look at themselves and determine their level of complicitness based on how they were ultimately using the product. I could say, having spent time at a media agency and working on hundreds of clients and being at a brand today, I don't know that I've ever had the opportunity or worked with the opportunity to mine all the Friends data and then create algorithms against that to the degree that this professor in Cambridge Analytica did. And I would imagine that most marketers were using the basic capabilities within Facebook, maybe to the extent of custom audiences as a really high end potential marketing tool, and I don't know if that's necessarily wrong. I think again, intent, and intent to use, and how the data is used plays a big part in this. And I would like to believe, from my own experience and what I hope is some level of morality within the marketing community, that people weren't necessarily taking this data and doing nefarious things with them. On the the other hand, people have opted in to give in their data, and offset it in the beginning. If the product is free, you are the product. And so we, as consumers, have opted in to this scenario, and I think-- so everybody can be considered complicit. I just think at the end of the day this is a-- we're still in, I think, a lot of what could even now be considered the early stages of the Internet and the early stages of data and it's potential uses, positive and negative. And I think that there's a lot that hopefully will come out of this as regards how goverments look at companies of this nature. And Facebook's certainly not the only one. Companies like Google and Amazon and Twitter or whomever. They all have reams and reams of data about us. There has to be a little bit more that's thoughtfully done by Congress and the Senate, in order to address what is a real scenario of trying to protect people from themselves. There's a weighty discussion that could be had in any direction when it regards that, but I don't know how complicit marketers are. I would tend, for the most part, to believe that most of the work that's been done has been done with at least a semi-positive intent to sell you a product, but not necessarily to psychologically move you in manners that were done here.
Continuing this conversation, a possibly broadening it just a bit, there is some thinking emerging out in the marketplace that maybe we've become too digital in our approaches to marketing. Julian, the way this runs, are we becoming too dependent on technology and it's associative metrics, at the expense of branding and marketing basics? Are we so dependent on looking at this data, and targeting so efficiently and effectively, that we're ignoring the fact that, sometimes, marketing happens through osmosis, and through plain awareness? What's your take on that? Is this just sour grapes from the people who are doing branding and experience?
No. It could possibly be. I think there's something to be said there. I definitely think that, in traditional marketing channels, television, which, by the way, buy more TV, in traditional marketing vehicles, television, newspaper, other print mechanisms, radio, you don't have the same level of capabilities of measurement that you do in digital. Fairly so, people moved into a measurable area. I do think that, with the volume of content that's available in a digital environment, and the behavior patterns that people create over time in using these platforms, there's fatigue, and there's less ability to get people's attention in digital environments. Certainly, people might be losing out on opportunities to reach consumers in ways that, potentially, aren't as effectively measurable as digital, but might have more impact and ability to actually move a needle for you as a business. I don't know if it's a massive overstatement in terms of spending in digital, versus other media types, but I do believe that, to some extent, we've lost out on the ability as marketers to really communicate effectively using all channels.
Just like how email spam made direct mail a winner again, digital marketing is making experiential marketing stand out even more. Netflix, last year, spent a ridiculous amount of money on experiential . It's actually one of their main driving forces. At ComicCon, this year, they took over a whole block to promote Marvel shows. They just did something, a couple days ago, in Los Angeles, to promote the Drew Berrymore Show. People want experiences, and really smart marketers know that they should be using digital to extend the experiential , and not forget the experiential . I think, for a while, people were just, "Push. Push. Push. Push. Push," when you actually should be giving people something they really want, and then use digital to spread it out to the world. Let me clarify here too, I don't want to get into a conversation about experiential , and television, and the branding type effects, versus what we typically call digital. I'm talking about the digitization of everything. We're talking about digitization of television, as much as anything. It's forced us to lose our effectiveness in tactics that are, traditionally, very very effective, because we're so focused on the targeting and results, as opposed to what these technologies, or what these platforms or medias, have always been good at doing. J, given that kind of framing, do you feel like we're getting too caught up in a digital mindset overall, and what do we do about it?
As somebody whose new book is about word of mouth, I say yes is the answer to that question. Absolutely yes. It's ironic that, I feel like digital has become the lazy marketer's savior, because of the targeting capabilities, Facebook first among them, that we can rifle shot in a way that you simply can't offline. We have decided to move to programmatic in using AI, and machine learning, and big data, to do the type of hyper-personalized, hyper-relevant communication, that has always been the promise of marketing, but wasn't really possible, until we fully digitized everything. Now, it's almost become too easy. Now, it's almost like, "Hey. Let's just press the button and send the robot army to build our ads and do our targeting, and sit back and look at spreadsheets, and hope for the best." I think there is something to be said, that we are losing the art, and the craft, and the believability of communications, and instead, are being run around by our calculators.
It's a good thing I'm on the show this week, because I expect very busy with inbound calls all looking for wonderful experiences for their clients. You guys know--
Just like Julian expects a lot of television calls [laughter].
I'll see [crosstalk] but hopefully, you know where to find me.
You know, Tim--
I think another thing-- oh go ahead Bob.
Well, I was going to say one of the most interesting things that I read this week about this subject was this idea that maybe we're creating a kind of segregation by getting so digitally focused and by being so targeted and we're dividing the have's from the have not's and limiting the future impact that comes from aspirational viewing. I mean it's just like let's face it when we run a television ad on broadcast, we're getting all kinds of people who we call scatter. It's this people who are not necessarily in our target but they can still see the ad and they can still be inspired by it. By being so digitally focused and going to a Hulu buy and only targeting specific individuals with certain ads, are we losing the ability to effectively communicate--?
Create [demand again?].
Yeah, are we losing that ability?
I think we are, I think we are. I think what the problems-- and we've got so many case studies and examples and research that proves that when you do great branding whether [inaudible] work or experiential or whatever you're doing that reaches a broader audience that inspires people to have an emotional connection with this brand or whatever that is. Then when you're running search engine campaigns or when you're doing Facebook campaigns or whatever, those do better and that makes sense and that makes sense because you're expanding that audience and if you only deliver ads to the people that are already searching for you, if you only then retarget the people that are searching for you in the past, you are inherently limiting the amount of people that you're going to get. And you can see why that's effective but I think it's been interesting you keep saying calling it digital mindset. I think for me anyways in very many ways it's a DR mindset, it's very much a direct response mindset and because we have so much data and people are so targetable and we can track these things and now we can start to track other mediums that in the past work as [crosstalk]--
And I want to be clear, Tim, and clear to the panel, I actually agree with direct marketing tactics. I think that they're an important part of the mix so I'm not arguing against that as much as saying but we're trying to apply direct marketing mindsets to everything at this point.
To everything, right. Everything's mid-funnel and below. Everything's inferred intent and down. Nothing, very little now is other than Super Bowl and big experiential campaigns are top of the funnel demands yet, right? It's all mid-funnel and down. We're going to infer your interest and target you that way and I agree with you, Bob. I feel like we have lost the, largely lost, the big, bold, let's create demand for something that people didn't know they wanted.
The best marketers.
[crosstalk] the mix.
Julian, you go first.
Oh, I was going to say the best marketers tend to understand how to use all channels effectively and they all should be working together with some level of concern. If that's the case then overloading in any one channel is probably a poor tactic.
And Tim, you were going to say something.
Same thing that Julian said with different words and what you said was "It's got to be part of the mix" and that's exactly it. It's about using the different channels the way that they need to be used.
Before we move on, I want to address that one part of the topic that I don't think is the most comfortable one but probably the most important one which is is this a form of racism or prejudice on the part of marketers? Do we segment out audiences to basically get the most effective audience but essentially what we end up doing is we market to the have's while we leave the have not's behind. It's just like we're marketing to the rich instead of to the poor and we're not effectively giving people a vision of what's possible for them in their lives, and is that a form of classism, racism? I mean, what's your take on that, Saul, is this something that we need to address as an industry with a series of ethics?
I don't think it has anything to do with racism or anything; I think it's got more to do with like a cover your ass mentality. You finally get this job and you don't want to lose it, so you're only going to speak to the 10 or 15 people that you think are actually going to buy something. I could be way wrong, and you guys can tell me what you think, I don't think all these people are thinking that far ahead, to say we're going exclude this group, or that group based on race, color, creed, or even financial. It's just really like, "I need to show an increase in 5% in this quarter or I'm going to get fired. So I'm going to do whatever it takes, like use a Cambridge analytic or whatever to--." Nobody's doing great work anymore. Nobody's doing inspiring work anymore. It's like the race to the bottom. So I don't think it has anything to do with discrimination, I think it has more to do with insecurity.
Well moving on-- Publicis made another bold proclamation; they seem to be in the bold proclamation business these days, so we'll see whether or not it turns out into anything. But--
What's their hourly rate for bold proclamations [laughter]?
I don't know. But apparently billing it at the top level. They announce that they are beginning a course correction, steering their operations away from purely being an ad creation company, in favor of management consulting. In fact, they seem to be entirely going toward consulting when you read the press release and you kind of pull it apart. Tim, does a move like this make any sense for them, and is it even plausible, or is it just a bunch of hype? What's your take on this?
Yeah. I think they have to make this move, actually. I do think it's plausible, and I do think that they have the opportunity to get there. And that might be a not-popular opinion, I think people like to pick on agencies a lot. But I think to be the trusted partners that agencies want to be, we have to start thinking about how to drive clients' business results across everything we do. And we use this term consultancy, but it's a very broad term, and consultants and consultancies come in all shapes and sizes. So I'm not sure agencies and publicists will ever compete head to head in all things that McKinsey does, or Accenture does, or whatever. But agencies, in general, are better at creative thinking that brings outside results, as opposed to just incremental improvements. And I think if agencies can leverage that creativity in a consultative context, that could be something pretty amazing. And agencies have a pretty decent track record of adaptation, actually, and holding companies, in particular, in a better position to adapt than any individual agency within their portfolio. They can acquire new companies. And Arthur Sadoun, in particular obviously lots of bold proclamations, and he's very forward leading in this change. So I wouldn't underestimate that he can do it; he's restructuring this group to be working in a very different way. I don't whether the people working at Publicis agencies will enjoy the change, but I don't know if he cares either.
Yeah. I wanted to go to you next because it's just like Sadoun could be a genius here if this works, if he manages to steer Publicis into a profitable region. However, at the same time, this is a monumental change in the thinking of an agency. He's got to start thinking in terms of shareholder value, and actually moving the needle in incremental ways, like Tim said. Is that even possible for an agency network?
Not only do I think it's possible, I think it's it's required for survival. And I can tell you, full disclosure, I spent 12 years at Publicis. And I have a lot of love for that company and the people there. But I will tell you - and I've been saying this for years since I left and probably even before I left - that the business of an agency needs to adapt and change in the direction that a lot of brands and marketers are kind of moving. And as we continue to talk about the proliferation access to data and the way that marketers are using it now, not simply just on varying digital channels but just holistically in terms of how they're using data in their marketing tactics, I think it's paramount for agency holding companies to start to transition away from some of their traditional tactics and some of the things that clients used to rely on them on and start to kind of [inaudible] themselves to provide other services. Some of them being consultative in nature similar to the Accentures and Deloittes of the world. That applies both on the media agency side and on the creative agency side. Publicis bought Sapient several years back while I was still there, and I thought that was an interesting purchase at the time. And I think it's a necessity for all these holding companies to kind of move in this direction because I think the clients and the marketplace demand that those skill sets are what are going to be needed for the future.
Jay, I want to get your thoughts on this because it seems to me that there's a lot of stumbling blocks for this to actually go through. I think that there's been some great points made about the fact that this is necessary to move forward with. However, it's a lot easier for a management consultancy to buy agencies and offer those services that these "agency vendor" are offering to their clients. It' a lot harder to build up relationships and trust with the CEO of companies and affect incremental changes in the stock price. So is this something that can be done in your mind? And what do they need to do specifically in order to accomplish it?
[inaudible] it can be done. I mean, anything is possible. I would say first it's not a very good day to be an art director [laughter] [at Publicis?]. Second, wanting a management consultant and having the depth of experience across the totality of the enterprise in order to deliver that level of management consulting is not necessarily the same thing. Agencies, of course, are primarily tasked with demand generation. And most management consulting projects transcend that significantly. So the first thing they'd have to do, Bob, is bring in a significantly new/different cast of characters with far different types of expertise in finance, in human capital, in M&A, just a lot of different types of people. And then you have to do the next big hurdle, which is convincing the biggest companies in the world that not only do you have those capabilities, but you are in fact the best choice to deliver that expertise. So it is possible, but it a lot harder than a press release.
I love that. I think that's going to be in the name of the show, A Lot Harder Than a Press Release [laughter].
Well, but that is super accurate because, obviously, the biggest challenge is getting and retaining the talent. But I would tell you I think these holding companies have not only a basis of multiple billion dollars of revenue to help kind of move that needle, but I also think they have the want and the need. And I spent a lot of time with Richard [Tibacuwalo?] who has my favorite line as regards agencies, which is, "Agencies are cockroaches." And truer words have never been spoken. The agencies will survive they will do what they need to do. They will find ways to hire and train and develop that talent. But it is going to be a rough patch and a rough transitional period.
Well, last but not least, Delta tried to stay out of the gun control debate by simply eliminating the NRA member benefits, by saying they felt that they needed to remain neutral in the issue. Well, after a few weeks, we're finding out that that satisfied nobody. Everybody's upset with this statement, and the NRA is boycotting the airline. Nobody else is happy with the fact that they're not taking a stand. So Delta's approach is not atypical for big companies. So why didn't it work this time, and what does this mean for the future of crisis communications? What's your whole feeling about this?
Them dropping the NRA discount, I don't think that that really is considered crisis communications. We can all argue that after, but. I don't know if you guys know this about me, but I'm willing to take great risks on behalf of brands. I'm working with someone now who almost let me do something so amazing and memorable that it would easily have been featured in the very first ad Win5 [laughter] [crosstalk]. I bring this up because one of the first conversations I have with any client I work about is, I ask them what their opinions are because having an opinion is the most important thing a company can share right now and always. The opinion doesn't have to be bold, it can be safe. But you better have an opinion and you better be okay with defending your opinion. As for Delta, the main issue was that they dropped the discount [inaudible] for the NRA. They got punished on social media by gun lovers. But they also got punished by the Georgia Senate, because the Senate voted to remove a gas tax exemption awarded to them previously, so. The world has changed now. You can never ever be neutral. Those days are over. This may sound super knee-jerk, and I'm not saying Delta should do this, but one move they could have done was, they should have doubled down, or they could double down and say that while they love all the people in Georgia as it's been their home hub forever, they would love to hear from other states who would welcome their business. It may sound like running from a problem, but siding on the side of anti-school shooting isn't a crazy side to be on. And if it makes them a media darling, that's wonderful. But the truth is, that the gun people are still going to fly Delta because when it comes to travel, convenience rules. That's been proven by Uber over and over and over. "Ooh someone gets raped but they're going to get me home at two in the morning, so I'll just use them." But the big that they did was that they just didn't say anything. They acted quietly. And I don't think brands can act quietly anymore. We're living in a world where you're going to have to just pick a side. And sometimes you're going to pick right, sometimes you're going to pick wrong, but if you truly believe in it and if you have values for your company, you're never wrong following your values. I mention American Apparel every fifth time I'm on this show. The brand is gone now and that's a whole other conversation. But when Dov Charney was in control of American Apparel, their values were super skewed, and weird, and didn't match what a lot of other people would agree with. But they stuck to their values and you know exactly what you're getting from them. More brands need to do that.
It didn't work out for them.
Actually, it did work out. A lot of the problems of American Apparel came from the investors, the shareholders, and things like that. But the company was very successful for a long time.
Yeah, I was just teasing. I was just teasing. But I think you make a really good point, which is not going to please everybody, and when you try to please nobody, it probably makes it worse. So to your point, kind of take a stand, go with it, and live your values, and be prepared to deal with whatever ramifications come from that.
Tim-- yeah, I was getting--
I think they were also late-- they were late to the game, in terms of-- I mean, it was like everybody decided to cancel that. It's not like the NRA hasn't been controversial until this year. It's been an issue for almost a decade in a major way. And so to do it now, it was taking a stand, but it was taking a stand in a way where they said they weren't taking a stand. Which I think just-- that's why it fell so flat.
Well with that, it's time for the [Adfell?] five, but before we get to that segment of the show, I do want to take this quick opportunity to thank my guests again, and allow them to each do a shameless plug, starting with Jay Baer. You can find him at convinceandconvert.com. That's the home of his consultancy, but also where you can find out more information about his books and speaking engagements, etc. Tell us what's going on in your world, Jay. What would you like to promote?
I teased it earlier, my friend. Speaking of books, new book coming from myself, co-authored with Daniel Lemon, out this fall, called Talk Triggers: The Complete Guid to Creating Customers With Word-of-Mouth. Super excited about it, lots of word-of-mouth case studies. Hopefully I'll be back on the show between now and the book launch date, but it is available for pre-order, as they say in the trade.
Anytime, Jay. Believe me, I would book you a lot more if I felt I could [laughter]. You just show up whenever you want to.
Thank you, my friend.
Next up we have Saul Colt. You can find him at theideaintegration.com. That's the home of The Idea Integration Company, his experiential marketing consultancy. Tell us, what's going on in your world, Saul? What would you like to promote?
I'm very excited. This Wednesday is another live I Make a Living event. We have seven hundred people signed up to attend I Make a Living powered by Freshbooks, in Toronto, our home-field advantage. And we're taking advantage of it.
No way. There's a case study of the I Make a Living events in my new book. True story.
I'm the guy who created it [laughter]. We've got seven hundred people signed up for Toronto. We have 0 people signed up for New York City, which is April 25, because we haven't really announced it. But you guys heard it here first. New York City, April 25. The lineup for New York City is huge. We have Caitlin Pearce from the Freelancers Union, friend of the show Peter Shankman, [Dare Frank?], and the amazing Jackie "The Joke Man" Martling, formerly of The Howard Stern Show. So if anyone wants to attend the New York event, it'll be live on Tuesday at imakealiving.com. Also Bob and I are going to be flying to Los Angeles April twenty fourth to record a couple live episodes of the I Make a Living podcast, powered by Freshbooks, at the LA Times Podcast Festival. So if you're within a seventeen hour drive, you should come and see us do the show live.
Yeah, it'll be a lot of fun, so looking forward to that. Next up, Tim Leake. You can find him at rpa.com. That's the home of the RPA Agency. Tell us, Tim, what's going on in your world. What would you like to promote?
Well I have no book. I didn't create an amazing event. But I am in LA, so I'll check you guys out when you're April twenty fourth. So I just want to plug my agency. I think a lot of people don't know that RPA is the biggest agency in LA at the moment. We're independent. There's no [inaudible] company politics. We're full-service. We have amazing talent, and an insane track record of helping our clients make a big impact with some great work. So whether you're a client or someone looking for a job, I think if you want to work with some really smart, passionate people making a difference in our clients' business, I hope you will check out rpa.com.
And Tim is worth meeting, so you definitely want to go out of your way to get a chance to talk with him. A really, really amazing guy. Thank you very much for being on the show, Tim.
Thank you, Bob. Hope to see you guys in LA.
And last but not least, Julian Zilberbrand, you can find him at Viacom.com. So, tell us what's going on at Viacom? What would you like to promote right now?
Well, as always, I'd like to plug television. The box in your house that gives you hours of endless entertainment if you choose to give it a chance. Also, if you happen to be in Chicago in June, you should go check out Nickelodeon Slime Fest, if you have children -- a wonderful event to do. If you're in San Francisco in June, go see Comedy Central's Clusterfest, a fantastic comedy and music festival. Both these live events are amazing and if you happen to be in New York, check out the Sponge Bob play. It's amazing.
[laugher] Awesome awesome. As for me, I will be in Vegas this week at the Summit event run by Adobe. If you're at the Summit event this week, come on out, check me out, talk to me -- whatever. Reach out, we'll get together. As for more information about me or the show, visit thebeancast.com. There, you can find a complete show archive, you can find out how to consult with me. You even find out how to advertise on the program so check it all out at thebeancast.com. Don't forget, we're now available on C-Suite TV. It's a thing that I worked out with Jeff Hayzlett, very happy to be on there so if you prefer to listen to the show via C-Suite, just go to the right page and we're there. And don't forget, we're also now having transcription services provided so if you want to get a transcription, they come a few days after the show posts but there will be transcriptions posted alongside the shows from now on so check it all out and if you want to get some great transcription services from Transcribeme.com, go to Transcribeme.com and use the code bean20 and you can get 20% off so check it all out at Transcribeme.com. And now, it's time for an [inaudible], a rundown of the lowest moments in advertising, marketing and public relations from the last week. And first up, for all the money spent on World Cup sponsorships, Julian, you'd think it would impact consumer perception in some way but apparently, 40% of viewers still think that Nike, Pepsi, and Mastercard are official sponsors even though they aren't [laughter].
This is what's called really smart marketing and buying. It's buying around enough to the extent that people just associate you with it. This has happened before to Nike where everybody assumed that they were sponsoring a World Cup and it was Adidas who was sponsoring so they've just mastered it and other brands should take note.
Makes you wonder whether or not these big sponsorship deals are worth the money if you can just be smart about it and work around the event [laughter] and still get that kind of perception.
A lot of [crosstalk] people are pulling out of the Olympic sponsorships and they've lost a lot of guys.
It may also have something to do with the fact that bars open at 7am to accommodate the time zones of the games.
Well, another bad day for Uber out there but probably not as bad as the one had by the homeless woman their self-driving car hit and killed in Arizona, Saul. I mean, I hate to call this an ad fail in a lot of ways because I'm so behind the self-driving movement but at the same time, you know, it couldn't happen to a better company, it seems like [laughter].
So first Uber gets returning soldiers who served to protect the United States, locked in on shady car loans and now they want self-driving cars. It's awful that a person died but it's also awful that Uber hates soldiers.
[laughter]. Now, next up Noom, a weight loss app for Millennials tried to launch with a tweet trashing Weight Watchers there, Jay, resulting in a common stream to end all common streams of testimonials for why Weight Watchers works. Talk about blowing up in your face. It seemed like the worst move ever to go on Twitter and trash Weight Watchers [laughter].
Yeah, super bad idea, I mean, is there anything as tribal as a national or global weight loss consortium where you all come together as a community and you are part of the Weight Watchers "family", and you are willing to advertise that to your friends on Facebook and social media and bumper stickers and the whole thing, I mean if you said, "Tell me the brands that have the greatest degree of tribalism in the US, Weight Watchers would make the top 10. That's not the fight you pick. That is insane. You literally could almost not decide, I mean, maybe Harley-Davidson would be a worse opponent than this kind of [laughter] [crosstalk].
I can't imagine going after Harley-Davidson.
You don't mess with Oprah [laughter].
No, you don't.
Also true, as a general rule.
Don't trash your competitors. It's a poor move and it never works.
Well, especially as a startup. Where do you come off, right? I mean, if you're going to challenge your brand the way T-Mobile does, T-Mobile's always taking shots at AT&T and Verizon, but they've got the scope and the scale and the track record of success to actually be cheeky. I mean, "Dare I challenge your brand that's multi-billions of dollars." These guys have $4 and a chicken sandwich to their name [laughter] and they're trying to drop the hammer on Weight Watchers, it's insane.
You said it well. It's cheeky. At least when T-Mobile does it, they do it in some kind of fashion which is funny. At least that takes the edge off.
Well, next up, where do you showcase your gun videos when you're a gun retailer who's suddenly banned from YouTube, Tim? Apparently, PornHub [laughter]. PornHub is welcome to all these gun retailers to post their videos on their site. It seems like an odd choice for the gun lobby to end up on the biggest porn site in the world, but there you have it [laughter].
And PornHub has such a strong, family-friendly brand [laughter] [crosstalk]. I wish I could've answered one of the other four [laughter].
I'll jump in. Now you can clean your gun two ways on PornHub [laughter].
Just waiting for that opening.
I was just waiting for the [inaudible] to reappear, but [laughter].
And last, but not least, there's Facebook. I mean, we've talked ad nauseam about Facebook's response to the situation that they faced this week, but my God they could win on the AdFail5 for at least a dozen different tactics they used over the last few weeks. I mean it's just crazy how badly they managed this situation. Anybody have anything, last words to add to this? Jay, any thoughts?
We almost had two episodes of The BeanCast between when it was announced and when they commented, right? I mean, they almost missed a week, which is hard to do in a crisis scenario. And I think, the one thing they have learned, I suspect, is that things that are big, Mr. Zuckerberg needs to come out and come out quickly.
I would almost say it's probably better that Zuckerberg doesn't come out and you send out somebody else more capable and PR-friendly and get them out the day of [laughter]. That might be a better tactic.
Well, that does it for this week's show. Have something to add to this list, or just want to discuss it? Comment online, Use the hashtag AdFail5. That's pound AdFail and the number five. And then--
[crosstalk] for a gun [laughter].
[crosstalk] find ads for one.
Well, if you do end up with a gun, we know where you found it, Jay. That's all I'm saying. Well, if you'd like to subscribe to this podcast, visit our website at thebeancast.com and click on the subscribe link. If you're an iTunes listener, we've also provided a direct link to the iTunes music store or just search for TheBeanCast in the podcast directory of iTunes. And whichever podcast directory you use, when you subscribe, please leave us a review. Got a comment? Have a question? We'd love to hear from you. Just send your emails to email@example.com. Opening theme was performed by Joe [Sibel?], closing theme by [CJax?], thanks for listening. I'm Bob Knorpp. We'll be back again next week. Hope you'll join us then.