Andy on Twitter

  • Connect

It’s Time to Build

Great essay from Marc Andreessen. Well worth a read.

Part of the problem is clearly foresight, a failure of imagination. But the other part of the problem is what we didn’t *do* in advance, and what we’re failing to do now. And that is a failure of action, and specifically our widespread inability to *build*.

  • Connect

Hey & Highway Robbery

Watching the scuffle with Apple and HEY playout is interesting. Am wondering if we have reached that watershed moment when Apple will have to acknowledge their incredible market power (not a monopoly but at least a duopoly) and how punitive pricing punishes rather than enhances the developers we all depend on to create the next big thing.

Does the world’s largest company really get to decide how millions of other businesses can interact with their own customers? In fact, Apple’s policy distances you from your customer.

I get Apple’s argument – it is our platform, play by the rules, we know what is best for customers. Without denying Apple’s right to make money – and they are pretty savvy at that – perhaps its time for them to acknowledge they can’t hide behind that mask and its time for fair and equitable pricing? They’ve got a distribution chokehold on the community.

So what do we want? I’m not saying IAP shouldn’t exist, or shouldn’t be an option. For some businesses, it might make sense. If Apple is sending you all your customers, it probably does make sense. The 30% rate is still highway robbery, as Congressman Cicilline recently said in an interview, but the fundamental problem for us is the lack of choice.

Apple, please just give your developers the choice! Let us bill our own customers through our own systems, so we can help them with extensions, refunds, discounts, or whatever else our own way. It’s our business, not your business. And Phil Schiller’s suggestion that we should raise prices on iOS customers to make up for Apple’s added margin is antitrust gold.

It’s one thing to argue what is right for customers but as the subscription economy continues to boom, its another to exercise total control over it in a dominant ecosystem. And if they are they need to give us as consumers much better control and transparency. Dealing with, for instance, family purchases and subscriptions is a nightmare for most parents.

The simple answer is a small commission for marketing and enabling the sale of the app, then the consumer chooses how they want to subscribe. When you publish an Android app you can freely choose between using Google’s subscription mechanism and paying them a cut, or implementing your own solution and not paying Google anything.

The argument that developers could just stop making apps for IOS is weak. Apple simply has too much market power and reach to ignore. What developers could do is stage a mass walkout, perhaps, but at what cost? Ultimately Apple needs to take a fresh look at what is right for consumers and developers.

One thing is clear beneath all this. The rules don’t apply equitably and are at best nebulous. in some cases popular apps don’t function as they should – The Audible app has no in-app subscription mechanism, Kindle doesn’t let you buy books through the iOS app. Subscription-based email apps like Microsoft Outlook are permitted on the app store without Apple getting a cent.

So, Netflix, Spotify, Amazon, Microsoft are all companies with enough size and power that Apple could be in serious danger if any of them decided to pull their apps from iOS, and even more potential trouble if they decided to challenge Apple’s practices from a legal standpoint. If you are too big to fight, you get a free ride. If you are smaller, obey or get out of the store.

This issue goes beyond just the HEY skirmish. It’s time they reviewed their approach to subscriptions, not just products, and do better for developers and consumers.

  • Connect

Marketing Spending Ups and Downs

Interesting chatting to CMOs on the shifts in marketing spending during the apocalypse. The majority I’ve chatted to reflect The CMO Survey at Duke University’s Fuqua School of Business which found that 30% of marketers surveyed have not experienced changes to their marketing budgets while 41.3% even reported gains and just 28.4% reported losses. On average, marketers reported a 5% increase in budgets during the pandemic and expect digital spending to grow by 4% in the next year. The top two goals? Building brand value and retaining current customers. Social media continues to be a key part of marketers’ planning. In fact, the report found that 84.2% have used social media for brand-building and 54.3% have used it for customer retention.

The nutty bit of those last two sentences IMHO is the expected impact of social on brand. I get it for customer retention but brand building, nope.

  • Connect

Feels Good!

Almost daily I get someone asking me how they can best keep their coffee fix going during isolation. Social distancing is possible. Coffee distancing, not possible.

That inevitably leads to questions about which machine to buy.

One of my favourites is the La Marzocco Linea Mini. Affordable, great quality, and gets you fully armed with an iconic machine for the years to come. Now, you want to get a grinder to go with it and while you could drop a heap on a “status grinder” – you know, the kind that any barista would look at and regard you as legit, I’m finding the Breville Smart Grinder well worth it.

Turns out my favourite roaster, St Ali has cooked up a cracker of a deal.

No lines, no queues, not too hot, not too cold. Your own tunes, your own cup, open early and open late. Be your own barista at home with ST. ALi and La Marzocco.

We’ve teamed up with our friends at La Marzocco to help bring ST. ALi home. Grab a La Marzocco Linea Mini today for $5990 and we’ll set you up with a 1 year ST. ALi Orthodox Subscription, with a bunch of goodies thrown in by La Marzocco. Need some help brewing and Melbourne-based? We’ll also send you latte art legend, competition wizard, and all-round nice guy Shinsaku Fukayama for three hours of training, hazmat-suited if need be.

So, the machine should pretty much pay for itself… over whatever period of time reflects your fueling. Two great brands and one great deal. What’s not to like. And St Ali also sells the Breville Smart Grinder Pro.

And, you get to support an amazing Roaster and a bunch of really good people.

  • Learned

Real Marketing vs. Fake Marketing

One newspaper, two different messages. No news there though.

On the one hand, we read a column with the media pundits crying that it’s no time to abandon your brand; consumers are consuming more media than ever; engage your customers… So, we end-up with advice like this:

“But we know that Australians are spending in retail, grocery, pharmacies and online as such FMCG (fast-moving consumer goods), pharmacy, local/state and federal government, health advice and online retail should be very active in media spend now,” said Mr O’Brien, chairman of Atomic 212, Australia’s biggest independent media agency.

This won’t make much sense to the well trained, commercial marketer. They don’t need to be active when consumers are facing limited availability in channels; high demand; pressure from the retail duopoly (= low margins); and constrained manufacturing and distribution. It’s just further evidence of how out of touch most on the Agency side are with marketing as a profession. That’s not saying they aren’t awesome at their element of the communications discipline.

And I keep hearing the same old, same old being pedalled:

“History shows companies that keep investing in their brand in down times cannot only build market share but are also best positioned to come back fast when better times return.”

Really? I’d love to see the evidence of this for the majority of brands in the market and not the minority with the balance sheets to pull it off. Yes, consistent investment in Brand matters. But not at the expense of the balance sheet and not with the same message pre-crisis.

Moreover, there are plenty of examples of companies navigating out of a crisis specific to them. BP, Ford, Exxon come to mind. It’s a different territory managing a crisis of such scale and profound impact as Covid-19. This will result in massive change. Not a return to a new normal such as that we saw post GFC.

On the other, a column, written by my favourite marketing opinionator – Mark Ritson – pointing out rightly that communications are just a fragment of what marketing is, and that marketing needs to get back to its core functions in a time of crisis. Actually, all the time. Nail pricing. Refine product and propositions. Rethink packaging. Drive to new channels.

Mark is right. The media pundits are wrong in absolute terms, but right if that fits with your strategy.

“In reality, brands should be occupied with a bigger mission: selling stuff. The pandemic is a massive societal threat.”

The example of Uber Eats developing new propositions and rethinking how it engages with local restaurants is spot on the money. So much better than running platitudes about being here to help. The real work for Marketers right now is the real work around the other Ps.

  • Learned

We’re all flying blind

Research into CMO’s views tends to humour me more than enlighten. It mostly tends to be out, based on what I am hearing, by some order of magnitude.

The latest from the CMO Council falls nicely into both the humour and out by an order of magnitude category. Here are a few snippets:

  • 84 per cent of global marketers expect the pandemic will multiply business disruption globally. OK, so what are the rest thinking – there either in self-isolation on a mountaintop or in denial?
  • 90 per cent expect to make changes to their marketing plans. Again, what is the remaining 10% thinking?
  • 66 per cent said they don’t have enough real-time visibility and insight into the pandemic’s impact across both the demand and supply chains. That should be like, 100%.
  • 69 per cent are not satisfied with the quality, timeliness and usefulness of decision support data. Again, should be 100%. It’s not that the functions providing the data are failing, it’s just they are living with VUCA as well.
  • Marketers feel they’re addressing customer consternation and concern extremely well (36 per cent) or moderately well (56 per cent). “Feeling” isn’t a fact. What do customers think? The many marketers I’ve spoken to are struggling with how to communicate in a relevant and authentic way, and to scale communications when all the resources they depend on are shutting down.
  • Two out of three said they’re safeguarding employees and support staff extremely well, and 27 per cent moderately well. I’m hearing real concern amongst marketers for their people. Not in terms of whether they are communicating well or not, but rather, whether there will be jobs at the end of this.
  • Nearly 60 per cent expressed moderate confidence in their company’s contingency, containment and recovery plans, while 31 per cent are extremely confident. I’m seeing this skew massively by sector. In banking, high confidence – they are built to weather crisis like this. In travel and hospitality, much less so. In non-essential retail, 100% aren’t. The industry matters greatly. Homogenizing data produces a false result.
  • Nearly half of marketers are bracing for marketing spending cuts. Another 26 per cent don’t know what’s going to happen. Bracing for cuts is right up there with “hope as a strategy”. The best marketers I am talking to are taking a leadership stance in reshaping and remodelling budgets to reflect demand models and architecting a strategy for the next three months, and alternate strategies for beyond that. The budget should be a by-product of strategy.

Your thoughts?

To view an infographic on the data, click here.