How Irrelevance Serves Monopoly

In the United States, our overclass has used its ownership of politics to prevent serious regulation of communications infrastructure, to say nothing of public ownership. As a natural result, we get the highest prices and worst services in the supposedly developed world.

Of course, a small part of the gargantuan cash geysers the overclass reaps from such a sweetheart set-up is used in marketing the overpriced, inferior products underlying its profit ranches.

Having no rational product differences or genuine technological breakthroughs to describe, such marketing is always mere empty manipulation.

Consider this perhaps familiar example:

How, one might wonder, could such unfunny and ham-handed irrelevancies be profitable to AT&T? What’s the business rationale? Is AT&T stoned?

Turns out, as always, not in the least.

Per an Ad Age story titled “How Big Data Shapes AT&T’s Advertising Creative,” there’s rather rigorous method to the apparent superfluity:

It’s Not Complicated” may have been its name, but the insights that drove one of AT&T’s most successful ad campaigns ever were based on a massive three-year big-data project that was plenty complex.

The campaign featuring comedian Beck Bennett and little kids in a classroom was the product of a three-year project. It involved an analysis of 40 copy-test variables and tagging 370 AT&T and competitive wireless communications ads on everything from the type of humor used and how characters interact to type of storyline.

The BBDO-created campaign that resulted from the analysis generated an additional $50 million in sales in AT&T’s estimation, said Greg Pharo, director-market research and analysis for the telecom in a presentation at the Advertising Research Foundation’s Re:Think 2014 conference in New York today.

Here’s how that happens, per Ad Age‘s report:

Mr. Pharo and AT&T Senior Data Scientist Damon Samuel, who made the switch from working on the telecom company’s marketing-mix analytics team to working on the project, delved into sometimes surprising details about what works and what doesn’t in their ads and those of rivals. Among the lessons:

-Ads with storylines are very effective

-Informative demonstrations boost ad performance

-Simple outperforms complicated

-Slice-of-life and transactional or promotional ads can both work

-Humor is effective at driving recall, brand favorability and likeability, but not all types of humor are equal

-Character interaction matters a lot

Of course, some of those lessons have guided TV advertising since Mrs. Olsen was pouring coffee for Procter & Gamble Co. and Folgers in the 1960s. But AT&T’s analysis has helped delve deeper into exactly how elements work, particularly humor.

The team, along with its market-research shop Added Value, painstakingly code commercials for such things as the type of humor. And they found, according to Mr. Pharo, that ads featuring humor deemed clever, sarcastic or snarky tend to outperform ads with silly humor (though Mr. Samuel noted that ads with darkly sarcastic humor tend to underperform).

While ads with storylines do better generally, those with complex storylines, too many scenes or vignettes and complicated visual montages “underperformed very significantly,” Mr. Samuel said. “Thirty seconds is just not enough time to share all the story elements and come to a resolution.”

Particularly effective are ads with informative presentations when a character explains the benefits and presentation of a product, Mr. Pharo said.

While people demonstrating product benefits works, just showing phones and benefits, or what Mr. Samuel termed “phone porn,” doesn’t. At best, such primitive product demos drive a shift in the mix of handset types sold without increasing total sales.

The rewards for AT&T are substantial, Mr. Pharo said, with the project showing that 25% of AT&T’s total sales are driven by media advertising and 10% from TV alone. Creative quality and tonality rather than media weight or placement account for a third of TV ads’ impact.

Such are the building blocks of our market-totalitarian culture.

Comcast Monopoly: The Marketing Logic

Per today’s Advertising Age:

Acceleration of addressable advertising

One of the biggest obstacles to ad targeting at the household level has been a lack of broad reach, which makes running campaigns across multiple operators a clumsy and inefficient effort. The merger should eventually help expand the addressable universe to the kind of scale that advertisers desire and speed up advances in areas such as dynamic ad insertion.

And increasingly, Comcast will have the data to make addressable smarter. With about 30 million set-top boxes, it will have an even bigger trove of ratings information, viewing habits and personal data. Combined with marketers’ own data, that will help planners and buyers laser focus their media selections, Mr. Kanefsky said.

Holy Grail

Untitled Now we [again] see the violence inherent in the system. Here’s the meat of a new Ad Age story on the expanded powers marketers are about to gain from the forthcoming launch of a new generation of TV gaming consoles:

Holy grail

“We are trying to bridge some of the world between online and offline,” [a Microsoft VP] said. “That’s a little bit of a holy grail in terms of how you understand the consumer in that 360 degrees of their life. We have a pretty unique position at Microsoft because of what we do with digital, as well as more and more with television because of Xbox. It’s early days, but we’re starting to put that together in more of a unifying way, and hopefully at some point we can start to offer that to advertisers broadly.”

Xbox One can essentially work like TV that watches you, bringing marketers a huge new trove of data about what’s going on in living rooms, including, as one marketer put it after the speech, unprecedented information about how people engage with TV advertising.

Biometric responses

Given that Xbox 360 has sold more than 78 million units, if even a fraction of likely Xbox One users could be persuaded to share data, the technology could create the world’s largest panel for measuring biometric responses to advertising.

The new generation of Kinect technology in Xbox One can distinguish up to six voices in a room, respond to voice commands, read skeletal movement, muscle force, whether people are looking at or away from the TV and even their heart rates, Mr. Mehdi said. The latter happens as the camera detects slight changes in skin tone related to dilation of a blood vessel in the eyeball that responds to heart rate, Mr. Mehdi said.

In a feature that was controversial among some users, Microsoft originally said that the Xbox One would have to be connected to the internet and Mircosoft’s servers at least once every 24 hours to function. After consumer outcry, Microsoft backed down. It also dropped its original plan to require that Kinect technology always be on for the console to work.

If You Must Shop…

…turn off your phone.

Helpful story in The New York Times today about the progress of corporate capitalist behavioral tracking. Lowlights:

Nordstrom’s experiment is part of a movement by retailers to gather data about in-store shoppers’ behavior and moods, using video surveillance and signals from their cellphones and apps to learn information as varied as their sex, how many minutes they spend in the candy aisle and how long they look at merchandise before buying it.

RetailNext, based in San Jose, Calif., adds data from shoppers’ smartphones to deduce even more specific patterns. If a shopper’s phone is set to look for Wi-Fi networks, a store that offers Wi-Fi can pinpoint where the shopper is in the store, within a 10-foot radius, even if the shopper does not connect to the network, said Tim Callan, RetailNext’s chief marketing officer.

The store can also recognize returning shoppers, because mobile devices send unique identification codes when they search for networks. That means stores can now tell how repeat customers behave and the average time between visits.

RetailNext also uses data to map customers’ paths; perhaps the shopper is 70 percent likely to go right immediately, or 14 percent likely to linger at a display.

Cameras have become so sophisticated, with sharper lenses and data-processing, that companies can analyze what shoppers are looking at, and even what their mood is.

For example, Realeyes, based in London, which analyzes facial cues for responses to online ads, monitors shoppers’ so-called happiness levels in stores and their reactions at the register. Synqera, a start-up in St. Petersburg, Russia, is selling software for checkout devices or computers that tailors marketing messages to a customer’s gender, age and mood, measured by facial recognition.

Of course, this being the NYT, they have to conclude the report by dismissing its meaning. Hence, they end by quoting an über-odious mommy-marketer:

“I would just love it if a coupon pops up on my phone,” said Linda Vertlieb, 30, a blogger in Philadelphia, who said that she was not aware of the tracking methods, but that the idea did not bother her. Stores are “trying to sell, so that makes sense,” she said.