An Olympic Anthem Made To Stick

The New York Times had an article today on successful and failed commercials from the just completed Olympics. I eagerly read it because I wanted to see what they said about the one commercial that I liked so much that I actually rewound it (using Tivo) and watched it many, many times. And I actually stopped my Tivo (an act that should be a metric of marketing success) whenever I spotted this commercial while fast-forwarding through Olympic commercial breaks. Not only that, I searched for the commercial on YouTube and watched it again. Not only that, I found the original source for the commercial and watched that again. Surprisingly, Stuart Elliott, the NYTimes article’s author, didn’t mention the commercial at all in his article on memorable commercials during the Olympics. So I will.

Nike’s United We Rise commercial takes film of Marvin Gaye singing the Star Spangled Banner at a 1983 NBA game and intermixes it with footage of the American Olympic basketball team preparing for the games. The effect, for me, was mesmerizing.

The appeal of the commercial, of course, is Marvin Gaye. To be able to take a national anthem and make it so different, so soulful, and so memorable is stunning even today. I can’t even imagine what the reaction was in 1983, although I know that Jose Feliciano almost ruined his career doing something similar at a baseball game in 1968.

What makes the Nike commercial so memorable? Let’s consider it within the context of Made To Stick, one of the more insightful commentaries on marketing of the past several years. In their book, Chip Heath and Dan Heath (brothers, one of whom is a Stanford Business School professor) outline the qualities of what makes a message (or commercial) sticky—what makes people remember a message and want to tell others about it, or in my case want to watch it over and over again.

The Heaths identify six characteristics that make a message sticky. Let’s examine the Nike commercial with these principles in mind:

  1. SIMPLICITY. The commercial’s message is simple enough: Gaye brought greatness in his own way to  honoring America, and the Redeem Team is going to do the same, in a way that will be memorable for ages. With style, and with a whole lot of coolness.
  2. UNEXPECTEDNESS. Needless to say, associating Marvin Gaye singing the national anthem with the Olympic basketball team was quite unexpected. Check.
  3. CONCRETENESS. Well, I’m not so sure what’s concrete about this commercial. Certainly it’s meant to embody Nike’s Just Do It, but without knowing that slogan already one would have a difficult time pulling that from the images. I’m going to rule that the commercial doesn’t capture this principle.
  4. CREDIBILITY. I believe that part of what Gaye brings to this commercial, believe it or not, is credibility to the USA basketball team. Gaye was a world-famous music icon who had recently had a hit with “Sexual Healing”, yet he chose to open an NBA game with a moving rendition of the national anthem that was as likely to hurt as help his career. Gaye took an American-born music genre and honored his country by applying his incredible talents in that genre to his national anthem. The American team had the ability to take an American-born game and apply their incredible talents in that game to honoring their country. The question pointed towards the USA basketball team as they entered the Beijing Olympics was whether they’d put their NBA stardom on the shelf during the Olympics and focus on representing America against the best of the rest of the world to the best of their ability. In today’s star-driven society, it’s easy to imagine a Kobe saying, “What’s the point? I’ve already achieved greatness in the greatest basketball league in the world.” Well, let’s consider what Marvin Gaye would say to that…
  5. EMOTIONS. Music has a way of touching people’s emotions unlike any other art form. Not only was Gaye’s performance masterful, when have you ever heard a national anthem transformed into a pop-art-form performance that preserved the spirit of the original anthem? There’s a reason that some of the most memorable (sticky) commercials have featured memorable music. Recent JC Penny commercials come to mind. This VW commercial from several years ago is said to have caused the significant posthumous revival of Nick Drake. And, of course, there’s Apple’s iPod commercials.
  6. STORIES. Well, there isn’t a strong narrative here. The message is more implied, as I’ve outlined above. I’m ruling that they didn’t meet this one as well.

So, that’s four out of the six Sticky principles achieved by this commercial. Not surprising that it stuck with me.

Given the nature of this blog, I’m forced to consider: was Marvin Gaye’s performance innovative? Given the requirement of economic value that many of my innovation colleagues require for something to be considered innovative, I suppose not. This Nike commercial, however, undoubtedly is.

Todd Mintz has a wonderful recount of his attendance at the NBA game in which Gaye performed. Below is the 60–second Nike commercial that I watched so many times on my Tivo (there’s 150 second version available on YouTube as well). And below that is film of the original Marvin Gaye performance. Enjoy.

Nike ad:

Original performance:

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Read This Post for Free!

FreePeople often make irrational decisions when money is involved. They’ll go out of their way to save 25 cents, say by driving around and around looking for a parking meter with time remaining, yet immediately after blow that much and more without a thought ($4.50 for a latte, anyone?).

Dan Ariely explores such irrational behavior in his book Predictably Irrational. Ariely is a business school professor at MIT, and much of the book describes simple yet ingenious experiments he’s conducted that demonstrate over and over again the consistently illogical behavior of people when making choices. This field of research, known as behavioral economics, stems from the ground-breaking research of Daniel Kahneman and Amos Tversky’s that won Kahneman the Nobel Prize in economics (I’ve been citing Kahneman for years in my talks on cognitive attention and effort, but it seems that every week for the past year I’ve read Kahneman’s name referenced in a different news story, book, or magazine article. Behavioral economics seems to be the hot topic these days). Ariely’s experiments demonstrate the fascinating ways in which people repeatably make decisions that appear to be contrary to common sense.

Ariely details, for example, the powerful allure of something being free. People’s choices change dramatically when items change from being effectively free (costing one cent, for example) to being actually free (costing zero cents). For example, he tells how Amazon’s customers bought more books on average once Amazon started shipping for free on purchases greater than $25—the increase in customer spending far exceeded the amount that they were saving on the free shipping, but they gladly spent more on books to get shipping for free. More puzzlingly, Amazon saw this behavior exhibited worldwide except in France. Was this because the French were more logical in their purchasing behavior? No. The country manager in France decided not to make shipping free but to reduce it to one franc, or 20 cents, which wasn’t a small enough shipping amount to change people’s purchasing behavior. Is 20 cents really a significant amount when buying a $20 book? No. Is a shipping cost of 20 cents effectively the same as 0 cents? For most people,yes. But when the manager in France reduced Amazon’s shipping charge from 20 cents to Free, French customers suddenly increased the amount of books they purchased per order by the same amount as the rest of the world.

The reason that I am writing about Predictably Irrational is to contest an explanation that Ariely gives for his first example, and one of the most interesting, of irrational behavior. In the example, Ariely describes an offer that I’ve seen before but never understood, which made me even more interested in his explanation (and my alternative one).

Ariely noted an ad in the Economist magazine that offered three different types of subscriptions:

  1. an electronic subscription for $59;
  2. a print subscription for $125;
  3. a print and electronic subscription for $125.

That’s right, the price for a print-only subscription was the same as the price for a print&electronic subscription. Why would they bother offering the print-only option when it was clear that no one would select it because they could get both the print&electronic versions for the same price? Being the good researcher that he is, Ariely decided to run some experiments to determine if there was a reason why the Economist made this offer (Ariely’s ability to set up simple experiments to provide insight into unusual behavior is fascinating).

Ariely asked two different groups of students to make a selection among a choice of Economist subscriptions, but each group were given a different list of options. One group was given the same three selections that the Economist offered. The percentage of students who selected each option was as follows:

  1. electronic: 16%
  2. print: 0%
  3. print&electronic: 84%

No one chose the print-only option (not surprisingly). This begs the question of why one would offer that option at all (the same question that motivated this experiment).

For the second group, the unchosen print-only option was removed and only the electronic subscription and print&electronic subscription were offered (still priced at $59 and $125, respectively). One might expect results similar to those from the previous group (16% for electronic and 84% for print&electronic) since there wasn’t any interest in the print-only option that was removed. The results for this second group were as follows:

  1. electronic: 68%
  2. print & electronic: 32%

Without print-only as an option, the number of people interested in the print&electronic option dropped from 84% to 32%! In other words, by offering an option that no one wanted, 52% of the people changed their preference from electronic-only to print&electronic at a $66 higher cost. What’s going on here?

Ariely’s explanation was that people need a basis for comparison when evaluating whether a deal is a good one or not, and from this comparison they make their decisions. With a similar item for comparison, they can assess the value of an item and determine whether that item is a good or bad deal. He gives a couple fascinating examples where the choices that people make are biased by the presence of a similar and inferior alternative. If people are choosing between A and B, they will choose A more often if there exists a third alternative similar to but inferior to A, and they will choose B more often if there exists a third alternative similar to but inferior to B. Having that third alternative allows people to say to themselves, “I can’t judge whether A or B is a better choice, but I know that A is better than this similar third alternative, so A must be a good deal.”

Ariely suggests that this is why the selection for print&electronic is high when print-only is offered for the same price—the print-only option gives people an alternative from they determine that print&electronics is a better deal, and that drives their choice.

I believe, however, that there’s another possibility for these results: people are more likely to select the print&electronic option in the presence of a print-only option because of the Free phenomenon. Let me explain.

Ariely’s explanation is partly correct: in the absence of knowing the cost of the print-only subscription, people cannot judge whether the combined subscription is a good deal or not. Maybe print-only was $66, and the cost of print&electronic was simply the sum of the costs of the individual subscriptions ($59+$66=$125). Or maybe print-only was $100 and getting the combined subscription would save $34. Or maybe print-only was also $50 and $125 for print&electronic was a rip-off. No one can tell whether both together is a good deal in the absence of a print-only option—in that, Ariely is correct.

The fact that the print-only and print&electronic options are priced the same, however, suggests another explanation for the large difference in behavior between whether or not the print-only option is offered. Ariely made the convincing case later in his book that getting something for free can have a hypnotizing allure on people’s decisions. Providing a print-only option at less than $125 probably would not be enough to drive such a large percentage of people to change their selection from print-only to the more expensive print&electronic option—the print-only option had to be priced at exactly same same price as print&electronics so that the electronics version was free if they chose both. It was the identification of something free that made such a large percentage of people select the print&electronic option. This is similar to the phenomenon observed by Amazon: 20–cent delivery didn’t change behavior but free delivery did. Given the convincing case that Ariely made for this free effect, one would probably have predicted that people would switch their decision from the electronic-only option to the print&electronic option when they discovered that the latter choice would get them the electronic version for free.

So, now you know why so many ads offer free cheap items if you purchase an expensive product A free month of HBO if I get the Lifetime Triple Gold package of cable—sign me up!

Cognition Boom

In August I spoke at the major hearing aid conference of the year, the International Symposium on Auditory and Audiological Research. What struck me at this year’s meeting was the preponderance of talks on cognitive issues. Two years ago, there were less than a handful of people presenting at these conferences on cognition and hearing loss or hearing aids. Now, it’s starting to become a dominant topic at conferences, and I’m more often hearing from PhD students who are basing their dissertations in this broad area.

I’ve posted before on the emergence of cognition as a major theme in many areas. Earlier this month, I was at a conference on Aging and Speech Communication, where the focus was on how how changes to cognition and hearing from aging affect communication ability. Several research presentations made clear that older subjects are more distracted by irrelevant information and were less able to ignore this information than younger people. When conducting tasks on a computer screen, the older subjects were less able to do the task when there were many items on the screen, and benefited more than younger subjects did by a clean and simple graphical user interface. Similar findings occurred with other modes of information.

This kind of research has huge implications for companies producing products for the older crowd, targeting the aging population of America. Several social networks targeted at the aging population have sprung up (Boomj, where customers must be too old to be worried about the “bj” favicon; Eons, which has the trademarked search engine cRANKy), and Facebook has been invaded by the post-college crowd who probably find the interface a little busy. A company that develops an understanding of how different age groups process information will provide an advantage over competitors that think the only change that needs to be made to such networks is content: Taking a social network designed for younger people and adding an obituaries section and a place to post photos of grandkids isn’t going to cut it. Tools that measure visual clutter or screen complexity could likely identify sites doomed for failure among the older crowd.

Certainly, an understanding of the unique cognitive demands and capabilities of the older population will be necessary for businesses targeting that market. In any business with targeted customers types, I expect that companies will begin to hire cognitive scientists as consultants and employees as they seek to understand their customers better. While User Experience Designer is a hot role in companies today, we could see User Cognition Researcher as the hot position of the future.

The Physics of Pricing

The Associated Press had a great article that I read today (in the SF Chronicle) on the use of advanced mathematics to help determine product pricing strategies. So-called price-optimization tools from companies such as Khimetrics (acquired by SAP) and Zilliant analyze massive amounts of historical sales data to find clues for better pricing that would be difficult to discern without their sophisticated models. (These software systems cost in the 7–figures—assuming that Khimetrics&Zilliant apply their own analysis to their own pricing in a kind of post-modern self-reflexive business analysis, their customers must be hugely self-conscious about the “optimization” of their bill).

PhysicsThis whole field of analysis in part began, according to the article, when Khimetrics’ founder, Ken Ouimet, was studying complex systems in a university Physics department and he epiphonied (which should be verb) that shoppers have no more sense than a hydrogen atom (or something like that). Next thing you know, mathematical models developed to simulate the motion of atoms in gas are being used to model the purchasing behavior of beer-and-Doritos-buying consumers.

The article and its sidebar have several interesting examples of the successes  of these systems. The systems determine, of course, which products have price elasticity and which don’t. That’s not necessarily difficult for experienced retailers to figure out. What is difficult is to fine-tune pricing on a huge inventory of widely differing categories of products with barely discernible differences within categories.

What’s even more interesting is their analysis of relationships between products and subsequent recommendations to exploit correlational behavior. Beer drinkers, for example, will pay careful attention to price when buying their brew (“10 cents cheaper? Mickey’s Big Mouth for me!”) , but will snatch up snacks to go along with the beer with little concern for cost. So, drop the margins on beer and crank them up on Cheetos—balance this adjustment correctly and you’ve just increased your bottom line.

And guess what? Those consumers care even less about price during big sporting event weekends—turn the pretzel-price up even higher during NCAA Tourney action! Increase the price of mint leaves during Kentucky Derby weekend and you’re golden. Who would have thought that sophisticated mathematics could improve the profitability of such unsophisticated businesses as Safeway’s and Albertson’s.

Personalization/Individualization is a consumer theme that has hit practically all consumer markets, with the extreme perhaps being the ability to completely customize your Nike shoes online so that no other shoe in the world is identical to the pair that you buy. This is normally viewed as empowering for consumers: a good thing.

Consider now the logical continuation of price-optimization. With store cards (e.g., Safeway cards) that people use to take advantage of item discounts, companies are amassing large amounts of personal information that can be correlated with buying habits. Cross-correlate this data with other databases that can be purchased from other sources, and the ability to personalize pricing becomes incredible once price-labeling become easily and quickly changeable (be afraid when grocery store prices are shown with LCD displays).

Herein lies the dark side of too much power from too much information.

Your price-optimization consultant tells you that students coming back from the bar after midnight don’t care too much about the price of frozen pizzas? Nudge those babies up by 15 cents every late-evening and watch your profits climb. Obese people less sensitive to the pricing of chocolate truffles? Put a weight sensor in the gourmet candy aisle. Mercedes drivers less discriminating towards wine prices? Do I really have to spell out for you what to do?

The AP article I mentioned at the beginning of this post predicts that store prices will become more like the mystical pricings of airplane tickets, and I doubt many consumers will relish that thought. Have you ever heard anyone say they wish other businesses priced their products like the airline industry? Where two people sitting beside each other who bought their tickets on the same website pay wildly different prices because their purchases were on different days? Imagine that you are in the register line at Virgin Records with the latest Bond DVD in hand, and the person in front of you buys the same DVD causing the price of your identical DVD to increase by $1. Welcome to the world of airline pricing strategy!

The days of setting prices based on a fixed margin, on prices from competitors, or simply on an incremental increase over last year’s prices is becoming a fading, quaint tradition. Welcome to the Machine.

I sound cynical, yes. But still…

I have to appreciate the evolution of process sophistication. Of modern thinking challenging and overcoming the wisdom of experience (goodbye Willie Loman). This is the essential nature of science, of business, of innovation: new ideas obsoleting the currently accepted lore. I particularly like seeing advanced mathematical theory being applied to such innocuous business processes as the pricing of ketchup. Luddites take note!

Truth be told, I’ve always had a warm spot towards the practical application of esoteric mathematical theory. In fact, since my college days I’ve had a warm spot towards the mathematical discipline of Information Theory (welcome “information theory” googlers!), probably because I tried a long time ago to apply it to neural signals and failed completely (but others eventually succeeded).

Information theory tells us, well, how much information is in something and how much information can be transferred by a transmission channel. How informative is the weatherman in San Diego when all he predicts in every forecast is that the weather the next day will be sunny and in the 80s? Even if is accurate 95% of the time? Information theory would tell you that his information content is low because there’s not much information in declarations of a near sure thing (Listen and be astounded: I am here to tell you that you will take a breath in the next 60 seconds! See?! How amazing is that?).

That being said, my prediction is that the next New Thing in business/marketing will be an information theoretic approach to marketing. Some marketing channels will be proven to have much more information capacity to target consumers than others, and the capacity of each channel will be calculated to the nearest bit, allowing companies to charge millions of dollars for advice on which channel will provide the highest information ROI for your marketing message. Advertising a NASCAR race on American Idol, or promoting hearing aids in Mad Magazine? That’s less than 1 bit of advertising information. Advertising for either product in Golf Magazine, however—that’s called maximizing your channel capacity.

Informationtheory.com is already taken. Marketinginformationtheory.com is not. What’s your guess on how long until all of the latter’s related domains are taken?

JC Bacharach

I haven’t seen many commercials since getting my Series 1 Tivo many years ago, but for some reason I stopped during a recent commercial break to watch the commercial embedded below. I recall some research showing that well known musical pieces can be recognized within one second, and perhaps that’s why I stopped on this commercial: I heard the first second of the music.

The commercial is astonishing in that it is for…wait for it…JC Penny. Not a brand known for its hip/cool image or fashion. This commercial, and a series of other ones, presents a striking new image and speaks to the power of creativity in marketing and its ability to change the perception of a low-quality product/merchant.

For some reason, this campaign resonates with me. Maybe because of the focus in this commercial on classic movies, which definitely has a place in my life, but for sure because of the use of Burt Bacharach music, one of the two greatest songwriters of the latter half of the 20th century (any guesses on who the other is?).

Oh, and a different JC Penny commercial features this other sprightly song as well:

http://www.myspace.com/foreverthursdaymusic

Edit May 3, 2007:
For those of you looking for information on the song used in the new JC Penny commercial that premiered tonight during Grey’s Anatomy, the song Only You is performed by Joshua Radin and is on his new album. You can hear a clip on his official website.

Oy, I’m a Mac

I snapped this photo today of a poster ad with my cellphone while in a London Tube station. Looks like the Apple vs PC characters are a little different in England than in the US. In my opinion, the PC guy doesn’t look as nerdy as the American version, and the Mac person looks more like a footballer than a Gen-Y hipster—he’s more likely to beat you up than help you download cool tunes. In fact, it looks like the Mac bloke is about to give the PC chap a right good thumping!

MacPc

Hobson, Alert the Media!

Dollars
I was watching Tivo on my Sony TV tonight while browsing the TechCrunch and The Loose Wire blogs on my Dell D600 laptop when what I read almost made me gag on my deliciously chewy Snickers bar. Apparently, some bloggers are being paid to promote products in their posts! I chugged a hit of pure energy from my refreshing Red Bull and read on.

PayPerPost.com is linking advertisers to bloggers with Maxim-like lubriciousness. Bloggers can find advertisers on the PayPerPost site who are offering to pay bloggers if they link to a site or review a product, and are sometimes only offering to pay if the blogger’s product review is positive. Thinking that I could learn more, I clicked on a graphic that declared “Easiest. Money. Ever.” on the TechCrunch site, but it only took me to a website trying to sell advertisements to bloggers.

I paused my Tivo, just when I was about to find out which team on The Apprentice was going to win the contest to create the best XBox 360 display at a Wal-Mart store, so that I could focus more on the story that laid beside the Intel Xeon Inside ad. I was shocked, shocked to find out that any of the 40 million bloggers out there would modify their content for money.

Seriously, buyer beware. This isn’t a case of “you get what you pay for,” because many of the free blogs that I read are of excellent quality and present trustworthy opinions. Still, don’t be naive, read with a critical eye. Would you be surprised to find out that people blog to promote their agenda, their book, their company, their friend’s company?

By the way, what are people being paid to blog about by these shameless capitalists? Looking at the PayPerPost list of opportunities, it looks like I could get $5 to post 50 words about public transportation, $5 to post 20 words about the TV show Hell’s Kitchen (which is god-awful…does this mention qualify me for the money?), and $10 to post 20 words about the May 20 release of the Spider Man 3 movie (damn, three words short…wait, now I’m over the twenty word requirement!).