4th Industrial revolution MARKETING #4IRM

Pillar 1 - Purpose:

I will spit you out of my mouth, because you are only warm and not hot or cold

REVELATIONS 3:16 - 18 THE BIBLE:

OVERVIEW & FORMAT

This is the second of seven posts about marketing in the 4th Industrial revolution. This post is about Pillar 1 of 4IR marketing, “Purpose”. It consists of 4 key reasons why Purpose is important to marketing and brands. The first two of these reasons are relevant at this very moment, with the remaining two reasons outlining how technology will effect the Pillar and marketing / the consumer in the future. The aim is to provide information that is useful right now for marketers and context and a road map that explains what marketers need to prepare for in the near future.

PURPOSE: Why it matters

Reason 1) THE ENVIRONMENT IS IN PERIL..

It might seem counterintuitive to start talking about the environment as a 4IR issue, but its impact on marketing is essential to understand and will become more acute as we enter the 4IR. At a functional level, the the 4IR will effect the environment through tech such as AI based vertical farming, synthetic meat, renewable energy source distribution etc, but as a marketer, the environment is going to have an increasingly important effect on politics, business and consumer behaviour. This is because, at its most basic, this is the first generation to be born knowing that if we don't radically change our behaviour, we could destroy the world we live in.

The above is a big realisation and puts into perspective why Millennials index so highly when it comes to being "belief driven" – It’s a pretty simple equation. "We are destroying the environment, causing great distress through consumption and waste so I don't want my dollars to contribute to this". Sound a bit over the top - well its not.

Have no illusions, we are at a nexus in history where circumstances are converging to ensure we re-evaluate the very foundations of capitalism, politics and what it means to be human - and this will have a profound effect on how we market products and services.

Most likely there will be a shift away from measuring success by the return on shareholders funds, to the affect the company in question has on the environment, society and "happiness" in general. Many companies are now actively leading this charge and the head of the world’s largest fund manager, Larry Fink of Blackrock, even wrote an open letter to CEOs saying he would give preferential treatment to companies that followed these values.**

For companies, this conversation will continue to filter into their marketing and they will be asked to demonstrate their purpose and have values that their customers and employees agree with.

A recent survey undertaken by EY’s Beacon Institute and Harvard Business Review analytic services*** highlights this, with 90 per cent of Executives saying their companies now recognise the importance of having “an aspirational reason for being which inspires and provides a call to action for an organisation … and provides benefit to society”, and that these companies tend to be better run and attract better staff.

The Prime Minister of New Zealand has even created a new system of evaluating how her Ministers allocate capital and are judged, its brilliant, the measurement is not just GDP. As important as GDP is, “Wellness, Empathy & Happiness” and she announced they are creating a “wellbeing budget” to support these goals.

This form of measurement and accountability will flow through our culture like a raging torrent in the next two years, brands that get onto this now will win significant loyalty from people, not because they got “points on a loyalty card” – that’s lost a lot of its power over - but because they have affected their culture positively.

Jacinda Arden - NZ Prime Minister - Discussing her “Wellbeing budget” at the world economic forum , Jan 29

Link here: https://www.weforum.org/events/world-economic-forum-annual-meeting/sessions/more-than-gdp-measuring-economic-progress

PURPOSE: Why it matters to 4IR marketing

Reason 2) Politics: the 5th “P” of marketing

There have been multiple studies showing that consumer behaviour has changed phenomenally in the last ten years and that brand loyalty has vastly reduced. We have become people who “shop around” as it has become so easy to find and compare products and services, and this has had a big effect on loyalty. In the 4IR world this situation is going to become more acute as new products and services, DTC offers and direct consumer promotions continue to increase as barriers to entry continue to decline. There is still loyalty in some categories, Mobile / Insurance / Investments but this is fast decreasing.

The landmark Mkinsey study, illustrated some startling facts about loyalty. When it came to what motivated customers to be loyal, the motivation, above rewards programmes, or even price, sat the ethical and moral standards of the company – their VALUES.

Customers were loyal if the company shared their values. even better, if they heard the CEO express opinions they believed in.

Given that churn and customer acquisition is so expensive, maintaining loyalty can be the do or die function of marketing and this is only set to become more significant, as such it makes “taking a side” or being “political” a legitimate marketing tactic as it also attracts those who believe in your cause and can make them stick with you - despite better / easier / cheaper offers. This is even more important given that being part of the “Initial consideration set” (one of the brands that you first considered before getting downstream in your purchase journey) was a major factor in the purchasing decision. In the echo chamber of social, it is much more likely that you are going to see / be made aware of a brand that reflects your culture and values than a competitor, and this is of vital importance as growth in customer acquisition and sales is significant in this set - see diagram below.

I spoke in 2015 at The Festival of Marketing about brands needing to get “political”, it made a bit of noise but was probably a little early - not any more, the time is now. But don’t expect it to be easy.

Colin Kaepernicks ads on his Twitter account for Nike - Sep 2018

Last year, I was talking with Senior members at Nike the day they launched their Coloin Kaepernick advert. This was the ad that championed Colin, an NFL player who protested about Police brutality by kneeling during the anthem at NFL games (more on that later). There was initially a deluge of negativity, people burning Nike clothing, banning it from some colleges football teams etc, and they were concerned - as anyone would be - about the effect on their brand. But they believed they were doing the right thing regardless of outcome, and contrary to much marketing journal talk, they did not do the ad as a marketing ploy. They did it because they believed in it. But they are the ground breakers, other brands will be much more prosaic about politics.

My comment to them was stay focussed, it looked bad in that moment - a 5% drop in the share price on the day - but I believed they were on “the right side of history” and the gains would come. And indeed they did, very quickly.

PURPOSE: Why it matters to 4IR marketing

Reason 3) PURPOSE AS A DEFENCE AGAINST EXTREMIST NARRATIVE HIJACKERS

Brands are being used to spread radical ideologies that fracture societal cohesion via “narrative hijacking”. A great example of this, as reported by GDS***** was extremists printing fake coupons that gave 75% off Nike products – but only if you were African American – this occurred when Nike supported Colin Kaepernick and the Black Lives Matter movement. The idea is to drag marginal people who might have had sympathies with Colin / the BLM and make them more extreme, to expand the rage on Social Media, to increase the hatred between communities and further their extremist ideology.

Sticking with the Nike theme, the below example is similar - and was identified by the company New Knowledge **** – it was an unsuccessful attempt to make the public think that Colin Kaepernick was “taking a knee” during the Anthem at American Football games to support transgender cheerleaders. This wasn’t true. He was kneeling during the anthem to support Black Lives Matter movement as mentioned above.

This attempt was unsuccessful but it’s a good example of how narrative hijacking works. See the text about “dividing the left” and “alienating normies” (who don’t want to support trans cheerleaders). The extremists are creating the memes and campaign and trying to proliferate the false narrative.

But that is nothing compared to false narratives supported and started by the Russian Government. See if you can follow this. Extremists (unrelated to Russia) wanted to accuse the NFL of being racist – see below.

According to New knowledge, the extremists hijacked the narrative, and then the Russian Government came in (through their cyber operations arm the “Internet research Agency”) and used money to buy Ads on Social channels to promote the fake ‘Associations” and propagate the false stories. Because of the ads they bought to promote the false messages, normal people then see the fake stories, pick-up on them and start to share them.

These stories then trend (because the algorithms of social platforms promote content that generates anger and engagement) and then the traditional media report on these fake stories and - et voila, its now real. I have no source data about this specific example so I cant vouch for its validity, however, what I do have is a mountain of data from the Senate Investigative committee, who had Oxford University and Graphica research Russias propaganda warfare against America, and its truly horrific

Heres a table from the Senate Investigative committee on THE Russian Governments fake sites, these are false associations created by Russia that pretended to support Black Rights, or Gay Rights, (etc) and then published false ads or supported false extremist views and directed people to vote for trump, not vote AT ALL or just spread false stories to help trump win - stories such as hillary clinton receiving money from the kkk. Have a look at the numbers of likes etc – millions of impressions and millions of shares by real people believing what they read.

These are the fake Russian sites / Associations mentioned above. “Blacktivist”, the fourth Association down, was the fake civic Association started by the Russian government that said Clinton was racist, took money from racist organisations and that the best way for Black people to exercise their rights was to “Not Vote”.

“NOT VOTING is a way to exercise our rights” (Blacktivist, 3 November 2016).

This was as reported in the “Computational Propaganda Projects report on The IRA, (The Internet Research Agency - the Russian Governments cyber operations agency) Social Media and political polarization in the US – 2012 – 2018” . This report is the singular most riveting read of my lifetime, it reveals the depth of fake news generation and substantial effect that Russia has had on manipulating our Democracy. Look at the chart below, its the volume of organic shares from the Top ten fake Russian campaigns – its astounding – its effected Democracy, its affected society and its effected brands.

This kind of activity will get worse and Purpose is one of the only defences against it as it needs real people to believe it, buy into it and share it.

The above manipulation of democracy by foreign states, plus the “filter bubbles” and lack of oversight of the major platforms algorithms and subsequent prevalence of disinformation will be the key reasons why the major tech companies will either be broken up in the next four years, or at the very least the data we marketers use to find and advertise to people will collapse as data goes truly private, owned no more by platforms, but rented to brands by individuals - and then given back - all hail the Blockchain.

This is why I encourage brands to create their own apps with social functionality now, its the only way to own data.

But I get into this in the net Pillar - DATA

deep fakes

Compounding the above are the new tech tools used to create fake videos, voices, text and “source material” to the point that its almost impossible to trace or see as fake, brands need to understand this.

Imagine a fake voice of a CEO calling the PR agency and telling them to release something BRAND DAMAGING, or a video message from a CEO to a senior exec telling him to release some information etc - this is all now highly possible.

In situations like this, Purpose helps protect the brand by making the Deep Fake too unbelievable and contrary to all their other behaviours. Nike in fact doubled down and used Kaepernick as one of the key faces of their 30 year anniversary, a hell of a move even after narrative hijacking had occurred. These kinds of brand damaging activities have only just started and big brands are easy targets.

Purpose Why it matters to 4IR marketing

Reason 4) Personal Artificial intelligence assistants will search by “Purpose”

So this is the bit that will “bake your noodle” (see if you can pick how many quotes I use from the matrix). One of the biggest features of the 4IR will be people using Artificial Assistants to help with daily life choices, but these won’t just be assistants that help us remember to buy milk. The real kick is that we will have assistants who WE OWN, who do WHAT WE BID, not owed by some global mega corp, and they will help us personalise our lives in ways we cant imagine.

In the beginning it will be Alexas and Google types, but - just like Social will move away from mega platforms, to growth in “Private”, security conscious niche platforms, so will AI assistants (I will explain that in one of the my later posts – its about data security, algorithms that are no longer controlled by the Social platforms, the falling cost of Machine learning programming and tools and the trend for micro tribes).

These AI’s will help us seek out and find like-minded individuals, content, and entertainment that we want. Content can live on the random server of a kid in Russia and your AI assistant will find it AND serve it TO YOU outside of any mega walled garden like Netflix.

An explanation of the above will be in another post but the key point here is that these AIs will help us find BRANDS… Brands that don’t just fit the bill and are the right price, no, brands that match our Values….. there will be no hiding place, no faking it. The AI will know all. If you’re a brand that isn’t environmentally friendly, or doesn’t pay staff fairly etc, or more mundane things – like the CEO supports the football team you hate.. it will know and understand.

AI’s will search for brands not simply by what they can do, but what they support, who they support. Sounds like politics – thats exactly what it will become, brands will become PART politics.

What brands choose to do, who they choose to support will transfer into politics, so I say get ahead of the game and do a Nike now, choose your Tribe, otherwise it will be forced on you, and this issue will only become more acute as tech amplifies the tools to discover your brands purpose and to manipulate consumer opinion.

CASE STUDIES

To see some recent purpose based brand activation have a look at H&Ms brand Monki and their support of mental Health with their campaign "All the feels" and the North Face and their support of women rock climbers. Or even “The Space” a new kind of retail store where every product is Purpose based, or HSBCs new campaign which points to Brexit and remainer support, which makes sense when you consider their demographic – expect to see a lot more coming your way.