November 2007 Archives

I like this piece in The Economist on Facebook's audacious new advertising plan -- and not just because it quotes me. Rather, the writer took seriously one of my long "there's nothing new under the sun" disquisitions that most of my friends and colleagues ignore. In this case, it's that today's social-networking and -marketing phenomenon is not at all novel. Rather, it derives from research done by two of the 20th Century's leading media theorists: Paul Lazarsfeld and Elihu Katz.

Lazarsfeld (pictured at right) was a famed emigre sociologist from Germany and Katz his student at Columbia University when they did the work that led to their pioneering 1955 book, Personal Influence. The book challenged a reigning theory of media influence: that mass media "work" directly, by injecting ideas into the minds of relatively isolated people. That notion was -- and still is -- almost reflexively accepted by anyone who has worked in or around media, marketing, and advertising. "Our programs and ads," we believe, "forge peoples' opinions." It is a tenet deeply-held by copywriters and anchormen alike.

Lazarsfeld and Katz showed that this "Magic Bullet Theory" was inaccurate. An earlier Lazarsfeld study had shown that only some 5 percent of Presidential voters had their opinions shaped directly by media messages. Together, the two scholars showed that media work more indirectly, through social influence. They identified a "two-step flow," by which media messages reinforced what people heard from others in one or another of their communities. These social influencers are, in the Lazarsfeld and Katz formulation, "opinion leaders."

Many of the assumptions that still drive modern marketing mavens were overturned 50 years ago by the two professors. Receiving a message does not imply responding to it, they showed. Moreover, top-down influence generally is fairly benign. People belong to numerous communities, and are influenced in different things by different opinion leaders. But just try telling that to a high-priced creative with a killer reel. It seems the world rediscovers personal influence every few years or so -- in the form of "word of mouth marketing," "brand advocacy," "guerrilla marketing," and "brand zealotry" -- only to forget it the next time a fabulous, award-winning ad campaign or a depressing, mud-slinging political campaign comes slamming down the airwaves.

The Facebook notion of defining the world's "social graph" -- "the network of connections and relationships between people on the service," in Facebook founder Mark Zuckerberg's phrase -- and deploying it in the service of marketers is the latest marketing spin around the half-century-old work of Lazarsfeld and Katz. (That's Katz at left.) What's changed, of course, is that when Lazarsfeld and Katz were writing, the only scalable communications tools available were mass media, notably the new phenomenon of television. Today, social networking sites of enormous reach -- larger than television's, because they have instantaneous global scope -- allow opinion leaders to shape attitudes in communities far and wide... and near and narrow. That's the promise underlying Facebook's notion to "marry an ad message to a user-initiated endorsement of a product or service," as Ad Age put it.

But Lazarsfeld and Katz bear re-reading, and not just for Silicon Alley cocktail party one-upsmanship. The importance of personal mediation means that television, radio, and print communications have always been filtered in ways their creators could not necessarily predict. The old saw that "nothing will kill a bad product faster than a great ad" is an example of this, although few practitioners recognize it. Today, with the Internet allowing all manner of influencers to wield their opinions in any way they choose, the relationship between the constructed campaign and its eventual effects is even more unpredictable.

In fact, it will take a supremely clever ad agencies and consumer marketers with strong stomachs to test themselves against the backlashes that seem all but inevitable. For if there's anything that might unravel your personal social graph, it'll be too many personal ads and endorsements tearing through it. The results might look like a book written by Dale Carnegie's evil twin: How to Lose Friends and Not Influence People.

A day before the always-stimulating Google Zeitgeist conference at the search-engine giant's Mountain View campus a few weeks ago, I had the privilege of participating in a day devoted to advertising agencies and marketing inventiveness. My role was simple: I was to moderate to panel on innovation, featuring five pioneering interactive companies, all of them, in their own ways, direct or indirect competitors. The panelists were Tim Armstrong of Google, Randy Falco of AOL, Brian McAndrews of Microsoft, Mike Murphy of Facebook, and Michael Barrett of MySpace.

But as we prepared for our two-hour session, I was worried. As much as our hosts wanted to talk about innovation, there was, I knew, an elephant in the room: industry consolidation. Microsoft's acquisition of aQuantive (of which Mr. McAndrews had been the CEO), Google's pending purchase of DoubleClick, the rise of social networking, the mainstreaming of digital video, to name just a few trends, were generating apprehension across the marketing-media value chain. The concern was captured in the now-famous term the WPP Group's Chief Executive, Sir Martin Sorrell, applied to Google at the Zeitgeist conference just one year before: "frenemy."

“We must show a willingness to address consolidation, disintermediation, reintermediation, ‘frenemization,’ and all manner of these Latinate concerns,” I suggested to my fellow panelists, “else we'll be accused of ducking.” All readily agreed.

Came the panel. Finished with introductions, I turned to the table of 10 advertising-agency executives -- an assembly of the most accomplished men and women in the business, gathered from creative agencies, media agencies, diversified services agencies, regional agencies, and global agencies -- and put the matter to them. We will address everything that interests and concerns you, I said, but what would you rather take up first: innovation or consolidation?

The immediate reply: “Innovation.”

And no matter how many times I tried to bait the agency executives, no matter how many times I tried to get them to start a “frenemy” discussion, they just would not rise to it.

"You must understand," said one, "that we understand what's happening to the landscape, and while there are obvious concerns, we really need to know more about the opportunities. What we want to know most is how you can help us build value for our clients."

“Our every move is being tabulated, tracked and sold to the highest bidder,” Jeff Chester, the executive director of a Washington anti-advertising organization called the Center for Digital Democracy, said ominously at the opening of the FTC “town hall” on online behavioral targeting.

Yikes! Really?

As I sit through this FTC presentation, I’m reminded that American consumer culture – a backbone of U.S. economic growth from the beginnings of the nation – has long been paralleled by a smaller but quite vocal anti-consumerist tradition.

The first tendency is known to all of us, and has long been recognized. Alexis de Tocqueville, writing in the early 19th century, observed that “without exception, travelers to the United States found the most striking feature of the American character to be the obsession with business and wealth.” This obsession manifested itself in the acquisition of goods – “conspicuous consumption,” the sociologist Thorstein Veblen labeled it.