Monday, 26 January 2009


There are lots of smart people out there agonising about how to make their idea viral and get it spreading out across the web. Whether they are in music, advertising, software or anything else that can spread across the web, they are thinking about this problem, and most are focusing on the proposition or the idea. Ideas are what reach a critical mass, create a dominate standard, become a web phenomena, a hit record, or a underground movie sensation. To say good ideas always trump bad ideas is generally true, but in reality its not always the best proposition that wins.

Betamax was an superior proposition to VHS but VHS still won. Dairy Milk had a superior ad campaign to Galaxy but it still lost market share (see post). The Backstreet Boys are a crap band but they still top the charts. The truth is that process is more important than proposition in a market that is made opaque by the subjective interpretation of ideas. If you get your marketing machine performing more effectively you win. That was the lesson from Betamax vs VHS.

We know from decades of studies that the diffusion of innovation is key in all of this, as shown below.

Each step in the diffusion of innovation requires its own process if it is to be successfully crossed. This means creating an experience that not only has a contagious proposition at its heart, but also has contagious processes built into it, such as: send to a friend, social bookmarking, social networks, and incentives that reward recommendation or as Seth Godin says Sneezing that infects the rest of the hive. Betamax lost because people didn't sneeze enough when they bought the product. It never developed network effects, which is a form of power you get from increasing the number of people in your network (see Metcalfe's Law).

This is why in addition to thinking about message, and medium as classically done, we now also need to think about the process, or what I'd call the modus.


Ben Evans said...

Tony - your 'proposition' vs 'process' point here is actually an extension of 'marcom' vs 'marketing'.

The reason that some bad ideas win (like VHS) is that marketing is a bigger and more all-encompassing discipline which subsumes marketing communications. My experience so far is that agencies nod sagely and say they understand the world beyond marketing communications but it is like being on two sides of the looking glass...

A slightly tortuous analogy would be to liken the two disciplines to roles within a football team:

Marketing communication is the forward line. It represents a lower total volume of a company's activity, has a higher public profile, often appears to be more important than it is, can cost more than the rest of the team combined, agents (agencies) cannot fathom why a client won't always burn their budget on it and it is capable in (rare but lauded) instances of winning a game all by itself.

Marketing on the other hand is the goalkeeper, defence and midfield combined. It is intrinsically linked to the business' strategy and it's strength comes from being realistic about operational capability.

The 'engine room' of the team, it has much more influence over how the team achieves it's goals. The best teams have the strongest foundations or leave themselves at the whim of their forward line's performance / frame of mind.

Teams who have strong defences and midfields tend to dominate possession and wear other teams down. Their value proposition is defined by their longevity - they earn respect by delivering value over the medium to longer term because they are dependable and actually deliver vs making quick and sometimes hollow promises :)

The reason VHS won is because it was more operationally capable as an 'organisational unit' of providing value to customers over the longer term, maybe but not necessarily, because it was better at communicating ideas.

Tony Effik said...

Hi Ben, thanks for your comment. I like the football analogy. Very apt with Arsenal's big game tomorrow against Man Utd.

When I say proposition I am not talking just about advertising proposition, but more broadly about marketing proposition. So on the whole I agree with you, which is why I said process is more important than proposition.Even if you have a great marketing proposition, such as betamax, you might still lose if you don't have an organised corporate machine.

I do, however, disagree with you in one important area. The aim of the game is to score goals. So in the same way that you can't win a game without scoring goals, you can't have an effective business if you don't reach your audience effectively. That need not be through paid for advertising. It could be telemarketing or through retail staff, but you need something to connect the last mile of that process to its intended audience. Frequently, good advertising is an articulation of a truth about how your company does things. For me the teams that win are those who get the whole team playing together.

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