Bias and Why to be Wary of It

I am going to use two links here for reference:

Interview with a VC partner at Sequoia Capital, the second dis a long You Tube Ad for the Chevy Volt.

Sequoia Capital partner Mark Kvamme

Did You Know Video

It's ok for a Brand to try to convince us into buying or trying something. I champion Brands and if I can help them figure out how to get an action from someone I will, but I will always do it ethically.

During the 2008 election cycle I got many surveys from both the DNC and RNC asking my opinions. So many questions were biased and didn't give you the proper choices, they actually corralled you into what they wanted to hear. Same with Research of all sorts. Often Brand R&D efforts are skewed to trumpeting success because the folks doing development naturally are biased towards success. If this wasn't true why do so many product launches fail? And anytime there is an economic incentive for someone to hype, promote etc they will because their livelihood depends on it. You normally want to please the person paying you. Remember all those Dot.com's and Sub-prime Mortgages that went bust, while the promoters and ones selling the hype made money knowing ahead of time they would be screwing people? Or the ratings agencies afraid to rate bonds as junk because they were afraid of losing business since the bond issuers paid for the rating?

The Chevy Volt spot is specially an example of skewed facts. It is easy to cherry pick and not give the full story. Some of the facts make you say DUH! India because of the massive population the 25% with the highest IQ's are more in quantity than the US population. That does not mean their 25% is more intelligent or has higher IQ's than say our top 25%. Or the number of jobs someone will have between 18 and 34. They don't qualify this with the 'because this generation got shafted, the worker-employer fabric having been destroyed over the last 25 years, and the crash in the economy keeping this group underemployed for years to come'. My point is bad facts, very poor qualification of the facts so why use them?

Next I just want to SHRED Mark Kvamme. Sequoia Capital made a killing during the dot.com boom. In fact many companies they backed and then cashed out of after the IPO left investors decimated. While VC's have a very important part to play in our economy you need to remember they only care about 1 thing only, and that is a return on their Equity Investment. They care nothing about the workers or investors beyond when they cash out. So never listen to a VC when it comes to talking about areas of business they invest in because they are inherently biased towards hype and promotion. If Facebook goes IPO at less than a $14 billion valuation all the investors lose millions if not billions of on paper equity value. They are going to do everything to hype Social Media as the end all. So he is going to hype all Social Media and Brands needs to cut through this BS to know Social Media has it's place but it will never replace traditional Advertising.

While Facebook keeps a clean site Twitter is a scary place. You might be placing Ads next to tweets from Racists, Nazi's, Haters, Preachers, screaming Satanists acting like Preachers, angry people wanting to kill Liberals and angry people wanting to kill Conservatives (ask for the hashtags!). And I do believe Facebook will go the way of Myspace and Friendster in the next 5 years so the day they have their IPO I am personally shorting the stock.

I could write a book on instances of bias but hammered it enough! So don't believe the hype in anything and always remember everyone has a bias. It's just human nature versus some evil plan. Beware of it.

The Convoluted Advertising Ecosystem

Yesterday I wrote about the Media/Entertainment world. Today I wish to discuss the world we operate in...Advertising. I am new to Advertising. Only 2 years in and I have an outsiders view. My background in B2B Sales, Business Development to Major Industrial Businesses like Lockheed Martin, Chevron-Texaco, Exxon-Mobile, Raytheon, Ford Motor Company etc really is completely foreign to Advertising to consumers. I have a Finance Degree but my social life is mostly around creative types in music, art, performers etc. Since I have always championed my customer, always sought to add value, and refused to take money just because I could unless I helped my client, I am actually the type of person the staid and entrenched entities in the Advertising-Media World love and loathe. I can help a Brand focus better to maximize their Ad Spending. I can help an Agency prove their worth to Brands to help them increase their value which always seems to be fuzzy.

The biggest issue with marketing is two fold. First is how do you connect marketing with sales. How do you value the different areas to prove you spent the Brands money well. Secondly is how complicated media plans are, especially today and now they are getting even more complex. To top this all off Agency's tend to specialize in certain niches like Mobile, Digital, TV etc, as well as for the actual Media Buying. And when you operate on a national scale combined with the fickle and chaotic decisions people make when they buy, I truly feel this is just as complex a task as when I worked on Missile Defense Programs for the Department of Defense.

Plus there is competing interests all over the place. I might tell Pepsi they can cut their advertising budget by 15% and they won't lose a penny in sales. Pepsi's Agencies will hate me for this reduction in revenue...even if it is true. It is not in an Agency's best short term interest to be honest if it means reduced billings and profits to be honest. But not being honest leaves you open to being exposed and have your business put out for review, which for long term is not in your best interest. This is why the review process sucks and hurts incumbents. Is the reason for the review a problem with creative or a problem with costs in the view of the Brand's CFO. As much as all you Creative types hate us Finance types, we control the purse strings. And while you may feel we aren't willing to spend money to make money, you should go see the expense reports for the sales team. It is the inability to measure the return on investment that creates all this chaos. And Brands and Agencies feel helpless.

Think of a nationwide media blitz for an upcoming Blockbuster Movie. You can spend all you want and force feed the information to the consumers but if the movie sucks it will bomb. How many times do I need to see a trailer? If I see it 25 times isn't 20+ of those times wasted money? And billboards and poster work across the nation? How do I know the placement is good? No one can do that on a massive scale. No one not even a media buyer/planner. They trust the local folks and take their word for it. And what about digital? My trailer had 1 million hits on You Tube. That was free yet I was told 20 million saw the TV trailer but that can't be proven because we are not in people's living room.

So a CFO who see's that his star salesperson spent $25,000 in entertainment expense brought in $30 million in sales. But the Ad Agencies can't truly prove their value which creates friction, distrust, and animosity...even if the Agency is kicking ass on behalf of their client. and sadly a product that sells itself, like an IPod often the Agency takes credit. And when the Agency kicks ass, but the product fails because it sucks, they get blamed.

At least with Missile Defense I can see if the interceptor hit the target, and how often.

Subtle Startegy, Network Greed or Poor Media Buying

We have observed this, we are watching a program on Cable or Network TV and we notice one or two commercials are repeated so often that we actually switch over while they play because we are sick of hearing the same message. I am currently watching a stand up comedian on Comedy Central. I have seen in 45 mins the same I Pod Touch commercial 6 times and an I Phone App commercial 4 times.

So is this strategy on someone's part? To ensure the message is beaten in my skull. So that I get brainwashed into buying the devices.

Or is this greed by Comedy Central? Apple gave them money for inventory to reach a certain demographic and they are light on clients for spots on this show so they just keep plugging Apple?

Or is this poor media planning? Where someone isn't paying attention or not critiquing the performance reports they get from Comedy Central when they come in?

I know media planning and buying for a major national brand across all platforms is as complicated as curing cancer. But Apple spent about 30% more than they should of on spots during this 1 hr program. And as a champion of the brand with a Finance/Sales background I call it wastage.