Book review: Wool

I was looking for intelligent and intHugh Howey: Wooleresting fiction to read during the christmas holidays. As a surprise to myself, I ended up reading science fiction. I came by Wool by Hugh Howey first on some “The most popular books” list and when checking the book’s reviews on Amazon, I noticed it was included on their Top-100 Editor’s pick for 2014.

Wikipedia summarizes the plot very briefly:

The story of Wool takes place on a post-apocalyptic Earth. Humanity clings to survival in the Silo, a subterranean city extending over one hundred and fifty stories beneath the surface.

The setting is interesting although typical after-nuclear-war-dystopia.  The really interesting part however is that the Silo society has strict authoritarian rules. There are rules concerning family planning and death penalty for rebellion. There’s no freedom of press – or actually – very limited ways to mass-communicate.

What makes it interesting is that the author explains the why for these rules. The set of rules sound credible and natural, inevitable and reasonable. I could think of real countries following the same pattern and similar justifications.

When the protagonist begins to question these rules, the reader is left wondering if that’s right or wrong. How well would the Silo function without their strict rules? Can you trust people to do the right thing if there’s no enforcing police force? Would you be willing to trade safety for freedom?

Unfortunately Hugh Howey doesn’t explore the topic much further but goes on with some action scenes and ends up polarizing the “good” and “bad”. What starts as an intriguing analysis of society, becomes a simplistic adventure. Therefore this book is not a classic but “only” a fun read.


Selling Ads: Viewability Metrics

Much of the consumer internet is “free” to use, that is, it’s based on selling advertisement inventory to advertisers. In most cases, advertisers pay for clicks (Cost-per-click, CPC) or impressions (Cost-per-mille i.e. cost per thousand ad impressions, CPM).

Now there’s a rising star: Cost per viewable impression, CPMv.

Why is this important? Because it drives quality and fairness.

The good old CPM measures when a banner is loaded on a web page. Therefore the advertiser pays only when someone actually can see the ad. This is pretty cool and much better than paying e.g. for an ad in a newspaper and not knowing if anyone ever reads the page your ad is on. The downside is that the banner can be so low down the webpage that it’s rarely seen by a reader. You see, some publishers (yes, big media houses) are filling their webpages with ads because they get paid for each ad impression. They don’t really care about quality, but only quantity. Some publishers break down their articles to multiple pages to generate more ad impressions for each article. And so on.

Depending on the source, it looks like half of the banner ads are not seen by anybody.  Half! That’s the average of course. Most websites are worse than that. Premium publishers are better.

The ability to measure viewability creates an interesting opportunity. We can put our viewability metrics side by side with other publishers and show that it’s better to advertise with us. While being more fair to advertisers, this benefits quality publishers as well. May I say “Win-Win”?

Take The Economist for example. They are a premium publisher and haven’t been holding back with viewability. The Economist sells “ViewGuarantee“:


For eligible campaigns, at least 75% of impressions served across the entire campaign will meet IAB ad standards (for most campaigns it will be higher). This is much higher than industry average. According to Moat analytics, Q2 2014 benchmarks for all publishers measured had 47.6% ad online and 44.2% on mobile.

I’ve been very happy to work with advertisers asking about viewability. Investing in quality pays off.



Pitching a Product

Introducing the big idea should take just one minute. Don’t spend time on details.

In Crossing the Chasm, Geoffrey Moore formulated a useful, short pattern for idea introduction.

For (target audience) who (statement of the opportunity), my idea is a (product category) that provides (statement of key benefit). Unlike (competitors), my idea (statement of primary differentiation).

The point is to give a high level introduction to the idea and position the idea in the markets. Yes, this is a positioning statement, too.

Introducing an idea

But how to make that sound interesting? “Our product is …” is often the most boring way to introduce anything.

This is how I would use Moore’s pattern:

For recreational sports team coaches who struggle with team management, PlayerLineup is a team calendar and website that makes sports team management easy and saves time. Unlike a generic Facebook or Whatsapp group, PlayerLineup provides attendance tracking, statistics and proper player roles.

That actually works quite ok in writing. In a cocktail event not so good. Amy Hoy put it well in her post Shut up and take my money. She writes that instead of answering “Our product is…”, one should answer with something that focuses on the person who’s asking. Let’s talk about the problem the customer has:

You didn’t want to spend your nights calling after players and answering angry parents about why their child is not getting the most minutes in all games. When you agreed to coach the local youth sports team, you thought you’d focus on education, coaching, strategy, and the game. You wanted to help the community and have fun coaching a group of kids.

PlayerLineup gives you that. We save your time and make team management a breeze.

I think I’ll use the first version when writing and the second version when talking casually..

Positioning by Marketing

Positioning - The battle for your mind by Al Ries, Jack TroutI read a 1981 marketing classic by Ries and Trout: “Positioning – The Battle for Your Mind.” It’s an inspiring book about how brands and products should be marketed: not in isolation but positioned against existing products and brands in the same category.

Hmmm… doesn’t sound too inspiring, does it? Let me try a shorter version: It’s not about the product, fool.

Instead of telling what’s good in your product you should tell how the product relates to other products that already have a place in the recipients’ mind. To me as the product designer this is difficult! I’ve put a lot of effort in designing the features and figuring out what the user benefits are. To me the product is the interesting piece. I’m naturally inclined to tell what features we have and why they benefit the user. For example:

At Playerlineup we have a feature for urgent notifications. The feature enables teams to communicate last minute changes in schedule. Any coach knows how much time is saved when you don’t need to do the emailing or phone trees.

The Playerlineup product is excellent and the feature is really useful. According to Ries & Trout, however, the problem is that this kind of marketing message does not stand a chance. The messaging / notifications category is so overwhelmingly overcrowded that there is no room for a newcomer. People send messages on Facebook and quick group notifications on WhatsApp.

We need to think about our position. We need to talk about how Playerlineup brings messaging and schedule together in a new, meaningful fashion, and how we are able to automate routines because we strictly focus on sports. We are a new category, not an also-ran social media site.

The definition of positioning, by Al Ries:

Positioning is not what you do to the product; it’s what you do to the mind of the prospect. It’s how you differentiate your brand in the mind. Positioning compensates for our overcommunicated society by using an oversimplified message to cut through the clutter and get into the mind. Positioning focuses on the perceptions of the prospect not on the reality of the brand.

It makes sense. If everyone thinks the best resource for travel info is TripAdvisor, then it’s no use trying to convince people that your travel website is the best because of some features. It’s much better to tell people how your product relates to the market leader.

For example, back in the day a “soft drink” meant a cola, so 7-Up positioned themselves as the “un-cola”.

Here’s Trout’s six-item checklist Brand Positioning: Key Questions.


Is This News or Ads?

I’ve always thought that I know pretty well how to navigate media. That I can immediately tell if a piece of content is an advertisement. After all, understanding the difference between ads and journalism is a crucial part of media literacy, right?

Then I read Wired’s story “How BuzzFeed mastered social sharing to become a media giant for a new era“.

BuzzFeed is a quickly growing media company that started in 2006 with a focus on viral content (pictures of cute cats, LOL). Since then they’ve gathered a funding of $46m, grown to a media giant and plan to take on serious journalism or so-called hard news.

We will stay away from anything that requires adopting a legacy business model… We are building the defining news and entertainment company for the social, mobile age.

BuzzFeed’s business model is advertising. Here’s the catch: on BuzzFeed I no longer know if I’m looking at an ad or not. That’s by design. The Guardian reports:

That advertorial – advertising content that looks like editorial – is actually the source of BuzzFeed’s financial progress, according to Peretti.

One of the following is a paid-for advertisment that had a very good 6,1% click-through rate:

At a glance, I’d say they look pretty similar.

31 Insanely Clever Remodeling Ideas For Your New Home10 Places You Need To Visit Once In Your Life

Conclusion: native advertisement or advertorials are going to replace banner ads.

Customer Centricity is Rare

Customer centricity vs product centricityTrue customer centricity is still rare. This is news to me because these days you’re supposed to be customer centric. I hear many entrepreneurs describe their business as customer centric. Their product is customizable and totally flexible; they know their would-be customers thoroughly; their product utilizes big data to adapt to users’ needs; and so on…

More often than not they are product centric. Examples:

  • I like to surf and ride a motorcycle (not at the same time). I can attach my GoPro to a surf board or my helmet. But GoPro is not customer centric, it’s a superior product.
  • My broadband went dead after a power failure. I called my provider and they quickly decided to send me a new ADSL box. No hassle, happy customer. But this is not customer centricity, it’s operational excellence.

Both cases are good customer service, but it’s the same for every customer. Customer centricity requires a step further. You need to know your customer, the lifetime value of each customer, when and what to offer to the customer to add the most value, etc. If you’re customer centric, you don’t offer the same product/service for any two customers. Instead you proactively tailor your offering to cater individual customer’s needs.

The most well-known examples of customer centricity come from retail. See How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did:

… Which means that the key is to reach them earlier, before any other retailers know a baby is on the way. Specifically, the marketers said they wanted to send specially designed ads to women in their second trimester, which is…

Another case is how Tesco manages to maintain high growth and ward off competitors like Walmart. In a story by Businessweek:

Tesco’s big advantage over major international rivals, which also include Germany’s Aldi and Lidl, is its unrivaled ability to manage vast reams of data and translate that knowledge into sales. While data crunching may sound dull, it has given Tesco two major advantages: an unmatched ability to operate multiple retail formats—ranging in size from convenience stores to hypermarkets—and the market knowledge to offer what many analysts say is the best and broadest range of house brands from any retailer.

Now that’s customer centricity.

Why would you want to be customer centric?

Because the world has changed. The power has shifted from producers to customers. Consider:

  1. Product development is much faster. Earlier it took a lot of effort to create a new product. Now technology enables anyone the create a product even if the scale would be very small. Think Kickstarter.
  2. Information flows much faster. It used to be impossible or very expensive to reach a big audience. Now anyone can publish a video, article, or create a social media campaign.
  3. Global delivery knows no borders. You just couldn’t order goods from other countries. Now anyone can go to Amazon or and order anything, delivered anywhere.

There used to be a barrier of entry. Even if someone could develop a similar product, there was no way they could market it to your customers. And even if they found a way to market the similar product, there was no way they could get it delivered. Not so anymore.

Nowadays customer centricity is the way to maintain your competitive advantage.

How I Learned Better Writing from

Would that be a good one?
Last Sunday I leisurely browsed through home-for-sale classified ads. Soon I noticed that the house descriptions fall in one of three categories:

  1. Short, focus on facts. Boring and not memorable.
  2. Vivid, descriptive language with focus on feelings. Unconvincing, pushy, and makes you want to come up with negative counter-arguments.
  3. Facts with adjectives including pros and cons. Balanced, credible, sticks in mind.

After filtering the classifieds based on the fixed form data and stats (including price), the description is pretty much the only means for differentiation. So. How do you write in a way that differentiates and sticks?

Type 3 is the best by far.

See for yourself:

Type 1:

Muuttovalmis perheasunto. Keittiössä on Domuksen kaapit ja uudet kodinkoneet. Tilava kylpyhuone/wc. Huoneisto sijaitsee 6. kerroksessa, josta avarat näkymät. Hissi. Sopii myös liikuntarajoitteisille.

—Ok, ihan kiva.

Type 2:

Toimivaksi todettu perheasunto kaikkien Lauttasaaren palvelujen välittömässä läheisyydessä. Hissillä esteetön kulku ostoskeskukseen. Kaksi lasitettua parveketta, joista vehreät näkymät etelään. Autoillekin löytyy paikat yhtiön autohallista.

—Toimiva kenelle? Kuka on todennut… Ja varmaan on vehreät näkymät talvella.

Type 3:

Heti vapaa läpitalon huoneisto hissillisen talon 3 -kerroksessa. Hyvin hoidettu taloyhtiön jossa mm. putki- ja sähkösaneeraus on tehty. Vehreät näkymät, olohuoneesta, parvekkeelta ja makuuhuoneista merinäköala kattojen yli. Kylpyhuone ja keittiö hyvässä kunnossa, muilta osin asunto kaipaa kunnostusta. Pihan puolelta kulku hissiin ilman portaita. Tervetuloa tutustumaan paikan päälle!

—Hmmm voisi käydä katsomassa…

Learning to be a better copywriter. I already revised a business document based on this amazing insight.

Compete to Be Different

I like to compete. When we’re cycling with a friend, it turns out to be a competition of who’s first up the hill. When we are shooting hoops, we always count the score. It’s fun, makes the game more interesting, and provides a solid measure for development. We are competing to be better.

But when it comes to business, this idea resonates strongly with me: Don’t compete to be better, compete to be different.

We’ve seen so many times that competing to be better just makes everyone similar. Think about cars. Jeep used to be rugged, Volvo used to be safe, Audi used to be sporty. Now every car is rugged and safe with great performance and modest mileage.

All airlines are the same. All bottled water is similar. Every PC or printer is the same.

Different - Escape the Competitive HerdTherefore, I was expecting a lot when I got my hands on a book titled Different: Escaping the Competitive Herd by Youngme Moon, a professor at the Harvard Business School. She writes about how markets evolve, why that leads to similarity, and how to stand out of the herd.

Typically, companies try to make their product better, and they do this by:

  • Augmentation by addition (more features!). Mobile phones used to be for calling…
  • Augmentation by multiplication (wider selection!). Coca cola light, classic, zero, vanilla, cherry, zero caffeine free, etc…

Customers expect the products to get better and the selection to get wider. What was great last year is not nearly good enough this year. Or that’s the belief that businesses have. This augmentation treadmill leads to over-serving and inflated set of benefits. I think Horace Dediu has written about similar idea in his analysis about how the iPhone is able to maintain its price: “In the case of the iPhone the tenacious retention of its ASP indicates that the point of over-service has not been reached.

Prof. Moon goes on to introduce Idea Brands. They are brands (businesses), who are more interested in separation that comparison. There are three categories of idea brands:

  1. Reverse brands.
  2. Breakaway brands.
  3. Hostile brands.

Reverse brands switch gears to reverse and actually remove benefits even if clients expect and want the benefits. Reverse brands’ products are stripped down, but not in the way the low-cost businesses operate. K-mart or Ryanair are not reverse brands. Reverse brands trim and eliminate features but at the same time introduce some other form of extravagance or splendour. Prof. Moon uses early Google as an example: back then Google removed all popular portal features and focused on search only. It was fast, efficient and clean – totally unlike Yahoo or AOL or Altavista at the time.

Breakaway brands position their product according to different, unexpected standards. They frame themselves differently. Examples include the Simpsons: it was a cartoon but totally different from any cartoons seen before. The Simpsons provided cultular criticism and complex jokes. Another example is the Swiss watch maker Swatch. Swatch didn’t have anything to do with the Swiss clock making traditions (i.e. long lasting, valuable, handcrafted time pieces). Instead Swatch positioned themselves as a fashion business. They had a huge selection, constantly renewing, and they were quick to introduce new models.

Hostile brands don’t compromise for anyone. They emphasize even their flaws and try to make a statement in doing so. They draw a line and know that only some will step over – but those who do, will be loyal customers. Birkenstock is ugly but stands for comfort. Many drinks try to play the hostile brand card: Devil Springs Vodka – not for celebrating your sister’s birthday. When Mini Cooper launched in the US in 2002 they didn’t try to convince us that the car is bigger than it looks or that it’s spacious enough. Instead they said this is a really small car – but not a boring car at all. Hostile brands know that traction requires friction.

Differentiation is not a form of competition but escape from the competition altogether.

Oh, about the book. I’d say it scores 3.5/5. The ideas are very interesting but not too strongly discussed. Evidence was too often just anecdotal and conversational. And there was too much talk about “my students, who did this ‘n that”.

Wasting Money on AdWords Mobile

Mobile Search Drives Valuable Outcomes?

Google is rolling out AdWords enhanced campaigns. Starting on July 22nd, all legacy campaigns begin to get automatically upgraded. Enhanced campaigns raise focus on mobile: it gets easier to customize, target and bid for mobile users.

I learned about enhanced campaigns the hard way.

When setting up a new campaign last week, I accepted the default setting. The new campaign was enhanced, i.e. the ads are displayed to mobile users, using the same bid as for desktop and tablets. The result was:

  • A lot of impressions with an ok CTR.
  • A lot of clicks in a short time absorbing the daily budget.
  • No conversions and a huge bounce rate.

Why? I started digging into the stats and found out that the majority of the clicks were from mobile users. If I disregarded mobile users, the stats were actually pretty good. The problem was that just by accepting the defaults, I ended up bidding way too much for clicks on mobile.

My immediate action was to modify the bid strategy so that for mobile we bid much less. It’s easy to do, but also easy to miss if you accept the defaults.

So, problem solved? Maybe AdWords mobile would be an opportunity? Based on a study by Google/Nielsen released in March 2013, mobile ads drive multi-channel conversions and trigger follow-up actions.

I have yet to hear about AdWords mobile success stories. So far I’ve heard only bad experiences from advertisers. Mobile increases inventory, the CPC is cheap, but: the conversion rates are way lower than desktop – in every industry. This is bound to change, I assume.

The above mentioned study states that Mobile search drives valuable outcomes for businesses. At the time being, it’s valueble for one business: Google.

The Increasing Profitability of Google AdSense

Coin TossGoogle Adwords offers no more quick win to small-time advertisers. The pioneers of online marketing have already moved on from Adwords, while the masses and big brands are getting onboard. In Adwords, the keywords are much more expensive and there’s a lot more competition all around.

This trend was well presented by Andy Brice on his blog post The declining profitability of Google Adwords. Andy says:

Less, more expensive clicks = less profit. I can either pay more and more per click to maintain the same number of sales. Or I can continue to pay the same per click and get less and less clicks. Either way, my profit goes down.

The positive flipside is that AdSense publishers get better bang for the buck. The inventory for ads is finite. When the average click price goes up, it means that publishers start getting fair price for their ad inventory.

I think this is very good news.

Publishers can monetize their remnant inventory efficiently, and do not cannibalize their direct sales by allowing AdSense. Hey, maybe there’s even a chance for a profitable media business… The quality of ads is getting better because of the increased competition among advertisers. The website visitors are going to enjoy better targeted, well-crafted ads and landing pages than before.

A quick look at Google’s financials seems to support this observation. The network revenues increased by 20% in 2012. Out of this $12.5 billion about 70% goes out to the publishers (the cost item is Traffic Acquisition Cost, TAC).

Website owners got $1.47 billion more in 2012 than the year before!