Attention Merchants, by Tim Wu - Review

The Attention Merchants - The Epic Scramble to Get Inside Our Heads, by Tim Wu

T
he business of selling requires that the target consumer pay - attention at the very least, for without attention, there is no interest, no sale, and no market. Even, and especially so, with services that are sold and advertised as free, there is still a valuable personal resource that is sold in exchange - your time.

Tim Wu's book is an engrossing, well-researched, and fascinating look into the evolution of the advertising business - the attention merchants, as he calls them. It helps put into perspective many of the advertising practices we see today.

Each one of Brahma's days may well be more than four billion years long, but for humans the time available to each one of us is far limited in comparison. What we do with the time available to us is decided by what we choose to pay attention to. The job of those looking to sell us their wares is to take a bite out of that span of attention and to broker it to the other party in the transaction.

Flipkart and the Art of Advertising Mishaps - 1

I
n the age of startups, especially in the e-commerce space, where money is plentiful - or till a a year or so back, used to be - the only metric that seems to matter for the marketing function is "spend". Not ROI, CPA, CLV, etc... Splurging money on advertising became an end in itself. Where the mantra to success is growth, unencumbered by thoughts of the bottom line, any kind of growth will do. Therefore, growth in "eyeballs", "page-views", "app downloads", and other metrics of "engagement" - any and all numbers will do. Into this heady mix of unaccountability, if you then throw in lack of experience, lack of competence, and rank immaturity, you get a series of marketing disasters of the kind that headlined Flipkart's slow descent into what seems like inevitable irrelevance. One still hopes it will recover to give a creditable account of itself in its existential battle against Amazon. Then there is Alibaba and WalMart waiting in the wings. One hopes.

In this series of short posts, I will look at just a few marketing and advertising fiascoes at the company.

Flipkart and Focus - 2 - Mobile Advertising Numbers Can Be Misleading

The second part of my series of articles on why I believed Flipkart was at losing focus, at the wrong time, when faced with its most serious competition to date. This one focused on why a fascination with mobile advertising numbers could be very misleading.
It was published in DNA on April 14, 2015.


The Numbers Game Can be Very Misleading
According to the Internet Trends report of 2014, mobile internet advertising spend grew 47% year-on-year in 2013 to reach $12.7 billion, or 11% of the total global internet advertising spend. This mobile ad spend number was about 32 per cent of total mobile app revenues of $38 billion. Clearly mobile ad spend has been growing several times faster than non-mobile ad spend.
Facebook, the world’s largest social network, has been stunningly successful in growing its mobile revenues. So much so that “In the final three months of 2014, Facebook served 65% fewer ads than a year earlier, but the average cost of those ads to advertisers was 335% higher.[i]” As much as $2.5 billion in Facebook’s annual revenues came from these mobile ads – shown on smartphones or tablets. So successful has Facebook been in making money from selling these mobile ads that it “launched its in-app mobile ad network” in 2014[ii] to sell ads within other apps,

Oracle Restaurant and Bar

Either Oracle, the enterprise software and hardware company, is getting into the consumer space in an example of brand expansion gone horribly wrong, or someone's been getting a bit creative with trademarks and all. In any case, you can't fault the person from sticking with the Oracle "red" color theme. The cuisine also promises to be international - Punjabi, Maharashtrian (OK so far it's all Indian), Chinese (yes, venturing out), Indian (back to the homeland), and seafood (ok, so not that international after all).

Shot somewhere on NH10, between Shirdi and Rahuri in Maharashtra.

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© 2014, Abhinav Agarwal (अभिनव अग्रवाल). All rights reserved.

Cinderella Ate My Daughter

Cinderella Ate My Daughter: Dispatches from the Front Lines of the New Girlie-Girl Culture, by Peggy Orenstein

“Why be a role model when you can be simply a model?" One icon begets another, more veneer, more commercialized, crasser.

The seeds of this book were laid in 2006, when the author wrote an article called "'What's Wrong with Cinderella?' which ran on Christmas Eve in The New York Times Magazine." The article itself was a response to the "Princess" obsession everyone seemed to be afflicted with. "I fretted over what playing Little Mermaid, a character who actually gives up her voice to get a man, was teaching her." "Her" as in Daisy, the author's daughter. The article attracted a ton of attention, and morphed into this book. We are taken to toy shops, those cheap Made-in-China Barbie dolls as well as those selling dolls that cost several times more, to kids' pageants, to the world of fairy tales, and what the originals say and what the ersatz Disney monstrosities have twisted them into, teenage pop singing sensations that cannot wait to grow up even as they pretend they aren't, and yes - the world of teenage sexed-up role models in TV serials like Hannah Montana and the like.

Onward by Howard Schultz

Onward: How Starbucks Fought for Its Life without Losing Its Soul (Kindle Edition, Onward from Flipkart.com, my user review on Amazon.com)

Where was the magic in burnt cheese?
Howard Schultz made Starbucks into a veritable synonym for many things, and a fixture on almost every block and intersection in the US. This is the story of his return as Starbucks CEO in 2007, the challenges he faced at the company, its turnaround, the successes and the failures in that turnaround, and at the end, as much a story about coffee as it is about the company. People familiar with Starbucks will find a lot to nod their heads about, while others will still find interesting anecdotes and information about coffee in itself.

Starbucks is a behemoth by any standard. "Today, Starbucks has more than $10 billion in annual revenue and serves nearly 60 million visitors a week in 16,000 stores in 54 countries. More than 200,000 people, whom we call partners, represent Starbucks." One of the most talked about events in Starbuck's return, after Schultz took over, was the closing of every single Starbucks store one Tuesday afternoon in February 2008, so that its baristas could watch a DVD explaining how the perfect cup of coffee had to be brewed.

If poured too fast from the spout into a shot glass, like water flowing from a faucet, the espresso's flavor will be weak and the body will be thin. A shot poured too slow means that the grind is too fine, and the flavor will be bitter. The perfect shot looks like honey pouring from a spoon. It is dense and tastes caramely sweet.

 Schultz also talks about his frustration and anger with some developments at Starbucks stores that he saw running counter to its culture, an obsession with "comps" ("the year-to-year differences in revenue generated by a retailer's existing stores") and signs of "hubris and invincibility".

It would be a while before I recognized that Starbucks’ amplified foray into entertainment, while it had its upside, was another sign of hubris born of a sense of invincibility.

The fruits of this “comp effect” could be seen in seemingly small details. Once, I walked into a store and was appalled by a proliferation of stuffed animals for sale. “What is this?” I asked the store manager in frustration, pointing to a pile of wide-eyed cuddly toys that had absolutely nothing to do with coffee. The manager didn't blink. “They're great for incremental sales and have a big gross margin.” This was the type of mentality that had become pervasive. And dangerous.

The evil sandwiches, that so riled Schultz up that he had them removed from Starbucks' stores, did make a comeback, but that's a different story in the book.

But I had resisted the idea of serving hot food from day one. While I encouraged innovation, I never envisioned people coming into Starbucks for a sandwich.

...

The more popular they became, the more our baristas had to heat them in our warming ovens. And when they did, the sandwiches’ cheese would inevitably drip and then sizzle in the ovens, releasing a pungent smell. Whatever rich, hearty coffee aroma remained in the store was overwhelmed by singed Monterey Jack, mozzarella, and, most offensively, cheddar. The smell further chipped away at our narrative. Where was the magic in burnt cheese?

There are several such accounts of Schultz's observations as he and his team went around trying to turn around the company in difficult times, even as the world threatened to sink into a global economic depression. The decision to close down hundreds of stores was particularly painful. The continued decline in earnings threatened the turnaround story. The very first act in the book, that of Schultz's return, is a delicate event - the current CEO had to be, to put it bluntly, fired. A person that had been appointed by Schultz.
This book is also very much an advertorial of Starbucks' products, its commitment to ethical coffee sourcing practices, and its employee-friendly practices. There are several pages of photographs of Schultz's visits to African countries from where Starbucks sources its coffee beans - these pages unfortunately have a very corporate brochure appearance about them. As does the section at the end that lists all the programs, products, and initiatives launched since Schultz took over the reigns at the company - like its launch of Pike Place Roast, or the launch of the Starbucks Loyalty Program, and more.

But there are some useful nuggets of information thrown in that provide a glimpse into the scale of the company's operations. Its IT infrastructure was antiquated and inadequate to handle the logistics involved in keeping every one of the 16000 stores stocked - "Every year in the United States and Canada, 608 million pastries were delivered to our company-owned stores. So were 103 million gallons of milk and 242 million pounds of coffee" - or that the stores' computers even more antiquated - "In short, a Starbucks store was essentially the equivalent of a $1 million-a-year business, yet an iPhone had more business application power than our stores’ technology"

I particularly enjoyed those pieces where the author talks about coffee. Like the difference between the two types of beans - robusta and arabica. Or why instant coffee is frowned upon by self-styled connoisseurs. 

Wherever the location, the best beans—the ones with enchantingly complex flavors and compelling characters, known as arabica—grow under some degree of stress, like high altitudes, intense heat, or long dry periods. Such harsh weather conditions can produce high-quality beans, but also fewer beans per tree. This makes arabica coffee more costly, which is why most mass coffee producers opt to buy cheaper robusta beans. Produced in more predictable and mild climates, robusta beans are less expensive because they deliver a higher yield per tree. But most robusta beans also taste harsh and rubbery, sort of like sucking on a pencil eraser. In its almost 40-year history, Starbucks Coffee has never used a single pound of robusta beans in our products. [pg 83]

The reason most instant coffee is so vastly inferior to high-quality brewed coffee is because its manufacturers subject poor-quality beans to intense water extraction and drying processes that strip the beans of their natural aromatic compounds and flavors. By the time the resulting powder, or “crystals,” are mixed with water, any quality in the raw bean is long gone. Yet instant coffee consumers accepted this mediocrity. [pg 243]

This is a good book for people trying to get a glimpse into how to build a brand, in the true sense of the word and not in the hackneyed, cliched sense that we get to hear about everyday, and the challenges that it can entail.

• Onward: How Starbucks Fought for Its Life without Losing Its Soul
• http://www.starbucks.com/onward
• http://www.rodaleinc.com/products/books/onward-how-starbucks-fought-its-life-without-losing-its-soul
• Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time
• Onward (Kindle Edition)
• How Starbucks Saved My Life: A Son of Privilege Learns to Live Like Everyone Else
• Wrestling with Starbucks: Conscience, Capital, Cappuccino
• The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary

Kindle Excerpt:

© 2011, Abhinav Agarwal. All rights reserved.

Advertising - objectification

When advertising, it often helps to dehumanize, inadvertently of course, and objectify an entire class of people. Think fairness creams and how they almost dehumanize the dark-skinned.
In this case, the ad for Durex condoms, plastered on the Garuda Mall in Bangalore, is aimed at achieving a sexual objectification of females. The pusillanimous will surely point out that the ad attracted attention and aided brand recall, which is the aim of most advertising, so what's wrong with it? Others will take refuge in the claim that the ad is not meant to appeal to everyone, and that it is "edgy", "pushes the envelope", and if it offends anyone they are, well, jolly well free to look elsewhere.

© 2010, Abhinav Agarwal. All rights reserved.

On the road to Dalhousie

Dalhousie, as the name suggests, or maybe not, is a hill-station in the state of Himachal Pradesh, and established by the British, ostensibly to escape from the intense summer heat of the plains.

Since it is a hill-station,  it stands to reason that there hills there. As it turns out, the grandest of mountains surround this beautiful hill-station - the Himalayas. The northern guardians of India's borders for millenia. Home to over one hundred peaks that are over 23,000 feet in height. That is over 7 km high. The birthplace of massive rivers like the Ganga, Brahmaputra, Indus, Yangtze, and more, that sustain over 3 billion people (Himalayas).

Strictly speaking. the hill-station of Dalhousie is located at the western edge of the Dhauladhar range. The Dhauladhar range itself is considered a part of the Himalayan Mountain Range system, and has several peaks that are close to 17,000 feet in height.

http://en.wikipedia.org/wiki/Dalhousie,_India
http://en.wikipedia.org/wiki/Dhauladhar
http://en.wikipedia.org/wiki/Himalaya
http://en.wikipedia.org/wiki/Gt_road
National Highways Authority of India (NHAI) 

The Dhauladhar (lit. White Mountain) range is a southern branch of the main Outer Himalayan chain of mountains. It rises spectacularly from the Indian plains to the north of Kangra and Mandi. Dharamsala, the headquarters of Kangra district, lies on its southern spur in above the Kangra Valley, which divides it from Chamba ^[1].

To get to Dalhousie from Delhi, you could choose to fly to Amritsar and then drive, or if you choose to drive, the road you need to take is the historic Grand Trunk Route, or NH1 as it is now called. The GT Road spans India and Pakistan, and "It was initiated by Chandra Gupta Maurya, and later renovated and extended by Sher Shah Suri". The poet Rudyard Kipling (1, 2, 3) said in his book, Kim, "such a river of life as nowhere else exists in the world."


View Larger Map View Larger Map

Much of the NH1 highway between Panipat and Jallandhar is being upgraded to six lanes, at a cost of Rs 2750 crores (that's Rs 2,750,00,00,000 or approx US $570 million). So you will find four lanes being expanded into six lanes, and flyovers being constructed over several towns and villages. Over the town of Panipat there is a six kilometer flyover that takes you from one end of the town to the other. Hour long traffic jams when trying to get through the town are now a thing of the past. A similar flyover exists over the town of Ambala too, and several others are in various stages of construction.

As you enter the state of Punjab, the drive does get a lot more colorful. Even without venturing off the highway, if you are ready and handy with a camera, you can snap some memorable pictures.

As the map above suggests, you should stay on NH1 as you near the Union Territory of Chandigarh, which means that you take the flyover.

Because the Grand Trunk road has been in existence for over two millenia, there are several large towns and cities that dot this highway. Delhi, Panipat, Karnal, even the holy town of Kurukshetra, Ambala, Khanna, Ludhiana, Amritsar, and Lahore in Pakistan. Ludhiana is by far the richest town in Punjab - as a district, and possibly as a town also. You get to see surreal spectacles like advertisements touting the services of Hummer stretch limousines, Mercedes Benz showrooms, and of course, a Mac Donald's fast food restaurant.

As I have said and blogged before (link), one of the most entertaining pieces of writing, lyrical Urdu poetry can be found on truck bumpers. Sample this below:

"gumraah ki zindagi hum jiya nahi karte,peecha hum kisi ka kiya nahi karte
ye dil nadan tha jo tum par aagaya, varna ye dil hum kisi ko diya nahi karte"

Poetry on the back of a truck

The last large town on the way to Dalhousie is Jalandhar. NH1 curves right and proceeds towards Amritsar and the India-Pakistan border. To go to Dalhousie, you need to follow the signs and make a right.

As you drive further away from Jallandhar, the scenery starts to feel less and less urban, and habitation starts to grow less and less dense. You almost feel like you are leaving the plains behind, and driving into unexplored territory. The drive after Pathankot gets you into the Himalayan ranges, and the road starts to curve and bend and climb.

A regular fixture on these highways is the presence of "dhabas", of fast-food roadside restaurants. The other fixture was the omnipresence of hoardings advertising beer. Not rum. Not gin. Not whiskey. But beer. Strong beer. A brand by the name of "Godfather" - now could there be anything stronger? Eh?

© 2010, Abhinav Agarwal. All rights reserved.

Nikon ad at Frankfurt Airport

A remarkably effective and cute ad. Without getting into the technogeek babble that can sometimes accompany advertising for technology products, this cuts through the clutter, and gets straight to the purpose of photography. To capture the essence of what one sees, and how one sees it.

I shot this photo at the Frankfurt International Airport in 2005.

Nikon camera ad, Frankfurt International Airport, Germany. 2005.

© 2010, Abhinav Agarwal. All rights reserved.

Kargil Hilton

The Kargil Hilton in Bangalore - yes, that's right. This is neither Kargil, nor is this a Hilton by any stretch of the imagination. And to top it all, this is Bangalore - Southend Road in Basavangudi to be precise. And to hell with trademarks and copyrights. I am sure the proprietor's last name is not Hilton either.

© 2006, Abhinav Agarwal (अभिनव अग्रवाल). All rights reserved. (Posted to this blog June 2013)

Sex and advertising

Sex in advertising - Sometime last year in September 2005 I had posted a photo on sex in advertising Sex in Advertising, where I posted the "before" photos. I realized I never posted the after photo. Here it is. The entire campaign was for a fitness gym. Go figure.

© 2006, Abhinav Agarwal (अभिनव अग्रवाल). All rights reserved. (Posted to this blog 2013)

Cog vs Crucial Cog

C|Net had a story, "India becoming a cog in IBM's machine" (link to article on C|Net), that originally appeared in the New York Times (link to article on NYTimes.com), but headlined "India becoming a crucial cog in IBM's machine" - the word "crucial" has been omitted from the C|Net story, possibly for reasons of clarity, brevity? What difference does it make? A cog is a cog is a cog. Crucial, dispensable, incidental - it's all the same!

Anyway, here are some snippets from the article:

"On Tuesday, on the expansive grounds of the Bangalore Palace, a colonial-era mansion once inhabited by a maharajah, the chairman and chief executive of IBM, Sam Palmisano, will address 10,000 Indian employees. He will share the stage with A.P.J. Abdul Kalam, India's president, and Sunil Mittal, chairman of the country's largest cellular services provider, Bharti Tele-Ventures. An additional 6,500 employees will look in on the town hall-style meeting by satellite from other Indian cities."

"IBM is growing not only in size by adding new hires, but also in revenue. The company's business in India grew 61 percent in the first quarter of this year, 55 percent in 2005 and 45 percent the year before."

"From 9,000 employees in early 2004, the number has grown to 43,000 (out of 329,000 worldwide), making IBM the country's largest multinational employer."

Business Today also had a cover story in its May 21 2006 issue, titled "The Race To $10 Billion" (paid login required to read article), that detailed the chances of the big three of making it to $10 billion - TCS, Infosys, Wipro.

Reposted to this blog, Dec 2013.

© 2006, Abhinav Agarwal (अभिनव अग्रवाल). All rights reserved.

Amul Horading

Amul hoarding cartoon on the Sourav Ganguly and Greg Chappell spat.


© 2005, Abhinav Agarwal (अभिनव अग्रवाल). All rights reserved. Reposted to this blog, May 2013.

Sun Ads and Dell

Sun has turned the heat on Dell in recent times, and they are certainly not pulling any punches! Look at some of their recent blogs as well as marketing campaigns and you get the idea that Sun has decided that Dell may be a most vulnerable target for their x86 servers.

Here is a sampling:

• Johnathan Schwartz's blog calls Dell "Slow, hot, and huge" in his blog. 
• Schartz again, using the recent high oil prices, takes a dig at Dell, insinuating that Dell is close to big oil companies and therefore may not have a real incentive to turn out less power hungry servers. 
• Marc Hamilton has a detailed analysis of why the power outages faced by the University of Buffalo can be attributed, partly, to their decision to go with Dell servers. 
• And finally, Sun has a list of comparative ads against Dell that they could not run in print as magazines deemed them too provocative. 

Reposted to this blog, Dec 2013

© 2005, Abhinav Agarwal (अभिनव अग्रवाल). All rights reserved.