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Archive for the 'Business' Category

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There Are No Laws of Best Ads

13th May 2012

A marketing company shares what it considers the most effective print ads of the year. Through a proprietary formula, the agency quantitatively rates thousands of print ads, then presents the best 10 of the year. You can visit the 2011 ads then the 2008 for a comparison.

As I look over these Top 10s I am at a loss to explain why these are rated as Great compared to all the other ads. Of course, we don’t have the Bottom 10 ads as a comparison and that might help, but this exercise reveals the problems with assessing persuasion.

Maybe you’re the maven after all and you can explain why these ads are Top 10 and others that look the same and ran in the same contexts aren’t. I can’t.

Start with my Rule: There Are No Laws of Persuasion and If There Were, Why Would Anyone Tell You.

Stated another way. If you do know the Laws that allow you to understand these Top 10 ads, then you are the Queen of Tomorrow.

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Persuasion Quote – 广告人去到中国

13th May 2012

China discovers automobiles!

Persuasion faces a target rich environment.

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Facebook IPO Scarcity Gets More Scarce!

11th May 2012

Dancers beware!

Facebook is, blush, pleased and honored to announce that its dance card for the May 18 IPO Prom is filled! More dancers have requested dances than Facebook can, blush, provide that day.

Assuming, blush, that all the said dancers do indeed attend the Ball on May 18!

When It Is Rare, You Must Have It!

P.S. When the Belle of the Ball is working this hard, you have to wonder just how bella the Belle is. Facebook isn’t glowing, it’s sweating.

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Facebook IPO Persuasion

11th May 2012

The Facebook IPO is scheduled for May 18, 2012. For the overwhelming majority of people who buy stock, an IPO like this is typically out of reach. Most often on the first day the IPO launches, institutional units get the shares, often with an eye of selling them that day when interest and enthusiasm is greatest; they buy at 9am, sell at noon, and pocket some profit. However, Facebook is playing this one differently than most IPOs.

. . . but Wall Street executives estimate that the retail share could be as much as 20 to 25 percent of the offering. Some of that increase is likely to go to brokerage firms like TD Ameritrade or E*Trade, which cater to small investors . . . The company is seeking to give retail investors a bigger cut because it sees itself as a service created for, and driven by, consumers. One person briefed on the offering, who declined to be identified because of regulatory restrictions, said Facebook sees itself as “the people’s company.”

This story is persuasion interesting for two reasons. First, see how Facebook is using social Cues to sell its IPO stock. Second, see how Facebook is using the New York Times as a vehicle for persuasion.

Start with a Little Guy investor.

“I would love to get Facebook stock,” said Joseph Quigley, a 32-year-old insurance sales and marketing manager in Maryland. Mr. Quigley is an active trader, buying and selling stock worth several thousand dollars a year.

Making the IPO available to small investors like Joseph Quigley will certainly help the price. Small investors, also known as John Jerk and his cousin Odd Lot Robert are the targets here, good folks who think they can swim in the financial ocean without encountering sharks. Usually the sharks are the institutional investors. In this case, Facebook is the shark. If you read the financial press – not the New York Times – much digital ink has been filed detailing the flaws with Facebook, its business model, and the IPO. The Big Boys and Girls are wary on this one.

If you’re Facebook and worried that institutional investors may lay back, you need to change the market. Don’t restrict the IPO to big professionals who doubt you. Encourage John and Robert and Joseph to participate on that first day. This move will create pressure on the price in a Scarcity play.

If It Is Rare, You Must Have It, drives this Cue. Facebook wants its IPO to be rare because that will push the price up. If the Usual Gang of Suspects is laying back, bring in some new guys for the Lineup. These unsophisticated buyers will succumb to that People’s Company line and overpay on the first day. That may tempt smarter professionals to briefly panic and buy higher than they would prefer.

You’ll recall that Facebook ran the Scarcity play earlier in the secondary market when they received permission from Congress to increase the number of private investors Facebook could have. They added a few more positions in the face of considerably higher demand. Adding some, but not many new positions increased pressure on even more to bid for those slots.

See how you can manipulate Scarcity with either More or Less. We observed Groupon reduce the number of shares available in its IPO (Less) to create Scarcity which helped keep that first day’s prices higher. Facebook will bring more buyers into the first day (More) to keep the price higher which will make shares scarce for bigger investors.

Now, the second Facebook persuasion play. Over the past few days, the New York Times in particular has been running favorable Facebook stories. Recall the Facebook organ donor persuasion fantasy. Now, in the current NYT story, the Times admires Facebook for opening up the IPO to the Little Guy. While the Times can write whatever it wants about anything or anyone, I find it peculiar that the financial press ranges from ambivalent to hostile in its coverage of Facebook. Here, for example, is a kind take on how people should consider buying Facebook on the first day of the IPO.

1. Don’t buy at the open.
2. Use a “limit” order.
3. Bet small.
4. Don’t be shy about taking profits early.

This is a cautious and thoughtful plan. Very High WATT. Nothing about the People’s Company or cheers for an organ donor box that won’t change anything for the real world. If you think about this plan (from the Wall Street Journal), that last line spills the beans – don’t buy to hold, buy to sell. That’s not a ringing endorsement.

So, why is the Times lately cheerleading for Facebook? A persuasion perspective suggests a relationship between the two companies. Perhaps key leaders at the Times own a piece of Facebook in that secondary market and would like to sell at a larger profit. More unsophisticated buyers on the first day aid that. Maybe key leaders at Facebook would like to get in on the first day IPO and are helping Facebook to get a better seat at the institutional table. Maybe Facebook made a straight business deal and bought the stories. Maybe, it’s just two companies helping each other out in hard times. Certainly, anything is legal. And persuasive. Facebook feeds socially relevant stories to the Times about organ donation and little guy outlets for the IPO and the Times shouts them into their megaphone.

And you thought it was just about money, market, and quality.

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Facebook Discovers New Persuasion Rules

10th May 2012

I think this is a pretty good Rule of Persuasion:

If You Can’t Count It, You Can’t Change It

Persuasion is about Change and Change means going from That to This which is at least countable as a difference in a vowel, but more typically a difference in thought, feeling, or action. Like money, for example. You’d think anytime persuasion involves money, you can Count the Change. Listen to this business guy with Kia Motors who’s spending money on Facebook.

 

“The question with Facebook and many of the social media sites is, ‘What are we getting for our dollars?’” said Michael Sprague, vice president of marketing at Kia Motors Corp.’s North American division.

Sprague thinks like I do. You can Count the Change with money. This is so true that the assertion is obvious. But, if you’re spending money with Facebook, this assertion is obviously false.

“If a marketer measures [return on investment] as direct sales from the Web, then Facebook may not be the ideal platform,” said Sarah Hofstetter, president of digital ad agency 360i, a unit of Dentsu Inc. “But if the goal is to move the needle on brand health metrics, whether its awareness or engagement,. . . then Facebook should be a key part of the marketing mix for most consumer brands.”

I need to go Talmudic on this quote. Giving Facebook your money won’t make money for you, but it will make your brand metrics move (and here’s where it gets Talmudic) which according to Hofstetter’s reasoning still won’t make you any money because she did not explicitly say that brand burnishing will then make money for you. She runs that as an enthymeme, the persuasion syllogism that leaves out key information you naturally fill in so it all makes sense. Taking only and exactly what she says, a Facebook play only builds your brand and you get no sales in return.

See another enthymeme in the story.

Last year, the company began working with research firms comScore Inc. and Nielsen Co. to offer tools that let big brands track their social media campaigns on the site. Nielsen, for example, measures consumers who saw an ad on Facebook and compares them with a similar control group of Facebook users who didn’t see the ad. It then matches that up against shopper data to see how ad exposure affected sales of the product.

We noted earlier Nielsen getting into the measurement game with the New New Thing. That’s great. You can make apples to apples comparisons then. So, why doesn’t Facebook tell us what those comparisons show? All they’re saying is that they are working with Nielsen. Again going Talmudic on this and comprehending only and exactly what is said, Facebook is working with Nielsen. If you follow the enthymeme, you complete that information with something like . . . And It Works! But, realize no one is saying that.

There is some kind of good news with Facebook persuasion. Consider this case with Ford.

Ford Motor Co. said by using Facebook ads instead of Super Bowl ads in marketing its 2011 Explorer, shopping activity for the Explorer jumped 104% versus the average shopping lift of 14% following a Super Bowl ad.

So, tire kicking doubled. But again nothing about sales. Why is no one showing me the money?

Because there is no persuasion money in Facebook.

According to Facebook, my Persuasion Rules are the Old Old Thing against their New New Thing; I’m your Father’s Oldsmobile. There is no relationship between Counting and Changing according to the Facebook Rules.

Just give them your money and they’ll explain it to you.

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