CHAPTER 1

THE DISRUPTIVE MINDSET

Create, Engage, Adapt

The true scarce commodity is increasingly human attention.

—SATYA NADELLA,
Chief executive officer, Microsoft

ONE HOT AND humid evening in late August 1922 a sound wave coursed through the New York City sky. Only those with a radio console tuned to 660 AM could hear the male voice, speaking in a “you’d-better-not-miss-this” tone, which traveled those airwaves.

The station was not WFAN Sports Radio, “The FAN,” which currently inhabits that frequency, where on-air hosts spend hours talking about the failures of the Jets and the Knicks. This station, whose call letters were WEAF, pumped out a steady stream of talk, news, and cultural tidbits interspersed with jazz and swing—the popular music of the early 1920s. Who could have guessed that the one male voice, speaking nonstop for about sixty seconds at 5 PM on that August evening, would ultimately transform how electronic communications would operate for the next eighty years.

Friend, you owe it to yourself and your family to leave the congested city and enjoy what nature intended you to enjoy. Visit our new apartment homes in Hawthorne Court, Jackson Heights, where you may enjoy community life in a friendly environment.

Today, Jackson Heights is a densely populated area that pulses with the captivating odors of Colombian, Ecuadorian, and Argentinean cuisine punctuated by street-corner discussions on fútbol clubs like Deportivo Cali, Emelec, and Boca Juniors. In 1922, however, this part of Queens was still being developed and that early radio ad touted its virtues.

In the modern era, anyone who still listens to AM/FM radio anywhere in the world will find an on-air commercial like this commonplace. But in 1922, it was new. Why would a voice bark out a message about the Hawthorne Court Apartments? Was it part of the evening’s programming? Or was something else behind it?

What listeners at the time did not know was that Hawthorne Court had shelled out $50, the modern-day equivalent of $678.64, factoring for inflation, to WEAF. Essentially what listeners heard that evening was the first paid radio advertisement.

Of course we understand that ads or content like this doesn’t simply end up on the air naturally. During my daily drive home on the crowded Interstate 405 from Bellevue to Kirkland, Washington, the Ron and Don Show on 97.3 FM KIRO radio will, out of nowhere, say something like, “Hey, do you want to eat a fresh lunch? Subway, eat fresh,” before continuing to talk about that day’s news. They do it so casually it’s as if they hadn’t interrupted the flow of the news to promote Subway. But we all know that these on-air personalities didn’t simply decide to talk about Subway or any of their favorite eateries without compensation to the station.

Third parties want to use media to reach audiences they feel will use their services or purchase their products. This is pretty common knowledge. The Hawthorne Court Apartments radio advertisement on WEAF was intended to appeal to a middle-class, radio-owning audience. But how did WEAF know to do this? Why did station management decide to take money from the Hawthorne Court Apartments in the first place?

To answer that, we need to look back to those who shaped radio into an advertising channel that would eventually influence its later cousins, television and the Internet. As is often true when something is done differently, it wasn’t radio people who developed the idea that led to selling advertising time on the radio. In fact, like most disruptive scenarios, the idea of radio advertising came from a source outside the radio business.

DISRUPTIVE MARKETING AND THE CREATION OF RADIO ADVERTISING

Actually, the idea for radio advertising came from the telephone industry. Specifically, it was the telephone call, not the telephone hardware, that ushered in the radio advertising model. In 1913, Bell Telephone and its parent, AT&T, unwittingly joined the radio race when it acquired a patent for the vacuum tube, which turned out to play a central role in radio broadcasting. As a result, AT&T had a prominent stake in the radio in 1922 when the station it owned, WEAF, aired that ad. But how did AT&T come up with the concept of selling airtime to third parties? The answer lies in telephone usage and behavior.

In this era, there was no rotary phone. You would pick up the transmitter and an operator would come on the other end of the line and say, “Operator; how may I direct your call?” and you would tell the operator the number, and she would connect the call. The underlying technology of the telephone—that any message could be carried and connected to any place at any time—was the connective link. Once the parties were connected, the operator left, and all the caller would pay for was the length of the call from that moment.

Herein lies the centerpiece of the future commercial broadcasting industry. The mechanics of placing a telephone call today (if you even make a phone call using a landline, with all the available alternatives of email, SMS, text applications, social networks, Slack, WhatsApp, etc.) are camouflaged in the convenience of area codes and direct dialing. But even mobile phone users know that what we are still buying from the AT&Ts, T-Mobiles, and Verizons of the world is time measured in exact minutes and seconds on a communication system for hire.

A Solution out of Thin Air

WEAF essentially was one of the first disruptive marketers. It found an answer to the problem that was in “plain blind sight,” also known as “inattentional blindness,” which Christopher Chabris and Daniel Simons discuss in their book, The Invisible Gorilla.

Thus, WEAF asked a “What if” question that the radio industry needed to solve: “What if we finance an endless stream of programming by giving airtime to businesses who will pay us for it?” This, of course, is an ongoing question for media; think of the freemium applications you download onto your smartphone. But in 1922, AT&T figured out a solution to a problem that others may have seen but hadn’t solved: how to bring together space, time, and reach to create a revenue model. This financial structure, used by the marketing industry ever since, is how most media outlets became cash rich in the twentieth century.

In the 1920s, the radio was a consumer item, a piece of furniture housed in an attractive wooden cabinet, with simple controls designed for anyone to operate. Think of it as comparable to today’s smartphone. But unlike your smartphone, which monetizes itself via data and calling plans, in 1922 the radio had a lot of time but, seemingly, nothing to sell to pay for the operating costs and technology.

The concept of time as revenue has always been used in economic models. In fact, AT&T was already using that model when, in 1922, it decided to sell what it called “toll broadcasting” on radio. The company simply brought payment for time and access from one technology (telephone) to another (radio). And it worked. Across many industries, time is the essential ingredient in the billing and revenue-generation process.

In fact, if you’re reading this during work hours, technically you’re going to have to make up that time later in order to earn your income. Even if you don’t bill by the hour, time is what your annual salary is based on. And if you work a shift, you are effectively billing a particular rate per hour. This rate is one set by the government, the employer, a combination of the two, or by you if you are offering a service as a third-party vendor.

Time billing is how professionals such as lawyers, consultants, construction people, and even creative services make most of their income. Therefore, it makes sense that time is the essential value that the media sell to third parties who want to use those media to reach audiences. Time is what advertisers are basically paying for when they buy media for their message.

Yet, time isn’t the sole quotient in this model.

In 1922, WEAF had a large listening audience because it covered a one-hundred-square-mile radius in a metro area with close to 5.6 million people. Because WEAF owned the technology and could rent that time to third parties that wanted to reach their audiences, we entered an era known as “pay to reach.” This was later amplified by television and the Internet, and more recently social media platforms like Facebook. For the remainder of the twentieth century, marketers essentially paid for two things when they bought media on third-party platforms: space and time.

All of those models of space and time in the form of billboards, newspaper and magazine ads, radio and television spots, digital online banner ads, Facebook ads, promoted tweets, and pre-roll video (the annoying thirty-second video spots you see on YouTube, the ones with the “Skip This Ad” buttons that I know you hurriedly tap) are now seen as distractions and clutter.

WHY ADS DON’T MATTER ANYMORE

We have become accustomed to tuning out the advertising and marketing messages because we don’t like interruptions in our habit-formed lives. And we’re skeptical of the messages ads bring us. In fact, most of us feel ads don’t bring much value to our lives, just more distraction.

There’s another reason we tune out ads. Frank Rose, author of The Art of Immersion: How the Digital Generation Is Remaking Hollywood, Madison Avenue, and the Way We Tell Stories, explained this to me in a Skype chat. Frank spent many years as a writer at Wired magazine. Many of his pieces were on the intersections of media, technology, and human behavior. There is no better person to talk to about this than Frank.

On why ads don’t matter as much anymore, Frank said, “The main reason is people are so much more media savvy than they used to be and it’s not hard to figure out that advertisers are simply trying to advertise.” Frank Rose noted how the power that technology gives to users reshapes their behavior. We can see it in our day-to-day lives. How many of you reading this book watch live television anymore? Do you own a DVR that gives you the capability to fast-forward through the ads? Do you even pay cable companies to access their content from a cable converter box, or are you a cord cutter? How many of you click on the banner ads, search ads, Facebook ads, or any other ad on your mobile device?

Rose is right: the world we live in is focused on how we personalize our experiences, which inevitably leads to rapid withdrawal from the interruptive advertising format. As he put it,

If you look back at the history of marketing, which came about in the mid-century in the 1950s with the rise of mass media, people were not very sophisticated. The whole 1960s approach to marketing is obsolete. . . . People are so much more sophisticated largely because of the Internet. The Internet has called into question the whole thirty-second spot. People had to watch those because they had no choice back in the day. You only had three channels and limited options. People don’t want clutter. The whole point of marketing now is moving toward creating messages that people want to share with others.

Nevertheless, Rose said, organizations aren’t systemically ready for disruptive marketing. No matter how many articles you read about digital, social, or mobile marketing in Advertising Age, Adweek, Digiday, or some marketing blog, conventional marketing is the norm. And the data backs it up.

In a study, the market research firm eMarketer reports that most big brands still put heavy emphasis on creating thirty-and sixty-second television spots, even though there are many other options that would get more traction. According to that same study, TV ad spending is forecast to be in the $75 billion range by 2017. According to Rose,

Interruption is something people will try to avoid at all costs and it’s not effective for the advertiser. It’s a completely different scenario but for some reason many people in business haven’t acknowledged this. These are the same people [who] said the Internet [was] a fad during the dotcom era of the early 2000s [and they] still hold power in business. There’s that mindset that is prevalent in the residue of the marketing community. To me that is a recipe for failure, but what do you do instead?

What you do instead is exactly what Rose was trying to answer in a program he runs at Columbia University’s School of the Arts digital storytelling lab. Rose was quick to point out a trend he identified years ago:

One thing that is interesting to me is that “storytelling” was not even on many people’s lips when I wrote [my] book. If you think about it, journalists are storytellers. . . . When I worked at Wired magazine I wrote about anything and everything [at] . . . the intersection of media and technology. I did a few pieces which led me to realize there are all sorts of people who worked in TV who went to video game companies [and] then went to work in web video. This cross-pollination . . . [among] all three of these industries is what [created] a whole new [way] we interact with others through stories.

Rose’s program is at the cutting edge of the new norm, which isn’t storytelling, but what he has dubbed the “enchanted state.”

THE NEW NORM: THE ENCHANTED STATE

Frank Rose pointed to Brian Boyd, author of On the Origin of Stories: Evolution, Cognition, and Fiction. Boyd notes something that many in physics would admire. When the world is noisy, the way to cancel out the noise is actually through additional noise. Not noise at a higher decibel level, but noise at the same level as the original noise, only on a different wavelength. Boyd dubs this technique “the conspiratorial whisper,” and he notes, “When everyone is shouting, the way to get people’s attention is to whisper.”

Frank Rose added,

The current taste for immersion is largely a by-product of the digital age. Video games and the Internet have taught people to be active participants rather than passive observers; just looking is no longer enough. People expect to dive in, and companies as disparate as Disney, Facebook, and Burberry have been scrambling to oblige them. But although digital technology seems to encourage it, immersion can be triggered by almost any form of media, starting with books and theater. People have been immersing themselves in stories for centuries.

This new normal has not been kind to conventional marketers. Many still trust customer journeys, rational decision-making purchase models, inbound marketing tactics (email, search, social), and noisy ads as the biggest drivers for their campaigns. David Zweig notes in his book Invisibles that this “noisy world” may originate from the current work ethic, which is rooted in using our brashness to draw attention to ourselves. “We’ve been taught that the squeaky wheel gets the grease, that to not just get ahead, but to matter, to exist even, we must make ourselves seen and heard.”

Rose, too, felt this is the wrong way to approach marketing. He mentioned the radical swing of companies that aren’t employing attention-grabbing techniques or tactics. There is a bubbling trend just beginning to make headway in marketing circles. “Some companies let their customers create or string their own stories together,” he said. “It makes people feel like they have ownership.”

To take it a step further, disruptive marketers are heading up some companies on the radical fringe that go beyond their own creative assets and intellectual property, and allow customers to piece together the stories. In this “enchanted state,” the stories may begin to even include competitors’ assets so customers can begin to create mashups or bootleg stories.

Yet much of this new paradigm seems beyond the reach of a compartmentalized marketing department conditioned to create a story that allows it to push and control brand narratives and value propositions. This new form of storytelling makes sense. It’s classically disruptive in its nature because it derives from the world of tech more than from the world of advertising.

WHAT’S HOLDING MARKETERS BACK FROM GOING ALL IN?

If I were to ask you to pull out your smartphone right now (or if you’re reading this on a tablet or laptop, any connected device you choose) and scan it for the apps you use on a daily basis to work, to live, and to communicate, would all of those apps have been developed by the same company?

Of course not. First, your operating system came installed with certain applications, whether you’re using iOS, OSX, Windows 10, or Android. Second, you may use software like OneDrive to back up your photos, but Dropbox to package them and send them to other people. Just as our world is inhabited by information technology professionals, we are our own CTOs (chief technology officers) when it comes to our devices and how we use them to experience the world. If this is true of us, why don’t brands do the same and allow their audiences to immerse themselves in a way that may be disruptive and that may include competitors’ content?

For this answer, I turned to the “power couple of digital marketing,” Rebecca Carlson and Eric Drumm. I’ve known them for the past decade, as they have toiled as disruptive marketers for a variety of agencies and tech startups, including 360i, Ogilvy, Sprinklr, and FindSpark. Now both have interesting roles on the brand side and in the agency world. Carlson, or “Reb,” as she likes to be called, is head of social media at Master & Dynamic, an audio company for the new era. Eric, or “Drummer,” as some call him, is a strategist at GLOW Digital Agency.

Drumm thinks brands will never move in the direction of competitive content because of the way marketing is “operationalized.” There are just too many stakeholders to allow innovation to happen. Marketing campaigns have too many steps, which makes it seem impossible to do things like this that are outside the box. “Many agencies and brands throw bodies at the work. The more bodies the better is their thinking,” said Drumm from Williamsburg, Brooklyn, during a Skype video chat with Carlson and me.

But as you and I know . . . we have worked at agencies where one person did the work of twenty-five people. Many companies like having specialists in silos that can handle the work, but . . . I’d rather go with an agency where there are less people and those people wear many different hats. Whenever you start a campaign where twenty-five people from the brand and agency side need to be in a meeting, you have to check off every box that applies to every part of a department. There really is no reason that [with] a smaller team you can’t have all of those things work in harmony.

Carlson noted that some agencies and brands are too rooted in “traditional trajectories” for their eclectic workforce. If they could think outside the box within their marketing roles, she said, they could think outside the box in how they also dish out marketing.

“My entire career has been working in social media, yet there are so many areas within social media where companies can specialize and capitalize on. They only see the role of amplification.” She said that her liberal arts background has helped her in areas where those with pure business degrees or marketing majors may have a disadvantage.

I [had] a more traditional liberal arts background. . . . At Hofstra University, I took lots of courses in humanities, art, foreign literature. . . . It forces you to understand the context of different people. The difference I’ve seen between [me] and other marketers is the ability . . . to tell a story where you can contextualize from different customer scenarios. Too many marketers get mired simply in data and only the data.

Drumm jumped in quickly to note that some companies don’t favor 360-degree backgrounds.

There are agencies that don’t appreciate a well-rounded background in marketing. They simply hire based on the singular syndrome. They want someone who does creative or analytics. This creates territorial problems. I had a creative tell me at Ogilvy & Mather that I couldn’t be a creative director because I wasn’t a copywriter, even though I wrote six television commercials.

According to Carlson, that type of traditional, rigid outlook and hiring practice may actually cause some firms to be less competitive.

The traditional career trajectory for marketing is very linear. I was always given career advice that “you should have this position within three years,” then “you should have this position and salary in four years; this one in five years.” People excel based on earned experience in an area. What’s happened in our economy is you’ve required people to dip into so many new skills because they are forced to learn them. You have to know how to communicate with people. When I was working at Sprinklr, they valued analytics and were data heavy. They hired me because I was the opposite of that. I was the only person that could talk to people and clients. You’d have one guy that would try to explain numbers and the customers wouldn’t get it and then I would use analogies beyond the math and they would understand. The way the economy is you have two people doing five different jobs each. Much of this forces the smarter marketers to become more ambitious and learn elements on the job.

Carlson thinks that even good storytellers may have an expiration date in marketing.

For things you come across that are of higher value, good companies can’t just have stories, or storytellers. They need to have missions. The CEO of one company involved in air travel decided he wanted to be the most sustainable and the greenest company in the world. Focusing on this allows companies to focus on their mission to make the whole world better. Good marketing goes back to a good company, good culture, and good leaders.

This swing away from stories to missions is probably why conventional marketing may finally be peaking. Frank Rose agreed this is the beginning of the end of conventional marketing. He based this on a number of signals.

Story worlds can’t be hermetic. They need to be porous enough for people to pass in and out of them at will. But the most fundamental requirement for immersion may be the hardest to achieve: the conspiratorial whisper. The time when brand marketers could dictate what people see, hear, and think is long past, if it ever existed at all. Now they invite people into their world and hope enough will stay to make the effort worthwhile.

CASE-IN-POINT