In part 1 of this series I highlighted a major force in game mechanics that exist today, stock markets.
It’s hard to look at this in isolation and to dream up other mechanisms and incentives that could be created to deliver more than just financial value.
Here are some inspirational examples of incentives and mechanics that are already used or could be used to create new types of value;
«just had to add Twitter today after initially posting this yesterday».
Twitter Promoted Tweets. Tweets are rated on a metric called “resonance”. Resonance is driven by factors such as how much a tweet is passed around, marked as a favorite or how often a user clicks through a posted link. This ranking of a tweet measures the usefulness of the tweet to everyone. From Twitter Search, anyone (brands to begin with), can pay to sponsor a tweet in the results that is resonating. However, the tweet will only be shown if it’s resonance is high enough.
Here the host of the game are the people. The players are the brands/advertisers. The brands have an incentive to make the tweet useful to people. They have an incentive to make the interaction meaningful. The outcome that twitter creates out of this is that people see brands that matter. Brands can only play if they are truly useful based on people’s feedback, making advertising hyper-efficient and connected.
The social stock market. This doesn’t exist yet, but Muhammad Yunus is suggesting a stock market for social business. In such a market, businesses are measured on #1 their social benefit (not just profits). As with the stock market, the hosts of the game are the investors, and the players are the social businesses and entrepreneurs. Investors invest money in businesses they believe will generate value for society.
Google PageRank. Google invented the algorithm that ranks content with more citations higher than those with less. This is a content quality ranking which is then passed to the people who search. Google became a great search engine because the quality of the results were higher than anyone else at the time, and people valued that.
Google and the people who use it because they value content quality, are the hosts of the game. The brands/products/services/content providers are the players. The incentives are to for the players to create higher and higher quality content. The leaderboard is the SEO position for a particular keyword.
By trying to achieve a higher leaderboard position, people gain the benefit of being better informed, educated, connected with stuff they care about. Other companies have been started to plug holes where there are content gaps - places where people value having higher quality content. Google benefits through a selling market for keyword advertising.
Walmarts Sustainability Index. Working on behalf of their customer’s values, Walmart is defining incentives around sustainability, evaluating things like energy use, material efficiency and the impact on communities where products are made. They will regularly quiz their 100,000 global suppliers and share the results with the shoppers. The shoppers are then better informed to make decisions.
The goal is to drive social, economic and environmental change. imagine making a laptop purchase based on the level of carcinogens, or the level of mineral extraction required for the components, or water use - the data exists, and walmart among others are trying to make it visible so shoppers can decide what they care about. The assumption is that with the right data, people will change their purchasing decisions which will effect change.
So back to games, the hosts are the shoppers and the players are the product suppliers. The leaderboards are the rankings that end up being published, imagine a list of the top 10 shampoos based on water use, or having in store/on web site descriptions that have a ranking out of 10 in each area evaluated.
Walmart is the market where this information is used, in this case a market for personal goods. The incentives however are greater, especially if the suppliers also provide products to other retailers, walmart essentially drives changes across the whole market.
Trustworthiness Currencies. Defined by Cory Doctorow, the Whuffie, is a currency for reputation. To earn currency, you have an incentive to develop a reputation. There is a parallel to Google’s Pagerank, where by quality is inferred through some structural relationships. The Whuffie Bank was set up to start generating whuffies for people to claim and earn. They use re-tweets or social network references to achieve the same goal, except instead of quality, it is reputation. Here the hosts are the bank, and the bank’s customers are the players.
So this is one isolated market, where you can trade your reputation for other stuff, but extending it further, Craig Newmark calls for ethical and interchange standards around trust currencies, which would in effect make trust transferrable out of the Whuffie bank, into other banks. This ability to transact and trade is critical to further adoption.
So here are four different areas of gaming to create new types of value (I’m sure there are others I have not found);
- social benefit,
- media content quality,
- usefulness/interest (resonance)
- sustainability, and
- trust and reputation.
There are some key takeaways that I think are important for anyone designing and building games for society, culture and people;
- The incentives should be transparent - imagine if walmart ranked a supplier with a low rating, but never told them where they were lacking. the supplier would never improve. this is one area where Google lacks with Pagerank - they are extremely secretive about their algorithms, because they don’t want people gaming them, even though this is one big game (oh the irony). I suspect the alrogithms really aren’t that useful to society, content would not be improved x10 or x100 if they opened up.
- The points/rankings data should be open - anyone that wants to use it should be able to, to maximise it’s application and benefit. imagine a walmart competitor using the same data to provide information to their customers, making more people are aware, and therefore making a greater impact on suppliers. if only walmart benefited, society doesn’t receive the best impact.
I’m not going to contribute to this debate, and whether or not social gaming is ultimately evil. I fundamentally believe that gameplay can be applied in meaningful ways in many different applications.
However, I suggest that we are looking in the wrong place to identify the meaningful value game mechanics can bring to people.
Games are structured by having a game HOST (farmville) structuring incentives to elicit certain behaviour out of the game PLAYERS (the farmers). There’s many ways to do this (here’s a gaming mechanics 101), but at it’s simplest level;
- players receive points for carrying out activities,
- players see feedback on progress like leaderboards, and
- players are rewarded things like badges, effectively showing they have achieved certain goals.
The incentives in many of these games are structured to do one thing really well, make money from the players who pay the game hosts. The outcome is purely financial (with some social engagement window dressing). It’s primarily a one way exchange of money.
A really important question we should ask is how can we make the outcomes more useful?
How can we create better incentives that are more valuable to society, culture and people?
Should we look at frameworks and structures that are two-way? Delivering value symbiotically?
My suggestion is that we can flip these mechanics around - what if the PLAYERS became the HOST and the HOST became the PLAYERS?
Imagine a group of people (the hosts) set the framework and parameters of outcomes and incentives that are valuable to the group; personally and as a community. These outcomes could be related to things like environment impact, sustainability, coolness, fashion, reputation, trust, finances, culture.
Now imagine there are businesses that are (the players) that would be interested in trading with these groups. If the businesses acted in certain ways, they would be awarded points, they could see how well they are doing on a leaderboard, and they could be awarded badges for achieving certain goals.
Now this idea isn’t just theoretical. There’s a game like this in hundreds of countries around the world today - it’s a financial market called a stock exchange.
The hosts are the investors. The framework of incentives that exist are primarily driven by law (organisational structures) and industry regulation. The investors subsume these incentives as what they value in outcomes. The primary outcome is financial gain.
The players are the businesses that are listed on the exchange. Their goal is to increase share price and market capitalisation, to increase value to their investors/shareholders. The activities they carry out are oriented around making this happen, and they can see indexes for their industry which are the leaderboards.
How much is something like this worth? - well the NYSE has a market cap of $8 billion, but the real value is in everyone else that plays the game - The aggregate market cap of all equities, derivitives available through all the NYSEs’ markets is $15 trillion.
And this number doesn’t necessarily capture the value of all of those unlisted companies that aren’t measured on the exchange but are involved in managing and creating value - from brokers, to investment managers, to banks, to data providers. There’s a lot of complimentary services and products that exist because of the market.
I hypothesise there is explosive potential in game mechanics from this perspective.
The potential is far greater than one single company like Zynga who creates games just to create value for themselves.
In these new games that we can create, we should look beyond finances because that only supports businesses driving people to consume more and more. We should be looking at other types of capital and meaningful stuff that are more highly valued by people, culture and society.
In Part 2, I am going to illustrate some other examples of games and their markets that are trading in more than just finances today.
In Part 3, I am going to propose what this means to marketing and how game mechanics can make marketing more meaningful, by “plug[ing] brands and ads into the social and cultural structures of interaction itself, to make return on attention hyperefficient”, “through markets, networks and communities" (ht Umair Haque for his ridiculously early insights - these links are almost 4 years old!).
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I had a dig at why marketing needs meaning and talked about the importance of having principles. That was very conceptual, so here are my suggestions for some tangible principles on which a great marketing business should be built. There are almost certainly better ones but here goes;
People and feedback not outdated audience research. Web sites use traditional audience research to segment their users based on many attributes, to then subsequently sell premium advertising based on these segments. A different approach is to open up a direct connection between the advertiser and the people to capture their preferences and feedback directly in real time, continuously, keeping information relevant and accurate.
Relevancy not interruption. Treating an audience as one mini-mass segment is wasteful on the time of the people using the sites. The interruption and annoyance created by advertising that is irrelevant frequently becomes unbearable across many types of online media. Use the power of people’s feedback to make advertising relevant to the individual.
Opt In not Opt Out. Through pressure from advocacy groups and in some cases legislation, advertisers have been forced to be able to let people opt out of cookie tracking and other technologies that determine what advertising should be shown. No advertiser or advertising network has ever started by asking people to opt in before any advertising is ever shown, they start with opt out. This is the biggest mistake ever made, and has created a fundamental imbalance and an adversarial relationship between people and advertisers since day one. We should shift the balance in favour of the people.
Long term benefit for people not short term economic performance. Each advertising campaign that runs is focused on maximizing performance today, regardless of the impact on people or even the advertiser/brand. We believe that the value of the advert to the people is paramount over the long term, not making sure impression and click-through targets are met just because they have been promised.
Open and transparent not secretive and opaque. Advertising personalisation technologies work in secret, capturing information on one site to be used in collusion (let’s call it what it is) on another site or a later time, where people have no knowledge of their use or application. The information they typically capture can cover both personal profiles as well as usage and even purchasing behaviour, all extremely personal information. We believe that disclosure should be driven individually by the people, with tools to make it easy to access and control all elements of profiling and it’s application.
These aren’t the only principles, and perhaps they overlap and perhaps there are gaps. Let me know if you think of any more.
I’ve been inspired by many people who stress the importance of meaning, purpose and doing stuff that matters.
Ultimately at the root of capitalism today is a focus on shareholder value over principles and ideals that matter to people, communities and society. A focus on profits no matter what the costs to others.
Economists call these costs; a type of externality. The most talked about costs today are things like homelessness and unemployment, the environment, and lack of universal healthcare.
Marketing is no different.
As an industry we haven’t cared about the cumulative costs to people. These may seem minor, but if the media industry is to survive and grow, it needs to get a grasp on these costs and focus on benefits instead. I’m not talking about product and feature benefits, I’m talking about benefits that are fundamental to the lives of people.
To help visualise, here’s a starter list (I’m sure there are more) of the costs of marketing today.
- irrelevancy (hello facebook)
- nuisance (ipad ads explosion)
- privacy (oh hello again facebook, and every ad network out there)
- marginal personal value (ad nets fighting over pennies)
- betrayal (Google following you around the internet)
Bear in mind that all of these costs are deemed acceptable by advertisers, publishers, and all the intermediaries. Why?
However, these costs are not acceptable to the most important part of media-industrial complex - the people.
So how do we move forward?
By designing principles on which we build new capabilities and services that are beneficial and meaningful to people.
I see hope, even from within the industry. Jim Stengel who is the ex-CEO of P&G - the largest advertiser in the world, is writing a book;
"Grow: How the World’s Best Businesses Use the Power of Ideals to Outshine the Competition"
Growing businesses by using the power of ideals. Of principles. Of stuff that matters.
I’m glad I don’t stand alone.
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Every time I touch the advertising industry, it makes me furious.
Every time I think of it, I see an opportunity for change. Not only is there a lack of innovation (i.e, see yet another gimmicky ad format that serves to interrupt my experience), but the industry is built on surreptitiousness and deception (e.g., cross-site profile tracking and behavioural targetting) for the sake of efficiency.
And ultimately acting in secret and deception is evil. (please argue with me if you disagree).
There are so many participants in the value system who work to extract attention and monetize eyeballs. Listen to those words. Language forms our key sense of the world, so does it make sense to talk about the eyeballs of people in that way?
The stance is all wrong - people are put on a defensive from the start.
Legislation and self-regulation have been needed to stop those with the power from going too far and being more transparent. There are many in the industry who don’t want change to happen.
But the internet can efficiently disrupts intermediaries. The internet shifts power.
Display (i.e., non search) advertising on the internet is still sold the same way advertising has been sold for 50 years —> the old newspaper model where audiences are large amorphous blobs. Large groups of people who don’t have a voice and who don’t interact. The blobs are being made relatively smaller but the people are not engaged.
With advertising today, people are only used for impressions and clicks. It’s a one way exchange of attention - an advertising on-night-stand. Nobody cares about me beyond a relatively very short interaction.
The one neglected participant in the whole marketing system is the PEOPLE
We aren’t inert and invisible anymore. We aren’t silent and we aren’t happy about deception and secrecy. Why are we treated this way?
It is my belief that armed with the right mechanisms and tools, people can change the shape of the whole marketing industry.
People are the ones with the eyeballs, they can make advertising more meaningful to themselves and to others; culturally, socially, personally, and humanly.
(I just randomly found this great video that has another take on this dramatic shift in reality)
- Hasn’t communication always been two way?? (theengagingbrand.typepad.com)
- Jack Myers: Will Positive Upfront Prospects Depress Network Investments in Innovation? (huffingtonpost.com)
The economic architecture of advertising, and in fact all marketing, has not fundamentally changed for 50 years.
The internet has a track record of disintermediating all types of agencies to create new ones; from new record labels connecting artists directly with listeners, to new retailers connecting designers with buyers, to new matchmakers connecting entrepreneurs with investors.
However there is one massive industry, marketing, that has not changed at all.
We still have the same design and graphic driven advertising we’ve had for decades in newspapers, and television. Only now it’s on technology steroids; user profiling, behaviour tracking, retargetting, cross-site tracking, with more interruption than ever before. Check out this transparent page takeover on the iPad. Nice (that’s British sarcasm by the way).
The thing is, technology is just being used to help us wring out maximum efficiency and productivity from an existing system. At some point, the returns will diminish, you could hypothesise that they already are.
So how do we change this? What would a new architecture of advertising look like?
I propose we need to start from scratch. At a high level, here is how;
We need to build from the ground up. Like so many other industries, we need to disintermediate and shift the roles of the middlemen. The efficiencies to be gained come from being more open and transparent, removing the financial and relationship arbitrage that most middlemen play (think researchers, agencies, planners and buyers).
We need to connect in new ways. Connecting the people who have needs with the marketers who have services and products. The internet affords an always on, two way communication and feedback mechanism. We are just learning how to use it, to listen not talk.
We need to structure new incentives. As a marketer I have very little incentive to stop putting ads in front of people, I’ll deliver as much as they can tolerate. As a person, I have very little incentive to experience the ad - I’ll go an make a cup of tea or use an ad blocker (the equivalent of ad skipping on a DVR). New incentives are about creating meaning for one another, not trading off revenue against anger.
So, this is why I’m here.
To find others who want to join me to rebuild marketing from scratch.