Mar 17, 2023 | Communication, Sales
Goliath, contrary to the stories, usually does win, it is just that we simply never hear about it. There is no drama, no unexpected outcome, no backstory of how little, under resourced David beat the giant who had all the advantages, and got away with the prize.
We use these stories in marketing all the time, because they work, and we know they work, because they have been told to us as stories when we were kids, and we remember them.
They have meaning.
Go to a live event, with someone selling something from the stage, and you will always hear pretty much the same sequence: hardship, battling against the odds, a personalised stage of despair then some insight that shows them the path, which made them hugely successful.
Now they want to help you walk the same path, they offer a picture of what it will be like at the end of the path, you just must be brave enough to take those steps, to grasp the opportunity they are offering, which they know works, because they are the living proof.
Trouble is, just buying the books and courses of someone who has been successful does not make you successful.
In fact, the reality is usually that the only success that someone flogging a book or course has had, is in selling you a book or a course.
Mar 15, 2023 | Change, Governance
One of my sons is a radiographer, working in a large public hospital, carrying some management responsibility while still being ‘on the tools’ in an under-resourced, bureaucratic and highly structured environment.
On one hand there is the health system, hobbled by rules, work practises inherited from another century, wrapped up in extreme risk aversion. On the other you have the doctors, ranging from the juniors who are hospital employees, to the specialists who after years of study and work have the opportunity to ‘cream’ the system.
Of interest here when considering the role of AI, is the relationship between the radiographers, who construct the images, and the specialist radiologists. The radiologists carry complete responsibility for the interpretation of those images, along with the directions for treatment to other medical branches that carry out the hands-on care of patients, from nursing to surgery. The radiographer just takes the ‘pictures’, and is prohibited from diagnosis, no matter how experienced they may be.
Being a commercial bloke, for years I have been asking my son, where to from here?
Being a public servant for life is not all that attractive to him, overworked, frustrated and grossly underpaid. On the other hand, to go into business for himself, the combination of the capital required for the imaging gear, and the simple fact that the regulations require that only a specialist radiologist interpret his ‘pictures’, means they have the private radiography game completely sewn up. No private radiography studio can set up without a Radiologist locked in to sign off every image.
However, AI is happening.
One of the earliest uses of AI has been to read medical images. Their ability to ‘learn’, and consistently improve means that the room left for interpretation by a human is being squeezed into an increasingly narrow field loosely described as, ‘So what now”. As this continues to evolve, the need for the specialist radiologist in diagnosis will disappear. With this increasing irrelevance, in a free market, my son could start his own radiography business. This should be free of the regulatory constraints that dictate diagnosis is only to be done by a Radiologist, whose role will be little more than to ‘sign off’ an AI generated diagnosis. Radiology is a medical speciality whose only role within a very short time will be answering the ‘so what now’ question, and that will be increasingly answered by AI, informed by the outcomes of previous cases.
I am sure the ‘Radiologist union’ will fight tooth and nail by lobbying, to prevent that from happening. They are a part of a very smart and very highly educated cohort who have made a huge investment of time and energy into their future, and are unlikely to easily let the rewards from that investment trickle away.
We have only just begun to think about the impact of AI in the wider strategic context, but it seems evident to me, just based on this small example, that huge changes are afoot, many of which will be hobbled by the past, making the changes necessary to leverage the capabilities of AI extraordinarily challenging.
Mar 13, 2023 | Innovation, Marketing
ChatGPT has blasted into our consciousness over the last 2 months. It has created an equal measure of excitement as people see the opportunities for leveraging their capabilities, and dismay at the problems they see being created.
Both are right, but if we are to make judgements about which side of that fence we choose to sit, it makes sense to understand a little bit about how it works.
These AI tools work on letters, and groups of letters, which then make up words, and the probability of one letter following another, and then another, and then one word following another, and another.
There are about 40,000 commonly used words in English, and billions of words published. From this database computation can give you the probability of a letter following another, eg. The probability of a U following a Q is very high, the probability of a V Following an L is low. This probability logic is extended to groups of 3, 4, 5 letters, one calculation of probability at a time. The outcomes of those cascading probability calculations transforms letters into groups that make up words based on the text used to ‘train’ the software.
Many words have multiple meanings, depending on the context in which it is used, homonyms. Sometimes the spelling is different, but they sound exactly the same. We understand what is meant by the context in which the word appears. For example: if I said, ‘I am on leave’ everyone knows I am on holiday. By contrast if I said, ‘I am going to leave’, it means I am about to depart whatever event we were at. I might also leave something for you at the door.
The word ‘leave’ is spelt and pronounced exactly the same way every time, it is the context in which it is used that makes the difference.
The juxtaposition of words also makes a difference to our understanding. If you remember your primary school grammar, it is all about the position of the subject and the verb.
If I was to say: ‘I am going to leave the party‘ the subject, object, and the verb are in the correct position in English for easy understanding. If I was to say ‘the party I am going to leave‘, most would understand, but would be expecting me to say more, despite the words being identical, it is just the position that changed.
Linguists have studied these relationships for years. Their mantra is: You will understand a word by the company it keeps.
If you take this to its logical extreme, the position of every word in a body of text has an impact on the understanding of every other word, and group of words in the same body.
If the surrounding text to my sentence is about going to a friend’s place for a drink, that will lead to a probability that the ‘party’ has to do with a social event. On the other hand, if the surrounding words were about politics, the phrase ‘I am leaving the party’ takes on a completely different meaning. All these considerations are taken into account by the magic of the probability of me leaving the party when the words friends and drinks are in the surrounding copy. Should those surrounding words be government, and policy, it is more likely the party I am leaving would be a political one.
The operating system of Open AI, and others, have scraped the web for all text published, and stuck it into what amounts to a huge multidimensional spreadsheet. The machine calculates the probability of any one letter appearing after another, then any word appearing next to another based on the occurrences of those letters and words and groups of letters and words in the scraped text. It does this over and over again, spreading the web of probabilities of words and groups of words appearing together, in a particular order, wider and wider, one word at a time, across the body of copy.
This process is extraordinarily computationally intensive. It is hugely expensive to build and program machines that can do these enormous sets of calculations on this amount of text.
If you give such programs a general brief, the best it can do is return a general response. The more detailed you can make the brief, the more explicit the context, the better the machine will be able to use probability to find that combination of words that best matches your requirements, then spit out a response to you.
As a marketer, you understand that when giving a creative brief to an ad agency, the more detail you can give the creatives, the more relevant will be the creative responses. A general brief will give you lots of ordinary creative responses. By contrast, a detailed brief that clearly articulates the target market, product benefits, and the value to be derived from the products use, will generate better creative responses.
ChatGPT is no different, so for good results, give it a good brief.
What makes this so powerful for those who are expert in their domains, is that they will be able to give better briefs, and so have returned better results, which will then be the basis of their creative thinking. This offers the opportunity to improve on the best that has been done to date. For those who are not as expert, their briefs will not be as good, the context in which the machine defines probabilities will be wider, so the output more general, generic, average, and average these days increasingly simply does not cut it.
I hope that helps.
For a more detailed and technical explanation of how ChatGPT works written by an expert, go to the fifth PS at the end of this blog post published when I first stumbled across ChatGPT in December last year.
Header Credit: Dall-E. The brief was ‘ChatGPT algorithms working hard to compute copy in a surreal setting’
Mar 8, 2023 | Collaboration, Leadership
We are all familiar with Darwin’s theory of natural selection. The forces that drove our evolution drive much of what we do, personally, socially, and professionally.
If you apply the idea to the marketing process, where we are dealing with qualitative factors that are really difficult to turn into numbers, you by necessity implement what is accepted as the ‘scientific method’. Form a hypothesis, test it, and revise the hypothesis to retest in a cyclic process, trying to disprove the hypothesis. In the absence of evidence that the hypothesis is wrong, accept it, at least for the moment.
It is the same process as Natural Selection, with some wrinkles.
In marketing you are entering a world where you have a fair idea of where you want to go, but no concrete roadmap. Therefore, you experiment with different approaches, ideas, treatments, whatever you choose to call them, using a combination of data, instinct, domain knowledge and A/B testing to progressively select the best options and improve on them.
Creative selection.
Every project I have been involved in, of any type, has risks.
On most occasions, the only risk that is really considered in any depth is the business risk. Can we make a bob? The answer to this relies absolutely on the forecasts of cash flow, which are usually on the optimistic side. More often than not, I have seen the other key risks we always face in marketing underweighted or completely ignored. Risk factors such as competitive reaction, failure to closely define the real customer problem you are solving, which product will customers stop buying to buy yours, and many others. Failure to consider these sorts of externalities constitutes a significant and often underrated risk to any project.
Without this sort of rigorous analysis and its countermeasures, you are often just left with a cheaper price as the attraction to a customer, and that is not good for anyone in the long run.
Thinking about our marketing as a risk management tool is a useful way of thinking.
Risk for us is reduced when we reduce the risks facing our potential customers, we can guarantee the outcome of using our products.
Creative selection shares another characteristic with natural selection.
It requires sex.
Not physical sex, but intellectual sex, the type that happens when a range of engaged and creative people collaborate deeply to solve a problem, to map an alternative course. Collaboration, real collaboration, not the organised type where a boss throws together a ‘team’ and instructs for a solution. That is never a real team, it is people working in close proximity. A team is one where minds meet to address what all members see as a truly worthwhile challenge that may deliver something great.
When you have that creative ferment, the focus on outcomes for customers, that is where you find great marketing.
Again, a bit like great sex.
Easier to talk about than to find and participate.
Header cartoon credit Scott Adams and the Dilbert crew.
Mar 6, 2023 | Governance, Strategy
The first is to have a monopoly, preferably a regulated one, such as a public asset that has been privatised.
Sydney’s Kingsford Smith airport was flogged off by the government to a private operator who makes obscene profits, not just from the landing rights, but parking, retail concessions, and every other opportunity to gouge. What are your options… catch a train to Singapore?
The second is to be in a market where the person shelling out the money for your product is not the decision maker in the purchase.
The Australian publicly funded pharmaceutical benefits scheme is such an opportunity. Once on the list, the pharma companies sell to the doctors, persuade them to prescribe their magic to their patients, who pay a consistent subsidised cost, whatever the price of the drug to the public purse. Perhaps inconsistently, I am in favor of this scheme, despite the obvious rorting potential it delivers, just disturbed by the lack of governance and oversight. During the height of the Covid pandemic, champagne must have been popping in the boardrooms of Pfizer et al as the governments delivered a marketing nirvana.
I am always caught between amazed laughter and despair when I hear a politician whining in the lead-up to an election about the prices of some commodity, the ownership of which they have flogged off to private enterprise, who then proceeds to make an outrageous profit, because they can. When the buyer is a multinational, you often see that profit disappear, as corporate financial engineering kicks in, and the tax havens suddenly appear as key corporate players.
Just look at what has happened to power prices since the privatisation of the poles and wires, the toll costs of driving from the western suburbs to the cities east, both done in a strategic vacuum for short term political gain.
The reason given was to free up capital to apply against community priorities of education and health. This is a fine aspiration, unmatched by the outcomes.
No matter what words are used, what they have done is subsidise private profit from the public purse.
The Northern beaches hospital at French’s Forest is a prime example. The NSW state government poured 2 billion dollars into the hospital and surrounding infrastructure, in a so called partnership with Healthscope, then an ASX listed company, and all but closed the alternatives in the area, Mona Vale and Manly hospitals. Subsequently, Healthscope was acquired by Canadian group, Brookfield, that featured in the Panama and Paradise papers as protagonists in tax avoidance via trusts located in tax havens. Meanwhile, chaos reigns in the hospital and public health outcomes are compromised.
So much for the competition, community outcomes, and for the tax on the resulting profits.
What a great way to make a bob!
