All posts filed under: Leadership

Ten minutes of Gaga

By Mark Di Somma

If I was a Lady Gaga fan, how would I feel about her claim to have written her latest single in 10 minutes? Would I see that as a sign of her huge creativity? Or would I, on reflection, consider that the return for minutes invested, assuming this is another big hit, is going to make most Wall Street bonuses look relatively modest? A cynic might say if it just took 10 minutes then she didn’t do a lot to make a lot. It didn’t take 10 minutes of course. It took all the experience that Gaga brought up to that moment, and all the subsequent time it took, both hers and for everyone else involved – to get the ideas in the song expressed, captured, edited, packaged, marketed and distributed; time probably better expressed in at least months. So the key value metric here is misleading; it’s not actually time to create (the idea), it’s time to market (the final result). By drawing attention to the 10 minutes, Gaga has framed the product in …

The value of market valuations

By Mark Di Somma

Now it’s Twitter’s turn to be valued like a phone number, and it seems I’m not the only one thinking this is just a little OTT. Google’s Eric Schmidt says there are clear signs of a bubble. Great. Then he adds: “But valuations are what they are. People believe that these companies will achieve huge sales in the future.” Isn’t that the point of bubbles? They’re based on valuations, and hopes, which people say are beliefs, and for some reason we accord these valuations the status of quasi-science. They are of course nothing of the sort. They are today’s guess, this minute’s emotional response, a numeric whim – surely that was the point of the GFC. Let me apply another quote from my friend Gren. Twitter worth $10 billion, with the potential to grow into a $100 billion company? “That’s dumber than a box of hammers.” Or maybe not. At least with a hammer you can nail something down.

Huff or puff?

By Mark Di Somma

What to read into AOL’s acquisition of The Huffington Post for 32 times earnings? Another sign of a social media bubble? A bid for respectability by the corporate that, for many, has defined the unsuccessful merger? Just as importantly, I’m struggling to get my head around the brand compatibility. Huffington Post – smart, sassy, informed. AOL – huge (though nowhere near as big as it was), dial up, looking to get back some high ground. Seems like Huff is looking for scale here, while AOL is looking for the quality they believe will drive advertising sales. I hope this doesn’t turn into a bun-fight between resources and returns. I’d also hate to see Huff Post’s integrity and feisty character compromised by the juggernaut. And while Arianna Huffington herself may have done this partly because she’s worried that the Post is erring towards “the innovator’s dilemma” of sticking too closely to its strategy, I’m sure I don’t need to remind her that corporate history is littered with the wrecks of brands who tried to be too …

The real power of endorsements (and other opinions)

By Mark Di Somma

The purser on the plane this morning reminded us as we landed that the airline had just won two industry awards. She didn’t name them but the point was made. Endorsement brings that extra degree of confirmation that we as consumers have made a good choice. It plays to our collective wish to make wise purchases. It tells us we got it right. The lack of specifics doesn’t matter. Schemas – the snapshot opinions that we form of people, places, things – are hugely powerful influencers. They help us navigate too many choices, too many questions, too much conflicting information, too little time. They motivate us to engage. Without realising it, we form schemas for almost everything. Some are positive. Some are negative. Some are unjustified, either way. But the most common one is actually blank. It says “I don’t know what to think”. People literally don’t have a clue. The reason is simple. You didn’t provide one. Your website looked the same as everyone else. The email you sent them was formulated and vanilla. …

That’s a wrap

By Mark Di Somma

Format is really just a polite word for expectation. The way something is meant to be packaged. Years ago, they told The Doors they’d have to recut “Light My Fire” to make it a single because it didn’t fit the format – too long. It was an OK single I guess, but it was nothing like the real thing. Change led to compromise. The original didn’t cram into a single for a reason. It would be like trying to make a 3 minute version of Bohemian Rhapsody. What are you going to leave out? But the reverse is also true – works that may have one or two good ideas, repeated and padded to try and make them look and feel more substantial, to make them extend into the format. Here’s the reasoning behind that action – if it’s a book, it must be 180 pages, so 180 pages it will be. Otherwise it’s not a book, it’s an extended essay or a long article or a something else. It must be that long in …

How do you value a crowd-based brand?

By Mark Di Somma

What is the value of global friendship and can you actually assign a price to it? Facebook’s own stats say that the site now has more than 500 million active users, and that 50% of them log on to Facebook in any given day. That means Goldman Sachs’ implied valuation of $50 billion suggests every active user is worth around about $100. Is that a lot? I actually don’t think it matters. The much more interesting question is: $100 – to whom? Users are not paying money to talk to their friends, post their photos and catch up on what’s going on as they generate content on Facebook, but if Goldman Sachs is right, then that’s what their millions of activities will generate for someone else. So who’s anticipating the $100 of value, and just as importantly, how? Investors, yes. But based on the production of what? There have been any number of comparisons between Facebook and Google – but to me, they overlook a fundamental difference. Google does produce something: a very powerful search …

Refreshing the connections: a perspective on The Pepsi Refresh Project

By Mark Di Somma

It’s great to see Pepsi deciding to spend money over a year in communities instead of splashing the lot on the Super Bowl. It certainly makes sense at one level. Conscientious consumers are asking corporates more and more questions about where their money is being spent and how committed they are to the people who buy their goods. On that score, this is huge. And it certainly lays down the gauntlet in terms of challenging corporates to think about where they put their money. Top marks for that too. The ultimate Pepsi challenge. It’s a move that has huge feel-good. Let’s face it, what’s not to like? Pepsi’s given away more than $20 million in grants to causes that otherwise would struggle to find the money they need to make a difference. Touchdown in that regard. And there’s been incredible traffic online. So a huge participation win. A lot of people talking over an extended period of time. But there’s one other thing I think they still need to do for this to really work: …

Pass the salt

By Mark Di Somma

Once, salt was one of the most valuable commodities on earth. Usual supply and demand dynamics: plenty of need because of its preservation skills versus hard to find. Over the centuries, it’s been a form of treasure, a trading currency, the cause of wars, a builder of empires and, in the case of Ghandi, a catalyst for protest. Today, it sits on a shelf in our supermarkets and we’re warned not to include too much of it in our diets. We don’t give it a second thought. The modern equivalent of such a rarity is probably time. Ask anyone how much free time they have these days. Most will tell you they don’t. They haven’t got time to do this or watch that or attend something else. They have so much to get through. And yet, according to Fast Company, Americans are spending more time on Facebook and Twitter than ever before: more than 2 hours a month on Twitter; more than four and a half hours on Facebook. It’s fine. It’s enjoyable. It’s part …

Flogging a dead Playhorse

By Mark Di Somma

Brands retain value from their legacy providing they are still seen as relevant and interesting, providing they are still competitive and providing they retain goodwill. Or if people have had enough time to forget why they failed in the first place. In other words they can recover if they have enough momentum, or they can be reborn on the back of nostalgia, but once they’ve flatlined, and particularly if they have been in that state for some time, they can be very difficult to resuscitate. Take the case of the Playboy brand. It’s powerful, sure. And it does have significant heritage. It’s logo is recognisable anywhere and there is huge history there. But can it just continue to trade on the value it had? Doubtful. It is, as Adam Gordon rightfully points out, “a classic failure of industry foresight” and even though Gordon observes that “Brand is value stored up in the past to be reaped in the future”, I don’t share his apparent optimism about the brand. Playboy cannot realistically expect to carry on …