Wednesday, August 26, 2009

Does innovation really sell?

The word innovation is almost universally revered these days. We organize conferences, seminars, and workshops, we write books, case studies, and even poems about it. Businesses are built around the idea of innovating constantly, or at least so claim the marketing messages. Despite such great enthusiasm, however, we collectively seem to have a knack for ignoring innovation when we are staring squarely at its face.

A chapter of the book "Chaos: Making New Science" is devoted to the nature of scientific revolutions. Quoting Thomas S. Kuhn, a historian of science, the author retells a psychological experiment conducted in the 1940s. In this experiment subjects were given brief glimpses of playing cards and asked to name them. What they were not told was that there were trick cards in the deck, like a red six of spades or a black queen of diamonds.

At high speeds, the subjects identified the cards successfully, without perceiving any anomalies. But when the speed was reduced, and they had more time to look at the card, they began to hesitate. The brain had perceived some irregularity but was unable to name it. When the speed was further slowed down, the subjects started to catch on and make corrections.

Interestingly, though, not all of them. A portion of the subjects reported painful disorientation.
"I can't make that suit out, whatever it is. It didn't even look like a card that time. I don't know what color it is now or whether it's a spade or a heart. I'm not even sure what a spade looks like. My God!"

Kuhn argues that professional scientists are no less likely to suffer from similar disorientation when confronted with a situation that is identified by the current paradigm as an "incongruity." Indeed, one does not need to be a historian of science to recall examples of revolutionary scientists facing harsh resistance, and even hostility from their peers, for having dared to challenge the status quo of scientific progress.

Reading this, I realized that innovation faces the same challenges even outside the realm of cutting edge science. The example I immediately can recall is that of OnLive, or gaming with Cloud Computing in general. Since the first announcement of the concept, there has been quite a significant reaction to it, generally erring on the negative side. Many people have shared their opinions on why such a service is not even technically possible, while some others have argued the financial unfeasibility of the endeavour. Industry people have called it "the end of the golden age" for gaming, and even gamers have been uttering the name in contempt.

In marketing, the risk of rejection is sometimes expressed in terms of consumer behaviour. If a product or service requires "significant change in consumer behaviour," as innovation often does, it carries a high risk for rejection. In my technology entrepreneurship classes, the strategy that was most frequently cited was that of "Crossing the Chasm," to overcome that challenge.

It is interesting to observe a similar strategy from scientists who have been trying to let the world know of their revolutionary findings. Stories are abundant, of scientists "dumbing down" their own papers to get them published, or changing the style to make them appeal to their peers, or even choosing obscure journals to publish on, out of desperation. In other terms, disruptive innovation has a way of sneaking in through the back door, like a sketchy, shameful acquaintance that we do not want to be publicly associated with.

This makes me wonder about the wisdom of mass-marketing anything as a "truly revolutionary product" when there is actually truth to the claim. Thinking about the OnLive example again, it seems to me that the buzz has focused too much about the technology, and too little about the value that the consumers will derive, the latter almost dangerously assumed to be self-evident.

The same could be said about Project Natal from Microsoft. The applicability of the technology to consumer experience is still vague at best, outside a narrow range of genres and styles displayed in the E3 presentation.

The dead end on innovation street has a sign pointing to it; "Admiration of novelty for its own sake," it reads, and is very tempting to the innovator him/herself for the pride in having put it together. What we see, though, is that relevance is the key (to the backdoor even as it might be) to gain acceptance. Beautiful as they may be, the guts of your innovation do not necessarily matter much to your audience if they cannot discern how all of that relates to themselves. Even among the brilliant minds of the scientific community, it seems difficult to get people to read anything if they cannot see what the knowledge helps them to understand.

On the other hand a more personal lesson to be derived, whether you are a consumer, investor or entrepreneur, is to keep an open mind and not let great opportunities slip by blindly favouring probability over possibility. When innovation becomes the master of the house, it will reward those that let it in through the front door.

To end the post with a positive note:

If it really sounds too good to be true, it possibly is... true.

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Wednesday, August 5, 2009

The Secret of Marketing with Games Explained with Motivational Forces and Neuroplasticity

In order to understand how marketing with games can be effective, it is very important to understand why people play games -and not just video games- in the first place.

Let's start with a little quiz. Can you tell what the following strings of characters symbolize?

AK47 - MP5 - M1A1 - M16 - UMP (I'll stop here before my blog shows up on national security queries)

If you are a gamer, chances are very good that you will correctly answer the question: they are all firearms. If you have played enough First Person Shooter games (like I have), you can go even further and tell me an amazing amount of detail about each weapon: ammo type, effective range, handling, accuracy, where and when to use each, and more.

I am a peaceful, anti-war individual who has never even touched a firearm in his entire life, let alone fire one. I advocate a gun-free society and do not plan to own any sort of gun any time at all. In short, I am nowhere near being in the market for guns. Yet why does my brain retain such intimate knowledge of the products in question?

Let's look at a less inflammatory example: I have never been in the market for a Ferrari, Porsche, Lamborghini or some other similar car either. Yet there was a time I could almost write up a factsheet about each one from memory. Why did I care?

While you think about that, let me turn back to the original question of why people play games. Playing and playtime are not limited to just humans. Many mammals, particularly those of the predatory kind, make use of games and playtime as an integral component of development of the individual. At its core, playtime is an opportunity for the mind to learn about risky situations, and to master the skills of dealing with them, without taking any actual risk of getting seriously hurt or wounded. This strong association of playtime with learning of skills that are crucial to survival, has shaped our brains into being incredibly receptive to new knowledge and information that we are exposed to within the activity of playing.

It is even more so when the knowledge and information is directly related to winning. Millions of years of evolution has sharpened one trait the most, common in all organisms alive today: competitiveness. Often times there has not been enough room on this planet for everyone. When that is the case, the one that survives is the one that wins over the competition. This is why the need to win (whether as an individual or as a group) is the mother of all motivational systems that our brains rely on. Any skill, knowledge or information linked to that primary motivation is sure to get the utmost focus of our perception and cognition. Playtime, particularly the structured sort, takes advantage of this fact by offering rewards to be won, and defining the set of rules, skills and knowledge to be used in reaching that goal. If the reward is enticing enough, the brain puts a flashing neon MUST-LEARN tag on all relevant information. Let us call this The Relevancy Factor.

A most beautiful advantage of playtime is that it allows for practice of skills and use of knowledge out-of-context. A cat does not need to wait for mice to show up, to hone her skills. In other words, you can simulate a particular experience as many times as you want, without having to rely on external conditions. Neuroplasticity studies have recently shown us that it is a highly competitive environment inside our brains, where the skills and knowledge that we do not frequently use tend to wane, and the ones we frequently use grow to occupy larger space. It is known as the use-it-or-lose-it principle. In this way, playtime allows for much more frequent use of skills and knowledge. Each round of playing reinforces the importance of the subject in question. After enough rounds played, the brain now puts a flashing MUST-RETAIN sign on all relevant information. Let us name this The Stickiness Factor.

Now we have the context for transitioning from Reach x Frequency, to a measure that is more appropriate to marketing with games; Relevance x Stickiness.

Reach vs Relevance
John Nelson Wanamaker, the father of modern advertising as they say, is often quoted in saying: "I know half of my advertising is wasted. I just don't know which half." Over time it has become one of the main struggles of marketing to reduce that ineffective half to smaller percentages by careful media buying, segmentation, geo-targeting, etc. Yet still when one airs an ad on any media, they are still paying for the eyeballs of a good number of people who are not even remotely in the market for the advertised product.

The limitation is that people pay attention to only what they deem is relevant to their lives. I am sure I will purchase a car in the next five years, but I have no pressing need right now to pay close attention to auto commercials. I may think about buying a house in the next ten years, but for all those real estate ads on the newspaper I am quite out of reach right now. And yet they pay for my eyeballs nonetheless.

But what if, as a marketer, you did not need to catch people at that perfect time in their lives to get their attention? What if you could seed the information now and reap the purchase interest later?

This is one advantage of marketing with games: you can make the information relevant by presenting it within an appropriate motivational context. I may not care for a muscle car, but if I am playing a racing game, I need to learn which one is the best, which one can turn the tightest corners, etc, because I want to win. Once the relevancy is established, the message is not going to waste anymore.

Compared to mass media advertising, your marketing does not need to be divided into Effective and Waste portions. Instead of that, it creates Effective and Collateral segments, the latter of which has a higher chance of triggering interest (compared to Waste) at later stages of the consumer's life.

Since relevancy means superior engagement of the consumer, we can also use the term Engagement Factor.

Frequency vs Stickiness
Frequency relies on mere repetition to cement the information in the minds of the audience. It is a passive method of "learning," requires constant upkeep, gives diminishing returns, and is also hard to manage. In short, it is grossly inefficient.

Stickiness, on the other hand, relies on the use-it-or-lose-it principle of neuroplasticity. When marketing with games, it occurs from constant self-exposure of the consumer to the marketing message while having fun. The fun factor engages the individual and keeps them coming back for more, allowing for many more instances of direct experience where they can actively use the information. When the use of information is directly relevant to the structure of the game, this allows for the brain to retain high volumes of information with an unusual level of detail about the product that is marketed. This is also how people learn more about European history, from games like Europa Universalis, than they do in many years of history classes in school. Compared to mere repetition, this retained knowledge also lasts much longer in the brain before it starts to wane due to lack of use.

A hybrid: Reach x Engagement x Stickiness
In order to have a succesful marketing campaign with games, you need three components:
  1. The game must get in the hands of the audience. If it's a commercial game, it needs to sell. You can distribute it for free to get the highest degree of reach.
  2. It needs to engage the user with your message. Your message needs to be relevant to the game at its core. Absorbing the information should be as closely tied to the game goals as possible.
  3. The game needs to be fun. This might make you say "Duh!" but it is surprising how even some commercial games miss that simple target. If it's not fun enough to keep the user coming back for more, it will hurt the duration of exposure to the message. The brain will not retain the information.
Hopefully this article will help people to start thinking beyond getting the eyeballs with in-game advertising, and start using the games medium in a fashion more suited to its true competency: engagement and interactivity.

It is also easy to see through such thinking, that people who have a deep understanding of both worlds (marketing and digital entertainment) will be in high demand in the future, as the video games sector continues on its path to becoming the dominant media.

If you are interested in learning more about neuroplasticity, I highly recommend reading The Brain That Changes Itself.

I should also note, the Engagement x Stickiness may also be worth thinking about if you are in education.

As always, for questions and comments, please feel free to use the comments section here, or email me at taykad-at-hotmail-dot-com.

(Addendum: JP Sherman has written a nice expansion to this post, applying the same principles to video game marketing itself. Check it out.)
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