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Posts from June 2006



This exploration of the hidden side of everything has some excellent tales that force you not to assume the obvious - the corrleation of factors and direction of causality is what economics is all about and this book uses those powerful tools to better understand some interesting social phenomena.

There's lots of good stuff here but the book is founded on a few key principles:

Incentives are the cornerstone of modern life - an understanding of incentives, both positive and negative, is the key to understanding human behaviour

The conventional wisdom is often wrong - it's often used without any substantiation because it's comfortable and easily swallowed

Dramatic effects often have distant, even subtle causes - the answer to any given riddle is not always right in front of you

Being a thoroughly 2.0 kind of book,  there is an accompanying blog and study guide

One Percent for the Planet


After the previous post's eco rant, I stumbled across the One Percent for the Planet, who are working for very similar goals:

1% For The Planet is an alliance of businesses committed to leveraging their resources to create a healthier planet. Members recognize their responsibility to and dependence on a healthy environment and donate at least 1% of their annual net revenues to environmental organizations worldwide. The alliance aims to prove that taking environmental responsibility is good for business.

Joining the 1% For The Planet business alliance can be good for your business because it increases visibility in a crowded marketplace. The 1% For The Planet logo lets your customers know of your company's commitment to ensure a healthy planet now and for the future. It identifies your business as one that recognizes the importance of good environmental stewardship.

Membership can also result in greater customer loyalty and an increased customer base, especially among the growing number of people who recognize and appreciate the importance of environmental responsibility. Your customers, employees and community can take pride and satisfaction in knowing that they support an environmentally responsible company. The 1% For The Planet logo is an emblem of your business's commitment to a healthy planet.

Saving Nemo or Ecological Sponsorship


I took this picture at the Great Barrier Reef. It's a world heritage listed site and supposedly protected as such.

However, some estimates suggest almost 70% of the reef is already dead in some areas and a recent World Wildlife Fund for Nature report projects that as much as 95% of the whole thing might be gone by 2050. Others think this is optimistic.

Depressing isn't it?

So let me explain the Disney logo. It's a pretty simple idea. When I was diving, the single most referred to thing was Finding Nemo, usually in the context of "Found Him!".

This got me thinking. The problem with saving the environment and that sort of thing seems to me to be a type of economic free rider problem - since no one is responsible individually, only collectively,  no one feels the need to do anything about it.

A corporation's primary responsibilty is to deliver growth for its shareholders. Therefore, if we can show that helping the environment will deliver tangible benefits for a brand, we could get these global economic powers and their financial and political muscle  involved.

To do this, I think we need to reposition the whole thing. Take this type of activity out of the Corporate Social Responsibility budget [something that money men consider, at best, a necessary expense] and move it into the much larger consumer marketing budgets: show how it can be used as a strategic marketing platform that delivers return on investment.

So let's call it a sponsorship. Instead of using the World Cup as a global platform, use a World Heritage or other environmental site that is in danger. Follow the standard rules of sponsorship - get involved with something that is consistent with or will help grow the web of associations that make up your brand. Spend as much again promoting the sponsorship as you did on it. Leverage the sponsorship internally, with customers, throughout your product line and touchpoints to build a stronger relationship with people and offer a tangible point of difference that gets people to support your brand.

This is Strategic Philanthropy - no hippies required. Disney sponsors the Great Barrier Reef as ongoing support for Nemo. Further, 1.8 million visit the Reef every year and spend approximately AU$4.3 billion (Australian Dollars) on reef-related industries from diving to boat rental to posh island resorts stays. Disney is active in all of these industries - it has cruises and resorts - so it can rapidly monetise its ecological sponsorship by becoming the official tour operator for the region - as long as it ensures the ongoing sponsorship to maintain it.

Another example: instead of getting Pele to talk about impotence [ok maybe as well as - that was hilarious] Pfizer sponsors a rain forest or two - the link being that that rain forests are the world's biggest pharmacy: 25% of Western pharmaceuticals are derived from rainforest ingredients but less than 1% of the plants have thus far been tested.

Brands that believe in something tend to resonate more with today's consumer.

All we need is to make sure that consumers continue to vote with their wallets, supporting brands that are doing some good.

Virtual Online Communities


My mate Lexa has written an excellent paper on Virtual Online Communities that is essential reading for anyone interested in the 'hottest topic on the web', to steal her words.

It covers the typologies of online communities, how they grow, the business opportunities [and risks] they offer and a brief glimpse into their future.

She was kind enough to credit me for the two cents on Second Life I offered her - thanks Lexa!

You can download the paper here.

Critical Mass - Long Tail

Critical Mass by Philip Ball is a mind expanding multidisciplinery book.

Its subtitle suggest the nature of it - similar to Gladwell's Tipping Point but much more sciencey, it applies the physics of phase transitions - the sudden shift in state from gas to liquid of millions of molecules of water for example - to other more 'complex' phenomena such as traffic and social networks.

All very interesting but the bit I particularly latched on to is the rule, also referenced in complexity theory, that MORE IS DIFFERENT.

What they mean is you can't know something about how large groups will act by observing individual behaviour because the interactions of large numbers change the output in ways you cannot predict from smaller numbers. Groups are not simply scaled up individuals. They act differently.

To me this suggests [if there was ever any doubt] that Mark Earls was on to something with his brilliant paper Advertising to the Herd [you can download it here - scroll down a bit]:

the most important characteristic of mankind is that of a herd animal, not a lone individual

If we want to understand how herds act and respond we need to study herd behaviour - not individuals.

[Side note: Critical Mass also began the popularisation of Power Law probability distribution - more commonly known now as The Long Tail.]