Time: A Flat Circle
A non-prediction prediction: when it comes to mistakes, 2024 is going to look a lot like 2023.
When I started this newsletter, one of my hopes was to overcome two habits simultaneously: overcontextualizing and rewriting to the point of not sending at all.
These goals sound contradictory, as one is an outcome of editing, and one is essentially not editing, but they’re both results of second-guessing yourself. For me, a few trips around this loop can result in a piece cleansed of original thought, replaced instead with a reinforcement of readers’ existing beliefs.
The persistence of this habit led me to write predictions even though I believe predictions are usually inaccurate and, as a result, misdirecting. In an earlier draft, for example, I surmised that the most trustworthy predictions are those in arenas where consumers are largely absent, like finance, only to read today that over the last 23 years, Wall Street forecasts have been inaccurate by an average of 13.8 percentage points — double the average annual performance of the stock market itself.
So, I scrapped that draft. In its place, I wrote what I believe is already true but widely ignored. These points center around the recurring idea, trapped in my brain, that marketing is overvalued, an idea that could be restated as: successful marketing is an outcome of successful banalities like efficient logistics, strong supply chains, good manufacturing, logical distribution, and product line cohesion, to start.
But a second theme is perhaps more important. Marketing is now a catch-all term applied to new market forces that have less to do with marketing than those banalities, and it’s this misapplication that leads many brands to failure. And my prediction, if you can call it that, is that we’ll continue to see these mistakes for the foreseeable future, at least through next year if not beyond.
On that note, here they are, in no particular order, to close out 2023.
Social commerce is distribution. Instagram Shop and TikTok Shop are sales channels and should be approached as you might retailers or Amazon. Yes, sales and marketing intersect within them — and marketing exists for sales, after all — but their value should be assessed in the framework of margins, logistics, inventory, and so on.
Social commerce is also overhyped. Trade media points to TikTok Shop’s success in Asia as a sign of its promise, but the region spent $650 billion on live commerce this year. The US spent $20 billion. The US and EU have simply never shown an interest. Not only did Instagram fail, but so did TikTok, and right out of the gate.
Most retail media networks are misfires. The focus of the retail industry this year was media networks, or the ability to buy ad space on retailer websites à la Amazon. 65% of retailers predicted that brands would grade their networks with an A. 6% of brands did. (An unsurprising finding if you’ve ever worked with traditional retailers.)
At best, though, retailers will become indistinguishable. The cause of the previous failure is said to be bad technology, but I think it has something more to do with the concept itself: you can’t be a curator and an advertising network. Advertisers want customers, and customers want brands. To populate enough of both, you need to let everyone in, and if a retailer succeeds in doing so, they’ve lost their purpose.
DTC is unaffordable. Amazon might be, too. Some low-hanging examples: DTC darling Parade made $75 million this year and was offloaded in a fire sale. Amazon aggregator Thrashio raised $1 billion to acquire brands and grow them on Amazon, then went bankrupt in two years. With a billion dollars.
The agency landscape is unhinged. Agencies once specialized in media or creative. Now they specialize in influencers, organic social, SEO, Amazon, Walmart, retail media, content, or even creative optimization. Half of a CMO’s job right now is finding the right combination.
In-house agencies are gone. Considering the point above, full-service internal teams are not a cost-effective solution. Not only do they lack the talent to evolve at a necessary pace, but they can’t meet a list of needs if it’s always growing. Don’t do it. (I’ve tried and am still not sure what to make of the outcome.)
Efficient content production is the dark horse. If you think media is expensive, wait until you see how much it costs to produce new campaigns every two weeks — while simultaneously producing daily organic content. Unique and affordable are at odds here. I’ll save what I believe to be potential solutions for another day.
Turnkey global distribution is already gone. Amazon, Meta, and others have all abruptly hit the wall of international regulations. This is particularly true in the EU, where Threads was delayed by the DMA and recent ESG rulings made launching on Amazon insurmountable for small brands. (These rulings are a win, in my opinion, both for the planet and the money you’d waste preempting demand with distribution.)
More CMOs will take CEO positions. As I suggested at the top, the line between operations and marketing is increasingly blurry, and this shift will benefit those who are learning by doing. We’re already seeing this movement between brands like Gucci, Stone Island, L’Oréal, Loro Piana, JW Anderson, Louis Vuitton, and Dunhill.
On that note, see you in 2024. Get some rest.