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Media Perspectives - Antifragile Marketing
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MEDIA PERSPECTIVES - June 10, 2015
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(Originally Published: December 20, 2012)
"...risk management is about fragility, not naive interpretation of past data. If Fannie Mae is sitting on a barrel of dynamite I would not use past statistical data for my current analysis. Risks are in the fragility."
- Nassim Taleb, author of The Black Swan
"Not seeing a tsunami or an economic event coming is excusable; building something fragile to them is not."
- Nassim Taleb
Antifragility is a term coined by Nassim Taleb and the subject of his latest book;
Antifragile-Things That Gain From Disorder
. You will be hearing a lot of this concept in the coming months/years. Basically, antifragility applies to those things that get stronger or benefit from chaos, volatility and uncertainty.
Many people confuse antifragility with the concept of decreasing fragility. When we decrease fragility, we make ourselves more resilient (robust?) to withstand the ravages of unpredictable negative "Black Swans." With antifragility, we actually gain from the disorder and chaos of a negative "Black Swan". Taleb gives as an example a forest fire gaining from the volatility of a steady wind which fans the flame and spreads the fire.
Both fragility and antifragility are concepts that seek to help us live in an evermore complex and uncertain world. Those reading this from an online marketing perspective (and especially the multitude of service providers) will recoil at antifragility because its common sense flies squarely in the face of mighty algorithmic equations that purport to tame uncertainty. It is axiomatic that algorithmic prediction is largely a fool's errand; a truth quickly discovered when we realize how little "skin in the game" - how little of their own money - those most eager to push algorithmic marketing solutions are willing to invest.
The marketing landscape is littered with the detritus of "bigger, newer, faster", a conspiracy of flawed reasoning that has driven down performance, crushed margins, driven up costs and created an impossibly toxic and complex commercial media environment that simply can't be sustained - on anybody's nickel. We can shuffle the high-tech deck chairs all we want, but the good ship Algorithm is clearly going down, collapsing under its own over-inflated weight.
And yet we keep shortening the legs on the table in our desperate hope to level it, not willing to accept the notion that uncertainty is cooked into the existential nature of our universe. Those among us brutally honest enough to decry the naked emperor would conclude that all of these data-driven schemes when pushed to scale have increased risk and failed more often than not.
"We are obsessed by prediction while we should focus on what our exposure to uncertain outcomes is all about. What matters is not, say, the uncertain outcome x but how it affects us."
From Convexity and Conflation Biases
In the same sense that the best hiding place often is the most obvious, the answer is often found in the question. So, rather than asking ourselves how to combat uncertainty and chaos, perhaps we should be seeking ways to embrace them. For example, it's no secret that the newspaper industry is in utter chaos, with 27 straight quarters of declining advertising revenues. The antifragile marketer views this as an opportunity to negotiate rock bottom rates or seeks to create common cause by novel new partnering relationships. The newspaper industry still collectively represents a potential to reach 70 million-plus consumers, so the challenge should not be how to succumb to a fragile situation, but how to exploit it instead.
Let's move to the online ecosystem. The top 50 online websites (out of 250 million sites) represents 90%+ of all advertising revenues. This leaves 249,999,950 websites and publishers in rather desperate circumstances. The antifragile marketer seeks to benefit from the stress in the system while the rest of the field tries to figure out how to make the top 50 websites more "efficient." Taleb's observations would suggest that instead of utilizing ephemeral algorithmic exchanges that promise targeting efficiencies, marketers and publishers would be better advised to work together toward durable solutions that eliminate layers of complexity and useless middlemen. The more complexity we eliminate, the more we can actually benefit from a bloated, chaotic ecosystem.
The first "rule of thumb" for marketers should be to adopt the opposite of the herd mentality and avoid the most successful "top 50" online properties. There isn't a single media entity that can't be bought around, something direct marketers spending their own money have long understood. As Paul Simon once said: "One man's ceiling is another man's floor." Let me suggest that chaos and disorder when embraced instead of feared, is a recipe for success in the right hands. That is what antifragility is all about.
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