Flow Theory
Welcome to People vs Algorithms #45.
I look for patterns in media, business and culture. My POV is informed by 30 years of leadership in media and advertising businesses, most recently as global President of Hearst Magazines, one of the largest publishers in the world.
Brian Morrissey and I are making a podcast. Listen here.
I am definitely not in the “flow.” A European business trip has me deeply jet lagged. Let’s fight it and explore the flow concept a bit.
The notion came to me as I was flipping through a slide deck outlining proposed strategic investment initiatives at a mid-sized media company I am involved with. The document offered a classic breakdown of the opportunities, the structure of which I am sure you are familiar — what is the total addressable market (TAM), how much is it growing, what is our unique product opportunity, how will our approach serve an unmet need or trump a competitive offering… and so on. Which was all fine, but I kept wondering if there was a more pragmatic way of mapping the opportunity, one that acknowledged the fundamental reality of doing business in the digital age.
I kept coming back to the idea of "flow" — that is, how target customers are moving through the digital pipes today, broadly defined. Where are they starting and stopping? What content are they consuming and making? How are they gathering? What is influencing their paths? Their mindset? How many different kinds of flows are there? How big is each? How might we intercept activity inside of them or add value to an existing flow? How much will it cost to get inside the flow? What is the easiest and fastest way to find out?
Flow is how I think about the path of consumers in the digital world. As a simple example, how someone researches a product by starting with a search query… as in "what are the best shoes for trail running." This is a basic search-driven flow. One's ability to find efficient ways into this search flow, by paid or organic means, can dramatically influence business outcomes. Understanding the volume of said queries, how others show up, the importance of content and recommendations inside of this flow and how you might hijack it within the margin profile of your business is key to understanding how hard it’s gonna be to win.
There are many types of flows. There are contextual flows — places where authoritative commentary shape perceptions and how decisions are made. An article in a running magazine or newsletter. There are conversational or community flows, places where enthusiasts gather to express passions and opinions on a topic that ultimately shapes consumer perception and commercial activity. In the example above, Reddit or Facebook forums on trail running or influential members of a community talking about the same on any social platform. There are commercial flows, where related purchase decisions are made, say in this case, other types of running gear. Or service flows, places where people go to help them do the things they want to do, as in a tool that lists the best running trails in Marin county. Identifying these flows, and looking at how you might influence them cost effectively, is the key to building any new offering.
Advertising, particularly the kind we used to do, is basically flow interruption. Brands try to minimize the interruptive downside by aligning a message to a contextual environment. But advertising rarely aligns well in video environments because most of what we consume is entertainment, news or sports. We replace commercial alignment with audience targeted amusement and repetition, like cute ads about car insurance during a football game. Flow interruption is expensive and misaligned with modern media consumption behaviors. But it’s easy to execute, especially if you are mass and have lots of margin to burn on advertising.
The internet, and increasingly much of the media world, is a consumer led environment. You are in control. Efforts to interrupt flow are more difficult here because the consumer can shut you down very easily. That's why ads are skippable on YouTube. If there were not, you would get annoyed and it would create an opening for competitive alternatives.
Successful internet advertising is highly contextual, placing ads or adding value inside the flow. This is why search advertising is so sensible. It is also why data plays a hugely important role in the effectiveness of online advertising — it attempts to insert a message into the flow when there is no discernable flow — we know you are interested in that thing, or at a lifestage when you ought to be interested, so we are going to interrupt you with an ad that is suited to your personal flow. This worked better when cookies were available to guide the flow.
Affiliate advertising appreciates flow. It works because it aligns content and commercial recommendations to the things that consumers are flowing towards. Here, editorial supports a commercial outcome. The affiliate link, really just highly contextual performance advertising, fits neatly in the editorial flow and does not need to interrupt like distracting, inefficient alternatives.
A related aspect of flow theory is crafting your own flows that guide consumers in a way that makes a purchase journey more effective, useful or enjoyable. This is content marketing, essentially the art of creating relevant flows to influence commercial outcomes. They work when they are helpful because when they are too salesy, you fuck up the flow.
A natural concern, particularly for new and unfamiliar product offerings is that the flow does not exist yet for the product — we are creating a new behavior. This limits the reach and application of search advertising as an example… ie we can only get in front of the things people are looking for today. I think this is a red herring. Related flows are flowing… you just need to re-contextualize. You don’t need a faster horse. You need a car. Same flow, new angle.
I find flow thinkers are natural internet marketers. They have deep fundamental knowledge about how flow really works online and begin all of their thinking about the viability of a business initiative from this point-of-view. The best could care less about TAM or points of differentiation and see business building as the act of finding meaningful flow and figuring out how to get inside of it. The spirit is deeply iterative and data led. Can we find a way to get a minimum viable product into a flow as cheaply as possible, measure what happens and move forward step by step. They best are great at hacking flow. They are enterprising about finding efficient distribution leverage and influence points that others overlook. They are SEO ninjas, performance marking assassins and culture jammers. The bring a very utilitarian perspective to brand / consumer exchange.
What I am suggesting might be dismissed as just, duh… digital marketing strategy. But I think there's something more to it. In the digital world everything is connected — awareness, research, recommendation, endorsement, entertainment and commerce. Understanding patterns of movement and category specific influence points are the key to success and how any idea finds its way to a market. Marketing is distribution. Distribution is flow. Being in the flow is everything.
I am encouraging you to think about flow as a foundational framework to understand and act on a new business opportunity. The thinking to do that would look something like this:
Identify the predominant flows that define how a consumer moves through a digitally-led consideration process (ie: how we discover, research, decide).
Look at secondary flows that are closely related to the primary flow. Find unexpected connections. Anyone can identify the obvious flows. Understand contextual, commercial, service, communication and community flows.
Is there enough flow to build something meaningful? How can we find out?
What is the best way to hack into the flow, alter its path and shape it to your commercial ends? How can we incent action?
How can you do this in a way that builds on existing currents vs fights against them?
How can you do it very quickly to validate your assumptions?
If you can't find flow, and a way to get inside of it better than someone else, chances are your are not going to build a business.
Have a great weekend. / Troy
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