1066 Blog

Everyone’s a Tiger

Who would be your personal sponsors? For me it might be Filson luggage, Mt. Gay Rum and Finn Crisp crackers (Yeah, okay, weird I know). The point is, we suspect that many of us, in the relatively near future, will be answering that question. A few trends are starting to emerge that look destined to bring individual sponsorship down from the celestial level to the everyday. First, social networking meets shopping; e.g. Stylehive. On these networks, friends can share information about what they’re buying and where they see the latest styles.  Second: “branding by association”. We’ve talked before about how brands increasingly are coupling with other brands to “reposition” or enhance their perception. (McDonalds selling Newman’s Own). What better than to have a brand placed in the context of an individual we trust. Third , and perhaps most importantly, is how all media is turning personal. Whether it is DVRs making channel “me”, Netflix lists, Pandora personalizing radio or the customization of everything from cars to sneakers the center of gravity is shifting radically to the consumer. Taken together, we think this adds up to an opportunity for the everyman to become a sponsor… and a paid one at that. Everyone from the family geek who tells us what technology to buy to the foodie friend who is always up on the latest restaurants to the Mom who really does know which detergent is best—could be sponsored and even rewarded for showcasing the brands they use most. And why not, historically most advertising mimicked the word of mouth endorsement. Today, technology is actually making it possible.

Banking's Long Tail

Chris Skinner has a great post on the long tail of banking.

There is no question that as the barriers to distribution disappear (the penetration of mobile devices/infrastructure in emerging markets a key driver here) money will begin to operate a lot more like software. The destabilizing effects of this on "business as usual" banking will be profound (just ask people in the music business).

Banks are fortunate that they can reference the lessons learned by other industries as they formulate their strategy for dealing with this seismic change. In order to capitalize on the opportunity presented by the "long tail" in banking, banks will need to think differently about the markets that they serve and the companies with which they compete.

The pressure being placed on interchange fees today will be compounded as technology companies look to disintermediate the banks. Had Google bought PayPal rather than eBay, the payments market would look quite different today. As it stands, Google is making inroads with Google Checkout, Amazon is looking to expand its patented 1-Click technology and Microsoft has made no secret of its intention to get involved with payments. Apple's development push will no doubt result in a bevvy of smartphone-based payments applications...and the list goes on.

These technology-driven solutions will have certain advantages, and yet, the banks themselves have a major head start. The key will be to build systems flexible enough to meet the demands of a fragmented market. What has passed for product innovation in the payments space will simply not be enough.