Because the best marketers deserve great content.
Stock and Flow, Revisited
When we first started Percolate, we spent a lot of time talking about stock and flow and how it could be applied to marketing. The idea, inspired by Robin Sloan, suggested that for brands to master digital and social they needed to be able to support both durable, long-lasting “stock” content and flow content, or quick-hit daily/sub-daily social posts. Fast forward five years, and the world has evolved quite a bit — as has my understanding of what stock and flow actually mean.
Traditionally, brands have been quite good at creating stock content in the form of ads and some of the more forward-thinking ones have found really interesting ways to translate that capability to beautiful web video and interactive experiences. While that’s great for short bursts, creating a sustained messaging strategy requires a combination of both stock and flow: longer-form, higher-quality content coupled with the quick-hit [social content].
That’s fine, though a bit naive to what stocks and flows actually represent in the world. In order to find a more accurate definition of stock and flow for our industry, let’s first dive into what they mean outside marketing. Here, I’m going to quote from Donella Meadows, who quite literally wrote the book on Thinking in Systems:
A stock is the foundation of any system. Stocks are the elements of the system that you can see, feel, count, or measure at any given time. A system stock is just what it sounds like: a store, a quantity, an accumulation of material or information that has built up over time. It may be the water in a bathtub, a population, the books in a bookstore, the wood in a tree, the money in a bank, your own self-confidence. A stock does not have to be physical. Your reserve of good will toward others or your supply of hope that the world can be better are both stocks.1
Meadows uses a bathtub to explain the concept and I’ll steal the device. A stock, in this context, is the water in the tub after the drain has been plugged and the faucet turned off. Unless we change something, the tub will stay full indefinitely. (For the purposes of this analogy, let’s pretend evaporation isn’t a thing … until later.)
Going back to marketing, I would argue we weren’t that far off by talking about stock as durable brand content. A stock, as Meadows points out, is anything that can be counted or measured at a given time. Durable and long-lasting brand content would seem to fit the bill. But to really understand stock, you have to understand flow. That’s because a flow is what fills (and empties) a stock. Going back to the bathtub, the flows are the faucet and drain with their ability to fill and empty the tub. A stock, Meadows explains, “is the present memory of the history of changing flows within the system.”2 In our analogy, the stock (water in the tub) is literally a memory of how long you left the faucet running.
Put simply, stock needs flow to exist. When we first spoke about stock and flow, we saw them as complementary: the flow of quick-hit social content supporting the durable, long-lasting stuff. But the flow wasn’t responsible for filling the stock. No one, in other words, was expecting their quick-hit social post to become the next brand icon.
This breakdown, I’d argue, has been felt acutely by the industry. At this point most marketers have realized that the flow of random social posts with no predictable audience wasn’t doing anything to fill the stock of enduring brand content, nevermind becoming a vital brand asset.
This is the core criticism of social media, and the platforms have all responded by both encouraging brands to post fewer, higher quality pieces of content, and paying to promote those to as wide a base as possible. That is, they have worked hard to position themselves as much more akin to a traditional advertising medium than something new and unique.
The second issue with the definition is more technical. In real systems, there are inflows and outflows. Back to our bathtub analogy, the faucet is the inflow and the drain the outflow. Applying this to brands is an interesting endeavor and this is where I want to officially start to explore a new way of thinking about stock and flow for marketing.
If stock is the heart of the system, we need to understand what the stocks of marketing are before we go any further. The stocks for other parts of an enterprise are easy to see; Finance has bank balances and budgets, Sales has current contracts, and HR has the employee base. Marketing obviously affects all of these things, but they aren’t the owner of any of those stocks (minus the headcount and departmental budget — but those belong to HR and Finance, respectively, at a macro level).
The most obvious stock owned by marketing is the brand. It’s an asset hugely valuable to a company, and can be added to and diminished by the choices an organization makes.
The question, I believe, is how to define that asset. Valuation is one way to measure brand — and many organizations use this — but that’s really just a proxy. I would argue that the better definition (and therefore, what we really need to keep in mind with our marketing) would be something along the lines of Byron Sharp’s memory structures or unique ownable brand associations.3 Here’s an explanation of how these memory structures work from Sharp’s 2010 book How Brands Grow:
Over time brands build memory structures; most of these are very simple, such as associations with color, pack shape, fonts and tone. These associations are vital because they allow consumers to recognize a brand and its advertising. In other words, associations allow a brand’s communications to do their job of refreshing salience and building new memory structures. Without these distinctive brand assets it is difficult for consumers to digest a brand’s communications. Failure to employ these distinctive elements in communications can also mean that existing customers screen out the communication as they do for the brands that they don’t use.4
Under this definition, the job of marketing is to fill and reinforce the stock of ownable brand associations and to find ways to avoid it becoming drained. In other words: build the brand’s mental salience.
How does that happen? Flows of course. For inflows, a marketer has a number of tools at their disposal, but the most obvious would be advertising and communications. This is clearly a big driver and reinforcer of the stock of unique brand associations and memory structures. On the outflow side, you have some obvious things that can diminish the stock, like crises (which can come quickly and swiftly — ask Enron) and competitive pressure (much more of a slow drain, as it was for Blockbuster). But most importantly, you simply have a constant leak of attention/memory, akin to a small crack in your bathtub, which if left for days, will eventually leave it empty. This small leak is particularly interesting, because it speaks to the need to take frequency into account in brand communications. While reach is a method of stock inflow, frequency is actually more of a way to avoid outflow by ensuring that you plug the hole of forgetfulness (Byron Sharp calls is “memory decay”5) that naturally arises in a crowded market. This is akin to the evaporation of water in the bathtub I told you to ignore earlier: If you don’t tend to your unique brand associations, they’ll lose their potency over time (thus lowering your stock).
Okay, so even if all this makes sense logically, what do you do with it tactically? A lot, it turns out.
First, by defining the unique stock of marketing we can start to get much more precise about what exactly the job of the marketer is (an issue that surely sits at the heart of low CMO tenure).
Second, by using a systems definition we must constantly ask ourselves whether the activities we’re taking part in are adding to, or taking away from, our stock. This concept of inflows and outflows can act as a simple question that should be included in every brief: Is this work filling my stock or helping to protect it from being depleted?
Finally, by acknowledging that marketing is a system and not magic, we can continue to focus on finding better ways to operate. This should continue to drive at positioning marketing on equal footing to the other departments in the enterprise.
Learn more about brand management and hear from Percolate co-founder and CEO Noah Brier at Transition Conference 2016 in New York City, September 20-21.
- Meadows, Donella H. (2008-12-03). Thinking in Systems: A Primer (Kindle Location 466). Chelsea Green Publishing. Kindle Edition.
- One could say that the goal of marketing is sales. I’m not denying that. In fact, the goal of the whole organization is sales. The problem is, if you are tight in your definition and say only one department inside a company can own a given “stock,” than the most obvious place for sales to reside is, well, inside sales. This leaves marketing searching for another stock to call its own.
- Sharp, Byron, and Ehrenberg-Bass Institute for Marketing science (Melbourne, Australia). How Brands Grow: What Marketers Don’t Know. Vol. 189. Melbourne: Oxford University Press, 2010.
- “Media strategy that achieves greater reach is particularly effective; reach is more important than frequency of exposure; continuous advertising is more effective than bursts followed by long gaps, because it counteracts memory decay.” Ibid.