Business

You are currently browsing the archive for the Business category.

cropped-wst-logo-main[3 December update: Here is a video of the panel.]

So I was on a panel at WebScience@10 in London (@WebScienceTrust, #WebSci10), where the first question asked was, “What are two aspects of ‘trust and the Web’ that you think are most relevant/important at the moment?” My answer went something like this::::

1) The Net is young, and the Web with it.

Both were born in their current forms on 30 April 1995, when the NSFnet backed off on its forbidding commercial traffic on its pipes. This opened the whole Net to absolutely everything, exactly when the graphical Web browser became fully useful.

Twenty-one years in the history of a world is nothing. We’re still just getting started here.

2) The Internet, like nature, did not come with privacy. And privacy is personal. We need to start there.

We arrived naked in this new world, and — like Adam and Eve — still don’t have clothing and shelter.

The browser should have been a private tool in the first place, but it wasn’t; and it won’t be, so long as we leave improving it mostly up to companies with more interest in violating our privacy than providing it.

Just 21 years into this new world, we still need our own clothing, shelter, vehicles and private spaces. Browsers included. We will only get privacy if our tools provide it as a simple fact.

We also need to be the first parties, rather than the second ones, in our social and business agreements. In other words, others need to accept our terms, rather than vice versa. As first parties, we are independent. As second parties, we are dependent. Simple as that. Without independence, without agency, without the ability to initiate, without the ability to obtain agreement on our own terms, it’s all just more of the same old industrial model.

In the physical world, our independence earns respect, and that’s what we give to others as a matter of course. Without that respect, we don’t have civilization. This is why the Web we have today is still largely uncivilized.

We can only civilize the Net and the Web by inventing digital clothing and doors for people, and by providing standard agreements private individuals can assert in their dealings with others.

Inventing yet another wannabe unicorn to provide “privacy as a service” won’t do it. Nor will regulating the likes of Facebook and Google, or expecting them to become interested in building protections, when their businesses depend on the absence of those protections.

Fortunately, work has begun on personal privacy tools, and agreements we can each assert. And we can talk about those.

Save

Save

This is a second draft of this post, corrected by Denise Howell’s comment below. Key facts: I am not a lawyer. She is. Good one, too. So take heed (as I just did). And read on.

nouber

Uber has new terms for you:

User Provided Content.

Uber may, in Uber’s sole discretion, permit you from time to time to submit, upload, publish or otherwise make available to Uber through the Services textual, audio, and/or visual content and information, including commentary and feedback related to the Services, initiation of support requests, and submission of entries for competitions and promotions (“User Content”). Any User Content provided by you remains your property. However, by providing User Content to Uber, you grant Uber a worldwide, perpetual, irrevocable, transferable, royalty-free license, with the right to sublicense, to use, copy, modify, create derivative works of, distribute, publicly display, publicly perform, and otherwise exploit in any manner such User Content in all formats and distribution channels now known or hereafter devised (including in connection with the Services and Uber’s business and on third-party sites and services), without further notice to or consent from you, and without the requirement of payment to you or any other person or entity.

The emphasis is mine. Interesting legal hack there: you own your data, but you license it to them, on terms that grant you nothing and grant them everything.

Talk about a deal breaker. Wow. (Except it’s also the old deal.)

Here’s the prior (and still current) version.

The new one goes into effect on 21 November. As I read that (when I wrote the first draft of this post), they have sale on personal data pending until that time.

For what it’s worth (nothing, given the above), here’s Uber’s privacy policy.

Meanwhile, here are Lyft’s terms:  Its privacy policy is on the same page, but here’s a direct link.

At the very least, Lyft should make hay on this, if they actually do have an advantage in the degree to which they protect privacy. (Denise, below, says they don’t. But hey, maybe they could if they wanted to compete on privacy.)

Here’s what matters (and remains unchanged from Denise’s corrections):::

We need our own terms. Meaning each of us should be the first party in agreements with service providers, not the second. Meaning they need to agree to our terms.

That’s Customer Commons’ reason for being. Just as Creative Commons is where you will find copyright terms you can assert as an artist, Customer Commons will be where you will find service terms you can assert as a customer.

With the wind of new .eu and .au  privacy laws (e.g. the EU’s GDPR) at our backs, we stand a good chance of making this happen.

The question is how we can get some mojo behind it. Thoughts welcome. Shoulders to the wheel as well.

Save

Save

Save

Tags: , , , , ,

Nearly all the ads I see on Facebook are fake news items like these two, next to Mark Zuckerberg’s latest post, which is, ironically, about fake news:

screen-shot-2016-11-12-at-7-57-34-pmBesides being false and misleading clickbait, these ads are not from espn.com. They’re from http://espn.com-magazines.online. They are also bait for a topic switch, since they’re actually about a diet supplement I won’t flatter by naming. So they’re two kinds of fraud at once: outright lies from a forged source.

It can’t be that hard for Facebook not to run this kind of obviously dishonest and misleading advertising, especially since this story itself is old news. (See here.) Why hasn’t it been stopped?

I’m guessing the answer is a technical one: that Facebook’s advertising system is too easy a hack for dishonest advertisers to resist, and too hard to change.

Either that, or the money they make from ad fraud more than offsets the cost of egg on their CEO’s face.

Save

stethoasclepiusEconomically speaking, the American health care system is not built for patients, because patients aren’t the ones paying for it directly. Insurance companies are.

See, health care in the U.S. is mostly a B2B business. It is only B2C where insurance doesn’t cover expenses to the patient. And even then, insurance still often pays for it when patients can’t, don’t or both.

Over the decades, the U.S. health care industry has matured, so to speak, into an interlocked cabal of insurance companies, kieretsus of hardware, software and service providers, and captive regulators of both.

And because the system is mostly disconnected from the controlling effects of direct accountability to patients, costs and inefficiencies within the system have grown out of control. To say the least of it.

It is therefore a mistake to assume that patient involvement in the system is “consumerism” in either of its common meanings: 1) acquisition of goods and services in ever-increasing amounts, or 2) The protection or promotion of the interests of consumers.

We tend to make this mistake whenever we conflate customers and consumers in contexts where their roles are separate and distinct. We do this most commonly in businesses that offer B2C services paid for in a B2B way. The split between the two is real, but treated as if it is not. Thus we have companies going on about how much they care about their consumers, users or patients, when those persons have no direct economic influence over what they get from those companies.

Companies with internal splits between their customers and consumers tend to be blind to what it’s consumers actually want or need — or can bring to the market’s table on their own — because money comes from somewhere else.

I’ve seen this for decades in commercial broadcasting, and with publishers whose primary customers are advertisers rather than those who “consume” what is now called “content” (as if it were nothing more than container cargo), even if those consumers in some cases (such as with newspapers and magazines) are paying subscribers. The primary customers are still advertisers and their agents.

I’m seeing it today in the cabal of perpetrators and beneficiaries of the four dimensional shell game that online advertising has become. This is why its members, all B2B businesses, miss the clear signal “users,” “consumers” and “the audience” are sending with ad blocking and tracking protection.

The only way we can begin to fix the U.S. health care system is by making patients as powerful and engaging as they would be if they were full-fledged customers of the care they receive, rather than mere consumers of services. And this can only begin with better ways for each of us to take control of our own health care data (which is valuable to those services), and how it is used by services mostly paid for by others.

The best approach I have seen so far to this challenge is HIE of One, a project of two MDs, Adrian Gropper and Michael Chen. HIE stands for Health Information Exchange, which Adrian and Michael describe as “a patient-centered health record based on the FHIR and HEART interoperability standards.”

Here is the main reason I like its chances: it is based on open source code already in development. This means many developers can step in and help raise its barn, for all of us.

If you’re a developer, and you care about the health of your self, your friends and family, and the human species, I highly recommend stepping up and stepping in. I can’t think of any #VRM project with more leverage on the good of the world—as well as one country’s most essential yet fucked-up service economy.

Save

Ingeyes Google Has Quietly Dropped Ban on Personally Identifiable Web Tracking, @JuliaAngwin and @ProPublica unpack what the subhead says well already: “Google is the latest tech company to drop the longstanding wall between anonymous online ad tracking and user’s names.”

So here’s a message from humanity to Google and all the other spy organizations in the surveillance economy: Tracking is no less an invasion of privacy in apps and browsers than it is in homes, cars, purses, pants and wallets.

That’s because our apps and browsers, like the devices on which we use them, are personal and private. Simple as that. (HT to @Apple for digging that fact.)

To help the online advertising business understand what ought to be obvious (but isn’t yet), let’s clear up some misconceptions:

  1. Tracking people without their clear and conscious permission is wrong. (Meaning The Castle Doctrine should apply online no less than it does in the physical world.)
  2. Assuming that using a browser or an app constitutes some kind of “deal” to allow tracking is wrong. (Meaning implied consent is not the real thing. See The Tradeoff Fallacy: How Marketers Are Misrepresenting American Consumers and Opening Them Up to Exploitation, by Joseph Turow, Ph.D. and the Annenberg School for Communication at the University of Pennsylvania.)
  3. Claiming that advertising funds the “free” Internet is wrong. (The Net has been free for the duration. Had it been left up to the billing companies of the world, we never would have had it, and they never would have made their $trillions on it. More at New Clues.)

What’s right is civilization, which relies on manners. Advertisers, their agencies and publishers haven’t learned manners yet.

But they will.

At the very least, regulations will force companies harvesting personal data to obey those they harvest it from, with fines for not obeying. Toward that end, Europe’s General Data Protection Regulation already has compliance offices at large corporations shaking in their boots, for good reason: “a fine up to 20,000,000 EUR, or in the case of an undertaking, up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher (Article 83, Paragraph 5 & 6).” Those come into force in 2018. Stay tuned.

Companies harvesting personal data also shouldn’t be surprised to find themselves re-classified as fiduciaries, no less responsible than accountants, brokers and doctors for confidentiality on behalf of the people they collect data from. (Thank you, professors Balkin and Zittrain, for that legal and rhetorical hack. Brilliant, and well done. Or begun.)

The only way to fully fix publishing, advertising and surveillance-corrupted business in general is to equip individuals with terms they can assert in dealing with others online — and to do it at scale. Meaning we need terms that work the same way across all the companies we deal with. That’s why Customer Commons and Kantara are working on exactly those terms. For starters. And these will be our terms — not separate and different ones that live at each company we deal with. Those aren’t working now, and never will work, because they can’t. And they can’t because when you have to deal with as many different terms as there are parties supplying them, the problem becomes unmanageable, and you get screwed. That’s why —

There’s a new sheriff on the Net, and it’s the individual. Who isn’t a “user,” by the way. Or a “consumer.” With new terms of our own, we’re the first party. The companies we deal with are second parties. Meaning that they are the users, and the consumers, of our legal “content.” And they’ll like it too, because we actually want to do good business with good companies, and are glad to make deals that work for both parties. Those include expressions of true loyalty, rather than the coerced kind we get from every “loyalty” card we carry in our purses and wallets.

When we are the first parties, we also get scale. Imagine changing your terms, your contact info, or your last name, for every company you deal with — and doing that in one move. That can only happen when you are the first party.

So here’s a call to action.

If you want to help blow up the surveillance economy by helping develop much better ways for demand and supply to deal with each other, show up next week at the Computer History Museum for VRM Day and the Internet Identity Workshop, where there are plenty of people already on the case.

Then follow the work that comes out of both — as if your life depends on it. Because it does.

And so does the economy that will grow atop true privacy online and the freedoms it supports. Both are a helluva lot more leveraged than the ill-gotten data gains harvested by the Lumascape doing unwelcome surveillance.

Bonus links:

  1. All the great research Julia Angwin & Pro Publica have been doing on a problem that data harvesting companies have been causing and can’t fix alone, even with government help. That’s why we’re doing the work I just described.
  2. What Facebook Knows About You Can Matter Offline, an OnPoint podcast featuring Julia, Cathy O’Neill and Ashkan Soltani.
  3. Everything by Shoshana Zuboff. From her home page: “’I’ve dedicated this part of my life to understanding and conceptualizing the transition to an information civilization. Will we be the masters of information, or will we be its slaves? There’s a lot of work to be done, if we are to build bridges to the kind of future that we can call “home.” My new book on this subject, Master or Slave? The Fight for the Soul of Our Information Civilization, will be published by Public Affairs in the U.S. and Eichborn in Germany in 2017.” Can’t wait.
  4. Don Marti’s good thinking and work with Aloodo and other fine hacks.

I just unsubscribed from Staples mailings, and got this:

screen-shot-2016-09-28-at-3-08-35-pm

WTF? Is the request traveling by boat somewhere? Does it need to be aged before it works?

We have computers now. We’re on the Internet. There is no reason why unsubscribing from anything should take longer than now.

Staples is not alone at this, by the way.. Many unsubscriptions are followed by promises to complete over some number of days. I don’t know why companies do that, but it smacks of marketing BS.

If you’re listening, Staples, give me a good reason. I am curious.

For what it’s worth, I unsubscribed because approximately all the mailings I get from Staples (and everybody else) are uninteresting to me. Un-cluttering my mailbox is far more valuable than getting bargains (e.g. “$220 off select laptops and desktops” and “UNBEATABLE Ink & Toner Prices”) I’ll never bother with.

Save

coins

Here’s the handy thing about cash: it gives customers scale. It does that by working the same way for everybody, everywhere it’s accepted. Cash has also been doing that for thousands of years. But we almost never talk about our “experience” with cash, because we don’t need to.

Marketers, however, love to talk about “the customer experience.” Search for customer+experience and you’ll get 35+ million results, nearly all pointing to stuff written by marketers and their suppliers. Even the Wikipedia entry for customer experience reads like an ad for a commercial “CX” supplier. That’s why a big warning box at the top of the article says it has “multiple issues” (four, to be exact), the oldest of which has persisted, uncorrected, since 2012. Try to read this, if you can:

In commerce, customer experience (CX) is the product of an interaction between an organization and a customer over the duration of their relationship.[1] This interaction includes a customer’s attraction, awareness, discovery, cultivation, advocacy and purchase and use of a service.[2][not in citation given] It is measured[by whom?] by the individual’s experience during all points of contact against the individual’s expectations. Gartner asserts the importance of managing the customer’s experience.[3]

Customer experience implies customer involvement at different levels – such as rational, emotional, sensorial, physical, and spiritual.[4][need quotation to verify] Customers respond diversely to direct and indirect contact with a company.[5] Direct contact usually occurs when the purchase or use is initiated by the customer. Indirect contact often involves advertising, news reports, unplanned encounters with sales representatives, word-of-mouth recommendations or criticisms.[6]

Customer experience can be defined[by whom?] as the internal and personal responses of the customers that might be line[clarification needed] with the company either directly or indirectly. Creating direct relationships in the place where customers buy, use and receive services by a business intended for customers such as instore or face to face contact with the customer which could be seen through interacting with the customer through the retail staff.[7][clarification needed] We then have indirect relationships which can take the form of unexpected interactions through a company’s product representative, certain services or brands and positive recommendations – or it could even take the form of “criticism, advertising, news, reports” [7] and many more along that line.[7]

Wholly shit. Do you—or anybody—have any idea what the fuck they’re talking about? Did you even try to read more than a few words of it?

Why would an industry big enough to put 35 million documents on the Web not have one comprehensible document in the only place where it would make full sense?

Here’s why: the industry is talking to itself. It’s one big all-BS echo chamber.

But let’s dig into it a bit, because (bear with me) we actually can fix this thing.

Basically, we have two problems with CX: complexity and perspective.

First, complexity.

Company promotions tend to be complex, because they’re gimmicks. Meaning they are a come-on to customers and not a persistent and predictable part of doing business.

Because promotional gimmicks are temporary and provisional, they also tend to have a bunch of moving parts. Even coupons, the simplest of promotional gimmicks, require that the company mint its own currency, for conditional uses, for limited periods of time, with restrictions on eligibility and lots of other forms of cognitive and operational overhead for everybody: the company, the customer, and whatever other partners that might be involved.

Here’s a good example.

This morning I got a promotional email from T-Mobile with a promo that looked interesting to me: an hour of free Wi-Fi from GoGo In-Flight, the next time I get on a plane. When I went to T-Mobile link for the promo, I found these instructions:

Before you board

  • Have a valid E911 address on file and a T-Mobile phone number.
  • To get your hour of FREE Wi-Fi and unlimited texting, make one Wi-Fi call before you board.
  • If you don’t have Wi-Fi calling, you can still get FREE Wi-Fi for one hour and use iMessage, Google Hangouts, WhatsApp, and Viber all flight long.”

Each of those bullet points contained deal-killing conditions:

  • I don’t know if I have a “valid E911 address.” In fact, I didn’t know what one was until I looked it up in Wikipedia, 30 seconds ago.
  • I think I know what they mean by a “Wi-Fi call,” but my experience of that (or what I think it is) with T-Mobile is with making normal calls on my T-Mobile phone over Wi-Fi where there is no T-Mobile cellular coverage. Would I have to look for a place at an airport where there’s no cell coverage but there is Wi-Fi? Am I making a Wi-Fi call when my phone says “T-Mobile Wi-Fi,” but I’m also getting a signal reading on my phone? I don’t know, and I don’t want to take the time to find out.
  • I have no interest in getting a free hour of Wi-Fi that limits me to four services I don’t use.

So I went on Twitter, tweeted what I hoped would be some good feedback to @T-Mobile and @GoGo. Here’s that tweet, with responses from both companies:

dsearls-tmobile-gogo-thread

Before we go forward with the lessons from this example, I want to make clear that I do appreciate what *NikosP, *RudyG and ^Joe are trying to do here. I am also clear that there are buildings full of other good people, all doing “social CRM,” or whatever its called this week, to care about customers and give them the best possible experience.

The problem for me, as a customer, is that getting this free hour of Wi-Fi on a plane isn’t worth the trouble. The problem for T-Mobile and GoGo In-Flight is that it’s probably not worth the trouble for them either.

Many years ago the great Jamie Zawinski uttered the best (and perhaps only worthy) critique, ever, of Linux. He said, “Linux is only free if your time has no value.” You can swap any promotion you like for “Linux” in that sentence. For example, “An hour of Wi-Fi on a GoGo equipped plane is only free if your time has no value.”

As Don Marti often puts it, customers are much better at applied behavioral economics than any of the companies trying to make customers fall for promotional come-ons.

So I’m wearing my applied behavioral economist hat when I decide that my time is worth more to me than whatever sum of it I might spend getting one hour of free wi-fi on a plane some day, even with all the help being tweeted to me.

I am also noticing that my time would be spent on this thing, and not invested. Worse, it would all be gone in one hour. Worse than that, it would be gone on a plane, where the working conditions are not ideal.

I have no idea how much time and money T-Mobile and GoGo In-Flight are spending on this promo, but I wouldn’t be surprised if the internal and external costs of it turn out to be far higher than whatever they would get out of investing the same amount of money and effort on simply making their services better.

So that’s complexity. Now lets look at perspective.

All of the CX perspective—100% of it—is anchored on the corporate side. Not the customer side. Worse, in every CX case the perspective is of one company, or a small collection of companies (e.g. T-Mobile and GoGo Inflight, or both plus the four other companies in the third of the first set of bullet points above).

See, each company is doing its own kind of CX to “deliver” an “experience” that is exclusive to them. In fact, that’s one way they compete. With this promo, T-Mobile is trying to do something Verizon, AT&T and Sprint aren’t doing.

The problem with this perspective is that it makes the customer’s experience different for every company she deals with. Worse, she has to spend non-recoverable time and effort trying to figure out what’s going on with each of the different companies imposing cognitive burdens along with promotional bargains. As the promos add up, the diminished returns are compounded, and the bargains add up to far less than $0.

If we take away the complexity, and take the customer’s perspective, you see  only two ways a company can “deliver” the best possible “experience” to customers:

  1. By making it as simple as possible to deal with the company; and
  2. By offering better products and services than competitors. That’s it.

For example, my wife and I have T-Mobile phones because we travel a lot outside the U.S. T-Mobile, alone among U.S. mobile phone carriers, provides free data and texting in something like 200 other countries, plus just 20¢/minute for phone calls. We also like not worrying about data usage, because T-Mobile has relatively high data allowances for that. So we don’t worry about going over. To obtain those simple graces, we put up with T-Mobile’s inferior coverage outside metro areas in the U.S. (though, to its credit, is catching up fast).

Our 19-year-old son, on the other hand, doesn’t travel much outside the country, so his phone is on Ting, which has outstanding customer service and the simplest possible usage pricing, with no promotional gimmicks. So both company and customer have low cognitive and cost overhead to deal with.

Which gets me back to cash.

Cash comes from the customer’s perspective. She can use the same cash with every company she deals with. She isn’t busy thinking, “Gee, I need to use Walmart’s money at Walmart and Burger King’s money at Burger King.” The cash in her purse gives her scale across every company that accepts it. Cash also gives her the same leverage across all her credit cards and other instruments of intermediation. It’s a great CX model.

So, is there hope we can wind down the BS in CX, and bring something with cash-like scale into the portfolio of tools customers have for dealing with many different companies?

Yes, there is.

A number of VRM developers are now working on CX, mostly by helping companies welcome help from customers, and learning from it. There are also some CRM companies starting to look toward VRM as a way of giving customers cash-like scale across many different companies as well. (The jlinc protocol, for example, has a lot of promise in that direction.)

That work, and other developments like it, give me hope that “Markets are conversations” will actually mean something—in less than two decades after marketers were first inspired to talk about it.

Save

Save

Save

Save

Save

shackles

Who Owns the Mobile Experience? is a report by Unlockd on mobile advertising in the U.K. To clarify the way toward an answer, the report adds, “mobile operators or advertisers?”

The correct answer is neither. Nobody’s experience is “owned” by somebody else.

True, somebody else may cause a person’s experience to happen. But causing isn’t the same as owning.

We own our selves. That includes our experiences.

This is an essential distinction. For lack of it, both mobile operators and advertisers are delusional about their customers and consumers. (That’s an important distinction too. Operators have customers. Advertisers have consumers. Customers pay, consumers may or may not. That the former also qualifies as the latter does not mean the distinction should not be made. Sellers are far more accountable to customers than advertisers are to consumers.)

It’s interesting that Unlockd’s survey shows almost identically high levels of delusion by advertisers and operators…

  • 85% of advertisers and 82% of operators “think the mobile ad experience is positive for end users”
  • 3% of advertisers and 1% of operators admit “it could be negative”
  • Of the 85% of advertisers who think the experience is positive, 50% “believe it’s because products advertised are relevant to the end user”
  • “the reasons for this opinion is driven from the belief that users are served detail around products that are relevant to them.”

… while:

  • 47% of consumers think “the mobile phone ad experience (for them) is positive”
  • 39% of consumers “think ads are irrelevant
  • 36% blame “poor or irritating format”
  • 40% “believe the volume of ads served to them are a main reason for the negative experience”

It’s amazing but not surprising to me that mobile operators apparently consider their business to be advertising more than connectivity. This mindset is also betrayed by AT&T charging a premium for privacy and Comcast wanting to do the same. (Advertising today, especially online, does not come with privacy. Quite the opposite, in fact. A great deal of it is based on tracking people. Shoshana Zuboff calls this surveillance capitalism.)

Years ago, when I consulted BT, JP Rangaswami (@jobsworth), then BT’s Chief Scientist, told me phone companies’ core competency was billing, not communications. Since those operators clearly wish to be in the “content” business now, and to make money the same way print and broadcast did for more than a century, it makes sense that they imagine themselves now to be one-way conduits for ad-fortified content, and not just a way people and things (including the ones called products and companies) can connect to each other.

The FCC and other regulators need to bear this in mind as they look at what operators are doing to the Internet. I mean, it’s good and necessary for regulators to care about neutrality and privacy of Internet services, but a category error is being made if regulators fail to recognize that the operators want to be “content distributors” on the models of commercial broadcasting (funded by advertising) and the post office (funded by junk mail, which is the legacy model of today’s personalized direct response advertising  online).

I also have to question how consumers were asked by this survey about their mobile ad experiences. Let me see a show of hands: how many here consider their mobile phone ad experience “positive?” Keep your hands down if you are associated in any way with advertising, phone companies or publishing. When I ask this question, or one like it (e.g. “Who here wants to see ads on their phone?”) in talks I give, the number of raised hands is usually zero. If it’s not, the few parties with raised hands offer qualified responses, such as, “I’d like to see coupons when I’m in a store using a shopping app.”

Another delusion of advertisers and operators is that all ads should be relevant. They don’t need to be. In fact, the most valuable ads are not targeted personally, but across populations, so large populations can become familiar with advertised products and services.

It’s a simple fact that branding wouldn’t exist without massive quantities of ads being shown to people for whom the ads are irrelevant. Few of us would know the brands of Procter & Gamble, Unilever, L’Oreal, Coca-Cola, Nestlé, General Motors, Volkswagen, Mars or McDonald’s (the current top ten brand advertisers worldwide) if not for the massive amounts of money those companies spend advertising to people who will never buy their products but will damn sure known those products’ names. (Don Marti explains this well.)

A hard fact that the advertising industry needs to face is that there is very little appetite for ads on the receiving end. People put up with it on TV and radio, and in print, but for the most part they don’t like it. (The notable exceptions are print ads in fashion magazines and other high-quality publications. And classifieds.)

Appetites for ads, and all forms of content, should be consumers’ own. This means consumers need to be able to specify the kind of advertising they’re looking for, if any.

Even then, the far more valuable signal coming from consumers is (or will be) an actual desire for certain products and services. In marketing lingo, these signals are qualified leads. In VRM lingo, these signals  are intentcasts. With intentcasting, the customers do the advertising, and are in full control of the process. And they are no longer mere consumers (which Jerry Michalski calls “gullets with wallets and eyeballs”).

It helps that there are dozens of companies in this business already.

So it would be far more leveraged for operators to work with those companies than with advertising systems so disconnected from reality that they’ve caused hundreds of millions of people to block ads on their mobile devices — and are in such deep denial of the market’s clear messages that they deny the legitimacy of a clear personal choice, misdirecting attention toward the makers of ad blocking tools, and away from what’s actually happening: people asserting power over their own lives and private spaces (e.g. their browsers) online.

If companies actually believe in free markets, they need to believe in free customers. Those are people who, at the very least, are in charge of their own experiences in the networked world.

Save

Tags: , , , ,

1-e10zgDdxrcJgNcp9Njr4GQ

I started calling online advertising a bubble in 2008.

I made “The Advertising Bubble” a chapter in The Intention Economy in 2012.

I’ve been unpacking what I figure ought to be obvious (but isn’t) in 52 posts and articles (so far) in the Adblock War Series. This will be the 53rd.

And it ain’t happened yet.

But, now comes this, from Kalkis Research:

kalkis-on-google

Some charts:

googlecpc

adblocking

change-in-advertising-vs-sales

costofadspace

And here is their downbeat conclusion:

We are living through the latest stages of the online advertising bubble, as available high-quality ad space is shrinking, leading to a decline ad space quality, and a decline of ad efficiency. Awareness for fraud is growing, and soon, clients will cut their online ad spending, and demand higher accountability. This will destroy the high-margin market of automated reselling worthless ad space, and will force advertisers to focus only on prime publishers, with expensive ad space.

This is a re-run of the online advertising crash of the early 2000s, when the proliferation of banners and pop- ups destroyed any value these ads had (and led people to install pop-up killers, just like with ad blockers today)…

We estimate that the online advertising market has been artificially inflated since the end of 2013, and is much more mature than its pundits are claiming. 90% of Google’s revenues come from advertising. We expect Alphabet’s share price to go down by 75%…

A larger number of companies will be impacted, as a growing number of third-party tech giants are involved in the advertising play (Oracle, Amazon, Salesforce), and we expect the whole tech sector to be hard hit by the unwinding of the bubble…

Currently, January 2018 Alphabet puts with a strike of $400 are trading at around $8, for a 20x return should our scenario materialize.

There are other signs. For example, a falling ping-pong table index:

pingpongtable

GroupM, the “world’s largest media investment group,” also just published Interaction 2016, which is also bearish on adtech:

Advertisers and the entities that place their ads have always sought relevance and engagement; the consumer has chosen to set a higher bar. Advertisers and the buyers of media have a further responsibility.

Until now, we have assumed almost all data are worth having. But however much he gathers, no advertiser commands complete, continuous data. This creates a risk that the advertiser’s left hand may not know what his right hand is doing. A customer who has already made a purchase may be bombarded with redundant repeat ads wherever he roams: what we might call the phenomenon of “repetitive irrelevance.” Even worse, several advertisers may be sharing the same data and using performance-oriented media, multiplying the “repetitive irrelevance.” Tracking and targeting intended to make advertising welcome makes it a nuisance. It is dysfunctional. The advertiser damages his reputation and pays to do so.

This brief analysis suggests that a partial solution to adblocking is a combination of design, technology, common sense and the ability to establish the point, across channels and vendors, at which the application of a particular data point becomes the poison of marketing rather than the antidote to ineffectiveness.

The emphasis is mine. (Hey, I know boldface tends to get read and blockquotes don’t.)

There are other signs. Last May Business Insider said The ad tech sector looks an awful lot like a bubble that just popped. In June, The Wall Street Journal said adtech investment dollars are running dry. “These companies are struggling to even get meetings,” they said. In December Ad Exchanger called 2015 a “reality check” year for adtech.

Clearly the end isn’t near for Facebook or Google. Tony Haile, founding CEO of Chartbeat — and to me the reigning king of adtech moneyball — compares Facebook to the Sun, and everybody else to planets and other debris orbiting around it. One pull-quote: “It is Facebook that curates and distributes. It owns the relationship with the user, and decides what content the user sees and how many see it.” Meanwhile Google, which places a huge percentage of online ads (for itself and countless others), is said by Digiday to be exploring an “acceptable ads” policy obviously modeled on the one launched by Adblock Plus. And while ad fraud has been bad, AdAge reports that it’s down, dramatically: “analytics firm Integral Ad Science found a 20.9% decrease in both overall and programmatic ad fraud last quarter compared to the fourth quarter of 2015.”

Still, I’ve been told by one (big) adtech exec that his business is “a walking zombie” and that he’s looking toward “the next paradigm.” One of the biggest online advertisers told me late last year that they yanked $100 million/year out of adtech and put it into traditional advertising for one simple reason: “It didn’t work.” I have a sense that they are not alone.

Got any more examples? I want us to get as clear a picture as we can of the adtech edifice as it starts crumbling to the ground. Or not. Yet.

(Later…) Okay we have some:

Tags: , ,

A photo readers find among the most interesting among the 13,000+ aerial photos I've put on Flickr

This photo of the San Juan River in Utah is among dozens of thousands I’ve put on Flickr. it might be collateral damage if Yahoo dies or fails to sell the service to a worthy buyer.

Flickr is far from perfect, but it is also by far the best online service for serious photographers. At a time when the center of photographic gravity is drifting form arts & archives to selfies & social, Flickr remains both retro and contemporary in the best possible ways: a museum-grade treasure it would hurt terribly to lose.

Alas, it is owned by Yahoo, which is, despite Marissa Mayer’s best efforts, circling the drain.

Flickr was created and lovingly nurtured by Stewart Butterfield and Caterina Fake, from its creation in 2004 through its acquisition by Yahoo in 2005 and until their departure in 2008. Since then it’s had ups and downs. The latest down was the departure of Bernardo Hernandez in 2015.

I don’t even know who, if anybody, runs it now. It’s sinking in the ratings. According to Petapixel, it’s probably up for sale. Writes Michael Zhang, “In the hands of a good owner, Flickr could thrive and live on as a dominant photo sharing option. In the hands of a bad one, it could go the way of MySpace and other once-powerful Internet services that have withered away from neglect and lack of innovation.”

Naturally, the natives are restless. (Me too. I currently have 62,527 photos parked and curated there. They’ve had over ten million views and run about 5,000 views per day. I suppose it’s possible that nobody is more exposed in this thing than I am.)

So I’m hoping a big and successful photography-loving company will pick it up. I volunteer Adobe. It has the photo editing tools most used by Flickr contributors, and I expect it would do a better job of taking care of both the service and its customers than would Apple, Facebook, Google, Microsoft or other possible candidates.

Less likely, but more desirable, is some kind of community ownership. Anybody up for a kickstarter?

[Later…] I’m trying out 500px. Seems better than Flickr in some respects so far. Hmm… Is it possible to suck every one of my photos, including metadata, out of Flickr by its API and bring it over to 500px?

I also like Thomas Hawk‘s excellent defense of Flickr, here.

 

Tags: , , , ,

« Older entries