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favorite-peets

My loyalty to Peet’s Coffee is absolute. I have loved Peet’s since it was a single store in Berkeley. I told my wife in 2001 that I wouldn’t move anywhere outside the Bay Area unless there was a Peet’s nearby. That pre-qualified Santa Barbara, where we live now. When we travel to where Peets has retail stores, we buy bags of our favorite beans (which tend to be one of the above) to take to our New York apartment, because there are no Peets stores near there. When we’re in New York and not traveling, we look for stores that sell bags of one of the bean bags above.

Since our car died and we haven’t replaced it yet, we have also taken to ordering beans through Peet’s website. Alas, we’re done with that now. Here’s why:

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I ordered those beans (Garuda and New Guinea) two Thursdays ago, June 16, at 7:45am. A couple days after I ordered the beans, I checked my account online to see where the shipment stood, and the site said the beans would be shipped on Monday, June 19. According to the email I got yesterday (a section of which I show above), the beans didn’t ship until the following Wednesday, June 21. Now the estimated delivery is next Wednesday, June 28.

While this isn’t a big deal, it’s still annoying because we just ran out of our last batch of beans here and we’ll be gone when that shipment arrives. Subscribing (which Peet’s e-commerce system would rather we do) also won’t work for us because we travel too much and don’t settle in any one place for very long. True, that’s not Peet’s problem, and I’m a sample of one. But I’ve experienced enough e-commerce to know that Peet’s shipping thing isn’t working very well.

And maybe it can’t. I don’t know. Here’s what I mean…

Way back in the late ’90s I was having lunch in San Francisco with Jamie Zawinski, whose work as a programmer is behind many of the graces we take for granted in the online world. (He’s a helluva writer too.) At one point he said something like “Somebody should figure out what Amazon does, bottle it, and sell it to every other retailer doing e-commerce.” And here we are, nearly two decades later, in a world where the one e-commerce company everybody knows will do what it says is still Amazon. (I’ll spare you my much worse tale of woe getting new air conditioners bought and shipped from Home Depot.)

So that’s a problem on the service side.

Now let’s talk marketing. A while back, Peet’s came out with an app that lets you check in at its stores for rewards when you buy something there. You do that this way at the cash register:

  1. Find the app on your phone.
  2. Click on Check In, so a QR code materializes on your phone’s screen.
  3. Aim the QR code at a gizmo by the cash register that can read the QR code.
  4. Hope it works.

I’ve done this a lot, or at least tried to. Here are just some of the problems with it, all of which I offer both to help Peet’s and to dissuade companies everywhere from bothering with the same system:

  1. It doesn’t work at every Peet’s location. This is annoying to customers who break out their phone, bring up the app, get ready to check in, and then get told “It’s not here yet.”
  2. Workers at the stores don’t like it—either because it’s one more step in the ordering process or because, again, “it’s not here yet.” Some employees put a nice face on, but you can tell many employees consider it an unnecessary pain in the ass.
  3. The customer needs to check in at exactly the right point in the purchase, or it doesn’t count. Or at least that’s been my experience a time or two. Whatever the deal is, the narrow check-in time window risks bumming out both the customer and the person behind the counter.
  4. The customer reviews are bad, with good reason. On the app’s page in iTunes Preview it says, “Current Version: 17 Ratings (1.5 stars) All Versions: 94 Ratings (2 stars).” The only published 4-star review reads, “They are a little vague on the rewards system – do I get a point per visit, or a point per drink? Also not a very rewarding system, esp when compared to starbucks or non chains I know of. However, I’ve had no problems with the app malfunctioning, so although I dislike the system it’s not the apps fault.”
  5. It sometimes doesn’t work. I mean, bzzzt: no soap. Or worse, works poorly. For example, when I opened the app just now, it said “Hi, Peetnik” and told me I have 0/15 reward points, meaning I’ve checked in zero times. Then, when I clicked on the “>”, it said “15 more & your next cup’s on us.” Finally, when I fiddled with the app a bit, it woke up and told me “4 points until your next reward.”

Here’s the thing: None of this stuff is necessary. Worse, it’s pure overhead, a value-subtract from the start. And Peet’s is one of the all-too-rare retailers that doesn’t need this kind of crap at all. It has already earned, and keeps, the loyalty of its customers. It just needs to keep doing a better job of making better coffee.

In The Intention Economy I tell the story of Trader Joe’s, another retailer that does a good job of earning and keeping its customers’ loyalty. You know how they do that? With approximately no marketing at all. “We don’t do gimmicks,” Doug Rauch, the retired President of Trader Joe’s told me. No loyalty cards. No promotional pricing. No discounts for “members.” (In fact they have no discounts at all. Just straightforward prices for everything.) Almost no advertising. Nothing that smacks of coercion. And customers love them.

My recommendation to Peet’s on the service side is to ship as fast and well as Amazon, or to stop trying and let Amazon handle the whole thing. Amazon already carries a variety of Peet’s beans and other coffee products. Either way, there is no excuse for taking almost two weeks to deliver an order of beans.

On the marketing side, I suggest dropping the app and the gizmos at the stores. Save the operational costs and reduce the cognitive overhead for both personnel and customers. Personal data gathered through apps is also a toxic asset for every company—and don’t let any marketers tell you otherwise. Like Trader Joe’s, Peet’s doesn’t need the data. Make the best coffee and provide the best service at the stores, and you’ll get and keep the best customers. Simple as that.

You’re in the coffee game, Peet’s. Keep winning that way. For everything that isn’t doing what you’ve always done best, less is more.

 

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crysalisIn The Adpocalypse: What it MeansVlogbrother Hank Green issues a humorous lament on the impending demise of online advertising. Please devote the next 3:54 of your life to watching that video, so you catch all his points and I don’t need to repeat them here.

Got them? Good.

All of Hank’s points are well-argued and make complete sense. They are also valid mostly inside the bowels of the Google beast where his video work has thrived for the duration, as well as inside the broadcast model that Google sort-of emulates. (That’s the one where “content creators” and “brands” live in some kind of partly-real and partly-imagined symbiosis.)

While I like and respect what the brothers are trying to do commercially inside Google’s belly, I also expect them, and countless other “content creators” will get partly or completely expelled after Google finishes digesting that market, and obeys its appetite for lucrative new markets that obsolesce its current one.

We can see that appetite at work now that Google Contributor screams agreement with ad blockers (which Google is also joining) and their half-billion human operators that advertising has negative value. This is at odds with the business model that has long sustained both YouTube and “content creators” who make money there.

So it now appears that being a B2B creature that sells eyeballs to advertisers is Google’s larval stage, and that Google intends to emerge from its chrysalis as a B2C creature that sells content directly to human customers. (And stays hedged with search advertising, which is really more about query-based notifications than advertising, and doesn’t require unwelcome surveillance that will get whacked by the GDPR anyway a year from now.) 

Google will do this two ways: 1) through Contributor (an “ad removal pass” you buy) and 2) through subscriptions to YouTube TV (a $35/month cable TV replacement) and/or YouTube Red ($9.99/month for “uninterrupted music, ad-free videos, and more”).

Contributor is a way for Google to raise its share of the adtech duopoly it comprises with Facebook. The two paid video offerings are ways for Google to maximize its wedge of a subscription pie also sliced up by Apple, Amazon, Netflix, HBO, ShowTime, all the ISPs and every publication you can name—and to do that before we all hit Peak Subscription. (Which I’m sure most of us can see coming. I haven’t written about it yet, but I have touched hard on it here and here.)

I hope the Vlogbrothers make money from YouTube Red once they’re behind that paywall. Or that they can sell their inventory outside all the silos, like some other creators do. Maybe they’ll luck out if EmanciPay or some other new and open customer-based way of paying for creative goods works out. Whether or not that happens, one or more of the new blockchain/distributed ledger/token systems will provide countless new ways that stuff will get offered and paid for in the world’s markets. Brave Payments is already pioneering in that space. (Get the Brave browser and give it a try.)

It helps to recognize that the larger context (in fact the largest one) is the Internet, not the Web (which sits on top of the Net), and not apps (which are all basically on loan from their makers and the distribution systems of Apple and Google). The Internet cannot be contained in, or reduced to, the feudal castles of Facebook and Google, which mostly live on the Web. Those are all provisional and temporary. Money made by and within them is an evanescent grace.

All the Net does is connect end points and pass data between them through any available path. This locates us on a second world alongside the physical one, where the distance between everything it connects rounds to zero. This is new to human experience and at least as transformative as language, writing, printing and electricity—and no less essential than any of those, meaning it isn’t going to go away, no matter how well the ISPs, governments and corporate giants succeed in gobbling up and spinctering business and populations inside their digestive tracts.

The Net is any-to-any, by any means, by design of its base protocols. This opens countless possibilities we have barely begun to explore, much less build out. It is also an experience for humanity that is not going to get un-experienced if some other base protocols replace the ones we have now.

I am convinced that we will find new ways in our connected environment to pay for goods and services, and to signal each other much more securely, efficiently and effectively than we do now. I am also convinced we will do all that in a two-party way rather than in the three-party ways that require platforms and bureaucracies. If this sounds like anarchy, well, maybe: yeah. I dunno. We already have something like that in many disrupted industries. (Some wise stuff got written about this by David Graeber in The Utopia of Rules.)

Not a day goes by that my mind isn’t blown by the new things happening that have not yet cohered into an ecosystem but still look like they can create and sustain many forms of economic and social life, new and old. I haven’t seen anything like this in tech since the late ’90s. And if that sounds like another bubble starting to form, yes it is. You see it clearly in the ICO market right now. (Look at what’s lined up so far. Wholly shit.)

But this one is bigger. It’s also going to bring down everybody whose business is guesswork filled with fraud and malware.

If you’re betting on which giants survive, hold Amazon and Apple. Short those other two.

fireadtech

Brands are bailing from adtech, and news about it is coming fast and hard.

The New York Times said AT&T and Johnson & Johnson were pulling their ads from YouTube, concerned that “Google is not doing enough to prevent brands from appearing next to offensive material, like hate speech.” Business Insider said “more than 250” advertisers were bailing as well. Both reports came on the heels of one Guardian story that said Audi, HSBC, Lloyds, McDonald’s, L’Oréal, Sainsbury’s, Argos, the BBC and Sky were doing the same in the UK. Another Guardian story that said O2, Royal Mail and Vodaphone were joining the boycott as well. Wired and AdAge have weighed in too.

Agencies placing those ads on YouTube were shocked, shocked! that ads for these fine brands were showing up next to “extremist material,” and therefore sponsoring it. They blame Google, and so does most of the press coverage as well.

And Google admits guilt. Business Insider:

Google’s executives were summoned to appear in front of the UK government last week after ads for taxpayer-funded services were found next to extremist videos, following an investigation by The Times newspaper. Google must return later this week with a timetable for the work it is doing to prevent the issue from occurring again.

On Monday, at a breakfast briefing with journalists before he took to the stage at Advertising Week Europe — Brittin said the annual ad industry event gave Google a “good opportunity to say first and foremost, sorry, this should not happen, and we need to do better.”

Brittin added: “There are brands who have reached out to us and are talking to our teams about whether they are affected or concerned by this. I have spoken personally to a number of advertisers over the last few days as well. Those that I have spoken to, by the way, we have been talking about a handful of impressions and pennies not pounds of spend — that’s in the case of the ones I’ve spoken to at least. However small or big the issue, it’s an important issue that we address.”

Google also isn’t alone at this. They’re just the biggest player in an icky business. That business is adtech: tracking-based advertising.

Let’s be clear about all the differences between adtech and real advertising. It’s adtech that spies on people and violates their privacy. It’s adtech that’s full of fraud and a vector for malware. It’s adtech that incentivizes publications to prioritize “content generation” over journalism. It’s adtech that gives fake news a business model, because fake news is easier to produce than the real kind, and adtech will pay anybody a bounty for hauling in eyeballs.

Real advertising doesn’t do any of those things, because it’s not personal. It is aimed at populations selected by the media they choose to watch, listen to or read. To reach those people with real ads, you buy space or time on those media. You sponsor those media because those media also have brand value.

With real advertising, you have brands supporting brands.

Brands can’t sponsor media through adtech because adtech isn’t built for that. On the contrary, adtech is built to undermine the brand value of all the media it uses, because it cares about eyeballs more than media.

Adtech is magic in this literal sense: it’s all about misdirection. You think you’re getting one thing while you’re really getting another. It’s why brands think they’re placing ads in media, while the systems they hire chase eyeballs. Since adtech systems are automated and biased toward finding the cheapest ways to hit sought-after eyeballs with ads, some ads show up on unsavory sites. And, let’s face it, even good eyeballs go to bad places.

This is why the media, the UK government, the brands, and even Google are all shocked. They all think adtech is advertising. Which makes sense: it lookslike advertising and gets called advertising. But it is profoundly different in almost every other respect. I explain those differences in Separating Advertising’s Wheat and Chaff:

…advertising today is also digital. That fact makes advertising much more data-driven, tracking-based and personal. Nearly all the buzz and science in advertising today flies around the data-driven, tracking-based stuff generally called adtech. This form of digital advertising has turned into a massive industry, driven by an assumption that the best advertising is also the most targeted, the most real-time, the most data-driven, the most personal — and that old-fashioned brand advertising is hopelessly retro.

In terms of actual value to the marketplace, however, the old-fashioned stuff is wheat and the new-fashioned stuff is chaff. In fact, the chaff was only grafted on recently.

See, adtech did not spring from the loins of Madison Avenue. Instead its direct ancestor is what’s called direct response marketing. Before that, it was called direct mail, or junk mail. In metrics, methods and manners, it is little different from its closest relative, spam.

Direct response marketing has always wanted to get personal, has always been data-driven, has never attracted the creative talent for which Madison Avenue has been rightly famous. Look up best ads of all time and you’ll find nothing but wheat. No direct response or adtech postings, mailings or ad placements on phones or websites.

Yes, brand advertising has always been data-driven too, but the data that mattered was how many people were exposed to an ad, not how many clicked on one — or whether you, personally, did anything.

And yes, a lot of brand advertising is annoying. But at least we know it pays for the TV programs we watch and the publications we read. Wheat-producing advertisers are called “sponsors” for a reason.

So how did direct response marketing get to be called advertising ? By looking the same. Online it’s hard to tell the difference between a wheat ad and a chaff one.

Remember the movie “Invasion of the Body Snatchers?” (Or the remake by the same name?) Same thing here. Madison Avenue fell asleep, direct response marketing ate its brain, and it woke up as an alien replica of itself.

This whole problem wouldn’t exist if the alien replica wasn’t chasing spied-on eyeballs, and if advertisers still sponsored desirable media the old-fashioned way.

Fixing it won’t be easy, because the alien replica has been drunk on digital for so long that very little humanity remains. This is true not just for Madison Avenue, but for both the client and the media stages of the advertising supply chain. On the client side, old-school sales & marketing VPs have been replaced by data-obsessed CMOs who would rather hire an IBM to paint a portrait of a fiction called “the chief executive customer” than actually talk to a real one. On the media side, publishers and broadcasters have long since fired their human sales people and outsourced income production to dozens of third party adtech systems.

But at least we’re seeing brands start to wake up, even if they’re still fooled by adtech’s magic tricks. And consciousness is surely happening a level or two above the CMO. Those senior executives, whose brains have not been snatched by adtech, will still recognize the obvious: that brands are best made and served by sponsoring media they know, like and trust.

After all, sponsoring trusted media is what produced brands in the first place. It’s also what still what makes brands familiar to whole populations, and what still sponsors worthy publications and the journalism they contain.

If brands still want to do “interest-based” or “interactive” advertising (adtech’s euphemisms for what it actually does) they should realize five things:

  1. Adtech sucks at branding. Hundreds of $billions have been spent on adtech so far, and not one brand known to the world has come out of it.
  2. Yes, it works, about .0x% of the time, on average. The other 99.9x% of the time it produces nothing but negative externalities, including lots of tendentious math by agencies and platforms to justify the expense.Among those externalities are subtracted value from brands themselves.
  3. Yes, direct response marketing does work, and it works best when target customers have already opted in, consciously and deliberately. (Note that there is a great deal of ambiguity about how much being a Google or Facebook member amounts to deliberate and conscious agreement to being followed and targeted, privacy controls withstanding. The choices in those controls should be much more binary and clear than they are.) So if L’Oreal wants to get a conversation going with customers of Lancôme, Giorgio Armani or The Body Shop, they should do it by those customers’ grace, not because the robots they’ve hired guess those customers might be interested, based on surveillance-gathered personal data.
  4. Adtech starts with spying on people. This isn’t the elephant in the middle of adtech’s room. It’s the volcano about to erupt from under adtech’s floor. In that volcano are pissed off people who will soon get their own ways to kill off adtech. The rumbling under the floor right now is ad blocking. The lava that will pave over adtech is full tracking protection.
  5. Adtech’s rationalizations are all around putting the “right message in front of the right people at the right time,” and aiming those messages with spyware-harvested Big Data. Both of those are direct marketing purposes, not those of brand advertising. The difference is stark, absolute, and essential for everyone to understand.
  6. The only reason publishers go along with adtech is that they don’t know any other way to make money from advertising online — and no developers have provided them one. (But that will happen soon. Trust me on this. I know things I can’t yet talk about.)
  7. What Shoshana Zuboff calls “surveillance capitalism” is going to be illegal a year from now in the EU anyway, thanks to the General Data Protection Regulation, aka GDPR. Mark your calendars: on 25 May 2018 will come an extinction event for adtech, because here are the fines the GDPR will impose for unpermitted harvesting of personal data: 1) “a fine up to 10,000,000 EUR or up to 2% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater (Article 83, Paragraph 4)”‘; and 2) “a fine up to 20,000,000 EUR or up to 4% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater (Article 83, Paragraph 5 & 6).”

Ad choices won’t do the job. That’s adtech’s way to “give you control” over “how information about your interests is used for relevant advertising.” The link into that system is this little symbol you see in the corner of many ads:

While clicking on it does provide a way for you to opt out of surveillance, you have to do it over and over again for every ad you see with the damn thing, like playing a slo-mo game of whack-a-mole, and it still relies on the adtech industry keeping cookies in your browsers.

If there is a market on the receiving end for “interest based advertising,” let’s have a standard system that puts full control in the hands of individuals, and speaks through open code and protocols to any and all publishers and broadcasters. Anything less will just be another top-down adtech industry paint-job on the same old shit.

An open question is if agencies can be programmatic online without spying on people. I think they can, if they start by admitting that spying is where the problem lies.

It should be clear that spying is why Do Not Track became a thing, and whyad blocking hockey-sticked when the adtech industry and publishers together gave the middle finger to people’s polite request not to be tracked. (Which is all Do Not Track provides.) It should also be clear that ad blocking and tracking protection are not “threats” and “costs” to publishers and agencies. They are clear and legitimate market responses by human beings to having adtech’s digital hands up their skirts.

It also won’t be easy for the big platforms to fix their adtech systems. Consider, for example, the egg that was splattered on Mark Zuckerberg’s face by Facebook’s own adtech when he posted his insistence that “99% of what people see is authentic” and “only a very small amount is fake news and hoaxes,” and fraudulent ads ran right next to his post:

zuckegg

These ads are fraudulent in at least three ways: 1) the headlines are lies; 2) espn.com is not the advertiser; 3) if you click on them, you find they’re bait for switches to something else. (One I clicked on was for a diet supplement.)

And this is no isolated case. Medium’s Ev Williams also reported the same kind of adtech-aimed fakery.

Facebook is going to have a hard time fixing this, because it is entirely in the chaff business. With Google, even though it’s hard to tell whether any given ad placed in a Google property is wheat or chaff, at least some of it really is wheat. (I would guess most search ads are, for example.) It should be just as easy for Google to disclose those ads’ nature as wheat as it is for the company to use Ad Choices to disclose adn ad’s nature as chaff. (I suggest one possible approach to this in A way to peace in the adblock war.)

But fixing the mess needs to start with advertisers. They can do it by firing adtech and its agents and going back to sponsoring reputable broadcasters and publishers. Simple as that.

 

amsterdam-streetImagine you’re on a busy city street where everybody who disagrees with you disappears.

We have that city now. It’s called media—especially the social kind.

You can see how this works on Wall Street Journal‘s Blue Feed, Red Feed page. Here’s a screen shot of the feed for “Hillary Clinton” (one among eight polarized topics):

blue-red-wsj

Both invisible to the other.

We didn’t have that in the old print and broadcast worlds, and still don’t, where they persist. (For example, on news stands, or when you hit SCAN on a car radio.)

But we have it in digital media.

Here’s another difference: a lot of the stuff that gets shared is outright fake. There’s a lot of concern about that right now:

fakenews

Why? Well, there’s a business in it. More eyeballs, more advertising, more money, for more eyeballs for more advertising. And so on.

Those ads are aimed by tracking beacons planted in your phones and browsers, feeding data about your interests, likes and dislikes to robot brains that work as hard as they can to know you and keep feeding you more stuff that stokes your prejudices. Fake or not, what you’ll see is stuff you are likely to share with others who do the same. This business that pays for this is called “adtech,” also known as “interest based” or “interactive” advertising. But those are euphemisms. Its science is all about stalking. They can plausibly deny it’s personal. But it is.

The “social” idea is “markets as conversations” (a personal nightmare for me, gotta say). The business idea is to drag as many eyeballs as possible across ads that are aimed by the same kinds of creepy systems. The latter funds the former.

Rather than unpack that, I’ll leave that up to the rest of ya’ll, with a few links:

 

I want all the help I can get unpacking this, because I’m writing about it in a longer form than I’m indulging in here. Thanks.

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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.

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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.

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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.

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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:

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2016-05-02berkman

This event is now in the past and can be seen in its entirety here.

Stop now and go to TimeWellSpent.io, where @TristanHarris, the guy on the left above, has produced and gathered much wisdom about a subject most of us think little about and all of us cannot value more: our time.

Both of us will be co-investing some time tomorrow afternoon at the @BerkmanCenter, talking about Tristan’s work and visiting the question he raises above with guidance from S.J. Klein.

(Shortlink for the event: http://j.mp/8thix. And a caution: it’s a small room.)

So, to help us get started, here’s a quick story, and a context in the dimension of time…


Many years ago a reporter told me a certain corporate marketing chief “abuses the principle of instrumentality.”

Totally knocked me out. I mean, nobody in marketing talked much about “influencers” then. Instead it was “contacts.” This reporter was one of those. And he was exposing something icky about the way influence works in journalism.

At different times in my life I have both spun as a marketer and been spun as a reporter. So hearing that word — instrumentality — put the influence business in perspective and knocked it down a notch on the moral scale. I had to admit there was a principle at work: you had to be a tool if you were using somebody as as one.

Look back through The Secret Diary of Steve Jobs, and you’ll see what I mean. Nobody was better than Ole’ Steve at using journalists. (Example: Walt Mossberg.) And nobody was better at exposing the difference between sausage and shit than Dan Lyons, who wrote that blog as Fake Steve. (Right: you didn’t want to see either being made. Beyond that the metaphor fails.)

Anyway, visiting the influence thing is a good idea right now because of this:

googletrends-influencer

And this:

googletrends-influencer-marketing

I call it a bubble and blame data. But that’s just to get the conversation started.

See (some of) you there.

(For a more positive spin, see this this bonus link and look for “We are all authors of each other.”)

 

 

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