Category Archives: Huh?

When Free Is $99

If you’ve not moved or bought a house recently, you are probably unfamiliar with the deluge of mail you receive for everything from supplemental mortgage insurance to yard services to security systems. The last time I bought a new place was in 1985 when it must have been a lot more difficult to pull together all the names and addresses of those people filing deeds or getting new mortgages. Apparently, it isn’t today.

One of the offers that showed up in the mailbox on Monday came from…well…I actually am not really sure from whom it came since there wasn’t a return address. It says it wants to welcome me to the neighborhood with a FREE OFFER! Of course, nothing in this world is free and this offer isn’t any different. The “free” security system will be installed with a $99 customer installation charge and the payment of $28 a month for monitoring. The free offer will only cost $435 the first year, and you have to sign a three-year agreement. Nice, right?  The fine print, which takes up a third of the second page, also mentions that labor charges might apply and that there are additional fees for various monitoring services beyond the basic. There are also limits on how many sensors you can get if your home isn’t prewired. Of course, it also comes with a $100 Visa gift card, so I got that working for me, which is nice.

This is yet another example of shady marketing. Sure, it’s a free offer in that the offer is free. The alarm and monitoring will run you thousands of dollars. The company behind it is called Protect Your Home and out of the 63 reviews for one location on Yelp, 59 are one-star reviews. There are complaints about being lied to by technicians, missed appointments, non-existent customer service, and even forged signatures. The BBB shows 1,630 complaints in the last three years. One can’t help but wonder why ADT, for whom they are an authorized reseller, doesn’t monitor how their brand is being marketed and serviced.

Trust is everything in marketing these days. A lot of fine print, unless it’s the sort of regulatory stuff the government makes you write as in a drug ad, is generally not a good indicator of trustworthiness. “Free” should really be free or the word should not be used. It sets an expectation which this company clearly doesn’t come close to meeting when the offer is broken down in detail. Honest marketing is one of the first steps to happy, satisfied, long-term customers. Beginning any relationship with a lie or half-truth really isn’t, is it?

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When You Don’t Know What Business You’re In

I started 2019 by buying a new home. When I say new, I mean brand spanking new as in “just built.” As I’m preparing to move in, I did what most folks would do first these days and called my local Cable TV/ISP to come set up the house. The builder did a good job of preparing the house for both cable TV and for wired internet and phone. There is a large junction box in a closet with both coax and Cat 6 wire running to most rooms. The living room and master bedroom both have conduit running into the crawl space for wires to be run easily. Frankly, I thought the hardest part of getting everything set up would be joining the coax and network wires that were hanging out of the side of the house to the main feeder lines. I was so wrong, and the reason why I was is quite instructional for any of us in business.

Hooking the house to the main lines was easy. Then, the tech set up the cable modem and router for my high speed (400MB+) wifi network. So far, so good, The problem came when I asked about connecting the wires that were in the closet to a switch or the router. None of them have caps – the little plugs – on them. “I don’t do that,” he said. But how can I connect the rooms to the network? What about putting the coax wires into a splitter for cable in the various rooms? At least that would help me identify which wires ran to which rooms. No help there either, even though he is the cable installer.

The final bit of laziness came when he informed me that he couldn’t run any cable through the conduits. He said he couldn’t find the conduit opening in the crawl space even though he pushed a long rod down the conduit and then went to look for it in the crawl space. I went down the next morning and found the openings in about 2 minutes. Yes, it was late (4p) on a Friday afternoon and I’m sure he wanted to get out of there, but still.

So here are some things we can all take away. First, the fact that the tech had no idea how to run wired internet tells me that the cable TV companies still think they’re in the cable TV business. Any look at the numbers will show you that people care far more about broadband and their ability to stream than they do traditional cable TV. If you are an Internet Service Provider, that you need to provide the damn service, and that includes wiring houses. I want my smart TV’s wired in, along with my game console. It’s a much better experience than via wifi, even high-speed wifi.

Second, the techs are customer service people along with being technicians. This guy was very nice but did nothing to solve my problem. To make matters worse he never left any paperwork so I have no way to know what exactly he did do. I can’t even tell you what my VOIP phone number is. Any company representative that deals with customers in any way should be trained to do so properly. They must have a focus on solving problems, not on creating them. And they certainly should never lie.

My ISP doesn’t know what business it’s in. They still think they are proving cable TV. They also still don’t understand how the power in all businesses has shifted to the customer. Let’s all agree to start 2019 by rethinking what businesses we’re really in and how we provide it to our customers, shall we?

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How Did We Get So Far Off Track?

I started working in the digital world in the mid-’90s. While I wasn’t exactly there for the dawn of the digital age, I was a relatively early member of the group of executives that began building businesses on the internet and on walled gardens like AOL used to be. A couple of things that have happened recently have me shaking my head, wondering how it’s all gone sideways.

First, I asked Twitter to send me something:

Keith Ritter, your advertiser list is ready! The list attached includes the advertisers that have included you in a tailored audience. These advertisers have included you in one or more tailored audiences. Tailored audiences are often built from email lists or browsing behaviors. They help advertisers reach prospective customers or people who have already expressed interest in their business.

I figured since I do a fair amount of cookie-blocking and other means to prevent tracking that I’d turn up in a handful of audiences and I was right. I appear in exactly 9 audiences. However, the rest of the 57-page document (not a typo) listed the similar audiences Twitter has decided I fit. They market me as a part of these audiences and I have no control over it. I can opt out and it will change the ads I see on Twitter. It won’t however, remove me from these audiences. I am included in over 1,000 of them, my data used and sold quite unwillingly.

Then there are the constantly apologizing folks at Facebook. This article in the NY Times is both frightening and disappointing. It talks about how Facebook “gave some of the world’s largest technology companies more intrusive access to users’ personal data than it has disclosed, effectively exempting those business partners from its usual privacy rules, according to internal records and interviews.”  Their privacy track record is abominable and every week it seems there is another apology and a promise to do better. Fool me once…

It’s taken years for the marketers and publishers to push back on the rampant fraud and abuse of programmatic ads. Social media is rife with “influencers” who buy fake followers and regularly violate FTC regulations on advertising. It seems that everyone under 30 is either a ninja or a guru. Fake reviews for products that are complete rip-offs are everywhere (run a link to an Amazon review through Fakespot if you don’t believe me).

All of this leaves one question: what the hell happened? How did the digital business world get so screwed up? At some point, Facebook and many other digital businesses decided that making money is way more important than serving their users is, I think, the basic answer. I’m all for making money, as my business track record shows. There are limits, however, and I have a fundamental belief that making money can only happen over the long term when you respect the customer. As the great David Ogilvy once said, “The customer is not a moron. She’s your wife.” Because most of the people who use digital have no concept about how they are tracked and marketed, most businesses treat them as morons and therein lies the problem.

I could rant on but I’ll end it here with a plea. To any of you who are in the digital world, please resolve to get back on track. Way back when in 1995, all we wanted to do was to amuse a few people and keep them engaged. Yes, we sold ads but we also didn’t track people once they left our domain. We didn’t treat them as numbers or rubes. You shouldn’t either. I get that the tools are more sophisticated and more powerful and that the world has changed. Basic business principles and human decency haven’t, have they?

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Those Pesky Joneses

You might have missed something in the financial news yesterday that reminds us of a really important business point. The good folks at Verizon wrote down the value of Oath, which is what they renamed their acquisitions of AOL and Yahoo. I’ll let the good folks at Bloomberg relay the facts:

Verizon Communications Inc. is conceding defeat on its crusade to turn a patchwork of dot-com-era businesses into a thriving online operation.

The wireless carrier slashed the value of its AOL and Yahoo acquisitions by $4.6 billion, an acknowledgment that tough competition for digital advertising is leading to shortfalls in revenue and profit. The move will erase almost half the value of the division it had been calling Oath, which houses AOL, Yahoo and other businesses like the Huffington Post.

For you non-financial types out there, writing down an asset is the accounting term used to describe a reduction in the book value of an asset due to economic or fundamental changes in the asset. In other words, something isn’t worth what you paid for it any longer. Oops. These were acquisitions that Verizon made to transition into taking on Facebook and Google as a content providing, eyeball-generating ad brand. This latest stumble comes on the heels of several others that Verizon has made over the last several years (a JV with Redbox, their failed news site, their awful app store and of course, V-Cast). When you basically spend $4.8 Billion and flush $4.6 Billion of it down the write-down toilet as they did the other day, you might need to rethink your strategic direction.

When you think about it, what Verizon did is not all that uncommon in business. They forget what their core competencies were and chased the latest shiny object. Big mistake. Where would we be now if all that capital had been invested in 5G networking or in WiMax? Video and advertising is something in which hundreds of companies are engaged. Yes, it’s highly profitable but it’s also dominated by two behemoths and subject to the ebbs and flows of consumer interest (whatever happened to MySpace anyway?). Why would you try to keep up with those Joneses?

It seems as if FiOS, their high-speed broadband service has been abandoned. They’re no longer expanding despite the fact that demand for very high-speed internet is everywhere. 5G is years away and technically challenging. Does anyone remember the dream of WiMax? Those are areas in which they are the Joneses and people have to keep up with them. None of us in business can forget what made our ventures successful because we think the grass is greener in some other business’ yard. Don’t chase the Jones’ success. Create your own.

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Why Does Anyone Buy Digital Ads?

Billions of dollars are spent marketing via programmatic advertising. Many billions more are spent paying for app installs – money that changes hands when an ad convinces a consumer to install an app on their smartphone. Ask yourself this: in what other business do you as a customer have a pretty decent chance of being defrauded? Off the top of my head, I can think of used cars and the investment world as places where customers should tread exceptionally carefully. Each of them has a certain subculture of ripping people off and there is a small percentage of bad actors who cause the bulk of the problems.

Try to wrap your head around these numbers. Somewhere between 3% and 37% of ad impressions were found to be from robots and not actually delivered to human eyes. That doesn’t seem bad until you do the math and see that over $6 Billion is spent on fraudulent ad impressions.

Do I have your attention yet? How about this from eMarketer:

eMarketer estimates that $7.1 billion will be spent on mobile app install ads in 2018, up from $6.5 billion last year…Several companies have conducted research that indicates how expensive install fraud is for marketers. Mobile marketing analytics firm Adjust estimated that between July and September 2018, 13.7% of app installs were rejected as fraudulent. According to Tune, app-install fraud cost marketers nearly $2 billion in 2017. DataVisor stated that for some ad networks, half of their app installs are fraudulent.

Is the industry trying to solve this? Of course it is, but it’s almost a Sisyphean task. One problem is solved and another method to defraud marketers and publishers pops up, and it’s been going on this way for as long as I can remember. Even among the legitimate ad service providers, there is an industry-wide reluctance to share the “black box” of how these systems actually do what they do. Do you think it’s only the little guys? It’s not. Facebook has been sued for overreporting how much time users spent watching videos. The suit says that Facebook knows that the majority of video ads on its platform are viewed for very short periods of time—users scroll right past. They claim that if advertisers were more widely aware of this fact, and in particular, if they knew that their advertisements were among those that were not drawing viewers’ attention, they would be less likely to continue buying video advertising from Facebook.

I tell clients that they need to be extremely careful if they go beyond search engine ads into other forms of programmatic. While I am well aware of how effective digital marketing can be, I constantly wonder if the bad actors are making that effectiveness almost impossible to achieve. I don’t know why anyone would enter the sewer that the digital ad world has become, at least not without full protective gear. Am I being too critical here?

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How About A Bowl Of Sugar?

Foodie Friday, and this week I’m revved up about a food issue which also raises an issue with every business. You are probably aware that there is an epidemic of diabetes in this country. According to the Centers For Disease Control, 1 in 3 adults in this country has pre-diabetes (elevated blood sugar) and over 9% actually have the disease. This incidence is much higher here in the South with some states having well over 11% of the population affected. Having spent a few years here I can tell you that there is a lot of sweet tea and other sugar-added foods sold everywhere.

What’s got me off on this rant today is what I would call yet another nail in the coffin of those who will contract the disease. Apparently, some genius at Post Cereals felt it would be a good idea to make a cereal named after Sour Patch Kids, a candy. I guess we can commend them for dropping all pretense for most breakfast cereals being anything other than candy and just calling it what it is. You think I’m hyperbolizing? You can literally pour a bowl of some breakfast cereals and half of what you pour is pure sugar. Golden Crips cereal (called Sugar Crisp when I was a kid) is almost 52% sugar. Honey Smacks (formerly Sugar Smacks) is over 55%. You would be better off feeding your kid a Snickers bar – it’s only 45% sugar.

There is a greater question here for anyone in business. Post isn’t the only company doing this. General Mills sells cereal with Reese’s Peanut Butter Cups on the front. I refuse to believe that the folks at Post or General Mills don’t have an understanding that what they’re selling is fostering an epidemic. It’s easy for them to shrug their shoulders and say “well, responsible parents will let their kids eat this only in moderation.” So why change the names of the aforementioned cereals to delete “sugar? Why isn’t the nutritional information for Reese’s Puffs on the General Mills website? These are dangerous products, folks, and they raise the greater business question. Should we make products that we know are doing great harm? Just because we can do something, should we? Isn’t it possible to sell the healthier alternatives you already make to kids and stop pushing something that you know puts these kids on the road to diabetes?

It doesn’t have to be that way. When scientists discovered a hole in the ozone layer and attributed it to the use of CFC’s, many companies that used CFC’s as the propellant in their spray products changed to something else. The products are less dangerous and the hole is healing. Having a conscience to go along with having a bottom line isn’t inconsistent nor bad business. It’s quite the opposite. Selling kids bowls of sugar under the guise of “making your day better” really is a sad way to make a buck, don’t you think?

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Carrying Yourself Like A Pro

I went to see my parents last week and my Dad and I got to talking about business as we often do. In the course of the conversation, we got into how things are different today from when I broke into the business world and not all for the better. No, today isn’t another chapter in “Keith Is A Cranky Old Man”, but please bear with me if I sound like one along the way. Like the proverbial pile of pony crap, there’s a pony in here someplace.

When I got into business and for the first 20 years I was there, things weren’t all that different from when my Dad was in the same business. The business model was the same and the processes for conducting business was pretty much the same. He was more of the “Mad Men” era than I was although I caught the very end of it in many ways. Things started to change two decades in – they got faster, more complicated and far less personal than when he was a TV guy.

One thing that didn’t change was you had to learn how to carry yourself like a pro. You had to learn how to interact with clients. You had to learn how to dress and to drink (yes, three-martini lunches were real). The older sales types would rib us younger guys mercilessly but they were training us, much as professional athletes will mess with rookies even as they’re teaching them how to dress and behave. I feel as if that’s gone today in many ways and I’m not a fan.

What’s changed now, another two decades in, is that there is so much unprofessional behavior that I’m beyond angry – I’m kind of sad. People who I barely know will ask me to make an introduction to someone they know I know. It seems as if many younger people operate in a transactional way – what can you do for me – rather than on an interpersonal way. Carrying themselves with character and decency seems a foreign notion. Showing up on time and dressed for business (not in a tie, not in a suit, but not in jeans and a T-shirt either) when you have a meeting are foreign notions.

The people who don’t need loans are the ones to whom banks want to give them. I always tried to look like I didn’t need a loan when I went in to ask for one. I carried the same thinking into my business life. Look successful. Carry yourself as if you are and understand the metrics that identify you as successful in your job. Be a pro. Don’t whine. Pitch in. Care about others and the team as much as you do yourself. Is all of that short for grow up?

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