Tag Archives: Business model

Why Apple Improving Privacy Has Marketers Upset

Apple announced a bunch of new stuff yesterday including the release date of the newest version of their mobile operating system, iOS10. You can read about all of the enhancements here (or just about any other place on the interweb) but one thing you probably won’t hear about piqued my interest because it gets to the question with respect to ad blocking that we’ve pondered before here on the screed.

First, a little tech talk. Apple has something called IDFA – Identifier For Advertising – that they use instead of a simple UDID (your device ID) or a cookie (which don’t work well in the mobile space). It’s used to track you, serve you ads, and also for privacy controls. What they’re doing in iOS10 will change how the IDFA behaves. When you opt in to limit ad tracking, the IDFA will return a string of zeros, effectively opting the user out of advertising. It will also prevent the previously permitted “frequency capping, attribution, conversion events, estimating the number of unique users, advertising fraud detection, and debugging” uses of this ID.

Needless to say, many in the ad world are very unhappy. “Ad blocking is stealing” according to the IAB. Pretty harsh, but I get that it’s a reflection of the disruption in the attention/value equation that underpins much of digital commerce. Here is the thing, though. Other media, many of which were built on the same equation, suffer from ad blocking and yet have figured out other business models. One blocks ads on TV either by watching on a delayed basis and skipping through the ads or by changing the channel until the program returns. Way back in the ’70’s, my fellow TV execs cringed at the thought of VCR‘s and felt they would irreparably harm the business. That thinking was repeated when DVR‘s (now at over 70% penetration) came out. Both lines of thinking were wrong.

The same is true of radio. No one is thinking about removing the buttons from your car that make it easy to change channels, nor is anyone thinking taking away your TV remotes would be a good thing. Ad blocking in print is as easy as turning the page. There is research that found people only fast-forward through about half of all ads during playback, and other research has found that even fast-forwarded ads make an impression on viewers. Even so, the business model for TV has changed a lot, and “ad blocking” was part of the impetus for that.

Maybe instead of worrying about Apple (or consumers, for that matter) doing what they can both to improve the web and mobile experience and to protect privacy, those of us involved in the digital marketing ecosystem need to keep refining our business models and whine a lot less? What do you think?

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Filed under digital media, Reality checks

Scum Of The Digital Earth

I read something the other day that made me sad and then angry. It’s the sort of thing that lessens my faith in humanity, although as I describe it you’ll probably just say I’m naive. It concerns the PPI business. What’s that? It stands for pay-per-install and the companies involved in it, some of whom are business names you’d know, are the scum of the digital earth in my book. Why is that?

First, what exactly is PPI? According to the folks at NYU who did some research on this topic with Google, commercial PPI is a monetization scheme wherein third-party applications — often consisting of unwanted software such as adware, scareware, and browser hijacking programs — are bundled with legitimate applications in exchange for payment to the legitimate software company. When users install the package, they get the desired piece of software as well as a stream of unwanted programs riding stowaway. It’s big business, with one outfit reporting $460 million in revenue in 2014 alone.

Ever installed a legitimate piece of software only to find your browser behaving strangely afterward? You get a barrage of advertisements on the screen, or a flashing pop-up warning of the presence of malware, demanding the purchase of what is often fraudulent antivirus software. On other occasions, the system’s default browser is hijacked, redirecting to ad-laden pages. The vendors of this crap will claim that you approved the installation of all the additional malware by clicking through the terms and conditions or forgetting to uncheck a box approving the install. Having had to remove this junk from both my family’s and friends’ computers I can tell you that that simple error can cost you may hours of diagnosis and repair, or a bit of money to purchase an anti-malware package.

But it gets worse. Today it’s just crapware, adware and the like. What happens when someone takes a check from someone who has more sinister intentions? Keyloggers and other spyware could just as easily be installed. As one article on the study pointed out:

The one-year study by Google and NYU Tandon School of Engineering of affiliate networks running pay-per-install programs (PPI) found that nearly 60% of offers bundled with these programs are flagged as unwanted, and that in aggregate drove 60 million weekly download attempts with tens of millions of installs detected in the last year. These sites can run ad injectors.

Tens of millions of installs a week. Hundreds of millions of dollars changing hands, and a conscience nowhere to be found. I’m not one to encourage government intervention in the digital realm but someone needs to shut these scum down before something catastrophic happens. It’s not all “Russian hackers” doing this. These “businesses” are about as close to criminal as one can get without being arrested. What are your thoughts?

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Filed under Huh?

Give Them A Reason

This Foodie Friday comes in the midst of various companies announcing their financial results. One of those companies is Wendy’s, which reported weaker than expected sales growth. That’s not particularly unusual for any company, but I think there’s a business lesson in the thinking behind their reasoning for the weak results. Let’s see what you think.

Foto de una carretera en la cual se destacan a...

(Photo credit: Wikipedia)

According to Wendy’s, people aren’t dining out as much because it has gotten even cheaper to eat at home. Bulletin to the financial folks at the company: it’s generally been cheaper to eat at home. I can’t ever recall anyone I know saying let’s go out to eat and save some money, even when our destination is a fast-food place. In my mind, that’s not why people choose to dine out. It may be more convenient or they might just not feel like cooking. Maybe there is a time crunch (although unless you’re already out and about, you can probably whip up a couple of burgers in the time it would take to get to Wendy’s and eat). Wendy’s isn’t alone in either the weak results or the unusual reasoning, at least according to this article:

The results from Wendy’s follow disappointing sales from other chains including McDonald’s, Burger King, Dunkin’ Donuts and Starbucks. The other chains have cited a variety of reasons, including the political uncertainty created by the presidential election, for their performance.

Let’s accept that their reasoning is sound (hmm). Any of us in business realize that there are always any number factors beyond our control. Commodity prices, which can be strongly influenced by the biggest thing out of our control – the weather – are certainly one factor in the food industry. What we can control is how we give our customers a reason to come patronize us, regardless of the cost. We ought to be selling value. Unfortunately, in the food business “value menu” has become synonymous with “cheap.” That can only work for so long, especially, as in this case, as the costs of making our product or providing our service rise.

Solve consumers’ problems and provide excellent value at a reasonable (but profitable) cost. Give them a reason to turn off the stove and get in the car. Let’s see where that gets us.

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