Tag Archives: digital media

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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Filed under Reality checks, Huh?, What's Going On

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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Me And Mr. Jones

You might have read the news this morning that Apple has banned Alex Jones and Infowars from their podcasting platform. They join Facebook, Spotify, and YouTube in tossing this material off their distribution channels. Some of you will see this as a political move, stifling free speech. I don’t want to look at it that way today. Instead, I’d like us to focus on some business issues.

If you’re not familiar with Mr. Jones, he’s a conspiracy theorist who has claimed, among other things, that the murders at Sandy Hook Elementary School were staged by paid actors and that the government is poisoning children to make them gay. Do you remember a guy walking into a pizzeria with a gun to free the children being held there as part of a sex ring? An Alex Jones listener, who heard that the Clintons were running the ring on Alex Jones’ program.

Following the ban, some folks are yelling about freedom of speech and the First Amendment. Sorry folks. Some speech is not protected. I can’t make things up about a product and knowingly advertise false information. I can’t yell “fire” in a crowded theater. The most relevant type of speech that’s not protected is this:

Government may prohibit the use of “fighting words,” which is speech that is used to inflame another and that will likely incite physical retaliation. Likewise, language that is meant to incite the masses toward lawless action is not protected. This can include speech that is intended to incite violence or to encourage the audience to commit illegal acts. The test for fighting words is whether an average citizen would view the language as being inherently likely to provoke a violent response.

That’s exactly why this material was banned. It violates the platforms’ terms of service. Frankly, it disappoints me that it’s taken so long and it raises a business point we all need to consider.

Section 230 of the Communications Decency Act protects platforms from liability when people publish on their platform. This prevents me from suing a platform when a third-party writes something completely false about me, and it’s a great idea. The problem is that too many platforms hide behind this, feeling as if they begin moderating the obviously false or hateful content that they might, in fact, become liable. In doing so, they open the platform up to become a megaphone for hate and disinformation. Most importantly, it damages their reputation and turns off users. Look at what has happened with Twitter. The word I hear most often when people describe it is “cesspool.” To their credit, Twitter management is acting to clean it up (finally) but a lot of damage has already been done.

Any of us in business need to do more to protect our brands and businesses than the minimum legally required amount. Being corporately responsible is proactive. Remember that there are other channels through which Mr. Jones or any other content provider can distribute their information. That doesn’t mean I have to allow him or anyone else into mine, just as you don’t need to permit anyone into your retail store who you find potentially troublesome – a suspected shoplifter, for example –  as long as it is not based on bias against a federally protected class of people. I need to be clear about that to my users (we don’t welcome hate speech or knowingly false information here in your terms of service, perhaps).  Most importantly, I need to be responsible and do the best I can to do the ethically correct thing. Not because I dislike what it is you have to say, but because it’s a hate-filled lie.

Your thoughts?

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Facebook Adds Friction

If you’ve been led to this post via my Facebook profile, welcome. It wasn’t as easy as usual to get you here and I’ll explain why in a moment. The circumstances for that raise a good business question, though, and that’s what I want us to think about today.

I received an email from WordPress the other day. The screed is published on the WordPress platform, as are thousands of other sites. When I write a new post, it appears on my site as well as on Facebook, Twitter, and LinkedIn. Those are decent sources of traffic for me and even if readers don’t click through to the source I can impart my thoughts via those other platforms to a certain extent.

Back to the email. WordPress notified me that as of today, August 1, 2018, a change to Facebook’s API means that third-party tools can no longer share posts automatically to Facebook Profiles. This includes Publicize, the tool that connects my site to major social media platforms like Facebook. Obviously, I can still do the posting to my own profile manually, as I’ve done today, but it’s certainly less convenient. Interestingly, they’ll still allow the tools to post to Facebook Pages, which tend to be used by businesses and groups. Of course, commercial entities such as pages have greatly reduced visibility in the News Feed unless you’re willing to pay to promote the post.

Why would Facebook do this? On the surface, it’s with good intention. They say it’s to prevent spam and nefarious actions on the site by making it harder to post across multiple profiles simultaneously. Some of the other changes they’re making that affect me less but some people a lot more are to protect user privacy. All laudable, right?

Maybe not. Here is what WordPress has to say:

While Facebook says it is introducing this change to improve their platform and prevent the misuse of personal profiles, we believe that eliminating cross-posting from WordPress is another step back in Facebook’s support of the open web, especially since it affects people’s ability to interact with their network (unless they’re willing to pay for visibility).

What if the moves are just to further insulate the Facebook platform from external content and/or actions? What if it actually is about solidifying their monopoly in the social media space? I won’t bore you with all of the API changes but some are pretty significant, including restricting a lot of the data pages get. Can you pay for it? I’ll willing to bet you can.

I guess my business question to you all is about where any of us draw the line in protecting our business. We’re living in a world in which reducing friction – the choke points within our daily lives where things stop flowing smoothly – is becoming expected. Facebook just added friction to adding content to their platform, a platform that would become almost useless without users doing exactly that. I’ve got trust issues with Facebook based on their behavior over the last decade with respect to everything from data privacy to their openness about what they’re doing. When traffic my stuff drops off, will I even bother posting there?

Do I think Facebook is going to go out of business without the screed generating engagement for them? No. Might they if it becomes too much trouble for anyone with engaging content to post on the site? Could be. I’ll guess we’ll all stay tuned right?

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Facebook, Sears, and Kodak

When I was a lad several decades ago, many Americans did their shopping at Sears and took their pictures with Kodak film (I can explain “film” to you youngsters if need be). More recently, my kids might have shopped at American Apparel or Claire’s. What all of those formerly huge companies have in common is that they are all nearly dead. The reasons for that range from bad management to dumb financial deals to changing tastes to the digital revolution. In every case, however, I think there is a common thread of a failure to understand their customers in the context of the customers’ changing world.

We have something similar going on in my mind with Facebook. It’s huge and seems invulnerable but one might have said the same thing about Kodak or Sears 50 years ago. First, think about how the world is changing for their customers. Privacy has moved from something that digital folk like me were babbling about many years ago to something that is on everyone’s mind. In an April survey of 1,051 US adult internet users by Janrain, most respondents said they are not in favor of websites or apps using what they learn about them online to target ads. In fact, 70% of them want some very restrictive laws, similar to the E.U.’s GDPR, passed here. I don’t think there is any doubt that a tech backlash is going on and the more consumers and lawmakers find out about the sloppy (at best), invasive, and maybe criminal (at worst) data use by large tech companies, the greater that backlash is going to become.

Facebook’s entire business is built around invading your privacy. Two points from eMarketer:

More people are becoming suspicious of sharing data through third parties. In a March 2018 survey from Raymond James, more than eight in 10 US internet users said they were at least somewhat concerned about how their personal data is being used on Facebook. Similarly, in a Gallup survey of 785 Facebook users in April 2018, 43% said they were very concerned about invasion of privacy. That’s an increase of 30% in 2011.

What has resulted is that people, especially young people, are sharing less content. The entire reason Facebook is valuable for most people is that content that their friends, classmates, and family post. It’s the network effect – that value of the network relates to the number of people on that network.

I’m not shorting Facebook stock today but I’m not so sure that unless they get their privacy house in order that won’t be a bad play down the road. Less content means fewer active users which leads to less revenue. Will they all move to Instagram (a Facebook company)? Maybe, but probably not since that’s not what’s occurring now. As each day brings a new headline involving a bad actor and data, another nail gets pounded into the coffins of companies that don’t respect their customers’ privacy and wishes. Privacy and data use are no longer just food for geek chats. They’re on the front page. How long can Facebook or any company last if they don’t figure this out? Longer than Sears or Kodak?

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Be Inefficient – It’s Better For Your Business

Representatives of Facebook, Google, and Twitter have been summoned to Capitol Hill to explain what they know about how Russia used their platforms to interfere in the last Presidential election.  Their testimony began yesterday, and there was a recurring theme that I think has implications for any business. It has nothing to do with politics and everything to do with serving your customers.

Facebook logo Español: Logotipo de Facebook Fr...

(Photo credit: Wikipedia)

You may remember something from a few months back. There was a kerfuffle about Facebook using human editors on the News Feed who had a liberal bias. Whether that’s true or not is immaterial to our discussion. Facebook removed human editors from the “trending topics” feature seen in the news feeds of users. Given the decreased human oversight, gaming Facebook’s algorithm became easier, as demonstrably false news reports spread with increasing speed during the election. As Recode reported:

Sen. Jeff Flake is asking Facebook how it monitors its service — humans or artificial intelligence or both? Stretch (note: Facebook’a lawyer) said both, and explained a bit about how algorithms can detect non-human behavior, like someone creating many accounts in a very short amount of time. But while software can detect some of this stuff, humans often need to make a final decision on whether or not contents should be removed. Twitter and Google confirmed they have similar setups.

Fewer humans means fewer edits, apparently. What caught my attention yesterday was that each of the three platforms testified that putting in human-based solutions are inefficient for their business. What about the people on their platforms? A significant percentage of young people get their news only from Facebook. How can they be expected to understand the issues when the facts that are presented to them may be propaganda and not news or factual at all?

None of us in business can afford to make decisions solely on the basis of what’s good for the business. We need to stay customer and consumer-centric. After all, you wouldn’t want doctors in an ER failing to administer expensive drugs because it’s inefficient for the hospital, right? The restaurant that cuts the quality of their ingredients or service because they need higher margins won’t be around for very long.

Like most of you, I use these three platforms every day. Twitter is a cesspool, in my opinion, filled with trolls, hate-speech, and spam, but it’s also critically important. It’s a shame that they use the “free speech” argument to ignore that crap. There are limits on speech – try yelling “fire” in a theater and see what happens to you – and Twitter needs to clean up its act. All three of these companies need to quit using the profit motive and their responsibility to shareholders as excuses to let the bad actors do their thing. Be a little less efficient and more customer-friendly. Facebook admitted they knew something was going on and did nothing, allowing the “fake news” and propaganda to disseminate. That’s not consumer-friendly, is it?

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Taking One For The Team

When was the last time, other than The Super Bowl, that you actively watched an ad? I suspect that you’re like me and you’re actively doing what you can to avoid seeing ads at all costs. You wear out the buttons on the remote or you record your favorite shows and watch them later. You might even have jumped into the camp of those of us who pay not to see ads. We pay Netflix or Hulu or Amazon or all three to watch the content we love in an uninterrupted way. I pay SiriusXM not to hear my favorite music interrupted by product ads (still can’t seem to avoid those promos, although they’re usually appropriate to the content I’m consuming).

Then there is the web, both computer-based and mobile. It makes a NASCAR vehicle seems as uncluttered and virgin as the newly fallen snow. Pop-ups, pop-unders, hidden ads that spew sound from a minimized window, multiple windows popping in succession, far too fast for the consumer to read but quickly enough to record an ad displayed and a marketer charged. It’s a nightmare.

Let me digress. There is one topic we hit hard here in the screed: customer experience. We’ve covered the customer service rep that screws you over, the faulty products delivered without shame or recourse, and the airline that my friends and I call “Air We Don’t Care” (actually our name is a little different and a lot more obscene). We’ve also covered the other side of that – the customer service rep that goes the extra mile and solves your problem beyond your expectations. All of that relates to what is called the user experience in the digital world.

It’s nice to see that there are finally a number of publishers who recognize that a focus on user experience over driving maximum revenue call pay off in the long run. Digiday ran a piece about it, explaining how some brave publishers are overcoming their fear of losing money in favor of cultivating a more loyal audience. It finally dawned on these publishers that people aren’t coming for the ads.

I spent many years selling media. I know that our customer is really the marketer and their agency. However, in order to attract those customers, we need to have viewers and readers that consume our content – a LOT of our content – and keep coming back for more. Improving the user experience makes that happen even if it might cause a temporary drop in page views, ads displayed, and revenue. Heck, when even the NFL is recognizing that they have to reformat their games to speed them up and make the ads less intrusive (a better user experience!), all other content providers need to take notice.

Is the sales department taking one for the team as the editorial group improves the user experience? Probably in the short term, yes. But in a world where ad-blockers, remote controls, DVR’s, and streaming rule, it’s a smart sacrifice in my eyes. You?

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