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  • feedwordpress 22:31:55 on 2021/01/17 Permalink
    Tags: , , content moderation, , Google, , , , , section 230   

    Stop Talking About Section 230. Start Talking About The Business Model. 


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    No. No. No.

    For the past several years, I’ve led a graduate-level class studying the early history of Internet policy in the United States. It runs just seven weeks – the truth is, there’s not that much actual legislation to review. We spend a lot of the course focused on Internet business models, which, as I hope this post will illuminate, are not well understood even amongst Ivy-league grads. But this past week, one topic leapt from my syllabus onto the front pages of every major news outlet: Section 230. Comprised of just 26 words, this once-obscure but now-trending Internet policy grants technology platforms like Facebook, Google, Airbnb, Amazon, and countless others the authority to moderate content without incurring the liability of a traditional publisher.

    Thanks to the events of January 6th, Section 230 has broken into the mainstream of political dialog. Slowly – and then all of a sudden – the world has woken up to the connection between the disinformation flooding online platforms and what appears to be the rapid decay of our society.

    Difficult and scary narratives need a villain, and the world’s found one in Section 230, pretty much the only law on the books that can reasonably be connected to this hot mess. No matter if you’re liberal or conservative, it’s pretty easy to logic your way into blaming 230 for whatever bothers you about the events of the past ten days.

    For folks on the left, the narrative goes like this: The insurrectionists were radicalized by online platforms like YouTube and Facebook. These platforms have failed to moderate disinformation-driven conspiracy theories like QAnon, or the blatant lies told by politicians like Trump. (When they finally did – two days after the coup attempt – it was far too little, far too late!). The reason they can get away with such blatant neglect is Section 230. Clearly, 230 is the problem, so we should repeal it! Unfortunately, our President-elect has endorsed this view.

    The conservative view ignores any connection between political violence and 230, focusing instead on seductive but utterly wrong-headed interpretations of First Amendment law: Big Tech platforms are all run by libtards who want to crush conservative viewpoints. They’ve been censoring the speech of all true Patriots, kicking us off their platforms and deleting our posts. They’ve been granted this impunity thanks to Section 230. This is censorship, plain and simple, a violation of our First Amendment rights. We have to repeal 230! Naturally, our outgoing President has adopted this view.

    The debate is frustratingly familiar and hopelessly wrong. The problem isn’t whether or not platforms should moderate what people say. The problem is in whether or not the platforms amplify what is said. And to understand that problem, we have to understand the platform’s animating life force: Their business models.

    It’s The F*cking Business Model!

    Three years ago I wrote a piece arguing that Facebook could not be fixed because to do so would require abandoning its core business model. So what does that model do? It’s really not that complicated: It drives revenue for nearly every modern corporation on the planet.

    Let that settle in. The platforms’ core business model isn’t engagement, enragement, confirmation bias, or trafficking in human attention. Those are outputs of their business model. Again, the model is simple: Drive sales for advertisers. And advertisers are companies – the very places where you, I, and nearly everyone else works. They might be large – Walmart, for example – or they might be small – I  got an ad for weighted blankets from”Baloo Living” on Facebook just now (HOW DID THEY KNOW?!).

    When advertising is the core business model of a platform, that platform’s job is to drive sales for advertisers. For Facebook, Google, Amazon, and even Apple, that means providing existential revenue to tens of millions of companies large and small. This means that “Big Tech” is fundamentally entangled with our system of modern capitalism.

    And killing Section 230 does nothing to address that fact.

    Let’s get back to the distinction I drew above – between moderating content (the focus of 230) and amplifying that content, a practice Section 230 never anticipated. To understand amplification, you need to understand a practice that nearly all advertising-driven platforms have adopted in the past ten years: Content feeds driven by algorithms. The Wall St. Journal seems to have just woken up to this practice, pointing out in a recent technology column that Social-Media Algorithms Rule How We See the World. Good Luck Trying to Stop Them. The piece does a fine job of pointing out what anyone paying attention for the past decade already knows: Our information diet is driven by algorithms we don’t understand, serving not the health of the public dialog, but rather the business model of social media companies and their advertising customers. The conclusion: We’ve lost all agency when it comes to what we consume.

    All About Agency

    But before feeds became our dominant consumption model, we happily outsourced our agency to journalistic media brands – and to the editors and journalists who worked for those media brands. Some of us still curate our news this way – but our ranks are thinning. Back before platforms became our dominant media platform (all of ten years ago!), anyone who wanted to read the news had to exert a critical, if often fleeting form of agency. We decided which media outlets we would regularly pay attention to. We chose to read The New York Times or the Post (or both), The Wall St. Journal or The Economist. Media brands stood as proxies for a vastly more complicated and utterly overwhelming corpus of information we might potentially consume. The job of the journalists at those media outlets was to curate that information into a coherent diet that conformed to whatever that media outlet’s brand promised: “All the News Fit to Print” if you’re the Times, aloof neoliberal analysis if you’re The Economist.

    But that’s not how the vast majority of Americans get their news these days. If anything, Facebook has given tens of millions of people who otherwise might not seek out the news an illusion of news literacy thanks to whatever happens to show up in their feed. For those who do want to chose a news diet, we might parrot the agency of the pre-feed days by following this or that new brand on Facebook, YouTube, or Twitter. But in the feed-driven environment of those platforms, articles from The Economist, The Times, or The Journal must compete, post for post, with the viral videos of flaming Zambonis and titillating proofs of elaborate child pornography rings shared by your friends. Given the platforms’ job is to drive revenue for its advertisers, which group do you think gets more amplification? You already know the answer, of course. Hell, it turns out Facebook has known the answer for years, and has consciously chosen to show us low quality information over accurate journalism. How do we know? It has a “News Ecosystem Quality” index – a SOMA-like tuning fork for its algorithms that dials up quality information whenever things might turn a bit too ugly. Let THAT sink in.

    Given all of this, it’s seductive to conclude that the best way to limit bad information on platforms is to ask the platforms to moderate it away,  threatening them with repeal of 230 to get there. But that’s a terrible idea, for so many reasons I won’t burden this essay with a recitation (but please, read Mike Masnick if you want to get smart fast).

    A far better idea would be to coax that critical layer of agency – the human choice of trusted media brands – back to the fore of our information diet in one way or another. And if we don’t like our choices of media brands, we should start new ones, smarter ones, more responsive ones that understand how to moderate, curate, and edit information in a way that both serves the public good and understands the information ecosystem in which it operates. (Yes, yes, that’s a self serving reference.)

    As a society we’ve at least come to admire our seemingly intractable problem: We’re not happy with who’s controlling the information we consume. The question then becomes, how can we shift control back to the edge – to the consumer of the information, and away from algorithms designed to engage, outrage, and divide?

    I’m of the mind this can be done without sweeping Federal legislation – but legislation might actually be helpful here, if it contemplates the economic incentives driving all of the actors in this narrative, including the businesses who currently pay Facebook and its peers for providing them revenue.

    In short, I think it’s time to hack the economic incentives which drive the platforms. Section 230 is a dodge – we’re obsessing on a 26-word law that offers nearly every contestant in the dialog a convenient dodge from a far larger truth: No one wants to threaten the profits of our largest corporations. And given I’ve been on for a while, I’m going to stop now, and get into how we might think differently in the next installment. Thanks for reading, and see you soon.

    —-

    This post is one of a series of “thinking out loud” on our current media ecosystem. Here are a few others:

    Media and Marketing Leaders: It’s Time to Stand Up For Truth  

    Facebook Is Finally Admitting It’s A Publisher

    Marketers: Your Role In Social Discourse Is Critical

    Marketers Have Given Up on Context, And Our National Discourse Is Suffering

    An Open Letter To American Corporations: It’s Good Business (and Smart Marketing) To Support Quality Journalism

     

     
  • feedwordpress 18:28:47 on 2021/01/01 Permalink
    Tags: africa, , , covid, , Google, , , , , , , spacs, ,   

    Predictions 2021: Disinformation, SPACs, Africa, Facebook, and a Return to Tech Optimism 


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    Never in my five-plus decades has a year been so eagerly anticipated, which makes this business of  prediction particularly daunting. I’m generally inclined to be optimistic, but rose-colored glasses stretch time. Good things always take longer to emerge than any of us would wish. Over 18 years of doing this I’ve learned that it’s best to not predict what I wish would happen, instead, it’s wise to go with what feels most likely in the worlds I find fascinating (for me, that’s media, technology, and business, with a dash of politics given my last two years at The Recount). As I do each year, I avoid reading other folks’ year-end predictions (though I plan on getting to them as soon as I hit publish!). Instead, I just sit down at my desk, and in one rather long session, I think out loud and see where things land.

    And off we go….

    1. Disinformation becomes the most important story of the year. In some ways, this is foolhardy – like predicting that the election would drive 2020, only to see it overwhelmed by COVID-19. The topic of disinformation feels a bit cerebral and hard to pin down – not as concrete as a pandemic or an election cycle. But I’m convinced 2021 will be the year we all realize that our media/information ecosystem is broken – with disinformation, propaganda, and brazen falsehood its most pernicious externality. Businesses are waking up to the threat this  poses to their bottom lines (and to society at large), most scholars and policymakers are already there. In the words of former Republican strategist Steve Schmidt, speaking on a recent Recount podcast: “In a society where there is no ability to distinguish between the truth and the lie, democracy will be lost.” 2021 will be a year where we search for the root causes of our failures over the past few years, and at the center of that failure is a communication system that mindlessly manufactures disinformation. A free and open democratic economy can’t run on bullshit. I’m personally devoting 2021 to exploring how we can navigate the collision of technology platforms, unfettered capitalism, broken media models, and feckless regulatory oversight. More on that soon…

    2. Facebook’s chickens come home to roost. Related to #1, yes, and it’s certainly passé to beat up on Facebook. As an OG in the space (“Facebook Can’t Be Fixed,” et al), I’m reluctant to go there once more – our troubles are bigger than one company alone. And for years the company has steamed ever forward, its fortunes unaffected by endless cycles of bad PR. But in 2021, the good ship Facebook will start taking on serious water. Incoming President Joe Biden will set the tone with his distaste for the company, and company’s tone deaf approach to communications will finally fail to deliver the company a pass. (If you missed it, you must watch this insanely scripted game of dodgeball between journalist Tamron Hall and Facebook COO Sheryl Sandberg). The company’s own employees are increasingly uncomfortable with their leadership, and its consumers and marketing partners are increasingly looking for alternatives to a platform they see as toxic and unwilling to change. Toss in policymakers’ thirst for an easy target and a media industry tired of the doubletalk, false narratives, and outright lies, and 2021 will be a dismal year for Facebook – in particular in the United States, where the company will likely admit that it has failed to grow user engagement. And that, to put a fine point on it, will tank the stock, full stop.

    3. AI has a mid-life crisis. The past few years have witnessed the shining resurgence of artificial intelligence – breakthrough after breakthrough has led to justifiable optimism that AI-driven innovation will solve both the mundane (Look! It can untangle corporate supply chains!) as well as the divine (Look! It can cure every disease known to humankind!). All of this and more is likely true, but humanity has yet to fully comprehend the potential negative externalities of AI, much less mitigate them. Chastened by our last bout with externality ignorance (see Facebook, above), 2021 will be the year society takes a step back and thinks hard about where this is all going. Setting up the narrative is Google’s mishandling of its relationship with leading AI critic Timit Gebru, but by year’s end, the AI narrative will be as much about hand wringing and regulatory oversight as it is about revolutionary breakthroughs.

    4. Then again, a wave of optimism around tech-driven innovation takes root. This is the counter narrative to five-plus years of a “tech as bogeyman” trope. 2021’s optimism will be driven by two major factors: First, a belief that we’re on a path to correct the worst mistakes of the past decade (see #1 – #3 above). And second, a slew of long-developing and real world proofs that technology-driven breakthroughs will bring serious benefits to society at scale. Candidates include biotech and bioinformatics (the core technologies behind the COVID vaccine), blockchain (though I’m certain bitcoin will have at least one of its several crashes this year), and lithium batteries (giving us hope on climate change and driving my otherwise random prediction on gas-powered cars, below).

    5. Google does in 2021 what I predicted it would in 2020. And what was that? That Google zags. I wrote: “Saddled with increasingly negative public opinion and driven in large part by concerns over retaining its workforce, Google will make a deeply surprising and game changing move in 2020.” I think this is even more likely given Google is fighting off a terrifying array of massive regulatory actions, and desperately needs to avoid looking like Facebook in the eyes of its employees, consumers, and business partners.

    6. Nothing will get done on tech regulation in the US. Blame antitrust. Whether or not Biden decides to continue Trump’s FTC and DOJ actions, he will likely start his own, and keep the focus on antitrust, rather than more thoughtful legislation around disinformation, machine readable data portability, or privacy. There will be some movement – net neutrality will probably get reaffirmed and we’ll fix Trump’s H1-B messes, for example. But by year’s end folks will realize that antitrust suits are essentially kabuki, an exercise designed to go nowhere and maintain the status quo. When Facebook is aggressively calling on Washington to regulate the Internet, you know they’ve done the math and concluded nothing is really going to change. Everyone’s talking about how it’s about time for the government to step up and do something, but I’m deeply cynical about anything changing in 2021. That doesn’t mean we won’t (or shouldn’t) make progress…just that it won’t happen in a year.

    7. A “new” social platform breaks out in 2021. I’ve made versions of this prediction in the past, but my timing was off. Given the handcuffs 2021 will place on the traditional players in Big Tech, this coming year presents a perfect opportunity for a breakout player to redefine the social media category. There’s plenty of VC money ready to invest here, and both Tik Tok and Snap  have had their moments in the sun. It won’t be some ripoff version of what already exists (sorry, Parler). I’d either look to something like an evolved Signal, an app that already has a growing user base, or a from-nowhere startup that gets super hot, super fast because it’s fundamentally rethought social media’s traditional, serotonin-driven models for engagement and advertising .

    8. The markets take a breather, and SPACs get a bloody nose. Back in 1987 I was a cub reporter covering the technology industry. One of the first stories I ever wrote involved a software startup run by a fellow I immediately judged to be a hustler. In our initial interview, he laid out how he was going to use financial engineering to take his small company public via a shell company. It struck me as dodgy then, and it strikes me as dodgy now. I have plenty of industry pals who are involved in SPAC mania now, and as far as I can tell, they’re on the up and up. SPACs can be a healthy and innovative approach to financing companies. But alas, this SPAC trend stinks of easy money and honeytraps for unsophisticated investors and shady operators. So in 2021, SPACs will lose their luster, driven in large part by several spectacular failures (or worse). Related, overall stock markets won’t crash, but by year’s end, they’ll sputter as tech stocks fall out of favor and society begins to realize how much debt needs to be worked through before true growth can reassert itself.

    9. 2021 will be prove to be the last year of growth in gas-powered automobiles. There, I did it – I wrote a prediction I wish for, rather than one I can back up with my own lived experience. That said, the aforementioned breakthroughs in lithium battery technology will lead to a wave of new options for vehicle buyers, and in the long lens of history, the early 2020s will be celebrated as the period where we finally overcame our addiction to burning fossil fuels. Please, MAKE IT SO.

    10. Africa rising, China…in question. A few years ago, I predicted China was going to crash, but I now realize the world needs China to counter US hegemony. With that in mind, the breakout continent of 2021 will be Africa, home to many of the fastest growing countries in the world, and the focus of years of Chinese investment and diplomacy. After four years of US neglect, the Biden administration will realize it’s dangerously close to losing Africa altogether, and announce a massive investment in the continent. Biden’s China policy will be fascinating to watch, but I’d not wager a cent on where it lands this year.

    11. Everyone loses their shit, in a good way. Because we deserve one big ass party, damnit, when this pandemic finally lifts. This is the easiest one to predict, because, well….I’ll be right there with you. Until then, folks, stay safe, wear a f*cking mask when in public, and do what you can to help others get through what is still a dark damn time in our history. See you on the other side.


    Previous predictions:

    Predictions 2020

    2020: How I Did

    Predictions 2019

    2019: How I did

    Predictions 2018

    2018: How I Did

    Predictions 2017

    2017: How I Did

    Predictions 2016

    2016: How I Did

    Predictions 2015

    2015: How I Did

    Predictions 2014

    2014: How I Did

    Predictions 2013

    2013: How I Did

    Predictions 2012

    2012: How I Did

    Predictions 2011

    2011: How I Did

    Predictions 2010

    2010: How I Did

    2009 Predictions

    2009 How I Did

    2008 Predictions

    2008 How I Did

    2007 Predictions

    2007 How I Did

    2006 Predictions

    2006 How I Did

    2005 Predictions

    2005 How I Did

    2004 Predictions

    2004 How I Did

     
  • feedwordpress 22:51:41 on 2020/12/23 Permalink
    Tags: , , , , , Google, , , , misinformation, , , , predictions 2020, , ,   

    Well That Was A Year: A Review of My 2020 Predictions 


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    From the Department of Didn’t See THAT Coming…

    Yes, it’s true: Last year, I did not predict a global pandemic in 2020. COVID is a gravitational force that warps everything it touches, so I approach this annual ritual of self-grading with trepidation. As I start, I honestly don’t remember what I predicted twelve months ago…but regardless, I’m expecting a train wreck. I’ll read each one in turn, repeat the prediction below, and then free associate some thoughts on what actually transpired. Grab a glass of your favorite beverage…and let’s go:

    1. Facebook bans microtargeting on specific kinds of political advertising. OK, Facebook did NOT do this – well, not exactly. What the company DID do was ban political advertising altogether – but only in the week before, and a short period after the US election. Of course, you can certainly say that by banning all political advertising, the company ended up banned microtargeting as a result. So that’s one argument for giving myself a “Nailed it.” If that’s too weak an argument, let’s go to the fine print in my original prediction: “The pressure to do something will be too great, and as it always does, the company will enact a half-measure, then declare victory.” And that is exactly what the company did. I mean, exactly. I also wrote: “The company’s spinners will frame this as proof they listen to their critics, and that they’re serious about the integrity of the 2020 elections. As with nearly everything it does, this move will fail to change anyone’s opinion of the company. Wall St. will keep cheering the company’s stock, and folks like me will keep wondering when, if ever, the next shoe will drop.” Yup. Nailed it.
    2. Netflix opens the door to marketing partnerships. This prediction requires a bit of clarification. I was not claiming Netflix would open the door to advertising on its platform, but rather that it “may take the form of a co-produced series, or branded content, or some other “native” approach, but at the end of the day, it’ll be advertising dollars that fuel the programming.” What I didn’t realize when I made this prediction was that Netflix was already deep into product placement deals for its Netflix Originals, and that it had already made sure the money changed hands somewhere else (such as between a production company and a brand).  There is no doubt that marketing money positively benefits NetFlix’s bottom line – and the  practice absolutely accelerated in 2020, as did everything streaming-related during COVID. But there was not a significant shift in NetFlix policy related to marketing that I can find, so I’m going to say I whiffed on this one.
    3. CDA 230 will get seriously challenged, but in the end, nothing gets done, again. This is exactly what happened. In fact, it’s happening as I type this – Trump is just vetoed a veto-proof defense funding bill because it doesn’t repeal 230, and Biden has already indicated he plans on rethinking 230 next year. But even though tens of millions of American citizens became familiar with Section 230 this year, nothing came of all that noise. Nailed it.
    4. Adversarial interoperability will get a moment in the sun, but also fail to make it into law. OK I have GOT to stop writing predictions about obscure academic terminology. I mean, what the actual f*ck? What I was trying to say was this: In 2020, there would be a robust debate about the best ways to regulate Big Tech, and the ideas behind “adversarial interoperability” would get a rigorous airing. This did not happen, and just like Jeffrey Katzenberg, I blame COVID. Exactly no one wanted to debate tech policy in the middle of a global pandemic. Making things worse, toward the end of this year multiple governmental agencies decided it was time to go after Big Tech, and they went batshit with proactive lawsuits – the DOJ and a majority of states sued Google (three times, no less), the FTC sued Facebook, and I’d put money more suits are coming (looking at you, Apple and Amazon). The suits revolve around antitrust law, so the debate will now be dominated by whether or not the government can prove its case in court.  This effectively postpones intelligent debate about remedies for years. I find this state of affairs deeply annoying. But a grade must be given, and that grade is a whiff, unfortunately.
    5. 2020 will also be the year “data provenance” becomes a thing. Literally stop me from ever writing predictions after hitting the flash evaporator, OK?! This was another policy-related prediction, and if I was going to miss #4 above, I’m certainly going to whiff here as well. In the very rare case you want to know what I was on about, this is how I described the concept: “The concept of data provenance started in academia, migrated to adtech, and is about to break into the broader world of marketing, which is struggling to get its arms around a data-driven future. The ability to trace the origin, ownership, permissions, and uses of data is a fundamental requirement of an advanced digital economy, and in 2020, we’ll realize we have a ton of work left to do to get this right.” Well, in fact, if you believe Google Trends, “data provenance” did have a marked lift in 2020. Does that qualify it for “becoming a thing”? I have no f*cking idea. And again, thanks to COVID, marketers were not exactly focused on public ledgers and blockchain in 2020. Note to self: Stop predicting that something will “become a thing.” Inane. Whiff.
    6. Google zags. Oh man, oh man, I feel so close on this one. I mean, there are still a few days left in 2020, right? I honestly think this is about to happen. Here’s how I explained it one year ago: “Saddled with increasingly negative public opinion and driven in large part by concerns over retaining its workforce, Google will make a deeply surprising and game changing move in 2020.” Google’s problems with both public perception (hello, three government lawsuits!) and an unhappy workforce only deepened this year – the Timnit disaster was just the most public of its struggles. But so far the company hasn’t produced a dramatic “game changing” move. Sure, the FitBit acquisition finally closed, but if that proves material, I’ll … start using a FitBit again. I firmly believe that Google must make a game changing move, and soon, if it’s going to keep its mojo. But….it certainly hasn’t happened yet. So…sigh…Whiff.
    7. At least one major “on demand” player will capitulate. Just weeks into 2020, I was well on my way to a “Nailed It” here. The tide was turning on the entire category: Uber was in trouble and badly below its IPO price, GrubHub was a falling knife looking for a buyer, PostMates had shelved its IPO dreams. And then…COVID reordered the universe, making on demand everything an essential part of quarantine life.  The entire category was supercharged – I mean, DoorDash at 19 times sales?!?! – and yet another of my predictions bit the dust. F U, COVID. Whiff.
    8. Influencer marketing will fall out of favor. Well, if ever there was a year to be sick of influencer marketing, it’d be this one. But no, with sports and entertainment programming suspended for the majority of the year, all that marketing budget had to go somewhere, and lord knows it wasn’t going to support news (despite that being the most engaged and highest growth category of all). So…brands threw in even more with influencers.  In my explanation I predicted that influencer fraud would be a huge problem – and by most accounts it is (the last figure I could find was 1.3 billion in 2019 – which was roughly 20 percent of the overall market!). But…influencer marketing did not fall out of favor, Charlie D’Amelio is making $50K per post, and damnit, I whiffed again.
    9. Information warfare becomes a national bogeyman. Finally, a slam dunk. Man, I was starting to question myself here. “Deep fakes, sophisticated state-sponsored information operations, and good old fashioned political info ops will dominate the headlines in 2020,” I wrote. Yep, and true to form, 2020 saved the scariest example for the end of the year. Nailed it.
    10. Purpose takes center stage in business. Here’s one prediction where COVID actually accelerated my take toward a passing grade. The year began with BlackRock’s stunning declaration that it would make investment decisions based on climate impact. Once COVID and the George Floyd murder came, nearly the entire Fortune 500 recalibrating their communication strategies around racial, gender, and climate equity issues. Last year I wrote “I expect plenty of CEOs will feel emboldened to take the kind of socially minded actions that would have gotten them fired in previous eras.” Whether it was P&G on climate and race,  Nike saying “Don’t Do It,” or nearly every major sports league standing with the Black Lives Matter movement, companies have taken previously unimaginable stands this year. Nailed It.
    11. Apple and/or Amazon stumble. Sure, Apple did pay up to half a billion to bury its “batterygate” scandal but let’s be honest, you  forgot about that, right? Even the publication of a terrifying expose of worker conditions in iPhone manufacturing plants failed to dent the company in 2020. But what you likely will remember is the Epic Fortnite story – and to me, that’s the stumble that tips my prediction to a “Nailed it.” Apple’s response to Epic was ham fisted and short sighted. The company  misread regulators’ appetite for antitrust, deeply injured its reputation amongst developers, and exposed the iOS App Store – the source of its most important growth revenues – as a pristine monopoly just begging for a Federal compliant. Meanwhile, while Amazon profited handsomely from COVID, the company’s reputation has only worsened in 2020. A drumbeat of negative press about unsafe working conditions, union busting, and anticompetitive practices culminated in a broadside from one of its own – Tim Bray, a respected technologist (and early reader of Searchblog) who penned a damning Dear John letter to his former employer  in May. Despite the strength of both companies’ stock prices, I think it’s safe to say that both Apple and Amazon stumbled in 2020. Nailed It.

    So there you have it, my review of how my predictions fared in 2020. Five right, six wrong, for a batting average of .454. Far better than last year, where I hit just .300, but far below some of my best. Still, not bad if you factor in COVID’s impact on nearly everything. Next week I’ll be writing Predictions 2021 – let’s hope this is the start of a trend.


    Previous predictions:

    Predictions 2020

    Predictions 2019

    2019: How I did

    Predictions 2018

    2018: How I Did

    Predictions 2017

    2017: How I Did

    Predictions 2016

    2016: How I Did

    Predictions 2015

    2015: How I Did

    Predictions 2014

    2014: How I Did

    Predictions 2013

    2013: How I Did

    Predictions 2012

    2012: How I Did

    Predictions 2011

    2011: How I Did

    Predictions 2010

    2010: How I Did

    2009 Predictions

    2009 How I Did

    2008 Predictions

    2008 How I Did

    2007 Predictions

    2007 How I Did

    2006 Predictions

    2006 How I Did

    2005 Predictions

    2005 How I Did

    2004 Predictions

    2004 How I Did

     
  • feedwordpress 18:53:51 on 2020/11/30 Permalink
    Tags: , , , , Google, , , , , , the press   

    Media and Marketing Leaders: It’s Time to Stand Up For Truth 


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    Why “information equity” matters.

     

    An idea has been tugging at me for months now, one I’ve spent countless hours discussing and debating with leaders in marketing, media, and journalism. And as I often do, I’m turning to writing to see if I can push it into more concrete form. I’m literally thinking out loud here, but I won’t bury the lede: I believe it’s time for all major corporations – not just the companies that pushed for the #StopHateForProfit boycott – to call for a broader, more universal movement related to their marketing practices and their “Corporate Social Responsibility” efforts.This isn’t about punishing platforms, rather it’s about reimagining our relationship to them, and shifting our focus to the externalities our collective dependance upon them has created. For now, I’m calling the movement “Information Equity” – a rather dry and academic moniker, to be sure. Toward the end of this post, I’ll ask for your help in pushing the idea forward. But for now, let me explain what I’m on about.

    ***

    Some years back I helped start a company called NewCo, an effort to identify and promote companies that view business as a force for good. The idea sprang from an observation that the most successful companies often had purpose at their core, they were animated by a desire to make the world better in some measurable way. Lately the idea of business as a force for good has found broader appeal, to the point where the Business Roundtable recently revised its definition of purpose in business. No longer would the true north of business be the maximization of profit for shareholders. In its place would now sit a new lodestar: “Creating an economy that serves all.”

    It’s easy enough to dismiss such declaratives as lipstick on the soulless pig of capitalism, but these kind of statements shift societal expectations over time, and eventually they change outcomes as well. Large corporations are increasingly being held to account by employees, customers, and the communities they impact. It’s demonstrably true that business practices have changed in recent years. And the last nine months – replete with a global pandemic and a deadly serious racial reckoning – have deeply accelerated those changes. Driven by COVID, the Black Lives Matter movement, and an impending climate disaster, “Corporate Social Responsibility” has now taken center stage in American business.

    Now that the klieg lights are on, the question rightly becomes: What will corporations do with the microphone?

    It’d be tempting to claim victory, and point to the change that’s already here. Less than a generation ago, it would have been corporate suicide to take a stance on charged issues like race, gender, or the environment. But today, the world’s largest advertiser – Proctor & Gamble – employs its marketing budgets to create and promote powerful films decrying systemic racial and gender inequality. The world’s largest money manager – BlackRock – has put climate change at the center of its investment and governance decisions. For each of these formerly third-rail issues – race, gender, climate – hundreds of major corporates have declared similar intentions.

    But while  race, gender, and environmental equity have become rallying cries for mainstream corporate America – and rightly so – there’s another fundamental human right I’d like to see taken up by our newly woke business leaders. This particular right – or its absence – drives society’s comprehension, education, discussion, debate and ultimately, society’s actions related to resolving historically intractable issues of human rights.

    In short, if we are going to solve our largest problems, we must first solve society’s problem with the truth.

    ***

    Over the past ten or so years, American society has lost its faith in a shared truth. We simply don’t believe the same things anymore. And in the battle to defend our particular versions of truth, we have badly weakened journalism – our historical institution of truth-telling.  We’ve not simply undermined journalism’s economic models, but more importantly, we’ve marginalized its impact and primacy in helping us determine the facts upon which society determines progress. We have questioned journalism’s motives, its  business models, and the social compact granting journalism the right to determine fact, establish reason, and debate course of action.

    I am not arguing these questions should not be raised – journalism is imperfect at best. But in abandoning journalism, we might have forgotten a larger question: If a free and fair press is not the answer to finding our common truth then … what exactly is? Think for a moment on what might replace journalism in our society. You’ll likely find yourself in a rather dark mood.

    Over centuries, we have built journalism as an institution of truth telling – in concert, in opposition, and even in cahoots with institutions of power in government, religion, and business. This truth-telling organ is commonly referred to as the Fourth Estate, and its record is both speckled and glorious. But it’s also the only private institution empowered by a Constitutional name check – and in the First Amendment, at that. So as far as I’m concerned, if ever there was a purpose-driven business, it’s one built around a newsroom. The mission of a news business is to fulfill the right of the people to be informed by truth. To deliver as full and transparent an account of truth as is possible. To hold truth as a mirror to power. And to demand an accounting if, once put to power, those truths do not square with the powerful’s actions.

    Without standard-bearers capable of this endless and grinding work, democracy is lost.  Without access to high-quality news reporting, the citizens of this nation will make decisions based on rumor, bias, self-interest, and fear.

    I’m all for Benkler’s concept of a “networked Fourth Estate” – that the rise of the Internet has added a multitude of actors – bloggers, non-profits, citizen journalists – to the category we might call “the press.” And the rise of social media has, indeed, given everyone with a voice an opportunity to speak. But we’ve failed to place guardrails around the institutional mechanisms which determine how these new voices are distributed in our society. At present, the inscrutable algorithms and powerful business models of our largest technology platforms determine the information diets of a growing majority of Americans. And I think it’s inescapably true that as things stand, these platforms have no incentive to change how they do business. That’s where corporations – and their advertising budgets – must come into play with a more long-term solution.

    ***

    Quality journalism at scale is under extreme duress. Yes, the Times, the Post, the Atlantic, the Wall Street Journal have all experienced a renaissance in the past few years. But all you readers of long form journalism, you devourers of words by the thousand, you are not the citizens of whom I speak. Your information equities are not in peril, your privilege is intact.

    What matters here is scale. Read Charlie Warzel or listen to Kevin Roose, and ponder the citizen who can’t afford (or simply doesn’t wish) to take their news from high-quality print outlets. When more than a hundred million Americans struggle to cover a $400 medical bill, society needs an advertising-supported model that brings quality information to the masses (this of course is Zuckerberg’s favorite defense for why Facebook is ad-driven, which is one of many examples of how the company has subverted the clothing of journalism without accepting its responsibilities). When the most convenient free service for news is Facebook, then Facebook will become America’s answer to news. As a result, tens of millions of our fellow citizens are caught in the jaws of systemic information bias, of institutionally-driven information pollution. One-quarter of Americans believe the recent election was possibly stolen, and a full third of us believe that the new administration may well enslave children for sexual favors. We’re in the grip of an information-driven disease – an information pandemic –  the cancerous externality of a society which has deemed the growth of our most profitable companies more important that the dissemination of fact-based information and truth.

    ***

    So what is business going to do about it?

    Boycotts are fine, but business must make combatting the lack of quality information in our society a primary and ongoing goal. Surely if corporate America can get comfortable with activism on behalf of racial, gender, and environmental equality, it can throw its support behind every citizen’s right to quality information.

    But how? How might business lead when it comes to addressing this fundamental issue?

    There are scores of ideas yet to be imagined, and plenty of think tanks, non-profits, and other organizations already working on important parts of this problem. But for all its skill at communication, the media industry has been far too silent in advancing solutions. It was just last month – last month!! – that the Global Alliance for Responsible Media, a working group comprised of leading platforms, media agencies, and brand advertisers, added “Misinformation” to its long list of “harmful content.”

    That’s progress, but democracy can’t wait for a committee report sometime next year. The most important step we can take now is to declare information equity an issue worthy of support by the business community. Marketers must dedicate a small but substantial portion of their budgets – which in aggregate equate to hundreds of billions of dollars each year – to a stated commitment supporting the creation and distribution of quality journalism at every level of society. I’ve written extensively elsewhere about how this is possible without abandoning the benefits of scale, targeting, and efficiency that platforms unquestionably bring to our industry. Not only is it possible, it’s also good for business results – and society at large.

    The media industry helped to create this problem of misinformation – by funding the rise of platforms, by ignoring the externalities these platforms foisted onto society, and by growing addicted to the results the platforms delivered to our bottom lines. If we don’t renegotiate the relationships between marketers, platforms, media companies and the audiences we all serve, how can we expect anything to change?

    Just as the planet can no longer tolerate the externalities of an economy driven by carbon, and just as our society can no longer tolerate the externalities of a culture driven by institutional race- and gender-based injustice, we can no longer whistle past the graveyard of truth.

    If you agree, please join me in an ongoing conversation. My email is jbat @ therecount dot com – hit me up, and I’ll add you to an engaged community of agency leaders, marketing executives, media entrepreneurs, and others who are interested in finding a path forward. I look forward to the dialog, and as always, thanks for reading.

     
  • feedwordpress 15:31:31 on 2020/06/17 Permalink
    Tags: , Google, , , , Recount Media, , The Recount, , ,   

    Marketers Have Given Up on Context, And Our National Discourse Is Suffering 


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    It’s getting complicated out there.

    Marketers – especially brand marketers: Too many of you have lost the script regarding the critical role you play in society. And while well-intentioned TV spots about “getting through this together” are nice, they aren’t a structural solution. It’s time to rethink the relationship between marketers, media companies (not “content creators,” ick), and the audience.

    So let’s talk about it. Grab your favorite beverage and read along. I’m heading into a bit of media theory for the next couple thousand words – I hope this will start an interesting conversation.

    For those of you who want a TL:DR summary, here it is: It’s time to get back to the work marketers used to be really good at: Deciding on the appropriate context in which to engage your audience. And it’s time to pull back from a habit most of you have fallen into: Letting the machines choose your audience for you. Thanks to new approaches which fuse at-scale ad targeting with high-quality editorial product, you can step into this renewed role without sacrificing the reach, precision, and targeting afforded by the likes of Facebook, Google, Twitter, and their kin. To understand how, let’s review some history.

    The Old Media Model

    If you read this site back when I wrote regularly on media (roughly 2003-2015), you’ll recall I laid out several basic tenets about how the media business works. It’s comprised of three core components: Editorial (the media company’s content), Audience (people who give their attention to the content), and Marketer (commercial actors who desire the Audience’s attention in the context of the Editorial). Of course, in the past ten years, a fourth component has eclipsed all three: The Internet Platform.

    Before the major Internet platforms deconstructed the media business, the three original components came together in what we’ll call a media product (I’m still partial to “publication,” but many think only of print when they hear that word). Print, television shows, and early web sites all served as vessels for a commercial relationship between  Editorial, Audience, and Marketer. The media company took the financial risk of creating and distributing the media product, and if successful, the marketer paid to run advertising inside the media product. In some cases, the audience also paid a subscription fee for the editorial. But for most media companies, advertising support was crucial to chin the bar of profitability and make a go of it as a business.

    A critical element of the media-product-as-vessel model for commercial transactions was that context matters. The media product created context for audience engagement, and if the marketer offered messaging that aligned with that context, it stood to reason that the audience would be more receptive to the advertiser’s message. Suffice to say that with the rise of audience buying on massive platforms, context has been lost, with nearly incalculable downsides across the media ecosystem (and society at large). More on that later on.

    Meanwhile, back in those pre-platform days, distribution was important, but it was also a constant. Most media companies consolidated distribution by acquiring broadcast licenses or cable networks (for television) or print distribution networks (if you were a magazine or newspaper company). And if you were a media startup, you could leverage those distribution networks for a relatively predictable rent – often without spending any capital up front. When we started Wired, for example, we secured newsstand distribution by agreeing to split the revenue earned by our nascent magazine with our distribution agent.

    I call this old-school model “Packaged Goods Media.” Fifteen years ago I noted that “PGM” was giving way to a new model, which I termed “Conversational Media,” or CM. CM, of course, was the precursor to “social media” – Twitter, Facebook, YouTube – and as I thought out loud about this new phenomenon, I noted several crucial distinctions between it and Packaged Goods Media. I predicted that the economics of Editorial, Audience, and Marketing were all going to change dramatically. In many ways I was spot on. But in several others, I was dead wrong. Here’s a summary of a few key points:

    • Editorial models would evolve from “dictation” to “conversational,” where the audience – and knowledge of the audience through data – became a central driver of editorial creation.
    • Distribution would become nearly free, obviating the rent-seeking monopolies held by major media companies. In fact, I wrote: “economic differentiation based on the control of distribution – the very heart of PGM-based business models – is irrelevant in CM-based services.”
    • Online, publications become more like a service, rather than a product. I noted that software, which was still largely a packaged product, was also heading in this direction. That means media will have different economics and different advertising models over time (I called them “native advertising” at the time).

    I’d argue that over the next ten years I got the first and third predictions relatively right, but I entirely whiffed on how distribution would play out. I simply failed to imagine how Facebook, Google, and others would leverage their newfound control of audience attention. In one piece from 2006, I wrote:

    “…finding massively scaled Conversational Media companies [besides Google] is a rather difficult search … it’s unclear whether CM companies will mature into massive conglomerates like Time Warner.”

    Well, it’s certainly clear now. Facebook, Google, and their peers are among the most powerful and well-capitalized companies in the world, and they got that way by doing one thing very well: Capturing the attention of billions of us. That gives them a near monopoly on digital distribution, which they’ve leveraged into a near monopoly on digital advertising. In the process, these tech platforms have eliminated the traditional role of publishers as a proxy for audience interest and engagement. I used to believe this trend spelled the end of high-quality independent media brands – indeed, it’s why I didn’t start a media brand after selling Federated back in 2013. But media models are always evolving, and I now see a new way forward. To understand that, we must first review where we stand today. And to do that, we must examine arbitrage.

    The Arbitrage 

    If I were writing a sequel to “The Search” focused solely on how digital media models have shifted in the past 15 years,  I’d probably title it “The Arb.”

    It would not be a pretty story. In the past ten years, audience arbitrage has become a dominant model of the digital media business. It’s an awful business practice that erodes trust, devalues media brands, and dilutes the importance of marketing. What follows is a bit of a rant, but hell, you’re still reading at this point, so refill your glass, and let’s get to it.

    The dictionary definition of arbitrage is “the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.”

    In media, the asset being arbitraged is audience attention. The arbitrageurs are publishers. Their enablers are the major tech platforms, fueled by dollars from advertisers.

    Here’s how it works. A big publisher like Buzzfeed or Cheddar sells a million-dollar advertising deal to a marketing brand. The media company guarantees the marketer’s message will collect a certain number of audience impressions or views, charging the marketer a “cost per thousand” for those impressions. (Known as “CPM,” cost per thousand pricing ranges widely, from a few pennies to $25-40 for “premium” placements). Utilizing a Packaged Goods media model, the publisher might fulfill those impressions on its “owned and operated” properties, but over the past ten years, doing so  has accrued significant drawbacks. The top three:

    • It’s expensive. Acquiring and retaining audiences on a media company’s own property is often far more costly than finding those same audiences on an at-scale platform like Facebook or Google.
    • It lacks sophisticated targeting. In the past decade, marketers have grown accustomed to the data-rich precision of large platforms. They don’t want to pay for just any old Buzzfeed or Cheddar audience member. They want their messaging to reach exactly the target they specify, and most publishers don’t have either the technology or the audience scale to fulfill the data-driven demands of modern marketers.
    • It forces extra work on the marketer. I am not the first, nor will I be the last to note that marketers and agencies don’t like to do extra work. While plenty of larger publishers have built high-quality advertising solutions on their owned and operated channels, marketers view these point solutions as  just one more channel they have to manage, analyze, and report on. It’s just So Much Easier to buy Facebook, after all.

    Because of all this and more, publishers have become audience buyers on Facebook, Google, and other networks. Enterprising publishers began packaging their own content with marketing messages from their sponsors, then they got busy promoting that bundle to audiences on Twitter, Facebook, and Youtube, among others.

    This is where “the arb” comes in: The publisher will charge the marketer, say, a $15 CPM, but acquire their audiences on Facebook for $7, clearing an $8 profit on every thousand impressions.

    You might ask why the platforms or the marketers don’t put a stop to this practice, and you’d be right to ask. But consider the economic incentives, and things get a bit more clear. The platforms are getting paid for what they do all day long: the delivery of precise audience impressions at scale. As far as platforms are concerned, the media brands are just advertisers in different dress.  Over the years, Facebook and Google have even accommodated the arbitrage by connecting all parties directly through their advertising technology systems.

    OK, so the platforms get paid to deliver audiences to marketers on behalf of media companies, but why on earth do the marketers put up with being arb’d? Couldn’t they just pay the same $7 CPM directly to Facebook, eliminate the middle man, and save the $8 spread?

    Well, indeed they can, and in most cases when it comes to buying audience on Facebook or Google, that’s exactly what they do. But remember my comments about context way up toward the top of this article? Some marketers still believe that the context of a media brand can help their messaging perform better, and they’re not wrong in that belief.  So they’ll pay a bit more to have their messaging associated with what they believe is quality editorial. And if that media brand does the work of acquiring that audience for them, so much the better – that’s less work for the marketer to do.

    But let me be clear: arbitrage sucks. Arbitrage is only lucrative in markets with imperfect information. It’s usually a great strategy in the early stages of a new ecosystem, when media buyers are less familiar with how advertising technology works. As those buyers get smarter, they start to squeeze the media company’s margins, devaluing content and context, and pressing ever closer to the price they could get directly from the platform. A good example is Demand Media – a company that, a decade ago, managed to insert itself between Google’s search algorithms and an advertiser’s desire to be associated with content around a particular topic. Demand pulled off a billion-dollar IPO based on creating advertiser-friendly “content farms” around popular Google searches. But advertisers figured out the arb, and Demand’s once billion-dollar valuation fell more than twenty fold in the past five years.  A similar fate has befallen the once high-flying arbitrageurs  of social media. Cheddar, Vice, BuzzFeed, and many others all played the game, but over time, markets will root out an arb. (Cheddar was smart enough to sell before its arb was uncovered – but it sold at a fraction of the sky-high valuations its peers once held).

    But wait, one might ask – aren’t the media companies adding true value? What about that context, which makes a marketer’s message more relevant and engaging? Isn’t that worth something?

    It certainly is, but this is where the lack of transparency around ad buying on platforms comes into play. Audience buying is cloaked in opacity – the major platforms are deeply invested in making sure no one truly understands how attention is priced. That means a media company buying audience on Facebook or Google will always be at an informational disadvantage – exposing them to a new kind of arbitrage, one executed by the platform’s own algorithms and benefiting the platform’s bottom line. Again, arbitrage works best in markets with asymmetric information features – and informational asymmetry is built into how Platforms operate. Over the past five or so years, most major media companies have come to realize they’re the ones being gamed.

    Audience arbitrage on platforms has even more destructive attributes. Because media buyers have outsourced their audience acquisition to either the media company or the platform itself, the marketer becomes disconnected from the context of its audience. Millions of impressions are scattered across millions of tiny content bundles, all of which are lost in a sea of endless posts on nearly every imaginable topic. The context and meaning that holds all brands together is lost.  Media companies, pressed by ever-thinning margins, will cut corners, buying “junk traffic” or worse, creating junk content that titillates or tricks audiences into false engagement. On the surface, boxes get checked, audiences get served, impressions get logged. But over time, editorial content deteriorates, deep relationships between brands and audiences attenuate, and the media ecosystem begins to fail.

    So what can be done about it?

    Well, at The Recount we’re exploring a way forward, through a brand new partnership we’re launching on Twitter this month. We’re calling it “Real-Time Recount,” and in the next installment of this post (I’m pushing 2500 words here, after all), I’ll explain more about the theory of the case behind it. For now, you can read more about what we’re doing in this Ad Age piece (paywalled, alas), or over on Fred’s blog. Thanks for coming along, and I look forward to the conversation I hope this will spark.

    Image: http://shop.drywellart.com/product/bourbon-empty-glass-print
     
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