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  • feedwordpress 22:01:00 on 2020/04/19 Permalink
    Tags: , , , , , , policy, , , , , ,   

    New Research Shows Why and How Zoom Could Become an Advertising Driven Business 


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    As the coronavirus crisis built to pandemic levels in early March, a relatively unknown tech company confronted a defining opportunity. Zoom Video Communications, a fast-growing enterprise videoconferencing platform with roots in both Silicon Valley and China, had already seen its market cap grow from under $10 billion to nearly double that. As the coronavirus began dominating news reports in the western press, Zoom announced its first full fiscal year results as a public company. The company logged $622.7 million in revenue, up 88% from the year before. Zoom’s high growth rate and “software as a service” business model guaranteed fantastic future profits, and investors rewarded the company by driving its stock up even further. On March 5th, the day after Zoom announced its earnings, the company’s stock jumped to $125, more than double its price on the day of its public offering eleven months before. Market analysts began issuing bullish guidance, and company executives noted that as the coronavirus spread, more and more customers were sampling Zoom’s easy-to-use video conferencing platform.

    But as anyone paying attention to business news for the past month knows, it’s been a tumultuous ride for Zoom ever since. As the virus forced the world inside, demand for Zoom’s services skyrocketed, and the company became a household name nearly overnight. Zoom’s “freemium” model – which offers a basic version of its platform for free, with more robust features available for a modest monthly subscription fee – allowed tens of millions of new users to sample the company’s wares. Initially, Zoom was a hit with its new user base – stories of Zoom seders, Zoom cocktail parties, and even Zoom weddings gave the company a consumer-friendly vibe. Here, again, was the story of a scrappy Valley startup with just the right product at just the right time. According to the company, Zoom’s monthly users  leapt from a high of 10 million to more than 200 million – an unimaginable increase of 2,000 percent in just one month.

    Just as quickly, however, Zoom became the subject of controversy. Like Google and Facebook before it, Zoom’s success as a product comes from an unwavering focus on convenience. Zoom makes it as easy as possible to use its platform. Employing invisible technical tricks, Zoom engineers made the platform easy to install, easy to share, and … easy to hack. Press reports about “Zoom bombing” began dominating the headlines, and as reporters dug in, so did reports of significant (and long ignored) security failings. Large corporations, state governments, and school districts banned the company’s products. Media outlets began to investigate the company’s Chinese roots – only to discover that the young firm had mistakenly routed user sessions through its servers in mainland China. Zoom responded quickly, freezing product development and focusing entirely on responding to critical security issues. The company then updated its privacy policies, in response to criticism that it might use user data in the same ways that Google and Facebook currently do (more on that below).

    But with China and the United States entering a third year of an increasingly heated trade war, and now blaming each other for the origin of the novel coronavirus, Zoom finds itself in an extraordinary position that no amount of crisis communications can overcome.  Zoom’s founder and CEO, Eric Yuan, is a Chinese ex-pat and naturalized American citizen. More than 700 of his 2,500+ employees live and work in China. Until March of this year, Yuan was held up as an example of the best that global capitalism can offer – an ingenious immigrant who bootstrapped his way to America and leveraged hard work, smarts, and venture financing into a multi-billion dollar fortune.

    Now Zoom’s brand – and its future – live under storm clouds of suspicion. In just four weeks, the company has inherited the full force of the American “techlash.” And the companies previously at the center of that storm – in particular the “Big Four” of Apple, Facebook, Google and Amazon – are  happy to pass along that unpleasant mantle. What might it do next?

    * * *

    As some readers know, I’ve been a student of the “Big Four” for more than two decades. For the past 18 months, that work has focused on the terms of service and privacy policies of the Big Four. Thanks to the work of researchers and faculty at Columbia’s School of International Public Affairs and Graduate School of Journalism, we’ve published a study of the underlying architecture of the Big Four’s core policies, a visualization we call “Mapping Data Flows.” This tool breaks down and compares each company’s core privacy and data use policies, with a goal of giving both ordinary consumers and academic researchers insight into the architecture of control currently dominating our economy’s relationship to data.

    Given its very recent and extraordinary rise as a consumer tool, we decided to apply this approach to Zoom’s terms of service and privacy policy as well. You can find our initial findings here.

    As with every research project, our study of Zoom’s policies began with a working hypothesis. One of the most interesting findings from our initial study of the Big Four was how similar their policies were – they all collect vast sums of data, and their terms of service allow them nearly unlimited usage of that data. And of course, all four granted themselves the right to collect, process, and employ user data for the purpose of pursuing advertising businesses – a multi-hundred billion dollar industry driving what Harvard scholar Shoshana Zuboff calls “surveillance capitalism.” We therefore asked ourselves two questions: First, would Zoom’s current terms of service and privacy policies allow them to join the Big Four in the pursuit of an advertising business? And second, given Zoom is (or was) an enterprise facing (focused on business users), as opposed to a consumer facing platform, would its privacy policies and terms of use be markedly different from the Big Four?

    The short answer to that first question is yes. And for the second? That’d be a no. As the first image below demonstrates, Zoom collects a ton of data, and its policies are quite similar to those of its Big Four cousins.

    Figure 1 – Zoom’s Data Collection visualized

    But exploring that first question – whether Zoom might become an advertising-driven business – yielded even more interesting insights:

    Figure 2 – Zoom’s data collection for purposes of Advertising.

    As the illustration from our new visualization above demonstrates, our research shows that nearly all data collected from Zoom user sessions may be used for the purpose of advertising. Despite the clarification of Zoom’s privacy policies posted on March 29th around usage of data from user sessions, nothing material changed in its actual policies. Indeed, the company writes that “We are not changing any of our practices. We are updating our privacy policy to be more clear, explicit, and transparent.”

    To be clear, Zoom does not currently run an advertising business along the lines of Facebook, Google, Apple, or Amazon’s (and yes, both Apple and Amazon have significant data-driven advertising businesses, they just don’t like to talk about them). So why, in their own policies, do they reserve the right to use all collected data for the purpose of “advertising”?

    As any lawyer will tell you, words are slippery things. Certainly in the context of Zoom’s current business, the word “advertising” covers the company’s role as an advertiser – as a brand that uses data to market to current and potential customers using platforms like Google or Facebook. But a careful reading of the company’s policies reveal how easily the same words could allow the company to pivot from advertiser to provider of advertising, should the company wish to. In other words, there’s nothing stopping the company from joining the Big Four as a major player in the provision of advertising services, should it wish.

    How might Zoom do such a thing? And  given its current privacy backlash, why would Zoom ever consider such a move?

    Let’s start with the How, then we’ll cover the Why.

    As I mentioned at the start of this piece, Zoom’s current business is based on what folks in the tech industry call a freemium SaaS (software as a service) model. The company makes a version of its platform available to anyone for free, and then “upsells” those free users to a paid version that has more bells and whistles, like the ability to record, larger numbers of participants on a videoconference, and so on. Pricing starts at $15/month, scaling up to thousands a month for large customers. This model is most often employed for enterprise customers (Slack is a good example), but it’s also found success in consumer-facing applications, where more often than not users pay to get rid of ads (think YouTube or Hulu). Regardless of whether the service is enterprise or consumer focused, free users always outnumber paying ones by an order of magnitude or more.

    One of the most difficult elements of a freemium SaaS model is luring those free users “down the funnel” into paying for a monthly subscription. So how might Zoom convince its bumper crop of roughly 190 million new consumers to start paying up?

    By now you’ve probably figured out where I’m going with all this. Zoom could implement a free service that’s supported by advertising, then encourage users to pay for a version that’s ad free. Doing so would be ridiculously simple: Just as with YouTube, Zoom could force its users to watch a “skippable” pre-roll video ad before the start of each videoconference (and it could use its data trove to make those ads extremely targeted).  Well aware that such an interruption would be an annoyance at best, Zoom could then offer to strip the ads out for customers who paid a small subscription service of, say, $5 a month. If just one quarter of its customer base decided to do so, Zoom’s revenues would jump by $250 million a month – adding a cool $3 billion a year to its top line revenue, nearly all of which would be pure profit. The resulting advertising business could easily add hundreds of millions, if not billions more. That’s five times more revenue than the company reported in its last fiscal year.

    Which brings us to the “Why” of this admittedly speculative (but nevertheless quite reasonable) exercise. And that why comes down to capitalism. Zoom is a public company with a massive valuation – more than $40 billion at the time of this writing. That gives it an unsustainable price to earnings ratio of roughly 1,750 – 76 times larger than the S&P average. The pressure to “grow into” those outsized expectations is enormous. Zoom is staring at a multi-billion dollar business model just begging to be implemented. For its shareholders, board, and senior executives, the question isn’t why it should be adopting the business model that made Facebook, Google, Apple, and Amazon the most valuable companies in the world. Instead, the question is simply this: Why shouldn’t it?

    In another post, we’ll explore answers to that question (and how Zoom, if it’s thoughtful, could help reimagine the core architecture of surveillance capitalism). For now, take a spin around our newest visualization, give us input in the comments below. Thanks for reading, and take care of yourself – and others – out there.

    ###

    The Mapping Data Flows project is seated at Columbia SIPA – we are grateful for the support of Dean Merit Janow, as well as the support of the Brown Institute at Columbia’s Graduate School of Journalism, the Omidyar Network, and faculty and staff including Mark Hansen, Juan Francisco Saldarriaga, Zoe Martin, Matthew Albasi, Natasha Bhuta, and Veronica Penney. Hat tip as well to Doc, who’s been focused on these issues for decades as well. 

     
  • feedwordpress 22:01:00 on 2020/04/19 Permalink
    Tags: , , , , , , policy, , , , , ,   

    New Research Shows Why and How Zoom Could Become an Advertising Driven Business 


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    As the coronavirus crisis built to pandemic levels in early March, a relatively unknown tech company confronted a defining opportunity. Zoom Video Communications, a fast-growing enterprise videoconferencing platform with roots in both Silicon Valley and China, had already seen its market cap grow from under $10 billion to nearly double that. As the coronavirus began dominating news reports in the western press, Zoom announced its first full fiscal year results as a public company. The company logged $622.7 million in revenue, up 88% from the year before. Zoom’s high growth rate and “software as a service” business model guaranteed fantastic future profits, and investors rewarded the company by driving its stock up even further. On March 5th, the day after Zoom announced its earnings, the company’s stock jumped to $125, more than double its price on the day of its public offering eleven months before. Market analysts began issuing bullish guidance, and company executives noted that as the coronavirus spread, more and more customers were sampling Zoom’s easy-to-use video conferencing platform.

    But as anyone paying attention to business news for the past month knows, it’s been a tumultuous ride for Zoom ever since. As the virus forced the world inside, demand for Zoom’s services skyrocketed, and the company became a household name nearly overnight. Zoom’s “freemium” model – which offers a basic version of its platform for free, with more robust features available for a modest monthly subscription fee – allowed tens of millions of new users to sample the company’s wares. Initially, Zoom was a hit with its new user base – stories of Zoom seders, Zoom cocktail parties, and even Zoom weddings gave the company a consumer-friendly vibe. Here, again, was the story of a scrappy Valley startup with just the right product at just the right time. According to the company, Zoom’s monthly users  leapt from a high of 10 million to more than 200 million – an unimaginable increase of 2,000 percent in just one month.

    Just as quickly, however, Zoom became the subject of controversy. Like Google and Facebook before it, Zoom’s success as a product comes from an unwavering focus on convenience. Zoom makes it as easy as possible to use its platform. Employing invisible technical tricks, Zoom engineers made the platform easy to install, easy to share, and … easy to hack. Press reports about “Zoom bombing” began dominating the headlines, and as reporters dug in, so did reports of significant (and long ignored) security failings. Large corporations, state governments, and school districts banned the company’s products. Media outlets began to investigate the company’s Chinese roots – only to discover that the young firm had mistakenly routed user sessions through its servers in mainland China. Zoom responded quickly, freezing product development and focusing entirely on responding to critical security issues. The company then updated its privacy policies, in response to criticism that it might use user data in the same ways that Google and Facebook currently do (more on that below).

    But with China and the United States entering a third year of an increasingly heated trade war, and now blaming each other for the origin of the novel coronavirus, Zoom finds itself in an extraordinary position that no amount of crisis communications can overcome.  Zoom’s founder and CEO, Eric Yuan, is a Chinese ex-pat and naturalized American citizen. More than 700 of his 2,500+ employees live and work in China. Until March of this year, Yuan was held up as an example of the best that global capitalism can offer – an ingenious immigrant who bootstrapped his way to America and leveraged hard work, smarts, and venture financing into a multi-billion dollar fortune.

    Now Zoom’s brand – and its future – live under storm clouds of suspicion. In just four weeks, the company has inherited the full force of the American “techlash.” And the companies previously at the center of that storm – in particular the “Big Four” of Apple, Facebook, Google and Amazon – are  happy to pass along that unpleasant mantle. What might it do next?

    * * *

    As some readers know, I’ve been a student of the “Big Four” for more than two decades. For the past 18 months, that work has focused on the terms of service and privacy policies of the Big Four. Thanks to the work of researchers and faculty at Columbia’s School of International Public Affairs and Graduate School of Journalism, we’ve published a study of the underlying architecture of the Big Four’s core policies, a visualization we call “Mapping Data Flows.” This tool breaks down and compares each company’s core privacy and data use policies, with a goal of giving both ordinary consumers and academic researchers insight into the architecture of control currently dominating our economy’s relationship to data.

    Given its very recent and extraordinary rise as a consumer tool, we decided to apply this approach to Zoom’s terms of service and privacy policy as well. You can find our initial findings here.

    As with every research project, our study of Zoom’s policies began with a working hypothesis. One of the most interesting findings from our initial study of the Big Four was how similar their policies were – they all collect vast sums of data, and their terms of service allow them nearly unlimited usage of that data. And of course, all four granted themselves the right to collect, process, and employ user data for the purpose of pursuing advertising businesses – a multi-hundred billion dollar industry driving what Harvard scholar Shoshana Zuboff calls “surveillance capitalism.” We therefore asked ourselves two questions: First, would Zoom’s current terms of service and privacy policies allow them to join the Big Four in the pursuit of an advertising business? And second, given Zoom is (or was) an enterprise facing (focused on business users), as opposed to a consumer facing platform, would its privacy policies and terms of use be markedly different from the Big Four?

    The short answer to that first question is yes. And for the second? That’d be a no. As the first image below demonstrates, Zoom collects a ton of data, and its policies are quite similar to those of its Big Four cousins.

    Figure 1 – Zoom’s Data Collection visualized

    But exploring that first question – whether Zoom might become an advertising-driven business – yielded even more interesting insights:

    Figure 2 – Zoom’s data collection for purposes of Advertising.

    As the illustration from our new visualization above demonstrates, our research shows that nearly all data collected from Zoom user sessions may be used for the purpose of advertising. Despite the clarification of Zoom’s privacy policies posted on March 29th around usage of data from user sessions, nothing material changed in its actual policies. Indeed, the company writes that “We are not changing any of our practices. We are updating our privacy policy to be more clear, explicit, and transparent.”

    To be clear, Zoom does not currently run an advertising business along the lines of Facebook, Google, Apple, or Amazon’s (and yes, both Apple and Amazon have significant data-driven advertising businesses, they just don’t like to talk about them). So why, in their own policies, do they reserve the right to use all collected data for the purpose of “advertising”?

    As any lawyer will tell you, words are slippery things. Certainly in the context of Zoom’s current business, the word “advertising” covers the company’s role as an advertiser – as a brand that uses data to market to current and potential customers using platforms like Google or Facebook. But a careful reading of the company’s policies reveal how easily the same words could allow the company to pivot from advertiser to provider of advertising, should the company wish to. In other words, there’s nothing stopping the company from joining the Big Four as a major player in the provision of advertising services, should it wish.

    How might Zoom do such a thing? And  given its current privacy backlash, why would Zoom ever consider such a move?

    Let’s start with the How, then we’ll cover the Why.

    As I mentioned at the start of this piece, Zoom’s current business is based on what folks in the tech industry call a freemium SaaS (software as a service) model. The company makes a version of its platform available to anyone for free, and then “upsells” those free users to a paid version that has more bells and whistles, like the ability to record, larger numbers of participants on a videoconference, and so on. Pricing starts at $15/month, scaling up to thousands a month for large customers. This model is most often employed for enterprise customers (Slack is a good example), but it’s also found success in consumer-facing applications, where more often than not users pay to get rid of ads (think YouTube or Hulu). Regardless of whether the service is enterprise or consumer focused, free users always outnumber paying ones by an order of magnitude or more.

    One of the most difficult elements of a freemium SaaS model is luring those free users “down the funnel” into paying for a monthly subscription. So how might Zoom convince its bumper crop of roughly 190 million new consumers to start paying up?

    By now you’ve probably figured out where I’m going with all this. Zoom could implement a free service that’s supported by advertising, then encourage users to pay for a version that’s ad free. Doing so would be ridiculously simple: Just as with YouTube, Zoom could force its users to watch a “skippable” pre-roll video ad before the start of each videoconference (and it could use its data trove to make those ads extremely targeted).  Well aware that such an interruption would be an annoyance at best, Zoom could then offer to strip the ads out for customers who paid a small subscription service of, say, $5 a month. If just one quarter of its customer base decided to do so, Zoom’s revenues would jump by $250 million a month – adding a cool $3 billion a year to its top line revenue, nearly all of which would be pure profit. The resulting advertising business could easily add hundreds of millions, if not billions more. That’s five times more revenue than the company reported in its last fiscal year.

    Which brings us to the “Why” of this admittedly speculative (but nevertheless quite reasonable) exercise. And that why comes down to capitalism. Zoom is a public company with a massive valuation – more than $40 billion at the time of this writing. That gives it an unsustainable price to earnings ratio of roughly 1,750 – 76 times larger than the S&P average. The pressure to “grow into” those outsized expectations is enormous. Zoom is staring at a multi-billion dollar business model just begging to be implemented. For its shareholders, board, and senior executives, the question isn’t why it should be adopting the business model that made Facebook, Google, Apple, and Amazon the most valuable companies in the world. Instead, the question is simply this: Why shouldn’t it?

    In another post, we’ll explore answers to that question (and how Zoom, if it’s thoughtful, could help reimagine the core architecture of surveillance capitalism). For now, take a spin around our newest visualization, give us input in the comments below. Thanks for reading, and take care of yourself – and others – out there.

    ###

    The Mapping Data Flows project is seated at Columbia SIPA – we are grateful for the support of Dean Merit Janow, as well as the support of the Brown Institute at Columbia’s Graduate School of Journalism, the Omidyar Network, and faculty and staff including Mark Hansen, Juan Francisco Saldarriaga, Zoe Martin, Matthew Albasi, Natasha Bhuta, and Veronica Penney. Hat tip as well to Doc, who’s been focused on these issues for decades as well. 

     
  • feedwordpress 16:24:01 on 2020/03/25 Permalink
    Tags: , , , , policy, , , ,   

    Will The Coronavirus Save Big Tech? 


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    Who’s Really Behind That “Death of the Techlash” Narrative?

     

    One of my least favorite kinds of journalism is the easy win. It’s the kind of story that just lands in your lap. It feels immediately counter intuitive and of the moment, and  it simply writes itself. It’s the kind of editorial sin most often committed by columnists facing immutable deadlines, and a perfect example can be found in the Wall St. Journal last week. “OK, Fine, Let’s All Get Back on Facebook,” the headline read. The subhead explains further: “All it took was a pandemic to make Facebook’s privacy-challenged products seem highly appealing.”

    Couched as a review of Facebook products helpful in our current era of social distancing and mandated work from home, the column may well stand as a turning point in what was once knows as the “techlash.” Has the coronavirus pandemic earned the world’s most powerful purveyors of surveillance capitalism a collective pass from the press?

    It certainly seems that way. A rash of articles over the past few days have picked up this narrative – and the comms teams at Apple, Facebook, Google and Amazon would be fired for malpractice for not stoking it. A good crisis must not be wasted, after all.

    But as the Journal columnist noted later in her piece, the reasons underlying society’s broad misgivings around Big Tech remain. With that prophylactic caveat duly administered, the columnist then profiled her own usage of Facebook’s services- and declared them a trend. Before COVID, the company’s many privacy missteps had led her to back away. But now that everyone she knew was stuck inside, she found herself once again checking her feeds, monitoring her neighborhood Facebook groups, and even pointing a Portal camera at her son.

    This narrative isn’t making it into the press without a bit of help. Facebook’s been quite public about the fact that people just like our columnist are in fact flocking to its products. “Facebook Is ‘Just Trying to Keep the Lights On’ as Traffic Soars in Pandemic” crows a recent Times piece. That headline quote comes from Facebook’s famously media-trained CEO, Mark Zuckerberg, who hasn’t exactly made a practice of calling the press and offering offhand observations these past few years.

    It’s always instructive to note when the company actively participates in stories, and when it declines comment. Lately, there’s been plenty of open lines of communication. The Times further wonders if “Big Tech Could Emerge From Coronavirus Crisis Stronger Than Ever.” And somehow (I can’t imagine how), an “internal report” from Facebook made its way into yet another Times reporter’s hands, leading to this chef kiss of a headline: ‘The Coronavirus Revives Facebook as a News Powerhouse.” Over at Wired, Facebook author Steven Levy asks “Has the Coronavirus Killed the Techlash?” He explains: “Facebook has gotten rare kudos for its responses to the pandemic, and perhaps even more significantly, more people are using it for the kinds of meaningful interactions that Zuckerberg has been promoting for a long time. Could this be a turning point?”

    Well, yes, but I certainly hope it’s not the kind implied by present day reporting. Again, the issues our industry struggled with Before Covid won’t disappear After Covid simply because the public is thankful for services (and business models) to which we’ve already become addicted. Perhaps instead, this pandemic could offer more of a step-change opportunity, one that might just offer us new approaches to connecting to others, buying shit we need (and don’t), and staying informed. I can see those new habits already starting to form, and I certainly hope they won’t be limited to Instagram dance parties. More on those in future posts, I hope. For now, back to work.

     
  • feedwordpress 15:28:56 on 2020/02/12 Permalink
    Tags: Andrew Yang, economics, policy, , , UBI, YangGang   

    For Now, America Just Doesn’t Want to Think That Hard 


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    Andrew Yang has dropped out, which means the presidential campaign just got a lot less fun (you must watch this appreciation from The Recount!). The race also lost a credible and important voice on issues related to the impact of technology on our society.  The fact that Yang’s campaign didn’t make it past New Hampshire didn’t surprise the political experts I know, but his rabid base both online and at campaign events clearly did.

    Perhaps Yang’s message of a “Freedom Dividend” never really caught fire because stock markets are at all time highs, and his warnings about tech-driven job losses have yet to come to fruition. It’s hard to get folks to care about something that requires thinking beyond the daily headlines, and harder still to ask them to consider long term trends like AI-driven automation or the wholesale reconstruction of our social safety net. But when Yang started his quest, these issues rarely made it to the national stage. Now they’re part of our shared vocabulary.

    I first met Yang in Pittsburgh in 2018 at a technology business event, where I interviewed him in front of 500 or so students and local business leaders. I immediately invited him to a much smaller salon that Fall in New York. At both events Yang lit the place up – but it also took time for his message to resonate. His informal campaign slogan was “Make American Think Harder,” after all. As I wrote then:

    “I for one hope Yang makes it to the debate stage, and that as a society, we will seriously discuss the ideas he proposes. We can no longer afford politics as usual – not the politics we have now, and certainly not a return to the cliché-ridden blandishments of years past. The time to traffic in new ideas – radically new ideas – is upon us.”

    Andrew Yang did make it to the debate stage – but it seems that stage wasn’t built for the kind of dialog Yang wants to have. Perhaps we’re not ready to have the kind of conversation his candidacy represented.  Or maybe as a candidate, Yang simply isn’t built for the reality of American politics. Regardless, now that he’s a national figure, I’d wager Andrew Yang isn’t finished with his turn in the public spotlight. Once unknown, Yang lasted far longer than most everyone thought he would, and he’s built a brand that will only become more relevant in the years to come.

     
  • feedwordpress 02:52:58 on 2020/01/06 Permalink
    Tags: , , , , , , policy, , , ,   

    Predictions 2020: Facebook Caves, Google Zags, Netflix Sells Out, and Data Policy Gets Sexy 


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    A new year brings another run at my annual predictions: For 17 years now, I’ve taken a few hours to imagine what might happen over the course of the coming twelve months. And my goodness did I swing for the fences last year — and I pretty much whiffed. Batting .300 is great in the majors, but it kind of sucks compared to my historical average. My mistake was predicting events that I wished would happen. In other words, emotions got in the way. So yes, Trump didn’t leave office, Zuck didn’t give up voting control of Facebook, and weed’s still illegal (on a federal level, anyway). 

    Chastened, this year I’m going to focus on less volatile topics, and on areas where I have a bit more on-the-ground knowledge — the intersection of big tech, marketing, media, and data policy. As long time readers know, I don’t prepare in advance of writing this post. Instead, I just clear a few hours and start thinking out loud. So…here we go.

    1. Facebook bans microtargeting on specific kinds of political advertising. Of course I start with Facebook, because, well, it’s one of the most inscrutable companies in the world right now. While Zuck & Co. seem deeply committed to their “principled” stand around a politician’s right to paid prevarication, the pressure to do something will be too great, and as it always does, the company will enact a half-measure, then declare victory. The new policy will probably roll out after Super Tuesday (sparking all manner of conspiracies about how the company didn’t want to impact its Q1 growth numbers in the US). 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. 
    2. Netflix opens the door to marketing partnerships. Yes, I’m aware that the smart money has moved on from this idea. But in a nod to increasing competition and the reality of Wall St. expectations, Netflix will at least pilot a program — likely not in the US — where it works with brands in some limited fashion. Mass hysteria in the trade press will follow once this news breaks, but Netflix will call the move a pilot, a test, an experiment…no big deal. 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. And while I won’t predict the program augurs a huge new revenue stream for the company, I can predict that what won’t happen, at least in 2020: A free, advertising-driven version of Netflix. Just not in the company’s culture. 
    3. CDA 230 will get seriously challenged, but in the end, nothing gets done, again. Last year I predicted there’d be no federal data privacy legislation, and I’m predicting the same for this year. However, there will be a lot of movement on legislation related to the tech oligarchy. The topic that will come the closest to passage will be a revision to CDA 230 —the landmark legislation that protects online platforms from liability for user generated content. Blasphemy? Sure, but here we are, stuck between free speech on the one hand, massive platform economics on the other, and a really, really bad set of externalities in the middle. CDA 230 was built to give early platforms the room to grow unhindered by traditional constraints on media companies. That growth has now metastasized, and we don’t have a policy response that anyone agrees upon. And CDA 230 is an easy target, given conservatives in Congress already believe Facebook, Google, and others have it out for their president. They’ll be a serious run at rewriting 230, but it will ultimately fail. Related…
    4. Adversarial interoperability will get a moment in the sun, but also fail to make it into law. In the past I (and many others) have written about “machine readable data portability.” But for the debate we’re about to have (and need to have), I like “adversarial interoperability” better. Both are mouthfuls, and neither are easy to explain. Data governance and policy are complicated topics which test our society’s ability to have difficult long form conversations. 2020 will be a year where the legions of academics, policy makers, politicians, and writers who debate economic theory around data and capitalism get a real audience, and I believe much of that debate will center on whether or not large platforms have a responsibility to be open or closed. As Cory Doctorow explains, adversarial interoperability is “when you create a new product or service that plugs into the existing ones without the permission of the companies that make them.” As in, I can plug my new e-commerce engine into Amazon, my new mobile operating system into iOS, my new social network into Facebook, or my new driving instruction app into Google Maps. I grew up in a world where this kind of innovation was presumed. It’s now effectively banned by a handful of data oligarchs, and our economy – and our future – suffers for it. 
    5. As long as we’re geeking out on catchphrases only a dork can love, 2020 will also be the year “data provenance” becomes a thing. As with many nerdy topics, 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. Yes, yes, blockchain and ledgers are part of the discussion here, but the point isn’t the technology, it’s the policy enabling the technology. 
    6. Google zags. 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. It could be a massive acquisition, a move into some utterly surprising new industry (like content), but my money’s on something related to data privacy. The company may well commit to both leading the debate on the topics described above, as well as implementing them in its core infrastructure. Now that would really be a zag…
    7. At least one major “on demand” player will capitulate. Gig economy business models may make sense long term, but that doesn’t mean we’re getting the execution right in the first group of on demand “unicorns.” In fact, I’d argue we’re mostly getting them wrong, even if as consumers, we love the supposed convenience gig brands bring us. Many of the true costs of these businesses have been externalized onto public infrastructure (and the poor), and civic patience is running out. Plus, venture and public finance markets are increasingly skeptical of business models that depend on strip mining the labor of increasingly querulous private contractors. A reckoning is due, and in 2020 we’ll see the collapse of one or more larger players in the field.
    8. Influencer marketing will fall out of favor. I’m not predicting an implosion here, but rather an industry wide pause as brands start to ask the questions consumers will also be pondering: who the fuck are these influencers and why are we paying them so much attention? A major piece of this — on the marketing side anyway — will be driven by a massive increase in influencer fraud. As with other fast growing digital marketing channels, where money pours in, fraud fast follows — nearly as fast as fawning New York Times articles, but I digress. 
    9. Information warfare becomes a national bogeyman. If we’ve learned anything since the 2016 election, it’s this: We’ve taken far too long to comprehend the extent to which bad actors have come to shape and divide our discourse. These past few years have slowly revealed the power of information warfare, and the combination of a national election with the compounding distrust of algorithm-driven platforms will mean that by mid year, “fake news” will yield to “information warfare” as the catchphrase describing what’s wrong with our national dialog. Deep fakes, sophisticated state-sponsored information operations, and good old fashioned political info ops will dominate the headlines in 2020. Unfortunately, the cynic in me thinks the electorate’s response will be to become more inured and distrustful, but there’s a chance a number of trusted media brands (both new and old) prosper as we all search for a common set of facts.
    10. Purpose takes center stage in business. 2019 was the year the leaders of industry declared a new purpose for the corporation — one that looks beyond profits for a true north that includes multiple stakeholders, not just shareholders. 2020 will be the year many companies will compete to prove that they are serious about that pledge. Reaction from Wall St. will be mixed, but 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. This is a good thing, and likely climate change will become the issue many companies will feel comfortable rallying behind. (I certainly hope so, but this isn’t supposed to be about what I wish for…)
    11. Apple and/or Amazon stumble. I have no proof as to why I think this might happen but…both these companies just feel ripe for some kind of major misstep or scandal. America loves a financial winner — and both Amazon and Apple have been runaway winners in the stock market for the past decade. Both have gotten away with some pretty bad shit along the way, especially when it comes to labor practices in their supply chain. And while neither of them are as vulnerable as Facebook or Google when it comes to the data privacy or free speech issues circling big tech, both Apple and Amazon have become emblematic of a certain kind of capitalism that feels fraught with downside risk in the near future. I can’t say what it is, but I feel like both these companies could catch one squarely on the jaw this coming year, and the post-mortems will all say they never saw it coming. 

    So there you have it — 11 predictions for the coming year. I was going to stop at 10, but that Apple/Amazon one just forced itself out — perhaps that’s me wishing again. We’ll see. Let me know your thoughts, and keep your cool out there. 2020 is going to be one hell of a year. 

     
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