GDPR: What’s the big whoop?

This past week, the European Union’s General Data Protection Regulation (GDPR) initiative kicked in. But what does it mean for businesses that operate in the EU region?

And what are the prospects for GDPR-like privacy coming to the USA anytime soon?

First off, let’s review what’s covered by the GDPR initiative. The GDPR includes the following rights for individuals:

  1. The right to be informed
  2. The right of access
  3. The right to rectification
  4. The right to be forgotten
  5. The right to restrict processing
  6. The right to data portability
  7. The right to object
  8. Rights in relation to automated decision making and profiling

The “right to be forgotten” means data subjects can request their information to be erased. The right to “data portability” is also a new factor.  Data subjects now have the right to have data transferred to a third-party service provider in machine-readable format.  However, this right arises only when personal data is provided and processed on the basis of consent, or when necessary to perform a contract.

Privacy impact assessments and “privacy by design” are now legally required in certain circumstances under GDPR, too. Businesses are obliged to carry out data protection impact assessments for new technologies.  “Privacy by design” involves accounting for privacy risk when designing a new product or service, rather than treating it as an afterthought.

Implications for Marketers

A recent study investigated how much customer data will still be usable after GDPR provisions are implemented. Research was done involving more than 30 companies that have already gone through the process of making their data completely GDPR-compliant.

The sobering finding:  Nearly 45% of EU audience data is being lost due to GDPR provisions.  One of the biggest changes is that cookie IDs disappear, which is the basis behind so much programmatic and other data-driven advertising both in Europe and in the United States.

Doug Stevenson, CEO of Vibrant Media, the contextual advertising agency that conducted the study, had this to say about the implications:

“Publishers will need to rapidly fill their inventory with ‘pro-privacy’ solutions that do not require consent, such as contextual advertising, native [advertising] opportunities and non-personalized ads.”

New platforms are emerging to help publishers manage customer consent for “privacy by design,” but the situation is sure to become more challenging in the ensuing months and years as compliance tracking the regulatory authorities ramps up.

It appears that some companies are being a little less proactive than is advisable. A recent study by compliance consulting firm CompliancePoint shows that a large contingent of companies, simply put, aren’t ready for GDPR.

As for why they aren’t, nearly half report that they’re taking a “wait and see” attitude to determine what sorts of enforcement actions ensue against scofflaws. Some marketers admit that their companies aren’t ready due to their own lack of understanding of GDPR issues, while quite a few others claim simply that they’re unconcerned.

I suspect we’re going to get a much better understanding of the implications of GDPR over the coming year or so. It’ll be good to check back on the status of implementation and enforcement measure by this time next year.

What’s happened to influencer marketing?

Over the past five years or so, one of the key tactics of branding has been convincing “market influencers” to promote products and services through endorsements rather than relying on traditional advertising. Not only does “influencer marketing” save on paid advertising costs, presumably the brand promotion appears more “genuine” to consumers of the information.

At least that’s how it’s supposed to work according to the textbook theory.

But let’s dissect this a bit.

Some of the earliest forms of “influencer marketing” were the so-called “mommy bloggers” who were stars of the social media world not so long ago. The blogs run by these people were viewed as authentic portrayals of motherhood with all of its attendant joys and stresses.

Mommy blogs like Heather Armstrong’s Dooce.com, Jenny Lawson’s The Bloggess and Glennon Doyle’s Momastery once held sway with stratospheric monthly traffic exceeding the million page level.  But once that volume of engagement happened, it didn’t take long for many bloggers to begin to command big dollars in exchange for product mentions and brand endorsements.

Various meetings and workshops were organized featuring these bloggers and other stars of the social media world – moms, style gurus, interior decorators, fashionistas and the like – providing a forum for consumer product and service companies to interact with these social movers-and-shakers and pitch their products in hopes of positive mentions.

Eager to jump on the bandwagon of this phenomenon, several years ago I recall one of my corporate clients attending their first conference of bloggers — in this case ones who specialize in home décor and remodeling topics.

To put it mildly, our client team was shocked at the “bazaar-like” atmosphere they encountered, with bloggers thrusting tariff schedules in front of their faces listing prices for getting brand and product mentions based on varying levels of “attention” – photos, headline story treatment and the like.

Even more eyebrow-raising were the price tags attached to these purportedly “authentic” endorsements – often running into the thousands of dollars.

Quite the gravy train, it turns out.

It would be nice to report that when the bubble burst on these types of blogs, it was because their readers wised up to what was actually happening.   But the reality is a little less “momentous.”  Simply put, blogging on the whole has stagnated as audiences have moved to other platforms. The rise of “mobile-everything” means that consumers are spending less time and attention on reading long-form blog posts.  Instead, they’re interacting more with photos and related short, pithy descriptions.

Think Facebook and Instagram.

Along with that shift, product endorsements have reverted back to something more akin to what it was like before the time of social media – product promotion that feels like product promotion.

Look at blogging sites today, and often they feel more like classified advertising – more transactional and less discursive. Photos and video clips are the “main event,” and the writing appears to exist almost exclusively to “sell stuff.”

Many consumers see through it all … and it seems as though they’ve come to terms with the bloggers and their shtick.  With a wink and a nudge, most everyone now recognizes that bloggers are “on the take.”  It’s a job – just as surely as the rest of us have our 8-to-5 jobs.

Still, it’s an acceptable tradeoff because in the process, useful information is being communicated; it’s just more transactional in nature, like in the “old days.”

So where does this put influencer marketing today? It’s out there.  It still has resonance.  But people know the score, and few are being fooled any longer.

It’s certainly food for thought for marketers who are thinking that they can use influencer marketing to replace advertising.

They still can … sort of.

Living History: An Ancient Road Comes to Light

“Vienna on the Adriatic”: Trieste, Italy.

The city of Trieste on the Adriatic Sea isn’t as well-known as most other Italian urban areas. And while places like Rome, Venice and Florence are highly popular tourist destinations, Trieste seems like a comparative backwater by comparison.

It’s a shame, because not only is the city quite beautiful, it’s also one of the most fascinatingly different ones in all of Italy.

Pick up any residential telephone directory for Trieste and read the names of the people inside it.  It rivals a phone book from Vienna:  What are all of those German, Slavic and Hungarian surnames doing in there?

Here’s your answer: For well over 650 years, Trieste was the main seaport for the Habsburg Empire.  The Austro-Hungarian navy was based there, and it was the primary maritime hub for the empire’s 50 million+ inhabitants.

“Vienna on the Adriatic,” indeed.

Following World War I, Trieste was annexed by Italy, whereupon the city went from an important commercial and maritime center to being “just another” middle-sized urban area – among numerous others like it up and down the Italian peninsula.

Trieste’s comparatively inconsequential role today is a vast change not only from recent history, but going back centuries before. As it turns out, threading through the region was one of the key trunk highways of the Roman Empire – one whose existence had been undetected until very recently and whose importance is becoming better understood only now.

A team of Italian and Australian scientists discovered the ancient Roman highway that runs throughout the mountainous limestone landscape just above Trieste … and its discovery would not have happened without the use of LiDAR mapping technology.

LiDAR – an acronym which stands for Light Detection & Ranging – is a system which works on the principle of radar but which uses light from a pulsed laser to measure variable distances to the Earth. LiDAR research is carried out using a laser-firing device mounted to a helicopter.  Firing four or five laser shots per square meter over a survey area will measure detailed distances.

Combining LiDAR-generated data with GIS (geographic information system) technology, the distance data enables the creation of three-dimensional information which can reveal otherwise-hidden formations.

In the case of the ancient Roman road above Trieste, the etched lines of the road are just tens of centimeters deep — but they stand out clearly in the images created using the LiDAR technology. Here’s what it looks like:

Discerning the ancient Roman road above Trieste.

The scientific team had decided to survey the entire region after discovering several ancient Roman military fortifications in the area. It’s likely that the newly discovered highway had connected these fortifications along the Adriatic coast.

After realizing that they were looking at the contours of an ancient road, teams of researchers ventured out to hunt for artifacts – timing their excursions to periods just after heavy rainfalls when the landscape would be more prone to reveal them.

In the finest tradition of “getting their hands dirty,” the researchers uncovered more than 200 Roman shoe hobnails along the highway – particularly those linked to the heavy-soled military sandals worn by Roman soldiers known as caligae.

A replica of caligae — Roman military footwear.

Hobnails are short nails that were inserted into the bottom of the Roman military shoes to provide traction and increase durability. Additional follow-up research has determined that the artifacts likely date to the time of the Roman Empire’s Gallic War.

The Trieste research has helped add to the understanding of the Roman Empire’s military fortifications.

It’s done something else as well:  It underscores how completely different the position of Trieste has become in the past 100 years, compared to the several millennia before that.

America’s “Always On” Dynamics

It’s natural to assume that these days, pretty much all Americans go online regularly. And indeed, that is the case.  According to a survey of ~2,000 Americans age 18 and older conducted recently by the Pew Research Center, more than three in four respondents (~77%) reported that they go online at least once each day.

Compare that to the far smaller cohort of people who don’t use the Internet at all, which is only around 10%.

But even more interesting perhaps is another finding from the Pew survey: More than one in four Americans (~26%) report that they are online “almost constantly”.

That proportion is up from one in five just a couple years ago.

Even for people who go online but don’t use a mobile device, nearly 55% report that they go online at least daily, although just 5% of them report being online continually.

Looking further into the Pew findings, the “always on” population is skewed younger … better educated … ethnically diverse … and with higher incomes:

Gender

  • Men: ~25%
  • Women: ~27%

Age

  • 18-29: ~39%
  • 30-49: ~36%
  • 50-64: ~17%
  • 65 or older: ~8%

Education Level

  • High school degree or less: ~20%
  • Some college: ~28%
  • College degree or more: ~34%

Race

  • Non-white: ~33%
  • White: ~23%

Income Level

  • Less than $30K annual income: ~24%
  • $30-$75K annual income: ~25%
  • $75K or higher annual income: ~35%

Location

  • Living in urban areas: ~32%
  • Living in suburban areas: ~27%
  • Living in rural areas: ~15%

Regarding location, one explanation for the lower “always on” characteristics of rural dwellers may be that interconnectivity isn’t as simple and easy as it is in urban environments.

Or perhaps it’s because rural areas offer more attractive options for people to spend their time doing more fulfilling things than being tethered to the online world 24/7/365 …

Which is it? Your thoughts on this or the other dynamics uncovered by Pew are welcomed.  You can also read more about the survey findings here.

Tech companies get tarnished in the 2018 Harris Reputation research results.

Longtime readers of the Nones Notes Blog have seen periodic articles about the evaluations done every year (since 1999) by the Harris Poll measuring the reputation of the 100 most visible U.S. corporations.

As perceived by the general public, in these annual rankings technology companies like Google, Facebook and Amazon have tended to outrank most other iconic brands across a variety of attributes.

It was almost as if the tech firms could do no wrong … whereas other famous corporate names were more susceptible to being hammered on a routine basis, depending on the “news of the day.”

Harris’ 2018 research results have now been published, and they show that the reputation of tech companies has been hit rather hard – all except for Amazon, that is.

The Harris Poll scores the 100 corporations on a variety of factors, including:

  • Products and services
  • Financial performance
  • Workplace environment
  • Vision and leadership
  • Social responsibility
  • Emotional appeal

The opinion research is conducted annually, beginning with consumer top-of-mind awareness of companies that have either excelled or faltered during the year.  With the highest possible company rating being a 100, the Top 20 companies in the 2018 Harris Poll listing come in with reputation quotients ranging between 79 and 83:

  • #1. Amazon.com:  83.22 reputation quotient
  • #2. Wegmans:  82.75
  • #3. Tesla Motors:  81/96
  • #4. Chick-fil-A:  81.68
  • #5. Wald Disney Company:  81.53
  • #6. HEB Grocery:  81.14
  • #7. UPS:  81.12
  • #8. Publix Super Markets:  80.81
  • #9. Patagonia:  80.44
  • #10. Aldi:  80.43 
  • #11: Microsoft:  80.42
  • #12. Nike:  80.24
  • #13. Kraft Heinz Company:  80.15
  • #14. Kellogg Company:  80.00
  • #15. L.L.Bean:  79.83
  • #16. Boeing Company:  79.80
  • #17. Costco:  79.78
  • #18. Kroger Company:  79.67
  • #19. Honda Motor Company:  79.60
  • #20. Proctor & Gamble:  79.32

It’s true that Amazon continues to be top-ranked (repeating its performance in 2017), but Google fell out of the Top 20 altogether, dropping from #8 position to #28.

Apple tumbled even more precipitously, falling from the #5 position to #29.

Facebook isn’t even in the Top 50 any longer; it languishes in the bottom half of the companies evaluated, now living in the neighborhood of companies like General Electric and YUM! Brands.

Of course, even the no-longer high-flying reputations of the tech firms can begin to compare with the bottom-dwellers – the companies who saw their reputations get hit with a ton of bricks over the past year and are now marooned at the very bottom of the Harris listing.

You know them: Equifax, Wells Fargo, and the Weinstein Company.  How wonderful they are …

Facebook fallout: Lots of talk … much less action on the part of users.

Over the past month or so, the drumbeat of ominous news about Facebook and how its user data have been used (or misused) by the social platform and customers such as Cambridge Analytica has been never-ending.

To hear the hyperventilating of reporters, you might think that Facebook was teetering on the brink of an implosion or similar corporate catastrophe as a result of all the nasty revelation.

Well … maybe not so much.

Securities firm Raymond James has surveyed a sample of ~500 Internet users in the wake of the Cambridge Analytica “user abuse” allegations in an effort to determine just how concerned people are about the news, and how it might be impacting on Facebook usage.

It comes as no surprise at all that a clear majority of those surveyed have concerns about Facebook’s use of their personal data. To wit:

  • Very concerned about Facebook’s use of personal data: ~44%
  • Somewhat concerned: ~40%
  • Not concerned: ~15%

But when asked how they may be changing their use of the social platform as a result of knowing about Facebook’s treatment of their personal data, it turns out that only ~8% of the survey respondents have stopped using (or plan to stop using) the platform.

On the other hand, a solid half of the survey respondents report no changes at all in their use of Facebook – now or in the future.

For those in the “mushy middle,” the majority of them plan to use the social platform “somewhat less” rather than “significantly less” than before.

So, what we’re witnessing is unmistakably heightened user concerns generated by a flurry of news reports that lead to … very little.

In fact, in a report that accompanies the survey findings, Raymond James’ analysts go even further, predicting that user concerns will likely ease as the news cycle slows on this topic.

Considering how strongly Facebook has integrated itself into many people’s daily lives, that prognosis comes as little surprise to me.

But what about you? Have you made changes in your usage of the social platform?  Have you noticed changes made by your friends on Facebook?  Feel free to share your perspectives with other readers.

Clueless at the Capitol

Lawmakers’ cringeworthy questioning of Facebook’s Mark Zuckerberg calls into question the government’s ability to regulate social media.

Saul Loeb/AFP/Getty Images
Facebook CEO Mark Zuckerberg on Capitol Hill, April 2018. (Saul Loeb/AFP/Getty Images)

With the testimony on Capitol Hill last week by Facebook CEO Mark Zuckerberg, there’s heightened concern about the negative side effects of social media platforms. But in listening to lawmakers questioning Zuckerberg, it became painfully obvious that our Federal legislators have next to no understanding of the role of advertising in social media – or even how social media works in its most basic form.

Younger staff members may have written the questions for their legislative bosses, but it was clear that the lawmakers were ill-equipped to handle Zuckerberg’s alternatively pat, platitudinous and evasive responses and to come back with meaningful follow-up questions.

Even the younger senators and congresspeople didn’t acquit themselves well.

It made me think of something else, too. The questioners – and nearly everyone else, it seems – are missing this fundamental point about social media:  Facebook and other social media platforms aren’t much different from old-fashioned print media, commercial radio and TV/cable in that that they all generate the vast bulk of their earnings from advertising.

It’s true that in addition to advertising revenues, print publications usually charge subscribers for paper copies of their publications. In the past, this was because 1) they could … but 2) also to help defray the cost of paper, ink, printing and physical distribution of their product to news outlets or directly to homes.

Commercial radio and TV haven’t had those costs, but neither did they have a practical way of charging their audiences for broadcasts – at least not until cable and satellite came along – and so they made their product available to their audiences at no charge.

The big difference between social media platforms and traditional media is that social platforms can do something that the marketers of old could only dream about: target their advertising based on personally identifiable demographics.

Think about it:  Not so many years ago, the only demographics available to marketers came from census publications, which by law cannot reveal any personally identifiable information.  Moreover, the U.S. census is taken only every ten years, so the data ages pretty quickly.

Beyond census information, advertisers using print media could rely on audit reports from ABC and BPA.  If it was a business-to-business publication, some demographic data was available based on subscriber-provided information (freely provided in exchange for receiving those magazines free of charge).  But in the case of consumer publications, the audit information wouldn’t give an advertiser anything beyond the number of copies printed and sold, and (sometimes) a geographic breakdown of where mail subscribers lived.

Advertisers using radio or TV media had to rely on researchers like Nielsen — but that research surveyed only a small sample of the audience.

What this meant was that the only way advertisers could “move the needle” in a market was to spend scads of cash on broadcasting their messages to the largest possible audience. As a connecting mechanism, this is hugely inefficient.

The value proposition that Zuckerberg’s Facebook and other social media platforms provide is the ability to connect advertisers with more people for less spend, due to these platforms’ abilities to use personally identifiable demographics for targeting the advertisements.

Want to find people who enjoy doing DIY projects but who live just in areas where your company has local distribution of your products? Through Facebook, you can narrow-cast your reach by targeting consumers involved with particular activities and interests in addition to geography, age, gender, or whatever other characteristics you might wish to use as filters.

That’s massively more efficient and effective than relying on something like median household income within a zip code or census tract. It also means that your message will be more targeted — and hence more relevant — to the people who see it.

All of this is immensely more efficient for advertisers, which is why social media advertising (in addition to search advertising on Google) has taken off while other forms of advertising have plateaued or declined.

But there’s a downside: Social media is being manipulated (“abused” might be the better term) by “black hats” – people who couldn’t do such things in the past using census information or Nielsen ratings or magazine audit statements.

Here’s another reality: Facebook and other social media platforms have been so fixated on their value proposition that they failed to conceive of — or plan for — the behavior inspired by the evil side of humanity or those who feel no guilt about taking advantage of security vulnerabilities for financial or political gain.

Facebook COO Sheryl Sandberg interviewed on the Today Show, April 2018.

Now that that reality has begun to sink in, it’ll be interesting to see how Mark Zuckerberg and Sheryl Sandberg of Facebook — not to mention other social media business leaders — respond to the threat.

They’ll need to do something — and it’ll have to be something more compelling than CEO Zuckerberg’s constant refrain at the Capitol Hill hearings (“I’ll have my team look into that.”) or COO Sandberg’s litany (“I’m glad you asked that question, because it’s an important one.”) on her parade of TV/cable interviews.  The share price of these companies’ stock will continue to pummeled until investors understand what changes are going to be made that will actually achieve concrete results.