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.

Amazon’s Spark that Fizzled …

Amazon Spark: Less like a sizzle … more like a fizzle.

It’s now been more than nine months since Amazon launched its social media platform Spark … and so far, it’s hardly sizzled.

In fact, it’s made barely a ripple in the market.

There are plenty of people who contend that the last thing the world needs is yet another social network. But others would like to see new alternatives to the recently beleaguered Facebook platform.

As for its trajectory, it looks as if Spark is following the former rather than the latter path. The question is, “Why?”

Very likely, the answer lies in Spark’s questionable underlying raison d’etre.  Essentially, Spark is a social feed of photos and other images. That makes it similar to Instagram … sort of.

One difference between the two platforms is that Spark is open to exclusively to Amazon Prime members.  That limits the potential number of Spark users pretty severely, right from the get-go.  [It’s true that non-members can view Spark feeds — but they can’t post their own content. And what’s a social platform if you cannot interact with it?  It isn’t one.]

Another difference with Instagram may be even more of a fundamental problem. The rationale for Spark is to focus on products that Amazon sells.  Spark is directly “shoppable,” which differentiates it from Instagram and other social networks.  It also makes it less like a true social network and more like a garden-variety e-commerce site.

In other words, rather than being an interesting and engaging social platform, Spark is boring. Informative – but boring.

It isn’t that Amazon/Spark allows brands themselves to post content there; posting privileges are granted only to people it dubs “enthusiasts” or “onsite associates.” Brands must seek out “regular people” [sic] who are members of Amazon Prime to post content on their behalf about their products.

And I’m sure that’s happening – along with varying levels and forms of compensation flowing to these supposed “enthusiasts” in return for the product plugs. But can anyone imagine less compelling content than what results from this kind of commercialized “AstroTurfing”?  No wonder people are ignoring this social media platform.

Andrew Sandoval, a group director for media planning agency The Media Kitchen, summarizes Spark’s predicament by noting that lifestyle-focused people tend congregate on Instagram — a place that shows people living their lives through products. By contrast, “Amazon Spark is mostly just talking about your products, which is the hard-sell.  Ultimately, the e-commerce social experience is a little too far from the social experience,” Sandoval opines.

Have you interfaced with Spark since its July 2017 launch? If so, do you see redeeming qualities about the platform that the rest of us might be missing?  Please share your comments with other readers.

Gord Hotchkiss and the Phenomenon of “WTF Tech”

Gord Hotchkiss

Occasionally I run across an opinion piece that’s absolutely letter-perfect in terms of what it’s communicating.

This time it’s a column by marketing über-specialist Gord Hotchkiss that appeared this week in MediaPost … and he hits all the right notes in a piece he’s headlined simply: WTF Tech.

Here is Hotchkiss’ piece in full:

WTF Tech

By Gord Hotchkiss , Featured Contributor, MediaPost

Do you need a Kuvée?

Wait. Don’t answer yet. Let me first tell you what a Kuvée is: It’s a $178 wine bottle that connects to WiFi.

Ok, let’s try again. Do you need a Kuvée?

Don’t bother answering. You don’t need a Kuvée.

No one needs a Kuvée. The earth has 7.2 billion people on it. Not one of them needs a Kuvée. That’s probably why the company is packing up its high-tech bottles and calling it a day.

A Kuvée is an example of WTF Tech. Hold that thought, because we’ll get back to that in a minute.

So, we’ve established that you don’t need a Kuvée. “But that’s not the point,” you might say. “It’s not whether I need a Kuvée. It’s whether I want a Kuvée.” Fair point. In our world of ostentatious consumerism, it’s not really about need — it’s about desire. And lord knows many of the most pretentious and entitled a**holes in the world are wine snobs.

But I have to believe that, buried deep in our lizard brain, there is still a tenuous link between wanting something and needing something. Drench it as we might in the best wine technology can serve, there still might be spark of practicality glowing in the gathering dark of our souls. But like I said, I know some real dickhead wine drinkers. So, who knows? Maybe Kuvée was just ahead of the curve.

And that brings us back to WTF tech. This defines the application of tech to a problem that doesn’t exist — simply because it’s tech. There is no practical reason why this tech ever needs to exist.

Besides the Kuvée, here are some other examples of WTF tech:

The Kérastase Hair Coach

This is a hairbrush with an Internet connection. Seriously. It has a microphone that “listens” while you brush your “hear,” as well as an accelerometer, gyroscope and other sensors. It’s supposed to save you from bruising your hair while you’re brushing it. It retails for “under $200.”

The Hushme Mask

This tech actually does solve a problem, but in a really stupid way. The problem is obnoxious jerks that insist on carrying on their phone conversation at the top of their lungs while sitting next to you. That’s a real problem, right? But here’s the stupid part. In order for this thing to work, you have to convince the guilty party to wear this Hannibal Lecter-like mask while they’re on the phone. Go ahead, buy one for $189 and give it a shot next time you run into a really loud tele-jerk. Let me know how it works out for you.

Denso Vacuum Shoes

“These boots are made for sucking, and that’s just what they’ll do.”

Finally, an invention that lets you shoe-ver your carpet. That’s right, the Japanese company Denso is working on a prototype of a shoe that vacuums as you walk, storing the dirt in a tiny box in the shoe’s sole. As a special bonus, they look just like a pair of circa 1975 Elton John Pinball Wizard boots.

When You’re a Hammer

We live in a “tech for tech’s sake” time. When all the world is a high-tech hammer, everything begins to look like a low-tech nail. Each of these questionable gadgets had investors who believed in them. Both the Kuvée and the Hushme had successful crowd-funding campaigns. The Hair Coach and the Vacuum Shoes have corporate backing.

The dot-com bubble of 2000-2002 has just morphed into a bunch of broader-based — but no less ephemeral — bubbles.

Let me wrap up with a story. Some years ago, I was speaking at a conference and my panel was the last one of the day. After it wrapped, the moderator, a few of the other panelists and I decided to go out for dinner. One of my co-panelists suggested a restaurant he had done some programming work for.

When we got there, he showed us his brainchild. With much pomp and ceremony, our waiter delivered an iPad to the table. Our co-panelist took it and showed us how his company had set up the wine list as an app. Theoretically, you could scroll through descriptions and see what the suggested pairings were. I say theoretically, because none of that happened on this particular night.

Our moderator watched silently as the demonstration struggled through a series of glitches. Finally, he could stay silent no longer. “You know what else works, Dave? A sommelier,” he said. “When I’m paying this much for a dinner, I want to talk to a f*$@ng human.”

Sometimes, there’s just not an app for that.

_______________________

Does Gord Hotchkiss’ column resonate with you as it did me? Feel free to leave a comment for the benefit of other readers if you wish.

In digital retail, there’s Amazon and then there’s … everyone else.

When it comes to online retailing in the United States, Amazon’s been cleaning up for years. And now we have new data from comScore that reveals that Amazon is as dominant online today as it’s ever been.

This chart illustrates it well:

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* MediaMetrix Multi-Platform, US, December 2017. Source: comScore 2018 State of the U.S. Online Retail Economy.

The chart shows that when comparing actual time spent by Americans at each of the Top 10 online retailers, Amazon attracts more viewing time than the other nine entities combined.

Even when considering only mobile minutes, where so much of the growth is happening for digital retailers, Amazon’s mobile viewing time exceeds the combined total digital traffic across eBay, Walmart, Wish, Kohl’s and Etsy.

Pertaining to the mobile sphere, there is an interesting twist that comScore has found in consumer behavior. It turns out, there’s a considerable disparity between the amount of time spent with mobile compared to its share of dollars spent – to the tune of a 40% gap:

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MediaMetrix Multi-Platform and ecommerce / mCommerce Measurement, Q4 2017. Source: comScore 2018 State of the U.S. Online Retail Economy.

In essence, the data show that whereas mobile represents nearly two-thirds of the time spent with online retail, it accounts for only one-fourth of the dollars spent on goods and services.

But this difference is easy to explain:  As the largest player in the field, Amazon fulfills a role similar to what Expedia or Trivago do in the travel industry.

Amazon gives consumers a way to scan the marketplace not only for product details but also for prevailing prices, giving them a sense of the expected price ranges for products or services — even if they ultimately choose to purchase elsewhere.

Consumer reviews are important to online shoppers. So, are more people participating now?

Based on new research, the time-honored “90-9-1 rule” may no longer be accurate.

The 90-9-1 rule states that for every 100 people active online, one person creates content … nine people respond to created content … and 90 are merely lurkers – consuming the information but not “engaging” with it at all.

But now we have a survey by ratings and reviews platform Clutch which suggests that the ratio may be changing. The Clutch survey finds that around 20% of online shoppers have written reviews for some of their purchases.

That finding would seem to indicate that more people are now involved in content engagement than before. Still, when just one in five shoppers are writing and posting customer reviews, it continues to represent only a distinct minority of the market.

So, the big question for brands and e-commerce providers is how to encourage a greater number of people to post reviews, since such feedback is cited so often as one of the most important considerations for people who are weighing their choices when purchasing a new product or service.

A few of the ways that businesses have attempted to increase participation in customer reviews include:

  • Make the review process as efficient as possible by requesting specific feedback through star ratings.
  • Provide additional rating options on product/service performance sub-categories through quick guided questions.
  • Offering incentives such as a contest entry might also help gain more reviews, although the FTC does have regulations in place that prohibit offering explicit incentives in exchange for receiving favorable reviews.
  • Providing timely customer service – including resolving products with orders – can also increase the likelihood of garnering reviews that are positive rather than negative ones.

This last point is underscored by additional Clutch results which, when the survey asked why online shoppers write reviews, uncovered these reasons:

  • Was especially satisfied with the product or service: ~33%
  • Received an e-mail specifically requesting to leave feedback: ~23%
  • Was offered an incentive to leave feedback: ~5%
  • Was especially dissatisfied with the product or service: ~2%

For companies who might be concerned that negative feedback will be given lots of play, the 2% statistic above should come as some relief. And even if a negative review is published, the situation can often be rectified by reaching out to the reviewer and providing remedies to make things right, thereby “turning lemons into lemonade.”

After all, most consumers are pretty charitable if they sense that a company is making a good-faith effort to correct a perceived problem.

In survey research, money talks … but to what degree?

For anyone who has attempted to survey consumers and businesses, it’s pretty universally understood that in order to boost the response rate, you need to give people a “WIIFM” reason to respond.

And that WIIFM incentive is often money. But what kind of monetary incentive works best these days, considering all of the different ways that people are being asked to participate in surveys?

One thing’s for sure: the trend data on response rates isn’t encouraging.  In 1997, the average response rate on telephone surveys was around 36%.  As of 2012, the percentage had nose-dived to just 9%.

It can’t have gotten any better in the five years since.

Recently, the Gallup organization set about to determine response rate dynamics in relationship to the types of monetary incentives offered. To do this, Gallup took the alumni listing from a major American university and deployed online surveys to three target groups of names drawn from it.

Each group was made up of randomly selected names, and each group received the exact same survey. The only difference was in in the incentive offered for recipients to respond to the survey:

  • Group A: 10,000 targeted people received no monetary incentive
  • Group B: 1,000 targeted people were promised a $5 gift card after completing the survey (post-paid incentive)
  • Group C: 1,000 targeted people received a gift card as part of the survey invitation (pre-paid incentive)

The Gallup test revealed that, as expected, offering a monetary incentive had a significant impact on the survey response rate:

  • Group A: 13% response rate
  • Group B: 20% response rate
  • Group C: 19% response rate

But perhaps more interestingly, the results suggest that a pre-paid incentive isn’t quite as strong as offering a monetary reward that comes after filling out the survey. Albeit, the results are very similar, so no definitive conclusions can be drawn.

What is clear, though, is that offering a monetary incentive of some kind does dramatically improve survey results – to the tune of ~50% higher.

Moreover, the Gallup research found no behavioral differences between income groups, suggesting that the “psychology” of being offered a token of appreciation for the survey-taker’s time is something universally appreciated, rather than it being tied to particular respondent characteristics like financial status.

Additional information about the Gallup research can be accessed here.