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.

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.

The escalating “arms race” in the adblocking arena.

Have you noticed how, despite installing adblocking software on your computer or mobile device, a lot of online advertising is still making it through to you?

That isn’t just your imagination. It’s happening – and it’s getting worse.

According to a recent report based on findings prepared by researchers at the University of Iowa, Syracuse University and the University of California – Riverside, the extent of “end runs” being successfully made around adblockers is quite high – and it’s growing.

According to the research, more than 30% of the Top 10,000 Alexa-ranked websites are thwarting adblockers in order that millions of visitors will continue to see online advertisements despite running adblocking software.

As the universities’ report states:

“Online publishers consider adblockers a major threat to the ad-powered ‘free’ web. They have started to retaliate against adblockers by employing anti-adblockers, which can detect and stop adblock users.   

To counter this retaliation, adblockers in turn try to detect and filter anti-adblocking scripts.”

Some of the more “forthright” publishers are being at least a little transparent about the process – first asking visitors to stop blocking ads. If those appeals go unheeded, the next step is to notify visitors that if they fail to whitelist the site, they will no longer be able to access any of its content.

The problem with this scenario is that many visitors simply go elsewhere for content when faced with such a choice. Still, it’s nice that some online publishers are giving people the choice to opt in … in an environment where the publisher’s content can be monetized to some degree.

Other sites aren’t so courteous; instead, they’re overriding the adblock software and serving up the advertising anyway. That certainly isn’t the way to “make friends and influence people.”

But “violating consumer intent” is kind of where we are in this arena at the moment, unfortunately.

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.

QR Codes Live!

In marketing, QR codes have been the butt of jokes for years. The funky little splotches that showed up in advertising on everything from magazines to transit buses were supposed to revolutionize the way people find out information about products and services.

Except that … QR codes never lived up to the hype.

While a few advertisers stuck with QR codes doggedly, for the most part we saw fewer and fewer of them after their first initial years of splash.

But now, QR codes are making a comeback. It turns out that they’ve become central to mobile marketing tactics.

We’re talking about QR couponing, which is exploding.  Newly published estimates by Juniper Research, a digital marketing consulting firm, show that nearly 1.3 billion coded coupons were redeemed via mobile devices in 2017.

Moreover, Juniper is forecasting that the number of coupons with QR codes being redeemed via mobile devices will continue strong at least through 2022.

A big reason for the sharp increase in use is built-in QR functionality on smartphones – led by Apple which has begun including QR reader functionality as part of the camera application on its new iPhones.

This action takes away a huge barrier that once confronted users. The lack of in-built readers meant that consumers had to download a separate QR code scanner app.

We know from experience that one more action step like that is often the difference between market adoption and market avoidance.

But with that hurdle out of the way, major retailers are starting to take advantage of the more favorable playing field by finding more uses of QR code technology. Target for one has announced a new Q code-based payments system to scan offers directly to their device-stored payment cards, which can be scanned at checkout for instant payment.

Expect similar activity in loyalty cards, making their redemption easier for everyone.

The newly revived fortunes of QR codes remind us that sometimes there are second acts for MarComm tactics and technology – and maybe it happens more often than we expect.

Changing Cross-Currents in E-Mail Marketing

Many marketers find it one of the easiest marketing tactics to execute … but also one of the least effective in terms of results.

In the realm of digital marketing, e-mail marketing has to be one of the most mature choices of tactics these days. It’s been around for a long time, and its relatively small hard-dollar costs make it one a natural “go-to” marketing tactic for many companies.

But today, a declining percentage of marketers see e-mail as one of their most effective tactics in the digital marketing arsenal.

So, what’s the problem?  Many companies have the technology and skills in place to perform e-mail programs using in-house resources. That’s the good news.

The not-so-good news is that more companies are seeing their e-mail programs becoming less effective — for a variety of reasons. Among them are these:

  • E-mail filtering technology is making it more difficult to land e-mails into inboxes.
  • Privacy regulations are becoming more stringent.
  • Overuse of this marketing tactic means more e-mail messages than ever from more companies are being deployed – and with that, more of them are being ignored by recipients.
  • While e-mail used to be the only digital direct marketing game in town, today there are a bigger variety of ways to engage with customers and prospects.
  • Building a high-performing e-mail list that also conforms to regulatory stipulations is more challenging than ever.

This last point is particularly nettlesome for marketers: Data quality and data management are considered among the most difficult challenges for marketers – and also among the least effective in terms of their success.

So, in some ways the factors affecting the use of e-mail marketing are working at cross-purposes. E-mail marketing is easier to execute than other digital marketing endeavors … but as for its effectiveness, many marketers rate other tactics higher, including content marketing and search engine optimization.

In the coming years, it will be interesting to see how attitudes and behaviors regarding e-mail continue to evolve. Will this time-honored tactic decline in importance, or find new life?  Stay tuned …

Welcome to the Ad Duopoly: Google and Facebook

Unless you’ve been living under a rock, it’s pretty obvious that the advertising marketplace in America has changed radically in the past few years.

In short order, we’ve seen the largest concentration of digital advertising converge on just two players:  Google and Facebook.  In fact, according to digital advertising research firm eMarketer, those two firms alone are attracting two-thirds of all digital ad dollars in the United States.

But this development isn’t all that surprising.  The vast bulk of Google’s ad market share results from its search engine marketing platform (paid search). As for Facebook, it dominates digital display advertising not just in America, but in many other countries all over the world as well.

And both companies are the “big kahuna” players in the mobile advertising sector, too.

What’s interesting is that, despite the shortcomings that many people recognize in both types of digital advertising – banner blindness and often ill-targeted paid search results — healthy growth in both forms of advertising continues apace.

Google’s ad revenue growth has average around 20% for more than 30 straight quarters. Its growth in the third quarter of 2017 is right on pace at 22%.

For Facebook, the growth dynamics are particularly lucrative; its year-over-year ad revenue growth is pushing 50%.

Mobile ad revenues are growing even faster; they accounted for “only” $9 billion in revenues for Facebook in just the third quarter.  And just as paid search advertising revenues represent more than 90% of Google’s total company revenues, mobile advertising accounts for nearly 90% of Facebook’s overall revenues.

With so much advertising activity, one might wonder from where it’s emanating.

One answer to that question is that the “universe” of advertisers is exponentially higher than we’ve ever encountered before. With low barriers to entry and “anyone can do it” ad development tools, “Jane and John Doe” are far more likely to be advertisers in today’s world of digital marketing than was ever contemplated just a few decades ago.

To wit: Facebook estimates that its social platform has more than 6 million active advertisers participating on it at any given moment in time.  That’s the equivalent of 2% of the entire population of America.

It’s kinda true:  “We’re all advertisers now.”