Social media data mining: Garbage-in, garbage-out?

Phillip Nones Advertising, Business, Content Creation and Content Management, Demographics, Direct Marketing, Marketing, Marketing Communications, Marketing Research, Media, Media Consumption, Social Media , , , , , , , ,

gigoIt’s human nature for people to strive for the most flattering public persona … while confining the “true reality” only to those who have the opportunity (or misfortune) to see them in their most private moments.

It goes far beyond just the closed doors of a family’s household. I know a recording producer who speaks about having to “wipe the bottoms” of music stars — an unpleasant thought if ever there was one.

In today’s world of interactivity and social platforms, things are amplified even more — and it’s a lot more public.

Accordingly, there are more granular data than ever about people, their interests and their proclivities.

The opportunities for marketers seem almost endless. At last we’re able to go beyond basic demographics and other conventional classifications, to now pinpoint and target marketing messages based on psychographics.

And to do so using the very terms and phrases people are using in their own social interactions.

The problem is … a good deal of social media is one giant head-fake.

Don’t just take my word for it. Consider remarks made recently by Rudi Anggono, one of Google’s senior creative staff leaders. He refers to data collected in the social media space as “a two-faced, insincere, duplicitous, lying sack of sh*t.”

Anggono is talking about information he dubs “declared data.” It isn’t information that’s factual and vetted, but rather data that’s influenced by people’s moods, insecurities, social agenda … and any other set of factors that shape someone’s carefully crafted public image.

In other words, it’s information that’s made up of half-truths.

This is nothing new, actually. It’s been going on forever.  Cultural anthropologist Genevieve Bell put her finger on it years ago when she observed that people lie because they want to tell better stories and to project better versions of themselves.

What’s changed in the past decade is social media, of course.  What better way to “tell better stories and project better versions of ourselves” than through social media platforms?

Instead of the once-a-year Holiday Letter of yore, any of us can now provide an endless parade of breathless superlatives about our great, wonderful lives and the equally fabulous experiences of our families, children, parents, A-list friends, and whoever else we wish to associate with our excellent selves.

Between Facebook, Instagram, Pinterest and even LinkedIn, reams of granular data are being collected on individuals — data which these platforms then seek to monetize by selling access to advertisers.

In theory, it’s a whole lot better-targeted than the frumpy, old fashioned demographic selects like location, age, income level and ethnicity.

But in reality, the information extracted from social is suspect data.

This has set up a big debate between Google — which promotes its search engine marketing and advertising programs based on the “intent” of people searching for information online — and Facebook and others who are promoting their robust repositories of psychographic and attitudinal data.

There are clear signs that some of the social platforms recognize the drawbacks of the ad programs they’re promoting — to the extent that they’re now trying to convince advertisers that they deserve consideration for search advertising dollars, not just social.

In an article published this week in The Wall Street Journal’s CMO Today blog, Tim Kendall, Pinterest’s head of monetization, contends that far from being merely a place where people connect with friends and family, Pinterest is more like a “catalogue of ideas,” where people “go through the catalogue and do searches.”

Pinterest has every monetary reason to present itself in this manner, of course.  According to eMarketer, in 2014 search advertising accounted for more than 45% of all digital ad spending — far more than ad spending on social media.

This year, the projections are for more than $26 billion to be spent on U.S. search ads, compared to only about $10 billion in the social sphere.

The sweet spot, of course, is being able to use declared data in concert with intent and behavior. And that’s why there’s so much effort and energy going into developing improved algorithms for generating data-driven predictive information than can accomplish those twin goals.

Rudi Anggono
Rudi Anggono

In the meantime, Anggono’s admonition about data mined from social media is worth repeating:

“You have to prod, extrapolate, look for the intent, play good-cop/bad-cop, get the full story, get the context, get the real insights. Use all the available analytical tools at your disposal. Or if not, get access to those tools. Only then can you trust this data.”

What are your thoughts? Do you agree with Anggono’s position? Please share your perspectives with other readers here.

Who Are the “Mobile Addicts” in This World?

Phillip Nones Marketing Communications, Marketing Research, Social Commentary, Social Media , , , , ,

phones on paradeMost of us know at least some people who seem to be on their mobile devices constantly. And now their total numbers have been quantified.

Bank of America has teamed up with Yahoo! research firm Flurry Analytics to publish a Consumer Mobility Report. The one published last month is the second such yearly report.

The BofA/Flurry analysis breaks down three categories of mobile device users: those who it characterizes as “regular users” … “super users” … and “mobile addicts.”

The classifications are defined as follows:

  • Regular Users: People who launch mobile applications 1 to 16 times per day
  • Super Users: Those who launch apps 16 to 60 times per day
  • Mobile Addicts: Those who launch apps more than 60 times per day

According to the study, using these criteria there are ~280 million people around the world who qualify as Mobile Addicts — and that figure is up sharply since 2014 (by nearly 60%).

By comparison, Super Users represent slightly under 600 million people, while Regular Users are still the lion’s share at ~985 million.

So, while a distinct minority, the number of Mobile Addicts is actually quite high — and it’s growing much faster than the other two segments.

It certainly helps us understand why we’re seeing mobile addiction-like behavior seemingly everywhere we look.

The BofA/Flurry study also delved into the major categories of apps that Mobile Addicts are using, and found that their usage levels are higher across all of these categories.

The five most popular categories for Mobile Addicts are topped by messaging and social platforms, which represent the biggest usage compared to other mobile phone consumers:

  • Messaging and social index: 556 (used 5.56 times more than the average mobile device consumer)
  • Utilities and productivity index: 427
  • Gaming index: 202
  • Finance index: 155
  • News and magazines index: 102

Study details are available here.

Do any of these statistics come as a particular surprise to you? Let other readers know your thoughts.

Magazine readership preferences confirm the continued primacy of print.

Phillip Nones Content Creation and Content Management, Marketing Communications, Marketing Research, Media, Media Consumption, Publishing , , , , , , , ,

pileIn my line of work, I receive many magazines and other publications covering not only the marketing and advertising field, but also the industries and markets of our corporate clients.

Every time one of these subscriptions comes up for renewal, I’m strongly urged to choose the online/electronic offering instead of the print edition.

I know why, of course. Between the printing, postage and shipping considerations, magazines and other printed media represent the most involved (and the most costly) form of delivery.

And there’s also the issue of “currency” and “recency,” with breaking news being covered much quicker and more efficiently online.

Still, I generally opt for print for the simple reason that a physical magazine, newspaper or newsletter is easier to browse and to read. I like the “linearity” of a print magazine and find magazine reading less satisfactory online.

Don’t get me wrong — I’m very happy digital versions of the print editions exist. I love the fact that I can go online and access an article of particular interest that I may wish to archive in electronic form, or pass along to friends and colleagues.

So, consider me an “all of the above” sort of person. Still, there are times when I think that I represent a more traditional way of thinking about consuming news articles — one that’s decidedly losing popularity.

But then … we see the results of a new digital magazine market study, published by Mequoda Group, a media consulting firm.

The survey, which was conducted in July 2015 among ~3,650 Americans adults age 18 or higher who have access to the Internet, found that digital magazine consumption has now reached ~43% of print magazine consumption.

So digital is rising.

But the Mequoda research also finds that ~70% of American adults who have access to the Internet have read an average of three print magazine issues in the past 30 days. (2.91 print magazine issues, to be precise.)

Here are the findings for print magazines read over the previous month:

  • Read one print magazine: ~18%
  • Read two: ~19%
  • Read three: ~13%
  • Read four: ~8%
  • Read five or more: ~13%

At the same time, ~37% of American adults who have access to the Internet have read an average of 2.37 digital magazine issues over the past month. Here’s how that breakdown looks:

  • Read one digital/online magazine: ~14%
  • Read two: ~8%
  • Read three: ~5%
  • Read four: ~3%
  • Read five or more: ~7%

What this means is that in 2015, print magazine readership activity outnumbers digital by a 2-to-1 margin.

The Mequoda research tested five reasons why people might prefer reading digital versions over printed versions of magazines. Of those who read digital magazines, here are the percentages who deemed those reasons “very important”:

  • Offers immediate delivery: ~42% consider very important
  • Portability / easy to carry: ~40%
  • Environmentally friendly: ~40%
  • Cheaper than print: ~39%
  • Thousands of titles: ~35%

The bottom line on this topic appears to be that the demand for print delivery of periodicals remains significant … and that publishers who elect to shift to “all-digital” delivery stand to lose at least some of their reader engagement.

Even so, I have no doubt that publishers will continue to push electronic delivery in the hopes that print can eventually fall completely by the wayside.

The full report is available free of charge from Mequoda here.

Offline America: Pew’s latest research shows that 15% of American adults don’t use the Internet at all.

Phillip Nones Demographics, Education, Media Consumption, Social Commentary, Social Media , , , , , ,

Internet usageFor those of us who spend practically every living minute of our day online, it seems almost unbelievable that there are actually some people in the United States who simply never go online.

The Pew Research Center has been researching this question for the past 15 years. And today, the percentage of “offline American adults” (people age 18 or over who don’t use the Internet) remains stuck at around 15% — a figure that has been stubbornly consistent for the past three years or so:

Pew Research Center Americans Not Online 2000-2015 survey results

But up until then, the percentage had been declining, as can be seen in these milestone Pew survey years:

  • 2000: ~48% of American adults not using the Internet
  • 2005: ~32% not using
  • 2010: ~24% not using
  • 2015: ~15% not using

Part of the long-term shift has been new people interfacing with the Internet.  But another factor is simply the “aging out” of older populations as they pass from the scene.

The demographic dynamics Pew finds on Internet usage show relatively little difference in behavior based on ethnicity — except that only about 5% of Asian-Americans never go online.

Rather, it’s differences in age particularly — but also in income levels and education levels — that are more telling.

offline AmericansThe age breakdown is stark, and shows that at some point, we are bound to have near-total adoption of the Internet:

  • Age 18-29: ~3% don’t use the Internet
  • Age 30-49: ~6% don’t use
  • Age 50-64: ~19% don’t use
  • Age 65+: ~39% don’t use

Income levels are also a determining factor when it comes to Internet usage:

  • Less than $30,000 annual household income: ~25% don’t use the Internet
  • 30,000 – 50,000 annual HH income: ~14% don’t use
  • $50,000 – $75,000 annual HH income: ~5% don’t use
  • Over $75,000 annual HH income: ~3% don’t use

And Pew also finds significant differences based on the amount of formal education:

  • Some high-school level education: ~33% don’t use the Internet
  • High school degree: ~23% don’t use
  • Some college: ~9% don’t use
  • College graduate or post-graduate education: ~4% don’t use

Lastly, while no difference in Internet usage has been found between urban and suburban Americans, the adoption rate in rural areas continues to lag behind:

  • Urban dwellers: ~13% don’t use the Internet
  • Suburban residents: ~13% don’t use
  • Rural areas: ~24% don’t use

One reason for the lower adoption rate in rural areas may be limited Internet access or connectivity problems — although these weren’t one of the key reasons cited by respondents as to why they don’t go online. Pew’s research has found these points raised most often:

  • Have no interest in using the Internet / lack of relevance to daily life: ~34%
  • The Internet is too difficult to use: ~32%
  • The expense of Internet service and/or owning a computer: ~19%

The results of Pew’s latest survey, which queried ~5,000 American adults, can be viewed here. Since the research is conducted annually, it will be interesting to see if Internet usage resumes its drive towards full adoption, or if the ~85% adoption rate continues to be a “ceiling” for the foreseeable future.

This email signature block says it all …

Phillip Nones Business, Direct Marketing, Marketing, Marketing Communications, Sales, Social Commentary, Social Media , , , , , ,

signature areaOver the years, I’ve noticed how signature blocks at the bottom of business e-mails have been getting longer and more elaborate.

Remember the days of simply showing an office address, phone, FAX and e-mail? That disappeared a long time ago.

Why it’s happened is all a function of the many ways people can and do choose to communicate today.

For folks in the marketing and sales field, sometimes the contact options go overboard. Not long ago, I received an e-mail pertaining to a business service pitch. Here’s what the sender had included in the signature area at the bottom of his e-mail message:

  • If you’re a phone person, here’s my mobile number:
  • If you’re a text person, send a message to my cell:
  • If you’re an email person, here’s my address:
  • If you’re an instant message person, here’s my Google ID:
  • If you’re a Skype person, here’s my handle:
  • If you’re a Twitter person, here’s my username:
  • If you’re a Facebook person, here’s my page:
  • If you’re a face-to-face person, here’s my office location:

The only thing missing was Pinterest, and a FAX number …

Seeing this signature block was a stark reminder of the myriad ways people are connecting with their business and personal contacts.

Nothing new in that, of course — but seeing it presented in one big bundle really drove the point home.

Scott Ginsberg
Scott Ginsberg

Later, I discovered that this litany of contact options was first popularized four or five years ago by the business author and blogger Scott Ginsberg. Evidently, others have now picked up and run with the same concept.

Taken together, it’s no wonder people feel busier today than ever before, despite all of the ways in which digital technology purports to simplify communication and make it more efficient.

I wouldn’t want to go back to the old days … but at times, there’s a certain attraction to the idea of not having to be “always on” in “so many places,” no?

How China’s economic woes will affect the United States: A view from East Asia.

Phillip Nones Banking, Business, Economics, Government, Social Commentary , , , , , , , ,

Chinese economyIt’s only natural for Americans to be somewhat spooked about what’s happening in the financial markets, what with thousand-point drops on the stock exchanges and all.

It’s even more disconcerting to realize that the forces in play are ones that have little to do with the American economy and a lot more to do with Europe and China. (China in particular, where bubbles seem to be bursting all over the place with the fallout being felt everywhere else.)

In times like this, I seek out the thoughts and perspectives of my brother, Nelson Nones, an IT specialist and business owner who has lived and worked outside the United States for nearly 20 years — much of that time spend in the Far East.

To me, Nelson’s thoughts on world economic matters are always worth hearing because he has the benefit of weighing issues from a global perspective instead of simply a more parochial one (like mine).

Nelson Nones
Nelson Nones

Yesterday, I had the opportunity to ask Nelson a few questions about what’s happening in the Chinese economy, how it is affecting the U.S. economy, and what he sees coming down the road. Here are his perspectives:

PLN: What is your view of the Chinese economy — and what does the future portend?

NMN: I’m a real pessimist when it comes to the current state of the Chinese economy. I also think the Chinese will turn on themselves politically as their economic house of cards is collapsing — so look for a sharp upturn in political and social turmoil as well.

Just as the bubble burst in the U.S. and Europe in 2007-08, it’s bursting now in China — and the rest of East Asia (South Korea, Japan, Thailand and Singapore) are going to get caught in the fallout because of the extent to which their economies are reliant on trade with China.

 PLN: What do you look at, specifically, for clues as to future economic movements?

NMN: The barometer to watch is the price of oil. It plummeted in 2007, presaging the “great recession” in the West.

untitledOil prices began to drop again in 2014.  The U.S. oil benchmark fell below $40 per barrel on August 24, 2015, a level not seen since 2009. I believe the underlying root cause is a sharp contraction of East Asian demand due to the economic bubbles bursting over here, coupled with persistently high supply as Middle Eastern oil exporters compete against American producers to protect market share.

PLN: How will these developments affect the U.S. economy?

NMN: The oil bust will continue in the U.S., dragging the economy down. But energy prices will be lower, buoying other parts of the American economy.  For instance, the domestic airline sector will benefit and consequential demand for Boeing jets will grow.

U.S. imports — specifically, imports from China and the rest of East Asia — will become cheaper as China and other countries allow their currencies to fall in order to protect their exports.

This is probably a “net-neutral” for the US economy in that American exports will be hurt due to the relatively stronger U.S. Dollar, but American consumers will benefit from lower prices. So, the direct economic impact is likely to be mixed.

PLN: So, why worry?

NMN: The real risk, in my opinion, is a global liquidity crisis. Over the past quarter-century, China and other East Asian countries have accrued enormous wealth. But they didn’t hoard their newfound wealth; they invested it both domestically and overseas.

China has invested ginormous amounts of cash in domestic infrastructure and housing. That money is already spent, and a sizeable part of the investment has already gone to waste in the form of corruption, new housing that nobody wants, underutilized transport infrastructure and non-performing loans made to inefficient state-owned enterprises. 

All of this will eventually need to be written off (that’s why their bubble is bursting).

But China has also invested lots of money in overseas financial instruments. Think of the Chinese as the folks who financed the Federal Reserve’s Quantitative Easing program as well as Federal debt in the U.S. But as the Chinese run out of cash at home, they will increasingly need to liquidate their overseas investments just to pay their bills.

This poses a very real threat to the fiscal stability of U.S. and European governments, and to the supply of capital in U.S. and European financial markets.

The Federal Reserve is likely to be caught in a double-bind. On the one hand, if the Fed raises interest rates in response to the reduced supply of capital (as it is widely assumed they will, later this year), they risk choking off the tepid U.S. recovery currently underway.

This would also cause the U.S. Dollar to strengthen further, thereby exacerbating the negative impact of the Chinese bust by making U.S. exports less competitive in global markets.

On the other hand, if the Fed leaves interest rates where they are (basically zero), then they won’t be able to attract enough capital to roll over the public debt that the Chinese are trying to liquidate. In other words, the Fed risks a “run on the bank.”

The Fed can deal with this by printing more money (more or less what the Chinese did in 2007-8), but this would inevitably introduce inflationary pressures in the U.S. It would also lengthen the time it takes for the Chinese to right their ship, because it will put downward pressure on the U.S. Dollar, thereby constraining whatever the East Asians can do to boost exports.

My guess is that the Federal Reserve will “blink” and keep interest rates at zero (and also print more money to pay off the Chinese) in hopes that (somewhat) cheaper imports will offset (some of) the inflationary impact of printing more money.

This is equivalent to kicking the can down the road.

PLN: Do you see any impact on the 2016 Presidential race in the United States?

NMN: As a result of kicking the can down the road, I foresee little impact on the 2016 U.S. Presidential race — but watch out in 2020 when the hangover is well underway.

Alternatively if the Fed raises interest rates, I suspect the Democratic Party candidate will be more vulnerable because the short-term economic pain will be much higher in the U.S. The incumbent party will get most of the blame. Fair or not, that’s just the way bread-and-butter issues play out in American politics.

PLN: What about unrest in China — might that have political repercussions in America? 

NMN: The way I see it, political or social turmoil in China will have zero impact on the U.S. Presidential race. Americans of nearly every political stripe or ideology dislike or distrust Chinese governance, yet unlike the “China lobby” of the Cold War era, they have no appetite to intervene in what they rightly perceive to be internal Chinese affairs.  

Or they’re clueless about events in East Asia. Or they just don’t care.

So there you have it — a view from the Far East. If you have other perspectives, please share them with our readers here.

______________

Update (8/28/15):  A few days after this post was uploaded, I received this follow-up from Nelson:

Just as I had predicted, check out this link.  Federal debt is getting more expensive to finance, because the drop in demand for U.S. Treasury bonds (caused by the Chinese liquidation apparently underway) is driving yields up.  According to the article, “The liquidation of such a large position, if it continues, could wreak havoc on the Treasuries market.”
Now look here:  http://www.bloombergview.com/quicktake/federal-reserve-quantitative-easing-tape. It’s an easily understandable explanation of how the Federal Reserve’s quantitative easing (QE) program worked.  Essentially the Fed, like China, stepped in to buy Treasuries also. The Fed also bought mortgage-backed securities.
The Fed’s purchases of Treasuries and mortgage-backed securities now make up ~85% of the Fed’s assets.  The Fed hasn’t indicated what it will do when these assets mature, but if it doesn’t roll over this debt (or a portion thereof) then we can expect Treasury yields to rise yet again. Even if the Fed decides to keep interest rates where they are, at near-zero, rising Treasury yields could bring on a liquidity crunch within the private sector as capital is increasingly drawn away from private investments (loans, corporate bonds and equities) to government-issued bonds paying higher yields with little risk.
Facing the Chinese liquidation, this is why I suspect the Fed will opt to roll over its holdings of Treasuries and mortgage-backed securities, and keep interest rates at near-zero, at least through the 2016 Presidential election cycle.  The Bloomberg article cited above describes QE as an alternative to printing more money, but in the end it’s really the same thing.

Have we become too complacent about cyber-security threats?

Phillip Nones Banking, Economics, Government, Human Resources, Security, Social Commentary, Social Media , , , , , , , , , ,

cyber warfareThe scandal involving the security risk to U.S. State Department e-mails is just the latest in a long list of news items that are bringing the potential dangers of cyber-hacking into focus.

But of course, we’ve seen it before — and it involves far more than just “potential” risk.  From Target, Best Buy and other retailers to Ashley Madison customer profiles, IRS taxpayer information and the U.S. government’s personnel records, the drumbeat of cyber-security threats that’s turned out to be all-too-real is persistent and ongoing.

In the realm of marketing and public relations, recent breaches of PR Newswire and Business Wire data gave hackers access to pre-release earnings and financial reports that have been used to enrich nefarious insider traders around the world to the tune of $100 million or more in ill-gotten gains.

These and other events are occurring so regularly, it seems that people have become numb to them.  Every time one of these news items breaks, Instead of sparking outrage, it’s a yawner.

But Jane LeClair, COO of the National Cybersecurity Institute at Excelsior College, is pleading for an organized effort to thwart the continuing efforts — one of which could end up being the dreaded “Cyber Pearl Harbor” that she and other experts have warned us about for years.

“We certainly can’t go on this way — waiting for the next biggest shoe to drop when hundreds of millions — perhaps billions — will be looted from institutions … It’s time we stopped making individual efforts to build cyber defenses and started making a collective effort to defeat … the bad actors that have kept us at their mercy,” LeClair contends.

I think that’s easier said than done.

Just considering what happened with the newswire services is enough to raise a whole bevy of questions:

  • Financial reports awaiting public release were stored on the newswires’ servers … but what precautions were taken to protect the data?
  • How well was the data encrypted?
  • What was the firewall protection? Software protection?
  • What sort of intruder detection software was installed?
  • Who at the newswire services had access to the data?
  • Were the principles of “least privilege access” utilized?
  • How robust were the password provisions?

In the case of the newswire services, the bottom-line explanation appears to be that human error caused the breaches to happen.  The attackers used social engineering techniques to “bluff” their way into the systems.

Mining innocuous data from social media sites enabled the attackers to leverage their way into the system … and then use brute force software to figure out passwords.

Once armed with the passwords, it was then easy to navigate the servers, investigating e-mails and collecting the relevant data. The resulting insider trading transactions, made before the financial news hit the streets, vacuumed up millions of dollars for the perpetrators.

Now the newswire services are stuck with the unenviable task of attempting to “reverse engineer” what was done — to figure out exactly how the systems were infiltrated, what data was taken, and whether malicious computer code was embedded to facilitate future breaches.

Of course, those actions seem a bit like closing the barn door after the cows have left.

I, for one, don’t have solutions to the hacking problem. We can only have faith in the experts inside and outside the government for determining those answers and acting on them.

But considering what’s transpired in the past few months and years, that isn’t a particularly reassuring thought.

Would anyone else care to weigh in on this topic and on effective approaches to face it head-on?

Higher education choices in America: A distinction without (much of) a difference?

Phillip Nones Business, Education, Employment, Social Commentary , , , , , , , , , , , ,

The cost differential is huge. But what about the education itself?

13According to the College Board, the average annual cost of college, including tuition and books, varies widely depending on the type of institution:

  • Private colleges and universities: ~$31,200
  • Public colleges and universities (out-of-state residents): ~$23,000
  • Public colleges and universities (in-state residents): ~$9,100
  • Community colleges: ~$3,300

In fact, the difference between the highest and lowest cost averages comes out to a factor of ten.

Averages are more difficult to calculate for online college institutions, where the annual cost ranges widely from as low as $5,000 all the way up to $25,000 or so, according to The Guide to Online Schools.

With such a disparity in college education costs, one might think that public perceptions of the value of the degrees granted by them would likewise show differences based on the type of institution.

But a recently completed national opinion study tells us otherwise. A telephone research survey conducted in June 2015 by the Gallup organization queried ~1,500 Americans age 18 or over about their attitudes toward college education.

Among the most interesting findings is the perception of community colleges: Two-thirds of the respondents rate the quality of education that community colleges offer as “excellent” or “good.”

For four-year colleges, the percentage figure for excellent/good quality was only slightly higher: ~70%.

Considering the vast difference in the financial outlay required to attend a four-year school, community college education is looking mighty attractive, indeed.

Tempering this finding are the Gallup survey’s respondents who possessed advanced degrees themselves.  They’re more likely to rate four-year institutions higher than community colleges on quality (a nine percentage point difference).

And of course, community colleges do face challenges such as their track record on lower graduation rates, plus the sometimes challenging process and procedures in successfully transitioning students from two-year to four-year schools.

Still, the perception of near-parity in education quality is striking — and it’s not very different from the findings Gallup has observed since beginning to survey the American public on this topic two years ago.

I don’t doubt that some families will be sharpening their pencils and doing new cost/benefit calculations based on the results of this Gallup survey.

But where a perceived difference in quality continues to persist is in online education. Survey respondents were about half as likely to rate the quality of Internet-based college programs as “excellent” or “good.”

While respondents don’t fault online programs for lacking a broad curriculum, or even for the value provided for the cost of enrolling, online education is seen as lacking strength in three key areas:

  • Reliable testing and grading
  • The quality of instruction
  • The value of the degree to prospective employers

But there’s another way to look at it.  Internet-based higher education is slipping through the door and becoming “mainstream” not just because of the online programs such as those offered by Capella University and the University of Phoenix, but because of the burgeoning online coursework being offered by traditionally brick-and-mortar institutions.

With that growing practice, I predict it’s only a matter of time before the perception of online higher learning will match the higher ratings that are already being given to community colleges, public and private institutions.

Let’s see how things look in another five years.

Google businesses: One big star and a bunch of perpetual understudies?

Phillip Nones Advertising, Business, Marketing, Media, Media Consumption , , , , , , , ,

Alphabet or no Alphabet, when it comes to anything beyond its core search and display advertising business, Google’s performance is pretty ‘meh.’

canHere’s an interesting news byte: Morgan Stanley estimates that Google has lost between $8 billion and $9 billion on its so-called “side projects.”

So reported the Barron’s blog this past week.

It’s the strongest signal yet that Google’s vaunted business model is spectacularly successful for its core business … but that it’s as ineffective as most other companies when it comes to building the next silver-bullet product or service.

Even Google’s YouTube business unit is likely only a break-even proposition, despite years of concentrated attention, enhancements and tweaking. According to Morgan Stanley’s Brian Nowak:

“We estimate YouTube runs at a 0% profit margin … YouTube’s profitability could [actually] be lower than we estimate, but since it likely varies significantly from quarter to quarter, and until we have more visibility into the business, we believe break-even is a safe assumption.”

umbrellaIt’s likely we wouldn’t have even these clues were it not for the recently announced creation of Alphabet, a new umbrella structure for Google’s various business segments:  search, which is an estimated 96%+ of its business volume, and then everything else.

This development is providing more “transparency” that enables investment houses like Morgan Stanley to come up with back-of-the-napkin rough figures like this:

Google Revenue and operating profit Morgan Stanley

As time goes on, it will be interesting to see if Alphabet can demonstrate that the corporation is more than a one-trick pony.

Regardless of that outcome, the way that Google has cornered a ginormous $60 billion+ chunk of the advertising business is amazing – and laudable. Fair dues on that.