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#nbcfail

July 30, 2012 //

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I love the Olympics. It’s my favorite sporting event, beating the World Cup in a photo finish. The Olympics have a special place in my heart because it combines human dedication, intensity, joy, humanity, and drama. I grew up in Germany, where all the events are shown live, where I was able to appreciate the strategy and tactics of weightlifting, the slowly evolving drama of the 50 kilometres race walk, the nail-biting shooting events, the nerve-wrecking archery events and the chaos theory aka cycling road race playing out in the streets of the host city. If there was a way to watch the Olympics for 24 hours live, I would watch it for 25 hours.

Since I moved to the US, my feelings towards the Olympics has dramatically changed and that’s because NBC never understood the Olympic spirit. The athletes are mere content to further NBC’s monetary and corporate goals. While the whole world was watching the Opening Ceremonies live from London, the US viewers were held prisoners by NBC to wait until they were ready for us. That meant a time delay of 8 hours of the West Coast, and it was so worth it: It allowed Matt Lauer to link the nation of Madagascar to the animated movies, reminding viewers that most of the athletes marching in the ceremony would not win a medal, and talking over the many, many musical interludes. It was also a good occasion to showcase the ignorance of the hosts when Lauer and Viera blew off a tribute to Sir Tim Berners-Lee, the man widely considered to be the inventor of the world wide web.

“If you haven’t heard of him, we haven’t either,” Viera said. “Google him,” Matt added moments later. And, so the hashtag #ShutUpMattLauer was born. Oh, he didn’t stop there: He connected Kazakhstan with Borat, called Luxembourg “a small, central European country”, and shared his belief that Rwanda bounced nicely back from that little annoyance some call genocide. Way to lift the Olympic spirit.

To give good old Matt a little history lesson: The idea of the Olympics is to bring the youth of the world together. As Pierre de Coubertin said (Meredith, google him): “The important thing in life is not the triumph but the struggle, the essential thing is not to have conquered but to have fought well.”

That’s the Olympic spirit. Not your flag-waving, US-centric orgy to market your mediocre fall shows. Not your shameful cut of the Olympic tribute to terrorism victim and replacing it with a vapid Michael Phelps interview by Mr. Hair Seacrest. The reason for it: “An NBC Sports spokesperson responding to the criticism says that it is their policy to shorten for both broadcast constraints and for the sensibilities of the local audience.” I guess NBC believes we want to be force-feed intellectual emptiness and don’t appreciate emotional moments of non-US nations. Thanks, NBC.

Day 2 was even better when the social web exploded after the Ryan Lochte win/Michael Phelps defeat and the majority of Americans had to wait another 10 hours to finally see the event. There was glimmer of hope when cable subscribers were able to sign up for online coverage. “We show everything live”, NBC promised. Yes, they do! But the majority of events are just shown without any commentary or graphics to show where we are in the competition. It’s not really that exciting to watch a parade of athletes competing when you have no clue what the current objectives are. It’s like watching a basketball game without knowing the score. Or a baseball game without knowing what inning it is. The swimming competition was shown live and I enjoyed it: All six races were done in 1 hour, minor interruptions, pure joy. And, the Gold online channel is what the Olympics are about: This Sunday morning alone I watched fencing, skeet shooting, basketball, cycling road race and kayaking. All in one hour.

NBC has a good argument to make: NBC has to maximize commercial revenue, which means maximizing prime time viewership, to recoup the billions paid for rights to broadcast. Billions that pay for the event and the corrupt pockets (allegedly) of IOC members. And, some might argue: the ratings were huge. A false argument. The avid fans (like me) will do anything to watch the events live. And they will sit through a repeat at prime time with their spouse enjoying great Olympic moments together. Who says that fans tweeting about the North Korean unbelievable upset in 56kg weightlifting wouldn’t entice other fans with no interest in weightlifting to enjoy the moment as well? Why not offer two layers of online viewing: one for free and one as a pay service? I would gladly pay quite a lot of money to access all events at my convenience, not based on a prime time schedule.

The real problem is that NBC and other media still try to preserve old business models in a new reality. They think that experimenting with new business models will cost them a lot of money. My argument is that the lack of experiments will lead to their ultimate demise. You can’t imprison customers anymore, we are way more advanced than you think. It’s not that hard to find ways to completely disengage from NBC’s effort and enjoy the games through other means.

Ultimately, I blame the IOC. Their greed has changed the games permanently. The spirit is still there, the athletes still give all of us hope for the future of humanity. But the overblown economics of the games makes it harder for each us to enjoy special moments.

P.S.: In case you’re wondering if NBC cares:

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#nbcfail

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SXSW 2012: The need for calm technology, Part 3

March 15, 2012 //

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Remember the Jetsons? The idea that robots and machines would do all the work for you while you can enjoy your life? Walking around the grounds of SXSW, one begins to think that something went awfully wrong. The machines are not here to serve us anymore, we’re serving and working for the machines. We’ve become slaves to the machines. The obsessive trap of compulsive loop systems like Email and Twitter keeps us busy engaging with the machines while we spend less time engaging with real-life humans.

Noisy technology has made us less human, less focused, less engaged with real people, problems and challenges.

Calm technology will get out of the way, let us live our lives as humans, unobstructed by technology and the need to push buttons all day. With calm technology, actions become buttons; invisible interfaces trigger interactions. Calm technology is just there, it works but it doesn’t require you to be glued to a device.

Just imagine: You geofenced multiple locations that you pass by each and every day. (Geofencing enables your actions to serve as buttons by creating persistent background locations that quietly track your every move.) While you leave the house, all unnecessary electronic items and lights will be switched off immediately. Since your work is only 10 minutes away, the geofence triggers the coffee machine to start up at your office and the computer to be turned on and ready for your arrival. (This example comes from Amber Case’s keynote at SXSW.)

It gets much deeper than that.

Imagine a device that records everything you do. It registers all the music you listen to, tracks each and every moment, knows who you interacted with, records when you work out and how intense, tracks your sleeping patterns, your food consumption, the quality of air you breathe – basically it tracks anything you do and encounter.

You already have that device in the palm of your hand most of the day. All above sounds a bit creepy because you’re afraid to share of the information with a third party. What are they going to do with that data? Increase your health insurance premium because you stopped at a burger joint once a week, didn’t work out enough and lived in smoggy conditions for 60 days a year? The scenario loses its creepiness when third parties don’t have access to it because you own the data. You control who has access to it.

How valuable would it be for your physicians to be able to access all your health data and provide you with better remedies to improve your health?

How fascinating would it be to explore your real-life social graph and encounters, the ones that’s tracked by your smartphone?

What amazing insights could we gather from all of our consumption habits and how to change them over time?

The majority of the data is already being collected. We don’t have access to it, private vertical silos do. Once we take real ownership of this data, we can really put that data to use. Currently, we create all this data to get incrementally more relevant advertising. Nice to have but nothing that changes my life dramatically. What will change lives is gathering this data in the background and putting it to important use: Health, Work, Entertainment, Education – you name it. That’s the revolutionary idea of VRM.

The future is not about being chained to the machines, feeding their insatiable appetite for data. The future is about integrating technology to improve lives, making our world a better place. That was always the idea, wasn’t it?

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The user data bubble

February 16, 2012 //

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“(In the publishing business) the readers are the product, and the customers are the advertisers.” – Dave Winer

It started with Path last week, and now we learned that Facebook, Twitter, Foursquare, Instagram, Foodspotting, Yelp, and Gowalla all either upload your contacts’ phone numbers or email addresses to their servers for matching purposes.

As the post on Venturebeat states:

“Some of these applications perform this action without first requesting permission or informing you how long they plan to store this data. Foodspotting is the worst of the bunch, as it appears to transmit your data over an unencrypted HTTP connection (in plain text), making it even easier for mischievous parties to intercept.”

It’s a sign of a major problem.

Tulip Mania. Railway Mania. Poseidon Bubble. Japanese asset price bubble. Dot-com bubble. Rice bubble. Housing bubble. Bubbles after bubbles. After the housing bubble, one would think we’d have enough of bubbles for a long time to come. Think again.

The dot-com crash had nothing to do with technology. It had everything to do with the business model used to pay for the technology, which was primarily either display advertising revenue or VC money advanced with the expectations of returns based on display advertising. Display Advertising was trackable, it would be more effective online than offline. The bubble burst, crazy valuations went away and the digital ad market boomed. Ad Networks, DSP’s and exchanged drove down the value of ad impressions. CPM’s went from $100 for premier placements to $10. And impression junk was and is still anywhere. Suddenly, new businesses that relied on advertising revenue to support their model had to pivot.

Welcome to the age of user data.

Massive assumptions are now being made based on revenue generated (or soon to be generated) by personally targeted advertising drawing on user data. Facebook has a business model but their valuation is based on future realization of user data. Twitter doesn’t have a sustainable business model yet but it’s worth billions of dollars.

Often, companies don’t even know what to do with this data, they just have it because one day it will rain gold. You can’t open your computer without reading of the promises of Big Data. Your user data, goes the theory, allows ads to be specifically targeted to you. Should you buy a big bag of dog food, you will likely receive more ads for dog products, sometimes coupons. You’ll be grouped in a segment with other “dog food buyers”, your age and location will be determined, and a data model of you will be developed. A very simplistic one-dimensional model of you is living in some data warehouse and that’s why you encounter all those online ads.

The problem is not with the use of data to make decisions – the problem is with the simplistic one-dimensional use of data to make decisions. And the other problem with this assumption is that it believes in the rational consumers. Targeted advertising draws on the idea of our observed behavior presenting a coherent and realistic picture of our desires and needs.

It doesn’t.

My spending behavior in 2010 bears no relation to my spending currently or in the future – economies change, circumstances change, tastes change, opportunities change. More importantly, we are social beings, not rational beings. We are more driven by emotions and our clique than anything you can find in our brains.

As we know, targeting works on a limited scale. It does lift metrics, it improves performance. But the user data dream that one day all served ads will be relevant and lead to immediate conversion is just that: a dream. I’m not trying to minimize the opportunities at the intersection of data and human behavior, as explained in “How companies learn your secrets.” from the NY Times. I just don’t believe the way to collect and use data right now will lead to a pot of gold.

Tulips have value. Houses have value. Data has value. But the value is not as high as people tend to estimate while the user data bubble is expanding. It’s highly questionable if even a small part of these valuations can be realized. At least, I haven’t see any evidence of that, yet.

Nobody wants to hear things like that, when everybody is enjoying the user data ride. Just like nobody wanted to listen to Nouriel Roubini when he predicted the financial crisis. Nassim Taleb the “Black Swan”. Or Dave Winer the end of the data bubble. But something is wrong here, very wrong.

VCs spend billions of dollars investing in companies based on the user data model. They even tell kids to leave college early to participate in the gold rush. “You can be the next Mark Zuckerberg.”

They fund companies that need our personal data to succeed, just like the mortgage bundlers needed the junk mortgages to create fictitious AAA ratings. One day, when reality sets in and the fundamentals don’t add up anymore, the bubble will burst. A lot of money will be lost. A lot of people will be hurt.

Out of the ashes, new companies will spring up that have realistic expectations about the value of user data. And, who knows, even give us control over the data. Now, that’s valuable. Correct, Doc Searls?


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CRM > SCRM > VRM

May 27, 2011 //

My talk from the Clickasiasummit in Mumbai, India.

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Apple, Sony and the future of personal data

May 6, 2011 //

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The iPhone knows its location and stores that information in a file. Apple denied this claim, called users confused and the problem a bug.

Sony admitted last week that hackers had obtained Play Station Network user names, addresses, email addresses, birth dates, passwords and IDs.

Oh, and a few days later, Sony admitted to a second security breach that may have resulted in the theft of personal information of 24.6 million Sony Online Entertainment (SOE) customers. This includes 12,700 non-U.S. credit or debit card numbers and 10,700 direct debt records.

This is not about bashing Sony and/or Apple. There are bigger issues at hand here.

The core issue is informed consent, which is a by-product of basic respect and empathy for customers. Most companies are lacking these important principles. 30 free days added to their subscription by Sony is just not good enough. Customers should be offered free credit reports and subscriptions to identity theft protection services. A few friends of mine had to deal with identity theft, and I can assure you 30 days of free service wouldn’t make up for the time they had to waste cleaning up their record.

Consumers will put up with a lot from brands they like and do business with so long as they are told what the brands wants to do (in non-marketing and non-technical speak) and they are given the opportunity to choose.

Apple didn’t provide any opportunity to opt-in for storage of location data, no choice was ever given. Sony didn’t do enough to ensure the anonymity and privacy of their users, they didn’t even encrypt personal data.

Lawyers will point to the end-user license agreement and TOS but the relationship between a brand and a person is much more than a legal contract. Nobody reads these documents, we just scroll down to mark the checkbox and get on with it. They protect the legal structure of an enterprise but they don’t do anything for customers. Sony and Apple, just like other enterprises that collect data, don’t put clear verbiage in front of people and give them real options. And, yes, the option to selectively enable and disable data collection and sharing should be included.

Sony had good reasons to collect customer data: It provides them the opportunity to sell more products by delivering relevant messages at an opportune time. That’s fine as long as the customer can make a risk assessment: Is a $5 coupon worth the risk of identity theft?

Trust in data security is eroding.

This is only the beginning of the end of personal data collection by enterprises. Almost every day we read about examples of companies abusing the ownership of our personal data. This massive crisis might force Sony into opening their data systems to independent external auditors, letting them access the source code of the implementation and validating that data is secured and used in a way consistent with the privacy criteria both parties agreed on. They will have to change their communication with customers to make it more human, less legal and transparent.

Will it be enough?

In the short-term, those measures should help the gain the trust of their most avid customers. In the long-term, more breaches in different verticals will become public and customers will finally see that their data is being treated recklessly and without any respect.

Ultimately, enterprises have to deal with this reality:

People will understand their personal data has more value than a “$1 off” coupon. They will refuse to give enterprises long-term access to their data. Instead, they will allow them to access their data for a limited amount of time in exchange for a real value proposition. People have given the key to brands too many times, just to get a wrecked car in return. It’s about time, they demand the key back.

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From group buying to tribe buying

March 30, 2011 //

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It’s pretty safe to say we’ve reached the peak of the group buying hype. (I’m glad.) While this doesn’t mean the end (or death) of group buying, I believe it will give way to a much more powerful of social shopping: tribe buying.

Group buying sites are all over the place: One day they offer a manicure, next day a whale watching tour, followed by 50% off for a restaurant 35 miles and a finger painting classes for 65% off. The wide variety of deals is interesting in the beginning but tired out my attention very quickly. Other companies saw this as an opportunity and provided more targeted offerings:

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We will see a shift from group buying to tribe buying

All of us have passion points: Running, wine, travel, books, music. These are just a few of mine. You have different ones. The more specific, the better. There’s no reason to fight for my attention when it comes to passion points. I’m always interested. I always want to hear from you. I’m part of a running tribe, a travel tribe. And these tribes will use their collective power to disrupt the usual e-commerce/customer relationship. Platforms will let customers negotiate their own group discounts. Platforms will be able to communicate with brands to message their demands and brands will fulfill them.

Think about a local wine store. They deliver good wine (with a good story) for a great price. They have a loyal customer base. Very soon, they’ll be able to leverage that customer base to go to supplies and negotiate regular group discounts. More interestingly, they can use the power of their customer base to demand special grapes from vineyards. Vineyards and wine tribes can get closer to each other and match up their needs. Runners can band together as a tribe and demand specific shoes from Nike. Fans can band together to ask a band for a special performance. Readers can ask an author to write about a specific topic.

Group buying was an interesting way to increase demand. Tribe buying will turn the whole demand-supply model on its head.

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Facebook joining the intention game

March 24, 2011 //

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Facebook is starting to join the real-time conversational marketing bandwagon. Basically, ads will be delivered based on the declared intention of the user. Ad Age explains:

“Users who update their status with “Mmm, I could go for some pizza tonight,” could get an ad or a coupon from Domino’s, Papa John’s or Pizza Hut. (…) ”

With real-time delivery, the mere mention of having a baby, running a marathon, buying a power drill or wearing high-heeled shoes is transformed into an opportunity to serve immediate ads, expanding the target audience exponentially beyond usual targeting methods such as stated preferences through “likes” or user profiles. Facebook didn’t have to create new ads for this test and no particular advertiser has been tapped to participate — the inventory remains as is.

A user may not have liked any soccer pages or indicated that soccer is an interest, but by sharing his trip to the pub for the World Cup, that user is now part of the Adidas target audience. The moment between a potential customer expressing a desire and deciding on how to fulfill that desire is an advertiser sweet spot, and the real-time ad model puts advertisers in front of a user at that very delicate, decisive moment.”

Could this work? Isn’t that finally the transformation of advertising from attention to intention? VRM has finally arrived? Hallelujah?

Sadly, no. Facebook tries to find a business model that can help them sustain their valuation of $85 billion. Or, is it $4.5 gazillion by now? Fact is, the Facebook ads perform abysmal. Brand pages and apps are doing okay but Facebook needs to make most of their money from  ads. So, they are scrambling. Problem is, the contract between Facebook and each Facebook user is broken. It’s not broken enough for people to leave Facebook. We’re just too lazy to head over to another network. It might happen one day. But not in the foreseeable future. The platform is too user-friendly, too big and too embedded into our daily lives.

Facebook is the new Microsoft

We didn’t like to use PC’s, always envied the Apple users. We didn’t really care for another version of Office. But the rest of the world was using it. Microsoft was omnipresent and we had no alternatives. That’s how people feel about Facebook. John Battelle thinks people will game the system. I don’t really see it as gaming, just another way to look for special offers.

But that’s not real challenge.

Facebook has only one asset: You & me, and the community we create. In order for Facebook to command any decent valuation, all of us have to be comfortable with the deal. And the deal is that Facebook sells our data, our personas to marketers. This requires an open, truthful and transparent relationship between Facebook and us. Have you ever thought of Facebook as an open, truthful and transparent company?

Exactly.

The Intention Economy is built around more than transactions. Conversations do matter. Relationships as well. So, do reputation, respect and trust. To think Facebook can be the mediator in an intention economy is, to say the least, questionable.

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Reverse the paradigm

February 8, 2011 //

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For the longest time, the marketing challenge was: How do we sell the product we have? How do we come up with great positioning? How do we come up with a good message? How do we find the people that find our message and product/service relevant? Trying to answer this question has created an enormous marketing and advertising industry.

What if we reversed the paradigm?

What if we asked: How can we deliver a product/service that people want? We could stop the insane guessing game all of us are engaged in. We wouldn’t have to battle for the attention of people; they asked for our attention. That’s the basic idea of Vendor Relationship Management. I’ve written many times about VRM before.

What baffles me is that many people believe this is an utopian dream. “It’ll never happen.” They tend to forget, it’s already happening. Not in the marketing world yet but it happened to the publishing industry. The desire of people to get customized media whenever they want it lead to the sale of Newsweek for $1. And the sale of Huffington Post for $315 million. It changed the recording industry forever. Or, rather, wrecked it. People revolted against getting their information top-down. They wanted customization, filters and control. It was a quick transformation because Web 2.0 made publishing so easy for everyone.

What makes you think the same won’t happen to marketing and advertising?

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First impressions from Click Asia Summit 2011

January 21, 2011 //

Consider this:

  • Population of India: around 1.2 billion people
  • 81 million Internet users (Source for above two facts)
  • Facebook: 21 million (as of July 2010) Twitter: 3.5 million (Source)
  • Mobile user base: 270 million
  • Mobile internet makes more than 50% of total internet usage and number of mobile phone users is more than 7 times higher than the number of people accessing internet. (Source)

Not sure how valid these numbers are since I heard many variations. Frankly, it doesn’t really matter. One thing is clear: It’s early. Many people told me that their digital marketing budget hovers around 2% of the overall marketing spend. 3G is not common yet.

In many ways, the environment resembles the US digital landscape around 2004-2005. That’s an amazing opportunity for Indian start-ups, media companies and agencies. They can learn from the mistakes we made in the US and Europe. The toolbox for brands is much bigger and better developed compared to 2005. There’s a vast library of case studies – successes and failures. There are many people that have been through the digital wars of the last 10 years than can help Indian marketers make their case for bigger budgets, for a seat at the table, for becoming the centerpiece of any digital marketing initiative and for transforming companies into social businesses.

These are exciting and often breathtaking times. While I encourage Indian marketers to get as much insights from their  European and American counterparts, I also urge everyone to create their own path.

“Do not follow where the path may lead. Go instead where there is no path and leave a trail.”

-Ralph Waldo Emerson

I’ve met numerous innovators, bright minds and passionate people during Click Asia Summit 2011. The world better listen up. We’ll hear from them very soon.

(Above is the presentation I gave about Social CRM and VRM this morning.)


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    The demise of niche networks

    January 4, 2011 //

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    Ok, let’s get this out of the way: I was a big proponent of niche networks and thought they would become more important than Facebook/Twitter and all the other global platforms.

    I was wrong.

    I still believe niche networks are the future but there’s a major underlying problem.

    It’s another thing we have to take care of.

    The last few weeks I’ve experienced an amazing uptick in Quora participation, I get too many emails each and every day letting me know someone new is following me. There is Path. I love Goodreads. And, this endless list of hundreds of new platforms. Too much. Everybody wants me to contribute. Add content. Participate. While I work, have a family, share content on Facebook and Twitter.

    Enough is enough.

    We don’t need more platforms, sites, log-in forms and passwords. What we need is a better way to share our information. That was the idea behind Facebook Groups. But it went nowhere. Because nobody saw the benefit of investing a lot of time in developing and curating your own groups. More settings, more hassle, more hard work.

    What we need is ownership of our own data

    I want to build my own experience where I can share the favorite moments of my life just with my kid. A scrapbook of her fathers’ life. I want to be able to create a network on the fly that enables me to share very personal experiences with a limited amount of friends. It can be 4. It can 60. It’s up to me, not Path’s limitation of 50 friends. I want to share my running experiences with my running friends. My concert experiences with my concert friends. My wine experiences with my fellow winos. But, the last thing I want to do is to sign-up for another platform. Learn another UI. Remember new passwords.

    There’s only one solution: data portability. As I’ve written in a few posts before, we need to own our own data. Control our own destiny. And  share this data on our terms. This will allow us to develop new, personal platforms that enable each one of us to build micro-networks of shared interests. Create my own destinations, completely independent from anyone.

    Let’s face it: That’s a huge problem for Silicon Valley. They rather focus on incremental innovation. Put lipstick on the pig of data exploitation (Ahem, Foursquare, anyone) and continue to make money off all of our data. And they will continue to push the agenda of creating thin value by adding more features and ‘oohs’ and ‘aahs’.

    But, that’s the past. The future lies in giving all of us control of our data. And release the real power of innovation.

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