Ethics

The changing nature of influence – from Lil Miquela to Fashion Ambitionist

June 21, 2019 by Susan Getgood 1 Comment

Lil Miquela is a fake “person” who seems real. Until the company that created her revealed that she was a virtual influencer last year in a publicity stunt, her 1.6 million followers presumably thought Miquela Sousa was just another teen Instagram star, not an avatar designed specifically to attract follows and likes. She has partnered with brands like Calvin Klein and Prada, and according to the NY Times, more than 80,000 people stream Lil Miquela’s songs on Spotify every month. She’s also not the only virtual influencer in the market, designed to be the perfect spokesperson. Some are more transparent than others that they are constructs; for example, KFC’s newest Colonel Sanders.

Fashion Ambitionist is a real person whose journey to matrimony, as documented this week on Instagram and pitched to sponsors, can best be described as staged spontaneity. For those that are not familiar, the short story is that her boyfriend is whisking her away for an amazing proposal in a faraway and romantic locale, with a variety of stops along the way. All of which is being documented in her Instagram stories. Supposedly, she is in the dark (at least about the details if not the ultimate objective), with everything being orchestrated by her boyfriend, friends and staff of her website. Maybe. There is a detailed sponsor deck for potential sponsors to evaluate the opportunity, so on some level she has to be in the know. It is after all her brand. In the end, though, it doesn’t matter whether or what she knows. It all feels a bit fake, even though they are undeniably real people and the whole thing is (at least somewhat) entertaining.

Fake person appearing real. Real person appearing fake. All in the service of finding followers and influencing them on behalf of brands.

There is no doubt that both Lil Miquela and Fashion Ambitionist have influence with their followers. But is this influencer marketing?

Yes. And no. Or at least, it is not consumer-to-consumer influencer marketing grounded in the genuine authentic endorsement of a consumer sharing her story and experiences with a product with her friends and yes, followers.

It is easy to see how Lil Miquela herself should perhaps be categorized as social marketing, not influencer marketing. Influencer marketing works because we like or identify with the person who is recommending a product, trust that recommendation is grounded in his or her own experience, and are therefore more likely to take action ourselves. While Lil Miquela seems real, her endorsements and actions are fabricated. She’s neither authentic nor genuine and her recommendations are simply advertisements. We can like and enjoy her content, but we are engaging in a pleasant fiction. We may share her content with our friends, but we should know, they should know, that they are engaging with an avatar, and responding to an ad, not another human. I strongly advocate for deeper disclosure than the simple #sponsored when it comes to avatars.

Fashion Ambitionist is a harder call. On its face, she is simply doing what all social influencers do – telling her story and weaving in brands as part of the tale. Just on a more dramatic scale. It’s not that different from what influencer marketing agencies (like SHE Media’s internal team) do when building programs for brands: we recruit influencers who love a brand to create sponsored content, although we don’t forget the sponsored disclosures. Since there aren’t any on these posts, either no one sponsored, which is sad, given the effort apparently expended, or they are violating FTC guidelines, which is just bad.

Except this Fashion Ambitionist stunt is different. Our goal with influencer marketing should be to have consumers create content that shows how brands are part of their lives. Not to have them stage their lives to provide a vehicle for brands. It’s a fine distinction.

It’s also unfortunately one that increasingly we collectively are not making. People are staging their lives for brands or trying to present some perfect image of themselves on Instagram in the interest of likes and followers. This isn’t authentic consumer storytelling. It’s a performance. Nothing wrong with it as a marketing activity; we should just understand what it is. Furthermore, when social posting detracts from actual enjoyment of the event, it’s not a good strategy and we are not getting the authentic engagement we wanted. Don’t miss the moment because you are trying to get the picture.

Note that I am not arguing against staged marketing opportunities. Flash mobs are fun. Virtual influencers are engaging in a creepy way. Some people are enjoying the Fashion Ambitionist content. In general, parties and events are a great way to create moments that can be shared across social media. Our BlogHer events have been providing sponsors with opportunities to connect with female consumers for more than 15 years, robot-free.

All these things — flash mobs, events, parties, virtual influencers – are opportunities for social marketing to tap into the desire of consumers to share content that excites them.

Influence, certainly. But influencer marketing well done isn’t just staging the event or making a social splash. It’s not about how much someone was paid to create content, and I am definitely not arguing that influencers shouldn’t be compensated for their work or that compensation somehow corrupts an endorsement. We don’t love a brand any less when it asks for our help in its marketing efforts.

Influencer marketing done right is about harnessing consumer passion for brands and connecting them to opportunities to share their love in the context of their own story. It’s about helping the brands reach those consumers in the right way, with the right opportunity, at the right time.

The influencer marketing moments that make my heart sing? Those are rooted in love.

A mom creating a sponsored post for a sunscreen and sharing a moment of joy of her child at the beach. A family test driving a car for a week and sharing their hectic, happy and not-so-happy moments along the way. A makeup lover sharing her tips, tricks and favorite products with her followers on YouTube, always trying out new things. Sometimes sponsored, sometimes not. A home chef leveraging her love of cooking into sponsored content opportunities and her own cookbook. Fans of a much-loved TV franchise sharing their excitement about the reboot.

Those moments when we capture that lightening in a bottle and connect a brand with its customer and make influencer marketing magic.

I love that.

— UPDATE 6/24 —

NY Times article on Fashion Ambitionist’s wedding stunt. Spoiler: they are married, sort of. French law has very specific residency requirements to legally marry in the country, so the stunt ended with a fake wedding. Which is perfect in its own way.

The lines between real life and entertainment are forever blurred thanks to reality television. Social media didn’t create this phenomenon; Fashion Ambitionist’s wedding stunt was no different than your typical reality show, which is why it captured public interest. If you were entertained by it, great. If you thought it was ridiculous, fine too. Different strokes for different folks.

But don’t confuse it with the principled practice of influencer marketing. The pitch wasn’t very good. Hard to read, light on the specific value for brands. Sponsored disclosure was terrible. The burst of followers is likely to be fleeting. It also was a lousy advertisement for Fashion Ambitionist as a legit influencer.

In other words, if you are mapping out your strategic plan to grow your own influence, this may not be the model to choose. It all depends on whether you want to be famous or infamous.

Because the difference between the two? It matters.

Two Truths and a Lie: trust, #ad and privacy

August 27, 2018 by Susan Getgood Leave a Comment

Gregarious Narain is on vacation until the end of the month. We’ve got a couple guests lined up to join me in his absence, but this week was a little hectic so (truth) I did not have time to prep them properly, so this week it was just me, and a slightly shorter show.

Would you like to join us on the show? It’s pretty easy. We broadcast live on Fridays at noon eastern for about 20 minutes. I send you a link to connect to the broadcast platform in the morning along with any show notes we’ve prepared and you log in by 11:50 am for an AV check. Sometimes you’ll be joining Greg and me, other times it is just me.

What will we talk about? We are open to discussing any topic related to marketing writ rather large — digital and social media, advertising, influencer marketing, technology , but also Internet culture, consumer behavior, digital fraud, privacy, artificial intelligence. If YOU have a topic you’d like to bring to the table within that rather large brief, we’d love to build a conversation around it with you. Email me at sgetgood@getgood.com or message me on Facebook.

Now to this week’s topic — consumer attitudes and trust. Joining me are my two guests this week, Mr. Rogers and Captain Rogers, two icons of honest integrity.

I only have 2 topics this week, because both are both truth and lie. The first is that consumers don’t like or engage with sponsored content the same way that they do so-called organic content. I wanted to discuss this (again) this week after reading a great op ed in Ad Age, In Defense of the Lowly Hashtags #ad and #sponsored by Natalie Zfat. Written in response to the statement “nobody likes the hashtag #ad” at an industry panel (filled with marketers), she shared her pride in using #ad because it meant she was able to successfully monetize her content while creating valuable content for readers.

This strikes a chord with me because I think treating sponsored content as a second class citizen is lazy thinking. Fact: transparency and best practice would dictate that we disclose relationships that might impact an endorsement even if the FTC Guidelines did not. But also Fact: the FTC guidelines in the US and similar guidelines in other countries DO dictate that we disclose when the content we create is sponsored or influenced by payment, business relationship or free product. And finally FACT: people are not as black and white in their consumption of content as the conceit organic:good, sponsored:less good makes it seem. I have seen more than a little organic content that is AWFUL and quite a lot of amazing sponsored content.

It is not that we don’t like advertising. It’s that we don’t like bad advertising. Whether an ad or a sponsored Instagram image. It is incumbent upon us as content creators to create quality content, full stop. When it is sponsored, we disclose, because it is the right thing to do. Cap agrees!

On social media, there is no situation where you do not have to disclose that the content is sponsored. Not even for celebrities. The reason for this is that on social, we have none of the cues that inform us that the endorsement is an advertisement that we have in other media. When we see a celebrity on Ellen, we know she is pitching her new movie because that is inherent in the talk show format. When we see an athlete in logo gear, we assume that he or she is sponsored by the brand, because that is how sponsorship works at that level. When we see the same celebrity promote something on Twitter or Instagram, her post looks just like all her other posts, and just like all the other posts of all the other people using the platform. There are no cues to clue us in that this post is sponsored. When an advertisement doesn’t look like an advertisement, it must be disclosed. Just this week I ran across another article about celebrities failing to disclose, this time in the UK. This is one time where wishing won’t make it so. Wishing you didn’t have to disclose or inventing all sorts of reasons why it doesn’t apply to you won’t change the facts. Because it is all about trust. Right, Mr. Rogers?

So, while it is true that people do treat sponsored content differently, the difference, in my opinion, is largely in the minds of the creators. If we stop assuming that people view sponsored content differently, create amazing quality content and honor the trust of our readers by being honest about our business relationships, we can be proud of #ad.

This week’s other part truth part myth is also related to trust. In this case, our trust in the social platforms and websites. Axios Media Trends reported this week on Census Bureau Data that indicates Americans are less worried about online privacy, largely, the report surmised because we have become accustomed to trading it for access and services.

But we are still concerned about data privacy, security and integrity. Witness the Twitter storm caused by the fake billboards in London last week.

They struck a chord because there is an underlying cognitive dissonance between the value consumers perceive they get from Facebook and the value they are increasingly aware Facebook gets from them. GenZ is already replacing it, including on college campuses, with new “facebooks” coming online, also reported in Media Trends this week.

I have been following the digital privacy conversation for more than 20 years, sometimes closely, sometimes less so but I am convinced we are finally at the inflection point where it matters as much to consumers as it does to advocates and geeks, and it is an increasingly informed consumer who understands that there are 3 issues: privacy security and integrity. Being willing to give up a little personal data in exchange for access is a fair trade but we are no less concerned about the protection of that data.

So. The truth is Americans may be less worried about privacy in general, but it is because they have become more informed. And we are very likely still very worried about how our information is used, whether information is true and whether bad actors can breach the walls. We just are more willing to accept the risk.

Two Truths and a Lie: The FTC Disclosure Guidelines

July 25, 2018 by Susan Getgood

Tom Chernaik, the CEO of CMPLY, Inc. joined me as our guest on Two Truths and a Lie this week. Greg Narain was traveling and could not join the conversation. We dropped some truth about the FTC disclosure requirements and hopefully dispelled a few myths.

Please forgive some of the technical difficulties at the beginning of the episode. It was our first program “on location,” I got a little lost on my way to Tom’s office downtown (I ALWAYS GET LOST BELOW WALL STREET) and in my rush to start on time, I forgot to plug in the Blue Yeti mic. Hey, it’s live, right??

About Tom
For more than 20 years, Tom Chernaik has worked with leading brands focusing on innovation and insight in marketing, law, social media, privacy and big data.

With a vision for addressing marketer concerns regarding compliance, Tom launched CMP.LY in 2009. He grew the company – rebranded as CommandPost – into the world’s leading social media disclosure solution and expanded the offering to include cross-platform social media measurement of audience and engagement. CommandPost was named a Gartner “Cool Vendor in Social Marketing” for 2015.

Tom holds multiple patents for his work developing innovative solutions for monitoring social network content for compliance, measurement and activation of offline processes. His work in the areas of disclosure and privacy has bridged the gaps between policy and practice with practical technology solutions.

Prior to launching his company, Tom spent more than 15 years in leadership and marketing roles for leading entertainment and media brands including XM Satellite Radio, All Indie (which he co-founded) and Gotham Records. He holds a BA in Liberal Arts from NYU and a JD from Yeshiva University’s Cardozo School of Law. Tom was also the Co-Chair of the Ethics Committee at the Word of Mouth Marketing Association from 2011-2017.

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For more posts about the FTC Guidelines, please review the FTC Category and the Ethics Category in the archives.

From BOTS to BOUGHT: The “crisis” in influencer marketing

June 29, 2018 by Susan Getgood

Today, Digiday published the confessions of a former influencer describing widespread fraud in the influencer marketing space, focusing largely on bought followers on Instagram, where influencers regularly amassed followers literally overnight in order to compete for coveted fashion and beauty deals. All to meet the demand of advertisers and their agencies for scale. Reach was the de facto result. This is absolutely 100% true, I have no doubt.

It’s also not influencer marketing. We have to be REALLY careful to not throw the baby out with this admittedly nasty AF bath water.

As I wrote last week, this fraud — and it is fraud — stems from the ad industry’s relentless pursuit of scale without a similar commitment to authenticity and performance metrics.

Influencer marketing works because it is human-centered, and humans beings don’t scale neatly with algorithmic and predictable precision.

In the 90s, anthropologist Robin Dunbar theorized that humans can only sustain a limited number of stable social relationships; 150 is commonly cited as the upper limit. While modern communication has changed how this dynamic works, as we are able to move more fluidly from group to group, online and off, and may participate in multiple networks of people with whom we share common interests, we should always keep Dunbar’s number in mind when thinking about how influence works. The ripple effect of a recommendation matters just as much as the initial impact. Much harder to measure of course, but just because something is hard doesn’t mean we should not strive to do it.

Influencer marketing done right is building relationships with customers over time, who serve as the advocates for your brand to their friends, fans and followers. You know and trust them. Their audience knows and trusts them. You work together to achieve a common goal. Kumbaya and all.

Influencer marketing works because we do move in and out of different groups online, and when we share a recommendation from one into another, we form a ripple on the pond. What’s been missing is way to independently assess the audience of influencers to verify that they do have the right audience. Independent of and across the platforms, independent of the agencies. It’s challenging, and even more so if you respect individual privacy rights. I’m working on some things in this space. More to come.

In the meantime, the best approach is to understand that the best results from influencer marketing don’t come from scale. They come from trusted relationships over time.

The other issue exposed in the Digiday Confession is poor measurement practices.

Reach is a delivery metric. It tells us whether we executed our social tactic successfully. It is not a performance metric. Performance is engagement with content, and your objectives dictate whether you are working toward likes, shares and comments, or driving all the way down the funnel to conversion. Reach is not a result.

The Digiday piece also shared that boosting posts, at least in this confessor’s situation, was just as fraudulent, reaching folks not even remotely in the audience target purely to shore up the numbers. This is just straight up bad practice. Boosting posts simply to increase the reach is a waste of money. You should ONLY boost your best-performing content, the content that is getting verified engagement, to expose it to a larger or different audience. Do not boost your turkeys. Let them fade away.

What about the BOTS?
The other article that caught my attention this morning was a piece on CNN about Lil Miquela, an influential CGI (computer generated image) that amassed quite a following before it was revealed that she was a CGI.

My opinion? If CGIs advocate for brands and someone is compensated for the endorsement, it is advertising, straight up, and should be disclosed. Ethically, I think it should be disclosed even if they are not doing brand or cause related work, because they are a construct, and consumers should know.

Personally, I’m not sure I love the idea of people modeling themselves after, being influenced by, robots, but as long as it is fully disclosed as CGI advertising, I don’t see why brands shouldn’t have the option to use CGI tools to deliver their message. They can dictate the message and don’t have to worry about the opinion of the CGI. Likewise if they use BOT accounts to manage message flow or respond for the brand in place of human CSRs. It’s okay as long as you tell people they are engaging with a BOT.

But CGIs and BOTs are not influencer marketing. They are simply innovations in advertising.

On Personalization and Targeting

June 14, 2018 by Susan Getgood

There is no question that the digital media industry has been disrupted by the Global Data Privacy Regulation (GDPR). It’s been at the top of advertising news for weeks, and while the volume of articles may decline, the impact of the law has just begun.

I used to say that consumers like ad targeting, because it ensures that we see ads that match our preferences, but I now have a more nuanced view. It’s not targeting that meets with our approval. No one likes being stalked by the slipper ad simply because we clicked it once on Facebook. Ad targeting relies too much on assumptions about past behaviors based on lookalikes and other data matching. It’s close, but very often, not. quite. right.

What we really want is personalization. To be addressed by our (correct) name when appropriate. To be presented with products that match our age, stage, and personal preferences. To be offered content (and ads) relevant to our interests.

First party data drives personalization, which is far more powerful than targeting.

Personalization is going to a store where the clerk greets you by name, asks if there is something special you want, and then offers solutions based on your answers. Targeting is the clerk stalking you through the store, thrusting products in your face based on an assessment of your “profile.”

I’ve written quite a bit about the opportunity we have to reforge better, consent-based relationships with customers in which we offer real, sustaining value for the privilege of using their personal data. Here are some ideas on what we might do.

Don’t ask users for too much or unnecessary information. Only ask for what you need to deliver value back to them. We’ve gotten so used to collecting everything under the sun, “just in case” and for targeting later marketing efforts, regardless of whether it makes sense or we have a specific use for the data. For example, buying a concert ticket. Certainly we need credit card information and the billing address to verify it. But we don’t need annual income or gender or marital status to deliver a concert ticket. We ask those questions out of habit, so the data set is complete.

GDPR requires that we inform users how we will use the data, but I recommend we do a better job than a blanket “for business purposes.” Have a reason that adds value for the consumer, especially for asks that go beyond those needed for the transaction. For example, your event is planning special activities for families with children, but to staff them appropriately, you’d like to know ages of the children attending. It’s reasonable to ask for this information during registration.

Encourage loyalty and repeat visits to your content by using the data your customers do share with you to personalize the experience. This could be as simple as customizing their “ front page” into your site with content that matches their preferences to explicitly making recommendations for products and services. Pinterest and Flipboard are examples of content platforms whose business model is built on the simple concept of consumers driving personalization by sharing their preferences to create their own contextual experience. Both have had their challenges in recent years, with the hyper-focus on third-party data, programmatic and targeting, but both will now be increasingly relevant, as brands and publishers alike start thinking about contextual distribution as an effective alternative.

Engage your community. Include the customers in the content with active experiences, not just passive viewing. Be useful and entertaining. Interactive content. Reviews. Community forums. Online focus groups and surveys. Free tools and widgets that make their lives easier. Cool stuff. Real-life events too. Remember — the reason social media works is that it is social. The media is just the vehicle for the human connection we crave. With each other and with the brands we love. The more personal the consumer’s experience is with your brand, the more you build mutual trust and utility with your content (and yes, your marketing,) the more likely your customer is to share the personal data that will improve the experience. For example, a consumer might not want to share age or income with a news or lifestyle site, but have no problem sharing it with a financial site in exchange for using a college planning tool.

Speaking of social media, use it to foster connections, distribute content and promote your brand, but do not put all your eggs in a basket owned by another. Build your audience and your customer relationships on your owned properties.

There’s going to be a lot of noise and confusion around GDPR and its impact for some time to come. I’ve already heard the expected arguments that regulation stifles innovation. While there is some merit to the argument, regulation also offers an opportunity to be innovative. To find ways to solve business problems while respecting the social good — in this case personal privacy — that the law was created to protect.

Compliance with privacy laws has costs. Simply having best practices about privacy absent regulation, which some companies like Apple already do, has costs. But the opportunity for deep, sustained customer relationships is far greater. That’s where marketers should be placing their attention.

Glass half full.

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Not sure how to get started? I’d love to help you engage your customers, build loyalty and drive results for your brand with an innovative digital strategy and content ecosystem. Even better, the first hour is free. Email sgetgood@getgood.com to book your free consultation. I’ll give you some thought starters during our conversation, and we can go from there.

Email box filling up with updated privacy notices? Thank the GDPR.

May 18, 2018 by Susan Getgood

Wondering why your email box is filled to the brim with companies asking you to opt-in to their new privacy policy or renew your subscription to their newsletter? It’s all due to Europe’s General Data Privacy Regulation (GDPR) which goes into effect next Friday May 25th.

Recently, I’ve been writing a great deal about GDPR and the impact it will have on the digital marketing ecosystem. Worldwide, not just in Europe. Beyond the required compliance, I see it as an opportunity for brands to build stronger relationships with their customers (and make more money!) by creating offerings and policies that respect privacy and offer the consumer real value in exchange for use of personal data.

But none of this will happen overnight. For the most part, advertisers, publishers and ad tech companies are in a mad scramble to comply with the law by the deadline of May 25th, or at least show good faith efforts. Points for trying and all.

Here a short primer on how the GDPR deadline impacts consumers.

Overflowing email boxes

The most visible immediate impact for the consumer is all those emails with opt-ins and links to privacy policies. GDPR requires companies to obtain consent for use of the personal data of EU citizens, but for practical purposes, most companies are executing their plans worldwide. Consent is required down to the specific uses, and brands must provide mechanisms for consumers to manage or withdraw their consent. This is an oversimplification but it will do for today’s purpose.

Most privacy policies were written much too broadly to be acceptable under GDPR. Even if they specified the uses the company would make of the data, they didn’t offer a mechanism to withdraw consent. And many more issues beyond that simple one, from sites that didn’t really offer “true consent” in that “free” functionality was contingent upon the submission of private data, to collection of data that wasn’t really necessary for the business purpose at hand, but helped the collector understand more about its customers for future targeting. For example, if you are buying a ticket for an event open to the general public, does the organizer need to know your gender or income to process the transaction? No. That information is used for marketing and audience targeting. Under GDPR, the event organizer has to provide much more information about, and justification for, the personal data they are collecting and potentially sharing onward with other partners, and give you a mechanism for managing that consent.

You will probably get an email from every site and every email newsletter you ever registered with, even ones that you long ago forgot. And if they DO share or sell your data, they are looking for an opt-in to the new policy, so that can claim they have your consent. In the long run, I don’t expect that’s going to be sufficient consent for the regulators, but it is why you are being asked to “renew” your subscription. Even though it may damage their subscription numbers in the short term, it is a whole lot easier to scrub the list and move forward with consumers who’ve consented than to keep people on for whom they have no audit trail, of any kind. That’s also why multi-nationals and companies conducting international e-commerce are generally applying the same policies across the board. It makes no sense to have double overhead by having one system for the EU and another for the rest of the world. Especially since other nations may follow suit with similar privacy laws and matching IP addresses to physical locations is far from foolproof.

What exactly are you giving permission for?

From a casual reading of my own emails, companies are keeping these communications pretty simple. They outline the uses they make of your data, and provide guidance on how you can manage consent. The thing you need to watch out for is whether they share or sell your data to other parties, and how you can manage consent once they have shared your data on. Companies are required to have a mechanism to manage this, and quite frankly, my take is that many haven’t gotten very far along with this part of the complex GDPR compliance process because it requires cooperation among multiple partners in the technology chain. And that has been slow in coming, even though the deadline has been known for a long time.

Generally speaking though, in my opinion, the more specific the policy is, the better off you are, even if it seems like a PITA to read all these policies. The thing I would be most wary of is when the site/firm uses “legitimate business interests” as a general reason for sharing your personal data with a third party. That’s a handwave that won’t pass muster. Especially if they haven’t produced a consent mechanism.

You should also expect more detailed sign-up forms going forward, both when you are signing up for access to content and subscribing to newsletters.

Some advertising terms that will help you better understand this privacy debate.

First-party data — That’s the data that you share directly with the website you are visiting. It can be personal data that you share or anonymous data that the site collects as a result of your use of the site. Privacy regulations are most concerned with personal data that can be used to identify or target you, and how companies will protect it and your rights to your own data. The opportunity for brands inherent in GDPR is to build a stronger relationship with you so you have incentive to share personal data with them — to make products better, to get more relevant advertisers, and so on.

Second-party data — This is not used that frequently. It refers to when a site shares/sells first-party data about you with a second-party, who then uses that data to contact or market to you. For example, a conference shares its registration list with its sponsors, who then contact you directly with offers. The conference (the first party) is obligated to get your permission to share your data with the second party, but the data is typically used as is, not combined with other information to create super-sets of data.

Third-party data — This is where all the action is with regard to GDPR compliance. The basic issue is that the digital advertising ecosystem relies on a variety of technologies to target and deliver ads to consumers, using data aggregated from multiple sources to create new “super-sets,” which identify consumers even more discretely than the original data sources. As a vastly oversimplified example, we combine the data from a media website with data from a luxury goods company to target ads to site visitors based on their past purchases of luxury goods. The basic concept is sound; it helps advertisers deliver ads to the people most likely to be interested in the products, BUT it also introduces a privacy issue. If I am the consumer, I did not give my information to the luxury goods company to facilitate delivery of ads on a media website. I intended to buy a product. There was probably a blanket consent within the transaction to the advertising use, but it most likely doesn’t pass the GDPR sniff test.

Right now, a lot of very smart people in the ad tech world are working to figure out how to manage consent for third party data. It’s tough, because it isn’t simply about the initial consent; the consumer has the right to withdraw that consent at any time, and then all the partners in the chain have to remove the data. In my opinion, it is worth solving but it will increase advertising rates for this premium targeting. As it should. There will be a whole lot of infrastructure to manage the consent as well as a burden on the first-party who collects the data initially to market the downstream use to its customers.

Consumers won’t “see” the impact of GDPR on advertising delivery. Behind the curtain, though there is a lot going on. Ad tech innovation to manage consent but also, I believe a return to more reliance on first-party data and contextual targeting, showing ads based on the surrounding content, not presumed consumer behaviors.

I’ll be participating in a Conference Board webcast next Wednesday May 23rd at 11am ET to talk about GDPR and its impact on the digital economy. It’s free, so if you’re inclined to know more, please join us.

Is Facebook vulnerable?

April 21, 2018 by Susan Getgood

For the first time since its very early years, Facebook is vulnerable. The Cambridge Analytica mess highlighted an important but oft-overlooked fact about Facebook’s business model. Facebook’s business is data, monetized through advertising, not community or social networking. Social networking and community are merely the means by which it gathers and aggregates data and delivers advertising.

This was easy enough to forget in the feature wars and fight for online social dominance, but the public now is generally far more aware than ever that if you aren’t paying, you are the product. It’s also now clear that Facebook’s business models skirt very close to violating consumer privacy, if not outright violations. When working as designed, by the way, not through some breach or hack into the system.

While Facebook has announced changes in the face of governmental scrutiny in the US and Europe following the Cambridge Analytica revelations, the response still seems pretty superficial. Lipservice, not customer service.

As a result, while I wouldn’t sign a death certificate for the platform any time soon, consumer trust in Facebook has seriously eroded, and it isn’t doing such a terrific job at getting it back. At least so far. I’m not sure they can. So many of the problems are built into the very infrastructure. This leaves an opening for competitors.

Others agree.

When asked by NY Mag whether a new platform could get a seat at the table, Dan McComas, former SVP of product at Reddit, said:

I think it’s absolutely possible, but it takes a couple of major factors. I think a start-up needs to think about the monetization and how it can work with the users instead of against the users. I think they need to figure out the right funding mechanisms and incentive structures that also work toward the users. I think they need to have the right product team in place to focus on users.”

Angel investor and entrepreneur Jason Calcanis has put some skin in the game, announcing via his newsletter this weekend a competition called the LAUNCH Open Book Challenge to find Facebook’s replacement. Seven winners will receive $100K investments from the LAUNCH Incubator. In his newsletter, he stated he is looking to fund a social network that is good for society, that will:

– Respect and protect consumer’s privacy
– Respect and protect our democracy from bad actors
– Respect and protect the truth, by stopping the spread of misinformation
– Not try and manipulate people by making them addicted to the service
– Protect freedom of speech, while curbing abuse (not easy!)”

If you’d like to follow along, or think you might like to enter, details are at openbookchallenge.com. The competition is open to existing projects as well as new ideas/paradigms, but ideas alone are not enough. The main criteria for selecting the semifinalists and the eventual winners will be ability to execute.

Reddit, Snapchat and perennial second place finisher Twitter are also in the hunt, but they may have too much baggage (and their own privacy violations) to prevail.

Something will succeed Facebook. It’s not a matter of IF, only of WHEN. Right now, WHEN feels a whole lot closer than it has before.