Alex Steer

793 words | ~4 min

I don't find the Guardian's argument that Amazon aren't destroying publishing, they're reshaping it wholly convincing. Or, rather, I think they are reshaping the industry, but not for the reasons given.

They argue that there's a power-shift happening from publishing houses to retailing gatekeepers:

So Amazon, Google and Apple are gatekeepers. They have realised that the key to profitability is not investing in risky startups, but owning the marketplace where those startups stand and (mostly) fall. So for the rest of us, outside the walls, what's the point of taking sides in a battle between "legacy" gatekeepers and new ones?

Well, yes and no. But as the article points out, there's scarcely a battle at all - except the battle that's always raged between producers and retailers. Amazon, like Apple, have switched from a 'wholesale' model of ebook retailing (where they have full control over pricing) to an 'agency' model where prices are set by the publishers. (This is explained better in this Time article.) So this scarcely counts as a disruption at all.

For me, the real disruption is the shift of the delivery technology for books, from the hands of publishers to the hands of retailers. The production of books has always lain with publishers - but now retailers (Amazon, Apple, Barnes & Noble) have control of the major ebook devices. Imagine that we only had paper books, and that suddenly it was bookshops doing the printing, not publishers, and you see what a shift that is.

This is disruptive because retailers, unlike publishers, benefit hugely from long-tail effects. As long as the production cost per unit remains low (and with ebooks, even more than paper, it does), it's in the interests of retailers to make it easy for people to produce and sell as many ebooks as possible. Even the really bad ones that only sell a handful of copies will contribute to the profit margin, because there are so many of them. By contrast, it's in a publisher's interest not to produce thousands of third-rate books, because publishers have high non-production overheads (editing, typesetting, publicity, etc.).

But why is this? It's to do with branding. Retailers are what you might call long-tail brands. As long as their catalogues are easy to search, retailers are thanked for carrying a lot of different products (paradox-of-choice arguments aside, for now). Publishers are short-tail brands: guarantors of quality who are expected not to churn out lots and lots of dross, but only to bring the best products to market. (Self-publishing firms are the exception to this rule.)

The reason retailers have invested so heavily in ebook devices is because it makes sense for them to give the many publishers of bad books a cheap and easy way to circumvent the publishing process. We sometimes call this 'democratisation', though that seems a slightly optimistic term for opening up the long-tail market and monetizing it. ('Whatever you produce, we'll try to sell' is the motto of the retailers.)

But retailers also profit hugely from the short tail - the few very good, very popular books - and these are controlled by the publishers. (This makes sense. If you write good, popular books, you want them to be well edited, well promoted, and distinguishable from all the dross on the market.) So having opened up the market to the long tail, retailers now have to make friends with the gatekeepers of the short tail too.

So it's not true that the old laws of publishing have been changed forever (they haven't), but nor is it true that this is just 'same old, same old'. Producers and retailers will always fight for share. They will have to come to a settlement: otherwise we'll see publishers being excluded from popular new platforms, or new platforms becoming less popular because they don't stock good books. This is not new - it happens everywhere from grocery stores to app stores.

What's new is the  shift in production control from publishers (paper) to retailers (devices). Publishers have let this happen; now they are clawing back some control over pricing, but only some. Retailers have annoyed publishers, and now some will suffer from being closed out of the short tail.

For me, the real disruption opportunity isn't on either side of this cat-fight, or in making unlikely claims about falling book prices. It's in helping people decide what they might enjoy reading, in a much-enlarged market where the current model - restricted supply through publishing houses, recommendations made through marketing and press reviews - is suddenly not wholly adequate.

1164 words | ~6 min

Last week we launched BrandEdge, Infosys's digital marketing platform developed in partnership with WPP. With it, we introduced the industry to Fabric, my company, which is handling the WPP side of things. It's been a busy, exciting few days, and now lots more people know what marketing technology is, and what it is that I do for a living.

So this seems like a good time to talk about what's happening in digital marketing at the moment - specifically, the land-rush around 'big data' (high-volume data analysis used for targeting, behavioural analytics and real-time decision-making), and the appearance of digital marketing platforms - web-based management system designed to help large organisations run digital campaigns more simply and effectively.

Not surprisingly, there's been a big push by the large IT and digital media companies, who are used to helping businesses use technology more efficiently, and have spotted the opportunity in marketing. IBM has a 'suite' of digital marketing tools; so do Accenture and Adobe; and Google and Facebook have been strengthening their offers to advertisers for several years. Digital marketing platforms tend to consist of some combination of the following:

• A data management platform that brings all your data together from different websites, devices, channels, markets, search, social media monitoring, etc.
• Analytics tools that let you manipulate the data to find insights and opportunities
• Workflow tools that let you share data, set alerts, etc.
• Asset management tools that let you store and share creative so you're not re-making what's already been made
• Delivery tools that help you create websites, campaigns, apps, etc.
• Campaign and media management tools that let you launch and monitor online campaigns

In theory this is all good news for marketers who want to be able to act faster and measure better. But this is a classic market for lemons. Since the buyers often know less than the sellers about the technology and analytics they're buying, how do they know which providers are good and which ones are charlatans?

So in the interests of making marketing technology a bit less of a black-box mystery for marketing directors, here are my three top questions you should ask anyone who's trying to sell you their platform.

1. Who owns the data?

This is vital. Most digital analytics involves dropping a piece of code (known as a tag) onto your sites, social channels, digital media, etc. But a lot of the time, that tag is a third-party tag: it's owned and operated by the provider, and the data it gathers is collected by the provider and sold back to you. If you've ever used Google Analytics or Facebook Insights, you're accessing third-party data. (Google and Facebook gather the data, then give it back to you.) The problem is that you never truly control your data. There are often limits to how you can download it, cut it, and join it up to other data. So you end up with more data, but often unable to bring it all together to tailor exactly the view of behaviour that you need.  So you've still got lots of different blocks of data (media, social, web, etc.) that don't speak the same language and can't be used together. Along with all that, there's a lot of pressure from lawmakers in Europe and the US to crack down on third-party data gathering.

What to ask for: a first-party data management platform and tagging service - a secure data store owned and operated on your behalf. This is very different from just buying data from a third party.

2. Where is data stored?

Having full access to your data isn't the only reason to want a first-party data management platform. You also need confidence that your data isn't going places it shouldn't. If you're a consumer business, you have a duty of care over the data you gather about your online customers. Do you know where it's going? Just as importantly, are you sure that your data providers aren't aggregating and selling your data to your competitors? This happens a lot.

What to ask for: your data management platform to be provided on a software-as-a-service basis, kept separate from data from your provider's other clients. And a contractual guarantee that data won't be aggregated and re-sold.

3. Who are you hiring?

This is my favourite, and the one most likely to make a lot of providers sweat nervously. Most tech companies hire like tech companies: they've got database experts, product developers, maths guys, and salespeople. This is great, of course, but start grilling some of these companies on marketing, and they come up short.

For my money, I'd want to know that my digital marketing firm gets marketing. And I mean really gets it. I don't just want some software consultants who have read about the Four Ps. I want people who can work with me and my agencies to understand business problems, formulate marketing and communications strategy and get things done.

What to ask for: treat your marketing technology company like they're an agency. Okay, don't put them through a hoop-jumping pitch process for the sake of it. (The good ones definitely shouldn't want to steal work from your creative agencies.) But look for a place that hires people with a solid marketing and media background - including strategists, designers and creatives. These people should be building products that marketers want to use, that make life easier; and they should be helping clients use data to understand their customers better, and act on opportunities faster.

Why this matters right now

Digital marketing companies are promising the moon at the moment. A lot of them can't deliver, because they don't get marketing. That's going to have some terrible consequences over the next few years. We'll see businesses who have invested in locked-down third-party data that they can't do much with; clunky user-unfriendly data dashboards that nobody ever bothers logging into; and insecure systems that lead to a privacy backlash from their customers. It's going to be messy. So ask for lots of control over your data. And look for smart people that you actually want to work with, not just ones who blind you with science or talk a good game.

So in the end, the best question to ask is: Can I work with this?

664 words | ~3 min

This is an interesting one.

[Roberts'] knowledge of the posts only becomes relevant if the court finds the activity of liking a Facebook page to be constitutionally protected. It is the court’s conclusion that merely "liking" a Facebook page is insufficient speech to merit constitutional protection. In cases where courts have found that constitutional speech protections extended to Facebook posts, actual statements existed within the record.

I don't agree that Facebook 'likes' aren't a form of 'speech' (at least where speech is defined as an expressive act). Nor does Ars Technica. But the point about 'insufficient speech' is interesting, because Facebook 'likes' suffer from various problems of expression.

Lots of users know the quandary you get into if you want to respond to a piece of ambiguous news. For example, if I post, 'Got burgled, but thank God my insurance covered it', or 'Turns out I need a new liver, thankfully the waiting list is short', is it appropriate to like that? There's a problem of 'insufficient speech' there. Likes on page posts appear to be binary - you like, or you don't.

In fact, likes have high pragmatic variance. As the giver or receiver of a like, you're as dependent on intepretation as you are on fact. If I tell a hilarious story and you like it, I infer that you found it funny. If I tell you about my struggles against adversity and you like it, I infer that it's the equivalent of a pat on the back, a little note of support. If I post a photograph of my dinner and you like it, I infer that you think it looks delicious. But if I post a photograph of a sunset or a close-up of a beetle, and you like it, I infer that you're giving props to my photography skills. The same is true of not liking. If you don't like my post, I normally don't infer that you dislike it - I'm likelier to assume that you just haven't seen it, though either is possible. So likes are binary in form but not in usage.

Likes of pages are a slightly different story. The range of options is more restricted. When you like a single post, you are making a speech-act (like) in response to a speech-act (post). When you like a page you are making a speech-act in response to a whole class of speech-acts: everything the owner of that page posts now and in future. In that sense it's a speech-act that's also a bet. You're betting that the future posts from that page will be in some way of interest.

But what kind of interest? I 'like' several Facebook pages - but not all of those likes are equal endorsements. There are pages for organisations I support; pages for clients I work for; pages I actually administer; and of course pages of clients' competitors. Though Facebook says I like these, from my point of view I am merely following them. I use liking for competitive intelligence.

So it's no surprise to me that some staffers 'liked' their boss's rival's Facebook page. I'm not saying this is what happened here - but it should be considered. The problem is not that likes constitute 'insufficient speech' to warrant protection. On that count, I entirely disagree. The problem is that likes are ambiguous speech. They provide an insufficient basis for interpretation.

In the old joke about the perils of binary speech, there's no good 'yes/no' answer to the question, 'Do you still beat your wife?' On Facebook, you either like something, or you don't. Until they introduce 'laugh', 'support' and 'stalk' buttons, we can't make out-of-context judgements about the meaning of a like. And even if we can, they are still speech-acts within the network, and merit protection.

371 words | ~2 min

On the subject of wallpaper advertising, Doug Nichol's short film Sunshine, about the experience of shooting two McDonald's adverts in China, makes for fairly bleak viewing. It's an interesting take on the tension between creativity and commerce.

I was struck by this line:

A movie can't just be a bunch of images strung together. But in advertising you can kind of get away with that.

And also by the sense you get from the film's subject, John Benet, that there's something rather accidental, or incidental, about advertising - that it's a kind of strange offshoot of consumer capitalism, disguising itself as a confused form of art. Benet seems at once a lot more cynical and a lot less realistic than a lot of people in the profession, which is necessary to reinforce the strangeness of what television advertising is, especially in markets where it's fairly new.

All that said, there's a risk of making advertising sound either too vacuous or too sinister. I think advertising's at its best when it's at its most self-aware, and when it treats its audiences as people who are smart enough to know they're being advertised to. The result tends to be better, less insulting work, that delivers better results and leaves the people making it happier than if we're all trying to pretend it's art. Our viewers are unlikely to be convinced.

314 words | ~2 min

M&S's new brand ad is out. Here it is.

Much as I quite like Gary Barlow's rendition of Here Comes The Sun (take aim, hipsters), I have a problem with this ad. And with ads like it, in fact - nothing particular against M&S as a brand, I just saw it and the thought occurred to me.

The ad is wallpaper. Nothing really happens in it that resembles a narrative; there's no joke that builds to a punchline; no puzzle that needs solving; no challenge to your thinking; nothing, really, except a bunch of people milling around in the sunshine, having a picnic, looking happy. I suppose in theory that's a plot, but it's a bit of a thin one.

If the thought here is that it's enough to create something evocative and beautiful that associates the brand with the idea of summer fun... well, I don't think it is enough. I ended up watching it, wondering what I was supposed to do with it. As a viewer, I've got no right of reply, and no reason to talk. All I can do is watch it, and go, 'Oh.'

By contrast, here are three ads that look and feel very similar, but that in some small way engage the brain.

With a slight puzzle (Why are they all hunting for chairs?) - KFC, 'Spare Chairs', 2011:

With some insight into how British people actually behave during summer - Bulmer's, Great British Summer (2008):

And, simply, with a plot - Sainsbury's, 'Bare Necessities', 2012:

1896 words | ~9 min

It's a hundred years since the Titanic sank. With the centenary, a lot of the questions about why the ship went down are being raised again. For me, the Titanic case is an important reminder about the relationship between risk and uncertainty, and how we react to extreme events.

Fates and flaws

Thomas Hardy, in his poem The Convergence of the Twain, saw the loss of the Titanic rather typically as an act of God or Fate against human vanity:

The Immanent Will that stirs and urges everything
Prepared a sinister mate
For her — so gaily great —
A Shape of Ice, for the time far and dissociate.

And as the smart ship grew
In stature, grace, and hue,<
In shadowy silent distance grew the Iceberg too.

Alien they seemed to be;
No mortal eye could see
The intimate welding of their later history,

Or sign that they were bent
By paths coincident
On being anon twin halves of one august event.

There is a touch of this, too, in the Spectator's reaction, from the 20th April 1912, which  it has re-published on its blog this week.

The destruction of the largest ship afloat on her maiden voyage, of a ship reputed to be unsinkable, of a ship followed everywhere with admiring thoughts as the last word in ingenuity, in luxury, and in the impressive accomplishments of science, brings to every thoughtful person a deep sense of powerlessness, of smallness, and humility. Even in these moments of crushing personal sorrow one is conscious — perhaps only to deepen the sorrow — of the overwhelming reverses of human confidence.

Happily, though, the article changes course fast, and shows an early public interest in the forensics of the disaster:

Although we do not know as we write these lines the details of the wreck, it is certain that the 'Titanic' struck an iceberg, and that there were not enough boats to take off more than about one in every three of the passengers. All the lifeboats carried by the 'Titanic' were picked up by the ‘Carpathia,' and the passengers in them — chiefly women and children — were saved. Although there was a slight swell there was no wind, and one cannot possibly escape from the conclusion that if there had been enough boats all the passengers might have been saved. Most people have learned with astonishment that it is possible for a ship like the ‘Titanic' to pass the Board of Trade tests with an insufficient number of boats.

I'd like to stick with the Spectator piece because it's so unusual. Looking back at archive material from the time, it's clear that in the days and weeks after the sinking the analysis of causes became increasingly sentimental. Yes, valuable criticisms like the one above, or the fault with the watertight bulkheads, were identified and raised. But we have also ended up with a long tradition of thought about the Titanic which tries to identify 'human confidence' or other moral flaws as the real reason the ship went down. From cowardly owners, to unwise claims about unsinkability, to a rash captain's decision to sail too close to the ice.

Here's how the Baltimore Morning Sun put the matter, just three days after the event:

Image from the Library of Virginia, used with thanks.

The Titanic sinking was seen as a tragedy, and thinking about tragic events in the early decades of the 20th century centred largely on the idea of the 'tragic flaw' in human character that inevitably leads to disaster. For a scholarly exposition of this, see for example Oxford Professor of Poetry A.C. Bradley's Shakespearean Tragedy, published in 1904. The Titanic seemed to have no shortage of Bradleian tragic figures. That same mode of thinking can be seen in James Cameron's 1997 film Titanic, where you can pretty much pick which combination of character flaws (by Captain Smith, Mr Ismay, Mr Andrews, etc.) led to the disaster.

What's important about this line of analysis is the uniqueness. We try to see what was uniquely wrong with the Titanic that led to its demise - so of course it's easy to look at the unique combination of people who were on it, or the unique marketing claims that were made about the unsinkability of the ship. With the centenary we see a lot of this 'unique tragic flaw' theory turning up again in new clothes - such as Francis Wilson's Wall Street Journal piece, 'How bad management helped sink the Titanic', which is really just a Bradleian tragic analysis dressed up in MBA-speak.

Burying the survivors

Here's the problem with the 'unique tragic flaw' way of looking at extreme events. You ignore all the ships that didn't sink in 1912.

With a grim irony, the cognitive error that leads us to focus on the Titanic is called 'survivorship bias'. I don't have figures to hand, but imagine that in 1911-12 a hundred large cruise ships set off across the Atlantic, all similarly built and provisioned. Only one of them hits an  iceberg, and sinks, and causes the deaths 1,500 people.

We tend to look at the one that sank and ask, 'What was different?' That's a natural question - but it leads us to attribute all the causes of the disaster to things that were different about Titanic. And that leads us to assume, without questioning the evidence, that all the causes of the sinking were aberrations - things about Titanic, or its crew, that were unique. Specifically, we end up with the idea that the Titanic took unique risks, and paid the price.

Gary Cooper puts this superbly in an article on the ship's captain, Edward Smith, on the BBC News site:

Though Smith was undoubtedly a forceful sailor who pushed his ships hard in conditions that may have daunted other captains, it is a fact of history that providing the weather was calm and clear - as it was that night - it was not unusual for any captain to sail ships into ice regions at speed and several captains from other shipping companies testified to this at the disaster inquiries. [my emphasis]

Our survivorship bias tells us that Titanic must have done something abnormal - from offending the fates to sailing too fast, too close to the ice. In other words, the problem was one of risk.

In fact, it's just as likely that the problem was not risk. To use Frank Knight's model, risk exists within a model where the potential probability of outcomes is known. If you and I flip a coin to decide who wins it, you know there is a 50% risk of loss. In scenarios where you can't calculate all the factors, we're not talking about risk - we're talking about uncertainty. In a highly uncertain situation, you can do all the things you normally do, and have a completely unpredictable outcome.

It seems the builders and owners and operators of the Titanic did the same as the builders, owners and operators of other ships. It's just that they happened to hit an iceberg. Of course, they had watertight bulkheads and lifeboats designed to cope with certain levels of damage. In other words, they treated icebergs and other events as calculable risks. Like the risk-management models that failed during the financial crisis, they assumed that the chances of a catastrophic event were low enough not to be worth insuring against. And in most cases, they were right - but in the Titanic's case, they were unprepared.

Futurists tell you that trying to calculate the risk from extreme events is pointless. Extreme events operate in the domain of uncertainty, and there's just not enough data (because they're so rare) to model the probability accurately. All you can do, in the end, is try to be resilient against the impact of those extreme events that you can imagine. And if you're a shipping company whose goal is to travel at high speed through the icy waters of the North Atlantic, you can definitely imagine a collision with an Iceberg. By getting hung up on likelihood, the White Star Line seem to have been blinded to possibility - the idea that a big enough Iceberg could destroy a whole ship, not just disable part of it. By this reckoning, the loss of the Titanic wasn't anything unique to do with the Titanic - it was a failure of resilience throughout the entire fleet, that just happened to make itself known one April night.

I'm going to end with a long quote from the 1912 Spectator piece. More than anything I've read on the subject from the last hundred years, this captures the difference between risk and uncertainty, the need for resilience, but also the inevitability of surprise.

The truth is, as we said the other day in writing about the Oceans, that every passenger ship puts to sea with the assumption that disaster will not happen. Far too much is taken for granted. The whole subject ought now to be threshed out and the proper provision of boats or rafts insisted on for ships of whatsoever size they may be. Even if seamen declare it impossible to manage more than an inadequate number of life boats, we cannot see why other means of life saving should not be perfected, such, for example, as having the top deck entirely detachable, so that in the last resort it could be floated off in sections, each of which would be a duly equipped raft. As for increasing the buoyancy of the ship herself we do not know whether experiments which are being tried with submarines would be possible with ships of great size. Perhaps not; the inflation of special floats in an emergency would probably not be possible on a large scale. But, however that may be, it is necessary seriously to meet the tragically established fact that all the bulkheads of the largest ship in the world may be so damaged, strained, or knocked away that she will sink just like a cheaply built tramp steamer.

973 words | ~5 min

In the first of these posts we covered mounting concern about behavioural tracking and targeting by digital marketers, and traced some of the history of the 'data panic' that people are experiencing now - the sense that their data is at large, at risk, and for sale. Now it's time to take the temperature of data panic today, see where it might lead, and what marketers need to do.

Short-term vs long-term risks

As I said in the previous post, the current state of data panic is an odd mix of the well-informed and the ill-informed. Let's try to tease out those two strands in order to see what might change, and what might stick, in the current mindset around tracking and targeting. I should say up-front, this requires a bit of honesty.

After all, a lot of the things people are worried about, well... they are a bit true, aren't they? The technology, media and advertising industries have carried on quite happily over the past few years collecting data about their customers' online behaviours, without much scrutiny, and without much sign of wanting to take the conversation public. And that's a problem, because when it does come to light and people get concerned about it, nothing says 'you got me' like an awkward silence.

It doesn't help that the technology and the mathematics involved in targeting are so opaque and often rather hard to explain. As soon as you get into a discussion about cookies or sessions or clustering or segmentation or regression analysis, you're in a sort of voodoo country of the mind that calls up the ghosts of high-speed algorithmic trading and  Long-Term Capital Management and whatever the hell they were doing at Enron. Terrifying, confusing, the-machines-are-taking-over stuff.

Obviously there's a lot of misreporting here, as well as more well-founded concern. I think it's likely that, if privacy stays on the public agenda, it will lose some of its ability to shock.  Specifically, I think it will split out again into two separate discussions: about the merits of tracking and targeting, and about security of personal data. The second of these will remain high-stakes: when data has the power to expose or embarrass us, it matters. Tracking and targeting will probably become more transactional, though, as consumers either accept it as it is, in exchange for increased relevance and free services, or seek to gear the system more in their favour, for example by warehousing their behavioural data and selling it to advertisers. (Though I tend to buy Doc Searls's argument, that the benefits of giving data away are greater than the sale value.) Finally, while I think concerns about 'filter bubble' effects are legitimate, I don't think they're mainstream enough yet to drive the agenda.

Even if the privacy discussion matures, though, it hasn't yet. Let's not kid ourselves: there is public concern about targeting, and there is legislative pressure in the markets where the use of targeting is most advanced.

Why you can't just ride this one out

It's easy for industry insiders to succumb to a kind of disaster myopia around changes to privacy legislation. We tend to see data collection as not only so valuable, but so undeniably useful and beneficial, that we forget what a shock it is to users who barely know what a cookie is, let alone the extent to which their behaviours are being recorded and trafficked between servers for a profit. It's also easy for us to forget that the instincts of policymakers are likely to resemble those of the voting public, rather than those of digital marketers.

So let's assume that, a few months down the line, the US and EU require users to opt in before third-party cookies can be set on their machines. At the moment, when asked 'Do you mind if marketers track your behaviour?', the answer's hardly likely to be yes. If marketers want to avoid losing all their tracking data overnight, there are a couple of things they should be doing now.

The first is to get their data back under their own control. A lot of behavioural tracking is done on behalf of marketers by third parties who install their tracking technology (typically script tags) on marketers' websites. So data collected on domain1.com (marketer's website) is trafficked over to servers owned by domain2.com (tracking provider), and possibly beyond. That makes it hard for marketers to keep track of where they are sending their customers' data, and leaves them open to charges of negligence, not to mention security risks. Since third-party cookies are likely to be hit hardest by new legislation, marketers need to take more responsibility for data management.

The second priority is more basic. Marketers need to start being honest about data - and to take privacy seriously. The case for data collection has to be made by marketers, not just technologists, and it has to be put - genuinely - in terms of benefit to users, not just value to businesses and advertisers. We need to show that a better understanding of people's real behaviours isn't just used to serve up ads like cards from a deck - but to design better products and services, and give your users more relevant information.

We haven't been good at this, and we need to get good at it, fast. Otherwise we'll quickly find ourselves left behind.

1705 words | ~9 min

The stakes have been raised in the online privacy debate again. The White House recently announced plans for a data privacy bill of rights, which together with the EU's data protection reforms mean that it will be increasingly difficult to collect behavioural data from internet users without their consent. It's increasingly likely that the law will require users to opt in before their online behaviours can be tracked, stored and used for targeting.

When issues start to reach the attention of high-level policymakers, it's usually a sign that their time has come. Another sign of the times is the sudden appearance of pieces on online behavioural targeting in the business press. To their credit, the Wall Street Journal have been running with this for the last couple of years with their excellent What They Know site. But they're now being joined by a wave of other voices, including Jerry Michalski's in his piece for Forbes from a few days back, Big Data and the Stalker Economy:

Big data is strategic now. Facebook is valued at around $100 billion because it has collected a treasure trove of data that may unlock the secrets of selling more things to more people. Most other companies would like to have whatever they’re having. Google offers free email, word processing, mapping, analytics, video, videoconferencing and much more because they’re selling us to advertisers. The byword these days is, “if you’re not paying for the service, you’re the product.”

Not all commentators are as even-handed as Michalski. Expect to see a lot more pieces over the next few months like this one from Molly Wood at CNET, which takes data mining far more personally, and conjures up a cast of 'shadowy data brokers slurping up every last byte about you'.

As Victor Hugo put it (only in French), nothing is more powerful than an idea whose time has come.

It's time for those of us who work in the marketing technology industry to get serious about data, privacy and permissions.

Data panic: a history

Let's get this out in the open. I'm one of those shadowy data brokers (apparently). I work in digital marketing, in a part of the industry that relies heavily on using information about people's online behaviour to help organisations make decisions and respond to their customers faster, more efficiently, and (I hope) more effectively too.

So what does that mean? It means I absolutely have a stake in this game. So if you're looking for an entirely even-handed commentary you might not come to me first. But it also means I understand a lot of the uses of this kind of information, I know what gets collected and what doesn't, and I know some of the range of attitudes to people's data that exist within the industry. The problem with a lot of the commentary we're seeing it's that it's classic 'first draft of history' stuff - timely, urgent, powerful, but not always well informed. Of course, you don't just want to rely on experts when evaluating the social impact of a new technology. Experts, by definition, are always implicated, often very close to their subject, and can find it hard to step back. But when a debate's important (and I think this one is), it's important to scale up the expertise of non-specialists as quickly as possible, so that the debate is informed as well as lively.

For what it's worth, I'm more of a scaled-up non-specialist than an expert. As readers of this blog will know, my background's not in data science and analytics but in advertising, strategic planning and futures with a technology angle. My current interests are in helping clients make the best use of all this information, rather than in the complexities of statistics or modelling.

I'm close enough to my subject, though, to know that we're going through a period of what I call 'data panic' at the moment. If you know where to look, you can chart its mainstream evolution back over a period of about five or six years. Here are what I think are some of its important stages so far in the US and Europe (where it's most prevalent):

1. Several high profile public-sector data leaks (including this one in 2007, and endless stories about civil servants leaving laptops on trains) provide easy headlines in the classic 'incompetent public management' mould we know and love. They also start to highlight the scale of data collection by the state, and the lack of training and safeguards associated. A few similar leaks in the private sector hit headlines, including the huge leak of AOL search data in 2006.
2. Around 2009/10, the scale of social network use got impressive enough that social phenomena became observable. One of these was the possibility of embarrassment (or indeed unemployment) arising from your drunken photos turning up in front of your parents/loved ones/prospective employers.
3. The public-sector data leaks (point 1) lead to growing pressure against the expansion of public-sector data collection, and concern about proposals to join together existing databases held by different public bodies. The scrapping of the UK's ContactPoint database of children's personal information in 2010 is a case in point. At this stage, there is still little scrutiny of, or interest in, data collection by the private sector.
4. Not until about  late 2010/early 2011 does private-sector data become a hot topic. It starts, in the UK at least, with the kinds of loyalty card data that major retailers keep on their customers. Brands like Tesco become early targets for scrutiny.
5. At around the same time, social networks (especially Facebook) are really hitting their stride and coverage is starting to focus on the downside of their enormous popularity. Much of the early conversation is around the idea of 'context collisions' - as coined by BT's Bruce Schneier, mentioned in point 2 above - and the idea that parts of your life that were previously separate are forced together online. (This insight drove the development of Google Plus's 'Circles'.) But the scale of the issue starts to get attention too. That means journalists and analysts start looking not just at individual scare stories, but at the business models of social networks which depend heavily on collecting data, and often seem to make their privacy settings complex, hidden, and very open by default.
6. We come full circle with some high-profile data leaks and hacks - but this time with the focus on the private sector. Headline events like the Playstation Network hack and the Epsilon email marketing database reinforce the idea that personal data is both widespread and fragile.
7. Last but not least, as 2011 drew to a close, came a renewed focus on the unnoticed scale of online behavioural tracking. The WSJ, as noted, had run with this one for a while, but stories like the iPhone location file and Android keylogging gave it further momentum.

There are two strands to the story above. The first is surprising scale and the second is surprising exposure. As the two storylines have progressed over the last few years, the public has been left with the sense that more of their personal data is out there than they realised, and that it's in the hands of people who can't necessarily be trusted with it.

Now, as we move into 2012, let's throw another element into the mix: advertising. Let's face it, lots of us find the idea of advertising (as distinct from individual adverts) either boring, or patronising, or disturbing, or all three. Few of us like to think our attitudes - or behaviours - are influenced by the ads we see, and we don't want to volunteer to see more of the humdrum hard-sell that the A-word conjures up in our minds.

So there's a perception that we now live in a world in which the people who make ads are secretly tracking our every move, piling up our private data and selling it to each other... so they can show us more ads. This perception gets confirmed by those stories (which are now primed to hit headlines and be shared in a climate of real concern) in which the scale of data, the risk of exposure and the annoyingness of advertising come together in a perfect storm - like the recent one in which Target identified that a young woman was pregnant from her purchasing behaviour, before her father knew.

It feels intrusive and dangerous and underhand and wrong. And that's the context in which legislators are under pressure to make changes.

The next post in this series will deal with the short- and long-term risks of the current privacy environment, some likely developments in legislation and in public perceptions of data, and the need for some realism and honesty from marketers.

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How many digital agency pitches have you seen recently that started with some Big Scary Trends? Trends like the adoption rate of smartphones, or QR codes, or augmented reality, or geolocation, or microblogging, or the latest social network. Trends about media fragmentation or time spent online, telling you that your audience is falling away into a maze of channels, and paying less and less attention to messages from brands. Trends that would make any marketer nervous.

The Big Scary Trend is a staple of modern digital agency pitching. They’re designed to leave you with the impression that the marketing environment is increasingly out of your control, to leave you with that dizzying sensation that convinces you that your existing agency relationships (with ‘traditional’ agencies) are completely unequipped to deal with the baffling, scary, complicated and breakneck world of digital. So you’d better sign that contract.

And once you’ve signed, what’s the answer? More and more, the answer that comes back from digital agencies is ‘content marketing’. All businesses, however they generate their profits, must spend their marketing budgets producing ever greater quantities of content and publishing it to an ever-growing range of digital channels. It’s no longer enough for a soap-powder company to engage consumers with a product truth and an emotional connection. Now, it seems every business must also develop a large-scale publishing sideline and run it out of the marketing department, in the mere hope of grabbing some tiny sliver of a consumer’s attention for long enough to create an impression that might, one day, lead to them buying some soap powder.

But hang on. Is this really the inevitable future of marketing, in which the value-to-effort ratio falls through the floor in the face of inattentive, hostile and distant customers? Or is all this Big Scary Trends stuff, in fact, just bad client service? Shouldn’t agencies, with access to an increasingly powerful range of analytical tools, be first of all advising their clients on how to get those ratios back under control – in other words, how to get value for money?

The content marketing explosion

At risk of sounding like one of those pitches, this is what happens if you graph Google searches for ‘content marketing’ over the last few years.

Content marketing is itself a Big Scary Trend. Searches for it have rocketed in the past year and especially since the start of 2012, a sure sign of a phenomenon hitting the marketing mainstream. Brands now have Chief Content Officers and content strategies, and 61% of marketers plan to spend more on content marketing over the next year (according to the Content Marketing Institute).

It’s true that online content can deliver value for brands and businesses, and drive efficient reach in social channels where advertising-type messaging might not gain traction. But it’s also hugely time-consuming and expensive – and an increasingly crowded field. Businesses can burn through huge amounts of marketing budget creating branded content they hope will stand out, while all their competitors are doing the same, and flooding the web with content that (let’s be honest) will rarely compare favourably to the output of publishers or TV companies. When we’re all producing content, the returns on your content will diminish fast.

The right content, not more content

New media channels do pose new challenges for advertising and marketing. Branded messages now compete for attention not just with other ads but with TV shows, newspaper articles, and home videos of cats playing the keyboard – with all the riches of the web. In an open field, no brand stands a chance. No wonder the ‘make all the content you can’ approach can feel like the answer.

I'm lucky enough to work somewhere (Fabric Worldwide) that believes the opposite. Brands should create only as much digital content as they absolutely have to, to reach the right consumers with the right stimuli in the right channels at the right time. That means that every digital marketing strategy should start, not with a Big Scary Trend or a shiny new channel, but with a clear business objective, a robust and consistent view of target audiences’ needs and behaviours, and client/agency relationships that are strong and honest enough to ensure you’re all working towards a common goal of delivering efficient marketing-driven growth.

Looked at this way, content marketing isn’t a terrifying new world of increased effort and diminishing returns. It’s simply marketing: in new forms and in new channels, but with the same clarity of purpose and rigour of measurement. As for the task of choosing agency partners, marketers should still be looking for the great client service, strategic counsel and creative thinking that they can rely on in the long run. These skills should be joined with the technology and data expertise needed to find customer insights, deliver campaigns and measure effectiveness consistently across the growing digital landscape.

The future of digital marketing isn’t about churning out more and more work and living in fear of Big Scary Trends. It’s about reliable partnerships with great marketing technologists who can make the complex simple, and help you act on opportunities faster.

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The third part of Kantar's series of whitepapers on Putting Social Media in Context has been published. It opens with my piece on the future of social networks, based on the work I did at The Futures Company last year.

My piece argues that businesses need to take a more structured approach to understanding how people want to interact online, because this - rather than technology change - will mainly decide whether different social networking models succeed and fail. There are implications for marketing strategy, media investment, and product and service design.

Speaking of the design, the data visualisation work in these reports is lovely.