April 23, 2018

Balancing Privacy And Commerce

I was having lunch with a friend from the ad business last week. After a glass of wine (or six) she laid into me:
"You're always going on and on about data and tracking, but you never seem to have the answer. All you talk about is what the problems are. If you're so f***ing smart how would you fix things and how would you explain it to people in terms they can understand?”
While I freely admit that whining is a lot more fun than actually doing something, I decided to take a crack at the problem. I'm going to lay out what I hope is a simple, practical but far-reaching solution for data, tracking, and privacy issues.

First, a few principles that this solution is based on:
  • Online publishers, media owners, and service providers have a right to make money from their efforts by selling advertising. If a user will not accept advertising or pay a reasonable fee, he/she should not expect to be able to access the content or service.
  • However, this does not give publishers, media owners, or service providers the right to collect personal private information about a user without the user's knowledge and informed consent.
  • Consumers have a right to decide what, if any, personal private information about them is collected, shared, and sold.
  • A consumer’s right to privacy outweighs any benefits that may accrue to marketers or media through the collection and use of data. 
  • To paraphrase the great Doc Searls, it should be the individual who sets forth "Terms of Use" for his/her data, not the marketer, medium, or publisher
Based on these principles, I believe the following options ought to be given to every user by every online publisher, media owner, and service provider. These consumer "Universal Terms of Use" would supersede anything written to the contrary by the supplier:

I am sure there are aspects of this that would need to be refined once technology experts and lawyers got their hands on it. But I believe this is a good start toward a simple formula and a set of options that would make privacy issues far more transparent and data collection far less dangerous, yet would afford online advertisers, media, and publishers fair opportunities for success.

Radio, TV, magazines and newspapers have been successful for decades without the need to spy on us and collect unauthorized personal private data. There is no reason why online advertising can't be equally successful without these dangerous practices. But let's leave it up to individuals to decide what their appetite for privacy is and give them options that are simple to understand.

These privacy options should not be limited to online media and should be applied to all media.

Your comments/criticisms would be appreciated.

Thanks to Don Marti and Doc Searls for their help.

April 19, 2018

Who Will Succeed Sorrell?

That's the question of the day in adland. But speaking with a very smart person recently who has deep roots inside WPP, he feels that isn't the key question. He says the key question is this: what does an agency holding company do?

He believes there is a continuum along which holding companies can operate. On one end, the holding company is basically a financial instrument that invests in businesses and manages the corporation's relationships with investors and regulators. The operations of the constituent companies are left to the talents of the individual company managers. The exemplar of this is Berkshire Hathaway.

At the other end, a holding company can be more of an operating company that is a brand in its own right and works directly with customers. This is, to a significant degree, how WPP seems to have operated.

To find a proper CEO, the board of WPP first has to decide where it plans to sit on this continuum. The proper person for option one may be a completely different type of person than is needed for option two.

It's my belief that the agency holding companies are operating more like brands and less like traditional holding companies.

I believe they have moved toward greater centralization and are often operating as business units themselves, especially when it comes to pitching large global accounts.

Sorrell invented the "team" new business scheme -- in which the best of breed resources from different agencies within the WPP portfolio were supposedly going to be brought together to handle a new prospect's account as a custom-made agency. This idea has been adopted from time to time by all the holding companies and is now standard operating nonsense.

(Right. The holding company is going to risk taking its very best people off 5 or 6 key accounts and put them on yours. Only a Global CMO could be stupid enough to buy this horseshit.)

I have a hard time believing that WPP will adopt a de-centralized Berkshire Hathaway model. The only way I see that is if they plan to break it up and sell off some pieces.

I expect the board of WPP to go with what has worked and look for a sales-oriented, operations-focused, customer-centric CEO in the Sorrell mold. There are two problems with this. First, Sorrell was unique in that he was both a financial whiz and a salesman. Second is that times have changed and the holding companies have the "faint aroma of performing seals"* about them.

Replicating the Sorrell act in the current environment is not going to be easy. Whatever you think of Sorrell, thus far the world has produced only one. Good luck finding another.

*"I Wish I Were In Love Again," Richard Rodgers and Lorenz Hart 

April 17, 2018

Bats, Balls, And Bozos

As a resident of Oakland, CA and a baseball fan, I have more than a passing interest in the health and welfare of the Oakland A's baseball team.

Like all sports franchises, the A's have had their ups and downs. But in recent years they have become one of the most hapless franchises in all of American sports.

For years the ownership of the A's have turned off fans by trading excellent players for "prospects," hinting that they were going to leave town, constantly whining about their predicament, and making one false start after another trying to build a new stadium. They have also had lousy teams.

But the end of last season was hopeful. Although they finished in last place in their division, the final month of the season they played .586 ball with a 17-12 record. This would have placed them in 2nd place in their division and earned them a playoff spot (a .586 winning percentage would have won the division in the American League East.) They had some good young players and showed promise for an exciting 2018.

With that as background I went to an A's game last week. It was very depressing. It was a night game in which parking was free (saving fans $30) and still the park was empty. There was one other person in my row. The A's announced attendance of about 7,000 which means there were probably fewer than 5,000 people really there. The stadium holds over 50,000. And this was the first week of the season when fans are at their most hopeful and interest is high. Something, I thought, is terribly wrong.

And then I read an article in the San Francisco Chronicle...
"For many years, the A’s had the best television ads in the game...This season, the A’s have moved their advertising in-house, and the TV spots are no more...The A’s have decided to focus on targeted marketing this season rather than mass advertising, and they’re segmenting their advertising campaigns to customized audiences..."
"advertising in-house...targeted marketing... customized audiences...?" This ol' boy doesn't need an interpreter to know what that bullshit means -- social media crap to millennials. It's the default advertising strategy for everyone who knows nothing about advertising.

So far in this early season the A's have missed every advertising and marketing opportunity they've had. In the first week they had potentially the most exciting player in a generation - Shohei Ohtani - come to town. Did they tell the market about it? No, they were too busy doing "targeted marketing to customized audiences."

They have a player, Khris Davis, who has more home runs than everyone in baseball except the much ballyhooed Giancarlo Stanton the past two years. Have the A's told the 5 million or so people in their market about him? No, they've been too busy doing "targeted marketing to customized audiences."

So I did a little research to see how well their new strategy is working.

All of last year the A's averaged 18,446 people per game. The first eight games of this year they averaged 15,212. A drop of almost 20%. And it's really a lot worse. Last year's attendance figures include the dog days of August. And this year's small sample include both Opening Day and Opening Night, often the biggest crowds of the season.

Which leads us to tonight. The A's are staging a generous, but potentially misguided marketing stunt. To celebrate the 50th anniversary of their first game in Oakland they have distributed 200,000 free tickets for tonight's game -  200,000 tickets and fewer than 60,000 seats. What could go wrong?

And what for? So they can have a meaningless PR claim -- "the biggest crowd ever to watch an A's baseball game." Which proves what? That if you give something away for nothing people will take it? This stunt has a marketing value of zero. In the best case scenario it will be forgotten in 48 hours.

The Oakland A's problems go way deeper than marketing incompetence. But when you're in the toilet the last thing you need is amateurs screwing around with the plumbing.