Archive for the ‘Advertising’ Category
Advertising news from all over
I expect other retailers, museums and the like to follow with their own iBeacon programs this fall.
Hudson’s Bay Co., a pioneering North American business that was founded in 1670, is blazing trails in mobile marketing. Two of the Toronto-based company’s retail chains, Lord & Taylor and Hudson’s Bay, are getting on board the smartphone-triggered beacons trend with a test program rolling out today in 10 stores.
While Hudson’s Bay Co. certainly is not the first department store to experiment with beacons (Macy’s ran a test in New York and San Francisco last year), it claims to be the first to do so in multiple locations across the United States and Canada. The Lord & Taylor stores participating in the U.S. include New York’s flagship Fifth Avenue store, a location in Westchester, N.Y., and three shops in Massachusetts. North of the border, Hudson’s Bay stores in Toronto, Calgary, Vancouver and Ottawa are testing the technology.
“We recognize the appetite for mobile experiences that cater to our customer’s needs and provide a seamless shopping experience,” said Michael Crotty, Hudson’s Bay Co. evp and marketing chief.
Upon entering the stores, consumers with these apps open will receive a welcome message. Certain departments like ladies’ shoes, cosmetics and Lord and Taylor’s Black Brown label will then send out specific messages around the store. Areas of the store that sell Michael Kors and Alex and Ani also plan to push out offers that are tailored towards specific groups. Approximately 10 beacons are deployed in each store, which are tied to an average of seven different messages.
(click here to continue reading 344-Year-Old Hudson’s Bay Tests Beacons in Several Markets | Adweek.)
For the record, if you haven’t yet heard of Apple’s iBeacon, here’s a brief overview:
The term iBeacon and Beacon are often used interchangeably. iBeacon is the name for Apple’s technology standard, which allows Mobile Apps (running on both iOS and Android devices) to listen for signals from beacons in the physical world and react accordingly. In essence, iBeacon technology allows Mobile Apps to understand their position on a micro-local scale, and deliver hyper-contextual content to users based on location. The underlying communication technology is Bluetooth Low Energy.
Why is iBeacon a Big Deal?
With an iBeacon network, any brand, retailer, app, or platform will be able to understand exactly where a customer is in the brick and mortar environment. This provides an opportunity to send customers highly contextual, hyper-local, meaningful messages and advertisements on their smartphones.
The typical scenario looks like this. A consumer carrying a smartphone walks into a store. Apps installed on a consumer’s smartphone listen for iBeacons. When an app hears an iBeacon, it communicates the relevant data (UUID, Major, Minor, Tx) to its server, which then triggers an action. This could be something as simple as a push message [“Welcome to Target! Check out Doritos on Aisle 3!”], and could include other things like targeted advertisements, special offers, and helpful reminders [“You’re out of Milk!”]. Other potential applications include mobile payments and shopper analytics and implementation outside of retail, at airports, concert venues, theme parks, and more. The potential is limitless.
This technology should bring about a paradigm shift in the way brands communicate with consumers. iBeacon provides a digital extension into the physical world. We’re excited to see where iBeacon technology goes in the next few years.
(click here to continue reading What is iBeacon? A Guide to Beacons | iBeacon.com Insider.)
more from Business Insider:
To state the obvious: Modern, smartphone-toting humans spend most of their time indoors.
But indoor spaces often block cell signals and make it nearly impossible to locate devices via GPS. Beacons are a solution. Beacons are a low-cost piece of hardware — small enough to attach to a wall or countertop — that use battery-friendly, low-energy Bluetooth connections to transmit messages or prompts directly to a smartphone or tablet. They are poised to transform how retailers, event organizers, transit systems, enterprises, and educational institutions communicate with people indoors. Consumers might even want to deploy them as part of home automation systems.
In a new report from BI Intelligence, we explain what beacons are, how they work, and how Apple — with its iBeacon implementation — is championing this new paradigm for indoor mobile communication. We also take a look at the barriers in the way of widespread adoption.
People are confused about Apple iBeacon because it has yet to take a true physical form. Apple hasn’t manufactured a physical beacon. Instead, Apple’s iBeacon is built into its devices and iOS7 mobile operating system. Already, 200 million iOS devices can already serve as transmitters and receivers. But third-party manufacturers have built beacons that can send iBeacon messages to Apple devices.
(click here to continue reading Beacons And iBeacons Create A New Market – Business Insider.)
Funny how that works. A few years ago, coconut water was being marketed as a panacea for each and every thing wrong with you. And now? Not so much. However, people still repeat those initial, miracle-drug claims. Shows you the power of advertising, doesn’t it?
When coconut water broke into the American market 10 years ago, it was billed as a miracle drink able to fight viruses, kidney disease and other ailments like osteoporosis. Global sales now reach $400 million a year, and many consumers believe that the beverage has a wide variety of health benefits. But they may be unaware that the drink’s marketers have sharply scaled back their claims.
The minerals in coconut water are what prompted the early claims of curative power, but their amounts are quite modest and they are widely found in other foods. A banana, for example, has 422 milligrams of potassium, compared with 660 milligrams in a typical container of coconut water. The water’s big three minerals are potassium (19 percent of the daily recommended intake), calcium (4 percent) and magnesium (4 percent).
Coconut water taps into a “deep consumer vein,” Tom Pirko, a beverage industry analyst, wrote in an email. “It is not seen as a ‘manufactured’ concoction, but rather the issue of Mother Earth.” And it seems poised to become just the first in a wave of natural waters; already for sale are bottled waters from maple and birch trees, barley, cactus and artichokes, with their own exuberant promotions.
(click here to continue reading Coconut Water Changes Its Claims – NYTimes.com.)
I do think coconut water is tasty, occasionally refreshing, but I would not expect it to cure anything. But then I’m a natural born skeptic…
Speaking of Big Data and Facebook, the marketing and privacy experts at Mark Zuckerman’s data mining company have come up with a new way to make money off of you: turning on the microphone on your mobile device, and listening in to your life as you live it.
The social network appears to be preparing to serve ads to users based on a Shazam-style feature that picks up via the microphones on devices with Facebook’s app installed—watching Breaking Bad? Check out this ad for the new drama on AMC. Listening to OutKast? Try Ludacris.…
Facebook’s ad strategy is getting more sophisticated every week; with the new tool (which Facebook stresses is optional, though you know how it is: if people like it and it’s convenient, that’s better than mandatory), it’ll have far more information about something Nielsen, Acxiom and other data giants conduct huge panel studies to determine: user media habits. Not the media habits users write down in diaries, but what people actually do and might not self-report to anyone but their friends—who marathons Murder, She Wrote until 3 in the morning or listens to nothing but Ween for three straight months.
- It’s totally fair to wonder where the data derived from the recordings—song title, album, etc.—is stored and where it goes. Based on the fact that this is being used for marketing, the short answer seems to be “to people who are willing to pay to know what you’re into.”
- It’s hard to make this not creepy. Facebook is using your cell phone to listen to you and serve you ads. It’s doing it all in the name of user convenience, of course, but it’s still doing it.
- Marketers are going to love this. Dynamic ad serving has been a pipe dream for so long, and Facebook’s multi-billion-person user base is everyone’s favorite thing for that specific purpose.
(click here to continue reading Listening to Beyoncé? Facebook Has an Ad for You | Adweek.)
From the WSJ:
Facebook on Wednesday added a feature to its mobile app that identifies music and television shows playing in the background and suggests users share them with a larger audience.
The feature was the latest in a series of changes by Facebook to nudge users to divulge more—and more-specific—personal information on the social network. This week, it introduced a feature that allows users to prompt their friends to divulge more information about themselves. Last year, the social network allowed users to categorize posts by activity.
Facebook uses the data to sell targeted advertisements. The more detailed the information it gathers from users, the more personalized—and expensive—advertising the company can sell.
The recent changes represent an effort by Facebook to prod users into sharing more information about themselves. In recent years, the company has added categories, like “watching,” “eating” or “listening,” that users can add to their posts. In April it created a “traveling to” category, allowing users to post their travel destinations. A “nearby friends” feature, also rolled out last month, lets users know when their Facebook friends are in the vicinity. Turning on the feature lets Facebook track users wherever they go, even when the app is closed.
This week, Facebook began allowing users to request their friends’ relationship status using the new “Ask” button.
Advertisers like the additional data.
(click here to continue reading Facebook Adds Feature to Identify Music, TV Shows – WSJ.com.)
Amusingly, Facebook announced on the same day:
Responding to business pressures and longstanding concerns that its privacy settings are too complicated, Facebook announced on Thursday that it was giving a privacy checkup to every one of its 1.28 billion users.
“They have gotten enough privacy black eyes at this point that I tend to believe that they realized they have to take care of consumers a lot better,” said Pam Dixon, executive director of the World Privacy Forum, a nonprofit research and advocacy group. Ms. Dixon was briefed in advance about the latest changes.
For most of its 10-year history, Facebook has pushed — and sometimes forced — its users to share more information more publicly, drawing fire from customers, regulators and privacy advocates across the globe.
(click here to continue reading Facebook Offers Privacy Checkup to All 1.28 Billion Users – NYTimes.com.)
Sure, sure they are.
Personally, I never, ever use logins that depend upon Facebook. I have run across a few iOS apps that insist upon Facebook logins, and I deleted them rather than give up my information. I have on rare occasion used the Google login, but I’d much prefer using my own login credentials, even if it involves creating yet another password. Since I use 1Password these days, creating and maintaining unique passwords isn’t as much of a burden as it used to be.
Facebook and Google are battling to be the gateway through which users connect to websites and mobile apps. But users and businesses may be losing interest in such “social login” services.
Consumers worry about broadcasting their preferences and habits to companies and across their social networks. Businesses are torn between making life easier for users and letting Facebook and Google see the resulting data.
“A few years ago, there was a frenzy, but the interest has peaked,” says Sucharita Mulpuru-Kodali, an analyst at Forrester Research who studies social login. “There’s the fear of, ‘Oh my God, I’m going to click something and God knows what’s going to show up on my Facebook wall.’ ”
The social login buttons allow consumers to log in to other websites and apps using their usernames and passwords, for example, from Facebook Login or Google+.
But a Forrester survey of 66 large and midsize companies finds that only 17% use social-login buttons, and more than half have no plans to do so. Forrester hadn’t previously done a similar survey, but Ms. Mulpuru-Kodali says social login offerings are no longer appealing to retailers and users.
(click here to continue reading Too Much Information? Facebook, Google Face Backlash Over Logins – WSJ.com.)
I think also more consumers are realizing that Facebook and Google are not creating these tools to make consumers digital lives easier, but instead to enable Facebook and Google to collect data on consumers that they will then sell to businesses. Why make the process any easier for Big Data? Especially since Google and Facebook have repeatedly made errors that benefit their own business practices, and only apologize when the “error” becomes public, or the FTC files a complaint.
One reason users hesitate is privacy — the fear that logging in to the real-estate website Zillow through a Facebook button, for example, might inadvertently reveal the house you looked at, and its price, to your social network. Facebook says this can’t happen without a consumer’s express permission. But many users are wary because of the social network’s mixed record on privacy.
Some large brick and mortar retailers are concerned that letting Facebook or Google put code on their website might lead to the Web giants collecting their purchase data. Google says it doesn’t collect this information1.
(click here to continue reading Silicon Valley Is Waging a War Over Your Online Identity. But Is It Worth It? – Digits – WSJ.)Footnotes:
- but won’t swear to it in court [↩]
Tired Of Keeping Track
Kudos to Attorney General Kamala D. Harris, let us stipulate that this becomes a national trend, and soon…
Every major Internet browser has a feature that lets you tell a website that you don’t want it to collect personal information about you when you visit.
And virtually every website ignores those requests. Tracking your online activities — and using that data to tailor marketing pitches — is central to how Internet companies make money.
Now California’s attorney general, Kamala D. Harris, wants every site to tell you — in clear language — if and how it is respecting your privacy preferences. The guidelines, which will be published on Wednesday, are intended to help companies comply with a new state privacy law that went into effect on Jan. 1. That law requires sites to prominently disclose all their privacy practices, including how they respond to “do not track” requests.
“This guide is a tool for businesses to create clear and transparent privacy policies that reflect the state’s privacy laws and allow consumers to make informed decisions,” Ms. Harris said in a statement.
(click here to continue reading California Urges Websites to Disclose Online Tracking – NYTimes.com.)
Though this is a voluntary rule, and there are lots of lobbyists chewing on Congress-critters ears to block this practice from expanding, the publics’ opinion is very clear, so maybe by the time the aliens land, or the oceans reach the Midwest, we’ll have action:
The California guidelines for the Jan. 1 privacy law are voluntary. Other efforts to establish more binding privacy protections — either through federal or state laws or through industry self-regulation — have failed to win enough support to pass.
In an attempt to nudge the process along, two of the leading web browsers, Mozilla’s Firefox and Microsoft’s Internet Explorer, began giving users the option of sending a signal that tells all websites they visit that they don’t want to be tracked. Apple’s Safari and Google’s Chrome later added similar options.
But despite pledges by the advertising and technology industries to find a way to honor such requests — and endless discussions at an industry standards group, the World Wide Web Consortium, that was supposed to come up with a common set of rules — little progress has been made. This month, a White House advisory group again called for limits on tracking.
Do Not Track
Today, virtually no site respects “do not track” requests coming from web browsers. The only major company that honors the signals is Twitter.
Yahoo, which was one of the first companies to respect “do not track” signals, announced last month that it would no longer do so. Part of the company’s turnaround strategy depends on personalizing its services and advertising, which requires — you guessed it — tracking you across the web.
For what it’s worth, I still use Ghostery, despite it breaking functionality of some websites like Crain’s Chicago, or Nordstroms…
We’ve long been dismayed by how powerful and secretive the massive data broker corporations have become. Our data is collected, often surreptitiously, then repackaged and sold to other corporations, and we don’t get a percentage of the profits, nor any real notice that this is happening.
Good news, maybe, from Washington, as reported by Kate Kaye of AdAge:
Today the Senate Commerce Committee held a long-awaited hearing about the consumer-data-broker industry.
“We have a feeling people are getting scammed or screwed,” said Senator Jay Rockefeller, D-W.V., whose office sent inquiries to several data brokers in the past year. He called out data giants Acxiom, Epsilon and Experian, threatening to use more forceful ways of getting them to divulge information about how they do business and with whom.
One concern shared by Mr. Rockefeller and privacy advocates is predatory marketing activity conducted by financial firms or other companies targeting vulnerable groups such as the impoverished or immigrant populations. Another concern is the practice of scoring individuals determined by algorithmic data analysis and serving them with tailored offers. In some cases that could involve higher interest rates for loans or dynamic prices for products based on prior web behavior or demographic data.
“To date they have not given me complete answers,” said Mr. Rockefeller of Acxiom, Epsilon and Experian. “I’m putting these three companies on notice today…that I am considering further steps and I have steps I can use to get this information.”
Mr. Rockefeller sent letters to data companies such as Acxiom, Datalogix, Epsilon, Experian and Transunion in June, then broadened the inquiry to include media firms — typically big collectors of behavioral web data — like About.com, Babycenter.com, Cafemom.com, Time’s Health.com and Conde Nast’s Self.com.
(click here to continue reading Rockefeller to Marketing Data Giants: You’re On Notice | Privacy and Regulation – Advertising Age.)
Bares paying attention to…
Oh, cry me a river. I’d love to have the same options available for myself! Kids luckily have some protection from being subsumed by the data collection industry, but not much. Adults – not even a token bit of assistance.
Internet groups complained Monday that new Federal Trade Commission regulations to protect children’s privacy online are financially burdensome to start-up companies.
Under regulations that went into effect July 1, websites catering to children will no longer be able to collect a range of identifying information without obtaining verifiable parental consent.
The child protection regulations will now hold the owners of sites and apps frequented by children responsible for third-party services — such as plug-ins or ads — that collect personal information from visitors who say they’re younger than 13. The third-party services will be held liable only if the FTC can prove they knowingly collected personal information from children.
Kid-friendly websites that want to use such ads to provide free content to kids, or that want to collect personal information for interactive content, now have to either get parental consent or forgo the content altogether, as some tech experts worry they’ll do.
“The biggest challenge here is that the commission defines personal information in a way that is so incredibly broad,” said Lydia Parnes, the former director of the FTC’s Bureau of Consumer Protection and now a privacy lawyer, at a gathering of data experts and representatives of Internet companies in Washington.
(click here to continue reading Internet groups decry cost of new online privacy rules for children – latimes.com.)
Have you ever tried to opt out of Acxiom’s database, for instance? Good luck. And they are just one firm out of thousands that Ghostery knows about. Unless you are paying attention to that industry, you’ve never heard of most of them, have no business relationship with them, nor consent to your information being bought and sold. Tough luck, unless you are under 13…
Personally, Eden Foods’ political stance gives Eden Organic beans a musty, old fashioned flavor, a flavor of the 15th century, a time when the Catholic Church decided for you what was legal or illegal, accepted or unaccepted.
The slogan for Eden Foods, which describes itself as the “oldest natural and organic food company in North America,” is “creation and maintenance of purity in food.” Its CEO and founder, Michael Potter, has been prominent in debates over labeling of organic food and GMOs. But the company has been quietly seeking in court another form of purity — to Catholic doctrine about sex being solely for procreation. That goes not just for Potter, but for all 128 of his employees.
That is, Eden Foods — an organic food company with no shortage of liberal customers — has quietly pursued a decidedly right-wing agenda, suing the Obama administration for exemption from the mandate to cover contraception for its employees under the Affordable Care Act. In court filings, Eden Foods, represented by the conservative Thomas More Law Center, alleges that its rights have been violated under the First Amendment, the Religious Freedom Restoration Act, and the Administrative Procedure Act.
Eden Foods, which did not respond to a request for comment, says in its filing that the company believes of birth control that “these procedures almost always involve immoral and unnatural practices.” The complaint also says that “Plaintiffs believe that Plan B and ‘ella’ can cause the death of the embryo, which is a person.” (Studies show that neither Plan B nor Ella interfere with fertilization, which is the Catholic definition of the beginning of life, if not the medical one. In other words, not the death of an embryo. Also, at that stage, it’s a zygote, not an embryo — let alone a “person.”)
But once Potter became aware that the company’s plan had begun to cover contraception in accordance with the Obamacare regulations, he teamed up with Thomas More Law Center to sue. The Center focuses on violations of “religious freedom,” including in connection with the repeal of Don’t Ask Don’t Tell. They also represented Pastor Terry Jones, who became famous for his plan to burn Korans on the anniversary of 9/11.
They filed suit on March 20, 2013, against Secretary of Health and Human Services Kathleen Sebelius and other government parties, demanding an exemption, despite the fact that Eden Foods is a for-profit company. Two days later, District Court Judge Denise Page Hood denied an emergency motion to be exempted, writing, “Courts have held that the Mandate in question applies only to the corporate entity, not to its officers or owners, and that as to the individual owners, any burden imposed on them individually by the contraception mandate is remote[.]” She added, “The purpose of the Women’s Preventive Healthcare Regulations is not to target religion, but instead to promote public health and gender equality.” A hearing has been set for May 10.
(click here to continue reading Organic Eden Foods’ quiet right-wing agenda – Salon.com.)
Eden Foods: Another company that deserves to lose in the marketplace. I’ll no longer purchase any product of theirs, that’s for damn sure, and I don’t even have a uterus, pure or not.
Katie Baker of Jezebel adds:
Eden Foods, an independently owned natural food company, is just as interested in the “Creation and Maintenance of Purity in Food®” as the maintenance of purity in your uterus: the company is suing the Obama administration for exemption from the contraceptive mandate. Owner Michael Potter believes sex is for baby-making alone, and hopes to force his 128 employees to follow suit.
In court filings, the plaintiffs (Eden Foods and Potter) lay out the reasons why Potter’s personal and nonsensical beliefs regarding birth control and emergency contraception — which Eden Foods has historically referred to as “Lifestyle Drugs” (we hear all the It Girls will be popping Yasmin at Coachella this year!) — should take precedence over reproductive choice. Examples: the company believes that contraception and abortifacients “almost always involve immoral and unnatural practices” and that the morning-after pill “can cause the death of the embryo, which is a person.” (No, it can’t, and if an embryo is a person, I’m a bag of “organic whole leaf dulse.”)
It’s unsurprising when Christian publishing companies and craft supply stores fight the contraception mandate. (We covered the first 18 for-profit companies that fought to eliminate the birth control benefit earlier this year; now 25 have filed suit.) But doesn’t it seem rather misleading for Eden Foods, which says it’s the “oldest natural and organic food company in North America,” to hide its conservative agenda?
(click here to continue reading Organic Eden Foods Isn’t Progressive Enough to Pay For Its Employees’ Birth Control.)
The image recalls work that Mr. Sanders did for an even more famous screen project. In 1966 he was asked by Stanley Kubrick, who had seen some of his experimental, noncommercial collages, to spend months with unfettered access to the set of “2001: A Space Odyssey” and illustrate scenes from the filming. Most of the images remained unpublished for decades. (Kubrick, famously averse to set photographers, seemed to have been ambivalent even about drawings.) But the experience was a formative one for Mr. Sanders in honing an illustration style that balanced slightly trippy abstraction with a concrete feeling of reportage.
Brian Sanders Creates ‘Mad Men’ Poster for New Season
For a long time, I had worked out a good system, using Delicious, Twitter, Feedburner and IFTTT. I found interesting articles or phrases in my daily internet life, tweeted them, and these URLs would be automatically fed into my Delicious account, and this in turn would seed entries into my daily blog email post1. Thus my blog’s hunger stayed fed, and I didn’t have to go to the trouble of creating an entire post around a few sentences. However, Twitter, in its drive to become less useful, has disallowed this kind of interaction by changing its APIs. Twitter wants to force every user interaction to occur on its own webpage, presumedly so they can sell advertising “eyeballs” – viewers – but this means a lot of the cool stuff that Twitter could be used for no longer are viable. At least that is my understanding of what happened between yesterday and today.
I’ll see what I can do to replace this lack of grist for my web grinding mill, but it is irritating. Anyone have any suggestions? Email me, or leave a comment.
Here is what should have been included in this morning’s blog email2:
- “Mother Cabrini Shrine Reopening; Le Corbusier in Color; More!” http://t.co/w9ainEtn
- “Ross Douthat’s schtick at The Atlantic: repeating Redstate talking points, minus the obscenity and grammatical errors” http://t.co/rkJVN0eH
- “Todd Akin compared the recent debate performance of Democratic Sen. Claire McCaskill to that of a “wildcat,” http://t.co/JOmjmi29
- “In 1960, about 5% of Americans expressed a negative reaction to political intermarriage; in 2010, about 40% did ” http://t.co/ONkWfpDk
- “Pro-life asshole vows to fight “to his dying breath” for rights of unborn” http://t.co/bMJ6qFwc C’mon Canada, you are better than this
- Opium Museum http://t.co/vTfSaJm4
- “How Collecting Opium Antiques Turned Me Into an Opium Addict” http://t.co/KWV4aoey
- “Romney mentioned that it would routinely take up to eight years to turn around a firm” http://t.co/xdbBghjv but US govt easier?
- Why Ryan is worse for Romney than “47 percent” http://t.co/79gHpcPE
- Brad DeLong: I Do Not Understand Why This Is Not Tax Fraud… http://t.co/wLipfAfZ Good ole DoubleClick
- Your Body’s Best Time for Everything http://t.co/N7KUjLQj
And actually, I’m being a little lazy in my cut/paste job here, as these links would also have included the full, original title of the URL, which is sometimes descriptive as well. For instance, the second link about Ross Douthat would have also spelled out “And If Only The Vietnamese Had Worn Bright Red Coats And Formed Infantry Squares”. You get the idea.
Anyway, thanks for messing up my workflow Twitter…Footnotes:
Feud is the wrong word, really, these are just competing businesses, not personal enemies, but still bears watching their competition unfold. At least this article in the NYT isn’t just trolling Apple, like Joe Nocera’s bit of vomit from yesterday.
Being kicked off the iPhone has potentially significant consequences for Google, whose Maps service earns more than half its traffic from mobile devices, and almost half of that mobile traffic has been from iPhone users. Apple’s move strikes at the heart of Google’s core business, search, because about 40 percent of mobile searches are for local places or things.
“Local is a huge thing for Google in terms of advertising dollars, and search is very tied to that,” said Barry Schwartz, an editor at Search Engine Land, an industry blog. “Knowing where you are, when you search for coffee, it can bring up local coffee shops and ads that are much more relevant for the user.”
But with maps, Google, which has long been the dominant digital mapmaker, now must adjust to a new rival, along with the loss of valuable iPhone users.
Even though Android phones far outnumber iPhones — 60 percent of smartphones run Android, versus 34 percent for iPhones, according to Canalys, a research firm — iPhone users account for almost half of mobile traffic to Google Maps.
In July, according to comScore Mobile Metrix, 12.6 million iPhone users visited Maps each day, versus 7.6 million on Android phones. And iPhone users spent an hour and a half using Maps during the month, while Android users spent just an hour.
Those users are a valuable source for Google, because it relies on their data to determine things like which businesses or landmarks are most important and whether maps have errors.
(click here to continue reading Apple’s Feud With Google Is Now Felt on the iPhone – NYTimes.com.)
I welcome the rivalry, maps will1 improve for all users as a result.Footnotes:
- should? [↩]
You might have heard that Google engineers created a way to surreptitiously collect data on all Safari users – including all iPad, iPhone and iPod Touch users – ignoring the privacy settings. As a result of a computer scientist by the name of Jonathan Mayer, his investigation, and a subsequent media uproar, the FTC got involved, and eventually fined Google a few nickels.
The Federal Trade Commission fined Google $22.5 million on Thursday to settle charges that it had bypassed privacy settings in Apple’s Safari browser to be able to track users of the browser and show them advertisements, and violated an earlier privacy settlement with the agency.
The fine is the largest civil penalty ever levied by the commission, which has been cracking down on tech companies for privacy violations and is also investigating Google for antitrust violations.
“The social contract has to be that if you’re going to hold on to people’s most private data, you have to do a better job of honoring your privacy commitments,” said David C. Vladeck, the director of the commission’s Bureau of Consumer Protection, in a call with reporters. “And if there’s a message the commission is trying to send today, it’s that.”
The commission said Google had broken the terms of a 2011 settlement over privacy missteps related to the Buzz, a social networking tool now defunct.
(click here to continue reading F.T.C. Fines Google $22.5 Million for Safari Privacy Violations – NYTimes.com.)
And I say nickels, because, to quote an earlier blog post:
The fine for violating the agreement is $16,000 per violation, per day. Because millions of people were affected, any fine could add up quickly, depending on how it is calculated
(click here to continue reading FTC Should Pursue Case Against Google at B12 Solipsism.)
Let’s do the math, as best we can on this convenient envelope on my desk. Google broke their agreement for about a year.1 Even if there was only one violation per day, this adds up to $5,840,000 in fines. But there are probably 200,000,000 iOS devices in active use2, plus desktop Macs running Safari, so potentially, Google was liable for 200,000,000 x 365 x $16,000 = $1,168,000,000,000,000 in fines. Doh! Of course, the FTC doesn’t have the gumption to fine any corporation that much. Instead they fined Google $22,000,000.
For comparison, Google’s annual revenue is over $43,000,000,000 (per their 2nd Q 2012 report PDF). $22.5 million divided by $43.16 billion is 0.05213%. A joke in other words, a rounding error. If you made $50,000 a year in gross salary, and you got a fine of this magnitude, you’d pay…wait for it…$26. Yep, just twenty six dollars. Would it be worth it to you to pay a couple bucks a month in exchange for sellable advertising data on 200 million phones and iPads? Hell yes! Those cookies are a large reason why Google makes $43 billion a year, obviously they are valuable!
Google got off way, way too easily.
What about those incompetent boobs at the Federal Trade Commission? The FTC isn’t very motivated to snoop out privacy invasions in the first place, as Wired reported back in June, 2012:
Jonathan Mayer had a hunch.
The young computer scientist suspected that online advertisers might be following consumers around the web — even when they set their browsers to block the snippets of tracking code called cookies. If Mayer’s instinct was right, advertisers were eying people as they moved from one website to another even though their browsers were configured to prevent this sort of digital shadowing. Working long hours at his office, Mayer ran a series of clever tests in which he purchased ads that acted as sniffers for the sort of unauthorized cookies he was looking for. He hit the jackpot, unearthing one of the biggest privacy scandals of the past year: Google was secretly planting cookies on a vast number of iPhone browsers. Mayer thinks millions of iPhones were targeted by Google.
The feds are often the last to know about digital invasions of your privacy. This is precisely the type of privacy violation the Federal Trade Commission aims to protect consumers from, and Google, which claims the cookies were not planted in an unethical way, now reportedly faces a fine of more than $10 million. But the FTC didn’t discover the violation. Mayer is a 25-year-old grad student working on law and computer science degrees at Stanford University. He shoehorned his sleuthing between classes and homework, working from an office he shares in the Gates Computer Science Building with students from New Zealand and Hong Kong. He doesn’t get paid for his work and he doesn’t get much rest.
If it seems odd that a federal regulator was scooped by a sleep-deprived student, get used to it, because the federal government is often the last to know about digital invasions of your privacy. The largest privacy scandal of the past year, also involving Google, wasn’t discovered by federal regulators, either. A privacy official in Germany forced Google to hand over the hard drives of cars equipped with 360-degree digital cameras that were taking pictures for its Street View program. The Germans discovered that Google wasn’t just shooting photos: The cars downloaded a panoply of sensitive data, including emails and passwords, from open Wi-Fi networks. Google had secretly done the same in the United States, but the FTC, as well as the Federal Communications Commission, which oversees broadcast issues, had no idea until the Germans figured it out.
(click here to continue reading Your FTC Privacy Watchdogs: Low-Tech, Defensive, Toothless | Threat Level | Wired.com.)
No wonder Google, and Microsoft, and others, spend so much money on lobbyists…
Google spent $5.03 million on lobbying from January through March of this year, a record for the Internet giant, and a 240 percent increase from the $1.48 million it spent on lobbyists in the same quarter a year ago, according to disclosures filed Friday with the clerk of the House.
By comparison, Apple spent $500,000; Facebook spent $650,000 Amazon spent $870,000; and Microsoft spent $1.79 million. Google even outspent Verizon Wireless, a notoriously big spender, which spent $4.51 million.
(click here to continue reading Under Scrutiny, Google Spends Record Amount on Lobbying – NYTimes.com.)Footnotes:
Funny how this works: databases containing all sorts of data about you is compiled by giant, somewhat secretive corporations, and then rented out to corporations so marketers can sell their goods and services to you, and yet you have no access to the data. For what it’s worth, I took the time to opt out of Acxiom’s system, based on my email address, but who knows if they really removed me. I doubt it, but there is no way to verify or confirm in any case. We are just numbers to them, not people.
I recently asked to see the information held about me by the Acxiom Corporation, a database marketing company that collects and sells details about consumers’ financial status, shopping and recreational activities to banks, retailers, automakers and other businesses. In investor presentations and interviews, Acxiom executives have said that the company — the subject of a Sunday Business article last month — has information on about 500 million active consumers worldwide, with about 1,500 data points per person. Acxiom also promotes a program for consumers who wish to see the information the company has on them.
As a former pharmaceuticals industry reporter who has researched all kinds of diseases, drugs and quack cures online, I wanted to learn, for one, whether Acxiom had pegged me as concerned about arthritis, diabetes or allergies. Acxiom also has a proprietary household classification system that places people in one of 70 socioeconomic categories, like “Downtown Dwellers” or “Flush Families,” and I hoped to discover the caste to which it had assigned me.
But after I filled out an online request form and sent a personal check for $5 to cover the processing fee, the company simply sent me a list of some of my previous residential addresses. In other words, rather than learning the details about myself that marketers might use to profile and judge me, I received information I knew already.
It turns out that Acxiom, based in Little Rock, Ark., furnishes consumers only with data related to risk management, like their own prison records, tax liens, bankruptcy filings and residential histories. For a corporate client, the company is able to match customers by name with, say, the social networks or Internet providers they use, but it does not offer consumers the same information about themselves.
(click here to continue reading Acxiom Consumer Data, Often Unavailable to Consumers – NYTimes.com.)
and I’m totally in favor of the FTC forcing these companies to become more transparent, based upon the historical precedent of the credit card industry’s standard practice:
Now federal regulators are pressuring data brokers to operate more transparently. In a report earlier this year, the Federal Trade Commission recommended that the industry set up a public Web portal that would display the names and contact information of data brokers, as well as describe consumers’ data access rights and other choices.
Julie Brill, a member of the Federal Trade Commission, said consumers should have access to all the details that data brokers collect on them, as well as any analyses that the companies sell about their behavior.
“I include in that not just the raw data, but also how that information has been analyzed to place the consumer into certain categories for marketing or other purposes,” she said. “I believe that giving consumers this kind of granularity will greatly increase consumer trust in the information flow process and will lead to more accurate marketing.”
At the moment, however, information brokers have wildly different policies. Acxiom lets people opt out of its marketing databases, while Epsilon, another marketing services firm, allows people to opt out of having their data rented to third parties. Epsilon says it will also furnish individuals, upon request, with general information about their past retail transactions — including the categories and years of purchase. But it does not include exact product or retailer names.
Commissioner Brill of the F.T.C. said she could not comment on specific companies. But she said the reluctance of the data broker industry to show consumers their own records reminded her of an earlier era, when consumer reporting agencies — companies that track and sell information about people’s credit histories — protested that it would be too expensive and time-consuming for them to show individuals the same reports that creditors could see. In 1996, Congress updated the Fair Credit Reporting Act of 1970, giving people greater access to the files that those agencies held about them. Today, consumers can easily gain access to their credit reports online.
“What the credit reporting industry did was change their point of view from client-oriented to consumer-oriented, and develop the tools and technology to allow consumers to see what’s in their reports and ensure it is accurate,” Ms. Brill said. “The data broker industry could do the exact same thing.”
(click here to continue reading Acxiom Consumer Data, Often Unavailable to Consumers – NYTimes.com.)
And speaking of Facebook’s deplorable business model, there turns out to be some Wall Street shenanigans going on as the IPO began. Lest you forget, Wall Street plays by its own rules, and if you want to play too, you are the mark, the rube. The amount of hype for the Facebook stock was, and remains overwhelming. That alone should make one suspicious. I know I was1
The Los Angeles Times reports:
As Facebook shares continued their slide, regulators launched inquiries into whether privileged Wall Street insiders were alerted to the company’s weakening financial projections, leading them to shun the stock or dump shares just as buying was opened to the public.
Morgan Stanley, which led the Wall Street effort to bring the social network public, came under fire following reports that the bank had told some favored clients that the bank was cutting its revenue estimates for Facebook. The lowered expectations came after the tech giant expressed caution in a public filing about its advertising sales on mobile devices.
The legal issue raised could be “securities fraud — plain and simple,” said Ernest Badway, a securities lawyer in New York and New Jersey and a former enforcement attorney at the U.S. Securities and Exchange Commission. “You can’t be putting out two sets of numbers.”
SEC Chairwoman Mary Schapiro said the agency will examine “issues” into the bungled Facebook public offering. The Financial Industry Regulatory Authority, the Wall Street industry-funded watchdog, has also expressed concern, and Massachusetts securities regulators have issued subpoenas for Morgan Stanley.
“If true, the allegations are a matter of regulatory concern to FINRA and the SEC,” Rick Ketchum, the watchdog’s chairman and chief executive, said in an e-mailed statement.
One major institutional investor was informed of the lowered expectations during Facebook’s IPO “roadshow,” in which Morgan Stanley and other underwriters appeared before mutual funds and other big investors to make the case to buy shares in advance of the public offering.
“I am pretty sure the grandma who bought 10 shares of Facebook through her Schwab account didn’t get that memo,” said a person familiar with the matter who declined to be named to preserve his business relationship with Wall Street investment banks.
Facebook’s offering was one of the most hyped events on Wall Street, and became the biggest tech IPO in history. The company raised $16 billion by listing on the Nasdaq Stock Market in a move that valued the company at $104 billion, which is bigger than American corporate stalwarts such asMcDonald’s Corp. andAmazon.com Inc.
(click here to continue reading Facebook IPO flop drawing increased scrutiny – latimes.com.)
I found this phrase telling:
Some bankers were also troubled by the huge demand from individual investors, a relatively capricious group. While Facebook allocated most of its shares to big, institutional investors like mutual funds and hedge funds, it also gave a larger-than-usual block, close to 25 percent, to ordinary investors.
Around the same time, red flags emerged about the company’s growth prospects. On May 9, Facebook revealed in a regulatory filing some potential challenges to its growth. In particular, the company highlighted that users were increasingly using Facebook on mobile devices, but the company was not making much money on mobile ads.
(click here to continue reading Facebook I.P.O. Raises Regulatory Concerns – NYTimes.com.)
Banks don’t want the hoi polloi to clutter up their hallways, mess up their nice tile floors.
Stay As You Are
Gawker’s Adrian Chen:
Facebook’s stock continues to suck harder than a Northwestern University freshman on a 5-foot bong in his profile pic. And the fallout from the most hyped IPO in history bursts not just the illusion that Facebook is actually worth $100 billion, but the idea that Facebook is different than any other corporation hell-bent on making as much money as possible for a handful of very wealthy people.
The lead-up to last Friday’s Facebook IPO was an orgy of web 2.0 populism. Started by a Harvard undergrad in his dorm room, Facebook was poised to become the largest tech IPO ever. And its value stemmed from our stuff—our status updates, pictures and pokes! This was the major driver of the outlandish hype surrounding Facebook’s IPO; the sense that the public would finally get a chance to share in the spectacular success of the company we helped build.
…(Incidentally, now that Facebook’s tanking, Morgan Stanley and the other banks that underwrote the deal have a good shot at making a profit by short selling millions of Facebook shares that had been created just for them under an arcane financial move known as the “Greenshoe option.” Nice deal, if you can get it.)
These maneuvers show once again that Facebook’s lofty ideals are at odds with how it functions in reality. For a company built on sharing and transparency, Facebook’s IPO was uniquely private and opaque. For a company which Mark Zuckerberg boasted in a letter to investors “was not originally created to be a company. It was built to accomplish a social mission,” Facebook sure as hell acted like a company in helping to enrich insiders at the expense of public investors.
So, Mark Zuckerberg screwed Facebook investors in the IPO like he’s screwed Facebook users on privacy. (Hours before the IPO, Facebook was hit with a $15 billion lawsuit over privacy violations.) This would be just a hilarious coincidence, except for the vast amounts of money he’s made doing both.
(click here to continue reading The Facebook IPO Was an Inside Joke.)
Felix Salmon writes:
This whole episode stinks. It’s almost certainly not illegal. But if you look at the Finra rules about such things, it definitely violates the spirit of the law. For instance, the rules say that Morgan Stanley analysts weren’t allowed to show Facebook their research before it was published — but they don’t say that Facebook can’t quietly whisper in Morgan Stanley’s ear that its estimates might be a bit aggressive. Obviously, there’s no need for the analysts to give Facebook advance notice of their earnings downgrade if that earnings downgrade was a direct consequence of something Facebook told them.
Similarly, Morgan Stanley isn’t allowed to publish a research report or earnings estimates for Facebook within the 40 days following the IPO. But a few days before the IPO? I guess that’s OK — even if the way the estimates were “published” meant they were only available to good friends of the bank.
More generally, the rules ignore the key point here. Retail investors, and the market as a whole, knew when Facebook had its IPO that Morgan Stanley (and JP Morgan, and Goldman Sachs) had research teams with estimates for Facebook’s future earnings. They also knew that those estimates would be made public in 40 days’ time. And if they were sophisticated enough, they probably knew that select Morgan Stanley clients were given access to the analysts and their estimates.
What they didn’t know — what they couldn’t know, because nobody told them — was that those estimates had been cut, significantly, just days before the IPO.
(click here to continue reading The Facebook earnings-forecast scandal | Felix Salmon.)
John Cassidy of The New Yorker points out there have been trades of Facebook for years now, just not public trades. In other words, the big investors already cashed out…
The fact is, Facebook’s I.P.O. wasn’t really an “initial” stock offering. In December, 2010, Goldman Sachs raised $500 million for the company in a deal that, following objections from the Securities and Exchange Commission, was limited to overseas investors. In the I.P.O. world, these late-stage quasi-public offerings are called “D-rounds,” and they are becoming increasingly common. Zynga did one before its I.P.O., and so did Groupon. They provide a cashing-out opportunity for insiders who would rather not wait until the I.P.O. More to the point, they allow “hot” companies to bid up the price of their stocks well before the investing public gets a sniff.
Groupon’s D-round, which raised $950 million in January, 2011, valued the company at close to $5 billion. (It is now valued at $8 billion.) The Goldman offering for Facebook valued the company at $50 billion. (It is now valued at about $95 billion.) The valuations put on the companies in these deals were quickly reflected in the so-called “gray market,” where investors in the know could buy and sell the firms’ stocks well before they started trading on the open markets. Now that Facebook’s stock is trading publicly, many of the early players have already sold out, taking a handsome profit.
How will the public investors fare? So far, they aren’t doing well, but it is still early. I said the other day that Facebook isn’t necessarily a bubble stock, but it is undoubtedly a very expensive one. Buyers are bearing a lot of risk, and it is hard to see them ever reaping the sort of returns that investors in companies like Amazon and Google enjoyed. At twenty-five times trailing revenues and a hundred times trailing earnings, the $38 I.P.O. is already discounting an awful lot of expansion—and this at a time when Facebook’s growth rate has already slowed.
(click here to continue reading Inside Job: Facebook I.P.O. Shows the System Is Broken : The New Yorker.)
And over and over we read the phrase, “unsuccessful IPO”, and yet what does that mean? The bankers got theirs, the Facebook execs got theirs…
may have doomed any real chance the social-networking company had that its stock would jump on its first day of trading—a hallmark of successful IPOs. On Tuesday, the second full day of trading, Facebook shares fell $3.03, or 8.9%, to $31, after falling 11% on Monday. Investors are blaming the downdraft on the last-moment expansion of the offering.
Securities and Exchange Commission Chairman Mary Schapiro said Tuesday that her agency will examine “issues” surrounding the IPO in an effort to ensure confidence in public markets. An SEC spokesman declined to elaborate.
(click here to continue reading Inside Fumbled Facebook Offering – WSJ.com.)
Some paid for the money with coin that I wouldn’t be happy paying with, namely being banned from the US. Is the money really worth it? I’d say no, but I like living in America.
Facebook co-founder Eduardo Saverin’s decision to renounce his U.S. citizenship just in time to avoid a large tax payment essentially means he will not be able to re-enter the United States again, immigration experts tell TPM.
“There’s a specific provision of immigration law that says that a former citizen who officially renounces citizenship, and is determined to have renounced it for the purpose of avoiding taxation, is excludable,” said Crystal Williams, executive director of the American Immigration Lawyers Association. “So he would not be able to return to the United States if he’s found to have renounced for tax purposes.”
Two immigration lawyers said his explanation hardly passes the laugh test. Saverin’s move was timed to the initial public offering of shares of Facebook stock. The valuation of the Facebook IPO explodes Saverin’s stake in the social media company to some $3 billion, on which avoiding taxes could save him at least tens — if not hundreds — of millions of dollars. Nor does it help his case that he relocated to Singapore, which levies no taxes on those earnings.
Two senators mobilized Thursday to crack down on Saverin and other tax dodgers.
“He’s fucked,” said Adam Green, an immigration lawyer based in Los Angeles. “He must have gotten horrendous advice.”
(click here to continue reading Renouncing Citizenship Makes Facebook Co-Founder Inadmissable To US | TPMDC.)Footnotes:
Very interesting point – is Facebook really a viable business? Will it be around in ten years? Will it be profitable? How?
Facebook is not only on course to go bust, but will take the rest of the ad-supported Web with it.
Given its vast cash reserves and the glacial pace of business reckonings, that will sound hyperbolic. But that doesn’t mean it isn’t true.
At the heart of the Internet business is one of the great business fallacies of our time: that the Web, with all its targeting abilities, can be a more efficient, and hence more profitable, advertising medium than traditional media. Facebook, with its 900 million users, valuation of around $100 billion, and the bulk of its business in traditional display advertising, is now at the heart of the heart of the fallacy.
The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter, a consequence of their simultaneous ineffectiveness and efficiency. The nature of people’s behavior on the Web and of how they interact with advertising, as well as the character of those ads themselves and their inability to command real attention, has meant a marked decline in advertising’s impact.
I don’t know anyone in the ad-Web business who isn’t engaged in a relentless, demoralizing, no-exit operation to realign costs with falling per-user revenues, or who isn’t manically inflating traffic to compensate for ever-lower per-user value.
Facebook, however, has convinced large numbers of otherwise intelligent people that the magic of the medium will reinvent advertising in a heretofore unimaginably profitable way, or that the company will create something new that isn’t advertising, which will produce even more wonderful profits. But at a forward profit-to-earnings ratio of 56 (as of the close of trading on May 21), these innovations will have to be something like alchemy to make the company worth its sticker price. For comparison, Google trades at a forward P/E ratio of 12.
(click here to continue reading The Facebook Fallacy – Technology Review.)
Facebook may have demographic information on 800,000,000 people, more or less, with more of less accuracy1, but what are they going to be able to do with this data? Currently, Facebook ads are so poorly targeted as to be a joke. I just looked at my profile, and see seven ads, only one of which is even mildly targeted to me2. The others are Dell ads3, luxury clothing ads, credit card ads, and some GMO tea in a plastic bottle. No wonder that GM decided to spend their money elsewhere. They weren’t the first to notice abysmal performance with Facebook ads. I’d be hard pressed to advise an advertiser to spend money on Facebook when there are so many better options.
General Motors Co said on Tuesday it will stop advertising on Facebook, even as the social networking website prepares to go public.
While GM gave no specific reason for dropping Facebook ads, a source familiar with the automaker’s plans said the company’s marketing executives decided Facebook’s ads had little impact on consumers.
(click here to continue reading GM to drop Facebook ads due to low consumer impact | Reuters.)
If I was a broker, I wouldn’t own Facebook stock for long.Footnotes: