Google's New Tact on Fake News...

Yesterday’s WSJ article speaks about Google retooling it powerful search engine to prevent fake news, hoaxes, and conspiracy theories from appearing in their top results. They will be using algorithms and training their search evaluators to weed out what would be considered “low quality sites”.

This change comes as Facebook took criticism this past election season from doing little to block content. These measures will prevent fake news sites from generating revenue through ad selling services. Ben Gomes VP of engineering at Google sais .25% of daily search queries return “ offensive or misleading” content.

Earlier in April Google added a "Fact Check" tag to some results showing whether or not they were true or not. Google is relying in part on its users to flag unexpected or inaccurate or offensive results that show up in autocompleted searches.

My own view on this is, a concern that certain parody or satire sites could be affected. Also where does the argument of free speech come into play? I don’t agree with these misleading sites or conspiracy theorists, but isn’t it their right to speak and have the same access to the public as anyone else would. Shouldn’t it be up to internet users to determine what is true and what is not?

Earlier today Stephanie Christie wrote an interesting piece somewhat related to the past election and the new effect media and data are having on the world of politics.

Chrome is Demanding more...let's hope it doesn't cost anything

A possible resurgence of ads that inspire and are touching; it’s a bit of a leap to speculate that there could be a renaissance if the largest internet content players were to start to expect more from ad firms. Such a move could have repercussions for ad-supported websites and services, advertising technology companies, and advertisers themselves, depending what the final advertising filter looks like for Chrome.


Some publishing executives and media companies the move could have upside and downside, they say. "If this is something that takes concrete steps to clean up the most offensive stuff on the internet, then I think that’s very good news for us,” said Neil Vogel, chief executive at IAC ’s About.com Group. “People install ad blockers because low-end publishers violate their trust. If Google can stop egregious ads that make people want to block ads in the first place, that will be a good thing.” Another concern is Google already has almost total control over adverting on the internet. In addition to producing web browsers, Google also operates a mammoth online ad business complete with its own set of interests. "The risk here is this could concentrate a lot of power in the hands of one organization that is not neutral and has vested interests in all sides of this,” Mr. Vogel said. Publishers and ad firms are often reluctant to speak publicly about Google because of the power they feel the ad giant already has over them. Many content producers depend on Google to drive traffic to their sites and to help them sell advertising. “From the beginning, we have avoided the kinds of ads cited as the target of the Chrome ad-blocker concept—pop-ups, pre-roll ads etc.…. It’s clear there are a lot of very onerous experiences out there that have led to the understandable rise of ad-blocking,” said Jay Lauf, president and publisher of online news site Quartz, in an emailed statement. "We can’t comment on Google’s approach given what has been revealed thus far, but I think a more surgical approach is needed—deploying a sledgehammer approach to the ad ecosystem could have harmful implications,” Mr. Lauf added.


The WSJ interviewed Jason Kint, CEO of online publishing trade body Digital Content Next. His group is “committed to the Coalition for Better Ads as the forum for addressing consumer concerns around online ad experiences”, and said “Google’s potential ad filters appear to focus on enforcing those standards” He also stated “The world of ad blocking is as murky as they come. Friends and enemies can easily be confused, good and evil often mistaken and interests aren’t always as they appear”.
The Interactive Advertising Bureau, a trade group is looking to protect its constituents, their CEO Randall Rothenberg says, “Ad blocking is a war against diversity and freedom of expression”. The Coalition for Better Ads is a IAB member. Google is a member of both the IAB and the Coalition for Better Ads, alongside companies such as Facebook, AppNexus and other online publishers and advertising technology companies.


My view on all of this is, Google in a way, created this environment we currently have. If they look to charge a premium to consumers to improve their experience, it just seems unprincipled and hollow. Why not create a better service and environment for all consumers without charging for it? While the plans are still in their infancy and it remains to be seen if there will be a consumer cost associated, most media producers, for now, are reserving judgments. Which brings me to my next point how did we allow Alphabet to get so large that now no one is willing to speak out against it for fear of loss of business. I thought there were laws preventing monopolies from garnering this much influence and control? While I fully support, as I think most people do, that pop-ups, pre-roll ads are not useful and an annoyance; an internet experience free of them once and for all for all users should be free of charge and possible.

The War on Web Ads...well what did you expect?

 
Publishers must soon weigh the pros and cons of Google Chrome adding an ad blocking feature to customer accounts as written in the WSJ article this week. The feature would limit, if not eliminate, the ads that irritate consumers.

The pros are it would eventually eliminate the types of ads that annoy and alienate consumers. The cons are it would give more power to an entity that already controls most if not all internet non-social media advertising. This would cause advertisers to further compete against each other. So, I would argue it may also force a rebirth of creative advertising that is positive and thought provoking.

On the ladder point I would to touch on what I see as the laziness of current advertisers and point out a few of the Internet ads that went viral and some that haven’t caught fire yet, but that have gained my consideration and attention.

If advertisers should start focusing more on producing ads that are genuine instead of focused on page views and impressions it could be a rebirth of a new age of advertising.  I will expand in my later posts on what advertisers and publisher think of this.

IBM Should Bank on Cognitive Computing, whatever that is...

IBM's quarterly earnings have dropped and it suffered narrower profits across all its business units. It looks as though IBM may have to consider shedding some of the dead weight of some of its more unprofitable segments. The cloud computing and AI operations units suffered slimmer profits as well, which is interesting because you would see those divisions as a real money makers. The only division that reported improvement was cognitive solutions. This is interesting; the data analytics segment is the main performer in such a large force like IBM.

IBM states cognitive computing is “understand the meaning hidden within that data. Cognitive computing is able to unlock the potential in all data - internal, external, structured, unstructured, voice, and visual - and make it work together. Enterprises can make better operational decisions, understand customer wants and needs, communicate in real time, and optimize business processes – infused with the cognitive ability to understand, reason, and learn”.

IBMs legacy business of selling hardware and software is shrinking as customers embrace big-data analytics. It seems like these are the signs of things to come, IBM needs to be able to communicate it strengths in big data and shift its organizational resources effectively toward cognitive computing if it wants to remain competitive.

https://www.wsj.com/articles/ibm-profit-falls-13-despite-gains-from-cloud-services-watson-1492547508

https://www-935.ibm.com/services/us/gbs/cognitive/

How do you Monetize Facebook and Snap Chat, the experts aren't sure...

Expanding a bit of what the marketing outlook is for a firm like WPP, Martin Sorrelll CEO was interviewed by CNBC last month. The key concept for what he sees as the future of data and marketing is “Amazon is the biggest threat to Google in search” and “Snapchat could be the third force in the digital ad market behind Alphabet and Facebook”

The amount spent on Google ads compared to other search tools show how effective a platform it is to advertise on. That aside Google through its analytic tools makes it a highly useful resource to study the market and monetize your message.

Sorrell goes on to explain that he sees Amazon as posing a real challenge to Google, as far as driving actual sales. It is the search on Amazon that poses the greatest threat, “Amazons tentacles are spreading rapidly into all areas”.  

Not only is Amazon a force to be reckoned with in the area of search and sales; its Echo product has complete changed the world of marketing. It takes consumers comparison shopping out of the equation. Buying is driven by prior purchase history and brand preference mostly.

Now consumer goods producers will just need to find new way for their products to be suggested by Alexa and the brand relationship will be set.

Sorrell said Google and Facebook represent 75 percent of spending on digital; and he hopes this changes to more of a balance; these two sites do not represent the silver bullet marketers and companies should rely on. Last year on behalf of their clients WPP spent just under $5 billion on Google advertising in 2016, an increase of $2 billion from the year before.

To give you a sense of what WPP spent on other media; it spent $1.7 billion on Facebook and $90 million on Snapchat. Sorrell said he believed ad spend for Google this year could reach $6 billionand Facebook could reach 2.5 billion.

Sorrell sees the threat to Facebook to be from Snapchat, he believes the spending is currently “relatively insignificant” but could become a strong third force to be reckoned with.

The problem with WPP spending (possibly) $2.5 billion in 2017 in ads on behalf of clients, is the results are not always as clear. That is the weakness in using a platform that reaches the masses but has little analytics behind it. Facebook is simply not built that way. Google has analytic tools and technology (obviously) and Amazon has their own data driven by sales of products. The frustrating thing for admen like Sorrell, I would surmise is the frustration with clients constantly looking to use Facebook as the preferred avenue of ad spend, with little knowledge of its success to be gleamed.

Sorrell goes on to point out the reason Google has been a success, is “the results are very clear”. Facebook is more effective (according to him) as a brand mechanism; as a way of building brands rather than driving sales. Which I would image is advantageous for social ideas and campaigns but not as a successful funnel for consumers.

My own opinion as it relates to social media channels the likes of Snap, Instagram, Facebook, Twitter, and Sorrell makes this point as well, you must be able to eventually demonstrate return on investment. Which has been the sticking point in the various finance classes I have attended; colleagues analyze new tech firms, such as Twitter, Instagram, Uber; the same issue constantly comes up, they are not profitable in the beginning, the breakeven point is five years into the future, the IPOs are priced outlandishly and likely by the time the firm gets to year five their attritions are in the gutter and they are yesterday’s news. The same can’t be said for Amazon or Alphabet.

Source:

http://www.cnbc.com/2017/03/01/amazon-is-the-biggest-threat-to-google-in-advertising-snap-facebook-thraet-martin-sorrell-wpp-ceo-says.html

Marketers on the defensive...

Interesting article in WSJ from last week, it states that there can be a lot learned and gleamed from pursing a lean and acquisitive operating model like Kraft Heinz. Which is to say companies in the consumer goods industry should not be solely focused on using advertising powerhouses like WPP and Omnicom. Investors and shareholder activist or not like to see that companies can boost their profitability without the help of outside ad agencies. Ad agencies are facing digital disruption; Google and Facebook are increasingly dominant if not completely necessary at this point. The article goes on to point out that “virtually all incremental ad spending in the US” was on Google and Facebook. This threatens the core competences of traditional ad agencies. There are still problems with automated advertising; something I mentioned in my previous blog post (regarding YouTube ads popping up in unlikely places). Unilever will cut ad spend by 30% and WPP is one of their top accounts (something mentioned in my previous post). Marketers, your traditional big 5 ad firms, will likely need to consider restructuring talent and money spent to make sense of the changing market and technology. I plan to expand on this concept more completely later this week.

YouTube settles the trouble with delayed gratification..kind of....

YouTube is finally changing their ad policy and viewer like me are rejoicing; however smaller channels are likely to lawyer up…

YouTube is instituting new rules for video creators, this is said to protect advertisers from having their content winding up on video channels they might consider unsafe. The new watermark is to have at least 10K views. When a channel reaches this benchmark “YouTube will review the creator’s activity to make sure it’s in line with its policies and safe for advertisers”. In the past advertisers have had their materials stolen and put on terrorist videos and racist biased channels.

 It’s a change in a policy from a few years ago; a policy that made it possible for anyone to make money from ads. It is meant to block channels that steal others’ content for revenue.

Unilever one of the largest ad producers announced it would produce 30% fewer ads and reduce the agencies it works with by half. Unilever says it produces more ads than consumers even see. Going forward Unilever will focus more on quality (time) over quantity.

I am sure that many viewers, myself, included are looking forward to getting to watch their favorite clips and how-to videos without having to watch a 30 second Tide commercial.

China's Leading Payday Lender uses AI and it's likely to catch fire

To make decisions on potential borrowers the leading payday app in China, Yongqianbao collects more than 1200 data points. The Wall Street Journal article states they are using artificial technology AI to analyze data and behavior.  To put this in context let’s look at some of the more interesting AI methods Yongquianao uses in making business decisions for potential borrowers. “iPhone users tend to have lower late-payment rates than Android phone users, and people who don’t answer calls or whose outgoing calls go unanswered represent a higher default and fraud risk”. Other red flags include making many changes when filling in the application, letting batteries run down and changing phones frequently. “Multiple applications from a single Wi-Fi hot spot is a danger sign”. Also, users who borrow in one city but spend in another are considered lower risks.

AI aside the alternate data being used by a competition loan service companies or Fintech companies analyzes mobile usage and online shopping tends to assess credit risk. The conventional data we are accustomed to such as credit score, loans outstanding, criminal history, previous account defaults are “old school” methods of making loan decisions.

The Chinese market for online loans last year accounts for roughly 1.2 trillion yuan or $174 billion. About 80% of its borrowers are younger than 30 and the most interesting point was that loans past the 60-day due date stood at 2.8% in February; which is not bad considering they approved 1.2 loans worth 1.8 billion yuan ($270m). Yongqianbao, whose approval rate for first-time applicants is 20% to 30%, is run by engineers. Fintech competitors say, “the power of artificial intelligence is bringing default rates down by finding correlations between smartphone behavior and risk and using them to create tools that can analyze creditworthiness in an instant”.

There are certain ethical considerations to all of this…

First financial tech companies without AI technology already have wealth of data to draw from when making loans decisions. Are those traditional data points not enough already? The use of AI to know instantly where you are typically every day, to know how much charge is in your phone, if you made any changes while filling out a loan application; certain seems like an invasion of privacy to me. Loan companies and payday lenders already hedge their bets with fees and interest, now with AI they can guarantee they will (97% of their time) get their money back. With limited or almost no risk, then you would think fee and interest would come down? Well the article does not expand on this point but my guess is fees and interest will not come down.

My concern is that just because China is currently using these technologies and methods does not mean that soon the US lenders like PayPal won’t. Given the history and current conditions of our financial services industry; I see little downside and huge upside. Especially if we consider a company like Wells Fargo opened thousands of accounts for customers without authorization; who is to say banks won’t implement these technologies in the backend or house these operations overseas far from the purview of the CFPB and FCC. It is a mighty slippery slope and it feels like and step to far into one’s personal life.

If these big data technologies were to find their way in to US loan decisions (eventually), I fear it will only come to light after an investigation or whistleblower reveals it. Financial tech firms and lending institutions have a history of skirting the law and concealing data analytics to their

China's payday loan companies can read your mind and cheat you blind, and YouTube stands to alienate almost every marketer...finally

There are two very interesting articles in this morning in the Wall Street Journal's tech. section. One involves Artificial Intelligence and Payday loans made to Chinese young adults here. The other article speaks about YouTube's change in policy requiring at least 10K views in order for ads to be present before and/or during a video here . The first article notes some of the analytics and algorithms companies are using behind making sound loan decisions; using what some would consider "creepy" data. The latter article stands to cut off 88% of YouTube's current channels, posing a potential negative impact on their bottom line; by addressing what has long been a compliant of their current viewers.


I plan on expanding on both of these subject with more of a focus on the Payday loans and Big Data, mostly because it a subject near and dear to my heart as a former chapter leader of a political research group's consumer protection segment. Big Data and AI can be used for positive influences and altruistic effect, but all to often they are used to expand negative influence on society and youth. What are the societal benefits and is there a possibility of an added positive influence on users?