Category Archives: Brand Building

The Seedy, Seedy World of Keto Gummies

OK, admit it. I play games on my phone.

Also, I’m cheap, so I play the free, ad-supported versions.

You might call this a brain-dead waste of time, but I prefer to think of it as diligent and brave investigative journalism.  The time I spend playing Bricks Ball Crusher or Toy Blast is, in actuality, my research into the dark recesses of advertising on behalf of you, the more cerebral and discerning readers of this blog. I bravely sacrifice my own self-esteem so that I might tread the paths of questionable commerce and save you the trip.

You see, it was because of my game playing that I was introduced to the seediest of seedy slums in the ad world, the underbelly known as the in-game ad. One ad, in particular, reached new levels of low.

If you haven’t heard of the Keto Gummies Scam, allow me to share my experience.

This ad hawked miracle gummies that “burn the fat off you” with no dieting or exercising. Several before and after photos show the results of these amazing little miracle drops of gelatin. They had an impressive supporting cast. The stars of the TV pitchfest “Shark Tank” had invested in them. Both Rebel Wilson and Adele had used them to shed pounds. And then — the coup de grace — Oprah (yes, the Oprah!) endorsed them.

The Gummy Guys went right the top of the celebrity endorsement hierarchy when they targeted the big O.

As an ex ad guy, I couldn’t ignore this ad. It was like watching a malvertising train wreck. There was so much here that screamed of scam, I couldn’t believe it. The celebrity pics used were painfully obvious in their use of photoshopping. The claims were about as solid as a toilet paper Taj Mahal. The entire premise reeked of snake oil.

I admit, I was morbidly fascinated.

First, of all the celebrities in all the world, why would you misappropriate Oprah’s brand? She is famously protective of it. If you’re messing with Oprah, you’ve either got to be incredibly stupid or have some serious stones. So which was it?

I started digging.

First of all, this isn’t new. The Keto Gummy Scam has been around for at least a year. In addition to Oprah, they have also targeted Kevin Costner, Rhianna, Trisha Yearwood, Tom Selleck, Kelly Clarkson, Melissa McCarthy — even Wayne Gretzky.

Last Fall, Oprah shared a video on Instagram warning people that she had nothing to do with the gummies and asking people not to fall for the scam. Other celebrities have fallen suit and issued their own warnings.

Snopes.com has dug into the Keto Gummy Scam a couple of times.  One exposé focused on the false claims that the gummies were featured on “Shark Tank.” The first report focused just on the supposed Oprah Winfrey endorsement. That one was from a year ago. That means these fraudulent ads have been associated with Oprah for at least a year and legally, she has been unable to stop them.

To me, that rules out my first supposition. These people aren’t stupid.

This becomes apparent when you start trying to pick your way through the maze of misinformation they have built to support these ads. If you click on the ad you’re taken to a webpage that looks like it’s from a reliable news source. The one I found looked like it was Time’s website. There you’ll find a “one-on-one interview” with Oprah about how she launched a partnership with Weight Watchers to create the Max Science Keto gummies. According to the interview, she “called the CEO of Weight Watchers and said ‘if you can’t create a product that helps people lose weight faster without diet and exercise, then I’m backing out of my investment and moving on.”

This is all complete bullshit. But it’s convincing bullshit.

It doesn’t stop there. Clickbait texts with outrageous claims, including the supposed death of Oprah, get clicks through to more bogus sites with more outrageous claims about gummies. While the sites mimic legitimate news organizations like Time, they reside on bogus domains such as genuinesmother.com and newsurvey22offer.com. Or, if you go to them through an in-app link, the URLs are cloaked and remain invisible.

If you turn to a search engine to do some due diligence, the scammers will be waiting for you. If you search for “keto gummies scam” the results page is stuffed with both sponsored and organic spam that appear to support the outrageous claims made in the ads. Paid content outlets like Outlook India have articles placed that offer reviews of the “best keto gummies,” fake reviews, and articles assuring potential victims that the gummies are not a scam but are a proven way to lose weight.

As the Snopes investigators found, it’s almost impossible to track these gummies to any company. Even if you get gummies shipped to you, there’s no return address or phone number. Orders came from a shadowy “Fulfillment Center” in places like Smyrna, Tennessee. Once they get your credit card, the unauthorized charges start.

Even the name of the product seems to be hard to nail down. The scammers seem to keep cycling through a roster of names.

This is, by every definition, predatory advertising. It is the worst example of what we as marketers do. But, like all predators, it can only exist because an ecosystem allows it to exist. It’s something we have to think about.

I certainly will. More on that soon.

The Comedic Comeback

Public confessions are a funny thing.

No, seriously. They’re funny. At least, John Mulaney hopes they’re funny.

His latest Netflix special, Baby J, which just dropped two weeks ago is all about coming back from having his reputation hammered on social media.

John has had a tough time of late. He filled his “Covid Years” with getting divorced from his wife, Anna Marie Tendler, stumbling into an intervention, going to rehab, relapsing, going back to rehab, dating Olivia Munn – and – oh yeah – announcing he’s having a baby with Munn. All of that happening not necessarily in that order.

Mulaney opens his Neflix show with a little song and dance:

“You know what I mean!
We all quarantined!
We all went to rehab and we all got divorced,
and now our rep-u-ta-tion is different!”
“No one knows what to think! 
Hey ya! 
All the kids like Bo Burnham more!
Because he’s currently less problematic.…

Likability is a jail.”


“Likability is a jail.” Mulaney sang that with a smile on his face, but there is some grit in that line. You can almost feel it grinding in the gears of his career.

To be fair, when you build a career on likability in the era of social media, you have to accept that it’s a pretty tenuous foundation for fame. It leaves you extremely vulnerable to being publicly called out for anything that might rub against the grain of your carefully constructed brand.  And, if you are called out – or, in extreme cases – completely cancelled, you have to somehow make it all the way back from simply being accepted to being liked again.

When you think about it, it’s probably a lot easier to build your brand on being an asshole. It’s a lot lower bar to get over. I don’t think Donald Trump loses a lot of sleep over being cancelled. And – just last week –  people gathered at the Met in New York for their Gala honoring fashion icon Karl Lagerfeld, who has never apologized for being one of the biggest and most outspoken assholes in history.  

Mulaney is the latest of a long line of comedian come backs who have been hammered by the fickle fist of being “social media famous.” He is gingerly treading in the footsteps of Louis C.K., Aziz Ansari – even Chris Rock took a stab at it, and he wasn’t the one that got cancelled. That would be Will Smith, who is still trying to pick up the pieces of his career after an ill-considered incident of physical assault in front of a worldwide audience.

You probably wouldn’t be surprised to learn that there’s a playbook for coming back after being eviscerated in the public arena of social media. According to Lori Levine, CEO of the PR firm Flying Television, it requires something called an “Apology Tour.”

The timing of this is critical. According to Levine, you first have to fly under the radar for a bit, “take a certain amount of time to stay quiet, stay off social media, not engage in any press interviews.” After a period of being suitably and silently contrite, you then move to Stage Two, “Slowly return explaining that they have ‘done the work’ [and] are feeling remorseful.”

This was pretty much the playbook that Mulaney followed. The advantage, if you’re a comedian, is that the stand-up stage is the perfect platform for the “apology tour.” It has the built in advantage of being an entertainment form that thrives on making fun of yourself. That’s probably why a good portion of Netflix’s programming calendar consists of comedians lining up for their respective “apology tours.”

Comedians on the social media comeback tour are also given a helping hand in this by the emergence of the “uneasy laughter” of dark comedy over the past decade or so. While dark – or black – humor has been around decades in the form of novels or movies, it has only been in the last decade or so that stand-up comedians combined dark humor with an unflinchingly intimate look into their own personal struggles. Since the unapologetically brilliant live performance of Tig Notaro in 2012 where she talked about her recent diagnosis of breast cancer, stand-up has dared to go to places never imagined just a few years ago.

This creates the perfect environment for the “apology tour.” The whole point is to have a no holds barred discussion of where the comedian erred in judgement. Mulaney navigated this potential minefield with surefooted grace. Probably the funniest and most authentic bit was when he started riffing with a 5th grader up in the balcony at the start of the show, warning him not to “do any of the things I’m about to talk about.”  Somehow – to me – that felt more real than everything that was to follow.

If anything, Mulaney’s recent performance was a sign of our times. It was a necessary step back from public humiliation. I’m not sure it was that funny. But it was John Mulaney reclaiming some control over his public persona. He was telling us we can’t possibly do anything worst to him than he’s done to himself…

“What, are you gonna cancel John Mulaney? I’ll kill him. I almost did.”

Why Infuriating Your Customers May Not Be a Great Business Strategy

“Online, brand value is built through experience, not exposure”

First, a confession. I didn’t say this. I wish I’d said it, but it was actually said by usability legend Jakob Nielsen at a workshop he did way back in 2006. I was in the audience, and I was listening.  Intently.

But now, some 17 years later, I have to wonder if anyone else was. According to a new study from Yext that Mediapost’s Laurie Sullivan looked at, many companies are still struggling with the concept. Here’s just a few tidbits from her report:

“47% (of leads) in a Yext survey saying they were unable to make an online purchase because the website’s help section did not provide the information needed.”

“On average respondents said it takes nearly 9 hours for a typical customer service issue to be resolved. Respondents said resolution should take about 14.5 minutes.”

“42% of respondents say that help sites do not often provide the answers they look for with a first search.”

“The biggest challenge, cited by 61%, is that the help site does not understand their question.”

This isn’t rocket science, people. If you piss your customers and prospects off, they will go find one of your competitors that doesn’t piss them off. And they won’t come back.

Perhaps the issue is that businesses doing business online have a bad case of the Lake Wobegon effect. This, according to Wikipedia, is a “a natural human tendency to overestimate one’s capabilities.” It came from Garrison Keillor’s description of his fictional town in Minnesota where “all the women are strong, all the men are good-looking, and all the children are above average”

When applied to businesses, it means that they think they’re much better at customer service than they actually are. In a 2005 study titled “Closing the delivery gap”, Global consulting firm Bain & Company found that 80% of companies believe they are delivering a superior service. And yet, only 8% of customers believe that they are receiving excellent service.

I couldn’t find an update to this study but I suspect this is probably still true. It’s also true that when it comes to judging the quality of your customer service, your customer is the only one that can do it. So you should listen to them.

If you don’t listen, the price you’re paying is huge. In yet another study, Call Centre Platform Provider TCN’s second annual “Consumer Insights about Customer Service,” 66% of Americans are likely to abandon a brand after a poor customer service experience.

Yet, for many companies, customer service is at the top of their cost-cutting hit list. According to the Bureau of Labor Statistics, the projected average growth rate for all occupations from 2020 – 2030 is 8%, but when looking at customer service specifically, the estimated growth is actually -4%. In many cases, this reduced head count is due to companies either outsourcing their customer service or swapping people for technology.

This is probably not a great move.

Again, according to the TCN study, when asked what their preferred method of communication with a company’s customer service department was, number one was “talking to a live agent by phone” with 49 % choosing it. Just behind was 45% choosing an “online chat with a live agent.”

Now, granted, this is coming from a company that just happens to provide these solutions, so take it with a grain of salt, but still, this is probably not the place you should be reducing your head count.

One final example of the importance customer service, not from a study but from my own circle of influencers. My wife and I recently booked a trip with my daughter and her husband and, like everyone else in the last few years, we found we had to cancel the trip. The trip was booked through Expedia so the credits, while issued by the carrier, had to be rebooked through Expedia.

My daughter tried to rebook online and soon found that she had to talk to an Expedia Customer Service Agent. We happened to be with her when she did this. It turned out she talked to not one, but three different agents. The first flatly refused to rebook and seemed to have no idea how the system worked. The second was slightly more helpful but suggested a way to rebook that my daughter wasn’t comfortable with. The third finally got the job done. This took about 3 hours on the phone, all to do something that should have taken 2 minutes online.

I haven’t mustered up the courage to attempt to rebook my credits yet. One thing I do know – it will involve whiskey.

What are the chances that we will book another flight on Expedia?    About the same as me making the 2024 Olympic Chinese Gymnastic Team.

Actually, that might have the edge.

Looking at Life through Ad-Coloured Glasses

Love em or hate em – you have to admit that ads are a fascinating creative form. They are – more perhaps than any other form of creative expression – a message with a mission.

Orson Welles once said, “The Enemy of Art Is the Absence of Limitations.”

Lorne Michaels – Executive Producer of Saturday Night Live, agreed, “To me there’s no creativity without boundaries. If you’re gonna write a sonnet, it’s 14 lines, so it’s solving the problem within the container.”

I do agree with both Mr. Michaels and Mr. Welles, so let’s strip down advertising to the 4 bare walls that make up the boundaries of a commercial message:

  • It has to get your attention when you may not want to give it
  • It has to get you to think about something you’re not currently thinking about
  • It has to persuade you to buy something or do something you probably don’t absolutely need to have or do
  • It needs to get its message across in an incredibly short span of time

Given these limitations, a successful ad gives us a fascinating glimpse into the context of the culture it was created within. In order to successfully tick all the boxes above, it can’t be subtle. It has to prick our consciousness, piercing through the fog of the cloud of cultural content we exist within. And, in doing all that, it then has to leave us feeling somewhere north of ambivalent about the product or brand that the ad is about.

For this reason, ads have to be unapologetically commercial, often blunt and sometimes push against the edge of what’s acceptable to us. They have to arouse our brains without triggering outrage. The boundaries of an ad help define the form of creativity that goes into the creation of an effective ad. This creativity, in turn, becomes an interesting reflection of the culture in which that ad has to perform.

I’ve talked before about the psychological concept called “leveling and sharpening” – where our brains repackage our experiences to make them easier to remember and retell as stories. Unnecessary detail is “leveled” out and certain outstanding details are “sharpened” to add interest. I suspect ads may represent an intentional leveling and sharpening that make them caricatures of the culture they come from.

I have a friend who’s a history professor. Some years ago, he oversaw an archeological dig at a site that had been a railway laborer camp 100 years before. He told me that for an archeologist, the most interesting area to dig was where they had the latrines, because that’s where you threw everything you didn’t want people to find. It was there that you found out what life was really like in the camps. In this way, maybe ads are a kind of metaphorical outhouse for our culture.

This all came to mind when I happened across an online post that featured ads from the past that would be unacceptable to us now, but as a relic of the culture they came from, gives us a fascinating and often uncomfortable glimpse of what was acceptable in a different time and place.

Looking Kellogg’s ad from the early 1900s. Source: Veronica Costa / Flickr / The Commons)

Take an ad for Kellogg’s Pep Cereal, circa 1940s. The ad’s headline is, “So The Harder a Wife Works, The Cuter She Looks” The ad features a picture of a couple, wife in front wearing a dress and apron while holding a feather duster, while the husband hugs her from behind with an admiring look in his eye. This messaging is not so far removed from the cultural context that would have surrounded it. Women were meant to be at home, making the house tidy and cooking dinner for her husband. Her only other worth is hinted at in the headline.

At least that ad is a little more subtle than the one for Pitney Bowes Postage Meters from 1947. The headline here is “Is It Always Illegal to Kill a Woman?” The premise – wait for it – is that the postage meter makes life so easy for a secretary that she has more time to gossip and slack off at work, driving her boss to justifiable homicide.

(Image Source: Monolith68 / Flickr / The Commons)

This ad, in particular, makes my point. Obviously, the supposed humor in the situation has been grossly exaggerated to get your attention. But even with this, there had to be a culture that saw this as being within the bounds of the acceptable, resulting in a “wink-wink” type of bemusement rather than moral outrage.

You also have to wonder about the targeting strategies of these ads. In the case of Kellogg’s Pep, it would have been assumed that women did the grocery shopping, so the ad would have been targeted with this unspoken message: “Women, throw some Kellogg’s Pep in your grocery cart and you’ll be the perfect wife.”

In the case of the Pitney Bowes ad, men would buy postage machines for an office (no women should have that much power) and so the ad played on what an “unsufferable pain in the ass female employees were.”

It’s in these ads where you see how misogynistic the culture truly was. These attitudes towards the place of women in society were more muted and often glamorized in other longer-form media, such as movies. Consider the bluntness of the chauvinism found in these ads compared to the more subtle forms found in popular movies of the time – such as the loyalty of Donna Reed to James Stewart in It’s a Wonderful Life or Ingrid Bergman’s “Ilsa” in Casablanca. All views came from the same culture, but through a different lens.

Ads didn’t have the luxury of being subtle. When you only have a few seconds to get your message across, there is no room for nuance. The boundaries defined the form of the message, and the message was that culturally, women were still considered chattel.

In our current reality of cancel culture, these ads are in a category of poor taste that can only be described as jaw dropping. But they do act as a lens through which to look at another place and time. They are cultural caricatures that – hopefully – point out that we have made some progress and perhaps, the past wasn’t as golden and innocent as some would have us believe.

The Joe Rogan Experiment in Ethical Consumerism

We are watching an experiment in ethical consumerism take place in real time. I’m speaking of the Joe Rogan/Neil Young controversy that’s happening on Spotify. I’m sure you’ve heard of it, but if not, Canadian musical legend Neil Young had finally had enough of Joe Rogan’s spreading of COVID misinformation on his podcast, “The Joe Rogan Experience.” He gave Spotify an ultimatum: “You can have Rogan or Young. Not both.”

Spotify chose Rogan. Young pulled his library. Since then, a handful of other artists have followed Young, including former band mates David Crosby, Stephen Stills and Graham Nash, along with fellow Canuck Hall of Famer Joni Mitchell.

But it has hardly been a stampede. One of the reasons is that — if you’re an artist — leaving Spotify is easier said than done. In an interview with Rolling Stone, Rosanne Cash said most artists don’t have the luxury of jilting Spotify: 

“It’s not viable for most artists. The public doesn’t understand the complexities. I’m not the sole rights holder to my work… It’s not only that a lot of people who aren’t rights holders can’t remove their work. A lot of people don’t want to. These are the digital platforms where they make a living, as paltry as it is. That’s the game. These platforms own, what, 40 percent of the market share?”

Cash also brings up a fundamental issue with capitalism: it follows profit, and it’s consumers who determine what’s profitable. Consumers make decisions based on self-interest: what’s in it for them. Corporations use that predictable behavior to make the biggest profit possible. That behavior has been perfectly predictable for hundreds of years. It’s the driving force behind Adam Smith’s Invisible Hand. It was also succinctly laid out by economist Milton Friedman in 1970:

“There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

We all want corporations to be warm and fuzzy — but it’s like wishing a shark were a teddy bear. It just ain’t gonna happen.

One who indulged in this wishful thinking was a little less well-known Canadian artist who also pulled his music  from Spotify, Ontario singer/songwriter Danny Michel. He told the CBC:

“But for me, what it was was seeing how Spotify chose to react to Neil Young’s request, which was, you know: You can have my music or Joe. And it seems like they just, you know, got out a calculator, did some math, and chose to let Neil Young go. And they said, clear and loud: We don’t need you. We don’t need your music.”

Well, yes, Danny, I’m pretty sure that’s exactly what Spotify did. It made a decision based on profit. For one thing, Joe Rogan is exclusive to Spotify. Neil Young isn’t. And Rogan produces a podcast, which can have sponsors. Neil Young’s catalog of songs can’t be brought to you by anyone.

That makes Rogan a much better bet for revenue generation. That’s why Spotify paid Rogan $100 million. Music journalist Ted Gioia made the business case for the Rogan deal pretty clear in a tweet

“A musician would need to generate 23 billion streams on Spotify to earn what they’re paying Joe Rogan for his podcast rights (assuming a typical $.00437 payout per stream). In other words, Spotify values Rogan more than any musician in the history of the world.”

I hate to admit that Milton Friedman is right, but he is. I’ve said it time and time before, to expect corporations to put ethics ahead of profits is to ignore the DNA of a corporation. Spotify is doing what corporations will always do, strive to be profitable. The decision between Rogan and Young was done with a calculator. And for Danny Michel to expect anything else from Spotify is simply naïve. If we’re going to play this ethical capitalism game, we must realize what the rules of engagement are.

But what about us? Are we any better that the corporations we keep putting our faith in?

We have talked about how we consumers want to trust the brands we deal with, but when a corporation drops the ethics ball, do we really care? We have been gnashing our teeth about Facebook’s many, many indiscretions for years now, but how many of us have quite Facebook? I know I haven’t.

I’ve seen some social media buzz about migrating from Spotify to another service. I personally have started down this road. Part of it is because I agree with Young’s stand. But I’ll be brutally honest here. The bigger reason is that I’m old and I want to be able to continue to listen to the Young, Mitchell and CSNY catalogs. As one of my contemporaries said in a recent post, “Neil Young and Joni Mitchell? Wish it were artists who are _younger_ than me.”

A lot of pressure is put on companies to be ethical, with no real monetary reasons why they should be. If we want ethics from our corporations, we have to make it important enough to us to impact our own buying decisions. And we aren’t doing that — not in any meaningful way.

I’ve used this example before, but it bears repeating. We all know how truly awful and unethical caged egg production is. The birds are kept in what is known as a battery cage holding 5 to 10 birds and each is confined to a space of about 67 square inches. To help you visualize that, it’s just a bit bigger than a standard piece of paper folded in half. This is the hell we inflict on other animals solely for our own gain. No one can be for this. Yet 97% of us buy these eggs, just because they’re cheaper.

If we’re looking for ethics, we have to look in other places than brands. And — much as I wish it were different — we have to look beyond consumers as well. We have proven time and again that our convenience and our own self-interest will always come ahead of ethics. We might wish that were different, but our spending patterns say otherwise.

It’s the Buzz That Will Kill You

If you choose to play in the social arena, you have to accept that the typical peaks and valleys of business success can suddenly become impossibly steep.

In social media networks, your brand message is whatever meme happens to emerge from the collective activity of this connected market. Marketers have little control — and sometimes, they have no control. At best, all they can do is react by throwing another carefully crafted meme into the social-sphere and hope it picks up some juice and is amplified through the network.

That’s exactly what happened to Peloton in the past week and a half.

On Dec. 9, the HBO Max sequel to “Sex and the City” killed off a major character — Chris Noth’s Mr. Big — by giving him a heart attack after his one thousandth Peloton ride. Apparently, HBO Max gave Peloton no advance warning of this branding back hand.

On Dec. 10, according to Axios,  there was a dramatic spike in social interactions talking about Mr. Big’s last ride, peaking near 80 thousand. As you can imagine, the buzz was not good for Peloton’s business.

On Dec. 12, Peloton struck back with its own ad, apparently produced in just 24 hours by Ryan Reynold’s Maximum Effort agency. This turned the tide of the social buzz. Again, according to data from Newswhip and Axios, social media mentions peaked. This time, they were much more positive toward the Peloton brand.

It should be all good — right? Not so fast. On Dec 16, two sexual assault allegations were made against Chris Noth, chronicled in The Hollywood Reporter. Peloton rapidly scrubbed its ad campaign. Again, the social sphere lit up and Peloton was forced back into defensive mode.

Now, you might call all this marketing froth, but that’s  the way it is in our hyper-connected world. You just have to dance the dance — be nimble and respond.

But my point is not about the marketing side of this of this brouhaha – which has been covered to death, at least at MediaPost (sorry, pardon the pun.) I’m more interested  in what happens to the people who have some real skin in this particular game, whose lives depend on the fortunes of the Peloton brand. Because all this froth does have some very IRL consequences.

Take Peloton’s share price, for one.

The day before the HBO show aired, Peloton’s shares were trading at $45.91. The next day, they tumbled 16%. to $38.51.

And that’s just one chapter in the ongoing story of Peloton’s stock performance, which has been a hyper-compressed roller coaster ride, with the pandemic and a huge amount of social media buzz keeping the foot firmly on the accelerator of stock performance through 2020, but then subsequently dropping like a rock for most of 2021. After peaking as high as $162 a share exactly a year ago, the share price is back down to spitting distance of its pre-pandemic levels.

Obviously, Peloton’s share price is not just dependent on the latest social media meme. There are business fundamentals to consider as well.

Still, you have to accept that a more connected meme-market is going to naturally accelerate the speed of business upticks and declines. Peloton signed up for this dance — and  when you do that, you have to accept all that comes with it.

In terms of the real-world consequences of betting on the buzz, there are three “insider” groups (not including customers) that will be affected: the management, the shareholders and the employees. The first of these supposedly went into this with their eyes open. The second of these also made a choice. If they did their due diligence before buying the stock, they should have known what to expect. But it’s the last of these — the employees — that I really feel for.

With ultra-compressed business cycles like Peloton has experienced, it’s tough for employees to keep up. On the way up the peak, the company is running ragged trying to scale for hyper-growth. If you check employee review sites like Glassdoor.com, there are tales of creaky recruitment processes not being able to keep up. But at least the ride up is exciting. The ride down is something quite different.

In psychological terms, there is something called the locus of control. These are the things you feel you have at least some degree of control over. And there is an ever-increasing body of evidence that shows that locus of control and employee job satisfaction are strongly correlated. No one likes to be the one constantly waiting for someone else to drop the other shoe. It just ramps up your job stress. Granted, job stress that comes with big promotions and generous options on a rocket ship stock can perhaps be justified. But stress that’s packaged with panicked downsizing and imminent layoffs is not a fun employment package for anyone.

That’s the current case at Peloton. On Nov. 5 it announced an immediate hiring freeze. And while there’s been no official announcement of layoffs that I could find, there have been rumors of such posted to the site thelayoff.com.  This is not a fun environment for anyone to function in. Here’s what one post said: “I left Peloton a year ago when I realized it was morphing into the type of company I had no intention of working for.”

We have built a business environment that is highly vulnerable to buzz. And as Peloton has learned, what the buzz giveth, the buzz can also taketh away.

When Social Media Becomes the Message

On Nov. 23, U.K. cosmetics firm Lush said it was deactivating its Instagram, Facebook, TikTok and Snapchat accounts until the social media environment “is a little safer.” And by a “safer” environment, the company didn’t mean for advertisers, but for consumers. Jack Constantine, chief digital officer and product inventor at Lush, explains in an interview with the BBC:

“[Social media channels] do need to start listening to the reality of how they’re impacting people’s mental health and the damage that they’re causing through their craving for the algorithm to be able to constantly generate content regardless of whether it’s good for the users or not.”

This was not an easy decision for Lush. It came with the possibility of a substantial cost to its business, “We already know that there is potential damage of £10m in sales and we need to be able to gain that back,” said Constantine. “We’ve got a year to try to get that back, and let’s hope we can do that.”

In effect, Lush is rolling the dice on a bet based on the unpredictable network effects of social media. Would the potential loss to its bottom line be offset by the brand uptick it would receive by being true to its core values? In talking about Lush’s move on the Wharton Business Daily podcast, marketing lecturer Annie Wilson pointed out the issues in play here:

“There could be positive effects on short-term loyalty and brand engagement, but it will be interesting to see the long-term effect on acquiring new consumers in the future.”

I’m not trying to minimize Lush’s decision here by categorizing it as a marketing ploy. The company has been very transparent about how hard it’s been to drop — even temporarily — Facebook and its other properties from the Lush marketing mix. The brand had previously closed several of its UK social media accounts, but eventually found itself “back on the channels, despite the best intentions.”

You can’t overstate how fundamental a decision this is for a profit-driven business. But I’m afraid Lush is probably an outlier. The brand is built on making healthy choices. Lush eventually decided it had to stay true to that mission even if it hurts the bottom line.

Other businesses are far from wearing their hearts on their sleeves to the same extent as Lush. For every Lush that’s out there, there are thousands that continue to feed their budgets to Facebook and its properties, even though they fundamentally disagree with the tactics of the channel.

There has been pushback against these tactics before. In July of 2020, 1000 advertisers joined the #StopHateForProfit Boycott against Facebook. That sounds impressive – until you realize that Facebook has 9 million clients. The boycotters represented just over .01% of all advertisers. Even with the support of other advertisers who didn’t join the boycott but still scaled back their ad spend, it only had a fleeting effect on Facebook’s bottom line. Almost all the advertisers eventually returned after the boycott.

As The New York Times reported at the time, the damage wasn’t so much to Facebook’s pocketbook as to its reputation. Stephen Hahn-Griffiths, the executive vice president of the public opinion analysis company RepTrak, wrote in a follow-up post,

“What could really hurt Facebook is the long-term effect of its perceived reputation and the association with being viewed as a publisher of ‘hate speech’ and other inappropriate content.”

Of course, that was all before the emergence of a certain Facebook data engineer by the name of Frances Haugen. The whistleblower released thousands of internal documents to the Wall Street Journal this past fall. It went public in September of this year in a series called “The Facebook Files.” If we had any doubt about the culpability of Zuckerberg et al, this pretty much laid that to rest.

Predictably, after the story broke, Facebook made some halfhearted attempts to clean up its act by introducing new parental controls on Instagram and Facebook. This follows the typical Facebook handbook for dealing with emerging shit storms: do the least amount possible, while talking about it as much as possible. It’s a tactic known as “purpose-washing.”

The question is, if this is all you do after a mountain of evidence points to you being truly awful, how sincere are you about doing the right thing? This puts Facebook in the same category as Big Tobacco, and that’s pretty crappy company to be in.

Lush’s decision to quit Facebook also pinpoints an interesting dilemma for advertisers: What happens when an advertising platform that has been effective in attracting new customers becomes so toxic that it damages your brand just by being on it? What happens when, as Marshall McLuhan famously said, the medium becomes the message?

Facebook is not alone with this issue. With the systematic dismantling of objective journalism, almost every news medium now carries its own message. This is certainly true for channels like Fox News. By supporting these platforms with advertising, advertisers are putting a stamp of approval on those respective editorial biases and — in Fox’s case — the deliberate spreading of misinformation that has been shown to have a negative social cost.

All this points to a toxic cycle becoming more commonplace in ad-supported media: The drive to attract and effectively target an audience leads a medium to embrace questionable ethical practices. These practices then taint the platform itself, leading to it potentially becoming brand-toxic. The advertisers then must choose between reaching an available audience that can expand its business, or avoiding the toxicity of the platform. The challenge for the brand then becomes a contest to see how long it can hold its nose while it continues to maximize sales and profits.

For Lush, the scent of Facebook’s bullshit finally grew too much to bear — at least for now.

Whatever Happened to the Google of 2001?

Having lived through it, I can say that the decade from 2000 to 2010 was an exceptional time in corporate history. I was reminded of this as I was reading media critic and journalist Ken Auletta’s book, “Googled, The End of the World as We Know It.” Auletta, along with many others, sensed a seismic disruption in the way media worked. A ton of books came out on this topic in the same time frame, and Google was the company most often singled out as the cause of the disruption.

Auletta’s book was published in 2009, near the end of this decade, and it’s interesting reading it in light of the decade plus that has passed since. There was a sort of breathless urgency in the telling of the story, a sense that this was ground zero of a shift that would be historic in scope. The very choice of Auletta’s title reinforces this: “The End of the World as We Know It.”

So, with 10 years plus of hindsight, was he right? Did the world we knew end?

Well, yes. And Google certainly contributed to this. But it probably didn’t change in quite the way Auletta hinted at. If anything, Facebook ended up having a more dramatic impact on how we think of media, but not in a good way.

At the time, we all watched Google take its first steps as a corporation with a mixture of incredulous awe and not a small amount of schadenfreude. Larry Page and Sergey Brin were determined to do it their own way.

We in the search marketing industry had front row seats to this. We attended social mixers on the Google campus. We rubbed elbows at industry events with Page, Brin, Eric Schmidt, Marissa Mayer, Matt Cutts, Tim Armstrong, Craig Silverstein, Sheryl Sandberg and many others profiled in the book. What they were trying to do seemed a little insane, but we all hoped it would work out.

We wanted a disruptive and successful company to not be evil. We welcomed its determination — even if it seemed naïve — to completely upend the worlds of media and advertising. We even admired Google’s total disregard for marketing as a corporate priority.

But there was no small amount of hubris at the Googleplex — and for this reason, we also hedged our hopeful bets with just enough cynicism to be able to say “we told you so” if it all came crashing down.

In that decade, everything seemed so audacious and brashly hopeful. It seemed like ideological optimism might — just might — rewrite the corporate rulebook. If a revolution did take place, we wanted to be close enough to golf clap the revolutionaries onward without getting directly in the line of fire ourselves.

Of course, we know now that what took place wasn’t nearly that dramatic. Google became a business: a very successful business with shareholders, a grown-up CEO and a board of directors, but still a business not all that dissimilar to other Fortune 100 examples. Yes, Google did change the world, but the world also changed Google. What we got was more evolution than revolution.

The optimism of 2000 to 2010 would be ground down in the next 10 years by the same forces that have been driving corporate America for the past 200 years: the need to expand markets, maximize profits and keep shareholders happy. The brash ideologies of founders would eventually morph to accommodate ad-supported revenue models.

As we now know, the world was changed by the introduction of ways to make advertising even more pervasively influential and potentially harmful. The technological promise of 20 years ago has been subverted to screw with the very fabric of our culture.

I didn’t see that coming back in 2001. I probably should have known better.

The Problem With Woke Capitalism

I’ve been talking a lot over the last month or two about the concept of corporate trust. Last week I mentioned that we as consumers have a role to play in this: It’s our job to demand trustworthy behavior from the companies we do business with.

The more I thought about that idea, I couldn’t help but put it in the current context of cancel culture and woke capitalism. In this world of social media hyperbole, is this how we can flex our consumer muscles?

I think not. When I think of cancel culture and woke capitalism, I think of signal-to-noise ratio. And when I look at how most corporations signal their virtue, I see a lot of noise but very little signal.

Take Nike, for example. There is probably no corporation in the world that practises more virtue signaling than Nike. It is the master of woke capitalism. But if you start typing Nike into Google, the first suggested search you’ll see is “Nike scandal.” And if you launch that search, you’ll get a laundry list of black eyes in Nike’s day-to-day business practices, including sweatshops, doping, and counterfeit Nike product rings.

The corporate watchdog site ethicalconsumer.org has an extensive entry on Nike’s corporate faux pas. Perhaps Nike needs to spend a little less time preaching and a little more time practicing.

Then there’s 3M. There is absolutely nothing flashy about the 3M brand. 3M is about as sexy as Mr. Wood, my high school Social Studies teacher. Mr. Wood wore polyester suits (granted, it was the ‘70s) and had a look that was more Elvis Costello than Elvis Presley. But he was by far my favorite teacher. And you could trust him with anything.

I think 3M might be the Mr. Wood of the corporate world.

I had the pleasure of working with 3M as a consultant for the last three or four years of my professional life. I still have friends who were and are 3Mers. I have never, in one professional setting, met a more pleasant group of people.

When I started writing this and thought about an example of a trustworthy corporation, 3M was the first that came to mind. The corporate ethos at 3M is, as was told me to me by one vice president, “Minnesota nice.”

Go ahead. Try Googling “3M corporate scandal.” Do you know what comes up? 3M investigating other companies that are selling knockoff N95 facemasks. The company is the one investigating the scandal, not causing it. (Just in case you’re wondering, I tried searching on ethicalconsumer.org for 3M. Nothing came up.)

That’s probably why 3M has been chosen as one of the most ethical companies in the world by the Ethisphere Institute for the last eight consecutive years.

Real trust comes from many places, but a social media campaign is never one of them. It comes from the people you hire and how you treat those people. It comes from how you handle HR complaints, especially when they’re about someone near the top of the corporate ladder. It comes from how you set your product research goals, where you make those products, who you sell those products to, and how you price those products. It comes from how you conduct business meetings, and the language that’s tolerated in the lunchroom.

Real trust is baked in. It’s never painted on.

Social media has armed consumers with a voice, as this lengthy essay in The Atlantic magazine shows. But if we go back to our signal versus noise comparison, everything on social media tends to be a lot of “noise,” and very little signal. Protesting through online channels tends to create hyper-virtuous bubbles that are far removed from the context of day-to-day reality. And — unfortunately — companies are getting very good at responding in kind. Corrupt internal power structures and business practices are preserved, while scapegoats are publicly sacrificed and marketing departments spin endlessly.

As Helen Lewis, the author of The Atlantic piece, said,

“That leads to what I call the “iron law of woke capitalism”: Brands will gravitate toward low-cost, high-noise signals as a substitute for genuine reform, to ensure their survival.”

Empty “mea culpas” and making hyperbolic noise just for the sake of looking good is not how you build trust. Trust is built on consistency and reliability. It is built on a culture that is committed to doing the right thing, even when that may not be the most profitable thing. Trust is built on being “Minnesota nice.”

Thank you, 3M, for that lesson. And thank you, Mr. Wood.

The Profitability Of Trust

Some weeks ago, I wrote about the crisis of trust identified by the Edelman Trust Barometer study and its impact on brands. In that post, I said that the trust in all institutions had been blown apart, hoisted on the petard of our political divides.

We don’t trust our government. We definitely don’t trust the media – especially the media that sits on the other side of the divide. Weirdly, our trust in NGOs has also slipped, perhaps because we suspect them to be politically motivated.

So whom — or what — do we trust? Well, apparently, we still trust corporations. We trust the brands we know. They, alone, seem to have been able to stand astride the chasm that is splitting our culture.

As I said before, I’m worried about that.

Now, I don’t doubt there are well-intentioned companies out there. I know there are several of them. But there is something inherent in the DNA of a for-profit company that I feel makes it difficult to trust them. And that something was summed up years ago by economist Milton Friedman, in what is now known as the Friedman Doctrine. 

In his eponymously named doctrine, Friedman says that a corporation should only have one purpose: “An entity’s greatest responsibility lies in the satisfaction of the shareholders.” The corporation should, therefore, always endeavor to maximize its revenues to increase returns for the shareholders.

So, a business will be trustworthy as long as fits its financial interest to be trustworthy. But what happens when those two things come into conflict, as they inevitably will?

Why is it inevitable, you ask? Why can’t a company be profitable and worthy of our trust? Ah, that’s where, sooner or later, the inevitable conflict will come.

Let’s strip this down to the basics with a thought experiment.

In a 2017 article in the Harvard Business Review, neuroscientist Paul J. Zak talks about the neuroscience of trust. He explains how he discovered that oxytocin is the neurochemical basis of trust — what he has since called The Trust Molecule.

To do this, he set up a classic trust task borrowed from Nobel laureate economist Vernon Smith:

“In our experiment, a participant chooses an amount of money to send to a stranger via computer, knowing that the money will triple in amount and understanding that the recipient may or may not share the spoils. Therein lies the conflict: The recipient can either keep all the cash or be trustworthy and share it with the sender.”

The choice of this task speaks volumes. It also lays bare the inherent conflict that sooner or later will face all corporations: money or trust? This is especially true of companies that have shareholders. Our entire capitalist ethos is built on the foundation of the Friedman Doctrine. Imagine what those shareholders will say when given the choice outlined in Zak’s experiment: “Keep the money, screw the trust.” Sometimes, you can’t have both. Especially when you have a quarterly earnings target to hit.

For humans, trust is our default position. It has been shown through game theory research using the Prisoner’s Dilemma that the best strategy for evolutionary success is one called “Tit for Tat.” In Tit for Tat, our opening position is typically one of trust and cooperation. But if we’re taken advantage of, then we raise our defences and respond in kind.

So, when we look at the neurological basis of trust, consistency is another requirement. We will be willing to trust a brand until it gives a reason not to. The more reliable the brand is in earning that trust, the more embedded that trust will become. As I said in the previous post, consistency builds beliefs and once beliefs are formed, it’s difficult to shake them loose.

Trying to thread this needle between trust and profitability can become an exercise in marketing “spin”: telling your customers you’re trustworthy, while you’re are doing everything possible to maximize your profits. A case in point — which we’ve seen repeatedly — is Facebook and its increasingly transparent efforts to maximize advertising revenue while gently whispering in our ear that we should trust it with our most private information.

Given the potential conflict between trust and profit, is trusting a corporation a lost cause? No, but it does put a huge amount of responsibility on the customer. The Edelman study has made abundantly clear that if there is such a thing as a “market” for trust, then trust is in dangerously short supply. This is why we’re turning to brands and for-profit corporations as a place to put our trust. We have built a society where we believe that’s the only thing we can trust.

Mark Carney, the governor of the Bank of England and the former governor of the Bank of Canada, puts this idea forward in his new book, “Value(s).” In it, he shows how “market economies” have evolved into “market societies” where price determines the value of everything. And corporations will follow profit, wherever it leads.

If we understand that fundamental characteristic of corporations, it does bring an odd kind of power that rests in the hands of consumers.

Markets are not unilateral beasts. They rely on the balance between supply and demand. We form half that equation. It is our willingness to buy that determine how prices are determined in Carney’s “market societies.” So, if we are willing to place our trust in a brand, we can also demand that the brand proves that our trust has not been misplaced, through the rewards and penalties built into the market. 

Essentially, we have to make trust profitable.