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 Terrors of New Technology

My neighbour just got a new car. And he is terrified. He told me so yesterday. He has no idea how the hell to use it. This isn’t just a new car. It’s a massive learning project that can intimidate the hell out of anyone. It’s technology run amok. It’s the canary in the coal mine of the new world we’re building.

Perhaps – just perhaps – we should be more careful in what we wish for.

Let me provide the back story. His last car was his retirement present to himself, which he bought in 2000. He loved the car. It was a hard top convertible. At the time he bought it it was state of the art. But this was well before the Internet of Things and connected technology. The car did pretty much what you expected it to. Almost anyone could get behind the wheel and figure out how to make it go.

This year, under much prompting from his son, he finally decided to sell his beloved convertible and get a new car. But this isn’t just any car. It is a high-end electric sports car. Again, it is top of the line. And it is connected in pretty much every way you could imagine, and in many ways that would never cross any of our minds.

My neighbour has had this new car for about a week. And he’s still afraid to drive it anywhere. “Gord,” he said, “the thing terrifies me. I still haven’t figured out how to get it to open my garage door.” He has done online tutorials. He has set up a Zoom session with the dealer to help him navigate the umpteen zillion screens that show up on the smart display. After several frustrating experiments, he has learned he needs to pair it with his wifi system at home to get it to recharge properly. No one could just hop behind the wheel and drive it. You would have to sign up for an intensive technology boot camp before you were ready to climb a near-vertical learning curve. The capabilities of this car are mind boggling. And that’s exactly the problem. It’s damned near impossible to do anything with a boggled mind.

The acceptance of new technology has generated a vast body of research. I myself did an exhaustive series of blog posts on it back in 2014. Ever since sociologist Everett Rogers did his seminal work on the topic back in 1962 we have known that there are hurdles to overcome in grappling with something new, and we don’t all clear the hurdles at the same rate. Some of us never clear them at all.

But I also suspect that the market, especially at the high end, have become so enamored with embedding technology that they have forgotten how difficult it might be for some of us to adopt that technology, especially those of us of a certain age.

I am and always have been an early adopter. I geek out on new technology. That’s probably why my neighbour has tapped me to help him figure out his new car. I’m the guy my family calls when they can’t get their new smartphone to work. And I don’t mind admitting I’m slipping behind. I think we’re all the proverbial frogs in boiling water. And that water is technology. It’s getting harder and harder just to use the new shit we buy.

Here’s another thing that drives me batty about technology. It’s a constantly moving target. Once you learn something, it doesn’t stay learnt. It upgrades itself, changes platforms or becomes obsolete. Then you have to start all over again.

Last year, I started retrofitting our home to be a little bit more smart. And in the space of that year, I have sensors that mysteriously go offline, hubs that suddenly stop working, automation routines that are moodier than a hormonal teenager and a lot of stuff that just fits into the “I have no idea” category. When it all works it’s brilliant. I remember that one day – it was special. The other 364 have been a pain in the ass of varying intensity. And that’s for me, the tech guy. My wife sometimes feels like a prisoner in her own home. She has little appreciation for the mysterious gifts of technology that allow me to turn on our kitchen lights when we’re in Timbuktu (should we ever go there and if we can find a good wifi signal).

Technology should be a tool. It should serve us, not hold us slave to its whims. It would be so nice to be able to just make coffee from our new coffee maker, instead of spending a week trying to pair it with our toaster so breakfast is perfectly synchronized.

Oops, got to go. My neighbour’s car has locked him in his garage.

Re-engineering the Workplace

What happens when over 60,000 Microsoft employees are forced to work from home because of a pandemic? Funny you should ask. Microsoft just came out with a large scale study that looks at exactly that question. The good news is that employees feel more included and supported by their managers than ever. But there is bad news as well:

“Our results show that firm-wide remote work caused the collaboration network of workers to become more static and siloed, with fewer bridges between disparate parts. Furthermore, there was a decrease in synchronous communication and an increase in asynchronous communication. Together, these effects may make it harder for employees to acquire and share new information across the network.”

To me, none of this is surprising. On a much smaller scale, we experienced exactly this when we experimented with a virtual workplace a decade ago. In fact, this virtually echoes the pros and cons of a virtual workplace that I have talked about in other previous posts, particularly the two (one, two) that dealt with the concept of “burstiness” – those magical moments of collaborative creativity experienced when a room full of people get “on a roll.”

What this study does do, however, is provide empirical evidence to back up my hunches. There is nothing like a global pandemic to allow the recruitment of a massive sample to study the impact of working from home.

In many, many aspects of our society, COVID was a game changer. It forcefully pushed us along the adoption curve, mandating widescale adoption of technologies that we probably would have been much happier to simply dabble in. The virtual workplace was one of these, but there were others.

Yet this example in particular, because of the breadth of its impact, gives us an insightful glimpse into one particular trend: we are increasingly swapping the ability to physically be together for a virtual connection mediated through technology. The first of these is a huge part of our evolved social strategies that are hundreds of thousands of years in the making. The second is barely a couple of decades old. There are bound to be consequences, both intended and unintended.

In today’s post, I want to take another angle to look at the pros and cons of a virtual workplace – by exploring how music has been made over the past several decades.

Supertramp and Studio Serendipity

My brother-in-law is a walking encyclopedia of music trivia. He put me on to this particular tidbit from one of my favorite bands of the 70’s and 80’s – Supertramp.

The band was in the studio working on their Breakfast in America album. In the corner of the studio, someone was playing a handheld video game during a break in the recording: Mattel’s Football. The game had a distinctive double beep on your fourth down. Roger Hodgson heard this and now that same sound can be heard at the 3:24 mark of The Logical Song, just after the lyric “d-d-digital”.

This is just one example of what I would call “Studio Serendipity.” For every band, every album, every song that was recorded collaboratively in the studio, there are examples like this of creativity that just sprang from people being together. It is an example of that “burstiness” I was talking about in my previous posts.

Billie Eilish and the Virtual Studio

But for this serendipity to even happen, you had to get into a recording studio. And the barriers to doing that were significant. You had to get a record deal – or – if you were going independent, save up enough money to rent a studio.

For the other side of the argument, let’s talk about Billie Eilish. Together with her brother Finneas, these two embody virtual production. We first heard about Billie in 2015 when they recorded Ocean Eyes in a bedroom in the family’s tiny LA Bungalow and uploaded it to SoundCloud. Billie was 14 at the time. The song went viral overnight and it did lead to a record deal, but their breakout album, When We All Fall Asleep, Where Do We Go?, was recorded in that same bedroom.

Digital technology dismantled the vertical hierarchy of record labels and democratized the industry. If that hadn’t happened, we might never have heard of Billie Eilish.

The Best of Both Worlds

Choosing between virtual and physical workplaces is not a binary choice. In the two examples I gave, creativity was a hybrid that came from both solitary inspiration and collaborative improvisation. The first thrives in a virtual workplace and the second works best when we’re physically together. There are benefits to both models, and these benefits are non-exclusive.

A hybrid model can give you the best of both worlds, but you have to take into account a number of things that might be a stretch for the typical HR policies  – things like evolutionary psychology, cognition and attentional focus, non-verbal communication strategies and something that neuroscientist Antonio Damasio calls “somatic markers.”  According to Damasio, we think as much with our bodies as we do with our brains.

Our performance in anything is tied to our physical surroundings. And when we are looking to replace a physical workplace with a virtual substitute, we have to appreciate the significance this has on us subconsciously.

Re-engineering Communication

Take communication, for example. We may feel that we have more ways than ever to communicate with our colleagues, including an entire toolbox of digital platforms. But none of them account for this simple fact: the majority of our communication is non-verbal. We communicate with our eyes, our hands, our bodies, our expression and the tone of our voice. Trying to squeeze all this through the trickle of bandwidth that technology provides, even when we have video available, is just going to produce frustration. It is no substitute for being in the same room together, sharing the same circumstances. It would be like trying to race in a car with an engine where only one cylinder was working.

This is perhaps the single biggest drawback to the virtual workplace – this lack of “somatic” connection – the shared physical bond that underlies some much of how we function. When you boil it down, it is the essential ingredient for “burstiness.” And I just don’t think we have a technological substitute for it – not at this point, anyway.

But the same person who discovered burstiness does have one rather counterintuitive suggestion. If we can’t be in the same room together, perhaps we have to “dumb down” the technology we use. Anita Williams Wooley suggests the good, old-fashioned phone call might truly be the next best thing to being there.

Getting Bitch-Slapped by the Invisible Hand

Adam Smith first talked about the invisible hand in 1759. He was looking at the divide between the rich and the poor and said, in essence, that “greed is good.”

Here is the exact wording:

“They (the rich) are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society.”

The effect of “the hand” is most clearly seen in the wide-open market that emerges after established players collapse and make way for new competitors riding a wave of technical breakthroughs. Essentially, it is a cycle.

But something is happening that may never have happened before. For the past 300 years of our history, the one constant has been the trend of consumerism. Economic cycles have rolled through, but all have been in the service of us having more things to buy.

Indeed, Adam Smith’s entire theory depends on greed: 

“The rich … consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements.”

It’s the trickle-down theory of gluttony: Greed is a tide that raises all boats.

The Theory of The Invisible Hand assumes there are infinite resources available. Waste is necessarily built into the equation. But we have now gotten to the point where consumerism has been driven past the planet’s ability to sustain our greedy grasping for more.

Nobel-Prize-winning economist Joseph Stiglitz, for one, recognized that environmental impact is not accounted for with this theory. Also, if the market alone drives things like research, it will inevitably become biased towards benefits for the individual and not the common good.

There needs to be a more communal counterweight to balance the effects of individual greed. Given this, the new age of consumerism might look significantly different.

There is one outcome of market driven-economics that is undeniable: All the power lies in the connection between producers and consumers. Because the world has been built on the predictable truth of our always wanting more, we have been given the ability to disrupt that foundation simply by changing our value equation: buying for the greater good rather than our own self-interest.

I’m skeptical that this is even possible.

It’s a little daunting to think that our future survival relies on our choices as consumers. But this is the world we have made. Consumption is the single greatest driver of our society. Everything else is subservient to it.

Government, science, education, healthcare, media, environmentalism: All the various planks of our societal platform rest on the cross-braces of consumerism. It is the one behavior that rules all the others. 

This becomes important to think about because this shit is getting real — so much faster than we thought possible.

I write this from my home, which is about 100 miles from the village of Lytton, British Columbia. You might have heard it mentioned recently. On June 29, Lytton reported the highest temperature ever recorded in Canada  a scorching 121.3 degrees Fahrenheit (49.6 degrees C for my Canadian readers). That’s higher than the hottest temperature ever recorded in Las Vegas. Lytton is 1,000 miles north of Las Vegas.

As I said, that was how Lytton made the news on June 29. But it also made the news again on June 30. That was when a wildfire burned almost the entire town to the ground.

In one week of an unprecedented heat wave, hundreds of sudden deaths occurred in my province. It’s believed the majority of them were caused by the heat.

We are now at the point where we have to shift the mental algorithms we use when we buy stuff. Our consumer value equation has always been self-centered, based on the calculus of “what’s in it for me?” It was this calculation that made Smith’s Invisible Hand possible.

But we now have to change that behavior and make choices that embrace individual sacrifice. We have to start buying based on “What’s best for us?”

In a recent interview, a climate-change expert said he hoped we would soon see carbon-footprint stickers on consumer products. Given a choice between two pairs of shoes, one that was made with zero environmental impact and one that was made with a total disregard for the planet, he hoped we would choose the former, even if it was more expensive.

I’d like to think that’s true. But I have my doubts. Ethical marketing has been around for some time now, and at best it’s a niche play. According to the Canadian Coalition for Farm Animals, the vast majority of egg buyers in Canada — 98% — buy caged eggs even though we’re aware that the practice is hideously cruel.  We do this because those eggs are cheaper.

The sad fact is that consumers really don’t seem to care about anything other than their own self-interest. We don’t make ethical choices unless we’re forced to by government legislation. And then we bitch like hell about our rights as consumers. “We should be given the choice,” we chant.  “We should have the freedom to decide for ourselves.”

Maybe I’m wrong. I sure hope so. I would like to think — despite recent examples to the contrary of people refusing to wear face masks or get vaccinated despite a global pandemic that took millions of lives — that we can listen to the better angels of our nature and make choices that extend our ability to care beyond our circle of one.

But let’s look at our track record on this. From where I’m sitting, 300 years of continually making bad choices have now brought us to the place where we no longer have the right to make those choices. This is what The Invisible Hand has wrought. We can bitch all we want, but that won’t stop more towns like Lytton B.C. from burning to the ground.

Why Our Brains Struggle With The Threat Of Data Privacy

It seems contradictory. We don’t want to share our personal data but, according to a recent study reported on by MediaPost’s Laurie Sullivan, we want the brands we trust to know us when we come shopping. It seems paradoxical.

But it’s not — really.  It ties in with the way we’ve always been thinking.

Again, we just have to understand that we really don’t understand how the data ecosystem works — at least, not on an instant and intuitive level. Our brains have no evolved mechanisms that deal with new concepts like data privacy. So we have borrowed other parts of the brain that do exist. Evolutionary biologists call this “exaption.”

For example, the way we deal with brands seems to be the same way we deal with people — and we have tons of experience doing that. Some people we trust. Most people we don’t. For the people we trust, we have no problem sharing something of our selves. In fact, it’s exactly that sharing that nurtures relationships and helps them grow.

It’s different with people we don’t trust. Not only do we not share with them, we work to avoid them, putting physical distance between us and them. We’d cross to the other side of the street to avoid bumping into them.

In a world that was ordered and regulated by proximity, this worked remarkably well. Keeping our enemies at arm’s length generally kept us safe from harm.

Now, of course, distance doesn’t mean the same thing it used to. We now maneuver in a world of data, where proximity and distance have little impact. But our brains don’t know that.

As I said, the brain doesn’t really know how digital data ecosystems work, so it does its best to substitute concepts it has evolved to handle those it doesn’t understand at an intuitive level.

The proxy for distance the brain seems to use is task focus. If we’re trying to do something, everything related to that thing is “near” and everything not relevant to it is “far. But this is an imperfect proxy at best and an outright misleading one at worst.

For example, we will allow our data to be collected in order to complete the task. The task is “near.” In most cases, the data we share has little to do with the task we’re trying to accomplish. It is labelled by the brain as “far” and therefore poses no immediate threat.

It’s a bait and switch tactic that data harvesters have perfected. Our trust-warning systems are not engaged because there are no proximate signs to trigger them. Any potential breaches of trust happen well after the fact – if they happen at all. Most times, we’re simply not aware of where our data goes or what happens to it. All we know is that allowing that data to be collected takes us one step closer to accomplishing our task.

That’s what sometimes happens when we borrow one evolved trait to deal with a new situation:  The fit is not always perfect. Some aspects work, others don’t.

And that is exactly what is happening when we try to deal with the continual erosion of online trust. In the moment, our brain is trying to apply the same mechanisms it uses to assess trust in a physical world. What we don’t realize is that we’re missing the warning signs our brains have evolved to intuitively look for.

We also drag this evolved luggage with us when we’re dealing with our favorite brands. One of the reasons you trust your closest friends is that they know you inside and out. This intimacy is a product of a physical world. It comes from sharing the same space with people.

In the virtual world, we expect the brands we know and love to have this same knowledge of us. It frustrates us when we are treated like a stranger. Think of how you would react if the people you love the most gave you the same treatment.

This jury-rigging of our personal relationship machinery to do double duty for the way we deal with brands may sound far-fetched, but marketing brands have only been around for a few hundred years. That is just not enough time for us to evolve new mechanisms to deal with them.

Yes, the rational, “slow loop” part of our brains can understand brands, but the “fast loop” has no “brand” or “data privacy” modules. It has no choice but to use the functional parts it does have.

As I mentioned in a previous post, there are multiple studies that indicate that it’s these parts of our brain that fire instantly, setting the stage for all the rationalization that will follow. And, as our own neuro-imaging study showed, it seems that the brain treats brands the same way it treats people.

I’ve been watching this intersection between technology and human behaviour for a long time now. More often than not, I see this tendency of the brain to make split-section decisions in environments where it just doesn’t have the proper equipment to make those decisions. When we stop to think about these things, we believe we understand them. And we do, but we had to stop to think. In the vast majority of cases, that’s just not how the brain works.

The Privacy War Has Begun

It started innocently enough….

My iPhone just upgraded itself to iOS 14.6, and the privacy protection purge began.

In late April,  Apple added App Tracking Transparency (ATT) to iOS (actually in 14.5 but for reasons mentioned in this Forbes article, I hadn’t noticed the change until the most recent update). Now, whenever I launch an app that is part of the online ad ecosystem, I’m asked whether I want to share data to enable tracking. I always opt out.

These alerts have been generally benign. They reference benefits like “more relevant ads,” a “customized experience” and “helping to support us.” Some assume you’re opting in and opting out is a much more circuitous and time-consuming process. Most also avoid the words “tracking” and “privacy.” One referred to it in these terms: “Would you allow us to refer to your activity?”

My answer is always no. Why would I want to customize an annoyance and make it more relevant?

All in all, it’s a deceptively innocent wrapper to put on what will prove to be a cataclysmic event in the world of online advertising. No wonder Facebook is fighting it tooth and nail, as I noted in a recent post.

This shot across the bow of online advertising marks an important turning point for privacy. It’s the first time that someone has put users ahead of advertisers. Everything up to now has been lip service from the likes of Facebook, telling us we have complete control over our privacy while knowing that actually protecting that privacy would be so time-consuming and convoluted that the vast majority of us would do nothing, thus keeping its profitability flowing through the pipeline.

The simple fact of the matter is that without its ability to micro-target, online advertising just isn’t that effective. Take away the personal data, and online ads are pretty non-engaging. Also, given our continually improving ability to filter out anything that’s not directly relevant to whatever we’re doing at the time, these ads are very easy to ignore.

Advertisers need that personal data to stand any chance of piercing our non-attentiveness long enough to get a conversion. It’s always been a crapshoot, but Apple’s ATT just stacked the odds very much against the advertiser.

It’s about time. Facebook and online ad platforms have had little to no real pushback against the creeping invasion of our privacy for years now. We have no idea how extensive and invasive this tracking has been. The only inkling we get is when the targeting nails the ad delivery so well that we swear our phone is listening to our conversations. And, in a way, it is. We are constantly under surveillance.

In addition to Facebook’s histrionic bitching about Apple’s ATT, others have started to find workarounds, as reported on 9 to 5 Mac. ATT specifically targets the IDFA (Identified for Advertisers), which offers cross app tracking by a unique identifier. Chinese ad networks backed by the state-endorsed Chinese Advertising Association were encouraging the adoption of CAID identifiers as an alternative to IDFA. Apple has gone on record as saying ATT will be globally implemented and enforced. While CAID can’t be policed at the OS level, Apple has said that apps that track users without their consent by any means, including CAID, could be removed from the App Store.

We’ll see. Apple doesn’t have a very consistent track record with it comes to holding the line against Chinese app providers. WeChat, for one, has been granted exceptions to Apple’s developer restrictions that have not been extended to anyone else.

For its part, Google has taken a tentative step toward following Apple’s lead with its new privacy initiative on Android devices, as reported in Slash Gear. Google Play has asked developers to share what data they collect and how they use that data. At this point, they won’t be requiring opt-in prompts as Apple does.

All of this marks a beginning. If it continues, it will throw a Kong-sized monkey wrench into the works of online advertising. The entire ecosystem is built on ad-supported models that depend on collecting and storing user data. Apple has begun nibbling away at that foundation.

The toppling has begun.

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.

The Split-Second Timing of Brand Trust

Two weeks ago, I talked about how brand trust can erode so quickly and cause so many issues. I intimated that advertising and branding have become decoupled — and advertising might even erode brand trust, leading to a lasting deficit.

Now I think that may be a little too simplistic. Brand trust is a holistic thing — the sum total of many moving parts. Taking advertising in isolation is misleading. Will one social media ad for a brand lead to broken trust? Probably not. But there may be a cumulative effect that we need to be aware of.

In looking at the Edelman Trust Barometer study closer, a very interesting picture emerges. Essentially, the study shows there is a trust crisis. Edelman calls it information bankruptcy.

The slide in trust is probably not surprising. It’s hard to be trusting when you’re afraid, and if there’s one thing the Edelman Barometer shows, it’s that we are globally fearful. Our collective hearts are in our mouths. And when this happens, we are hardwired to respond by lowering our trust and raising our defenses.

But our traditional sources for trusted information — government and media — have also abdicated their responsibilities to provide it. They have instead stoked our fears and leveraged our divides for their own gains. NGOs have suffered the same fate. So, if you can’t trust the news, your leaders or even your local charity, who can you trust?

Apparently, you can trust a corporation. Edelman shows that businesses are now the most trusted organizations in North America. Media, especially social media, is the least trusted institution. I find this profoundly troubling, but I’ll put that aside for a future post. For now, let’s just accept it at face value.

As I said in that previous column, we want to trust brands more than ever. But we don’t trust advertising. This creates a dilemma for the marketer.

This all brings to mind a study I was involved with a little over 10 years ago. Working with Simon Fraser University, we wanted to know how the brain responded to trusted brands. The initial results were fascinating — but unfortunately, we never got the chance to do the follow-up study we intended.

This was an ERP study (event-related potential), where we looked at how the brain responded when we showed brand images as a stimulus. ERP studies are useful to better understand the immediate response of the brain to something — the fast loop I talk so much about — before the slow loop has a chance to kick in and rationalize things.

We know now that what happens in this fast loop really sets the stage for what comes after. It essentially makes up the mind, and then the slow loop adds rational justification for what has already been decided.

What we found was interesting: The way we respond to our favorite brands is very similar to the way we respond to pictures of our favorite people. The first hint of this occurred in just 150 milliseconds, about one-sixth of a second. The next reinforcement was found at 400 milliseconds. In that time, less than half a second in total, our minds were made up. In fact, the mind was basically made up in about the same time it takes to blink an eye.  Everything that followed was just window dressing.

This is the power of trust. It takes a split second for our brains to recognize a situation where it can let its guard down. This sets in motion a chain of neurological events that primes the brain for cooperation and relationship-building. It primes the oxytocin pump and gets it flowing. And this all happens just that quickly.

On the other side, if a brand isn’t trusted, a very different chain of events occurs just as quickly. The brain starts arming itself for protection. Our amygdala starts gearing up. We become suspicious and anxious.

This platform of brand trust — or lack of it — is built up over time. It is part of our sense-making machinery. Our accumulating experience with the brand either adds to our trust or takes it away.

But we must also realize that if we have strong feelings about a brand, one way or the other, it then becomes a belief. And once this happens, the brain works hard to keep that belief in place. It becomes virtually impossible at that point to change minds. This is largely because of the split-second reactions our study uncovered.

This sets very high stakes for marketers today. More than ever, we want to trust brands. But we also search for evidence that this trust is warranted in a very different way. Brand building is the accumulation of experience over all touch points. Each of those touch points has its own trust profile. Personal experience and word of mouth from those we know is the highest. Advertising on social media is one of the lowest.

The marketer’s goal should be to leverage trust-building for the brand in the most effective way possible. Do it correctly, through the right channels, and you have built trust that’s triggered in an eye blink. Screw it up, and you may never get a second chance.

The Deconstruction of Trust

Just over a week ago, fellow Insider Steven Rosenbaum wrote a post entitled “Trust Is In Decline Worldwide.” He quotes from the Edelman Trust Barometer Report for 2021. There, graph after graph shows this decline. And that feels exactly right. The Barometer “reveals an epidemic of misinformation and widespread mistrust of societal institutions and leaders around the world.”

Here in the ad biz, the decline of trust is nothing new. We’ve been seeing it slip for at least the last decade.

But that is not a universal truth. Yes, trust in advertising is in decline. But trust in brands — at least, some brands — has never been higher. And that is indicative of the decoupling we’re seeing between the concept of brand and the practice of advertising. One used to support the other. Now, even when an ad works, it may be stripping the trust from a brand.

This decline in advertising trust also varies from generation to generation. An Ofcom study in the UK of young adults 16 to 34 found that 91.6% of all respondents had little or no trust in ads. The same study found that if you were looking for trustworthy sources, 73.5% would go to online reviews or recommendations of friends.

One reason for this erosion in trust is that advertising has been slumming. Social media advertising is the least trustworthy channel that exists. The vast majority of us don’t trust what we see on it. Yet the advertising dollars continue to pour into social media.

Yet more than ever, we want to trust a brand. The Edelman Report shows that business is the most trusted institution, ahead of NGOs, government and media. And the brands that are rising to the challenge are taking a more holistic approach to brand management.

More than ever, brands are not built on advertising. They are built on consumer experience, on ideals and on meeting promises.  In short, they are built on instilling trust. Consumers, in turn are making trust a bigger deal. Those aged 18 to 34, that very same demo that has no trust in advertising, is the first to say brand trust matters more than ever. They’re just looking for proof of that trust in different places.

But why is trust important? That seems like a dumb question, but it’s not. There are deeper levels of understanding that are required here. And we might just find the answer in southern Italy.

Trust to the north and south of Naples

Italy has an economic problem. It’s always been there, but it definitely got worse after World War Two. It’s called the Mezzogiorno Problem.

Mezzogiorno means “noon” in Italian. But it’s also a label for the south of Italy. Like many things in Italian culture, it can make even problems sound charming and romantic. It has something to do with being sunny.

Italy has two economies. The North’s economy has always been more robust than the South’s. Per capita income in the Mezzogiorno is 60% of the national average. Unemployment is twice as high. Despite repeated attempts by the government to kickstart the economy of the South, the money and talent in Italy typically flow north of Naples.

The roots of the Mezzogiorno problem go to a not totally surprising place: a lack of trust. Trust is also called social capital. And southern Italy has less social capital than the North. Part of this has to do with geography. Villages in southern Italy are more isolated and there is less interaction between them. Part of it has to do with systemic corruption and crime. Part of it has to do with something called Campanilismo — where Italian loyalties belong first to their family, second to their village or city, third to their immediate region and, lastly, to any notion of belonging to a nation. People from the South have trouble trusting anyone not from their inner circle.

For all these reasons, the co-ops that transformed the agricultural industry in the north of Italy never gained a foothold in the South. If you were to look for an example of how low trust can lead to negative outcomes for all, it would be hard to find a better one than southern Italy.

But what does this have to do with advertising? That begins to become clear when we look at the impact trust has on our brains.

Our Brains On Trust

Neuroeconomist Paul J. Zak has found that trust plays a key role in the functioning of our brains. When trust is present, our brain produces oxytocin, which Zak calls the trust molecule. It literally rewards our brain when we work together with others. It pushes us to cooperate rather than be focused exclusively on our own self-interest. This is exactly what was missing in southern Italy.

But there’s another side to this: the dark side of oxytocin. It can also cause us emotional pain in stressful social situations. And these episodes tend to get embedded in us as bad memories, leading to a triggering of fear or anxiety in the future.

We have to think more carefully about this question of trust. The whole goal of advertising is simply to get an impression to the right person. I suspect most marketers might define an unsuccessful ad as one that gets ignored. But the reality might be far worse. An ad that is shown in an untrusted channel might cause an emotional deficit, leading to the creation of future anxiety about or animosity towards a brand.

Once this happens, the game is over. You now have a Mezzogiorno of marketing.