Social Media Snakes on a Plane

Did you hear the one about the plane full of social media influencers that left Montréal headed for a party in Cancun? No? Then you obviously haven’t been in Canada, because we have been hanging our heads in shame about it ever since the videos started to go viral.

This Plane of Shame left La Belle Province on December 30. It was a Sunwings chartered flight, packed with partiers hand-picked by entrepreneur and social influencer James William Awad, who chartered the flight as part of his 111 Private Club. It was always intended to be a select event for just the “right type” of people, meaning those who showed well on social media. In that, this excursion brought back troubling memories of the infamous Fyre Festival.

The antics of this group and the inability to “read the room” amongst skyrocketing COVID numbers has left many slack-jawed in stunned disbelief. The breathtaking entitlement of these partiers relied solely on how attractive, young and digitally well-connected they were. For most of them, their number of followers seemed to give them carte blanche to be complete assholes.

And behind it all was Awad, who was pulling the strings like a social engineer from hell. According to him, these jerks were the type of people we should all aspire to be. It’s exactly this type of person he wants for his “exclusive” club. In fact, in an interview with the so appropriately named Narcity blog, they are screened for “the personality, the energy, the vibe , make sure they understand the rules, know their age, their background, and their general status in society”.

I suspect Awad is more concerned with their “vibe” and “status” then their “understanding of the rules.”

The sad thing is that this social media stunt seems to be working. In fact, James Awad is currently laughing all the way to his cryptocurrency bank.  After showing the barest sliver of remorse when the media piled on, he quickly backtracked and doubled down on his support of abominable behavior, saying in a tweet on January 9, “Reality of the story, sheeps (sic) are mad because people partied on a private chartered plane where partying was allowed. Wake up!!“

And the stunt has brought a flood of interest to his 111 Private Club. In an interview, Awad said he had hundreds of people on his waiting list, desperate to join his club. It shows that when it comes to social media influence marketing, at least when it comes to boorish behavior, there truly is no such thing as bad press.

I’ve made no bones about the fact that I’m not a fan of influencer marketing. And I realize that I am light years removed from being in the target market for this particular campaign. So, is this just a question of targeting, or does it go deeper than that? If marketers are using social media to spread messages through influencers, is there a social and ethical responsibility for those messages to not be harmful or conducive to anti-social behaviors? After all, by their very name, these people influence the behavior of others. Should the behavior they’re encouraging be scraped from the lowest dregs of our culture? Jerks will be jerks, but when exactly the thing makes them jerks has the hell amplified out of it thanks to the knock-on effects of social media, should we start putting our foot down?

Like almost everything to do with marketing and media now a days, this falls into a grey area roughly the size of the Atlantic Ocean. Even the old rules of engagement that used to govern advertising – as flimsy as they were – no longer apply. Essentially, social influencers seem to be able to do whatever they want, flaunting the guidelines of common decency that govern the rest of us. Not only are there no consequences for this, but they’re rewarded handsomely for behaving badly.

Influencer marketing is governed (in the United States) by the First Amendment ensuring Freedom of Speech. But there is an exception for messaging that is “directed to inciting or producing imminent lawless action.” This example wouldn’t quite meet the requirements for that exception, but perhaps this is a case of our industry establishing its own boundaries. When it comes to social media influencers, we should aspire to be a little less shitty.

The thing I like the least about influencer marketing is that it reduces social complexity to a level most of us haven’t seen since high school. The sum of your self-worth is determined by the parties you did (or didn’t) get invited to and the brand of jeans you wear. I don’t know about you, but I’m glad I left this all behind when I turned 18. In my experience, those that hit the peak of their popularity in high school have had a long, downwards slide ever since. We can only hope the same will be true of the social influencers that were on board that plane from Montréal to Cancun.

When it comes to these social media influencers, even our own Prime Minister Trudeau (who I suspect might have been invited to all the right parties and wore the right jeans in high school) had had enough:

“I think like all Canadians who have seen those videos, I’m extremely frustrated. We know how hard people have worked to keep themselves safe, to limit their family gatherings at Christmas time, to wear masks, to get vaccinated, to do all the right things, and it’s slap in the face to see people putting themselves, putting their fellow citizens, putting airline workers at risk by being completely irresponsible.”

And just to show them how disappointed we Canadians are, Sunwing pulled the plug on the return flight, stranding the group at their resort in Cancun. Two other airlines followed suit. As Jimmy Fallon joked, there’s no better way to discipline a bunch of Canadians in the middle of winter than to strand them at a luxury resort in Mexico.

That’ll show ‘em!

I Was So Wrong in 1996…

It’s that time of year – the time when we sprain our neck trying to look backwards and forwards at the same time. Your email inbox, like mine, is probably crammed with 2021 recaps and 2022 predictions.

I’ve given up on predictions. I have a horrible track record. In just a few seconds, I’ll tell you how horrible. But here, at the beginning of 2022, I will look back. And I will substantially overshoot “a year in review” by going back all the way til 1996, 26 years ago. Let me tell you why I’m in the mood for some reminiscing.

In amongst the afore-mentioned “look back” and “look forward” items I saw recently there was something else that hit my radar; a number of companies looking for SEO directors. After being out of the industry for almost 10 years, I was mildly surprised that SEO still seemed to be a rock solid career choice. And that brings me both to my story about 1996 and what was probably my worst prediction about the future of digital marketing.

It was in late 1996 that I first started thinking about optimizing sites for the search engines and directories of the time: Infoseek, Yahoo, Excite, Lycos, Altavista, Looksmart and Hotbot. Early in 1997 I discovered Danny Sullivan’s Webmaster’s Guide to Search Engines. It was revelatory. After much trial and error, I was reasonably certain I could get sites ranking for pretty much any term. We had our handful of local clients ranking on Page One of those sites for terms like “boats,” “hotels”, “motels”, “men’s shirts” and “Ford Mustang”. It was the Wild West. Small and nimble web starts ups were routinely kicking Fortune 500 ass in the digital frontier.   

As a local agency that had played around with web design while doing traditional marketing, I was intrigued by this opportunity. Somewhere near the end of 1997 I did an internal manifesto where I speculated on the future of this “Internet” thing and what it might mean for our tiny agency (I had just brought on board my eventual partner, Bill Barnes, and we had one other full-time employee). I wish I could find that original document, but I remember saying something to the effect of, “This search engine opportunity will probably only last a year or two until the engines crack down and close the loopholes.” Given that, we decided to go for broke and seize that opportunity.

In 1998 we registered the domain www.searchengineposition.com. This was a big step. If you could get your main keywords in your domain name, it virtually guaranteed you link juice. At that time, “Search engine optimization” hadn’t emerged as the industry label. Search engine positioning was the more common term. We couldn’t get www.searchenginepositioning.com because domain names were limited by the number of characters you could use.

We had our domain and soon we had a site. We needed all the help we could get, because according to my prediction, we only had until 2000 or so to make as much as we could from this whole “search thing.” The rest, as they say, was history. It just wasn’t the history I had predicted.

To be fair, I wasn’t the only one making shitty predictions at the time. In 1995, 3Com co-founder Robert Metcalfe (also the co-inventor of Ethernet) said in a column in Infoworld:

“Almost all of the many predictions now being made about 1996 hinge on the Internet’s continuing exponential growth. But I predict the Internet, which only just recently got this section here in InfoWorld, will soon go spectacularly supernova and in 1996 catastrophically collapse.”

And in 1998, Nobel prize winning economist Paul Krugman said,

“The growth of the Internet will slow drastically, as the flaw in ‘Metcalfe’s law’ becomes apparent: most people have nothing to say to each other! By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s”

Both of those people were way smarter than I was, so if I was clueless about the future, at least I was in good company.

As we now know, SEO would be fine, thank you very much. In 2004, some 6 years later, in my very first post for MediaPost, I wrote:

“I believe years from now that…2004 … will be a milestone in the (Search) industry. I think it will mark the beginning of a year that will dramatically alter the nature of search marketing.”

That prediction, as it turned out, was a little more accurate. In 2004, Google’s AdWords program really hit its stride, doubling revenue from 1.5 billion the previous year to $3 billion and starting its hockey stick climb up to its current level, just south of $150 billion (in 2020).

The reason search – and organic search optimization – never fizzled out was that it was a fundamental connection between user intent and the ever-expanding ocean of available content. Search Engine Optimization turned out to be a much better label for the industry than Search Engine Positioning, despite my unfortunate choice of domain names. The later was really an attempt to game the algorithms. The former was making sure content was findable and indexable. Hindsight has shown that it was a much more sustainable approach.

I ended that first post talking about the search industry of 2004 by saying,

“And to think, one day I’ll be able to say I was there.”

I guess today is that day.

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.

Why Are Podcasts so Popular?

Everybody I know is listening to podcasts. According to eMarketer, the number of monthly U.S. podcast listeners will increase by over 10% this year, to a total of 117.8 million. And this growth is ruled by younger consumers. Apparently, more than 60% of U.S. adults ages 18 to 34 will listen to podcasts.

That squares with my anecdotal evidence. Both my daughters are podcast fans. But the popularity of podcasts declines with age. Again, according to eMarketer, less than one-fifth of adults in the U.S. over 65 listen to podcasts.

I must admit, I’m not a regular podcast listener. Nor are most of my friends. I’m not sure why. You’d think we’d be the ideal target. Many of us listen to public radio, so the format of a podcast should be a logical extension of that. But maybe it’s because we’ve already made our choice, and we’re fine with listening to old-fashioned radio.

In theory, I should love podcasts. At the beginning of my career, I was a radio copywriter. I even wrote a few radio plays in my 20s. As a creator, I am very intrigued by the format of a podcast. I’m even considering experimenting in this medium for my own content. I just don’t listen to them that often.

What’s also perplexing about the recent popularity of podcasts is that they’re nothing new. Podcasts have been around forever, at least in Internet terms.

A Brief History of Podcasting

The idea of bite-sized broadcasts goes back to the 1980s and ‘90s, but the advent of the Internet in 2000 opened up the concept of the digital delivery of an audio file to the average listener. This content found a new home in 2001 when Apple introduced the iPod. For the next 10 plus years, podcasts were generally just another delivery option for existing content.

But in 2014, “This American Life” launched season one of its true-crime “Serial” podcast. Suddenly, something gelled in the medium, and the audiences started to grow. The true crime bandwagon gathered speed. Both producers and audiences found their groove; the content became more compelling, and more people started listening.

In 2013, just over 10% of the U.S. population listened to podcasts monthly. This year, podcasting will become a $1 billion industry and over 50% of Americans listen regularly.

So why did podcasting, a medium with relatively few technical bells and whistles, suddenly become so hot?

A Story Well Told

The first clue to the popularity of podcasts is that many of them (certainly the most popular ones) focus on storytelling. And we are innately connected to the power of a good story.

The one genre of podcast that has been the most popular are the true crime series. Humans have a need to resolve mysteries. These podcasts have become very good at creating a curiosity gap that itches to be closed. They hit many of our hard-wired hot buttons.

Still, there are many, many ways to tell a murder mystery. So, beyond a compelling story, what else is it about podcasts that make them so addictive?

The Beauty of Brain Bonding

When you think of how our brain interprets messages, an audio-based one seems to thread the needle between the effort of imagination and the joy of focused relaxation. It opens the door to our theater of the mind, allowing us to fill in the sensory gaps needed to bring the story alive.

As I mentioned in last week’s post, the brain works by retrieving and synthesizing memories and experiences when prompted by a stimulus. It’s a process that makes the stories a little more personal for us, a little more intimate; these are stories self-tailored for us by our own experiences and beliefs.

But there are other audio-only formats available. This clue gets us closer to understanding the popularity of podcasts, but still leaves us a bit short. For the final answer, we have to explore one more aspect of them.

An Intimate Invitation

When you google “why are podcasts popular?” you’ll often see that their appeal lies in their convenience. You can listen to them at your own pace, in your own place and on your own timeline. They are not as restrictive as a radio broadcast.

You could take that at face value, but I think there’s more that meets the ear here. There is something about the portability and convenience of a podcast that sets them up for possibly being the most intimate of media.

When we listen to a podcast, we do so in an environment of our own choosing. Perhaps it’s in our vehicle during our daily commute. Maybe it’s just sitting in our favorite recliner by a fireplace.

Whatever the surroundings, we can make sure it’s a safe space that allows us to connect with the content at a very intimate level. We generally listen to them with our earbuds in, so the juicy details don’t leak out to the world at large.

And the best podcast producers have realized this. This is not a broadcast, it’s a one-sided conversation with your smartest friend talking about the most interesting thing they know.

Whatever lies behind their popularity, it’s a safe bet that half the people you know listen to podcasts on a regular basis.

I’ll have to give them another try.

The Complexities Of Understanding Each Other

How our brain understands things that exist in the real world is a fascinating and complex process.

Take a telephone, for example.

When you just saw that word in print, your brain went right to work translating nine abstract symbols (including the same one repeated three times), the letters we use to write “telephone,” into a concept that means something to you. And for each of you reading this, the process could be a little different. There’s a very good likelihood you’re picturing a phone. The visual cortex of your brain is supplying you with an image that comes from your real-world experience with phones.

But perhaps you’re thinking of the sound a phone makes, in which case the audio center of your brain has come to life and you’re reimagining the actual sound of a phone.

recent study from the Max Planck Institute found there’s a hierarchy of understanding that activates in the brain when we think of things, going from the concrete at the lowest levels to the abstract at higher levels. It can all get quite complex — even for something relatively simple like a phone.

Imagine what a brain must go through to try to understand another person.

Another study from Ruhr University in Bochum, Germany, tried to unpack that question. The research team found, again, that the brain pulls many threads together to try to understand what another person might be going through. It pulls back clues that come through our senses. But, perhaps most importantly, in many cases it attempts to read the other person’s mind. The research team believes it’s this ability that’s central to social understanding.  “It enables us to develop an individual understanding of others that goes beyond the here and now,” explains researcher Julia Wolf. “This plays a crucial role in building and maintaining long-term relationships.”

In both these cases of understanding, our brains rely on our experience in the real world to create an internal realization in our own brains. The richer those experiences are, the more we have to work with when we build those representations in our mind.

This becomes important when we try to understand how we understand each other. The more real-world experience we have with each other, the more successful we will be when it comes to truly getting into someone else’s head. This only comes from sharing the same physical space and giving our brains something to work with. “All strategies have limited reliability; social cognition is only successful by combining them,” says study co-researcher Sabrina Coninx.

I have talked before about the danger of substituting a virtual world for a physical one when it comes to truly building social bonds. We just weren’t built to do this. What we get through our social media channels is a mere trickle of input compared to what we would get through a real flesh-and-blood interaction.

Worse still, it’s not even an unbiased trickle. It’s been filtered through an algorithm that is trying to interpret what we might be interested in. At best it is stripped of context. At worst, it can be totally misleading.

Despite these worrying limitations, more and more of us are relying on this very unreliable signal to build our own internal representations of reality, especially those involving other people.

Why is this so dangerous? It’s The negative impact of social media is twofold. First it strips us of the context we need to truly understand each other, and then it creates an isolation of understanding. We become ideologically balkanized.

Balkanization is the process through which those that don’t agree with each other become formally isolated from each other. It was first used to refer to the drawing of boundaries between regions (originally in the Balkan peninsula) that were ethnically, politically or religiously different from each other.

Balkanization increasingly relies on internal representations of the “other,” avoiding real world contact that may challenge those representations. The result is a breakdown of trust and understanding across those borders. And it’s this breakdown of trust we should be worried about.

Our ability to reach across boundaries to establish mutually beneficial connections is a vital component in understanding the progress of humans. In fact, in his book “The Rational Optimist,” Matt Ridley convincingly argues that this ability to trade with others is the foundation that has made homo sapiens dominant on this planet. But, to successfully trade and prosper, we have to trust each other. “As a broad generalisation, the more people trust each other in a society, the more prosperous that society is, and trust growth seems to precede income growth,” Ridley explains.

As I said, balkanization is a massive breakdown of trust. In every single instance in the history of humankind, a breakdown of trust leads to a society that regresses rather than advances. But if we take every opportunity to build trust and break down the borders of balkanization, we prosper.

Neuroeconomist Paul Zak, who has called the neurotransmitter oxytocin the “trust molecule,” says, “A 15% increase in the proportion of people in a country who think others are trustworthy, raises income per person by 1% per year for every year thereafter.”

We evolved to function in a world that was messy, organic and, most importantly, physical. Our social mechanisms work best when we keep bumping into each other, whether we want to or not. Technology might be wonderful at making the world more efficient, but it doesn’t do a very good job at making it more human.

The Unusual Evolution of the Internet

The Internet we have today evolved out of improbability. It shouldn’t have happened like it did. It evolved as a wide-open network forged by starry-eyed academics and geeks who really believed it might make the world better. It wasn’t supposed to win against walled gardens like Compuserve, Prodigy and AOL — but it did. If you rolled back the clock, knowing what we know now, you could be sure it would never play out the same way again.

To use the same analogy that Eric Raymond did in his now-famous essay on the development of Linux, these were people who believed in bazaars rather than cathedrals. The internet was cobbled together to scratch an intellectual and ethical itch, rather than a financial one.

But today, as this essay in The Atlantic by Jonathan Zittrain warns us, the core of the internet is rotting. Because it was built by everyone and no one, all the superstructure that was assembled on top of that core is teetering. Things work, until they don’t: “The internet was a recipe for mortar, with an invitation for anyone, and everyone, to bring their own bricks.”

The problem is, it’s no one’s job to make sure those bricks stay in place.

Zittrain talks about the holes in humanity’s store of knowledge. But there’s another thing about this evolution that is either maddening or magical, depending on your perspective: It was never built with a business case in mind.

Eventually, commerce pipes were retrofitted into the whole glorious mess, and billions managed to be made. Google alone has managed to pull over a trillion dollars in revenue in less than 20 years by becoming the de facto index to the world’s most haphazard library of digital stuff. Amazon went one better, using the Internet to reinvent humanity’s marketplace and pulling in $2 trillion in revenue along the way.

But despite all this massive monetization, the benefactors still at least had to pay lip service to that original intent: the naïve belief that technology could make us better, and  that it didn’t just have to be about money.

Even Google, which is on its way to posting $200 billion in revenue, making it the fifth biggest media company in the world (after Netflix, Disney, Comcast, and AT&T), stumbled on its way to making a buck. Perhaps it’s because its founders, Larry Page and Sergey Brin, didn’t trust advertising. In their original academic paper, they said that “advertising-funded search engines will inherently be biased toward the advertisers and away from the needs of consumers.”  Of course they ultimately ended up giving in to the dark side of advertising. But I watched the Google user experience closely from 2003 to 2011, and that dedication to the user was always part of a delicate balancing act that was generally successful.

But that innocence of the original Internet is almost gone, as I noted in a recent post. And there are those who want to make sure that the next thing — whatever it is — is built on a framework that has monetization built in. It’s why Mark Zuckerberg is feverishly hoping that his company can build the foundations of the Metaverse. It’s why Google is trying to assemble the pipes and struts that build the new web. Those things would be completely free of the moral — albeit naïve — constraints that still linger in the original model. In the new one, there would only be one goal: making sure shareholders are happy.

It’s also natural that many of those future monetization models will likely embrace advertising, which is, as I’ve said before, the path of least resistance to profitability.

We should pay attention to this. The very fact that the Internet’s original evolution was as improbable and profit-free as it was puts us in a unique position today. What would it look like if things had turned out differently, and the internet had been profit-driven from day one? I suspect it might have been better-maintained but a lot less magical, at least in its earliest iterations.

Whatever that new thing is will form a significant part of our reality. It will be even more foundational and necessary to us than the current internet. We won’t be able to live without it. For that reason, we should worry about the motives that may lie behind whatever “it” will be.

The Relationship between Trust and Tech: It’s Complicated

Today, I wanted to follow up on last week’s post about not trusting tech companies with your privacy. In that post, I said, “To find a corporation’s moral fiber, you always, always, always have to follow the money.”

A friend from back in my industry show days — the always insightful Brett Tabke — reached out to me to comment, and mentioned that the position taken by Apple in the current privacy brouhaha with Facebook is one of convenience, especially this “holier-than-thou” privacy stand adopted by Tim Cook and Apple.

“I really wonder though if it is a case of do-the-right-thing privacy moral stance, or one of convenience that supports their ecosystem, and attacks a competitor?” he asked.

It’s hard to argue against that. As Brett mentioned, Apple really can’t lose by “taking money out of a side-competitors pocket and using it to lay more foundational corner stones in the walled garden, [which] props up the illusion that the garden is a moral feature, and not a criminal antitrust offence.”

But let’s look beyond Facebook and Apple for a moment. As Brett also mentioned to me, “So who does a privacy action really impact more? Does it hit Facebook or ultimately Google? Facebook is just collateral damage here in the real war with Google. Apple and Google control their own platform ecosystems, but only Google can exert influence over the entire web. As we learned from the unredacted documents in the States vs Google antitrust filings, Google is clearly trying to leverage its assets to exert that control — even when ethically dubious.”

So, if we are talking trust and privacy, where is Google in this debate? Given the nature of Google’s revenue stream, its stand on privacy is not quite as blatantly obvious (or as self-serving) as Facebook’s. Both depend on advertising to pay the bills, but the nature of that advertising is significantly different.

57% of Alphabet’s (Google’s parent company) annual $182-billion revenue stream still comes from search ads, according to its most recent annual report. And search advertising is relatively immune from crackdowns on privacy.

When you search for something on Google, you have already expressed your intent, which is the clearest possible signal with which you can target advertising. Yes, additional data taken with or without your knowledge can help fine-tune ad delivery — and Google has shown it’s certainly not above using this  — but Apple tightening up its data security will not significantly impair Google’s ability to make money through its search revenue channel.

Facebook’s advertising model, on the other hand, targets you well before any expression of intent. For that reason, it has to rely on behavioral data and other targeting to effectively deliver those ads. Personal data is the lifeblood of such targeting. Turn off the tap, and Facebook’s revenue model dries up instantly.

But Google has always had ambitions beyond search revenue. Even today, 43% of its revenue comes from non-search sources. Google has always struggled with the inherently capped nature of search-based ad inventory. There are only so many searches done against which you can serve advertising. And, as Brett points out, that leads Google to look at the very infrastructure of the web to find new revenue sources. And that has led to signs of a troubling collusion with Facebook.

Again, we come back to my “follow the money” mantra for rooting out rot in the system. And in this case, the money we’re talking about is the premium that Google skims off the top when it determines which ads are shown to you. That premium depends on Google’s ability to use data to target the most effective ads possible through its own “Open Bidding” system. According to the unredacted documents released in the antitrust suit, that premium can amount to 22% to 42% of the ad spend that goes through that system.

In summing up, it appears that if you want to know who can be trusted most with your data, it’s the companies that don’t depend on that data to support an advertising revenue model. Right now, that’s Apple. But as Brett also pointed out, don’t mistake this for any warm, fuzzy feeling that Apple is your knight in shining armour: “Apple has shown time and time again they are willing to sacrifice strong desires of customers in order to make money and control the ecosystem. Can anyone look past headphone jacks, Macbook jacks, or the absence of Macbook touch screens without getting the clear indication that these were all robber-baronesque choices of a monopoly in action? Is so, then how can we go ‘all in’ on privacy with them just because we agree with the stance?”

The Tech Giant Trust Exercise

If we look at those that rule in the Valley of Silicon — the companies that determine our technological future — it seems, as I previously wrote,  that Apple alone is serious about protecting our privacy. 

MediaPost editor in chief Joe Mandese shared a post late last month about how Apple’s new privacy features are increasingly taking aim at the various ways in which advertising can be targeted to specific consumers. The latest victim in those sights is geotargeting.

Then Steve Rosenbaum mentioned last week that as Apple and Facebook gird their loins and prepare to do battle over the next virtual dominion — the metaverse — they are taking two very different approaches. Facebook sees this next dimension as an extension of its hacker mentality, a “raw, nasty networker of spammers.” Apple is, as always, determined to exert a top-down restriction on who plays in its sandbox, only welcoming those who are willing to play by its rules. In that approach, the company is also signaling that it will take privacy in the metaverse seriously. Apple CEO Tim Cook said he believes “users should have the choice over the data that is being collected about them and how it’s used.”

Apple can take this stand because its revenue model doesn’t depend on advertising. To find a corporation’s moral fiber, you always, always, always have to follow the money. Facebook depends on advertising for revenue. And it has repeatedly shown it doesn’t really give a damn about protecting the privacy of users. Apple, on the other hand, takes every opportunity to unfurl the privacy banner as its battle standard because its revenue stream isn’t really impacted by privacy.

If you’re looking for the rot at the roots of technology, a good place to start is at anything that relies on advertising. In my 40 years in marketing, I have come to the inescapable conclusion that it is impossible for business models that rely on advertising as their primary source of revenue to stay on the right side of privacy concerns. There is an inherent conflict that cannot be resolved. In a recent earnings call,  Facebook CEO Mark Zuckerberg said it in about the clearest way it could be said, “As expected, we did experience revenue headwinds this quarter, including from Apple’s [privacy rule] changes that are not only negatively affecting our business, but millions of small businesses in what is already a difficult time for them in the economy.”

Facebook has proven time and time again that when the need for advertising revenue runs up against a question of ethical treatment of users, it will always be the ethics that give way.

It’s also interesting that Europe is light years ahead of North America in introducing legislation that protects privacy. According to one Internet Privacy Ranking study, four of the five top countries for protecting privacy are in Northern Europe. Australia is the fifth. My country, Canada, shares these characteristics. We rank seventh. The US ranks 18th.

There is an interesting corollary here I’ve touched on before. All these top-ranked countries are social democracies. All have strong public broadcasting systems. All have a very different relationship with advertising than the U.S. We that live in these countries are not immune from the dangers of advertising (this is certainly true for Canada), but our media structure is not wholly dependent on it. The U.S., right from the earliest days of electronic media, took a different path — one that relied almost exclusively on advertising to pay the bills.

As we start thinking about things like the metaverse or other forms of reality that are increasingly intertwined with technology, this reliance on advertising-funded platforms is something we must consider long and hard. It won’t be the companies that initiate the change. An advertising-based business model follows the path of least resistance, making it the shortest route to that mythical unicorn success story. The only way this will change will be if we — as users — demand that it changes.

And we should  — we must — demand it. Ad-based tech giants that have no regard for our personal privacy are one of the greatest threats we face. The more we rely on them, they more they will ask from us.

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.