Category Archives: User Behavior

The Joe Rogan Experiment in Ethical Consumerism

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Don’t Be Too Quick To Dismiss The Metaverse

According to my fellow Media Insider Maarten Albarda, the metaverse is just another in a long line of bright shiny objects that — while promising to change the world of marketing — will probably end up on the giant waste heap of overhyped technologies.

And if we restrict Maarten’s caution to specifically the metaverse and its impact on marketing, perhaps he’s right. But I think this might be a case of not seeing the forest for the trees.

Maarten lists a number of other things that were supposed to revolutionize our lives: Clubhouse, AI, virtual reality, Second Life. All seemed to amount to much ado about nothing.

But as I said almost 10 years ago, when I first started talking about one of those overhyped examples, Google Glass — and what would eventually become the “metaverse” (in rereading this, perhaps I’m better at predictions than I thought)  — the overall direction of these technologies do mark a fundamental shift:

“Along the way, we build a “meta” profile of ourselves, which acts as both a filter and a key to the accumulated potential of the ‘cloud.’ It retrieves relevant information based on our current context and a deep understanding of our needs, it unlocks required functionality, and it archives our extended network of connections.”

As Wired founder and former executive editor Kevin Kelly has told us, technology knows what it wants. Eventually, it gets it. Sooner or later, all these things are bumping up against a threshold that will mark a fundamental shift in how we live.

You may call this the long awaited “singularity” or not. Regardless, it does represent a shift from technology being a tool we use consciously to enhance our experiences, to technology being so seamlessly entwined with our reality that it alters our experiences without us even being aware of it. We’re well down this path now, but the next decade will move us substantially further, beyond the point of no return.

And that will impact everything, including marketing.

What is interesting is the layer technology is building over the real world, hence the term “meta.” It’s a layer of data and artificial intelligence that will fundamentally alter our interactions with that world. It’s technology that we may not use intentionally — or, beyond the thin layer of whatever interface we use, may not even be aware of.

This is what makes it so different from what has come before. I can think of no technical advance in the past that is so consequential to us personally yet functions beyond the range of our conscious awareness or deliberate usage. The eventual game-changer might not be the metaverse. But a change is coming, and the metaverse is a signal of that.

Technology advancing is like the tide coming in. If you watch the individual waves coming in, they don’t seem to amount to much. One stretches a little higher than the last, followed by another that fizzles out at the shoreline. But cumulatively, they change the landscape — forever. This tide is shifting humankind’s relationship with technology. And there will be no going back.

Maybe Maarten is right. Maybe the metaverse will turn out to be a big nothingburger. But perhaps, just perhaps, the metaverse might be the Antonio Meucci  of our time: an example where the technology was inevitable, but the timing wasn’t quite right.

Meucci was an Italian immigrant who started working on the design of a workable telephone in 1849, a full two decades before Alexander Graham Bell even started experimenting with the concept.  Meucci filed a patent caveat in 1871, five years before Bell’s patent application was filed, but was destitute and didn’t have the money to renew it.  His wave of technological disruption may have hit the shore a little too early, but that didn’t diminish the significance of the telephone, which today is generally considered one of the most important inventions  of all time in terms of its impact on humanity.

Whatever is coming, and whether or not the metaverse represents the sea change catalyst that alters everything, I fully expect at some point in the very near future to pinpoint this time as the dawn of the technological shift that made the introduction of the telephone seem trivial in comparison.

Why Outré is En Vogue

Last week, I talked about the planeload of social media influencers that managed to ruffle the half-frozen feathers of we normally phlegmatic Canadians. But that example got me thinking. Outrage – or, as the French say, “outre” – sells. The more outrageous it is, the better it seems to work. James William Awad  – the man behind the Plane of Shame – knew this. And we all just obligingly fell into his trap.

This all depends on how understanding how social networks work. Let’s begin by admitting that humans love to gossip. Information gives us status. The more interesting the information, the higher it’s value and, accordingly, the higher our social status. The currency of social networks is curiosity, having something that people will pay attention to.

But there is also the element of tribal identification. We signal who we are by the information we share. To use Canadian sociologist Ervin Goffman’s analogy, we are all actors and what we share is part of the role we have built for ourselves.

But these roles are not permanent. They shift depending on what stage we’re on and who the audience is. In today’s world social media has given us a massive stage.  And I suspect this might overload our normal social mechanisms. On this stage, we know that things that spread on social media tend to be in outlier territory, far from the boring middle ground of the everyday; they could be things we love or things that shock and outrage. Whether we love or hate the things we share depends on which tribe we identify with at the time.

Think of us humans as having a sharing thermostat where the trigger point is set depending on how strongly our emotions are triggered. If a post with new information doesn’t hit the threshold, it doesn’t get shared. Once that threshold is passed, the likelihood to share increases with the intensity of our emotions. It’s true for us, and because we’re human, it’s also true for everyone else that sees our post. The benefits of sharing juicy information is immediately reinforced through the dopamine releasing mechanism of getting likes and shares. The higher the number, the bigger the natural high.

But even when they lie well out in outlier territory, good news and bad news are not created equal. In evolutionary terms, we are hardwired to pay more attention to bad news. Good news might make us temporarily feel better, but bad news might kill us. If we want to survive long enough to pass on our genes, we better pay attention to the things that threaten us. That’s why traditional broadcasters know, “if it bleeds, it leads.”

Harvard Business School professor Amit Goldenberg found the same is true for social networks. “Although people produce much more positive content on social media in general, negative content is much more likely to spread,” says Goldenberg.

This creates an interesting – and potentially dangerous – arena for social and influencer marketing to play out in. The example I used in my last post is a perfect example. If you can outrage people, you win. It will spread virally through social networks, creating so much noise that eventually, traditional media will pick it up. This then connects the story to a broader social media audience. You get an amplification feedback loop that keeps reaching more and more people. Yes, the majority of the people will be outraged, but your target market will be delighted. Again, it all depends on which tribe you identify with.

It’s this appeal to the basest of human instincts that is troubling about this new spin on “earned” media. Savvy marketers have learned to game the system by pushing our hot buttons, leaving us in a perpetual state of pissed-off-edness.

The most frustrating thing is – it works.

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.

A 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 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.

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.