The author of that statement was S Yesudas, founder of a new agency called Trigger Bridge and a 20-year ad veteran with experience in top media agencies like Vizeum and its parent, Aegis Media.
This struck a chord with me:
I have been part of the advertising industry for over two decades. Have sat in seminars and conferences pointing towards the need for redefining the practice. The only change I witnessed is the influx of super specialised verticals set up by most agencies, resulting in incremental noise by marketers to sell their products/service to consumers and agencies upselling and cross-selling those specialisations to clients…
New-age companies are replacing fundamentally strong long-running companies, largely based on two factors: Their investors’ willingness to wait for long-term returns, and brand love by consumers.
While the shareholder mindset on returns from the already profitable companies cannot be changed overnight, brand love and a possible impact of the same on the balance sheets can surely be a reality.
Companies fundamentally know this. They understand that protocols and processes that have worked for decades may need some serious adjustment.
Then there are others who blindly feel they are emerging into an increasingly agile environment, willing to try the “new digital” frameworks. However, when all is said and done, the “new” just sits on an archaic platform that has been deemed as the tried and true. The “new” succumbs to the complacency and the tradition of the company and eventually fails to meet its true potential.
Call it what you like. That is not evolution. It’s this:
Agency performance models are broken
Campaigns. Clicks. Views. Performance. Agencies are only as good as their last campaign. Their goals have always been short-term performance-based. It’s never really been about the customers as much as it’s been about the numbers. Scalability on views and awareness has been the name of the game. Accountability from a revenue standpoint is another layer that puts further pressure on agency performance.
The main issue is that the focus on performance negates the need to really understand customers. I’ve witnessed agencies today continuing to reference PMB (Print Measurement Bureau) as part of their targeting research. The data they find continues to be based on demographics and psychographics to find customers (who may be unwilling to buy). Nobody understands the customer anymore — inside and outside of the company relationship. What matters to them? What do they need? Who influences them? What are their interests?
… NOT how can I influence them to buy my product?
S Yesudas put this nicely:
How can there ever be “love” if transaction is the only motive in an interaction?
The incessant media noise demands a need for relevance
Advertising dollars are being wasted today. We know that media fragmentation is now a reality. Consumers are bombarded with messages, ads, communications (email, text, chats, social networks). Consumers have created our own filters for sorting through this daily clutter.
In reality, we can’t possibly consume everything that is thrown at us. Consider this:
This number has been debated, and the latest article suggests we consume about 5,000 messages per day. This assumes the following:
8 hours of sleep each day leaves 57,600 awake seconds per day.
To see 5,000 ads/branding messages per day, we would need to see one every 11.52 seconds.
Chalk it up to science to determine what our brains really absorb in a given day.
“Even if those ads/brands are within eyesight, the reality is our brains see very few of them. Our senses are bombarded with over 11 million bits of data every SECOND. The average person’s working memory can handle 40-50 bits, max. That means we ignore 10,999,950 bits of data every second we are awake.”
This author asserts that 300-700 marketing messages per day is a more reasonable estimate. This fragmentation makes it increasingly difficult to battle for the customer’s attention.
My colleague Susan Silver referenced the success of BuzzFeed:
BuzzFeed has flipped the model of engagement on its head, and discovered the key to connecting with audiences that many brands haven’t figured out: Great content isn’t about the content itself, but the emotion it can evoke from its audience.
By analyzing the interactions readers have with their content, BuzzFeed realized what people really care about. They tapped into many cultural trends and were able to connect with users on a deep level. Jonah Peretti, founder of Buzzfeed, acknowledged this:
We think of media as something people use to help them in their lives.
Advertising simply isn’t working… as well anymore
We’ve seen the rise of ad blocking and its current impact on consumers, especially on mobile. I referenced the declining average click-through performance of .06%.
What is also clear is that increasing consumer control over which messages they see and which ones they’ll eventually respond to is making marketers question the value of their ad dollars. A recent article, Advertising’s Promised Land has become a Digital Desert, states the impending doom of digital media – however prematurely – as it references the softening in ad revenue for the giant Daily Mail:
We were told to expect £80m in digital revenues. In fact only £73m transpired. Hopes of £100m next year duly expire. Some 41% growth last year has slowed to 18% – and though that sounds good by most standards, it is also signals a grinding halt to vaulting expectation…
“We think we’re beginning to skate on thin ice in terms of the relationships we have with advertisers and audiences,” Tim Gentry, the Guardian’s global revenue director, told an industry meeting recently. “Five to six years on, we have to look at ourselves with a bit of a harsh yardstick and say we’ve not really delivered on that promise.”
Compounding this is the move to retreat to more conservative ad spending estimates for 2016, Firms Trim Ad Spending Growth Forecasts for 2016. Media forecasters indicate much of this can be attributed to the decrease in TV advertising spend in favor of less expensive digital media. Let’s not forget that while there will be modest expenditure gains in the coming year(s), marketers have become much wiser to the issues of ad fraud, ad blocking, and viewability of online ads.
The move to focus on relevance and the right audience vs. scalability
Here are the things I know: Developing customer relationships goes beyond clicks, campaigns, or ROI. It takes time. Today’s increasingly fragmented environment means we need to take the time to understand the holistic view of consumer, not simply whether they are ripe for purchase. Because that customer is no longer clicking, we must vie for his/her attention by appealing to things that matter to him/her.
This needs to go beyond demographics… beyond psychographics… beyond retargeting… something will eventually give. As S Yesudas contends:
Transactional advertising can never build bridges of relevance.
I believe in the Pareto Principle: Things are not distributed evenly. Those customers who love you the most may only be 20% of the total targeted audience. But they may very well impact 80% of your business.
I am in an industry where these types of insights are readily available. I am vigilant in my belief that the knowledge that we have access to today will profoundly change the way we communicate to customers. It allows us all to abandon the crutches we’ve held on to – practices that will continue to limit our ability to gain and keep customers.
I would love to hear your thoughts on this. Are marketers willing to shed old practices to embrace the value of truly understanding customer?
Only half of manufacturers and brands currently have e-commerce websites.
In today’s digital-centric world, what could possibly be the cause of this? E-commerce best practices have been well understood for over fifteen years, capital costs of e-commerce systems have come down dramatically, and over 90% of business buyers – and just about every single consumer – are using the web for research, and many for purchasing.
Business buyers – your buyers – are planning to make 55% of their work purchases online within the next two years. Those companies with e-commerce websites are realizing incremental revenue from current and new customers, driving meaningful improvements in gross margins, and reducing customer support costs. Yet only half of manufacturers and brands have e-commerce sites.
Why is this? What is the problem?
Or the lack of it.
Take heed, B2B executives: 2018 is the year to deploy e-commerce, before it is too late.
B2B leaders take note: Legacy doesn’t mean don’t change
In the B2B world, many manufacturers and brands are struck with organizational inertia. “If it ain’t broke, don’t fix it” is a common mindset – even if not expressed – of divisional and executive leadership. Whether they realize it or not, companies are tied down and limited by their processes and traditional ways of doing business, and in some ways are victims of their own historical success.
Traditional selling channels – the direct sales force (outside and inside), distribution and resale partners, telesales, catalog, and other methods – have driven many companies to tremendous revenue and profit levels in their categories. These legacy sales channels will forever be an important part of the buyer-seller relationship in B2B industries.
However, the world has changed. While these companies are living in collective inertia, customers’ expectations have organically shifted. Today’s B2B buyers expect to have a buyer-focused purchasing experience, often based on their experiences making retail purchases in their own personal lives as consumers. And that fact of the matter is that this purchasing experience has shifted either directly to, or is heavily influenced by, digital means. And as younger professionals come into the workforce, “digital native” is no longer a name for a category of buyers – it is every single buyer B2B organizations sell to.
The roots of organizational inertia
Many executives continue to ignore these trends at their own peril. Why? Change is not easy, and particularly difficult when business performance continues to sustain at somewhat acceptable levels through traditional sales channels, and the change agent (in this case, the e-commerce expectations of business buyers) is completely unfamiliar to the executive-in-charge.
Inaction is the result – somewhat driven by fear, somewhat by not knowing where to start. But the reality is that ignoring digital transformation is not sustainable, and customers are forcing change. Here’s the good news in this – companies that are listening are being rewarded – massively. Why shouldn’t you be one of these companies?
Digital transformation isn’t just about opening up an e-commerce store. It is not about hiring an intern to manage your website. True transformation comes about by looking at the organization, its processes, and its people, and figuring out how to change the entire organization. Successful change is incremental, more evolutionary than revolutionary. However, these changes are uncomfortable for the organization, across multiple functions. Intestinal fortitude is required! Leaders will be confronted with real tests of leadership.
The leadership imperative
There are four key foundational elements of organizational evolution necessary to prepare for and execute a successful digital transformation.
1. Redefining leadership – from the very top
Digital transformation simply won’t occur with this one single ingredient: senior leadership driving change. And this needs to come from the very pinnacle of the organization. Including the CEO, but even above him or her, the board of directors (or owners of the firm) need to not only buy into the goal of becoming a digital-first organization, but they also need to embrace this change and find ways to incentivize and empower the entire organization to evolve.
2. Get the right people on the bus (and the wrong people off it!)
Leaders cannot be successful without the right team around them. This is not a new concept, but one that is difficult for B2B companies to accept and adopt. The right team must go beyond loyalty to the organization (which does have value), and include a healthy dose of new digital expertise and a willingness to embrace (not just accept) change.
3. Establish cross-functional alignment and accountability frameworks
B2B organizations of all sizes contain departments that are impacted by digital transformation. Sales teams can view e-commerce selling as a threat to their customer relationships and compensation structures. Marketing budgets and traditional approaches are challenged with new digital marketing methods. Finance must account for revenues through new selling channels.
Information technology (IT) has brand-new systems to integrate and maintain. Customer service is handling orders through new channels, and concerned that customer self-service via the web will make their roles irrelevant. Fulfillment must ship individual orders in smaller quantities using unfamiliar shipping methods. There is virtually no aspect of the organization that is untouched by digital transformation. As a result, cross-functional involvement and communication related to digital efforts are critical.
4. Hire real e-commerce experience, and give your leader real authority
To enable digital transformation, B2B organizations need to hire people with relevant e-commerce experience who can lead and drive this change, with the full support of the CEO and Board. Without knowing what to look for in this leader, too often B2B organizations look within the company to promote (typically to the IT department) for this expertise.
It isn’t that internal leaders can’t succeed, but they frequently lack the skills and experience to understand what is necessary to drive digital engagement and e-commerce sales. Moving outside of the traditional “promote from within” approach of many B2B organizations, companies should strongly consider bringing in someone from a B2C e-commerce leadership role to fill a similar role in the B2B enterprise. And companies should look to provide real authority to these roles.
Too often, I see the leader that B2B companies appoint to run their e-commerce operation with less than five years of total experience and holding a title such as “e-commerce manager” or “web coordinator.” This role must be empowered to be a change agent. Anything less diminishes the organization’s ability to execute and drive true transformation.
Organizational evolution enables transformation
Ultimately, the organization itself must learn how to be comfortable with e-commerce, even if this is accomplished piece by piece. One of my B2B clients, for example, built an e-commerce store for its employees to buy its own products as a first step. This storefront was internal only, but by doing this, they were able to show the entire organization that it was not only possible to sell their products online, while also demonstrated the value e-commerce brings to their customers.
The road to digital transformation isn’t an easy one. It is not flat, and in some cases, it can be very long. There are bumps along the way, and there will be roadblocks. But having empowered and accountable leadership in place, with the right experience, skills, and knowledge, is the first step.
I’m here to help. Reach out to me at email@example.com, and I can help you break through the inertia, establish collaborative structures, and create a path forward towards digital transformation.
Want to learn more about digital transformation? Don’t miss our series here!
Well, an estimated $62 billion in retail revenue is lost due to poor customer service, and while 80% of companies believe they are providing outstanding service, only eight percent of consumers believe they are receiving good customer service.
Why, in 2018, are retailers not taking customers seriously? One of my own customer experiences made me think about this. Why do consumers love or leave brands? And how can companies offer a better CX and, ideally, increase revenue?
Is your commerce experience live?
While planning to buy a new wardrobe, I went to my preferred furniture company in Germany (a Swedish company with four letters), compared two or three models, tested, touched, and tried everything. After that, I headed back home to start my configuration online, with the intent to buy the products in the store. After adding everything to my virtual shopping cart, a new window popped up, saying that the function to order online but pick up the wardrobe in the store was out of order.
So, I took notes on the different components of my wardrobe and checked their availability online. In times of omnichannel business, the customer should be able to perform this check and receive information about alternative products to forge a closer customer relationship. For 59% of Russian consumers, it is essential to get relevant product recommendations to keep the brand relationship alive. This is a high number in comparison to the global average of 39%. Now that retargeting based on personal shopping or surfing history is standard, this number should rise in the near future.
Let the customer see your supply chain to foster your relationship
Following the holiday season, it was no surprise to see the wardrobe I wanted was out of stock. Since I needed some other, smaller things, I drove to my local furniture store and asked an employee at the information desk when my desired wardrobe would be available again. They replied, “Well, I cannot see it, so that might be a sign that this model was removed from the catalog during the turn of the year.”
It should be an imperative to allow store employees to see their current stock and supply chain situation in real-time in order to give sound advice to their customers. Employees shouldn’t have to guess if a product is out of stock or not, and it’s a good opportunity for companies to gather pertinent information about the customers’ intents in the buying cycle.
To stand out among competitors, brands must offer consistent online and offline experiences. What happens if they don’t? This depends on the country and the mentality: According to a global consumer insight study, 61% of consumers in Saudi Arabia would likely break with a brand if the online and in-store promotions were not consistent. In Japan, only 25% of customers would complain about that.
Brand love by the numbers – rewards are expected
After realizing I couldn’t get the wardrobe I’d desired, I reverted to buying an alternative model from the same furniture brand and began the process of purchasing it in the store. Armed with a big caddy, I began pulling long packages, only to find that one was missing.
An important lesson for brands: If customers invest their time, money, and in my case, sweat, with a brand, they want gestures that reward and gratify them. For example, 70% of Russian consumers expect a gift, perk, or freebie from their favorite brand. In Thailand, only 47% of customers expect the same treatment.
In my case, at some point during my customer journey, I would have loved it if the brand recognized the difficulties I was experiencing while trying to purchase something from it. My last chance to claim victory in my case: I signed up for the email notification service that pings you when the material is back in stock.
Finally, three weeks later, I received an email that the missing wardrobe piece was in – I could finally finish my project! The day I bought it, I checked my email while waiting in line at the self-service cash out. Imagine my dismay when I read a message from the brand: They were happy to inform me that my first choice for the wardrobe was back in stock and available for purchase.
Looking for more insights about why consumers love or leave brands? Get them for free here!
In the tech world in 2017, several trends emerged as signals amid the noise, signifying much larger changes to come.
As we noted in last year’s More Than Noise list, things are changing—and the changes are occurring in ways that don’t necessarily fit into the prevailing narrative.
While many of 2017’s signals have a dark tint to them, perhaps reflecting the times we live in, we have sought out some rays of light to illuminate the way forward. The following signals differ considerably, but understanding them can help guide businesses in the right direction for 2018 and beyond.
When a team of psychologists, linguists, and software engineers created Woebot, an AI chatbot that helps people learn cognitive behavioral therapy techniques for managing mental health issues like anxiety and depression, they did something unusual, at least when it comes to chatbots: they submitted it for peer review.
Stanford University researchers recruited a sample group of 70 college-age participants on social media to take part in a randomized control study of Woebot. The researchers found that their creation was useful for improving anxiety and depression symptoms. A study of the user interaction with the bot was submitted for peer review and published in the Journal of Medical Internet Research Mental Health in June 2017.
While Woebot may not revolutionize the field of psychology, it could change the way we view AI development. Well-known figures such as Elon Musk and Bill Gates have expressed concerns that artificial intelligence is essentially ungovernable. Peer review, such as with the Stanford study, is one way to approach this challenge and figure out how to properly evaluate and find a place for these software programs.
The healthcare community could be onto something. We’ve already seen instances where AI chatbots have spun out of control, such as when internet trolls trained Microsoft’s Tay to become a hate-spewing misanthrope. Bots are only as good as their design; making sure they stay on message and don’t act in unexpected ways is crucial.
This is especially true in healthcare. When chatbots are offering therapeutic services, they must be properly designed, vetted, and tested to maintain patient safety.
It may be prudent to apply the same level of caution to a business setting. By treating chatbots as if they’re akin to medicine or drugs, we have a model for thorough vetting that, while not perfect, is generally effective and time tested.
It may seem like overkill to think of chatbots that manage pizza orders or help resolve parking tickets as potential health threats. But it’s already clear that AI can have unintended side effects that could extend far beyond Tay’s loathsome behavior.
For example, in July, Facebook shut down an experiment where it challenged two AIs to negotiate with each other over a trade. When the experiment began, the two chatbots quickly went rogue, developing linguistic shortcuts to reduce negotiating time and leaving their creators unable to understand what they were saying.
Do we want AIs interacting in a secret language because designers didn’t fully understand what they were designing?
The implications are chilling. Do we want AIs interacting in a secret language because designers didn’t fully understand what they were designing?
In this context, the healthcare community’s conservative approach doesn’t seem so farfetched. Woebot could ultimately become an example of the kind of oversight that’s needed for all AIs.
Meanwhile, it’s clear that chatbots have great potential in healthcare—not just for treating mental health issues but for helping patients understand symptoms, build treatment regimens, and more. They could also help unclog barriers to healthcare, which is plagued worldwide by high prices, long wait times, and other challenges. While they are not a substitute for actual humans, chatbots can be used by anyone with a computer or smartphone, 24 hours a day, seven days a week, regardless of financial status.
Finding the right governance for AI development won’t happen overnight. But peer review, extensive internal quality analysis, and other processes will go a long way to ensuring bots function as expected. Otherwise, companies and their customers could pay a big price.
Elon Musk is an expert at dominating the news cycle with his sci-fi premonitions about space travel and high-speed hyperloops. However, he captured media attention in Australia in April 2017 for something much more down to earth: how to deal with blackouts and power outages.
In 2016, a massive blackout hit the state of South Australia following a storm. Although power was restored quickly in Adelaide, the capital, people in the wide stretches of arid desert that surround it spent days waiting for the power to return. That hit South Australia’s wine and livestock industries especially hard.
South Australia’s electrical grid currently gets more than half of its energy from wind and solar, with coal and gas plants acting as backups for when the sun hides or the wind doesn’t blow, according to ABC News Australia. But this network is vulnerable to sudden loss of generation—which is exactly what happened in the storm that caused the 2016 blackout, when tornadoes ripped through some key transmission lines. Getting the system back on stable footing has been an issue ever since.
Displaying his usual talent for showmanship, Musk stepped in and promised to build the world’s largest battery to store backup energy for the network—and he pledged to complete it within 100 days of signing the contract or the battery would be free. Pen met paper with South Australia and French utility Neoen in September. As of press time in November, construction was underway.
For South Australia, the Tesla deal offers an easy and secure way to store renewable energy. Tesla’s 129 MWh battery will be the most powerful battery system in the world by 60% once completed, according to Gizmodo. The battery, which is stationed at a wind farm, will cover temporary drops in wind power and kick in to help conventional gas and coal plants balance generation with demand across the network. South Australian citizens and politicians largely support the project, which Tesla claims will be able to power 30,000 homes.
Until Musk made his bold promise, batteries did not figure much in renewable energy networks, mostly because they just aren’t that good. They have limited charges, are difficult to build, and are difficult to manage. Utilities also worry about relying on the same lithium-ion battery technology as cellphone makers like Samsung, whose Galaxy Note 7 had to be recalled in 2016 after some defective batteries burst into flames, according to CNET.
However, when made right, the batteries are safe. It’s just that they’ve traditionally been too expensive for large-scale uses such as renewable power storage. But battery innovations such as Tesla’s could radically change how we power the economy. According to a study that appeared this year in Nature, the continued drop in the cost of battery storage has made renewable energy price-competitive with traditional fossil fuels.
This is a massive shift. Or, as David Roberts of news site Vox puts it, “Batteries are soon going to disrupt power markets at all scales.” Furthermore, if the cost of batteries continues to drop, supply chains could experience radical energy cost savings. This could disrupt energy utilities, manufacturing, transportation, and construction, to name just a few, and create many opportunities while changing established business models. (For more on how renewable energy will affect business, read the feature “Tick Tock” in this issue.)
Battery research and development has become big business. Thanks to electric cars and powerful smartphones, there has been incredible pressure to make more powerful batteries that last longer between charges.
The proof of this is in the R&D funding pudding. A Brookings Institution report notes that both the Chinese and U.S. governments offer generous subsidies for lithium-ion battery advancement. Automakers such as Daimler and BMW have established divisions marketing residential and commercial energy storage products. Boeing, Airbus, Rolls-Royce, and General Electric are all experimenting with various electric propulsion systems for aircraft—which means that hybrid airplanes are also a possibility.
Meanwhile, governments around the world are accelerating battery research investment by banning internal combustion vehicles. Britain, France, India, and Norway are seeking to go all electric as early as 2025 and by 2040 at the latest.
In the meantime, expect huge investment and new battery innovation from interested parties across industries that all share a stake in the outcome. This past September, for example, Volkswagen announced a €50 billion research investment in batteries to help bring 300 electric vehicle models to market by 2030.
At first, it sounds like a narrative device from a science fiction novel or a particularly bad urban legend.
Powerful cameras in several Chinese cities capture photographs of jaywalkers as they cross the street and, several minutes later, display their photograph, name, and home address on a large screen posted at the intersection. Several days later, a summons appears in the offender’s mailbox demanding payment of a fine or fulfillment of community service.
As Orwellian as it seems, this technology is very real for residents of Jinan and several other Chinese cities. According to a Xinhua interview with Li Yong of the Jinan traffic police, “Since the new technology has been adopted, the cases of jaywalking have been reduced from 200 to 20 each day at the major intersection of Jingshi and Shungeng roads.”
The sophisticated cameras and facial recognition systems already used in China—and their near–real-time public shaming—are an example of how machine learning, mobile phone surveillance, and internet activity tracking are being used to censor and control populations. Most worryingly, the prospect of real-time surveillance makes running surveillance states such as the former East Germany and current North Korea much more financially efficient.
According to a 2015 discussion paper by the Institute for the Study of Labor, a German research center, by the 1980s almost 0.5% of the East German population was directly employed by the Stasi, the country’s state security service and secret police—1 for every 166 citizens. An additional 1.1% of the population (1 for every 66 citizens) were working as unofficial informers, which represented a massive economic drain. Automated, real-time, algorithm-driven monitoring could potentially drive the cost of controlling the population down substantially in police states—and elsewhere.
We could see a radical new era of censorship that is much more manipulative than anything that has come before. Previously, dissidents were identified when investigators manually combed through photos, read writings, or listened in on phone calls. Real-time algorithmic monitoring means that acts of perceived defiance can be identified and deleted in the moment and their perpetrators marked for swift judgment before they can make an impression on others.
Businesses need to be aware of the wider trend toward real-time, automated censorship and how it might be used in both commercial and governmental settings. These tools can easily be used in countries with unstable political dynamics and could become a real concern for businesses that operate across borders. Businesses must learn to educate and protect employees when technology can censor and punish in real time.
Indeed, the technologies used for this kind of repression could be easily adapted from those that have already been developed for businesses. For instance, both Facebook and Google use near–real-time facial identification algorithms that automatically identify people in images uploaded by users—which helps the companies build out their social graphs and target users with profitable advertisements. Automated algorithms also flag Facebook posts that potentially violate the company’s terms of service.
China is already using these technologies to control its own people in ways that are largely hidden to outsiders.
According to a report by the University of Toronto’s Citizen Lab, the popular Chinese social network WeChat operates under a policy its authors call “One App, Two Systems.” Users with Chinese phone numbers are subjected to dynamic keyword censorship that changes depending on current events and whether a user is in a private chat or in a group. Depending on the political winds, users are blocked from accessing a range of websites that report critically on China through WeChat’s internal browser. Non-Chinese users, however, are not subject to any of these restrictions.
The censorship is also designed to be invisible. Messages are blocked without any user notification, and China has intermittently blocked WhatsApp and other foreign social networks. As a result, Chinese users are steered toward national social networks, which are more compliant with government pressure.
China’s policies play into a larger global trend: the nationalization of the internet. China, Russia, the European Union, and the United States have all adopted different approaches to censorship, user privacy, and surveillance. Although there are social networks such as WeChat or Russia’s VKontakte that are popular in primarily one country, nationalizing the internet challenges users of multinational services such as Facebook and YouTube. These different approaches, which impact everything from data safe harbor laws to legal consequences for posting inflammatory material, have implications for businesses working in multiple countries, as well.
For instance, Twitter is legally obligated to hide Nazi and neo-fascist imagery and some tweets in Germany and France—but not elsewhere. YouTube was officially banned in Turkey for two years because of videos a Turkish court deemed “insulting to the memory of Mustafa Kemal Atatürk,” father of modern Turkey. In Russia, Google must keep Russian users’ personal data on servers located inside Russia to comply with government policy.
While China is a pioneer in the field of instant censorship, tech companies in the United States are matching China’s progress, which could potentially have a chilling effect on democracy. In 2016, Apple applied for a patent on technology that censors audio streams in real time—automating the previously manual process of censoring curse words in streaming audio.
In March, after U.S. President Donald Trump told Fox News, “I think maybe I wouldn’t be [president] if it wasn’t for Twitter,” Twitter founder Evan “Ev” Williams did something highly unusual for the creator of a massive social network.
Speaking with David Streitfeld of The New York Times, Williams said, “It’s a very bad thing, Twitter’s role in that. If it’s true that he wouldn’t be president if it weren’t for Twitter, then yeah, I’m sorry.”
Entrepreneurs tend to be very proud of their innovations. Williams, however, offers a far more ambivalent response to his creation’s success. Much of the 2016 presidential election’s rancor was fueled by Twitter, and the instant gratification of Twitter attracts trolls, bullies, and bigots just as easily as it attracts politicians, celebrities, comedians, and sports fans.
Services such as Twitter, Facebook, YouTube, and Instagram are designed through a mix of look and feel, algorithmic wizardry, and psychological techniques to hang on to users for as long as possible—which helps the services sell more advertisements and make more money. Toxic political discourse and online harassment are unintended side effects of the economic-driven urge to keep users engaged no matter what.
Keeping users’ eyeballs on their screens requires endless hours of multivariate testing, user research, and algorithm refinement. For instance, Casey Newton of tech publication The Verge notes that Google Brain, Google’s AI division, plays a key part in generating YouTube’s video recommendations.
According to Jim McFadden, the technical lead for YouTube recommendations, “Before, if I watch this video from a comedian, our recommendations were pretty good at saying, here’s another one just like it,” he told Newton. “But the Google Brain model figures out other comedians who are similar but not exactly the same—even more adjacent relationships. It’s able to see patterns that are less obvious.”
A never-ending flow of content that is interesting without being repetitive is harder to resist. With users glued to online services, addiction and other behavioral problems occur to an unhealthy degree. According to a 2016 poll by nonprofit research company Common Sense Media, 50% of American teenagers believe they are addicted to their smartphones.
This pattern is extending into the workplace. Seventy-five percent of companies told research company Harris Poll in 2016 that two or more hours a day are lost in productivity because employees are distracted. The number one reason? Cellphones and texting, according to 55% of those companies surveyed. Another 41% pointed to the internet.
Tristan Harris, a former design ethicist at Google, argues that many product designers for online services try to exploit psychological vulnerabilities in a bid to keep users engaged for longer periods. Harris refers to an iPhone as “a slot machine in my pocket” and argues that user interface (UI) and user experience (UX) designers need to adopt something akin to a Hippocratic Oath to stop exploiting users’ psychological vulnerabilities.
In fact, there is an entire school of study devoted to “dark UX”—small design tweaks to increase profits. These can be as innocuous as a “Buy Now” button in a visually pleasing color or as controversial as when Facebook tweaked its algorithm in 2012 to show a randomly selected group of almost 700,000 users (who had not given their permission) newsfeeds that skewed more positive to some users and more negative to others to gauge the impact on their respective emotional states, according to an article in Wired.
As computers, smartphones, and televisions come ever closer to convergence, these issues matter increasingly to businesses. Some of the universal side effects of addiction are lost productivity at work and poor health. Businesses should offer training and help for employees who can’t stop checking their smartphones.
Mindfulness-centered mobile apps such as Headspace, Calm, and Forest offer one way to break the habit. Users can also choose to break internet addiction by going for a walk, turning their computers off, or using tools like StayFocusd or Freedom to block addictive websites or apps.
Most importantly, companies in the business of creating tech products need to design software and hardware that discourages addictive behavior. This means avoiding bad designs that emphasize engagement metrics over human health. A world of advertising preroll showing up on smart refrigerator touchscreens at 2 a.m. benefits no one.
According to a 2014 study in Cyberpsychology, Behavior and Social Networking, approximately 6% of the world’s population suffers from internet addiction to one degree or another. As more users in emerging economies gain access to cheap data, smartphones, and laptops, that percentage will only increase. For businesses, getting a head start on stopping internet addiction will make employees happier and more productive. D!
About the Authors
Maurizio Cattaneo is Director, Delivery Execution, Energy, and Natural Resources, at SAP.
David Delaney is Global Vice President and Chief Medical Officer, SAP Health.
Volker Hildebrand is Global Vice President for SAP Hybris solutions.
Neal Ungerleider is a Los Angeles-based technology journalist and consultant.
I’ve always been passionate about the ability of data and analytics to transform the world.
It has always seemed to me to be the closest thing we have to modern-day magic, with its ability to conjure up benefits from thin air. Over the last quarter century, I’ve had the honor of working with thousands of “wizards” in organizations around the world, turning information into value in every aspect of our daily lives.
The projects have been as simple as Disney using real-time analytics to move staff from one store to another to keep lines to a minimum: shorter lines led to bigger profits (you’re more likely to buy that Winnie-the-Pooh bear if there’s only one person ahead of you), but also higher customer satisfaction and happier children.
Or they’ve been as complex as the Port of Hamburg: constrained by its urban location, it couldn’t expand to meet the growing volume of traffic. But better use of information meant it was able to dramatically increase throughput – while improving the life of city residents with reduced pollution (less truck idling) and fewer traffic jams (smart lighting that automatically adapts to bridge closures).
I’ve seen analytics used to figure out why cheese was curdling in Wisconsin; count the number of bubbles in Champagne; keep track of excessive fouls in Swiss soccer, track bear sightings in Canada; avoid flooding in Argentina; detect chewing-gum-blocked metro machines in Brussels; uncover networks of tax fraud in Australia; stop trains from being stranded in the middle of the Tuscan countryside; find air travelers exposed to radioactive substances; help abused pets find new homes; find the best people to respond to hurricanes and other disasters; and much, much more.
The reality is that there’s a lot of inefficiency in the world. Most of the time it’s invisible, or we take it for granted. But analytics can help us shine a light on what’s going on, expose the problems, and show us what we can do better – in almost every area of human endeavor.
Data is a powerful weapon. Analytics isn’t just an opportunity to reduce costs and increase profits – it’s an opportunity to make the world a better place.
So to paraphrase a famous world leader, next time you embark on a new project:
“Ask not what you can do with your data, ask what your data can do for the world.”
What are your favorite “magical” examples, where analytics helped create win/win/win situations?
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About Timo Elliott
Timo Elliott is an Innovation Evangelist for SAP and a passionate advocate of innovation, digital business, analytics, and artificial intelligence. He was the eighth employee of BusinessObjects and for the last 25 years he has worked closely with SAP customers around the world on new technology directions and their impact on real-world organizations. His articles have appeared in publications such as Harvard Business Review, Forbes, ZDNet, The Guardian, and Digitalist Magazine. He has worked in the UK, Hong Kong, New Zealand, and Silicon Valley, and currently lives in Paris, France. He has a degree in Econometrics and a patent in mobile analytics.