Facebook and the world’s most valuable resource

The continuing saga of Facebook and its lack of respect for users’ privacy is getting tired. A recent article in the Minneapolis Star Tribune and the Washington Post discussed the likelihood of a sizable fine, Facebook, FTC discussing ‘multibillion dollar’ fine based on a current investigation. The FTC has increased its focus on such violations in the aftermath of the Cambridge Analytica breach which resulted in some 87 million users having their private data packaged and sold .

Interested in the history of Facebook and privacy violations? NBC News has complied a timeline that begins in 2006 when Zuckerberg’s brainchild (sorry Winklevoss boys) was just two years old running through last year. Some will say it is still not complete despite including nine incidents in twelve years.

According to The Economist the world’s most valuable resource is no longer oil, but data . Perhaps Facebook needs to start treating its customers data as a valued – and sometimes private – resource.

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Marketing Takeaways From An Election To Forget

All the controversy aside, there are a few things worth remembering from the way the candidates managed marketing and communications in this recent presidential election.We all tend to ignore the fundamentals at times and this serves as a reminder that the basics still count.

Market research is good but sometimes the data can be flawed. Use your judgement. If the data just seems off…it may well be. The media is being roundly criticized for being so far off with poll data in the days leading up to the election. Trump ignored that data. Perhaps Hillary should have as well.

Quick. What was Trump’s key message? “Make America Great Again”. Easy. Hillary’s? Not so easy. Trump’s camp put forth simple easy to remember messages (think Crooked Hillary) and repeated then ad nauseam.  Simplification and consistency can still be a worthwhile marketing strategy.

In you ever doubted it, digital communications and social media rule. If you do not have a strong digital component in your marketing strategy you are potentially missing a large portion of the worlds population.

Now let’s see how the President-elect communicates his agenda and his plan. This will be interesting.

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Medical device makers get into the advertising business

Medical device makers are, at last, dipping their toes in the direct to consumer advertising waters. In a January 17th article in the Minneapolis Star Tribune Medical device makers get into the ad game, heating up ethics debate  reporter Joe Carlson touches on the many issues presented by this development. Once Big Pharma started, most people figured it was only a matter of time. As with advertising by pharmaceutical companies, the issues run deep.

Do these ads run up costs for the health care system? The American Medical Association (AMA) says yes, and they are pushing for a ban on direct to consumer ads for prescription drugs and implantable medical devices, saying the negative impact on costs outweigh the benefits of educating consumers. Will such a ban be effective in the USA?  Voluntary bans on broadcast advertising in the distilled spirits markets and similar restrictions for tobacco have seen mixed effects.

Is advertising an implantable medical device an ethical way to educate consumers, consumers who have access to an abundance of similar information on web sites for the AMA, the American Heart Association, WebMD.com and other sources? Like most marketing messages, the assertions such ads make only cover summary benefits and the critical data is often lost in the “small print”.

The FDA is running to keep up as the game changes. Currently, rules for prescription drug advertising are more stringent than they are for medical devices.

This one will be interesting to watch.

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The Economist Weighs In On Data Security

We mentioned earlier in this space, outsourcing security and regularly testing your defenses are two specific ways to get better at protecting yourself.

But here’s one approach that is plausible but rarely used. Apply deception. Deliberately plant data with enticing file names and erroneous data. When that data is used you know you not only have a breach but who the attacker might be. Chances are they are in a country where you cannot reach them but the government might want to know anyway. One example cited in Manage Like a Spymaster from The Economist is that of a bank.

one American bank placed a series of fake profiles of non- existent staff on its internal computer network, including e-mail addresses. Whenever a transfer request arrived, addressed to one of these aliases, it knew that the sender was likely to be a fraudster.

Sometimes the best defense is a good offense.

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Hackers Focus On the Little Guys

It is the Target, Home Depot and U.S. government breaches that get all the attention but in a Verizon Data Breach Report it is the little guys who get hit the most often. Companies with fewer than 100 employees bear the brunt of 71% of cyberattacks.

In a recent Wall St Journal article, Lou Shipley, president and CEO of Black Duck Software, shared his thoughts on what small businesses can do to protect themselves. If you are one of those smaller firms it might make for a worthwhile read. Even if you are not, it is probably a good investment of a few short minutes.

Some of what Shipley writes is just good business sense. If you cannot afford the expense of on-staff IT professionals then outsource your network security. The independent perspective offers more of a reality check. Using Free Open Source Software (FOSS)? Think again. Yes, some of it, like Mozilla Firefox, is quite good but it is free for a reason. Your security is not as high on their list as it is on yours.

Food for thought.

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Crisis Damage Quantified

Occasionally we see it….data that deliver metrics on behavior. A recent article in the Wall St. Journal “At Work: An Executive’s Misdeeds Often Prove to Be Costly” cited a Mississippi State University , Drexel University study that suggests bad behavior by top executives can cost an average of $110 million or 1.6% of shareholder valve. More than double that amount if that executive is the CEO.

Surprising? It shouldn’t be. What is surprising is that boards often keep that executive on at the organization even though additional studies show it hurts company performance and company value.

Who are the culprits? Often they are male and older and nearly half of the instances cited in the study were reports of sexual indiscretions. Locally, Best Buy Co Inc. founder and Chairman Richard Schulze had to step down in 2012 after being accused of covering up an affair between former Chief Executive Officer Brian Dunn and a colleague. Dunn resigned. (The stock hit the $20 range after Dunn’s departure and today trades in the $33 range.)

Previous posts here have detailed just how substantially these problems can hurt smaller companies, especially those without a response plan. According to the Association of Small Business Development Centers, more than one in four businesses will have a significant crisis. The Hartford Insurance company says 43% of those who have a crisis and no crisis plan never reopen. And the Hartford study says of those that do re-open; only 29% are still operating two years later.

In the digital age there are few secrets, very little privacy and lots of good reasons to hire and retain the right people.

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What the Internet Is Doing to Our Brains Part II

The torrent of new technology and new ways to use it is unrelenting. Some push back. There is a recent emphasis by some investment management companies on human financial advisors, advisors that are actually NOT robo advisors, that new class of financial adviser delivering portfolio management online with minimal human intervention.1 Imagine that! Highlighting the human touch!

But it’s futile. It was over four years ago when this space talked about

What the Internet Is Doing to Our Brains

Now the questions have come around to: Is Technology Making People Less Social?2

Larry Rosen, a professor of psychology at California State University says yes.
In one study of more than 1,100 teens and adults, my fellow researchers and I found that the vast majority of smartphone users under 35 checked in with their electronic devices many times a day and mostly without receiving an external alert.

Keith N. Hampton, who holds the Professorship in Communication and Public Policy at Rutgers University’s School of Communication and Information, argues that technology is enriching our relationships.
…together, the small sips that come from the steady contact of social media can add up to a big gulp of information about the activities, interests and opinions of the people we connect with.

All of which sounds like those of us with ADD. Multiple brief sets of stimulation is our preferred manner of digesting information.

As with most things, the answer is somewhere in between, beginning with who are the participants. If Millennials, then they are likely quite comfortable with social media and similar ways to distribute info. And they are capable of digesting it as well. For others? Perhaps not so much.

All of which as spawned a whole series of consultants and agencies that specialize in helping with communication between generations. Locally in Minneapolis, XYZ University is one. Sarah Sladek delivers insights that are not always things that come easily to mind when it concerns communication.

As a part time lecturer at local colleges and universities I see it in the classroom every week. In order to inform and educate I must first have their attention. Or I will be replaced by a robo-professor who does.

1 Wikipedia – http://en.wikipedia.org/wiki/Robo-Advisor
2 Wall St Journal May 11, 2015 page R4

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Growth in Smartphones Spurs Content at Google

Have you used the Google search engine lately and seen more content than you expected on your first screen? I recently Googled (yes, it’s a verb) seeking hotels in Prague’s city center and saw the expected Expedia ad at the very top but a lot more on that same initial screen. It’s Google-driven content and it is creating a bit of uncertainty in a marketing environment where search engine optimization (SEO) is becoming a key component in integrated marketing communications programs.

Google was invented as the best tool to bring you to the most popular and useful sites and it has worked beautifully, making Google one of the most valuable companies in the USA. Trouble is, things are changing and the PC, which has helped to build Google into a powerhouse, is no longer the device of choice. It is the smartphone, and users just don’t surf the web on the smaller screens on their phones as much as they use apps to get specifically want that want. That makes Google search related advertising less attractive and less profitable. Hence the transition to more Google driven content. Most web experts will tell you that in today’s environment, it is all about the content. It is your only differentiator.

The trouble is, some of Google’s best customers are being affected the most. Expedia is one. When you compete with your largest customers, something has to give. When you own a large stake in Uber and your customers might include similar car-hailing services such as Lyft or Sidecar then the conflict becomes even more challenging.

Rolfe Winkler of the Wall St. Journal wrote an interesting piece on just what this means to Google, its advertisers and users of Google services. You can read it here on the WSJ subscription site.

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Even cheapskates want customer service

“You get what you pay for” is a mantra that has been with us a long time but that doesn’t keep people from complaining and wanting more than their money’s worth. The Internet has given us more and faster ways to provide feedback and we as consumers are quick to utilize those channels. From the businessman who tweeted about his rotten Hyatt stay in San Francisco (he got free room nights) to the shopper who shared a bad experience with Pottery Barn on Facebook (response time was 8 minutes), we are all quick to complain.

But better service comes with a price. You can’t expect low prices and great customer service, shares Paco Underhill retail anthropologist and author of “Why We Buy: The Science of Shopping.” in a recent Star Tribune article (Want better customer service? Quit being a cheapskate). With consumers expecting more for less, something has to give. “Customer service got lost in the process of consumers demanding cheaper prices,” said Underhill.

So which is it? In a hypercompetitive marketplace, are low prices and good customer service to be expected? How does that impact the brand? Star Tribune writer John Ewoldt thinks that WalMart gets good marks for customer service because the bar is so low in the first place.

Apple chooses to go in a different direction. Innovation is key but so are the Genius Bar, free training classes and lots of company representatives in every Apple store (try that in Macy’s!). By providing those things along with desirable, cool products Apple enables the highest prices in the industry. And record sales and profits.

The businessman in me says set expectations up front. Don’t offer what you cannot provide. It will just get worse when the customer service you offered is of poor quality. And if low prices is where you compete, that’s OK. Customers get value in different places in different ways. Just ask Apple.

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Lessons from The Interview

Never mind that North Korea’s Supreme leader Kim Jong-un was able to get into the SONY organization’s files and embarrass Seth Rogan and a handful of SONY executives, the real culprit is organized crime and the burgeoning market for consumer financial data.

According to an article in the USA TODAY, 43% of companies had a data breach in the past year. Target, Michaels, PF Chang’s Home Depot and Neiman Marcus and a host of well-known brands are among those hacked. Also reported in that story is that data breaches are significantly under-reported.

If you don’t want to read about it in the newspaper, just listen to Steve Kroft of 60 Minutes summarize the issue.

There is no moral to this story save this. If you are a consumer, take steps to minimize your risk knowing that you cannot eliminate it entirely. If you are an organization doing business using digital data, prepare for the impact both to your finances and to your reputation. According to the experts, it is a matter of not if but when your data is breached.

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