tag:econsultancy.com,2008:/topics/legal-and-regulations Latest Legal content from Econsultancy 2017-06-30T10:43:00+01:00 tag:econsultancy.com,2008:BlogPost/69209 2017-06-30T10:43:00+01:00 2017-06-30T10:43:00+01:00 Six inconvenient truths about influencer marketing Patricio Robles <h3>1. Calculating ROI can be difficult</h3> <p>As Rakuten Marketing MD and Econsultancy contributor James Collins <a href="https://econsultancy.com/blog/69164-should-sales-be-used-to-measure-the-roi-of-influencer-marketing/">recently noted</a>, “influencer marketing is often about raising awareness through aspirational content, with a view to generating purchases further down the line, rather than pushing immediate sales.”</p> <p>But for brands spending growing amounts of big bucks on influencer marketing campaigns (according to research from Linqia, marketers will spend $50,000 to $100,000 per influencer marketing campaign this year) justifying that spend increasingly requires more than faith that it will produce a return down the line. </p> <p>Unfortunately, a recent Econsultancy report <a href="https://econsultancy.com/reports/measuring-roi-on-influencer-marketing/">revealed that measuring ROI on their influencer initiatives is the biggest challenge for 65% of marketers</a>. While measuring ROI is hardly a challenge exclusive to influencer marketing, given the growing cost of influencer marketing campaigns, it's getting harder and harder for marketers to brush the ROI question aside.</p> <h3>2. Engagement doesn't necessarily translate to efficacy</h3> <p>Part of the ROI calculation challenge is that some of the most easily tracked metrics in influencer marketing campaigns are related to how much followers engage with sponsored content. But likes, retweets and comments aren't always meaningful metrics and don't even necessarily mean that an influencer's followers have truly engaged with the branded content.</p> <p>At a minimum, companies should use benchmarking to assess whether or not the engagement their campaigns is generating is in line with what they expect based on an influencer's non-paid content, but it's not clear that marketers are even doing this.</p> <h3>3. It's hard to assess audience quality </h3> <p>Fake accounts, often created by automated means, have for years been a thorn in the side of social platforms like Facebook and Twitter. While it's impossible to pin down exactly how many fake accounts exist, even if a relatively small percentage of the accounts on these platforms are fake, that represents tens of millions of fake accounts, if not more.</p> <p>By some estimates, even some of the biggest influencers on these platforms have fake followers well into the double digit percentages, which can equate to anywhere from tens of thousand to millions of fake followers. Even though in most cases this almost certainly isn't intentional, it's a problem given that the most popular influencers are setting their prices based on their total audiences and marketers can't really be sure whether the number of useless accounts following a particular influencer is 1%, 10%, 25%, etc.</p> <p>Beyond fake accounts, it's even more difficult to assess the quality of an influencer's legitimate audience. How many followers are active? How many are truly fans of the influencer? And so on and so forth.</p> <h3>4. You can't control how people will react</h3> <p>The concept behind influencer marketing – that brands benefit by positive associations with high-profile individuals on social media platforms – isn't an invalid one, but that doesn't mean that campaigns are guaranteed to produce positive reactions.</p> <p>For example, Marigold, a prominent dairy and beverage company in Singapore, learned that the hard when when it used three influencers to promote its Marigold Peel Fresh juice drink. One of the influencers, Naomi Neo, who did not disclose that she was being paid by Marigold, claimed that she “always [carries] around a carton of my favorite MARIGOLD PEEL FRESH juice.”</p> <p>That claim was, for obvious reasons, <a href="http://mothership.sg/2016/05/internet-person-says-she-carries-1-litre-carton-of-marigold-peel-fresh-everywhere-she-goes/">met with extreme skepticism</a> and lots of negative comments on social media and the web – probably not what Marigold was looking for.</p> <p><img src="https://assets.econsultancy.com/images/0008/7191/neo.jpg" alt="naomi neo" width="615" height="424"></p> <h3>5. Influencer relationships can go south, and quickly</h3> <p>Influencers are human beings and thus not infallible. That means influencer relationships are fraught with many of the same risks as typical celebrity endorsements.</p> <p>In a worst-case scenario, brands associated with an influencer could suffer some level of embarrassment if the influencer becomes the subject of a public firestorm.</p> <p>Case in point: after a Wall Street Journal article highlighted a number of anti-Semetic videos posted by PewDiePie, YouTube's biggest homegrown star, brands that had been involved with him, <a href="https://www.wsj.com/articles/disney-severs-ties-with-youtube-star-pewdiepie-after-anti-semitic-posts-1487034533">including Disney</a>, made the decision to cut ties. </p> <p>While it's unlikely that the PewDiePie association will have a lasting negative impact on a brand like Disney, the fact that it had to end the kind of long-term influencer relationship that is most likely to pay dividends demonstrates just how hard it can be to bank on internet stars as reliable partners.</p> <h3>6. Disclosure is still an issue</h3> <p>In the U.S., the Federal Trade Commission (FTC) is ramping up its efforts to ensure that influencers are adequately disclosing when they are being paid to promote products and services for companies. </p> <p>While in theory it should be easy for marketers to require that the influencers it works with are following the applicable rules, and platforms like Instagram are aiming <a href="https://www.bloomberg.com/news/articles/2017-06-14/instagram-to-make-it-clearer-when-influencer-posts-are-paid-ads">to make it even easier</a>, the FTC <a href="http://fortune.com/2017/04/20/ftc-instagram/">is still finding dozens upon dozens of instances of violations</a> of its rules. Even following the FTC's letters, a number of watchdog groups <a href="https://www.mediapost.com/publications/article/303461/celebrities-still-fail-to-disclose-instagram-ads.html">discovered that</a> many of the influencers the FTC warned are not disclosing when they are posting content for brands.</p> <p>Ultimately, if brands aren't proactive about making sure the influencers they work with are following the rules, it's likely that the FTC will be forced to take enforcement action, action that could carry with it fines for brands.</p> tag:econsultancy.com,2008:BlogPost/69217 2017-06-29T17:14:00+01:00 2017-06-29T17:14:00+01:00 As WPP hit by cyberattack, brands need to pay more attention to agency security Patricio Robles <p>Like WannaCry, <a href="https://www.theguardian.com/technology/2017/jun/27/petya-ransomware-cyber-attack-who-what-why-how">Petya</a> appears to be ransomware, as it encrypts files on infected computers and demands payment for access to be restored.</p> <h3>A very high-profile victim</h3> <p>One of the companies hit by Petya was the world's largest ad holding firm, WPP. In a statement, the company revealed that on June 27, "a number of WPP companies were affected by the ransomware attack that hit organisations around the world."</p> <p>WPP assured clients that it was working with its IT partners and law enforcement "to take all appropriate precautionary measures, restore services where they have been disrupted, and keep the impact on clients, partners and our people to a minimum."</p> <p><a href="http://www.adweek.com/agencies/wpp-cyberattack-serves-as-a-wake-up-call-to-agencies-and-cmos-alike/">According to</a> AdWeek, "staff at various offices left work early yesterday due to an inability to access their networks."</p> <p>In an internal memo, WPP chairman Sir Martin Sorrell tried to reassure staff that the cyberattack wasn't hurting the firm's business. "Many of you will have experienced significant disruption to your work. However, contrary to some press reports, WPP and its companies are still very much open for business," he told staff, adding that there was "no indication that either employee or client data has been compromised."</p> <h3>A new agency risk</h3> <p>Even if WPP emerges from this cyberattack with little more than a few nicks and scratches, the fact that it was affected at all by Petya should be of concern to brands that count agencies as some of their most important partners. After all, if a brand's agency is knocked offline, loses data or is otherwise compromised, it could affect clients in any number of ways, such as disruption to or delays of campaigns. </p> <p>As Michael Connolly, CEO of adtech firm Sonobi, <a href="http://adage.com/article/digital/wpp-ransomware-attack-smoke-screen/309614/">told AdAge</a>, "Any impact to an organization's infrastructure or operational ability...can have an impact on the ability to execute, particularly when data is involved." Data, of course, has become the lifeblood of digital advertising thanks in large part to the rise of programmatic.</p> <p>And there are a number of worst-case scenarios that could expose clients to even costlier crimes. For example, because agencies are privy to some of the most sensitive information of their clients, it's not inconceivable that agencies could be specifically targeted by groups who are aiming to extort or otherwise inflict damage on their clients by stealing, modifying or deleting client data.</p> <p>Seem far-fetched? Consider that this <a href="http://www.latimes.com/business/hollywood/la-fi-ct-hacking-disney-netflix-20170523-story.html">is exactly what is happening to Hollywood studios</a> on a now disturbingly frequent basis. Like brands, Hollywood studios rely heavily on third-parties, which out of necessity often have access to some of their most sensitive and valuable assets.</p> <h3>Agencies are ill-prepared</h3> <p>Unfortunately for brands, according to experts who spoke to AdWeek and AdAge, agencies are largely unprepared to deal with cyber threats like Petya. </p> <p>According to Tom Pageler, chief risk officer and chief information security officer at global information services provider Neustar, agencies are "probably doing the minimum versus other, more heavily regulated industries like financial services that deal with critical data."</p> <p>The news isn't all bad, however. "The industry realizes that they’re really not where they need to be," he stated, and in the the wake of the Petya attack, Pageler is already seeing signs that companies are trying to catch up. He predicts WPP specifically will soon announce the hiring of a big security vendor.</p> <p>But while agencies have a lot of work to do, brands must also recognize that they share with their partners responsibility for cybersecurity. They can't just demand that their agencies own the cybersecurity challenge. Instead, they need to better educate themselves, take an active role in establishing and enforcing data security policies that their agencies are required to adhere to, and take steps to ensure that they're not creating vulnerabilites themselves.</p> tag:econsultancy.com,2008:BlogPost/69213 2017-06-29T12:00:00+01:00 2017-06-29T12:00:00+01:00 How Europe's $2.7bn Google antitrust fine could impact the internet economy Patricio Robles <blockquote> <p>...Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.</p> </blockquote> <p>Google, not surprisingly, was quick to issue <a href="https://www.blog.google/topics/google-europe/european-commission-decision-shopping-google-story/">a response</a> refuting the EC's claim that it has illegally acted to stifle competition. In it, Google's general counsel Kent Walker stated that the company "respectfully disagrees" with the EC's conclusions and suggested that the rise of competitors like Amazon could be responsible for the challenges other shopping comparison sites have faced.</p> <p>"When you use Google to search for products, we try to give you what you're looking for," Walker wrote. "Our ability to do that well isn’t favoring ourselves, or any particular site or seller – it's the result of hard work and constant innovation, based on user feedback."</p> <p>An appeal, while not yet announced, would appear likely.</p> <p>In the meantime, Google parent company Alphabet has 90 days to cease the conduct the EC found to be illegal or it will face daily fines of 5% of its average daily worldwide turnover. The EC also noted that in addition to the fine being levied by the EC, Google could face civil penalties for its behavior and that a new EU Antitrust Damages Directive will "[make] it easier for victims of anti-competitive practices to obtain damages."</p> <h3>A sign of things to come?</h3> <p>While Google, which generated some $90bn in revenue last year, can easily swallow the EU's $2.7bn fine without batting an eye, the billion-dollar fine signals that regulators, after years of talk, might now be willing to take action to reign in large tech companies that are increasingly dominant.</p> <p>Google and Facebook, for instance, <a href="https://digiday.com/media/will-duopoly-face-government-intervention/">have been labeled by some as a duopoly</a> that needs to be regulated more heavily, and as a candidate, now-U.S. President Donald Trump went so far as to <a href="http://www.cnbc.com/2016/05/13/trump-says-amazon-has-a-huge-antitrust-problem.html">publicly state</a> that Amazon has "a huge antitrust problem."</p> <p>There's no evidence that tech giants like Google, Apple, Facebook and Amazon are going to become less dominant any time soon. In fact, the evidence <a href="https://econsultancy.com/blog/69186-is-the-whole-foods-acquisition-the-beginning-of-amazon-s-endgame/">indicates</a> that the dominance of a handful of large tech firms will only grow. This has led to concern that these companies are becoming too powerful and must be reigned in to protect the public.</p> <p>While it's too early to know whether the EC's Google fine is the beginning of a period of aggressive antitrust enforcement, the EC did use its press release to point out that it "has already come to the preliminary conclusion that Google has abused a dominant position in two other cases" involving Google's mobile OS Android and AdSense. </p> <p>It also noted that it "continues to examine Google's treatment in its search results of other specialised Google search services" -- a not-so-subtle warning that Google is still under a powerful antitrust microscope.</p> <h3>Is a Europe-US split developing?</h3> <p>Some observers have suggested that the EC unfairly targeted Google, an American company, and that this week's fine is actually intended to serve protectionist goals without starting an overt trade rift. The EC <a href="http://money.cnn.com/2017/06/27/technology/eu-google-biased-protectionism/">has dismissed</a> these arguments.</p> <p>While U.S. presidential candidate Trump bandied about the "antitrust" word in reference to Amazon, which is owned by one of his most prominent tech industry critics, Jeff Bezos, it's somewhat doubtful that President Trump will eschew his business-friendly political platform and go after big tech firms who employ tens of thousands of highly-paid workers in the U.S.</p> <p>This raises the prospect of a Europe-US split in which large tech companies, most of which are headquartered in the U.S., are forced to change the way they operate in Europe while keeping their modus operandi the same across the pond.</p> <p>For companies that rely in some form on these tech giants, particularly large brands, this possibility is worth paying close attention to. After all, if Google is forced to make significant changes to the way it operates in Europe, it could affect how Google's many frenemies work with and compete against it in Europe versus the rest of the world.</p> tag:econsultancy.com,2008:BlogPost/68865 2017-05-05T14:17:29+01:00 2017-05-05T14:17:29+01:00 Will bad PR lead Uber to destruction? Patricio Robles <p>Since the beginning of the year, the eight-year-old transportation company that investors have reportedly valued at more than $60bn has seen its name dragged through the mud:</p> <ul> <li>On February 19, a former Uber engineer, Susan Fowler, published <a href="https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber">a blog post</a> detailing a culture of sexism at the company, sparking outrage and forcing the company's founder and CEO, Travis Kalanick, to announce an independent review.</li> <li>Shortly thereafter, Uber's SVP of engineering, Amit Singhal, <a href="http://www.recode.net/2017/2/27/14745360/amit-singhal-google-uber">left the company</a> after it was revealed that he had left his former employer, Google, following an allegation of sexual harassment that the search giant had found to be "credible."</li> <li>Around the same time, a video recorded by an Uber driver revealed a conversation the driver had with Kalanick who, when pressed about driver pay, responded, "You know what, some people don't like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!" Kalanick apologized for his behavior and <a href="https://newsroom.uber.com/a-profound-apology/">in a statement</a> said "This is the first time I’ve been willing to admit that I need leadership help and I intend to get it."</li> <li>In late February, Susan Fowler tweeted that "research for the smear campaign has begun. If you are contacted by anyone asking for personal and intimate info about me, please report asap" and shortly thereafter announced that she had hired a law firm. Uber <a href="http://www.recode.net/2017/2/24/14728660/uber-says-its-not-behind-the-phone-calls-to-investigate-susan-fowlers-personal-life">responded and stated</a> that it was not behind any investigations of Fowler's personal life.</li> <li>Google parent company Alphabet, on behalf of its self-driving car unit Waymo, <a href="https://medium.com/waymo/a-note-on-our-lawsuit-against-otto-and-uber-86f4f98902a1#.v5sjnsfbq">filed a lawsuit</a> against Uber and Otto alleging that former Waymo employees engaged in a "concerted plan to steal Waymo’s trade secrets and intellectual property." Otto is a self-driving car startup Uber purchased in 2016. That lawsuit <a href="https://techcrunch.com/2017/04/25/uber-must-turn-over-information-about-its-acquisition-of-otto-to-waymo-court-rules/">does not appear to be going well</a> for Uber and might be why the head of Uber's Advantage Technology Group, who is at the center of the lawsuit, just <a href="https://techcrunch.com/2017/04/27/ubers-anthony-levandowki-out-as-advanced-technologies-lead-amid-legal-fight/">stepped aside</a>.</li> <li>In early March, Uber was forced to respond to <a href="https://www.nytimes.com/2017/03/03/technology/uber-greyball-program-evade-authorities.html">reports that it had built a "greyballing" system</a> so that it could evade law enforcement and regulators in markets where it was not permitted by law to operate.</li> <li>Also in early March, another former female Uber engineer <a href="https://medium.com/@contactkeala/sexism-at-uber-from-female-management-uberstory-238874075bbb">spoke out</a> about her last days at the company, which she claimed were filled with "disrespect, condescending managers, and sexism."</li> <li>Uber's president, Jeff Jones, who was previously the CMO of retail giant Target, resigned from the company after just six months on the job. Jones <a href="http://www.sfchronicle.com/business/article/Amid-turbulence-at-Uber-company-s-president-11013195.php">said that</a>, "The beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber and I could no longer continue as president of the ridesharing business."</li> <li>In late March, <a href="http://www.theverge.com/2017/3/25/15061270/uber-employee-company-trip-south-korean-escort-bar">a report was published</a> claiming that Uber's Kalanick and five other employees visited an escort karaoke bar in Seoul, Korea in 2014, which resulted in a complaint to Uber human resources by a female employee who was present. According to the report, Kalanick's girlfriend was later asked by Uber’s senior VP of business to lie if questioned about the incident.</li> <li>Earlier this month, it <a href="https://www.theinformation.com/ubers-top-secret-hell-program-exploited-lyfts-vulnerability">was revealed</a> that between 2014 and early 2016 Uber had a software program called "Hell" which was used to track drivers driving for Lyft, the company's chief rival. As part of this program, which relied on fake Lyft rider accounts and a flaw in Lyft's technology, Uber tracked drivers who worked for both Uber and Lyft with the goal of luring them to work for Uber instead. Now, an ex-Lyft driver <a href="https://www.cnet.com/news/former-lyft-driver-sues-uber-for-hell-tracking-program/">is suing Uber for $5m</a> alleging that the program violated the Federal Wiretap Act and California's Invasion of Privacy Act. The lawyers representing the ex-Lyft driver are seeking class action status.</li> </ul> <p>Given Uber's ubiquity and dominance in key markets, one might assume that the company will no doubt weather all of these scandals with minimal long-term damage, but is that really a valid assumption?</p> <h3>Lyft pounces</h3> <p>If Lyft's fortunes are any indication, Uber might have reason to worry.</p> <p>While Uber has been dealing with bad headline after bad headline, Lyft has been courting riders and polishing its image. For example, when Uber was facing a #DeleteUber campaign over CEO Kalanick's participation in a business advisory council for US President Donald Trump, Lyft was responding to Trump's temporary travel ban targeting seven Muslim countries by announcing that it would be donating $1m to the American Civil Liberties Union.</p> <p>Is Lyft's cleaner image winning over consumers?</p> <p><a href="https://www.bloomberg.com/news/articles/2017-04-27/lyft-bookings-and-ridership-soar-while-losses-shrink"> According to</a> Bloomberg, Lyft's ridership and bookings "surged" in the first quarter of the year and according to fundraising documents Bloomberg obtained, the company is beating its internal targets. The documents revealed that Lyft's gross bookings in Q1 grew to $800m, more than double what they were in Q1 2016, and total ridership in February was 137% higher than February 2016.</p> <p>Obviously, there's no way to know just how much of Lyft's gains, if any, have come at Uber's expense, but it's difficult to ignore the fact that Lyft's momentum seems to be accelerating at the very same time its larger rival is under constant media fire.</p> <h3>The big problem with Uber's bad PR</h3> <p>Many companies face scandal at some point or another, and Uber is no stranger to bad press. From reports that the company <a href="https://arstechnica.com/tech-policy/2016/06/uber-hired-investigators-to-impersonate-journalists-to-target-lawsuit-plaintiff/">impersonated journalists</a> as part of a lawsuit reponse to <a href="http://bgr.com/2016/12/13/uber-privacy-and-security/">claims it has spied on users for years and lied about it</a>, Uber is at this point fairly well-versed in crisis PR. And on the surface, the company's response to the latest string of bad headlines has followed best practice.</p> <p>High-profile claims of a rampant sexual harassment? Denounce the behavior and announce an investigation to be led by the former US Attorney General. CEO gets caught on camera treating a driver poorly? Have the CEO issue a heartfelt apology and promise to get help. And so on and so forth.</p> <p>But something <em>feels</em> different about the latest crises. When the relatively new president of the company quits after only six months and points to the "beliefs and approach to leadership" as the reason, it suggests there's a bigger problem, as do the views of <a href="https://www.theguardian.com/technology/2017/mar/07/uber-work-culture-travis-kalanick-susan-fowler-controversy">current, former and prospective employees, as well as recruiters</a>.</p> <p>To be sure, companies <em>can</em> recover from <a href="https://econsultancy.com/blog/6119-bp-s-internet-response-the-good-the-bad-the-ugly/">huge mistakes that create PR messes of significant proportions</a>, but what happens when a brand burdens itself with a culture in which mistakes that wreak PR havoc are inevitable? And what happens if a company comes to be seen by the public as rotten at its core?</p> <p>While the thought of the $60bn-plus upstart imploding seems like a far-fetched proposition, Uber appears to be testing just how far the limits of bad PR can be pushed in a way that is perhaps unprecedented.</p> tag:econsultancy.com,2008:BlogPost/69006 2017-04-20T15:00:00+01:00 2017-04-20T15:00:00+01:00 What publishers and advertisers need to know about Princeton and Stanford's new super ad blocker Patricio Robles <h4>1. It uses "perceptual ad blocking"</h4> <p>Most ad blockers in use today look for the footprints of digital ads. For example, they scan the contents of a page, identifying snippets of code and URLs that are commonly associated with ads and ad networks. This approach is very effective at blocking ads served by major ad players like Google, but it's far less effective at weeding out ads that are served by publishers themselves, including native ads.</p> <p>The university researchers' ad blocker uses computer vision technology to analyze the contents of a web page much the same way a human would. As Vice's Jason Koebler <a href="https://motherboard.vice.com/en_us/article/princetons-ad-blocking-superweapon-may-put-an-end-to-the-ad-blocking-arms-race">explained</a>...</p> <blockquote> <p>...it uses optical character recognition, design techniques, and container searches (the boxes that ads are commonly put in on a page) to detect words like "sponsored" or "close ad" that are required to appear on every ad, which is what allows it to detect and block Facebook ads.</p> </blockquote> <h4>2. It could be 100% effective at blocking ads</h4> <p><a href="http://randomwalker.info/publications/ad-blocking-framework-techniques.pdf">According to</a> a paper published by the Princeton and Stanford researchers who created the new ad blocker, so long as advertisers and publishers adhere to the disclosure standards promulgated by regulatory agencies like the Federal Trade Commission (FTC), "a perceptual ad blocker will have a 100% recall at identifying ads governed by that standard."</p> <h4>3. The ad blocker is difficult if not impossible to detect</h4> <p>The new computer vision-based approach allows the Princeton and Stanford ad blocker to more stealthily block ads by taking advantage of techniques normally employed by malware. In fact, when tested on 50 websites employing anti ad-blocking scripts, the university's ad blocker was able to block ads without being detected 100% of the time. </p> <p>Because it stealthily blocks ads, the super ad blocker is able to avoid detection by <a href="https://econsultancy.com/blog/66606-here-come-the-ad-blocker-blockers">anti ad-blocking techniques</a> that publishers commonly use to thwart users who browse their sites with ad blockers.</p> <p><img src="https://assets.econsultancy.com/images/0008/1281/netflixad.png" alt="" width="590" height="226"></p> <p>That's obviously not going to be good news for the growing number of publishers that are using anti ad-blockers to cut off access to people using the technology, and could encourage some of them to erect more restrictive paywalls.</p> <h4>4. The technology is currently available in a proof-of-concept that doesn't block ads</h4> <p>While it's probably only a matter of time before perceptual ad blocking technology makes its full debut, for now, the Princeton and Stanford researchers decided to release a limited proof-of-concept in the form of <a href="https://chrome.google.com/webstore/detail/perceptual-ad-blocker/mahgiflleahghaapkboihnbhdplhnchp?hl=en">a Chrome extension</a> that doesn't actually block ads. Instead, the extension highlights the ads it identifies.</p> <p><img src="https://assets.econsultancy.com/images/0008/5479/adblocker.png" alt="" width="644" height="404"></p> <h4>5. Perceptual ad blocking isn't the only new approach to ad blocking that could have a big impact</h4> <p>While it would appear that perceptual ad blocking has the potential to end the ad blocking wars, handing victory to consumers and defeat to publishers and advertisers, this new approach to ad blocking isn't the only one that publishers and advertisers need to worry about. </p> <p>In a paper detailing their perceptual ad blocking tech, the Princeton and Stanford researchers also presented another technique that could make ad blocking more effective. Under this approach, a browser extension would create two copies of a page, blocking ads in the one displayed to users. The end result would be that publishers would again have no way to identify users who are blocking ads.</p> tag:econsultancy.com,2008:BlogPost/68953 2017-04-04T15:30:00+01:00 2017-04-04T15:30:00+01:00 Can pharma companies effectively use influencer marketing? Patricio Robles <p>As Digiday's Yuyu Chen <a href="http://digiday.com/marketing/inside-influencer-marketing-weigh-loss-supplements/">recently detailed</a>, a weight-loss supplement company turned to <a href="https://econsultancy.com/reports/the-voice-of-the-influencer/">influencer marketing</a> to help it "restore its image" as it battled legal issues related to product recalls.</p> <p>Unlike most influencer campaigns, Collective Bias, the firm it worked with, needed extra time to find influencers in the supplement company's target market – overweight female adults over the age of 40. And because the content the influencers created needed to be compliant with Food and Drug Administration (FDA) rules, legal reviews were required before content could be published.</p> <p>All told, the campaign, which involved a relatively small number of influencers – less than two dozen – took two months to execute. Normally, Collective Bias says campaigns take three to four weeks.</p> <p>Another firm, Talent Resources, which has created influencer marketing campaigns for weight loss companies SlimFast and Hydroxycut, confirmed that pharma campaigns are a different beast. According to the firm's CEO, Michael Heller, with pharma campaigns it normally takes two months to find the right influencers.</p> <p>One of the big challenges is finding influencers who will commit to campaigns that are longer than usual because pharma companies frequently need influencers to publish content about their progress using a product over an extended period of time.</p> <p>Campaign execution brings its own challenges. Because of the amount of disclosure required by the FDA, the content published by influencers often looks more "heavily branded."</p> <p>Of course, not complying with the rules is a no-no. Last year, one of social media's highest paid influencers, Kim Kardashian, published a sponsored Instagram post for Diclegis, a morning sickness drug marketed by pharma company Duchesnay.</p> <p>The post racked up nearly half a million likes and boosted social media conversation about the drug by 500% according to one social media analytics firm, but because the post didn't abide by the FDA's rules, the regulator sent Duchesnay a warning letter and demanded corrective action. That <a href="https://consumerist.com/2015/08/31/after-fda-warning-kim-kardashian-posts-corrected-endorsement-of-morning-sickness-pill/">resulted in</a> a follow-up post by Kardashian in which she was forced to tell her followers that her post didn't meet FDA requirements.</p> <p><img src="https://assets.econsultancy.com/images/0008/5145/kimk.png" alt="" width="680" height="346"></p> <h3>A subtler way to use influencer marketing?</h3> <p>While there's no direct evidence that the FDA's action had a chilling effect on other pharma companies, the unique rules that pharma companies have to deal with will likely limit their use of influencer marketing and encourage them to think differently about how they can take advantage of it.</p> <p>One approach pharma companies seem to be embracing as an alternative to traditional campaigns in which an influencer directly pitches a product or service is to enlist influencers to drive awareness of a medical condition the pharma companies' drugs treat.</p> <p>Last year, pharma giant <a href="https://econsultancy.com/blog/68403-pharma-company-novartis-taps-facebook-live-event-to-promote-heart-failure-drugs">Novartis partnered with actress/singer Queen Latifah</a> as part of a <em>Rise Above Heart Failure</em> initiative designed to call attention to heart failure, a condition that the company's drug Entresto treats. Novartis involved Queen Latifah because her mother, Rita Owens, had previously experienced heart failure, so the campaign was something that she was ostensibly eager to be involved with.</p> <p>As part of its initiative, Queen Latifah participated in a Facebook Live event.</p> <p><img src="https://assets.econsultancy.com/images/0008/0425/Screen_Shot_2016-10-17_at_17.13.28.png" alt="" width="500" height="453"></p> <p>Other pharma companies appear to be mirroring Novartis's approach. For example, <a href="http://www.mmm-online.com/campaigns/agn-eye-care-campaign-diabetes-marketing-pharma/article/636563/">Allergan is participating in a <em>See America</em> campaign</a> that aims to put an end to preventable blindness. The awareness-building portion of the campaign will have Allergan "working with influencers in various areas, including art, fashion, sports, and music, to reach people across the country."</p> <p>Obviously, tapping influencers to promote a condition or cause might not seem as desirable as tapping them to promote a product directly, but for pharma companies already hampered by reputational woes, it's not only likely to be the best way to minimize the regulatory red tape associated with their campaigns, it's probably the best way to ensure that the goodwill of the influencers they work with doesn't go to waste or worse, is put in jeopardy. </p> tag:econsultancy.com,2008:BlogPost/68945 2017-04-03T14:01:17+01:00 2017-04-03T14:01:17+01:00 Thanks to politicians, ISPs could soon become the dominant digital ad players in the US Patricio Robles <p>One of the obvious goals of these acquisitions is to stake out a better position in the booming digital advertising market, which surpassed television ad spending last year in the US and is now worth more than $70bn annually.</p> <p>But now, ISPs may have an even easier time realizing their digital advertising dreams thanks to the US House of Representatives and Senate voting to pass S.J. Res. 34, a measure that kills consumer broadband privacy rules that the Federal Communications Commission (FCC) <a href="https://www.fcc.gov/document/fcc-adopts-broadband-consumer-privacy-rules">enacted last October</a> which required ISPs to get consumers to give them permission to collect sensitive data, including their browsing histories, geolocation data, and financial information. Additionally, the rules required ISPs to be more transparent about their data collection and sales practices.</p> <p>US President Donald Trump is expected to sign S.J. Res. 34.</p> <p>Once that happens, as DSLReport's Karl Bode <a href="http://www.dslreports.com/shownews/The-GOP-Just-Killed-Consumer-Broadband-Privacy-Protections-139244">notes</a>, "there's arguably little to prevent ISPs from doing whatever they'd like with your personal information, including selling it to [third-party] companies."</p> <h3>Disappointment and outrage</h3> <p>Not surprisingly, many observers expressed disappointment and even outrage at the vote, which saw S.J. Res. 34 pass in both the House and Senate by a slim margin along party lines. <a href="https://www.eff.org/deeplinks/2017/03/congress-sides-cable-and-telephone-industry">According to</a> the Electronic Frontier Foundation (EFF), once President Trump signs S.J. Res. 34 the internet is going to become a less friendly and potentially downright scary place for US consumers:</p> <blockquote> <p>...big Internet providers will be given new powers to harvest your personal information in extraordinarily creepy ways. They will watch your every action online and create highly personalized and sensitive profiles for the highest bidder. All without your consent.</p> <p>This breaks with the decades long legal tradition that your communications provider is never allowed to monetize your personal information without asking for your permission first. This will harm our cybersecurity as these companies become giant repositories of personal data.</p> <p>It won't be long before the government begins demanding access to the treasure trove of private information Internet providers will collect and store.</p> </blockquote> <p>While such dire predictions are not guaranteed to come true, most tech industry observers and experts have expressed significant concerns that the elimination of the FCC's privacy rules would leave consumers vulnerable. Indeed, it would appear that, absent a regulatory change of heart, ISPs will now be free to collect data, and sell and use it, without many restrictions.</p> <p>So what happened? Members of the House and Senate recognized what was at stake. Democratic critics of S.J. Res. 34 <a href="https://arstechnica.com/tech-policy/2017/03/for-sale-your-private-browsing-history/">warned</a> that the measure would make ISPs "more powerful than Amazon and Google." And they raised the privacy implications. "Just last week I bought underwear on the Internet. Why should you know what size I take or the color?" Rep. Michael Capuano asked his colleagues during debate.</p> <p>But Republicans who voted for S.J. Res. 34 expressed concern that the FCC's privacy rules "arbitrarily [treat] Internet service providers differently from the rest of the Internet" and thus represent "government intervention in the free market." They argued that this benefited search engines and social networks, namely Google and Facebook, who use their massive data troves with minimal restriction to dominate the digital ad market.</p> <p>Of course, users can more easily choose not to use Google and Facebook than they can not to use an ISP, and there are steps they can take to limit tracking when they use internet services. On the other hand, ISPs have the unique ability to track every single site a customer visits, which is why there is so much disappointment and outrage over S.J. Res. 34.</p> <p>The unfettered ability to use and sell that browsing history data will put ISPs in position to make big moves in the digital advertising market and for better or worse, nobody should expect them to delay.</p> tag:econsultancy.com,2008:BlogPost/68940 2017-03-29T13:39:29+01:00 2017-03-29T13:39:29+01:00 Banks are using data access to disrupt their disruptors Patricio Robles <p>As The New York Times <a href="https://www.nytimes.com/2017/03/23/business/dealbook/banks-and-tech-firms-battle-over-something-akin-to-gold-your-data.html">detailed</a> last week, major banks like JPMorgan Chase and Wells Fargo are demanding new terms from tech companies that want to be able to pull data for their banking customers.</p> <p>Many fintechs rely on their users providing access to the data from their bank accounts, and use third-party intermediaries like Envestnet Yodlee and Intuit to access that data. Those third-parties have direct relationships with some banks and use scraping technologies to access data from others when users provide the credentials to their accounts.</p> <p>To date, there have been few rules and standards as to how the data pulled is used and big banks want to change that. According to Jason Kratovil, a VP at bank lobbying organization Financial Services Roundtable, "When you think about millions of customers handing over their bank-account credentials to third parties, who currently have no real oversight or examination of their security controls, you start to understand why our members get pretty nervous."</p> <p>But many fintech execs believe the concerns over security are an excuse to thwart companies banks see as a threat. Personal Capital CEO William Harris told The New York Times, "It’s pretty clear the real intent of the banks is to limit this data because it puts their business model at risk."</p> <p>Personal Capital, which was founded in 2009, is an upstart wealth manager. It offers free analytics tools that it says more than 1.3m users take advantage of to track their personal finances. If those users were unable to give Personal Capital access to their bank accounts, it wouldn't be able to pull in the data it needs to provide such tools.</p> <h3>Banks get aggressive</h3> <p>According to The New York Times, big banks are getting increasingly aggressive in their dealings with the third-party platforms that many companies use to access bank account data. In January, JPMorgan Chase and Wells Fargo struck a deal with Intuit "that will give Intuit more streamlined access to data from the banks, in exchange for new rules about how Intuit uses the data."</p> <p>Wells Fargo also demanded compensation "to help the bank cover the additional infrastructure costs involved in providing real-time access to data."</p> <p>Envestnet Yodlee, which competes with Intuit, has reportedly not yet come to an agreement with the banks and The New York Times says that the company is trying to push back on the banks' demands. As Steve Boms, Envestnet Yodlee's VP of government affairs sees it, "with data limitations, you are hindering the ability of millions of consumers to save more and optimize their finances." </p> <p>But it's not clear just how much push back is possible. Several banks have warned Envestnet Yodlee that if it doesn't agree to their terms, it could lose access to some of the data it is currently able to retrieve from them. </p> <h3>Ambiguous regulation and an uncertain regulatory environment</h3> <p>Unfortunately, the negotiations are high stakes in large part because it's not clear what banks are required to do or what consumers are entitled to.</p> <p>As The New York Times notes, in Europe regulators have basically decided that consumers, not banks, own the data from their accounts. In the US, Section 1033 of Dodd-Frank states that covered financial institutions, including banks, "shall make available to a consumer, upon request, information in the control or possession of the covered person concerning the consumer financial product or service that the consumer obtained from such covered person, including information relating to any transaction, series of transactions, or to the account including costs, charges and usage data. The information shall be made available in an electronic form usable by consumers."</p> <p>But the "electronic form usable by consumers" is ambiguous, and the Consumer Financial Protection Bureau (CFPB) that Dodd-Frank created, despite its push for greater openness on the part of banks, hasn't issued a mandate regarding this.</p> <p>What's more, new US president Donald Trump <a href="https://econsultancy.com/blog/68779-how-will-donald-trump-s-policies-affect-fintech/">has directed his Treasury secretary to review Dodd–Frank</a>, and spoke of repealing it during his campaign.</p> <p>Is the more aggressive negotiating stance that big banks are taking a result of the perceived favor they have with the new administration? If it is, fintechs should expect big banks to get even more aggressive if and when Dodd-Frank is dismantled and/or repealed.</p> tag:econsultancy.com,2008:BlogPost/68779 2017-02-06T14:15:37+00:00 2017-02-06T14:15:37+00:00 How will Donald Trump's policies affect fintech? Patricio Robles <p>While preventing another major financial crisis is a sensible goal, Dodd-Frank has been a source of controversy. At more than 2,000 pages, Dodd-Frank is, as one might expect, incredibly complex, and since it became law, it has been blamed for a number of trends, ranging from a decline in community banks to a decline in business lending by banks.</p> <p>During his campaign, then-candidate Trump promised to do away with Dodd-Frank and his directive last week is the first step in delivering on that promise. While this will almost certainly be a complex process that takes time, it's not too early for companies in the financial sector to start evaluating how the elimination of Dodd-Frank could affect their businesses.</p> <p>Specifically, the eventual death of Dodd-Frank could have a significant impact on fintechs, which <a href="https://econsultancy.com/blog/68159-five-ways-fintech-upstarts-are-disrupting-established-financial-institutions/">have been distrupting established financial services institutions</a>. Here's what it could mean for these financial service upstarts.</p> <h3>The good</h3> <p>Dodd-Frank created the Consumer Financial Protection Bureau (CFPB), which has broad regulatory powers over a number of consumer finance markets. While the CFPB has been largely supportive of innovation in financial services, it has also taken action against fintechs.</p> <p>For example, it fined both startup payment provider Dwolla over its data security practices and subprime consumer lending startup LendUp for "failing to deliver the promised benefits of its products."</p> <p><img src="https://assets.econsultancy.com/images/0008/3699/donald_trump.jpg" alt="" width="726" height="482"></p> <p>To be sure, few would argue that fintechs shouldn't be regulated and held to the same standard as established financial institutions. But if given the choice, most fintechs (and their investors) would probably opt for less regulation instead of more regulation, so to the extent that the repeal of Dodd-Frank results in less regulation, players in the fintech market would probably welcome it.</p> <p>In addition to the possibility that fintechs will have to deal with less regulation, if big banks are relieved of many of the regulatory burdens that Dodd-Frank has imposed on them, it could conceivably encourage them to more aggressively acquire, invest in or partner with fintechs.</p> <p>Already, large banks <a href="https://econsultancy.com/blog/68350-digital-transformation-in-a-b2b-giant-jp-morgan-ge/">like JP Morgan</a> have made an effort to work with startups as part of their <a href="https://econsultancy.com/training/digital-transformation/">digital transformations</a>, and they could get much closer to those startups if regulatory concerns diminish.</p> <h3>The bad</h3> <p>On the other hand, regulatory relief for big banks could put them in a better position to compete with fintechs. This effect could be particularly pronounced in the consumer and business lending markets, as Dodd-Frank has been blamed for significantly decreased bank lending. </p> <p>The void in the lending markets fueled the rise of non-bank lenders, which include <a href="https://econsultancy.com/blog/68549-how-will-fintech-lenders-cope-with-an-economic-downturn/">online lenders</a>. If big banks aggressively re-enter the lending markets, the increased competition could make it much more difficult for fintech lenders to generate business.</p> <p>Other changes could harm a number of wealth management startups that have promoted the use of robo-advisors. President Trump wants to end the so-called fiduciary rule, which requires retirement account advisers to work in the best interests of their clients.</p> <p>Throwing out the fiduciary rule "will shrink the market for robo-investing" <a href="https://www.wired.com/2017/02/trumps-gifts-wall-street-threaten-retirees-robots/">according to</a> one industry executive, which explains why fintech startup Betterment went so far as to take out ads in the New York Times and Wall Street Journal with open letters urging Trump not to undo the rule.</p> <h3>The ugly</h3> <p>While reduced regulation would probably be welcomed by fintechs, there is one part of Dodd-Frank that many fintechs rely heavily on. <a href="https://www.wsj.com/articles/fintech-startups-want-to-save-one-key-page-of-dodd-frank-1486035001">Section 1033</a> of the bill essentially establishes that consumers have the right to their financial data.</p> <p>Using third-party platforms offered by companies like Yodlee, Intuit and Plaid, many fintech startups make it easy for their customers to connect to their bank and credit accounts to retrieve data. This is used for everything from spending analyses to underwriting of loans.</p> <p>If Section 1033 is eliminated, large financial institutions, namely banks, would conceivably have the ability to block third-parties from accessing data from customer accounts. If this happens, some fintechs could find it difficult to survive as they would no longer have a viable way to obtain the data they need from their customers' bank accounts in a quick, secure and automated fashion.</p> tag:econsultancy.com,2008:BlogPost/68693 2017-01-11T14:46:00+00:00 2017-01-11T14:46:00+00:00 The importance of the blockchain: The second generation of the internet Nick Hammond <p>The profile of bitcoin (powered by a blockchain network) has often masked the <a href="https://www.businessesgrow.com/2016/07/20/blockchain-101/">rising importance and relevance of the underlying blockchain technology</a>, but this is changing rapidly.</p> <p>One perspective is that the blockchain is the ‘second generation of the internet’.</p> <p>According to an article <a href="http://raconteur.net/business/the-future-of-blockchain-in-8-charts">published on Raconteur</a>, ‘The first generation brought us the internet of information. The second generation, powered by blockchain, is bringing us the internet of value; a new, distributed platform that can help us reshape the world of business and transform the old order of human affairs for the better. But like the internet in the late-1980s and early-1990s, this is still early days.’<a href="http://raconteur.net/business/the-future-of-blockchain-in-8-charts?utm_source=pardot&amp;utm_campaign=wed50117&amp;utm_medium=email"><br></a></p> <p>The initial paper regarding bitcoin (and blockchain) entitled <a href="https://bitcoin.org/bitcoin.pdf">Bitcoin: A Peer-to-Peer Electronic Cash System (2008)</a> was authored by a mysterious individual, likely a pseudonym, going under the name of Satoshi Nakamoto.</p> <p>While the original paper was written with financial transactions in mind, blockchain has far wider potential. Time will tell, but it may be that Nakamoto’s paper will have ramifications on a par with Tim Berners-Lee’s innocuously titled 1989 paper <a href="http://info.cern.ch/Proposal.html">Information Management: A Proposal</a>.</p> <p><iframe src="https://www.youtube.com/embed/Gc2en3nHxA4?wmode=transparent" width="560" height="315"></iframe></p> <p>In December 2015, the UK government’s Chief Scientific Adviser, Sir Mark Waldport, stated in his report <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf">Distributed Ledger Technology: beyond blockchain</a>, that: ‘The technology [blockchain] offers the potential, according to the circumstances, for individual consumers to control access to personal records and to know who has accessed them.’  </p> <p>Canadian writers and researchers, Alex and Don Tapscott, authors of the recent book <a href="https://www.amazon.co.uk/d/Books/Blockchain-Revolution-Technology-Behind-Bitcoin-Changing-Business/1101980133">Blockchain Revolution</a>, believe that the blockchain goes way beyond the second coming of the internet. The pair, like so many others, stumbled across blockchain via the bitcoin association, quickly realising the genie is out of the bottle. </p> <p>Alex Tapscott observes, ‘With blockchain technology, a world of possibilities has opened and we now have a true peer-to-peer platform that enables personal economic empowerment. We can own our identities and our personal data; we can do transactions, creating and exchanging value without powerful intermediaries acting as the arbiters of money and information.’</p> <p>The blockchain, essentially a database and a giant network, known as a distributed ledger, records ownership and value, and allows anyone with access to view and take part. The asset database can be shared across a network of multiple sites, geographies or institutions. All participants within a network can have their own identical copy of the ledger. Any changes to the ledger are reflected in all copies, like a Google doc. </p> <p>The blockchain is currently having its biggest impact in financial services, with the largest changes caused by infrastructures using blockchain APIs, which are delivering in the areas of speed in data processing, transparency (amongst the right people) and security. </p> <p>But what does the blockchain mean for businesses outside of the financial sector? The answer lies in the areas of - privacy/information control, disintermediation, and business processes. </p> <p>As mentioned above, the blockchain offers consumers opportunity to achieve greater control over their information. This will impact on most organisations, as they increasingly rely on the acquisition and application of customer data.</p> <p>The importance of privacy is obviously a sensitive issue. One current solution for consumers is the selection of ephemeral applications like Snapchat and encrypted messaging, but the future might lie in the anonymity of blockchain technologies. </p> <p>Another change will affect business sectors where there are many intermediaries, for example travel and tourism. Here, the blockchain’s ability to simplify and speed up interactions, will likely lead to a process of dis-intermediation.</p> <p>Current examples of businesses and categories active in the blockchain include: Peer-to-peer payments (Abra, BTC Jam), <a href="https://econsultancy.com/blog/68612-how-the-internet-of-things-will-fundamentally-change-marketing/">internet of things</a> (Chimera-Inc, Filament), collaborative transport (La’Zooz, Arcade City) and online gaming (Auckur, SatoshiDice).</p> <p>As the number of applications that utilize blockchain technology increases, so will its relevance. Not only will we be selling products through the blockchain, but marketing companies that run off it as well.</p>