Month: November 2016

Facebook and Mark Zuckerberg have faced many criticisms based on their apparent control of content on the global network and the use of the information gathered from users. They have been accused of unfairly targeting certain users and content that did not align with their intentions for the site or the prevalent political beliefs held by the founder and leadership.

It is now ironic that they are coming under fire for not doing enough to limit content in the form of “fake news” on the site.

http://money.cnn.com/2016/11/19/technology/mark-zuckerberg-facebook-fake-news-election/index.html

Facebook makes money by letting advertisers get in front of users that are most likely to want to see what they are offering. That political ads would follow this model is not surprising, but where the line is drawn between using the data that Facebook has for commercial gain and political gain seems to have been put to the test during the most recent election cycle.

Initially Zuckerberg stated he did not think the content of “fake news” was sufficient to have had any meaningful impact. Now Facebook is taking steps to address this perceived issue, and that is the primary reason. They have done a great deal to build the Facebook brand around the ideas of bringing people together and improving the human condition. Zuckerberg’s efforts to bring the internet to the world are the most recent example of driving forward this perception. Regardless of how much actual impact the “fake news” had, at this point they must at least appear to do the socially responsible thing and work toward making sure that their information sharing instrument is not misused.

Recently, stores have made a stand to close on Thanksgiving and Black Friday.  Every year it seems like more stores give their employees Thanksgiving off and opt out of the Black Friday madness.  An article by the American Marketing Association explains the benefit of closing on Thanksgiving.  Not only is it good for the morale of the customers, it’s good for marketing.

More companies should take this stand.  Thanksgiving should be spent with family and friends.  Giving employees the day off will have such a positive impact on the employees and the company.

https://www.ama.org/career/Pages/day-off-thanksgiving-good-employees-good-marketing.aspx

SpaceX has made a name for itself by being a vocal proponent of commercial space exploration and setting its sights on Mars. Now it seems that that is not the only direction it wants to look.

SpaceX has filed a request with the FCC for approval of a satellite system that would bring the internet to every corner of the globe. The three way battle between Musk, Bezos, and Zuckerberg for most forward thinking techno-genius billionaire continues as Musk is now literally going above Zuckerberg’s ambitious autonomous drone program that would bring wifi to the world from the skies.

The SpaceX plan would put over 4,000 satellites into orbit in conjunction with ground based systems and would cost over $10 billion. The plan is in its early stages, but if we have learned nothing else about Musk from his previous ventures, it is that he is patient, committed to his visions, and does not see money as an obstacle.

On November 17, 2016, OneWest Bank was accused of breaking federal laws by deliberately keeping branches out of minority neighborhoods and allowing very limited numbers of mortgages to be processed for black and Latino borrowers.  From 2014-2015, OneWest approved only two mortgages to black borrowers across a number of diverse counties throughout Southern California, despite the fact that the bank operated 52 branches in those areas.

According to the director of the California Reinvestment Coalition, “the bank has no significant branch presence in communities of color and its home loans to borrowers and communities of color are low in absolute terms, low compared to peer banks, and low when compared to what one would expect.”  This advocacy group has filed a complaint with the US Department of Housing and Urban Development asking them to investigate what they claim is a violation of laws that ensure equal access to credit for minority home buyers.

This story is particularly important due to the identity of the owner of OneWest at the time this was reported to have been happening.  Steven Mnuchin was the founder and Chairman of OneWest before it was acquired by CIT Group.  Steven Mnuchin is also now being named as top pick to be the next Secretary of the Treasury Department under the Donald Trump Administration.

 

Sources:

Dakin Campbell, “Mnuchin’s Bank Accused of Redlining Black and Latino Homebuyers,” Bloomberg, November 17, 2016.

 

In 2013, The Onion, a satirical newspaper and online content creator, launched Onion Labs.  As The Onion wound down its print operations it needed a new revenue stream, especially as the prevalence of ad-blockers continually hampered critical advertising revenue.  Thus Onion Labs was born, a content creation studio that specialized in creating sponsored content that mirrored the tone and style of the Onion media family’s content, and achieved marketing goals for partner companies.

Currently the content studio enjoys tremendous success.  This is in large part because of the incredible reach of The Onion’s properties.  The Onion claims over 50 million unique visitors per month to its sites, and over 250 million in social media reach.  It knows its core demographics, claiming to ” reach a young, urban, educated, and affluent audience”, provided statistics show that roughly 75% of readers have a college degree, and roughly 33% make more than 75K a year.  These demographics are why companies like Audi, Ford, and Lenovo partnered with Onion Labs.

The case studies put forth on the Onion Labs website demonstrate significant success in terms of increased buying propensity, awareness, and even awards from marketing groups.

The success of these campaigns is in large part due to Onion Labs utilizing The Onion’s distinct voice and humor in crafting content.  This can elevate brands to an entirely new level for people, and get people talking.  The ads themselves often are serious parodies of sponsored content.  By being so on the nose and honest about the fact that it is sponsored content, it effectively lifts the intellectual repulsion from the content, and permits the reader to enjoy the content on its own merits.  Whereas much other sponsored content attempts to pass quietly for normal content, here it is front and center.  In many ways, it enjoys a post-ironic flair to advertising, finding new and more entertaining ways to sell out, which Which the cynical millennials who make up more than 60% of the viewership find tremendously entertaining having grown up in the era of mass traditional advertising.

Recent Example:

http://imgur.com/pKldFOh

Sources:

http://mediakit.theonion.com/

http://adage.com/article/media/onion-people-read-sponsored-content/298745/

https://en.wikipedia.org/wiki/The_Onion

https://contently.com/strategist/2016/05/23/dont-make-a-commercial-the-onions-cco-explains-why-so-much-content-marketing-sucks/

Can we please talk about this Snoop Dog and Martha Stewart combo?!  I first heard about this show on Facebook.  Actually, I only heard about this show on Facebook.  Unfortunately, I don’t have VH1, so I couldn’t watch it, or record it to watch it.

I’m aware of Martha Stewart because my stepmother is a fan, then, of course, that whole insider trading thing happened.  Snoop will always have a special place in my heart because when I was younger, his song was chosen for my gymnastics (tumbling) team’s recital performance.  I’ve been aware of his existence since that recital.

So what’s the deal with this new show?  Well, Martha Stewart’s publicly traded company was bought out in June 2015.  She needed a new image, or at least to mix her image up.  What better way to do that than to start a cooking show with pot smoking, rapper Snoop Dog.  The previews for the show made me laugh out loud, because parts were unexpected.  Stewart is still prim and proper, which makes their banter so comical.

Snoop Dog seems to be doing well.  This partnership gives him an opportunity to “expand his cannabis lifestyle brand Merry Jane”.  This partnership is smart.  The advertisement was debuted on Facebook, which was also smart because, well when is that last time you watched VH1?  Well, 1.7 million viewers tuned in for its premiere Monday night.  This was VH1’s top series debut since January.  Using Facebook, and probably other social media sites, worked.

http://www.salon.com/2016/11/04/the-weird-high-magic-of-martha-and-snoops-potluck-dinner-party/

http://deadline.com/2016/11/martha-snoops-potluck-dinner-party-premiere-ratings-vh1-1201851043/

Federal regulations enforced by the US Department of Transportation (DoT) require airline companies to generously compensate airline passengers that are bumped from flights in order to dissuade the airlines from intentionally bumping low-fare customers to provide seats to higher-paying travelers.  While these are the rules, airlines do not always follow them as they know that most passengers are oblivious to them.  This is exactly what United Airlines has been caught doing.  However, one passenger successfully fought back which led to a $2,000 settlement in court and an article in the Wall Street Journal highlighting United’s less than honest practices with their customers.

According to DoT regulations, if a passenger is bumped from a flight where they have a reserved seat, typically due to airlines overbooking, that passenger is entitled to a cash payment amounting to 200% of their original fare (up to $675) if they are rebooked with only a delay of two hours, or 400% of their fare if it is longer than two hours.

In the case of this traveler, he paid $706 for two tickets for him and his wife, but when he was bumped from his flight due to overbooking and had to wait several hours, the United gate agent only offered them a total of $376.  However, according to federal regulations, he should have been entitled to at least $1,400, but probably even more considering he was stuck at the airport for well over two hours only to ultimately abandon their trip entirely.  This man then filed a suit in small claims court that United initially fought, but when he persisted and sought to take the case to a trial court, United eagerly sought to settle for $2,000, an offer that was accepted by the plaintiff.

This case highlights a lesson for many consumers, that many companies will not operate by the rules when they know that most of their customers are ignorant of those rules and where paying out legal settlements is still far cheaper than operating by the law.  While United did have to pay a few hundred dollars more in this settlement than they would have if they paid him the legally mandated amount for bumping him from the flight, they are still making far more in revenue with overbooking flights and expecting bumped passengers to never be the wiser when they are offered a fraction of what they should be receiving, if anything at all.

In this rare case a customer fought back and won in what was an isolated instance of holding the airline to account.  However, until better regulatory enforcement is in place to force compliance, United and many other American-based airlines will continue to ignore this regulation and will continue bumping paying customers from flights without fair compensation.

Source:

Scott McCartney, “When United Bumped this Flier, He Fought Back,” Wall Street Journal, November 9, 2016.

For those that are not aware of the low end high fashion retail store Primark you will know more as the retail store begins to move its retail operations deeper into the US. Today Primark operates retail stores on the East Coast in the city’s of Boston, New York, Burlington, Massachusetts. The role out will continue in the US to compliment its stores from Europe. What has made the Pimark stores so successful? Many customers and employee’s contribute the success to offering low prices, great fashion and stores that offer a very fun, design friendly environment.  Primark success has carried year over year with the last year sales increasing by 9% and almost reaching double digit growth.

The strategy behind Primark is to reach the customer by adds and drive the traffic into the brick and mortar of the stores in which they operate. The company is looking to drive foot traffic into the stores and today does not offer online shopping, so no real ecommerce strategy is in place.

Primark key competition comes from the likes of GAP and Zara. Primark retail locations will mimic those of other low end high value brand leaders.  Both Zara and GAP have been closing many of its retail locations due to competition from online clothing and other clothing retail stores. As Primark enters deeper into the back yard of GAP and Zara, brand and customer experience will become a  major factor towards US success for the retailer. Successful brand awareness through social networking sites along with hip fun store environments will drive shopping behaviors.

I have twelve year old  and one of the hot topics she talks about is the mall and spending money in trendy stores. Primark, if you move to Austin, Texas and place a store in Barton Creek mall Primark will soon see my household money.

Recently I heard a story from NPR regarding the practice of nudging.  This is the practice of encouraging consumers to take certain products or services over others by manipulating subtle things about their surrounding and ease of access.  The NPR story specifically mentions healthy food at food banks, such as wholegrain pasta and oatmeal.  For oatmeal, they were able to enhance the distribution of oatmeal merely by putting pictures of it and signs saying “Fills you up!”.  Little things like this can make a big difference in decisionmaking.  The food bank in question stated that this boosted the highlighted items by 46%.

This story made me think about other examples of what might be nudging.  Perhaps candidate’s yard signs near polling places, or even political bumper stickers could be viewed as nudges toward endorsing a certain view or another, as opposed to making a full argument.  Putting snacks and gum near check out lines at supermarkets are also good nudges to get people to purchase them with snap judgements.

Nudging is extremely prevalent in the gaming world, especially the microtransaction driven mobile gaming freemium world.  The game is ususally playable without the microtransactions, but slowly and slowly becomes less and less fun over time without spending money.  Pokemon GO operates on this model for example.  Even full non-mobile games on PC and console often launch with paid downloadable content, designed to try to nudge people into spending more money on the game.

http://www.npr.org/sections/thesalt/2016/11/07/499325457/food-pantries-try-nutritional-nudging-to-encourage-good-food-choices

Tesla announced it will soon change its offering with unlimited access to free fast charging stations starting in 2017. This is a strategic change to support the launch of its less expensive Model 3 electric car that is now being positioned for mass production.  Tesla originally invested in the Super Charge Network to help bring fast charging stations to the public through such distribution channels as large brand grocery stores such as Whole Foods, to Malls and other locations where the consumer spends a significant amount of time. While there if a strategic shift to take the spend away from the Super Charge Network and shift the cost over to marketing and advertising the new Model 3 to bring electric  car adoption rates to all time highs.

Today owners of vehicles can use unlimited amounts of electric at the super charge network, but beginning 2017 new customers  can only charge up to 400 kilowatts which is equivalent to 1000 miles. After that there will be a charge for electricity at these super charge stations.  Today most buyers will have an electric outlet at home and rely on this source to charge their vehicle, and the main purpose of the charging stations was the include the electric car owner to drive long distances without worry of running out of electricity.

The super charge network is worth $194 million and comprises of 734 charging stations world -wide.  There is an need to increase the Super Charge Network, in anticipation of the Model 3 deployment. There are already over 300,000 pre-orders for the vehicle and if there is not enough Super Charge locations there could be a dissatisfaction on the end of the consumer and the vehicle launch could become a disaster if the right resources to support the demand are not in place.