Of course, this turned out to be completely wrong. Millennial income did not overtake baby boomers in 2017. According to Business Insider, in 2018 in the US baby boomers out-earned millennials in every state in the union. “In all 50 states and Washington, DC, the median millennial made less money than the median Gen Xer or baby boomer…The gap in median income between millennials and baby boomers ranged from the older generation making about 25% more than millennials in Iowa to 65% more than millennials in Alaska.”
The average millennial income is about $35,000. The average baby boomer income is about $46,000. There are about 9% more millennials than baby boomers, but their income is about 24% less. So even though there are substantially more of them, in aggregate their income is way behind baby boomers.
Getting that asking price wrong can have real consequences.
“Statistics show that if you overprice your home and take even one price reduction, the final price that you will settle for is usually 5-7 percent lower than you would have gotten if you had priced the home properly to begin with,” Ciancio said, citing sales data from the multiple listing service REcolorado.
Though David Romer and Amber Wilson got less than they wanted for their old house, they said got a good deal on the new one, a four-bedroom ranch they bought for $469,000. Sitting by the fire on a recent evening, Romer dared to pull up the old app on his phone.
“The Zestimate shows at [$515,000],” he said.
“Yay, winning,” Wilson said, relieved. Even though they were well aware how off that number can be, for the moment they could feel a little richer.
Let’s start with some context by looking at the period 2011–2018 on the US market:
Over the past seven years, Digital ad spending in the United States rose from $32B to $111B; a 3.5x increase.
Google, which had already a stronghold on the US market seven years ago rose from $18B to $63B in revenue, also a 3.5x increase.
Facebook, which was created eight years after Google, catapulted from $2.1B to $27B, a 13x rise.
The New York Times digital advertising revenue rose from $233m in 2011 to $259m, a modest 11 percent increase. See the chart below (the perimeter has evolved: for the FY 2011, I took the NYT “News Media Group”, which excluded properties such as the Boston Globe):
Therefore, the number one priority of advertisers is making sure that the new mediums built to sustain the next generation of marketing efforts appear as human and natural as possible as they enter the cultural slipstream. The medium is still the message. We are in the midst of a vast re-education program about what it means to live thoroughly digitized lives. Take the ad about the Google assistant’s language translation capabilities. The ad seems to be about the convenience of having a digital assistant translate speech in real-time. The viewer is taken on a visual and linguistic tour of the planet, dropping in on conversations between people of different cultures who overcome the language barrier by asking Google for help.
Visual signifiers like open air markets, women wearing hijabs and exotic nature scenes tell us that we are having a multicultural experience. The narrator speaks gently to the viewer in a vaguely Indian accent about all the kinds of words that are translated in these settings. Words about food, friendship, sports, belief, fear, “Words that can hurt and sometimes divide. But everyday, the most translated words in the world are “how are you,” “thank you,” and “I love you.”
The tinkling piano soundtrack lends an air of humility and heartfelt goodwill between people of different backgrounds. But what is really going on here?
The global fraternal charity bit is at least as old as Coke’s similarly cloying 1971 ad, “I’d Like to Teach the World to Sing” where a band of singers on a hilltop, all with the same glazed expression, sing about the peace and harmony brought about by sharing a Coke. Babel was not built in a day, so Google picks up where Coke left off and continues selling the idea that products have the transcendent ability to resolve deep cultural tensions.
The Google ad is titled “100 Billion Words” because we are told at the beginning of the ad that more than 100 billion words are translated everyday. How do we know this? Because Google has likely captured and analyzed them. The cynical ad copy dangles words—food, friendship and sports—like the piece of meat for the guard dog of the mind. Sure, who doesn’t like those things! It does not matter where you are from or what you believe, we can all agree about the goodness of food and sports.
Meanwhile, the more architectonic work of inculcating the universal language of the new digital medium, namely its binary logic and code, is the real work of the ad. Food and sports work just fine at the human level but the system level has to be made up of something more consistent and uniform like 1’s and 0’s. More importantly, binary language and logic must be embraced as the new natural syntax for human interaction via our omnipresent devices.
Jean Baudrillard hit upon this nearly forty years ago in his seminal treatise, Simulacra and Simulation. Signs no longer reflect a profound reality. Think of the sacraments. Oil, water, bread and wine are signs that bring about profound changes in the soul of the recipient because they are tied to a fundamental reality, God’s saving love for mankind affected through the Incarnation and the created order. In Baudrillard’s view, signs no longer have this sacramental power because they have been detached from the Real, due, in no small part, to the dissembling media environment.
The correct answer, in 2019?
- Let me go to the office, search the MLS and get back to you in a few days?
- Let me go to the office, look at my system and schedule a time to meet again?
- Open agent app, tap stats. Present, discuss and share via airdrop, messages or email.
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Over the years, there has been considerable discussion of Google’s “filter bubble” problem. Put simply, it’s the manipulation of your search results based on your personal data. In practice this means links are moved up or down or added to your Google search results, necessitating the filtering of other search results altogether. These editorialized results are informed by the personal information Google has on you (like your search, browsing, and purchase history), and puts you in a bubble based on what Google’s algorithms think you’re most likely to click on.
The filter bubble is particularly pernicious when searching for political topics. That’s because undecided and inquisitive voters turn to search engines to conduct basic research on candidates and issues in the critical time when they are forming their opinions on them. If they’re getting information that is swayed to one side because of their personal filter bubbles, then this can have a significant effect on political outcomes in aggregate.
Back in 2012 we ran a study showing Google’s filter bubble may have significantly influenced the 2012 U.S. Presidential election by inserting tens of millions of more links for Obama than for Romney in the run-up to that election. Our research inspired an independent study by the Wall Street Journal (paywall):
New York City real estate firm Compass is another.
In September, Compass raised $400 million in a series F round led by the Vision Fund and Qatar Investment Authority, valuing the start-up at $4.4 billion. That’s double the valuation fetched at the prior round in December 2017. Consistent with financial backer Masa Son, Compass CEO Robert Reffkin is thinking big. In June, Reffkin told Bloomberg: “What books were for Amazon, the brokerage model is for us.”
Compass, which began the year with 30 offices, will finish the year with 150 and reach 300 locations by the end of next year, according to chief growth officer Rob Lehman. On Nov. 29, The Real Deal reported that Compass is launching a company-branded credit card for its real estate agents, who can pay back their charges on their “own timelines,” according to Lehman. In October, The Real Deal reported on another generous perk for agents: a company stock option program which provides for a 30% bonus for every dollar invested back in Compass. The company reported last month that more than 1,000 agents have invested some or all of their commissions back into the unicorn, a development that CEO Reffkin described thusly:
It’s not something we needed to do to raise capital. It’s purely an offering to respond to an agent’s desire to have ownership in Compass’ future success.
Three weeks ago, Compass hired Carlyle Group veteran Kristen Ankerbrandt as chief financial officer to help oversee what Reffkin termed the company’s “next stage of hypergrowth.” Ankerbrandt replaces Craig Anderson, who was on the job for just seven months.
For a detailed analysis of SoftBank, see the Nov. 30 edition of Grant’s.
The astounding thing is that with all the data Facebook is collecting, all the geniuses we have analyzing display ad results, all the space-age targeting we are constantly being beaten over the head with, and all the young creative prodigies lecturing us on the magic of online advertising, empty ads outperformed our online geniuses.
We aren’t as smart as we think. I need periodic reminders of that fact, but even then, I seem to fall into the trap again. Fortunately, my biggest mistakes are ancient history. (Yes, I’ll share those with you shortly.)
As a unique demographic, it seems we pilots never run out of ways of to be, well, stupid. I think the best way to learn how to avoid that is to examine the actions of others who clearly did not. It may be worth a laugh — “I would never do that!” — but keep in mind you may be tempted to do something along the same lines. You must always be on guard for the next stupid thing.
There is no shortage of stupid in the pilot pool; it seems to be a phase some of us go through, including me. Luckily, I got my dunce cap in 1981, long before the advent of cellphone cameras and Flight Operational Quality Assurance (FOQA) programs. The other advantage that I had was we lieutenants in the U.S. Air Force were expected to be stupid back then. (It was part of our bloodthirsty killer training.) The service, fortunately, grew out of that mindset. But before I start throwing stones from my glass house, let me fess up about my worst. Then we can move on to more recent examples and consider a way of surviving it all.
Buying a home is in many ways the pinnacle of the American dream. And yet the way things work today, it’s a painful process. Real estate agents, brokers, banks, notaries, title insurers, and many other intermediaries all make for a convoluted, difficult, and expensive process for home buyers and sellers alike.
In this presentation from a16z’s annual Summit event, a16z general partner Alex Rampell explains how as consumers get used to less friction and more transparency in the age of mobile, software is finally beginning to disrupt buying a home — from discovery to purchase to finance and more. Including even disrupting the nature of home ownership itself.
Facebook’s shifting algorithms and pay-to-play “boosting” schemes over the past few years have primed a generation of influencers, podcasters, bloggers, and Group admins to look for the exit. When you’ve worked for a decade to build a following, and now only 1% of that following sees what you produce, you’re ready for an alternative.
Creators and Group admins used to be scared their users would riot if they took their page or group elsewhere. What a difference a year makes. Yesterday I spoke to a podcaster whose large following explicitly asked him to find a Facebook alternative. This isn’t to say that people are deleting Facebook. It’s more nuanced than that. It’s a way for people to have fewer reasons to be there. If they’re part of something special and authentic, many don’t want it to be tarnished by what’s happening across the rest of the social network.
Big brands will be the last to leave. Unlike creators and Group admins, big brands will stick with Facebook for as long as possible. Despite CPMs jumping 171% in one year, big brands have institutionalized Facebook ad buying and posting not only with budgets but with dedicated teams. They’re too invested to acknowledge the writing on the wall, despite objectively diminishing returns.
If executives at his unnamed targets— Facebook Inc. and Google parent Alphabet Inc. —rolled their eyes, you can understand why. Mr. Cook is, after all, talking his book: Apple makes its money by charging premium prices for its products. Google and Facebook make theirs by giving away their products and then selling ads.
Yet this is not just some internecine battle of billionaires. The zero-price business model is a source of many of the problems plaguing the Internet. It’s no coincidence that Google, Facebook and Twitter Inc. —which garner more than 80% of their revenue from advertising—are the ones most often accused of propagating toxic content and eroding privacy, while Microsoft Corp. and Apple, whose revenue comes from selling software, hardware and services, fly under the radar.
Think about why price matters: It’s how the market rations precious resources. A price signals to suppliers how much to invest in a product. It’s how a consumer decides whether that product is the best use of her budget.
A price of zero cripples that rationing role. When it comes to generating volume, free is a dream; when it comes to quality control, it’s a nightmare.
The homeownership rate among older millennials (ages 25 to 34) is 37 percent, compared with 45 percent for Gen Xers and baby boomers when they were the same age, and these rates vary when broken down by race and ethnicity. This data talk session will explore these racial gaps and size up the mortgage-ready millennial population by race and ethnicity. Millennials are more racially and ethnically diverse than previous generations, and it is likely that the parents of millennials of color have lower wealth and lower homeownership rates than their white counterparts. This data talk will ask the question, “What is the impact of parents’ homeownership and wealth on the homebuying prospects of their children?” and quantify how parents’ homeownership and wealth impact their children’s homeownership prospects. We also estimate the portion of the racial gap in young adult homeownership that can be explained by parental tenure status and financial capacity. Speakers will also examine how an increase in parents’ housing value and wealth increases their children’s ability to transition to successful homeownership.
While Millennials, often referred to as digital natives, have grown up using technology and are thus fully versed in the world of bits and bytes, the post-war generation known as Baby Boomers is having a harder time adjusting to modern technology. While using electronic devices may not come as naturally to those aged 50+ as it does to younger people, that doesn’t necessarily mean that older Americans are disconnected from the modern world of technology.
A recent report by the American Association of Retired Persons (AARP) shows that many Americans aged 50 and older are embracing technology to stay connected with their families and the world in general. According to the AARP’s findings, 7 in 10 Americans above the age of 50 own a smartphone and 9 in 10 own either a Laptop or a Desktop PC. The following chart provides a more detailed look at what devices older Americans are currently using and which ones they steer clear of for now.
Facebook Inc. knew of problems in how it measured viewership of video ads on its platform for more than a year before it disclosed them in 2016, according to a complaint filed Tuesday by advertisers.
A group of small advertisers filed a lawsuit in California federal court in 2016, alleging the tech giant engaged in unfair business conduct by disseminating inaccurate metrics that significantly overestimated the amount of time users were spending watching video ads.
The plaintiffs later added a fraud claim, and in Tuesday’s court filing they alleged Facebook knew of irregularities in its video metrics by January 2015 and understood the nature of the miscalculation within a few months, but failed to disclose the information for over a year.
The filing followed the plaintiffs’ review of some 80,000 pages of internal Facebook records that they obtained as part of court proceedings.
The complaint, which cites the internal Facebook documents, also alleges that the scale of the miscalculation was far worse than understood.
Present (seller, open house, buyer) with sharing, 5.34 minutes
Sharing includes (time in the video):
Summary (text, email and social) 3:51
Video (text, email and social) 4:08
I spend more time than I would like to admit looking at real estate listings online. I recently found a nice townhouse in my neighborhood that costs 25 times my annual salary, which is honestly a better deal than most other places in the surrounding area. The moral of the story is that I’m convinced I’ll never be able to afford a home, at least not anywhere I’d like to live.
According to a new study by Bank of America, I’m not alone in my pessimism. Its annual homebuyer insights report, released on Wednesday, found that 72 percent of millennials, which the report identified as being born between 1978 and 1995, consider being able to own a home a “top priority” — more than traveling (61 percent), getting married (50 percent), or having children (40 percent). Millennials may be killing the housing market, but it’s not because they don’t want homes of their own.
Even if millennials are putting off having kids (which are expensive to raise) and weddings (which are expensive to have) to buy a home, a host of structural factors are getting in their way. High rent prices, student loan debt, and the toll of the 2008 financial crisis are all keeping young people from buying property. Some of these hurdles are purely psychological — naturally, a generation that grew up in the midst of foreclosures and evictions would be scared of buying property — but most are material. Young people spend a lot of money on student loans and rent payments, which keeps them from having money for, well, anything else.
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In addition, certain groups of Americans – most notably, older adults – face their own unique challenges when it comes to using and adopting new technologies. In a 2015 survey, 34% of internet users ages 65 and older said they had little to no confidence in their ability to use electronic devices to perform online tasks, while 48% of older adults said the statement, “When I get a new electronic device, I usually need someone else to set it up or show me how to use it” describes them very well. And a substantial share of seniors reports they have chronic health condition, disability or other type of physical limitation that might prevent them from fully utilizing a variety of devices.
While many long-standing measures of technology adoption have steadied the past two years, the ways that people get connected and use digital platforms are constantly shifting and evolving. For instance, Pew Research Center surveys have shown that the number of people who are “smartphone-only” internet users – meaning they own a smartphone but do not have traditional home broadband service – has grown from 12% in 2016 to 20% this year.
And although the shares of Americans who use certain social media platforms have changed little in recent years, that has not been true with every site. The percent of adults using Instagram, for example, has grown from 28% in 2016 to 35% this year. And looking beyond the adult population, the social media environment of today’s teenagers looks remarkably different than it did just a few years prior.
Meanwhile, new connected devices continue to emerge. Consumer surveys show that the use of smart TVs and wearable devices has grown in recent years. Nearly half of Americans (46%) use digital voice assistants on smartphones or devices like Amazon Echo, according to a 2017 Pew Research Center survey. A host of items collectively called “the Internet of Things” – ranging from household thermostats and security systems to “smart city” transportation systems – are also coming on the market.
The biggest ad buyer in the world has some serious issues with Facebook, and it wants action.
“We’re increasingly holding Facebook to account to justify the levels of investment we are putting in them,” said Robin O’Neill, managing director of digital trading for GroupM. “We continue to press them to allow us to independently verify our metrics and operate in the real world. Facebook doesn’t operate with real-world metrics. I would urge every agency to hold Facebook to account and interrogate the data that comes out from them.”
Facebook and YouTube have been plagued by negative headlines over the last year or so, either related to brand-safety issues or lack of transparency around metrics. Both companies have attempted to offer improvements: Facebook introduced new brand-safety measures as recently as this week, though advertisers weren’t wholly impressed by its efforts. Google launched Google Measurement Partners in July, which allows advertisers to verify ad delivery through a set of third parties including comScore, DoubleVerify, IAS, MOAT, Nielsen, and Kantar.
The advertising industry prides itself on being brand builders. Building successful brands is supposed to be the essence of what we do. But in recent years the ad industry has been guilty of cheapening some of the most important brands it controls — its own.
I am going to be picking on WPP because it is the biggest offender. But to some degree the same can probably be said about each of the major holding companies.
WPP is the owner of some of the most famous and worthy brands in the history of the ad business: JWT, Ogilvy, Y&R and Grey. It has been systematically dismantling the value in these brands. Today they are splinters of what they were.
The holding companies have undermined their agencies from the top down and from the bottom up.
What a holding company usually does is buy successful brands and manage them at arms length to, presumably, add value to shareholders. Examples of successful holding companies are Berkshire Hathaway and Procter & Gamble. Nobody buys a Berkshire Hathaway or a Procter & Gamble. The buy GEICO insurance or Tide detergent. The value is in the brand, not the bookkeepers who support it.
Facebook on Friday said an attack on its computer network led to the exposure of information from nearly 50 million of its users.
The company discovered the breach earlier this week, finding that attackers had exploited a feature in Facebook’s code that allowed them to take over user accounts. Facebook fixed the vulnerability and notified law enforcement officials.
More than 90 million of Facebook’s users were forced to log out of their accounts Friday morning, a common safety measure for compromised accounts.
Facebook said it did not know the origin or identity of the attackers, nor had it fully assessed the scope of the attack. The company is in the beginning stages of its investigation.
Many services use Facebook credentials – unfortunately.
Brian Krebs has much more.
General Motors Co. and Google couldn’t be more different. GM musters an army of people and machines to produce the 10 million cars it sells each year. What Google makes doesn’t really exist: You type on a laptop or click play on a YouTube video, and Google zips back bits of digital information.
But Google parent Alphabet Inc. and the other four dominant U.S. technology companies—Apple, Amazon.com, Microsoft, and Facebook—are fast becoming industrial giants. They spent a combined $80 billion in the last year on big-ticket physical assets, including manufacturing equipment and specialized tools for assembling iPhones and the powerful computers and undersea internet cables Facebook needs to fire up Instagram videos in a flash. Thanks to this surge in spending—up from $40 billion in 2015—they’ve joined the ranks of automakers, telephone companies, and oil drillers as the country’s biggest spenders on capital goods, items including factories, heavy equipment, and real estate that are considered long-term investments. Their combined outlay is about 10 times what GM spends annually on its plants, vehicle-assembly robots, and other materials.
The splurge by tech companies is behind an upswing in capital-goods spending among big U.S. companies, which is seeing its fastest growth in years, according to a Credit Suisse analysis. The $80 billion tab also is a snapshot of why it’s tough to unseat the tech giants. How can a company hope to compete with Google’s driverless cars when it spends $20 billion a year to ensure it has the best laser-guided sensors and computer chips? There are a lot of physical assets behind all those internet clouds.
A few weeks ago Google shipped an update to Chrome that fundamentally changes the sign-in experience. From now on, every time you log into a Google property (for example, Gmail), Chrome will automatically sign the browser into your Google account for you. It’ll do this without asking, or even explicitly notifying you. (However, and this is important: Google developers claim this will not actually start synchronizing your data to Google — yet. See further below.)
Your sole warning — in the event that you’re looking for it — is that your Google profile picture will appear in the upper-right hand corner of the browser window. I noticed mine the other day:
This new act of disciplinary nihilism on LinkedIn was therefore not a surprise. As someone who has taught brand management for 20 years and worked with brand managers for just as long, I was depressed at the column, but with the kind of philosophical, relaxed depression with which you miss the last tube or step in a puddle wearing new shoes. It’s a pity, but you expected nothing less.
But as I read the next part of the post, my mouth dropped open in shock and bewilderment. So sudden was the sensation that I actually rubbed my eyes and concentrated on the text like a cartoon character. Was my jetlagged brain playing tricks on me?
The author of the post was Hanneke Faber. You may not know the name, but you certainly know where she works: Unilever. And she is no junior executive either. Faber is the president of Europe for Unilever. That makes her, in branding circles, a double-VIP.
First, Unilever is one of the great homes for brand management. After arch rival Procter & Gamble, it is probably the next great repository for the people, thinking and practice of branding. And then there is Faber’s seniority. She is literally one of the top five people at the company.
Faber denouncing brand management as “dead” is a bit like Lenin questioning the practicality of socialism. Or the Queen proclaiming a constitutional monarchy irrelevant and archaic in the 21st century. It is a cut of the very deepest, most serious kind because it comes from within, and high up.
America is often described as a place of great divides — between red and blue, big cities and rural towns, the coasts and the heartland. But our social lives are shaped by a much stronger force that ignores many of these lines: distance.
In the millions of ties on Facebook that connect relatives, co-workers, classmates and friends, Americans are far more likely to know people nearby than in distant communities that share their politics or mirror their demographics. The dominant picture in data analyzed by economists at Facebook, Harvard, Princeton and New York University is not that like-minded places are linked; rather, people in counties close to one another are.
Even in the age of the internet, distance matters immensely in determining whom — and, as a result, what — we know.
Coastal cities like New York, Washington, San Francisco, Boston and Los Angeles do exhibit close ties to one another, showing that people in counties with similar incomes, education levels and voting patterns are more likely to be linked. But nationwide, the effect of such similarity is small. And the pull of regionalism is strong even for major cities. Brooklynites are still more likely to know someone on Facebook near Albany or Binghamton than in the Bay Area.
A Picture of Social
Connectedness in America
Pocket listings, or those listings that are just for me, or me and my friends, rise and fall with the market. Tight inventory cycles lead to more, while Buyers markets, often less. Queue a recent inman (compass) news article. 
We’ve helped clients promote listings, including “pre or withheld” properties privately for many years. I’ve summarized a few examples below:
A. CMA Subject property.
Agents, teams and brokers can generate a preview or pocket listing, including photos and videos, from our CMA’s subject property in the agent app or cloud system.
The property information can be shared immediately via email, reports and branded app notifications.
B. Manual listing entry.
Our broker cloud system supports private listings. You determine display and share rules.
C. Public records with status.
Find addresses via public records, enter media and status; publish.
Agents can create net sheets for potential sellers, then, with a tap, create a CMA subject property.
Note that private listings can be updated via our MLS interfaces when your agents or administrators add an MLS number to the property.
Brokers, agents and teams should be familiar with local association rules as they consider implementing private and public pocket and preview listings.
A new marketing initiative by Compass will allow agents to post listings days before they appear on the market — even as conversation around so-called ‘sneak peek’ listings heat up.
Compass Coming Soon, which rolled out in all but New York and Washington D.C. last week, is a tactic for Compass agents to get a head start on marketing before properties are listed on multiple-listings systems and real estate portals like Zillow and Realtor.com. The marketing feature will be available in New York and Washington D.C. later this week.
Unlike the more secretive whisper or pocket listings for properties outside the MLS, Compass Coming Soon shows buyers properties that will eventually appear on the open market — but first pre-markets them to an agent’s base of clients.
Recent technologies have enabled the role of customer to be fused with the newer role of user, who inhabits an entire system rather than a specific transaction. Exploring that transition, writer Kevin Slavin describes how the experience of app-based food delivery narrows one’s perspective: “For users, this is what it means to be at the center: to be unaware of anything outside it.” Those apps’ minimal interfaces, requiring little more than the push of a button to order food, conceal the labor and logistical sophistication that make it possible. Users don’t need to understand the messy complexity that supports their simplified solipsism. In Slavin’s example, that insight wouldn’t help them order more food, so the user experience excludes it.
Amazon similarly merges the customer and the user within its own optimized environments, letting these subjects exist at the center of an ever-expanding system. Imagine an avid Amazon customer’s typical day living with a near future iteration of the platform: He wakes up and speaks his first words of the morning to his Amazon Echo in the kitchen, asking Alexa to order toothpaste after noticing he was running low. Upon checking his email, he gives Alexa a few more instructions, adding social engagements and reminders to his calendar, checking the weather, and finally opening the garage door once he’s ready to leave for work. At the office throughout the day, idle shopping fills his distracted moments. He browses books, clothing, and even furniture, placing orders within seconds, many of which automatically appear in his shopping cart based on patterns from his activity history (he even knows that some of what he buys will be waiting at home tonight). During the evening commute another Alexa-enabled device in his car prompts him to send his sister a birthday card, an action he asks Alexa to do for him. He stops by Whole Foods to pick up groceries — as an Amazon Prime member, it’s always the most cost-effective option in his neighborhood. He arrives home to find a variety of Amazon packages stacked neatly on the living room coffee table, delivered throughout the day by part-time contractors who let themselves into the house via the smart lock on the front door. The soundtrack to his entire day is provided by Amazon Music, in which his Prime membership has automatically enrolled him for a small monthly fee. Few parts of this hypothetical day, which is already within the realm of possibility, remain untouched by Amazon’s user experience.
Amazon, as much as any single company, is transforming the environments in which we live and embedding itself within the fabric of daily existence. Beyond individual experience, those changes also manifest themselves in the physical environment. Many physical retail stores have been rendered obsolete as Amazon and other online retailers started undercutting them on price and offering a wider selection. (Bookstores experienced this first but it eventually spread to almost every form of retail.) Sidewalks and building lobbies have become staging areas for packages, with delivery vehicles exacerbating traffic and obstructing bike lanes as piles of brown Amazon boxes increasingly take up space. As Amazon and food delivery apps eliminate some of the most common reasons to leave one’s house one wonders what sort of neighborhood life will be sustainable in affluent urban areas.
Our analysis of the food and beverage market from 2013–17 reveals that the top 25 manufacturers are responsible for 59 percent of sales but only 2 percent of category growth. Conversely, 44 percent of category growth has come from the next 400 manufacturers.1 Our experience in working with large consumer companies suggests that they don’t suffer from a lack of ideas; where they struggle is in knowing where to make bets, moving products quickly to launch, and then nurturing them to scale. Effectively driving growth through innovation requires CPG companies to evolve many of the assets and capabilities already in place and adopt significantly different and new ways of working.
This change will not be easy. Many of the innovation systems that need to evolve are deeply entrenched. They have their own brand names, dedicated IT systems, firmly established management routines, and more. However, our work with CPG organizations has convinced us that these changes are necessary and can return significant value. Our analysis of ~350 CPG companies across 21 subcategories found that growth leaders excelled at harnessing commercial capabilities, including innovation. Additional McKinsey analysis has shown that CPG “Creator” companies—those that consistently develop new products or services—grow more than their peers. These winning Creators have adopted a formula that borrows the best from progressive new players while fully leveraging existing advantages in scope and scale.
How did we get here?
For the past two decades, CPG innovation models have been designed to maintain and steadily grow already at-scale brands. This meant that most innovations were largely incremental moves with the occasional one-off disruptive success. This slow and steady approach worked because CPGs didn’t really need disruptive innovation to grow. Geographic expansion, pricing, and brand extensions were all successful strategies that kept the top line moving. As a result, most of the systems designed to manage these innovations were optimized for fairly predictable and low-volatility initiatives. They emphasized reliability and risk management.
That very success, however, led to calcified thinking as companies built large brands and poured resources into supporting and protecting them. In recent years, as they have tried to respond to new entrants and rapidly changing consumer needs, CPGs found their innovation systems tended to stifle and stall more disruptive efforts. As the returns from innovation dwindled, companies cut marketing, insights, and innovation budgets to cover profit shortfalls. This created a negative cycle. As a stopgap, many large consumer companies have turned to M&A to fill holes in the innovation portfolio—but on its own, M&A can be a very expensive path to growth with its own difficulties in scalability and cultural fit.
Internal politics soon asserted itself. A case study co-authored by Henderson describes the PC division as “smothered by support from the parent company”. Eventually, the IBM PC business was sold off to a Chinese company, Lenovo. What had flummoxed IBM was not the pace of technological change — it had long coped with that — but the fact that its old organisational structures had ceased to be an advantage.
Rather than talk of radical or disruptive innovations, Henderson and Clark used the term “architectural innovation”.
“An architectural innovation is an innovation that changes the relationship between the pieces of the problem,” Henderson tells me. “It can be hard to perceive, because many of the pieces remain the same. But they fit together differently.”
An architectural innovation challenges an old organisation because it demands that the organisation remake itself. And who wants to do that?
The armies of the late 19th century were organised — as armies had long been — around cavalry and infantry. Cavalry units offered mobility. Infantry offered strength in numbers and the ability to dig in defensively.
Three technologies emerged to define the first world war: artillery, barbed wire and the machine gun. They profoundly shaped the battlefield, but also slipped easily into the existing decision-making structures. Barbed wire and machine guns were used to reinforce infantry positions. Artillery could support either cavalry or infantry from a distance.
Tanks, however, were different. In some ways they were like cavalry, since their strength lay partly in their ability to move quickly. In other ways, they fitted with the infantry, fighting alongside foot soldiers. Or perhaps tanks were a new kind of military capability entirely; this was the view taken by J F C Fuller.
These discussions might seem philosophical — but in the light of Henderson’s ideas, they are intensely practical. “You have to find an organisation that will accept the new bit of technology,” says Andrew Mackay. Mackay runs an advisory firm, Complexas, but was also the commander of British and coalition forces in Helmand, Afghanistan, in 2008. “The organisational question is deeply unsexy, but it’s fundamental.”
Most notably, 44% of younger users (those ages 18 to 29) say they have deleted the Facebook app from their phone in the past year, nearly four times the share of users ages 65 and older (12%) who have done so. Similarly, older users are much less likely to say they have adjusted their Facebook privacy settings in the past 12 months: Only a third of Facebook users 65 and older have done this, compared with 64% of younger users. In earlier research, Pew Research Center has found that a larger share of younger than older adults use Facebook. Still, similar shares of older and younger users have taken a break from Facebook for a period of several weeks or more.
Using the accelerometers built into smartphones, Google can tell if someone is cycling, driving or walking. If you click on the algorithmically generated search prediction Google proposes when you type “Merkel”, for instance, the probability increases that the autocomplete mechanism will also display this for other users. The mathematical models produce a new reality. The behaviour of millions of users is conditioned in a continuous feedback loop. Continuous, and controlled.
The Italian philosopher and media theorist, Matteo Pasquinelli, who teaches at the Karlsruhe University of Arts and Design, has put forward the hypothesis that this explosion of data exploitation makes a new form of control possible: A “metadata society”. With metadata, new forms of biopolitical control could be used to establish mass and behavioural control, such as online activities in social media channels or passenger flows in public transport.
“Data,” Pasquinelli writes, “are not numbers, but diagrams of surfaces, new landscapes of knowledge that inaugurated a vertiginous perspective over the world and society as a whole: The eye of the algorithm, or algorithmic vision.”
The accumulation of figures and numbers through the information society has reached a point where they become a space and create a new topology. The metadata society can be understood as an extension of the cybernetic control society, writes Pasquinelli: “Today it is no longer a matter of determining the position of an individual (the data), but of recognising the general trend of the mass (the metadata).”
For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the U.S. That insight came thanks in part to a stockpile of Mastercard transactions that Google paid for.
But most of the two billion Mastercard holders aren’t aware of this behind-the-scenes tracking. That’s because the companies never told the public about the arrangement.
Alphabet Inc.’s Google and Mastercard Inc. brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly. The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant’s strategy to fortify its primary business against onslaughts from Amazon.com Inc. and others.
But the deal, which has not been previously reported, could raise broader privacy concerns about how much consumer data technology companies like Google quietly absorb.
“People don’t expect what they buy physically in a store to be linked to what they are buying online,” said Christine Bannan, counsel with the advocacy group Electronic Privacy Information Center (EPIC). “There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.”
California, that innovative economic juggernaut that so often takes the regulatory lead on matters such as automobile emissions, is once again establishing the ground rules to a vital industry. The California Consumer Privacy Act (CCPA), signed into law by Governor Jerry Brown in June, is the improbable result of a wealthy real estate investor, with the colorful name of Alastair Mactaggart, and a gang of volunteers taking an interest in consumer privacy. Mactaggart used California’s zany ballot initiative system (and his personal fortune) to get a version of a proposed privacy law onto the November ballot. Faced with the horrifying prospect of a well-funded privacy evangelist jamming regulation down the throats of the state’s golden-goose tech companies, legislators quickly devised their own alternative. This rollicking policy adventure is recounted at length in a cover story by Nicholas Confessore for The New York Times Magazine.
Look through the rah-rah triumphalism of the piece, however and you’ll see that far from succumbing to some irresistible activist push, incumbents Google and Facebook craftily shaped the legislation to suit themselves. When in the history of American democracy have state legislators voted to severely and onerously regulate trillion-dollar companies in their home districts, motivated only by an overweening concern for consumer rights (and not donor pressure)? Never, is the answer—which is why the implications of CCPA could use some further scrutiny. (Spoiler alert: Facebook doesn’t hate the law).
The museum exhibits over 900 carefully selected and sorted web sites that show web design trends between the years 1995 and 2005.
Google paid Mastercard millions of dollars for the data, according to two people who worked on the deal, and the companies discussed sharing a portion of the ad revenue, according to one of the people. The people asked not to be identified discussing private matters. A spokeswoman for Google said there is no revenue sharing agreement with its partners.
A Google spokeswoman declined to comment on the partnership with Mastercard, but addressed the ads tool. “Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the company said in a statement. “We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.” The company said people can opt out of ad tracking using Google’s “Web and App Activity” online console. Inside Google, multiple people raised objections that the service did not have a more obvious way for cardholders to opt out of the tracking, one of the people said.
Heffington’s letter is a scorcher. It pulls no punches and concludes it’s questionable whether West Point, founded in 1802, “should ever remain open.” Heffington’s “BLUF,” Bottom Line Up Front: “First and foremost, standards at West Point are nonexistent. They exist on paper, but nowhere else. The senior administration at West Point inexplicably refuses to enforce West Point’s publicly touted high standards on cadets, and, having picked up on this, cadets refuse to enforce standards on each other.” He goes on: “The Superintendent refuses to enforce admissions standards or the cadet Honor Code, the Dean refuses to enforce academic standards, and the Commandant refuses to enforce standards of conduct and discipline.”
Heffington notes that students are admitted to play Division I football, which degrades academics: “we routinely admit athletes with ACT scores in the mid-teens across the board. I have personally taught cadets who are borderline illiterate and cannot read simple passages from the assigned textbooks.” Faculty members who object are silenced, he says.
To this, I say “Amen, brother.” Heffington’s letter caused me personal joy and professional agony. I’ve been making a number of the same points about Annapolis, an essentially identical taxpayer-funded institution, for the last several decades, earning repeated salvos of our administration’s ire and attempts to silence me. (West Point has few civilian professors, and no tenured ones.) So it was gratifying to hear someone else say the same things about our sister institution, with more vitriol than I usually employ.
In his Beyond Engagement: the Content Performance Quotient presentation at An Event Apart in Chicago, Jeffrey Zeldman introduced a new metric for tracking how well Web sites are performing. Here’s my notes from his talk:
The number one stakeholder request for Web sites is engagement: we need people using our services more. But is it the right metric for all these situations?
For some apps, engagement is clearly the right thing to measure. Think Instagram, long-form articles, or gaming sites. For others, more time spent might be a sign of customer frustration.
Most of the Web sites we work on are like customer service desks where we want to give people what they need and get them on their way. For these experiences, speed of usefulness should matter more than engagement.
Content Performance Quotient (Design CPQ) is a measure of how quickly we can get the right content to solve the customer’s problem. The CPQ is a goal to iterate against and aim for the shortest distance between problem & solution. It tracks your value to the customer by measuring the speed of usefulness.
Pretty garbage: when a Web site looks good but doesn’t help anyone. Garbage in a delightfully responsive grid is still garbage. A lot of a Web designer’s job is bridging the gap between what clients say they need and what their customers actually need.
Marlboro’s advertising company (in the 50s) rethought TV commercials by removing all the copy and focusing on conveying emotions.
They went from commercials typically full of text to just ten words focused on their message.
Mobile is a great forcing function to re-evaluate our content. Because you can’t fit everything on a small screen, you need to make decisions about what matters most.
Slash your architecture and shrink your content. Ask: “why do we need this?” Compare all your content to the goals you’ve established. Design should be intentional. Have purpose-driven design and purpose-driven content. If your design isn’t going somewhere, it is going nowhere.
I consider Definite Optimism as Human Capital to be my most creative piece. Unfortunately, it’s oblique and meandering. So I thought to write a followup to lay out its premises more directly and to offer a restatement of its ideas.
The goal of both pieces is to broaden the terms in which we discuss “technology.” Technology should be understood in three distinct forms: as processes embedded into tools (like pots, pans, and stoves); explicit instructions (like recipes); and as process knowledge, or what we can also refer to as tacit knowledge, know-how, and technical experience. Process knowledge is the kind of knowledge that’s hard to write down as an instruction. You can give someone a well-equipped kitchen and an extraordinarily detailed recipe, but unless he already has some cooking experience, we shouldn’t expect him to prepare a great dish.
I submit that we have two big biases when we talk about technology. First, we think about it too much in terms of tools and recipes, when really we should think about it more in terms of process knowledge and technical experience. Second, most of us focus too much on the digital world and not enough on the industrial world. Our obsession with the digital world has pushed our expectation of the technological future in the direction of cyberpunk dystopia; I hope instead that we can look forward to a joyful vision of the technological future, driven by advances in industry.
This is one of my longer essays; the final section summarizes the main points.
Process knowledge is represented by an experienced workforce. I’ve been studying the semiconductor industry, and that has helped to clarify my thoughts on technological innovation more broadly. It’s easy to identify all three forms of technology in the production of semiconductors: tools, instructions, and process knowledge. The three firms most responsible for executing Moore’s Law—TSMC, Intel, and Samsung—make full use of each of these tools. Each of them invest north of $10 billion a year to push forward that technological frontier.
Today, I am convinced that:
Software-defined networks will be the most valuable businesses, displacing traditional corporations as central actors.
Networks can bring exponential improvements in prosperity throughout the world.
Networks will encounter fierce resistance from traditional businesses, governments, and other parts of society that don’t want a different future.
Alibaba hit the headlines with the world’s biggest IPO in September 2014. Today, the company has a market cap among the global top 10, has surpassed Walmart in global sales, and has expanded into all the major markets in the world. Founder Jack Ma has become a household name.
From its inception, in 1999, Alibaba experienced great growth on its e-commerce platform. However, it still didn’t look like a world-beater in 2007 when the management team, which I had joined full-time the year before, met for a strategy off-site at a drab seaside hotel in Ningbo, Zhejiang province. Over the course of the meeting, our disjointed observations and ideas about e-commerce trends began to coalesce into a larger view of the future, and by the end, we had agreed on a vision. We would “foster the development of an open, coordinated, prosperous e-commerce ecosystem.” That’s when Alibaba’s journey really began.
Alibaba’s special innovation, we realized, was that we were truly building an ecosystem: a community of organisms (businesses and consumers of many types) interacting with one another and the environment (the online platform and the larger off-line physical elements). Our strategic imperative was to make sure that the platform provided all the resources, or access to the resources, that an online business would need to succeed, and hence supported the evolution of the ecosystem.
“The bottom line is society needs identifiers,” says Jeremy Grant, coordinator of the Better Identity Coalition, an industry collaboration that includes Visa, Bank of America, Aetna, and Symantec. “We just have to make sure that knowledge of an identifier can’t be used to somehow take over the authenticator. And a phone number is only an identifier; in most cases, it’s public.”
Think of your usernames and passwords. The former are generally public knowledge; it’s how people know who you are. But you keep the latter guarded, because it’s how you prove who you are.
The use of phone numbers as both lock and key has led to the rise, in recent years, of so-called SIM swapping attacks, in which an attacker steals your phone number. When you add two-factor authentication to an account and receive your codes through SMS texts, they go to the attacker instead, along with any calls and texts intended for the victim. Sometimes attackers even use inside sources at carriers who will transfer numbers for them.
This spring, Facebook reached out to a few dozen leading social media academics with an invitation: Would they like to have a casual dinner with Mark Zuckerberg to discuss Facebook’s problems?
According to five people who attended the series of off-the-record dinners at Zuckerberg’s home in Palo Alto, California, the conversation largely centered around the most important problem plaguing the company: Content moderation.
In recent months, Facebook has been attacked from all sides: by conservatives for what they perceive is a liberal bias, by liberals for allowing white nationalism and Holocaust denial on the platform, by governments and news organizations for allowing fake news and disinformation to flourish, and by human rights organizations for its use as a platform to facilitate gender-based harassment and livestream suicide and murder. Facebook has even been blamed for contributing to genocide.
These situations have been largely framed as individual public relations fires that Facebook has tried to put out one at a time. But the need for content moderation is better looked at as a systemic issue in Facebook’s business model. Zuckerberg has said that he wants Facebook to be one global community, a radical ideal given the vast diversity of communities and cultural mores around the globe. Facebook believes highly-nuanced content moderation can resolve this tension, but it’s an unfathomably complex logistical problem that has no obvious solution, that fundamentally threatens Facebook’s business, and that has largely shifted the role of free speech arbitration from governments to a private platform.
As for what they learned, here’s how Google summarized the findings:
1. Immersive, multi-sensory experiences drive better recall than single sensory experiences.
Implications: Food ads should stimulate the full range of senses and use the full potential of audio, visual and text cues to do so.
2. Separating visual input from text (voice and supers) increases both recall and favorability.
Implications: Brands making short-form ads should consider separating visual clips from audio/supers for maximum impact.
3. Explicit instruction to imagine increases both recall and favorability.
Implications: Brands should use instruction to drive impact until they can prove more effective options.
4. We want edge-to-edge food in our food ads.
Implications: Food ads should include super close shots of the food to drive favorability and recall.
5. Bite and smile is not the only way to show a pleasurable food experience.
Implications: A range of human/food approaches are equally valid. Brands should feel there is freedom in how they present their food being enjoyed, not constrained by bite-and-smile.
6. Younger audiences responded better to first-person perspectives (POV) than older audiences did.
In “Google Data Collection,” Professor Douglas C. Schmidt, Professor of Computer Science at Vanderbilt University, has fully cataloged how much data Google is collecting about consumers and their most personal habits across all of its products and how that data is being tied together.
The key findings include:
A dormant, stationary Android phone (with the Chrome browser active in the background) communicated location information to Google 340 times during a 24-hour period, or at an average of 14 data communications per hour. In fact, location information constituted 35 percent of all the data samples sent to Google.
For comparison’s sake, a similar experiment found that on an iOS device with Safari but not Chrome, Google could not collect any appreciable data unless a user was interacting with the device. Moreover, an idle Android phone running the Chrome browser sends back to Google nearly fifty times as many data requests per hour as an idle iOS phone running Safari.
An idle Android device communicates with Google nearly 10 times more frequently as an Apple device communicates with Apple servers. These results highlighted the fact that Android and Chrome platforms are critical vehicles for Google’s data collection. Again, these experiments were done on stationary phones with no user interactions. If you actually use your phone the information collection increases with Google.
Google has the ability to associate anonymous data collected through passive means with the personal information of the user. Google makes this association largely through advertising technologies, many of which Google controls. Advertising identifiers—which are purportedly “user anonymous” and collect activity data on apps and third-party webpage visits—can get associated with a user’s real Google identity through passing of device-level identification information to Google servers by an Android device.
Likewise, the DoubleClick cookie ID—which tracks a user’s activity on the third-party webpages—is another purportedly “user anonymous” identifier that Google can associate to a user’s Google account. It works when a user accesses a Google applica
Lyons said she soon realized that many people were reporting posts as false simply because they did not agree with the content. Because Facebook forwards posts that are marked as false to third-party fact-checkers, she said it was important to build systems to assess whether the posts were likely to be false to make efficient use of fact-checkers’ time. That led her team to develop ways to assess whether the people who were flagging posts as false were themselves trustworthy.
“One of the signals we use is how people interact with articles,” Lyons said in a follow-up email. “For example, if someone previously gave us feedback that an article was false and the article was confirmed false by a fact-checker, then we might weight that person’s future false-news feedback more than someone who indiscriminately provides false-news feedback on lots of articles, including ones that end up being rated as true.”
For almost five decades, the United States has guided the growth of the Internet. From its origins as a small Pentagon program to its status as a global platform that connects more than half of the world’s population and tens of billions of devices, the Internet has long been an American project. Yet today, the United States has ceded leadership in cyberspace to China. Chinese President Xi Jinping has outlined his plans to turn China into a “cyber-superpower.” Already, more people in China have access to the Internet than in any other country, but Xi has grander plans. Through domestic regulations, technological innovation, and foreign policy, China aims to build an “impregnable” cyberdefense system, give itself a greater voice in Internet governance, foster more world-class companies, and lead the globe in advanced technologies.
China’s continued rise as a cyber-superpower is not guaranteed. Top-down, state-led efforts at innovation in artificial intelligence, quantum computing, robotics, and other ambitious technologies may well fail. Chinese technology companies will face economic and political pressures as they globalize. Chinese citizens, although they appear to have little expectation of privacy from their government, may demand more from private firms. The United States may reenergize its own digital diplomacy, and the U.S. economy may rediscover the dynamism that allowed it create so much of the modern world’s technology.
But given China’s size and technological sophistication, Beijing has a good chance of succeeding—thereby remaking cyberspace in its own image. If this happens, the Internet will be less global and less open. A major part of it will run Chinese applications over Chinese-made hardware. And Beijing will reap the economic, diplomatic, national security, and intelligence benefits that once flowed to Washington.
“My belief is that the highest calling of marketing is to create a successful brand. That’s job #1.” – Bob Hoffman 
Facebook’s message to media: “We are not interested in talking to you about your traffic…That is the old world and there is no going back” 
“We can make a lot more money by selling a home ourselves, by having a mortgage originated by us.” Spencer Rascoff. 
“Convenience is the Ultimate Currency” – Nielsen 
Do brokers, teams and agents have the tools necessary to compete and build their own brands in 2018?
We strongly believe that the answer is yes. Here are a few examples (from one system!):
One link for www, apps, social, text and email. Your brand, everywhere.
World’s best CMA
Live, beautiful comparables.
One Tap Lead Capture
Text, email, social, www.
Full Feature Website
Fast, responsive and elegant.
CRM + AVM Power
Automagic branded postcard followup.
Close in your app
Sign or Docusign. Autofill. Easy. Desktop or Agent App.
Play to win using the best platform, from leads to closings.
 Are you deluded? Bob Hoffman thinks you are.
 Zillow CEO on Missed Guidance, Mortgage Origination Deal.
 Convenience is the ultimate currency.
Content marketing is a footnote. And there’s nothing wrong with footnotes. But thinking you’re going to have a big marketing success is unlikely.
Sure, some people do. But marketing is about likelihoods and probabilities, and what’s the probability that you’re going to create a successful brand using content marketing?
I think it’s very low.