February 21, 2019

More Elephant Advertising


There is a cute little research trick that semi-clever operators use to con gullible rubes. I will give you a small, silly example of it which I hope will make it more understandable on a large, global scale. It goes like this.

Let's say you want to open a strip club in a residential neighborhood. Obviously, no one in the community in their right mind wants a strip club in their neighborhood. But as the potential owner of the strip club you have to make a case to the city council to try to get your permit.

You do a survey in your community. What you don't ask is a clear, direct question, "Do you want a strip club in your community?" because you'll get a resounding no and a few solid blows to the golden globes.

Instead, you ask a question that sounds kinda like a suitable question: "Do you think the residents of Smallville would benefit from more recreational and entertainment opportunities?" This question has a lot of benefits.
  • Who is going to say no to the vague notion of "more recreational and entertainment opportunities?"
  • The so-called "recreational and entertainment opportunities" are not defined
  • The social ramifications (cost/benefit relationship) of the so-called "recreational and entertainment opportunities" are not described
Once the survey is completed you go to the city council and show them your pitch slides:
  • 88% of people in our community are in favor of "more recreational and entertainment opportunities." That's what we provide!
  • If approved, revenue from our company will contribute over $1 million annually to the tax base in the community.
  • We understand that not everyone will be in favor of our business, but enjoying our shows is entirely voluntary and no one is forced to patronize our establishment.
Even a city council isn't dumb enough to swallow this bullshit. Even a city council isn't dumb enough to not understand when they're being conned. That's how they're different from us.

I would submit to you that this is exactly the type of specious rationale that underpins the entire online ad industry. The con goes like this: the reason that tracking and spyware are necessary is that consumers want "more relevant advertising." This claim is put forth virtually every time the spy masters are asked to justify their practices.

To quote a semi-clever operator named Zuckerberg, “People consistently tell us that if they’re going to see ads, they want them to be relevant.

Yeah, right. People are out in the streets marching for more relevant advertising.

A recent New York Times piece by a communications professor and a law professor exposed this bullshit for what it is. They reported on two large studies they did. Here are some of the results...
"Sixty-one percent of respondents said no, they did not want tailored ads for products and services, 56 percent said no to tailored news, 86 percent said no to tailored political ads, and 46 percent said no to tailored discounts. But when we added in the results of the second set of questions about tracking people (emphasis mine - BH) on that firm’s website, other websites and offline, the percentage that in the end decided they didn’t want tailoring ranged from 89 percent to 93 percent with political ads, 68 percent to 84 percent for commercial ads, 53 percent to 77 percent for discounts, and 64 percent to 83 percent for news."
By posing questions in manipulative ways that don't actually describe the issues in question, it is possible to use research to distort the truth. If you ask someone "do you prefer ads that are relevant?" of course they're going to say yes. Just like if you ask if they want more entertainment opportunities.

But if you're asking the appropriate question -- "Are you willing to trade private, personal information about yourself and your family, and have your movements tracked and catalogued both online and offline, and have your emails and texts read and archived, and have files about you sold to anyone who wants to buy them, in order to get more relevant advertising?"-- I don't think you need to be a Harvard-billionaire-semi-clever-operator to know that you better be wearing a cup.

February 14, 2019

True Detective: How Bullshit Becomes A Fact


There is so much bullshit in our business that sometimes you have to wonder where it all comes from. Yesterday I decided to "peel back the bullshit" and see if I could reconstruct how something that was completely wrong wound up being represented as a fact in reputable publications like Forbes and The Drum. Here's the story.

Yesterday Samuel Scott tweeted out a quote from an opinion piece in The Drum.

Anyone with half a brain knows that millennials are nowhere near having the most spending power. In fact, on a per capita basis they have the lowest spending power of any adult group. People over 50 control 70% of the wealth in the US, and are responsible for about half of all consumer spending.

So I decided to do a little detective work and try to figure out where this bullshit "fact" came from. In doing so, I got a nice close-up look at the astounding ignorance that is embedded in our industry and how bullshit, repeated with enough frequency, becomes a fact.

I started with the piece in The Drum. It was called "Why direct-to-consumer companies are using Influencer generated content to win over the market." It was a thinly disguised self-promotion piece full of the usual data hysteria. As noted above, the piece claimed that millennials "have the most spending power of any generation."

As justification for this claim, the article linked to this article in Forbes entitled "How To Tap Into The Millennial $200 Billion Buying Power With Social Media" which asserted that "By 2018, they will have the most spending power of any generation." 

The article offered no back-up for this claim other than a link to this thing called "41 Revealing Statistics About Millennials Every Marketer Should Know." This piece lived on an agency website, was written by someone who was two years out of college who called herself a "Marketing Strategist." The marketing strategist had this to say...
Once again, there was no back-up for this claim other than a reference to something called "Bazaar." Searching for this source lead me to a pdf from 2012 entitled "Talking To Strangers: Millennials Trust People Over Brands" by a company called Bazaarvoice that sells some kind of software for harnessing the power of "user generated content." (Remember that?)

Once again, there was no detail or proof, just this assertion...

The attribution for this claim was a footnote about a book...
1. Kit, Yarrow and O'Donnell, Jayne. Gen BuY: How Teens and Twenty-Somethings Are Revolutionizing Retail, 2009.
The book in question was published in 2009 and was one of those "millennials are a new species" things that were all the rage until it turned out that millennials were pretty much just like everyone else. I couldn't find a direct claim in the book (frankly, I didn't look very hard) that "millennials have the most spending power of any generation." The closest thing I found was this:
"Generation Y, (remember when millennials were called Gen Y?- BH) those born between 1978 and 2000 has overtaken baby boomers in sheer numbers and is poised to do the same with its incomes by 2017..." (Emphasis mine, BH)
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.

Here's a graph that demonstrates that income per capita among baby boomers is far higher than millennials.

One more thing. Even if millennials had higher income than baby boomers, that still doesn't mean they would have "the most spending power." Spending power is not a function of income. It is a function of income plus accumulated wealth plus access to credit. According to the Federal Reserve, baby boomer wealth is more than 15 times greater than that of millennials (which means they also have way more access to credit.)

So let's recap the timeline.
- In 2009, a book incorrectly predicted that millennial income would surpass baby boomer income by 2017.

- In 2012, in a self-promotional pdf by a software company, this false prediction was misinterpreted to mean that millennials would have "more spending power than any other generation" by 2017.

- In 2017, a piece of "content" on an agency website, written by a "marketing strategist" two years out of college, used this quote from the software company to assert that millennials "will have the most spending power of any generation by 2018."

- Later that year, an article in Forbes used the assertion on that agency website to justify a claim that, "By 2018, they (millennials) will have the most spending power of any generation."

- And yesterday, in 2019, an article in The Drum leaning on the piece in Forbes, proclaimed that millennials "have the most spending power of any generation."
And that, my friend, is how in the slovenly and slipshod world of marketing, bullshit becomes a fact.