April 24, 2019
Each year, I set a one word intention and this year, my word is trust, inspired by a surprise adventure at the end of last year. I asked a friend to pick a place for me to go on holidays alone, and not tell me. I found myself in Bali for a few weeks. With only a backpack, no phone and a handful of envelopes that guided me one day at a time, it was an experiment in trust.
When I got back to New York and reflected on the digital media industry which we are all responsible for leading, it has become so clear to me that there is a lack of trust everywhere. Trust is the new currency for the web and it is on us to build a better web.
Marc Pritchard, P&G’s top marketing exec, used the words trust and privacy 22 times in his speech at the ANA earlier this month. Mark Zuckerberg used the words privacy, safety and trust 47 times in his memo to share Facebook’s new vision last month. The NYT reporter who recently spoke with Susan Wojcicki shared that “she recognizes that her ultimate legacy will be whether YouTube can get a handle on its problems.”
A link to Marc’s ANA speech, Mark’s privacy memo and Susan’s interview are all included at the end of this post. I recommend you read them.
Over the past few months, I’ve travelled the world to see our publisher partners and their clients, and had the opportunity to meet with hundreds of brands and agencies in New York, London, Toronto, Dubai, Cape Town, Singapore, Sydney and more. A similar question continued to surface in all my conversations, ‘how do we make sense of digital media?’.
Below is my (long) answer.
In Sapiens, one of my all time favorite books, the author Yuval Noah Harari shares:
“This is the best reason to learn history: not in order to predict the future, but to free yourself of the past and imagine alternative destinies.”
This quote means to learn from the past but not to be defined by it – and I could not think of a more fitting quote for the digital media industry today.
It was in the late 90’s that Wifi was made commercially available, Google launched, and Wikipedia soon followed. 41% of adults were online by 1998 and the biggest frustration was trying to find something, with slow connection speeds coming in second. This infrastructure helped media move online. The Open Web vision was beautiful and it has led to many unimaginable innovations that we take for granted today.
Ten years into this journey, around 2007, the Open Web became the Programmatic Web. This is when the automation of advertising was first introduced through exchanges and marketers started to buy based on audiences versus context. It was also the start of the end for publisher websites. Remnant inventory was a double edged sword that has killed so many publishers in the past decade. It is unbelievable that leftover inventory is still treated like food scraps today. And the IAB standardizing ad sizes was the kiss of death for quality publishers, removing any identity between high-quality content publishers and long-tail bloggers.
And ten years later, by 2017, the Programmatic Web became the Dirty Web. And when something is so dirty that you can no longer clean it, you throw it out. This is exactly what has happened to the business model for the Open Web. By 2017, 600m people were using ad blockers. In the same year, P&G pulled $200m of digital ad spend and did not see any negative impact in sales. Brands have lost faith in the Dirty Web – littered with fraud, non transparency models, non viewable and non brand safe inventory. Publishers have also thrown out the Dirty Web business model by moving to registration and subscription models. Scale for scale’s sake is no longer a strategy.
The Open Web has collapsed under the weight of its own challenges.
Google bought YouTube at the end of 2006, for a mere $1.65 billion, a startup that was 1.5 years old. It has to be the best tech acquisition in history. I estimate that YouTube is on track to generate over $100 billion in cumulative revenue for Google by next year. Around this time Facebook opened up to businesses and by late 2007, there were 100,000 businesses on the platform (there are now 90 million). And Twitter launched, seeing 60,000 tweets a day (there are now 500 million per day).
The birth of the Social Web paved the way for user generated content. Up until that moment, content came from traditional media companies and niche content came from long-tail bloggers. The social web democratized content creation.
Fast forward 10 years, the Social Web has now become the Unsafe Web.
The first sign that the Social Web was not safe for brands was about two years ago, when The Times of London investigation, among others, revealed that hundreds of big brands like Mercedes, Waitrose, Verizon, J&J, Jaguar and HP were funding terrorism, pornography and divisive content via YouTube. The backlash from brands may have been temporary but it opened everyone’s eyes to YouTube’s flawed business model.
Next, we learned the Unsafe Web is not safe for your data. Facebook’s Cambridge Analytica scandal brought light to malpractices going on for years on the Unsafe Web. Social platforms were giving user data to third parties without consent. The #LeaveFacebook campaign was the most telling sign to me, as users began to express their anger.
And now what we are learning is that the Unsafe Web is not safe for your attention. From social feed algorithms that purposely withhold likes to get users to check back often, Silicon Valley engineers have intentionally designed technology that preys on many of our basic human vulnerabilities for profit.
A few signals as to how bad the situation is: I am an active volunteer in the mental health space and have seen research that measures brain activity when people are using social media. The same nerve centres light up in the brain when consuming social media as when using cocaine.
Last year, a UK research study of 1,500 young people’s social media usage over three months revealed that without a doubt social media increases symptoms of mental illness, anxiety, depression, and isolation in our kids.
The Social Web has become the Unsafe Web. Unsafe for your brand, your data, your attention and your kids. The world’s largest democracy (India) is in the middle of an election. Canada (my home country) has an election later this year. And all eyes are on the US over the next 18 months. I am fearful of how the Unsafe Web might be used to influence democracy.
What’s next? The Unsafe Web is quickly becoming the Closed Web.
Let’s start with YouTube. In response to the brand safety issue they have, they are hiring 10,000 people to monitor and moderate content. The situation is so bad that last year, YouTube’s CEO shared that they are limiting the content their moderators can watch to 4 hours a day in order to protect their mental health. As a mental health advocate, I am pleased to see them taking care of their own staff. But why is YouTube not limiting how much content its 1.5 billion users can watch in one day as well then?
Sticking with Google, in an earlier earnings report, we can see that they now generate 83% of their revenue from owned & operated (O&O), which means YouTube, Search, Gmail, Play and Maps. Their O&O business generates 87% margin whereas their network business (aka the Dirty Web) generates 30% margin. Their public statements make it very clear that they are investing in growing their high-margin O&O business at the expense of their network business. Google may own the ad stack that powers the Dirty Web today but I would not be surprised if we see them continue to introduce policies that make it a closed and opaque platform.
In the Fall, Facebook cut off access for advertisers to use third-party data for audience targeting inside the platform. This was conveniently positioned as making Facebook more secure given the Cambridge Analytica scandal but in reality it had absolutely nothing to do with third-party app developers stealing user data. Facebook actually closed off data to third-party app developers back in 2015. Facebook smartly seized the opportunity to cut advertisers off any competing data to get further hooked on Facebook’s data.
Google and Facebook are trending to become closed platforms, which is ironic given the original Open Web vision from twenty years ago. They control the last mile, access to users, and they are increasingly going to force advertisers to use their data to access their users. People on their platforms are not your customers, they are Google and Facebook’s. These platforms have always been closed to publishers and are now becoming closed to brands.
This is the game they are playing, and while we should be aware of the game they are playing – we do not need to play their game.
With the rise of fake news, false news, disinformation (or whatever new label we want to give it to feel less guilty about the reality) users are becoming aware of this issue. The number of public service campaigns to educate the mainstream population on the difference between real news and fake news will continue to grow. Sri Lanka’s government turned off social media this week for the entire country, for fear of misinformation after the horrific attacks on Sunday.
Edelman’s recent trust barometer, a global standard to understand consumer sentiment towards government, institutions, and media, showed that total trust in news increased 22 points in the past year. Trust in traditional media is the highest at 65 points where trust in social media is the lowest at 43 points.
People value trusted content enough now to pay for it. The rise and early signs of success in publisher registration and paywalls is a signal of the value of trusted content in today’s world. Netflix. Spotify. Live Sports. And now trusted news.
Brands have to stand for something today. Trust has become more important than ever for brands because today’s consumers are bombarded with choice. What was previously a choice between a handful of brands is now a global mix of hundreds.
I trust the web enough now to keep my credit card and I am now purchasing goods from brands I have never heard of. Amazon, Shopify, and other e-commerce platforms are riding the wave of new found trust in the web.
Edelman’s trust barometer shows that only 48 percent of the general population in the US trust businesses, falling from 58 percent last year and with a general trend moving downward over the past decade.
Accenture scored 7,000 companies on trust and found a 54% decline in consumer trust over the past two and a half years due to data breaches, “C-suite missteps,” regulatory violations or negative PR. They estimate this has resulted in $180 billion in lost revenue.
PwC’s recent trust report showed that the top 3 reasons people make a purchase from a retailer are: (1) “they have the items I want”, (2) “I trust the brand” and (3) “they have a good location”. Trust is a top 3 influencer of purchase decisions.
A CMO Council study found that 78% of companies say their brands have been hurt by unintended associations with objectionable content, images, topics, audiences or conversations.
An agency executive shared with me that a number of CMOs have called her to share that they see themselves as “wholesome brands” and cannot be associated with Facebook and YouTube to the degree that they have been. It’s now bad for their brand.
Trust has become the new currency for the web and trusted publishers with quality content sit at the heart of the Trusted Web.
A final word to those working tirelessly at the heart of the trusted web: thank you. Your work matters and despite the countless challenges and shrinking resources, I am grateful that you continue to stay committed to your mission of producing trusted content to help inform, inspire and entertain the world. You are the heart of the Trusted Web.
CEO | Polar
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