An American Made Dream of Innovation & Design

File this under ‘it will never happen, but what if…’

An examination of two American juggernauts outlines to me some obvious challenges that, left on their own, leaves doubt as to whether they will ever be fixed. But what if they combined their power? Let’s dive in.

First up, Apple.

Self admittedly, I am not a huge fan of the current Apple strategy, as I think they are milking assets that they should have been doubling down years ago and have a massive innovation problem — Apple Pay, the watch, and signing Oprah do not constitute world-class innovation to me. The move to ‘services’ is just another head-scratcher as it fails to acknowledge that 61% of revenue is coming from a device (iPhone) that is flat, and in fact, is losing share in markets like China. The idea that Apple’s services, (currently 15% of revenue) will soon replace the iPhone is amusing considering that these services are dependant on…the actual handset that is losing share. Instead of innovating, Apple is focusing on single sign-on authentication, content deals, Apple pay/credit card (which I like but makes me wonder — what took them so long) while others like Facebook (rightly or wrongly) turn the financial world upside down with a big swing with Libra.

There is a famous debate between famed investor/entrepreneur Peter Tiel and Eric Schmidt of Google where Tiel confronts Schmidt by telling him “Google has no idea how to invest its cash into technology effectively” and finishes by saying ‘they have no new ideas’. As it relates to Apple, I would suggest the same thing. Apple has over $100B in cash, and core assets, such as the iPhone, stalling. Meanwhile, Spotify (market cap $28b) and Netflix (market cap $142b) are creating businesses right under the nose of Apple in a category that they invented. Not good. Additionally, the future after Tim Cook is Jeff Williams. If you’re saying “who”, that’s my point. Let’s replace Jobs and designer Jony Ive’s with Tim Cook and Jeff Williams. Is anyone feeling comfortable with this? Sitting on top of $100b in cash is just a bad idea as it also attracts corporate raiders like Carl Ichan who put pressure on companies to give it to investors as a dividend. Good for the stockholder but a zero for solving the innovation gap. Apple needs to spend this money on innovation as they clearly won’t find it internally. This is not about Cook — who is a world-class executive — but rather a need for a more ambitious, aggressive plan to take advantage of its cash flow before it dwindles due to loss of hardware share.

Apple has done a miraculous job of extending the life of the iPhone, but all good things have to come to an end at some point.

Next, let’s look at Tesla.

It’s fair to say that Musk is today’s Edison. Paypal, Tesla, NASA (yes I put NASA under Musk as SpaceX is now NASA). Musks impressive CV spans digital payment to batteries, cars, solar and now space. Shit, he even has a flamethrower in there. The focus in the capital markets and the corresponding media around the stock of Tesla is always on its ability to deliver vehicles quarterly (or lack thereof) and its cash burn. Musk, quarter over quarter, is constantly scrambling to deliver on vehicle expectations while also stating publically that “the company will run out of cash unless “hardcore” cost-cutting moves are made”. As I watched CNBC’s Tesla coverage the other day I kept thinking; “with this company/stock trading where it is today ($246 per share) it is going to have to go back to the market and raise a ton of cash to justify this valuation and continue their expansion”. If they continue to burn $700m per quarter there is not a lot of wiggle room for any setback. So where can Tesla get unlimited cash and operational excellence? You are starting to see where this is going, aren’t you?

One more thing before we put all of this together.

Let’s acknowledge that we are in the early innings of a new cold war, not one based on guns and nuclear weapons, but rather technology. This cold war puts the USA and China directly in conflict with one another. The USA administration has realized that their time as the global leader is fading, and they are using the fact that they have a $380b trade deficit with China to their advantage to try and cut the legs out of some of the momentum of China before its too late. This deficit is ‘house money’ and puts the USA in a good spot to extract what they need from China during this negotiation. It’s tough to negotiate a deal when you have a dependency on a country (USA) for $380b worth of goods, as China is quickly realizing, and no matter how much they devalue the yuan and add their own tariffs they have more to lose, at least in the short term. Trump knows this and is squeezing them, with China stalling and hoping Trump doesn’t get re-elected. The reality is, Trump will be elected again (by a larger majority this time) and China is going to have to change its strategy and play offense. What can they do? Well, how about following the lead from the USA. The first shot the USA placed on China was the embargo on the telco Huawei, which is backed by the Chinese government and accused of espionage. In a tit-for-tat move, what would happen if China took a shot right back at the USA and made a move to ban Apple from China? Ahh, problem. All of Apple’s (attempted) growth is coming from that market, not to mention its dependence on rare-earth materials and manufacturing capacity. Meanwhile, Huawei is now focused on selling its wares to emerging markets like Africa and others as a way around this embargo but what are Apple’s options if this happened? It looks pretty dire esp when you consider what would happen to the stock if this took place. 30% decline? Minimum.

Unless of course Apple makes a big move and purchases Tesla.

Let’s look at the numbers:

• The market cap of Tesla is approx. $44b

• Apple has $105b in cash on hand. That cash is earning a grand total of 0% in the bank right now and Cook doesn’t have anything to invest in because…he doesn’t have any new ideas.

Why does this make sense?

1. Tesla is going to continue to burn $700m in cash a quarter. They have about $2b in cash on hand. Do the math.

2. Apple has a shit load of free cash for the near term future while people still buy iPhones, but as the number of phones decreases so will this cash flow.

Apple purchasing Tesla solves all of the cash issues for Tesla but also gives them access to one other thing: operational excellence. Tim Cook is maybe one of the best operators on the planet. Let Cook and his soldiers take on the production issues rampant in Tesla, and let Musk focus on innovation. This allows both companies to solve their biggest challenge.

Additionally, in making this move, Apple is getting the visionary that they desperately need to take Apple to the next level (sorry Jeff Williams…you are demoted).

Musk goes back to creating and building and leaves board management, capital markets, and his Twitter account to Cook to skillfully manage.

As an aside, Trump goes all-in on this ‘made in America’ solution’ and likely takes credit for its creation.

Tesla and Apple is a USA match made in heaven. It’s the capitalist version of The Avengers when 1 + 1 = 3.

It’s never going to happen. But what if.

Over to you Tim.

Neil

When The Sea Parts — Knowing When To Go All In With Your Product & Company

Then Moses stretched out his hand over the sea, and the Lord caused the sea to go back by a strong east wind all that night, and made the sea into dry land, and the waters were divided. So the children of Israel went into the midst of the sea on the dry ground, and the waters were a wall to them on their right hand and on their left.

Exodus 14:21–22

Most are familiar, at least in its most basic construct, with the story of the parting of the Red Sea.

Captured in Exodus 14, Moses leads the Israelites out of the slavery of the Egyptians to Canaan, where they are to settle. With the Egyptians in pursuit and all looking lost, Moses raised his staff, splitting the waters of the Red Sea and allowing the Israelites to cross. Once on the other side and instructed by God, Moses once again raised his staff, bringing the waters back together, drowning the entire Egyptian army, and setting the Israelites free.

I have used this story many times over my career when speaking to others about the delicate nature of entrepreneurship. While I’m not religious, I feel that this story best exemplifies the specific timing needed to be successful as a business, without which even the best can be washed away.

It is a common misconception that what makes a company successful is the product that the company produces. Wrong. A close second is “the team” or the capital raised — sorry, not those either. Of course, all of these things are important to a successful business, but they are not what makes a company successful. What is it?

Timing.

The best entrepreneurs are genius product people with world-class vision and sales skills, but almost every single one of them has had lady luck on their side that, when combined with their vision as well as the product, team, and capital, creates a synapse that drives success.

My father used a term when I was young when he told me to be patient. He used to say, “Neil, keep your powder dry.” This was his way of telling me that “now” was not the time to light the fuse.

I think the same applies to business. Using the Red Sea analogy, if you are too early or impatient and push forward, you risk driving yourself and your company right into the sea and drowning.

The list of companies that were too early is long. People forget that Friendster was the social network launched two years before Facebook. Or how about Segway? With all the hype around the transportation IPOs of Uber and Lyft and the recent $2b valuations of Bird and Lime, it seems like they were just a little early.

How about those that were too late and had the proverbial waters close in on them before they could get to the other side? This list, too, is long and includes Nokia, Kodak, and countless other startups, but the one I always come back to is RIM (Blackberry) and how badly they dropped the ball on messaging.

Not only did RIM help prop up WhatsApp in the early days by providing them with APIs from their messaging service BBM — but they also had an intern who had ideas around agnostic messaging that fell on deaf ears. We all know what happened with WhatsApp, but many don’t know that the intern was Ted Livingston, who went on to launch KiK and KiK’d the ass of BBM.

BBM was messaging, but RIM didn’t evolve, so they couldn’t get over to the other side. It’s bad enough that they created the smartphone and lost that to Apple due to arrogance, but they also created messaging and lost there as well. Name another company that coughed up two categories bigger than smartphones and messaging. Ouch. Professors will use this case study for years to outline where they went wrong.

This is a really important concept for entrepreneurs to understand. You may think you are ready to “blitzscale,” to borrow Reid Hoffman’s term, but if you are early, all you will do is burn your cash and blitzscale directly into the “sea” and drown. Not going fast enough when the opportunity presents itself is just as dire as the fickle market will turn on you, leaving you behind to talk about ‘what if..’.

The OG of entrepreneurs, Bill Gross, does a masterful job of explaining this in his TED Talk from 2015, where he examined all of his companies (he has started more than 100 companies!) and found that timing was the single biggest difference between success and failure. I would encourage you to give it a watch. I have played this in my town halls in years past to explain why we are waiting or why we are pushing in on something.

Great entrepreneurs' genius (or luck) is knowing exactly when to hit the gas and seeing the signs that the sea is beginning to part. The key for any new startup is to keep your powder dry and wait till these signs are prevalent. When they are — hit the gas as if your life depended on it because… it does.

A great example of this was the creation of Lululemon. Chip Wilson, the founder, outlines the factors that were becoming increasingly apparent for the creation of a new technical fabric for what he deemed “Power Girls” — those young professional females who were being neglected by the big athletic brands — in his fabulous book Little Black Stretchy Pants. The generational change where women were waiting longer to have children, were increasingly more independent, and were kicking ass in business also coincided with a movement for a more active, healthy lifestyle. From building pop-up shops to scaling physical stores, Chip saw the trend building and pushing in at the right time, in turn creating the ‘athleisure’ category that brands like Nike and Under Armour have since copied. Love it.

What are the signs that the market is building for your product? Besides the obvious research and intuition, here is a couple that many overlook and should be discussed with your team.

• What’s the revenue?

I am not interested in this fallacy about how “we are going to focus on revenue later.” You are not Zuckerberg. If you can’t sell it, you’re dead.

• What’s the growth rate?

Entrepreneurs focus way, way too much on price in the early days. Don’t do that. Price is arbitrary and determined by the market, not you. All you care about is:

a) Can you sell it?

b) Can you sell it again — both to the same client and a new client?

Transactional revenue is a function of all early-stage startups, but you must figure out how to turn transactional revenue into recurring to grow. In one of my businesses, we had 17% recurring revenue in year one (not bad), but we made some adjustments to our product, pricing, and positioning over the next year and moved that to 65% by year three (better). That’s what you want to be looking for, as recurring is the only way to scale your business.

• Tell your clients what’s coming and gauge their reaction/appetite.
  Product is not about what you have today, it’s also about what you will have in the future. If clients are excited about what’s to come — they bind to you and scale with you. Anyone who has worked with me has been exposed to this vision riff with clients before. Usually leading to an awkward elevator ride where my co-worker says, “I had no idea we were building that.” My response? “We weren’t, but we are now.” This is a product velocity gauge, as it will tell you that the market wants your iteration NOW or that it’s “interesting,” — which is code for them thinking your idea sucks.

There is an insatiable appetite for innovative new products that solve problems. Sometimes you can see what nobody else can. Trust that. It’s what makes you an entrepreneur and those that don’t see it, future employees. If you can take your vision, benchmark it against some revenue, and know when to push in, who knows, you may get to the other side before the water closes the gap. I hope you do.

Good luck.

Neil

Original Medium Post 9.10.19 https://medium.com/@neil_22007/when-the-sea-parts-knowing-when-to-go-all-in-with-your-product-4551e9dd99cd

A Compliance-Privacy Tsunami Will Slam Into the Data Ecosystem in 2019: Big Changes to Watch

It feels like it was just yesterday that I wrote my 2018 piece on what’s to come. You can find that, as well as the 2017 version, here and here if you feel like reminiscing.  

So, as we look to the future, what are the themes and trends that will emerge? It would be too easy to say, ‘data.’ Rather, I think the big changes will be further down funnel but still related to data. The takeaway for 2019 will be consent management.

Consent management is where data, privacy, and regulation intersect. Simplistically, it is a mechanism for ensuring you have user consent to collect and use the data that is driving your decisions.

Why is this going to be the trend? Two reasons—the first is because consent management is nonexistent in today’s technology stacks (and no, the catch-all ‘do you accept’ button will not be sufficient moving forward for consent management). And, second: a compliance/privacy tsunami will bear down on the entire world (not just advertising) in 2019. Every trend in 2019 will tie back to a company’s ability, or inability, to check the box on consent management.

Prediction: Big changes are coming for companies collecting and trading in consumer data. This will be transformational for those in the location space and will shape the continued reordering of the hierarchy of brands and platforms. Let’s dive in.

2019’s Biggest Trends

The Apple doesn’t fall too far from the privacy tree

Apple is just getting started on privacy, and in 2019 we should all expect that they are going to make an even bigger move. When your CEO goes to the EU to speak about data and privacy being “weaponized,” it’s a precursor to a larger strategic decision for the company. In this case, Tim Cook of Apple did exactly this. Why? Because Apple is smart enough to realize that privacy is not a compliance issue but rather a strategic one. The best companies in the world will make privacy and compliance foundational to their strategies, getting ahead of the companies who are complying because they have to.  

There is also a more subtle strategic play associated to this move, and it originates in Ireland. What does the Emerald Isle have to do with data? Well, take a look at where the International HQs of the Valley-based tech players such as Google, Facebook, Twitter, LinkedIn, and others sit—yes, you guessed it: Ireland. In 2019 we will see, at minimum, one big strike at a major tech firm around privacy and GDPR (The General Data Protection Regulation), starting in Ireland. Big companies mean easy targets for catching a big fish exploiting consumer data in relation to GDPR. Apple embracing privacy is a way to distance themselves from the authorities in the EU when the privacy hammer comes down.

Apple is going to be the leader in privacy, and it will be interesting to see who joins them for the ride. Apple can do this against its pseudo competitors like Facebook and Google because they don’t own an advertising business. As Tim Cook watched the executives at Facebook play whack-a-mole with privacy and Amazon deal with antitrust chatter, he realized it’s hard to knock the company sticking up for the little guy. While it’s fair to say that Apple has always had a complicated relationship with advertising, 2019 will be the year that they go all in on privacy.  

Are you following?

The most disruptive thing I think Apple will do in 2019 is eliminate persistent location tracking in the background from the application ecosystem. The impact here will be massive. First, a little background: When downloading an application, you, as the consumer, can choose to allow location or not. Location can be ‘always on’ or ‘only when using the application.’ Location is a requirement for a number of applications—weather, ride share, etc.—but is location needed all the time?

This is where the first change will happen. Location tracking won’t go away, but it will be consumer opt-in and in the foreground only. All applications in the store will have background location disabled, cutting the available data from the iOS ecosystem in half, if not more. Applications that rely on data should take this as a warning of a more onerous data policy on the horizon that will start with location data but won’t end there. Privacy advocates, regulators, and government officials will applaud Apple’s focus on privacy, allowing Apple to gain favor with regulators and politicians to cash in at a later date.

While Android has 80% market share of the global handset market, iOS is a core source of data for many in the marketing and advertising space. Facebook, Google, Snap, and Twitter won’t be the only ones who suffer from this—there are hundreds of companies in the marketing and advertising space that depend on this data.

Location aggregators, those who sell data outside their walls to companies, could see their supply shrink by as much as 30% in 2019. This supply crunch will happen not only because of Apple’s moves but also due to a decision by consumer apps to stop selling their data due to the negative PR that just isn’t worth the number on their balance sheets.

While some consumer apps will stop proactively selling their data externally, this will be compounded by the operating systems (and the media’s) fixation to hunt down those that are leaking data without consent. Case in point: the Weather application that was exposed earlier this week by the WSJ. One by one, applications and their data will be removed from the ecosystem, creating a larger and larger supply crunch.  

Don’t believe me? Ask anyone who is looking for data what the ecosystem looks like 10 months after GDPR came into effect. Supply is scarce, and prices are high. This is the point in the article where I remind you all that you are now on a 12-month countdown to the California Consumer Protection Act (CCPA)—which is GDPR USA—whose end result will be the same on the data ecosystem.

Trends To Follow

Separation is natural

The second trend, which will be a bit slower to develop, will be a separating of the ecosystems—no longer will you create one product for Android and iOS. The functionality inside of the OS is changing based on a combination of privacy and regulation, and Google can’t be as aggressive here due to their dependence on the ad business. Look to see an eventual splitting where you will have entire businesses created on Android vs iOS and vice versa.  

I am intrigued to see if there will be a company that can win by embracing just one OS. This again is where Apple comes into play. With iPhone sales starting to wane due to the slowdown in China, Apple needs to figure out how they can stimulate new demand, most importantly in emerging markets. It’s right in front of them, and a quick look at Samsung’s history gives them a playbook from which to draw.  

Samsung not that long ago was the #1 handset in China but lost its way to local competitors such as Huawei. In five years, Samsung went from the #1 handset in China (20% market share) to only having 1% of the Chinese market. One percent!  

Guess what share of China Apple has … 10%. They need to make a move here before 10% becomes 1%. This, too, is where privacy comes back to the forefront. If you are in a battle with Chinese firms for market share, there is only one card that you can play in today’s environment. Espionage. Today, every major telecommunications firm in the world is pausing implementation of technology from Huawei due to its association with the Chinese government. Wouldn’t privacy and consumer control be a convenient way for Apple to maintain and grow share in 2019 and beyond? I think so.     

Managing data management

Here come the data management platforms (DMPs). This space has been heating up for over a year now, but 2019 will be even more aggressive. DMPs have been living in a world of data lakes that are quickly turning into data swamps due to the lack of consent from users. This puts enormous pressure on these firms to implement consent management solutions in 2019 to ensure compliance.

In 2019 as we head closer to CCPA, we will see a massive increase in M&A activity to drain the swamps. This has already started with firms moving to position themselves with tools that adapt to this new world. Here is a summary of some moves just over the last few quarters:

• Salesforce / Mulesoft

• LiveRamp / Acxiom

• Salesforce / Datorama

• SAP / Qualtrics

• Oracle / Grapeshot

There will be a few more moves that transpire in the early days of 2019—the most obvious being the beauty show that LiveRamp is putting on now. The disposal of Acxiom in July was clearly based on the valuation of Mulesoft ($6.5B), which was valued at 2x the entire Acxiom LiveRamp company. Sell Acxiom ($2.3B), trade as a pure play, improve valuation, clean up house, hire a bank, sell. Done. Current market cap of LiveRamp as a standalone company is $2.68B.   

All of these moves on the chess board will better position the top players to bring consent management into the core of their strategic approaches to 2019 and 2020. While, yes, the Apples, Googles, and Facebooks of the world may be the first to move, this will not be the year for the smaller companies to sit back and wait to see how the changes impact the larger ecosystem.

Remember, the clock is counting down to 2020 for CCPA, and we all know that legislation doesn’t wait just because you haven’t figured out yet how to adjust your business to meet new regulation demands. A recent survey by PwC of U.S. businesses showed that less than half of the retail sector (46%) was confident they’d be ready to meet the demands of this pending legislation. I’m sure retail isn’t alone—everyone is more exposed than they even realize. So, buckle up, everyone, because the compliance management tsunami is just starting to roll, and we’re all going to be swept up for the ride whether we like it or not.

Article first published in Street Fight Magazine January 8th

Consumers Are Coming For Their Data And Some Companies Are Giving Them Control

Ask any marketer about data and watch how fast they salivate. However marketers collect data—either directly from consumers or purchased through data miners—the advertising industry just can't get enough of those bits of bytes. Otherwise, how would they sell their wares?

The passage of the European Union's General Data Protection Regulation, though, is proving to be an inflection point for the future of data collection. GDPR, which went into effect in May, imposed limits on how companies can collect and use personal data, and determined that data ownership and control is the user's right. In the U.S., platforms and third parties still maintain ownership of the data they collect on internet users, but that could soon change.

Some state and federal regulators are attempting to crack down on unfettered data collection and use. California, for example, recently passed its California Consumer Privacy Act, which goes into effect in 2020. At the federal level, legislators are considering data privacy regulations with GDPR serving as a loose blueprint. Meanwhile, data breaches and privacy scandals are shining a light on the opaque world of data mining and making some consumers think twice about where their data is going.

Some services are getting ahead of the regulatory curve by offering individuals the chance to track their data in one place and make decisions about how their data is used and to whom it's provided. These services offer a central mobile platform on which consumers can upload personal data and enter into individual data-sharing arrangements with the entities of their choice.

"Companies are increasingly decisioning through data, and they're decisioning on data that's owned by the consumer—yet the consumer has no understanding of what that data is, how it's being used or the overall value it's creating," said Neil Sweeney, founder and CEO of Killi, an app that allows consumers to share pieces of personal data like email addresses, location and mobile identifiers with data buyers in exchange for cash. "Companies are making billions and billions of dollars, and the everyday consumer is getting nothing in return."

Killi is banking on the premise that consumers should be compensated for their data. Sweeney said he designed the app with the hope of improving the value proposition of data-sharing for consumers. The app, which debuted in June, is approaching 100,000 users, the company says, and has attracted brands like GM and McDonald's. The average revenue Killi users have made off of their data right now is $1, but Killi insists that figure will grow if it can attract more brands.

Killi is far from the only app that offers financial incentives for sharing data. The decentralized data marketplace Wibson offers its users (who are in EU countries for now) cryptocurrency in exchange for deciding to share certain types of data with data buyers, whether it's from social media accounts or from bank accounts. Like Killi, Wibson is built on a decentralized blockchain model, which permanently tracks transactions.

Not all of the value propositions are financial. Digi.me, an app founded in early 2018, allows individual users to plug in to up to 15,000 different sources of their data, anything from a music streaming service to a wearable fitness device, and then agree to share certain pieces of that data with third parties who can analyze your health or finances. Digi.me has also partnered with the company Ubdi to build a monetization framework where users can share data in exchange for crypto tokens.

Shane Green, co-founder and CEO of Digi.me, said the approach helps users understand their digital data footprints and allows them to make better decisions about data sharing. Green said a privacy-centered approach could eventually allow data buyers to get even more granular data sets—like, for instance, sourcing participants for clinical trials.

"It can create better outcomes for consumers as well as for companies that play by these new rules that respect people's control and ownership of their data," Green said.

It's all easier said than done. Mat Travizano, co-founder and CEO of Wibson, said data-sharing services can incentivize companies to play fair, but acknowledged there are some practical limitations of preventing data buyers from reusing or misusing data they've purchased. Another challenge is getting enough users on the services to create data sets that are valuable to data buyers.

But there's also opportunity. Sweeney, Green and Travizano all said they believed a push for data privacy rules has led to broader public awareness about data. Ultimately, they hope, companies and brands who want to use data will be required—by law or otherwise—to seek it out ethically. And what's more ethical than getting data straight from users who are compensated when they share it?

"Data ownership should be a human right," Travizano said. "We think of ourselves as catalyzers for that future."

Article originally appeared in Ad Age Nov 26th

THIS APP LETS CONSUMERS SELL THEIR DATA DIRECTLY TO BRANDS

Although it's early days, brands such as McDonald's, Staples and GM are paying cash and purchasing data direct from consumer, giving literal meaning toward the notion that "data is the new currency."

Between regulation such as GDPR and scandals like those plaguing Facebook, consumers are aware more than ever of the so-called value exchange when using online services. At the same time, they're also tuning in on how companies such as Cambridge Analytica are plundering their data without their consent.

To that end, Freckle IoT recently launched Killi, an app that makes explicit value of data by actually paying consumers with cash for sharing their data, location, or providing insight about what ads they'd like to see. Even more money is on the table if users scan the back of their driver's license with their phones, for example.

Killi has so far lined up McDonald's, GM, Danone and Staples as participating brands, it says.

"This is not something people in the industry should ignore," says Sargi Mann, exec VP and head of digital strategy and investments at Havas Media Group.

Ad Age reached out for a comment from the brands involved but did not get a response by press time.

"People are excited about this idea and the technology; it's something consumers have been requesting: 'How do I control my data?'" Mann adds. "Data privacy has huge momentum right now and innovations like Killi are certainly a big step … this can take off in a few hours, weeks or months."

As Mann points out, ad blocking was a consumer created solution for bad ads, and when it took off, it caught the entire industry off guard. The notion of consumers controlling which brands can or cannot access their data is perhaps the next evolution, she says.

"Consumers want control of their data and marketers need to be compliant with regulation, but there are zero tools for that," says Neil Sweeney, founder and CEO of Freckle IoT. "When the Cambridge Analytica news hit, everyone did '#DeleteFacebook,' but that was an emotional reaction."

Neil Sweeney, CEO and founder of Freckle IoT Credit: Freckle IoT

Sweeney points to U.S. regulation such as the California Consumer Privacy Act as evidence on regulation's imminent rise in the states.

"All of this regulation is happening and the industry is standing on the sidelines, but it can't drop the U.S. market like some companies did when GDPR hit in the EU," he says. "They just can't afford that."

Sweeney says Killi currently has some 70,000 users since launching May 25, symbolically the same day GDPR went into effect, despite no marketing. That changed this week, as Sweeney began a $5 million campaign aimed at consumer acquisition through platforms such as Apple Search, Facebook, Twitter and other outfits known for driving app installs.

Every transaction also occurs through blockchain, which solves the compliance challenge inherent in regulation such as GDPR or California's Consumer Privacy Act with regards to securing data, the company says. Users, meanwhile, have a full record of who exactly has purchased their data.

Brandon Galindo, an account manager at eMarketer, says he downloaded the Killi app partly because of privacy concerns. "Right off the bat you're asked to insert your identity, phone number, allow persistent location and enable Advertising ID," he says regarding his experience in signing up. "Brands can reach out to you, but it is so much more transparent; I'm the one that is asking for this and I am the one who is allowing you to have my data."

Galindo says he made about 25 cents after signing up for the app – literally pocket change – but Killi says that will change once marketers buy in; a luxury brand such as Paneri, for example, may pay $10 or $20 to target a consumer if the data adds up.

Sweeney says when additional brands come to the table, "the average revenue for the user increases. People might not care if they're getting a dollar, but at $2 some might and there's a network effect in there that we're chasing, where it suddenly because $4, then $6."

But for that to happen, more users need to sign up, and the company is banking hard on the fact that consumers want control of their data.

Lars Feely, a digital media veteran with stints at places such as Google, Ogilvy and Hearts & Science, downloaded Killi while visiting his father, watching TV as Mark Zuckerberg testified on Capitol Hill. "My dad turns to me and asks, 'How much data does Facebook have on me?'" he says. "That whole weekend was 'holy shit' to me because I realized that people start paying attention to how their data is being collected when Zuckerberg gets on stage."

Agencies are keeping tabs

Agencies representing brands that spend billions on marketing each year are keeping tabs on Killi, but they're not buying any data yet.

Donald Williams, chief digital officer at Horizon Media, says, "The reason we gravitated toward Killi is because beyond all the turmoil within the personal data landscape, we think this is where the industry is heading; we've always felt that way being an organization focused on primary research. It is not the worst thing in the world to benefit from [a consumer's] own information they share and marketers who are willing to both observe and pay to get exposure to those prospective clients."

He adds the company was eager to get on board early "to learn whether the theory where the relationship between a marketer and consumer would be strengthened through transparency" is true.

"We thought it was a no brainer," Williams adds. "This is really about getting to the point where we are having an honest conversation about value related to media and a brand's product offering."

Still, Williams says the company has not purchased any data, but instead is keeping tabs on the situation, mainly to see Killi can indeed scale and capture a user base within the millions. The reality is outfits such as LiveRamp or demand-side-platforms can provide the consumer data they need at scale.

Mike Lamar, senior director of biddable investments at Hearts & Science, has taken a similar position to Williams. "This is the way the industry is moving," Lamar says. "Consumers are becoming more aware in how there data is being used."

"It used to be like, 'Sure, use my data, but give me stuff for free,'" he adds. "But now they are becoming more aware that there data is being collected and sold not just once, but multiple times down the chain. They want to have a voice in this, and block all these advertisers. Without a doubt, there's going to be an education of the market, and that's going to happen sooner rather than later."

This article originally appeared in Ad Age August 9th 2018

The CCPA’s Potential Impacts That No One Is Talking About

During the lead-up to the rollout of the EU’s General Data Protection Regulation (GDPR), there was a ton of coverage about the good it might do for consumers and the challenges it would create for the digital marketing ecosystem.

And with the recent signing of the California Consumer Privacy Act(CCPA), effective Jan. 1, 2020, there are articles, blogs and op-eds about every strata of minutiae for this regulation.

But amid all this chatter, I believe some bigger issues are being missed.

The data privacy protection movement may shake the digital marketing ecosystem to its very core in two very specific ways: The in-housing trend will accelerate, and identity’s role as a currency will become clearer.

Marketers will likely bring more functions in-house

Ad agencies and holding companies, already struggling with heavy pressure on their businesses, are going to face new challenges for how they transition their data models toward more compliance and ownership. The CCPA defines personal data more broadly than GDPR and imposes tighter restrictions on data sharing for commercial purposes, including requirements that information pertaining to households and devices be handled in the same way as data covered by GDPR.

We have started to see moves such as IPG’s purchase of Acxiom, which is an attempt to solve the ownership challenge by removing their dependency on third-party providers. Will the original sources of that data pose a significant challenge as they wade through compliance-related issues heading toward the CCPA? Time will tell, but the notion of the data lake, which is so often used as a metaphor for scale and success, may in fact become a data swamp due to its inherent lack of transparency and explicit opt-ins.

We operate in a $600 billion industry with every channel, vendor and brand in the ecosystem dependent on data for its decisioning. With such dependence on third-party data – and even first-party sources – void of explicit opt-ins, many data providers will be unable to transition their models to comply with the CCPA ahead of the deadline. This could wipe out a large portion of the inventory that the industry uses to decision on daily. What then? The ripple effect will be extensive.

Should there be a reduction of data supply in the market, basic economics suggest that the price of data would rise. The pricing trend will look eerily similar to the change in price that we saw in the biddable ecosystem when advertisers moved from buying open exchange inventory to private market inventory, which was more transparent and higher quality but more expensive. If the cost of data increases 20-30%, who will pay for it and how will that affect business models that are already operating on low margins?

Any purchaser of data, including agencies, would be faced with the option of using noncompliant data – not likely, as it is the regulatory equivalent of playing Russian roulette – or accepting the increased data costs and passing this on to clients.

If the latter becomes the prevailing path and the client is in fact paying for the data, expect an acceleration of marketers taking more buying and planning functions in-house. If data is what underpins planning and buying and is the most valuable part of the value chain, why wouldn’t they take this in-house at a faster rate? If you thought the trend of marketing functions moving brand-side was growing, the CCPA will only speed it up.

Identity is the new currency, and too many are holding on to outdated models

It’s often said that data is the new currency of the information age. That’s false. Data is just the manifestation of identity. You don’t buy or store data – you buy and store identity.

GDPR and the CCPA show the new reality: Consumers are the rightful owners of their own data and identity. We often speak about first-party data, but is it really first-party? Real first-party data comes directly from the consumer, not the publisher working on behalf of its amalgamated users. This is not a subtle difference considering the number of models that rely on this amalgamated user base for data.

Too many in the digital marketing ecosystem are not acknowledging this difference – that consumer data isn’t just numbers to be crunched, but rather a collection of individuals’ personal interests, queries, locations and more – or giving it the focus it needs. In doing so, they are illustrating a lack of respect for consumer privacy and therefore exposing themselves to enormous technical and business risk.

Unless companies want to dump markets like the EU to avoid GDPR and the US prior to the CCPA, they’d better come up with a plan. Consumers must be at the core of any plan moving forward. Consumers are not opposed to their data being used on the condition that they have been included in the conversation. Any data strategy in the future must include this narrative.

It’s about time that everybody stopped looking at the trees and started taking notice of the forest that is currently smoking. The cliché has always been that where there’s smoke, there’s fire.

If you are a business today that relies on data at its core, you should be asking yourself today what you would be doing differently in January 2020. If you are not doing that now, it’s time to start or be prepared to face the fire in 16 months.

Original Article appeared in Ad Exchanger

Follow Killi (@killi_io) 

Welcome To Killi, Your Data Revolution

You say you want a revolution, well ya know, we all want to change the world. John Lennon

So here it is: our new product, Killi. And, yeah, I want to change the world with it.

Killi is a consumer-facing mobile application that allows people to opt-in to take back control of their personal data and enter into direct financial contracts with brands and advertisers via the blockchain. Killi directly tackles the issues of personal data breaches and massive corporations getting rich by selling their customers’ data in exchange for, well, nothing. Killi also provides a transparent market solution in the face of growing cries for government regulation around the collection and use of personal data. Killi is owned, conceived and developed by Freckle as there is an important symbiosis between the two business concepts that I will outline in a future post. Today though it’s all about Killi.

Killi is the manifestation of an itch that I couldn’t scratch — an idea that I started poking at around 11 months ago. Any watcher of the signs could see this data privacy wave coming, and I have been paddling like hell to get ahead of it. Recent events such as Cambridge Analytica have simply confirmed my initial beliefs around data control and caused the shift to happen faster than expected.

Four key macro trends came together to make this product essential and of the moment:

1. GDPR and Privacy

2. The Eroding Consumer Value Proposition

3. Security

4. The Indebted Consumer

GDPR and Privacy

For those of you who are not familiar with GDPR (and I hope there are only a few) it is a new privacy framework generated in the EU that prohibits the use of consumer data without first getting an explicit opt-in from the consumer. In addition to the required opt-in, those entities which maintain data need to also allow a user to be forgotten while also revealing specifically how their data will be used. Failure to do so will result in fines of 2–4% of topline revenue. While this law originates in the EU, you would be naive to think that a version of this legislation is not coming to North America. It is arguably already here.

Killi is an application that is entirely controlled by the consumer. The consumer opts in and decides what personal information they would like to share and sell directly to brands. Should the consumer change their mind, they can drop or delete any of the various pieces of data that they elected to add. Any data that is purchased is done so directly between the consumer and the brand that bought it.

We have designed and patented the architecture so that not even Killi has access to the data. Yes — not even Killi. Data remains with the consumer at all times. Not only is Killi data GDPR-compliant, it also reveals the fidelity, or lack thereof, of data that people have been buying today in what is loosely referred to as ‘segments’ (code for modeled, third party, non-compliant data operating in a hashed blackbox). Let’s call that data what it really is — garbage.

The new Killi data model is a private marketplace controlled by the consumer and built on the blockchain. Those other data companies are nothing more than the modern day equivalent of the open exchange, a blind ecosystem of little accountability and a lot of fluff. Good luck with that.

The Eroding Consumer Value Proposition

Are you aware that you, as an individual in North America, are worth approximately $25 per month to Facebook? Are you aware that this open-ended license on your personal data is growing at a rate of 35% a year? Are you aware that there are thousands of other firms using similar data to make billions of dollars a year? Facebook made $40 billion NET last year through its 2.2 billion users. Your take: $0.

Today your identity is worth approximately $25 to $200 a month. The advertising world has been operating on a free input to run its business. Not only is this number real (Facebook publishes this in their filings), it is going up as consumers get wind of what’s going on (ex: Cambridge Analytica) and eventually demand a piece of the action. The companies that benefit from this system will not change this on their own; doing so would just hurt their businesses, and consumers will need to be the catalyst. Nobody can credibly suggest that the consumer should be entitled to all of this revenue, as it does cost money to build and maintain these products, but the notion that companies need to use your data to provide you with free access to their products starts to ring false when, after expenses, they still have amassed $40 billion from your personal information.

This isn’t an attack on Facebook et al. but highlights the need to change the ecosystem as a whole. Helped along by the new government regulations, Killi is a steward of the consumer’s data and educates them on how their data is being used and what it is worth. The end result — is a more involved, knowledgeable consumer and a more balanced ecosystem where the consumer has a choice.

Security

The Equifax data hack in the United States was a seminal moment in data security. Equifax gave up 146 million profiles of consumers, including social insurance numbers, addresses, dates of birth, etc., in its data breach. Not to be outdone, Yahoo coughed up over 3 billion profiles of its users when it was targeted — the single largest data breach ever. It has become regular news to see reported weekly hacks — Intercontinental Hotels Group, Saks, FedEx, Arby’s, Verifone, and more. In 2017, there was a 45% increase in data breaches versus 2016. This trend is not slowing anytime soon, especially when you consider that the value of data is only increasing.

The takeaway? The notion of storing data in a centralized manner is over. If you ignore the facts and store sensitive data in a central location, you deserve to be hacked. The only reason you have not yet been hacked yet is because your data is not as valuable as the data of others. Don’t feel bad… they will get to you eventually.

The Indebted Consumer

As per the Wall Street Journal, citing Federal Reserve data, U.S. consumers are paying approximately 5.8% of their disposable personal income to stay current on their non-mortgage debts. This figure is at the highest level since the end of 2008. Additionally, in Q4 2017 consumer debt rose 5.5% to $3.8 trillion — the highest amount ever recorded since the Federal Reserve Bank of NY started tracking it in 1999. Last, student debt in the USA just hit $1.5T (yes..T) exceeding both credit card ($977B) and auto debt ($1.1T).

How about Canada, one of the more stable banking environments in the world? Here consumers are drowning. Canadian household credit totaled a record $2.13 trillion at the end of February, roughly doubling since 2006, according to the central bank. Driving this is residential mortgages accounting for 72% of this total. In a report put forward by MNP Financial, over one-third of mortgages are up for renewal within 1 year, and one-third of respondents have stated that the rising interest rates could possibly push them toward bankruptcy. Forty-seven percent of the respondents also said they do not believe they’ll be able to cover all living and family expenses in the next 12 months without going into further debt. And did I mention that the government has doubled its interest rate since March of last year?

At some point — this will get ugly.

The consumer has never been in more need of cash since maybe the Depression; yet there is a honey pot of money, derived from their identity being used to pay corporate bonuses instead of consumers’ bills? Want to see a primal reaction? Go tell your neighbor that you have been stealing $25-$200 from them every month for the past 10 years and see what happens. The Cambridge Analytica story was an interesting one as it exposed how data was being used, but what it never covered was the amount of money the data is worth. When the penny drops and the consumer gets wise to the value of their identity being sold by business, the ferocity of this data revolution will rival #ArabSpring, #BlackLivesMatter, #MeToo and #OccupyWallStreet.

Putting Money Back in the Consumer’s Pocket

The rise of the shared economy has created the foundation for Killi. Consumers are increasingly open to participating in the “gig” economy and operating a “side hustle” to get back into the black. People drive for Uber and rent for Airbnb to make extra money. Intuitively, these people, and many others, should be interested in controlling and monetizing their own data if the process was made frictionless. This equates to a massive redistribution of control from the corporation to the individual.

This is where this product gets exciting for me. Yes, Killi can solve issues around privacy and data, but if we get this right, this could be the single largest redistribution of wealth from the corporation to the consumer that the world has ever seen. Sound ridiculous? Let’s unpack it. In 2017, the largest donation in the world was $4.6 billion from the Bill & Melinda Gates Foundation, an extraordinary gift of generosity. However, when compared to the value of data used by corporations, the value of this gift is tiny. If Facebook gave every one of its members $0.50 a month for a year, the redistribution of wealth would be 3x that given of Bill and Melinda Gates in 2017… and that’s only one company.

Let’s Change the World

Many of us create products, but very few of them extend beyond a business vertical and even fewer impact every person. I believe this product actually helps people. Consumers, brands, platforms and politicians can all support this. Could Killi redistribute $1 billion of money back to the everyday consumer? Yes. I find this tremendously exciting, and one that I am hoping that millions of consumers and brands around the world will help us accomplish.

John Lennon tried to start a revolution from his bed; let’s start one in our pocket.

#yourdatarevolution

Neil

Join Killi’s data revolution: https://www.killi.io/

Available on iOS HERE and Android HERE

Why All Local Tech Vendors Need Offline Attribution in 2018

Last year I wrote here my prediction that in 2017 the advertising industry would increase their overall focus on in-store attribution. While this shift has happened, there have also been a number of events over the past 12 months that provide clues as to where the industry is headed in 2018.  First though, I’d like to quickly revisit last year’s piece.

“Measurement will not come from the vendor itself but rather from third party measurement firms decoupled both from the buying and selling of advertising and from the platforms on which the media runs”

Not quite.  While this will be the eventual end state, there is one more phase before we get there. In much the same way as all vendors support a viewability standard, we will see an acceleration of platforms supporting offline attribution; in 2018 all vendors must add an offline attribution metric to their offering. With Google and Facebook offering their own standalone solutions (to measure only their own media) and with Snap’s 2017 purchase of Placed, anyone in the market of competing for share, will need, at minimum, the same tools as the next guy.  As a result, look for all others in the social space to add an offline attribution solution in 2018 – the real question is will they build it or buy it?

“I believe that by this time next year the majority of mobile campaigns will contain an attribution metric”

Sort of.  But also maybe beside the point. Mobile is definitely the channel that has, on a percentage basis, led the charge around offline attribution due to its symmetry of matching the mobile IDs of individuals seen in a location to those mobile IDs captured in the bidstream, but offline attribution transcends all channels including desktop, mobile, social, search, TV and OOH (all verticals supported at Freckle btw). Mobile impressions alone do not represent a proxy of offline attribution for all of your media and fail to account for the media exposure that all other channels are also providing.

So what’s the prediction? There are two. The first is, as brands pursue offline attribution available from a single channel, they will expand horizontally by adding additional media, the most obvious being mobile and desktop, otherwise known as cross device offline attribution.  Accelerating this trend is the second prediction – that all DSPs, TV providers, Out of Home companies, etc. will add an offline solution (home baked or partnered) in 2018.  For the platforms who are in front of this trend, this will be a tactic used to attract media dollars from those brands who have embraced single channel attribution and are looking to expand into other channels.  The pitch will go something like this:

“we measure offline attribution, competitor X does not, so work with us”

OR

“Spend media dollars with us and we will add offline attribution as value ad” (#biased). 

This tactic will work initially but by the end of 2018 as everyone adopts this strategy, a platform’s ability to differentiate based on a stand alone attribution solution will be similar to differentiating on your ability to support viewability – zero.  Anyone who is considering building their own offline attribution solution should take pause here – if the market is moving to an agnostic measurement provider do you want to put the time and money into building your own solution to support your own media?

The above segues into what I believe will be the larger trend of 2018 – the move towards multi-touch attribution (MTA), which is the evaluation by a third party of who (which ad and which medium) is actually responsible for a store visit.  This is a very complex data science problem, and one that will separate the real measurement firms in the space from those who are only measurement firms when they get kicked off the media buy.

The move to MTA is where things get interesting.  If you subscribe to the notion that brands will embrace MTA (and you should), then who has access to all of the signals from each of their media?  The agencies sure… but also increasingly the brands themselves.  As brands continue to bring advertising components in-house, the by-product of doing so provides them with the ingredients (data) to build solutions to add more intelligence on top of this data.   As brands continue to cut ‘largely ineffective ads’  and look for visibility and proof around decisions, agencies will need to accelerate their positions around MTA or brands will build these solutions in-house.  If successful, the brands will have the data , the measurement and the predictive decision-making in-house – leaving what exactly for agencies?  Not a lot.

Neil Sweeney is the founder and CEO of Freckle IoT, a first party data company that solves offline attribution for brands and agencies.

Originally published: http://streetfightmag.com/2018/01/03/why-all-local-tech-vendors-need-to-offer-attribution-in-2018/

Every single online KPI goes away with better (offline) attribution

It goes without saying that smartphones have radically changed the marketing landscape. One of those changes is the capacity to determine whether and how digital ads are affecting foot traffic into stores. Location data collected from mobile devices also offer a range of other benefits: audience and operational insights, competitive benchmarking and more.

Yet, despite these capabilities, location data and offline attribution are still not widely utilized. I recently talked with Neil Sweeney, founder and CEO at Freckle IOT about the current state of location intelligence, offline attribution and where things are headed in the near future.

Greg Sterling: How widely adopted is offline attribution today?

Neil Sweeney: I think it is maybe 5 percent [of brands and retailers] at most. Those that are adopting offline attribution, if they are, are doing so using a standalone channel (i.e., Google) and not holistically across the board.

GS: What are some of the other current use cases you’re seeing for location data, beyond offline attribution?

NS: Audits are probably the second largest. If you are a retailer and want to know who is in your location — irrespective of media — on Monday afternoon, in a specific store, how do you measure this?

In short, you don’t. Retailers are in hand-to-hand combat right now and are in desperate need of this real-time data so they can make more intelligent decisions.

Another thing I am seeing is location data being used as a baseline in the creation of segments, which is a completely intellectually bankrupt model. Segments are the equivalent of branding, a feel-good tactic with no science behind it. They won’t succeed due to their inability to determine their overall effectiveness in driving a sale (that is what attribution does).

GS: Which marketing channels are currently most aligned with offline attribution?

NS: Digital by far the most: desktop and mobile. This makes sense, as those in this vertical are the most data- and measurement-savvy and have experience working with DMPs and third-party measurement firms, such as viewability vendors, etc.

As you get down the tunnel of traditional media, your implementation tends to fall off. Outdoor is interesting. The industry has been buying a non-real-time, self-reported number for way too long, and this is ripe for disruption.

Search is also starting to take form due to the overall spend levels going into search, but its challenge is the dominance of one firm.

Terrestrial radio and TV are the hardest, but both of these mediums are moving to an OS model where that AM signal in your car will be replaced by an app that will allow for attribution to take form. The same goes for TV.

In short: All channels are moving toward offline attribution but at different speeds. They will all end up in the same spot. When they all embrace attribution down each channel, is when it gets sexy; that is when the data science really needs to kick in. This is the part that I am excited about.

GS: How do you see real-world attribution impacting online KPIs and metrics (e.g., clicks, engagement, etc.)? Do they go away? Do they exist side-by-side?

NS: First of all, I am biased. I think every single one of them goes away. Both online and offline attribution are, in my opinion, the base level metric from which all media will be based in the future. The click is just dumb, viewability has no basis as a proxy for action, and fraud is a concept that can be solved if you got away from clicks and actually focused on attribution.

The industry is perpetuating its own issues by embracing the wrong measurement metrics while spending way too much time on silly concepts that provide no incremental value (e.g., header tag).

As a brand, you care about one thing only: selling product. That product is bought either online or in a store. The market will increasingly move towards a performance model based on attribution. If you can’t get my customer to buy a product, online or offline, then I am not paying for it.

GS: What are the current limitations of offline attribution as you see them?

NS: For sure, it is knowledge as a starting point — people are really just being exposed to it and are now having to navigate new waters. This will rectify itself over time. But what is and what is not possible is what brands are dealing with.

Matching in digital is an issue for sure. When you match cookie to ID, you will lose some fidelity and this is for sure a challenge. It is getting better but isn’t perfect. Scale is a bit of an issue as well, but this also speaks to the knowledge concept. When looking at attribution, you must understand that it is really a combination of scale + fidelity + matching.

GS: Do you see problems with focusing on a single channel (re attribution)? Does that obscure some larger “reality” of the consumer journey?

NS: Yes. It is not fair to say it is a “problem,” rather I would say it is a starting point. It is not fair to suggest that measuring just mobile impressions represents a proxy for attribution, especially when this only represents <10 percent of your total impressions; but it is definitely better than zero percent.

I encourage brands and agencies to start in whatever channel is the easiest and then integrate horizontally. Every additional input and channel you add makes your model better. In time you will eventually get all inputs and all channels.

Congratulations, you now are in multi-touch and this is 100 percent where the entire industry is going. The agencies and brands that embrace this will be so far ahead of everyone else, it will be ridiculous.

GS: Do you foresee a time when offline attribution simply becomes part of a larger multi-touch attribution scenario? If so, what will it take to get there and over what time frame?

NS: Yes, offline attribution is a precursor and a necessary step for MTA.

It will take 16 months. In 2018, every major platform will have a “solution,” the majority of which will not be home-baked. The DMPs will move into this space, as it is a massive gap in their toolkit. It will be used as a weapon against the walled gardens, which will try to sell their own solutions.

The comparable would be viewability divided by 2 (Moore’s law). If it took viewability five years to roll out, it will take half the time for attribution. You’re are not learning a new “habit,” rather a new methodology.

GS: How do machine learning and AI play into offline attribution in the near term?

NS: If you are not doing this now, you are dead. Anyone whose business is location is the equal to someone who is saying their business is flour. Flour you can get in any grocery store; it’s a necessary ingredient to make something else. ML/AI use “flour” to make their cakes, cookies and tarts; without it you just have flour. Good luck with that.

GS: Location data in the programmatic universe is often criticized as being sloppy, fraudulent or inaccurate. Do you see that changing? What will change it?

NS: In the short term, it won’t really change. Buying location data in a DSP today is equivalent to driving a convertible down Las Vegas Boulevard with $150K in loose cash in the back seat: [throwing] away your money. What is going to change is a move away from the banner, not the move to better location. It’s way too hard.

The way apps surface location is so different by app, it would be impossible to police perfectly. This isn’t to suggest it is fraud (some is, but not all of it) but programmatic has bigger issues around outright fraud and domain spoofing; better location is way down the list of things to fix.

GS: What do you see as the future for beacons and other in-store positioning and location technologies?

NS: I think I was doing beacons really before anyone else (hence the SDK at Freckle). There is some value there, but there are also some limitations — namely the reliance on an SDK.

The SDK is not a sustainable technology moving forward. So, as a consequence, that will have an impact on beacons. In-store positioning is tricky, as it is siloed. Retailers want to know what is going on in their stores, but they also want to know what is going on in competitors’ stores. You can’t solve that with beacons.

Where do I think it is going? Various other systems including your car, smart home devices, etc., will eventually connect to the CPU in your pocket (and your identity) to power everything around you — including what is happening in store.

Originally published: https://martechtoday.com/freckle-ceo-every-single-online-kpi-goes-away-better-offline-attribution-209443

ABOUT THE AUTHOR

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.

21st Century Branding: Is it a Hoax?

I smirk when anyone tells me that "branding" is the core of any campaign. Branding is to measurement what superstition is to science. You advertise to do one thing: move product — period. That product is sold either online or offline. Online measurement, while not perfect, is evolving. Offline, up until recently, not so much.

In 2017, advertisers spent $500-plus billion on campaigns that were intended to drive consumers in-store. After all, 85 percent of action still takes place in a location and, yet, measuring the effectiveness of campaigns and vendors in driving consumers into a store is still a black hole of unsubstantiated claims.

As a brand marketer, spending billions of dollars each year on advertising, wouldn’t you want to know if a customer did indeed go to your store as a result of those ads? And, if so, which vendor or channel was responsible?

Keeping Up

While data-driven marketing has been a major advantage for measurement, there are still areas, like offline and multitouch attribution, that haven't evolved at the pace they should given the climate of brick-and-mortar. Through these gaps we're missing the most important metric of all: the effectiveness of the ad spend.

Related story: How to Establish Consumer Confidence Throughout the Online Sales Cycle

To put this into context, a QSR restaurant, for example, spends millions of dollars a year in various channels, across various vendors with the intention of selling more hamburgers. Retailers, more clothes. An auto company, more cars. Yet, after all of this spend, how many more cars, burgers or clothes did they sell? We have no idea.

While brands will spend millions of dollars this year to create advertising paths for online consumers to become offline, most are still without the ability to determine if their campaigns are driving the consumer to these locations. In this highly competitive environment, knowing how, why and when consumers are lured into stores is no longer a luxury; it's imperative for stores to survive the brick-and-mortar evolution.

The Keys to the Kingdom

Mobile offers us the unparalleled ability to know who is where by virtue of the device in our pocket. This information allows brand marketers to target customers close to their stores and, more importantly, to influence those customers to actually go inside. The piece that's often overlooked, and the reason why mobile is the key to ALL media, is not that mobile is better at getting people into stores (open to debate), but rather that you can use mobile, in all of its variations, to measure the effectiveness of advertising within ALL of your media spend. Mobile is the only device that can tie ALL channels (including desktop, search, TV, radio and social) back to a location metric.

Survive or Thrive?

So, who will thrive in the emerging direct brand economy? While established brands are struggling with growth, make no mistake that the customized, data-enriched, consumer-centric brands are indeed thriving. In a world where not a day goes by without an article discussing fraud, viewability, bots, waste, etc., proving your success is essential to maintaining the confidence of everyone in the ecosystem.

As the media landscape continues to evolve, marketers must urgently make ample use of their marketing data. Aligning their organizational strategies around that data will help brands, publishers and their partners compete in a world with agile, tech-focused new market entrants and adapt their businesses to thrive in the 21st century.

Originally published: http://www.mytotalretail.com/article/21st-century-branding-is-it-a-hoax/

Neil Sweeney is the CEO of Freckle IoT, a provider of multitouch offline attribution.  

FRECKLE IOT PARTNERS WITH LIVERAMP TO BRING IN-STORE 1ST PARTY DATA SEGMENTS TO THE MARKETING ECOSYSTEM

The partnership allows for Freckle’s unique 1st party segments to now be available to advertisers via LiveRamp’s highly distributed platform.

Freckle IoT, a first-party data company and Global leader in offline in store attribution, today announced a partnership with LiveRamp™, an Acxiom® company (NASDAQ: ACXM) and leading provider of omnichannel identity resolution. Freckle IoT will make its first-party custom segments available via LiveRamp’s IdentityLink ™ solution.

Freckle IoT operates an installed base of over 50 million mobile devices worldwide, providing deterministic, in-store location data which is captured directly from opted-in users’ mobile phones, in real time. This direct integration differentiates Freckle from location providers that primarily rely on probabilistic bid-stream data, which has lower accuracy.

Advertisers interested in custom individual in-store segments of the top 25 retailers from Freckle can access these segments from LiveRamp’s IdentityLink data store feature via many leading demand-side platforms (DSP’s) and other media platforms that they use today. Additional custom segments are prepared within 24 hours and distributed via IdentityLink to the media platform of choice.

“There has been an enormous increase in client demand for unique data sets. Freckle IoT’s ability to provide a deterministic in-store audience, at scale, is rare in today’s environment,” said LiveRamp Head of Data Partnerships, Luke McGuiness. “This level of accuracy and granularity enables our clients to get greater insight into their customers and to make smarter decisions with their targeting. This is at the core of what we are trying to provide at LiveRamp, and we are happy to partner with Freckle IoT on this initiative.”

“Providing LiveRamp customers with access to Freckle’s unique first-party in-store data allows clients to prove with 100% precision that a consumer has visited a specific location, something that up until now was challenging to do,” says Neil Sweeney, founder and CEO of Freckle IoT. “As the industry continues to look for unique data sources, having access to a source of first-party data that is decoupled from the sale of media is ultimately what advertisers want. We are excited to partner with LiveRamp to move the industry closer to this inevitable goal.”

A Look Ahead: The Rise Of Data, Consolidation And Privacy

In today’s unpredictable environment, the unconscious belief that the current state’s pace of change will reflect the future state is now more inaccurate than ever.

Change is not only constant, but accelerating at a pace that is hard for most to comprehend in their day to day. Over the past five-plus years, we have seen programmatic move from a nascent, long-tail methodology to the dominant approach being used across all media.

Along the way we have wiggled, pivoted and innovated in ways that have arguably made a bigger impact on the media world than ever before. I see three trends that will significantly shape the next five years:

Mass Consolidation And Retraction

The word programmatic has dominated these pages for the past five years, and there have been enormous improvements in how the industry approaches it. We have moved from the open exchange to a more balanced approach which includes private marketplaces, programmatic direct and a futures model of automated guaranteed. At the same time, we have increased fraud detection, made great strides in viewability and leveled the playing field via the header tag.

So, what’s next? I believe it will be consolidation. Unfortunately, there are simply too many undifferentiated platforms currently in the space, and in reality, the winners have already been determined. The ad tech space has now evolved into a share game where the big will get bigger and the small will continue to get smaller – either through market contraction or consolidation. Add into the mix the acquirer’s need for efficiency and the picture isn’t pretty.

After all of the banter over the last few years about the overcomplexity of the Lumascape, this will be the year that the congestion will begin to contract exponentially – with the unfortunate consequence of a lot of industry people out of work. This will accelerate in Q1 as many in the space are expecting Q4 to save their year. It won’t, which will force a long-overdue recalibration in January. This shedding has already started but will accelerate in Q1 and continue throughout the year.

Read more at Adexchanger

Beacon Companies Pivot Toward Attribution As Acquirers Come A-Knocking

Beacons started out as a solution in search of a problem. And now some beacon providers are companies in search of a home.

On Monday, mobile ad platform The Mobile Majority acquired geolocation beacon company Gimbal, a spinoff of Qualcomm.

In June, location data company Verve Mobile bought beacon provider Roximity almost exactly one year after Verve’s acquisition of beacon startup Fosbury.

Gimbal, which collects consumer location data and runs and analyzes proximity and location-based campaigns, has an SDK footprint of 160 million and around 100,000 active beacons in its network. The Mobile Majority declined to share the deal price.

“It makes sense for people to start buying up beacon companies, especially if they do analytics and we’re not just talking about their hardware,” said Andre Kindness, a principal analyst at Forrester. “Like all technology, it’s probably going to be the 80/20 rule – 80% will get acquired and 20% will just go out of business.”

There are more than 500 proximity and beacon companies, each with their own network of hardware deployments. Read more at Adexchanger