More quick links

Here is some additional detail on Tom Lowe, the film maker who spoke directly to the Pirate Bay forums, as I wrote here. I was rudely offended by the reality of the censorship of TPB, not because I wanted to download the movie, but because I wanted to see how the discussion would play out. It looks like I wasn’t the only one with curiosity. I’m glad to say that John Biggs of Techcrunch caught up with Tom and asked him directly about the experience. The article is here.

Here is the Vimeo preview of the film in question, which in fact is actually quite stunning.

 

Score one for Wales. We can’t seem to get the rugby together so instead I’m going to shout proudly about our advances in the field of barcoding fauna. For real.

We present the first national DNA barcode resource that covers the native flowering plants and conifers for the nation of Wales (1143 species)

 

More from Scotland on ecological innovations in energy. Props to Scottish Power.

A 30-meter- turbine anchored to the seafloor off the Scottish coast is proving that tidal farms are a turn closer to being a viable renewable energy source.

 

Finally a wonderful youtube clip about chocolate. Specifically this is about the Mast Brothers, a couple of hipsters in Brooklyn who make their own chocolate (from beans to wrapping). I first spotted these guys over a year ago (logged here). Reading about their intentions to only use beans that they had had delivered from South America by sailboat, I was enamoured but sceptical. It seems I should not have been a sceptic. Here is an update.

 

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Mobile advertising: a contrarian view

In the year 2000 I was hired (agency side) to help IBM with their direct response advertising for Thinkpads, their laptops range. It was a very valuable engagement giving me exposure not only to one of the world’s foremost brands but also I was in a great place to see what was happening with digital advertising.

As a direct response specialist I figured that I would find likeminded souls in the digital team at the agency. Digital was still pretty nascent back then, but with its promise of ever greater measurability the one thing I felt sure of was that it was, and would be, a predominantly direct response medium.

Not one of my digital colleagues agreed. No, from their perspective the glittering brand budgets were still in reach. They weren’t going to jump out of the Rolls Royce into the Ford Escort. So, we argued about it.

It won’t surprise anyone to hear that those arguments never did reach a conclusive end. How could they. On the one hand we had arguments of adaptability and relevance and suitability, on the other many many clients were throwing brand budgets at digital teams. Ho hum.

Remember this was around the time that McDonald’s agency in the US proudly announced that they were going to run banner advertising with the interactivity turned off. Yes, that’s right. They ran digital advertising and made it impossible to click through. I laughed, my colleagues didn’t.

My central argument was one of size. I looked at the mediums that traditionally had been seen as the kings of building brands. TV, outdoor, large format press, cinema.

Effective brand ads were big. The bigger the better. They dominated the viewing experience and they didn’t, where possible, share that viewing experience with anything (think of the impact of a full page press ad versus a small 25×4 in the corner). TV was exclusive, so was cinema, the content and the ads were delivered separately of each other so that there was no conflict of attention. Outdoor formats always trended to bigger.

In contrast the banners and buttons of the digital world were fighting for every nano-second of exposure. Fighting against competitors positions on the same page, and fighting against the actual content that the consumer had chosen to consume. And they were tiny.

Popups came and went, advertisers eventually realising that pissing off your prospective customers really did not build strong brand empathy. Full page takeovers went the same way.

Today, even though some would still disagree, it is clear that the digital channel is mostly treated as a direct response channel. Agencies have started to call their digital teams “performance” teams, tech vendors are pushing ever more insidious tracking and attribution solutions (although they are almost always flawed but that’s a topic for a different day) and data collection is becoming ever more sophisticated / creepy to fuel ever more specific targeting.

That all sounds like right message, to the right person at the right time to me!

And now we have mobile. With even smaller spaces available for advertising.

Honestly, you’d have to think that the advertising community has undergone a collective group hallucination in order to make sense of some of the rhetoric you hear in regards to the future of mobile advertising.

It’s all based on a frivolous equivalency between where consumers will be spending their time, and where it is effective to advertise to them.

There is no doubt that the mobile platform will be (already is) huge in capturing the time and attention of today’s citizens. The coming dominance of the mobile consumer experience is not really up for debate. There will, therefore, be a lot of marketing that incorporates mobile, as commercial entities will have little choice but to find ways to engage users on these platforms, because that is where the eyeballs will be. But marketing is not advertising.

A content strategy, for example is plainly a marketing initiative, not an advertising one. If anything it is closer to PR than advertising.

Now, you might run some ads to tell people about the great content you have produced, but the heart of the campaign is the content itself. And, by the way, it’s highly unlikely that a good place to run those ads would be on the customers’ mobiles. Almost any other channel is likely to deliver better results. Think of all those ‘find us on Facebook’ TV ads, for example. They aren’t an accident.

Ok, what about the high street? What about Google and search?

Well there is some potential here. Certainly search will have a role in the mobile experience. As more and more individuals primary access to the internet is through their phones, then we will see the volumes of search queries move to the mobile platform. This makes sense. There is nothing intrinsic about the mobile platform that reduces the effectiveness of the proxy intent that is a Google search. I’m even willing to agree that there may be new classes of search volumes created by individuals searching for information on the hoof. Here are a few; price comparison in store, where’s the nearest coffee shop, translation, resolving arguments, why am I in a traffic jam (although you might be better advised to use twitter for that last one)?

But what about the ads that will send people into a store or a restaurant, when they would not have done so otherwise? That sounds seductive doesn’t it? Geo location gives advertisers an unprecedented level of relevant targeting to do this, surely that’s a slam dunk?

No, it isn’t. There are 2 big problems.

  1. We will not continue to happily disregard the privacy concerns that are raised by the current data collection and data aggregation practices that are fuelling today’s crop of free web services. If you have any doubts about this (and let’s be honest it is reasonable that you do as there is very little evidence that people care) then imagine what you would advise an 8 year old when they get their first mobile device. You might sign your own privacy away, I really hope you will protect your children’s. As the more tech savvy generations become parents the inherent creepiness of overt / covert tracking will become unpalatable.
  2. Do not track. The law is going to catch up eventually. We are seeing the first threads of the do not track movement today, wise heads in governance and law are making waves. Furthermore there will be a debacle at some stage. A grave injustice will occur and the whole game will be up, the advertisers will have to concede to the legislation.

There is a whole new world coming to replace today’s push model. I’ve written about it previously, it’s the intention economy. A model where we are willing to share our data with commercial organisations because we will have rebalanced the power to own and control what is done with our data. In turn that will enable real relationships that are in the control of the customer not the vendor. At that point using the data won’t be creepy because we will have sanctioned it and it will be to the mutual benefit of customer and vendor.

Now, I really can hear some of you saying look at the data Mr Lioninasidecar, mobile advertising is growing, it’s going to be huge, what the hell are you on about!

And in regards to the data its true it is growing, and it is likely to keep growing for quite a few years yet too. But that doesn’t mean that it should be growing, and it doesn’t mean that it is the correct place for those advertising / marketing dollars to be spent.

But how could that happen? How could an industry en masse keep pumping money into strange places, that aren’t delivering value?

Well, someone managed to convince a multinational to run banner ads without the click through functionality in place (perhaps the most ridiculous thing ever) and I can almost guarantee that a part of the argument involved the delicious dulcet temptation of the phrase “it will be a media first”

This time around it will be a combination of the lure of media firsts, the fact that everyone else is doing it (which takes some bravery to ignore) and the fact that there are a bunch of big businesses (media agencies) that can’t really afford to see their market contract. Eyeballs are what a media agency buys for advertisers. They are, therefore, massively incentivised to keep a paradigm in place that buys eyeballs instead of earning them through quality content. I’ve spent 12 years as a media agency man, so this is not an anti-advertising screed. It is, however, an honest assessment of where we are going to find ourselves.

This situation is simply circumstantial, no-one is to blame, I’m even comfortable with the fact that there will be an artificial extension, beyond utility, of the mobile advertising paradigm, it’s what humans do. We never change direction until forced. The older more ingrained value of brand advertising will be safe. Discovery and engagement are tools that will serve advertisers well for some time yet. The casualty will be the side of marketing that relies on data, direct marketing. And as far as mobile advertising goes, that’s all its got. Bye bye.


First they came for the Socialists, and I did not speak out — Because I was not a Socialist.

I can’t begin to tell you how disgusted this makes me feel.

I don’t pirate, I really don’t, as crazy as that seems. Furthermore from informal surveys of my work colleagues I also know that I am massively in the minority. I still buy CD’s, even my legal, free NIN download sits as a lonely folder on my desktop, never listened to. I don’t own an MP3 player and haven’t loaded any music onto my smartphone.

Anyone who has read this blog will understand, however, that I have fairly strong views on the conflict between the existing incumbent content industries approach to piracy and the reality of the new marketplace. The supply demand relationship has changed and unless we hamstring computing and computers, on a ubiquitous basis (which is such a lunatic idea I actually have faith that we will be able to head that one off at the pass) the old business models are dead.

Today, for the first time ever I tried to go to the Pirate Bay. It was in response to this post on Reddit.

The makers of the movie also contribute to the Reddit thread, their views are worth reading, please do.

I was met with the image at the top of this post.

I actually feel as if I need to take a shower it makes me feel so grubby. It’s as if I have been transported to some strange country that has no relation to the great nation I believed I belonged to. A nation that once defended the common man against the march of the fascist and the immoral. No longer.

I knew that this blocking had occurred as I, clearly, keep abreast of developments in this space. That still didn’t prepare me for actually finding censored access in reality.

So, here we are modern Britain. In order to protect the defunct business models of a dinosaur industry we have lost the rights that many have died to protect, to free speech and free association.

Here is the rub. I had no desire to download that movie. I have still got 23 DVD’s still in plastic wrappers, stacked up against my lounge wall (although that will be 22 later tonight after I have watched the Senna documentary), more than enough AV entertainment to keep me happy probably for the rest of this year.

Anyone who does want to download the movie, however, still can and still will. The thread that followed, on Reddit, had many other links where that could be achieved without any need for technical expertise.

I, however, wanted to see the maker of that movie interacting with the Pirate Bay denizens. I wanted to see if he would be received politely, or whether they would be angry and offensive. I wanted to know if they would actually go and buy the movie as a result of his posting there.

But I’m not allowed to. And that‘s a disgrace.

 

Then they came for me–and there was no one left to speak for me – Martin Niemoller

Am I being a little dramatic using the Niemoller quote in this context? For sure. Nonetheless, It still makes a good point. It’s time to take an interest in these issues regardless of whether or not you want to pirate content.

I am not a pirate, but I’m not an idiot either.


Time to revisit Enron: ask why, asshole.

I’ve just finished watching ‘the smartest guys in the room’ a documentary which goes through the detail of exactly what happened at Enron before it went bust. I’m surprised on so many levels, but perhaps mostly by how little I had understood of the scandal’s DNA, from the coverage at the time and since.

In my mind it had been an accounting scandal, the lunacy of mark to market combined with Arthur Anderson’s complicity and some market rigging of the Californian electricity markets. It was more than that though. Enron’s position as the poster boy of free market ideology (something I had missed) was a causal factor, not an accidental correlation as many seem to believe.

The scandal is also a testament to that ultimate human frailty, the happy decision to proceed with stupidity, largely because someone told us to, and everyone else was.

There is also a wider lesson here, something that resonates with the challenges that we currently face.

Those challenges can be stated as a question; how should we structure capitalism today?

To help answer that question it is instructive to ask exactly what Jeff Skilling did to get to the top? Jeff was an ideas man. The idea he introduced was this.

When faced with the difficulty of making sufficient returns on the production, sale and distribution of power (originally the market Enron played in was gas, electricity came later) Skilling took the company in a different direction. They became traders in the energy markets. This is easy to misunderstand because, of course, they always were trading in the energy markets.

The indication here is that we are talking of 2 different meanings of the words trader / trading.

Enron originally was a trader in the sense that they sourced, extracted and distributed the raw materials (gas) of energy production. They pulled it out of the ground and sold it.

Skilling added a 2nd, but wildly different, sense of the word trader. He turned them into a company that traded power in markets. Enron traders became traders in the sense that the stock exchange floor is populated by traders.

To be clear. They reduced the focus on creating a product and selling it to their, and their customers advantage, and became a drain instead, making money as a by-product of trades of energy commodities.

They became a financial company, instead of a company that makes products.

It is past time that this approach to wealth creation is removed from the ascendant position it currently occupies as the primary and most significant driver of western economies. Effecting this change is one of the most significant challenges facing modern capitalism.

We don’t need to lose the bankers. We don’t need the bankers to be put in the poor house. We just need to get them into a support role for production capital, rather than expending their energy in endless schemes to create new money without any real underpinning wealth and value. The zero sum game needs to stop, and it needs to stop NOW.

Analyst: You are the only financial institution that can’t produce a balance sheet or cash flow statement with their earnings…
Jeffrey Skilling: You, you, you… Well, uh… thank you very much. We appreciate it… asshole.

That quote was from a public earnings call with analysts. Skilling, the CEO, could not explain how Enron made money and publicly called the analyst an asshole for asking a very reasonable question. That is probably worth repeating.

The CEO could not explain how they made money and publicly called the analyst an asshole for asking a very reasonable question.

Enron was a black box. In one end went desires, out the other end came a set of what we now know were fraudulent earnings statements. And that’s before we even start to examine the horrendous rigging of the Californian electricity market and the actions of the CFO in hiding losses.

The documentary uncovered tapes of the Enron traders talking about the market manipulations in California.

The concept of arbitrages, as used here, is quite vital to the situation. Essentially California had been experimenting with deregulation of the energy markets. Arbitrage was the process whereby loopholes were found, within the remaining regulations, and exploited. Even though this seemed legal to the traders, on paper, it is clear how they actually viewed these practices.

“He just f—s California,” says one Enron employee. “He steals money from California to the tune of about a million.”

“Will you rephrase that?” asks a second employee.

“OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day,” replies the first.

There is evidence that they asked producers to turn off production to create artificial supply shortages resulting in artificial increases in price.

“If you took down the steamer, how long would it take to get it back up?” an Enron worker is heard saying.

“Oh, it’s not something you want to just be turning on and off every hour. Let’s put it that way,” another says.

“Well, why don’t you just go ahead and shut her down.”

And then there are the comments that show just how little concern these people had for the impact of what they were doing, which, for what it is worth, and in my opinion, was behaving like a pack of feral little shits.

“They’re f——g taking all the money back from you guys?” complains an Enron employee on the tapes. “All the money you guys stole from those poor grandmothers in California?”

“Yeah, grandma Millie, man”

“Yeah, now she wants her f——g money back for all the power you’ve charged right up, jammed right up her a—— for f——g $250 a megawatt hour.”

Free market ideology and deregulation have been the corner stone of western economic policies since the days of Thatcher and Reagan. The economic theories of Carlota Perez show that these policies, that favour finance capital over production capital do indeed have a time and a place. I am not discounting their use in appropriate circumstances, but for now, in this part of the cycles their day is done and we need to urgently move on. If nothing else surely the Enron debacle proves such a point.

The last time we saw this changeover of ascendancy between finance and production capital was after the depression of the 1930’s. It took 13 years and a world war to complete. Let’s not be so stupid this time too.