 
## Chasing String in the Digital Era

### by Jaffer Ali

### Smashwords Edition

### Copyright 2013 Jaffer Ali

## Contents

Endorsements

Dedication

Preface

Introduction

Chapter 1: Politics and Media

Behold, Here Comes Tweedle Dum and Tweedle Dee

The Demise Of Mainstream Media, One Constituency At A Time

DOJ Asks Court to Keep GOOGLE-NSA Partnership Secret

The Decline of the MSM

What Middle East Uprisings Say About Online Marketing

The Egyptian Revolution, Media and the Internet

Is Media Privatization The New Trend?

Chapter 2: On Technology

Our Faustian Bargain

Has Google's Empire Passed Its Zenith?

Can Eric Schmidt and Marketers Predict Human Behavior?

First, Do No Harm: How Our Need to Intervene Ruins Everything

From Simulated Life To Simulated Marketing

Will the Tallest Midget in the Room Please Stand Up!

Chapter 3: The Online Ecosystem

Sustainability

Media...Evolve or Die?

After the Last Sky

The Internet's Boulevard of Broken Dreams

Rescuing The Internet From Infocrats

Inside Plato's Digital Cave

A Critical Discourse

One More Time - The Ad Model Is Broken

Has Online Advertising Lost Its "Schwerpunkt"?

The Audience In The Media Ecosystem

Chapter 4: On Privacy

An Interview with George Orwell & Paddy Chayefsky

Big Brother's Brother

Why Behavioral Targeting Is Immoral

Behavioral Targeting: Putting Lipstick on a Pig

A Brand's-Eye View of Behavioral Targeting

Chapter 5: Uncertainty Reigns

The Center Cannot Hold

Limits of Knowledge

The Paradigm of Prediction

Embracing Uncertainty

The Pretense of Knowledge

Chapter 6: Sense and Nonsense

Walking the Talk: Count on Yourself

Respecting the Rodney Principle

The Algorithmic Debate Is Over- The Loser Is Clear

Long Tail Marketing – A Field of Screams

Time for a New Thinking Cap

What's My Job?

Leaked Memo from a Brand Manager – 'Discovered' by Jaffer Ali

Chapter 7: The Wonder of it All

Chasing String in the Digital Era

Marketing with Wonder

Being 'In the Zone'

Dreams of the Heart

O Captain, My Captain

Abandoning Fear

Taking Flight with Black Swans

Fear is the Mind-killer

Media and Marketing Beyond The Algorithm

55 About the Author
Endorsements

What Are They Saying About Chasing String in the Digital Era?

"Jaffer Ali's prose is about all things large and small while forever lighting the way. Chasing String in the Digital Era is part a working-man's Nassim Nicholas Taleb, part Henry David Thoreau, part John Boyd, part Marshall McLuhan, part soaring heart, part unfettered mind and - thankfully - all vintage Jaffer Ali."  
\- Jeff Einstein, Media critic and founder of Brothers Einstein Digital Agency

"Everyone in online marketing has opinions, but like all industries there's a great deal of groupthink. Jaffer has a refreshing voice for two important reasons. First, he has invested his own money to test the approaches he has opinions about. And second, he is more concerned with what works than with what is popular. I highly value what Jaffer has to say. So should you."  
\- Tom Cunniff, Founder of Cunniff Consulting

"Jaffer Ali writes from the intersections of Heart, Common Sense, Street Smarts and Experience. I've helped countless brands in the digital marketing sector since 1994 and learn something new every time he makes time to share his wisdom. Whether this is your first foray into ecommerce and digital marketing or you're an experienced veteran, this collection of Life and Business lessons will open your eyes."  
\- Adam Boettiger, Senior Digital Marketing Strategist

"Whether you're talking politics, privacy or technology, Jaffer's insight and knowledge will help you sift through the illusion of everyday life and cut right to the heart of matters!"  
\- Shelly Palmer, Fox Television's Shelly Palmer Digital Living & author, Digital Wisdom: Thought Leadership For a Connected World
Dedication

Everything I am or will likely become rests on the foundations that my father, Khalil B. Ali, taught me. At an early age, he inculcated in me the notion of what it meant to be a "free man". So much of what I write is a loving tribute to this amazing man and Father. He was my first teacher about entrepreneurship and through his lovingly patient and guiding hand lit the way for the path forward.

No dedication would be complete without mentioning my wife, Carol. She has been my faithful companion for over 26 years. She defines what it means to nurture all that know her and gratitude is unbound for the joy she has brought every day to our lives. As a serial entrepreneur, there is no way I could have managed the highs and lows without her undying support. This is not a cliché. Everyone needs at least one person in the world to believe in them. Her faith carried me through many tough days as she created an oasis of calm at home.

Lastly, I would like to thank my cousin Tom and sister Anisa for their patience in being my business partners for over seventeen years. It has been quite a ride and they have always been generous with their spirit in both good times and bad.
Preface

The online digital marketing and media ecosystem is a troubled mess. But few of the trade publications acknowledge or are aware of the mess. Since our own media companies and marketing division has touched every part of the online ecosystem, we have a front row seat into the problems and challenges of our industry.

I started writing about the problems of the industry way back in 1998 and continued more or less to this day. It is not always comfortable to be the one yelling that the emperor has no clothes, but that is what I set out to do. Chasing String in the Digital Era is a collection of the essays and articles written over the years.

But what is "chasing string?" If you ever had a pet cat, you would understand how it chased string endlessly, seemingly without purpose. While we can never be sure what purpose is in the cat's mind, modern day marketers are doing their best feline imitation. Only the digital string being chased is behavioral targeting, Big Data and a love of all things new (neomania). Our industry is chasing this string all the while purring like a kitten.

I have noticed that few of the pundits that do most of the writing really have skin in the game. What I mean by this is that few are really spending their own money while making a living in the online ecosystem. They may be flush with VC money and publishing content. Others are at agencies who must peddle the latest technologies and services to their clients. Other "experts" come from large brands making media buying decisions with budgets supplied from high above them.

This environment does not lend itself to truth. It lends itself to a great deal of cheerleading. While we have made a good living within this dysfunctional ecosystem, we never could get ourselves to don the pom poms and cheerlead. I am congenitally unable to cheerlead.

Because we always spent our own money exploring this new thing or that new idea, we had to look at reality squarely in the eye. If banners sucked as a medium, we would only say it after spending our own money. If pre-roll advertising could be sold, but REALLY did not work very well, how could we continue to buy it? We could not. How could we continue to sell pre-roll? We could not and still look ourselves in the mirror.

Nothing stops you from chasing string more than if that twine can wrap around your neck and strangle you. We discovered the dangers of chasing string pretty quickly. There are others that really make a lot of money dangling that string in front of others. Another metaphor of "snake oil" also comes to mind.

Chasing string has another terrible side effect. We get shockingly distracted from what is important. And that goes way beyond making or losing money. Our digital lives have engendered the age of distraction where data trumps knowledge and wisdom is in very short supply.

Chasing String in the Digital Era is meant to give readers a chance to pause...to think. To add a bit more deliberation to what they do. We cannot continue to short change privacy...to exaggerate differences between political parties...to surrender our thoughts and inclinations to entities "too big to fail".

This collection of essays is a journey of sorts. Politics, economics, marketing and media are covered. Each essay can stand on its own and collectively, a business and worldview emerges that hopefully the reader will appreciate.

Jaffer Ali, March, 2013
Introduction

This collection of essays represents my fourth contribution to the publishing industry. Some may find it a curious blend. The articles or essays are divided into seven themes. But what unites them all is a sense that something is not quite right.

In Chapter One, "Politics and Media," the curious relationship between our media, economics and political discourse is examined. Traditional media is having a difficulty competing with the Internet on many fronts. It is worthwhile asking just how much our MSM is secretly subsidized to maintain prevailing societal myths.

But as audiences for MSM news erodes, independent, online media are replacing traditional media outlets that frame discourse with only two frames of reference. The online environment allows for many different types of flowers to bloom.

In Chapter Two, the overriding theme deals with why we should not place unbridled faith in technology. There is a pervasive love of all things new... neomania if you will and this is not healthy. Technology and its relationship to regime change has been drastically overstated. Examining the relationship to social change and technology is a subject worthy of a book by itself.

In Chapter Three we take a look at the online ecosystem from several perspectives. Asking questions of sustainability to drilling down and examining the advertising model, there is a lot of fodder for the fire if one wishes to explore in depth after reading.

Chapter Four deals with privacy challenges a connected world presents. In a drive for improving advertising returns, there is a real cost to our privacy. The irony of ironies is that all the data collected on us is not leading to improved economic performance.

If one is honest and experiences poor performance of the new ad models, it behooves us to understand why so much data has not improved ROI. Chapter Five deals with how uncertainty is cooked into the meals we are served... in our online ad models and beyond.

There is not always a hard delineation between one chapter and another. In Chapter Six, we cover the extremes between what makes sense and nonsense. We hope you have a little fun with The Rodney Principle which liberally uses simple, yet elegant one-liners from Rodney Dangerfield. Tying jokes to business models was not as difficult as it might sound. Working for fifteen years in the online space, I have seen more than my share of business models that were no better than jokes.

The final chapter "The Wonder of It All" offers hope and a possible way out. It is not just a way out for online marketers, it is a way out for us personally who admit to the challenges of being tethered to the Internet 24/7. Our online lives have merged with our offline lives. The space between the two has narrowed. They promise to narrow even further. One need not look further than Google Glasses in beta at the time of this e-book coming out.

Chasing string is a useful metaphor for our lives. I hope these collected essays offer a perspective that can help you in your personal and professional lives.
Chapter 1: Politics and Media

Behold, Here Comes Tweedle Dum and Tweedle Dee

Published 10/9/12

" **Our democracy is but a name. We vote? What does that mean? It means that we choose between two bodies of real, though not avowed, autocrats. We choose between Tweedledum and Tweedledee."  
\- Helen Keller, in a letter written in 1911**

Did you happen to catch the "debate" last week? The monumentally wooden Jim Lehrer spent most of his time trying to get Romney and Obama to air how different they were from each other. Lehrer was not so much of a moderator but more of a human jack-o-lantern with eyes looking as if he was drawn by a Japanimation artist.

But I digress...

I spent a lot of time watching the pundits afterwards further making a case for the "stark differences" between Obama and Romney. CNN and MSNBC felt the differences were not drawn as sharply as they could have...and "should have". Chris Matthews was practically foaming at the mouth because Obama did not draw enough distinctions.

In short, Tweedle Dum appeared too much like Tweedle Dee.

I have been writing about politics, media and marketing for over thirty years now. The binding thread of all three is that they all deal with illusion. My particular style of writing is to expose the illusions, sort of like that guy sitting in the front row at a magic show saying the bird is in the front, left pocket.

" **There's not a dime's worth a difference between the two of them."  
\- Judge Napolitano**

So here is just a partial checklist of areas in which Tweedle Dum and Tweedle Dee are in almost perfect harmony:  
Bailouts: Both supported corporate welfare programs  
Federal Reserve: Both support the policies of the Fed as well as Chairman Ben Bernanke  
Iranian Sanctions: Both support  
Patriot Act: Both support  
NDAA: Both support [National Defense Authorization Act codifies into law, for the first time in our history, the right to imprison US citizens indefinitely WITHOUT trial]  
Universal Health Care: Both support [Marginal differences]  
Gun Laws: Both support the same registration procedures  
Foreign Aid: Both support same levels of foreign aid  
Support for Israel: Both fall over themselves touting full-throated support  
Aggressive Foreign Policy: Both have neo-con advisors advocating imperial ambitions  
Goldman Sachs: Largest donor to both campaigns

" **Between Romney and Obama, there isn't all that much difference."  
\- George Soros**

I actually could go on for quite some time. While I disagree with most of the above, that is not the point of this post. The reason for this blog post is to point out the illusion. To demonstrate that the differences are exaggerated by powerful interests that seeks to foster the illusion of choice.

I know most reading this are about to protest and ready with MSM talking points on the minutia of differences between them.

Now for the speculation.

We have demonstrated that the pigeon is in the inside front pocket. But why does the MSM wish to continue the illusion? Why does the MSM want to foster the nonsensical notion of "choice" and therefore seek to draw distinctions without real differences?

The answer is quite simple. As long as we FEEL there is a difference between these candidates, we will not seek out candidates that want real change. The MSM exists to perpetuate the myths of the power elite. In essence, to protect the elite. To protect its interests. To protect the status quo. So if we busy ourselves with the illusion of choice, real change can be avoided.

A candidate like Ron Paul threatens the status quo because he represents real change. He would knock down the military-industrial complex. He would bring troops home from 170 bases around the world. He would eliminate the Federal Reserve. He would decentralize decision from authoritarian government to individual states. He would not make war without a Congressional declaration of war.

That is major stuff...and real change.

How much money did Goldman Sachs give to RP's campaign? They actually strip the illusion by giving generously to both candidates...but the MSM keeps that quiet. It matters not to Goldman which candidate wins, as long as the winner is Obama or Romney.

Because of the Internet, the grip of MSM and therefore the elite's mouthpiece is waning with each passing election. That is why the elite tried hard to pass SOPA and will try many new things in the coming years to control information. The elite requires a powerful advocate.

Helen Keller wrote the words that introduced this post back in 1911. Although blind, she saw more than we do. Although deaf, Helen Keller heard more acutely than we do.

The Demise Of Mainstream Media, One Constituency At A Time

Published 9/11/12

" **There is not one of you who dares to write your honest opinions, and if you did, you know beforehand that it would never appear in print...You know it and I know it, and what folly is this toasting an independent press? We are the tools and vassals of rich men behind the scenes. We are the jumping jacks, they pull the strings and we dance. Our talents, our possibilities and our lives are all the property of other men."  
\- John Swinton, 19th Century NY Times Journalist (Source: Labor's Untold Story)**

The great political theater otherwise known as our political conventions are over. The way Ron Paul and his delegates were treated made me pause to think about how the MSM covered him. I happened to be in Maine when the Ron Paul delegation was unseated by the RNC. The RNC did not want Paul to have a 5-state plurality of delegates that would have insured his name put into nomination for President.

The MSM basically made this story nothing more than a footnote in the theatrical production. Millions of Ron Paul supporters know that the MSM basically left him out of the equation for the entire campaign. In other words, the Ron Paul constituency learned what journalist John Swinton said more than 100 years ago.

But how many other constituencies have learned the lessons of Ron Paul and John Swinton?

If you are a Native American that has not fully assimilated or lost his/her identity, would you not know that the MSM has largely marginalized your history...and your present circumstances as well? On my recent trip to the great Northeast, I traveled from Illinois (a vestige of the Indian word, "irenwe-wa" meaning "speak the regular way") to Niagara Falls (Iroquois for "thundering water") and on to Maine which was only inhabited by the Algonquin Indians until the 1600s.

My trip was breathtakingly beautiful, but the long forgotten Native American names and villages along the way reminded me what Gore Vidal said; "USA stands for the United States of Amnesia." MSM has been obliging in forgetting history and even made its destruction sound noble with phrases like "Manifest Destiny." MSM lost the confidence and trust of the Native American constituency long ago.

If you are a black person living in the USA, an overwhelming majority have dropped out of the MSM target audience.  One in three black men end up in prison. Less than 30% of blacks vote. I think it is safe to say that the MSM has lost the trust of a majority of this constituency, from conservative blacks like Louis Farrakhan and his followers to progressive voices like Cornel West.

If you are a progressive who hangs on every word Noam Chomsky says, you will not find him anywhere on MSM news outlets. If you lean left...really left, there is no place within the MSM matrix to satisfy you. You understand quite well what Swinton was talking about.

If you are one of the 7 million Muslims in the US, you know how the MSM implies association with Al Qaida if you dare question drone strikes killing civilians.  The NY Times has done this on more than one occasion, helping out its handlers. MSM has never earned the trust and confidence of this constituency, so it could not lose that trust.

If you are a real conservative Tea Party member (as opposed to the neo-conservative Tea Party hack) or a liberal Occupy Wall Street protester, you know how the MSM has marginalized you as fringe groups and most likely have you wearing a tinfoil hat. The MSM has lost the trust and confidence of these two constituencies.

If you are a person who questions why a private bank (Federal Reserve) is allowed to print money and earn interest from printing trillions of dollars...interest paid by the government earned from taxing citizens...you are marginalized as a "conspiracy theorist" for even asking why we pay taxes to pay interest to a private bank. Meanwhile, the General Accounting Office (GAO) released a partial audit of the Fed and discovered that $16 TRILLION was given to banks, not the amount reported by the MSM (see page 131 of the report for details.)

If you are one of the 57% that believe that Kennedy was not killed by a lone gunman or  52% of the population who questions the official version of 9-11, the MSM labels you a kook...and tries to marginalize you. Simply put, these constituencies no longer believe or trust the MSM which continues to promote the official story.

Another former, NY Times journalist and Pulitzer Prize summarized why the MSM is in decline:

" **We are ruled, entertained, and informed by courtiers — and the media has evolved into a class of courtiers. The Democrats, like the Republicans, are mostly courtiers. Our pundits and experts, at least those with prominent public platforms, are courtiers. We are captivated by the hollow stagecraft of political theater as we are ruthlessly stripped of power. It is smoke and mirrors, tricks and con games, and the purpose behind it is deception."  
\- Chris Hedges, Empire of Illusion: The End of Literacy and the Triumph of Spectacle**

There are many more constituencies for whom the MSM has lost trust. In the past, there was really no place for these constituencies to turn. But the Internet has allowed these groups to find and nurture each other. And what has become of the national news outlets?

They are in precipitous decline. With each attempt to marginalize yet another group, newspapers and national news outlets like CNN, Fox, MSNBC, ABC News, NBC News and CBS News have all become a shell of their former selves. They increasingly carry the water for their masters. They  give quote approval for Obama and Romney camps. They  withhold stories on demand.

When the most trusted name in US journalism is an American comedian, Jon Stewart, the joke may be on us. The MSM is in full decline because it has lost constituencies one at a time. I could have continued with naming more but in the interest of time, I cut it off. Many of the ones listed may disagree with each other but they are all in agreement that trust in MSM has been lost. And they have all found alternatives.

DOJ Asks Court to Keep GOOGLE-NSA Partnership Secret

Published 3/16/12

" **Everything secret degenerates, even the administration of justice; nothing is safe that does not show how it can bear discussion and publicity."  
\- Lord Acton**

I waited a week before I decided to write about today's topic. The idea that I read as many online industry trade publications as I do and have not read a single word on this point astounds me. The source was not some "conspiracy" site, but rather The Legal Times Blog. The article was short and I encourage all to click  here to read it.

The Electronic Privacy Information Center filed suit to compel the government to tell us about the deal Google has made with the NSA concerning the information they are collecting on us. The government's position is that it's really none of our business.

I have written extensively about the collusion between government and corporate data hoarders. I need not go into that here. The real point of taking to the keyboard is to chastise our industry trades for a job poorly done. Amidst all the privacy talk, how much has focused on the unholy alliance between Google and the government?

If I am to be kind, I will say, "not enough". But if we are honest, we can conjure a raft of epithets that come much closer to the mark. I accuse our industry trades of malignant neglect. The privacy debate is incomplete without addressing collusion between "Big Data" and Big Government.

And in the rare instances when the topic arises, some "enterprising" mouthpiece for "Big Data" will invariably go on the attack by labeling the whistleblower a "conspiracy, tin-foil hat aficionado". I have personally brought this issue up in two high profile industry discussion groups comprising self-professed industry leaders.

With the exception of only a few, the issue did not resonate. I guess it was not deemed important by the trade publications. The trades exist to inform us on important issues that affect us, yet the ongoing collusion between "Big Data" and the NSA has not made the headlines. Are these trades de facto tools of these unholy alliances? Not sure. Perhaps the answer lies in an analysis of whose advertising dollars are at play. Or, maybe the industry trades are not tools, but merely fools.

So often I have felt like Brando in the Wild One. When asked, "What are you protesting?" He answered, "What have you got?" I don't write as much as I used to. I am tired. It sure would be grand to see a few younger people in our online industry pick up the torch and defy the darkness.

The Decline of the MSM

Published 2/15/12

" **We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of."  
\- Edward Bernays**

My last essay on the  fourth estate garnered more feedback than I have had in a long time. People sent me email generally praising the notion that something is not quite right with the state of journalism and our mainstream media (MSM).

So I decided to continue the theme. The quote that begins today's essay comes from Edward Bernays. Have you heard of him? If you are a media professional and have not heard of him, our problem as a nation begins here. We all need to learn the history of the profession in which we operate.

Bernays is the father of modern-day advertising and public relations. He also happened to be the nephew of Sigmund Freud. He wrote a book, Propaganda. Back then, the term "propaganda" was not a negative term. It was not until after WW II and Nazi Goebbels set out to systematically apply the principles outlined by Bernays that the term took on negative connotations.

By the way, before you start thinking that Bernays was some kind of right-wing yahoo, he was a liberal in the Rooseveltian sense. Once one really dives down into media criticism, you discover that conservative/liberal labels do not really matter.

Last week an expose came out on the BBC. You probably did not hear about it, but it was significant. The Independent broke the story how  documentaries were produced by production companies receiving millions of dollars from the subjects of the films. Egypt's Mubarak paid a production company to tout how great he was and the BBC hired this firm to make a documentary on Egypt.

The Independent discovered 13 such propaganda films made in the past year. The BBC was forced to issue a global "apology" for breaking editorial rules. This is a big story and ask yourself, "why didn't you know about the story?"

I spend a lot of my time reading alternative media sources. And I try to understand history in a different light ever since reading Howard Zinn's "People's History of the US." But a recent PBS documentary, "Slavery By Another Name" shocked me. After the 13th amendment was passed making slavery illegal, a little known exception in the amendment made slavery legal if one was imprisoned.

So "peonage laws" were passed throughout the south that made many cultural practices that blacks normally did illegal. The result? Hundreds of thousands of blacks were imprisoned and then their services sold to coal mines, steel mills and other businesses.

How is it that this shameful chapter in history is not known by every grade school child? Instead, we get a day off in grade school honoring Columbus, who raped, murdered and pillaged from the native population amidst landing in the New World.

You see, our history books are part of the MSM and they serve a real function of fostering myths. Propaganda by another name.

I have never voted Republican NOR Democrat so I am no party hack. But if you have not noticed how the MSM treats Ron Paul, you are simply not paying attention. Here is just one line from the MSM LA Times trying to marginalize Ron Paul.

" **As usual, he ranted about monetary policy and railed against wars and other military operations abroad."  
\- Kim Geiger, LA Times, 2/4/2012**

But where the MSM particularly shines is in its full throated calls for war with Iran. Lost amidst the rhetoric is the fact that Iran has not attacked another country in more than 300 years. It has oil, which we all know, but no longer accepts dollars to settle oil sales. This fact coupled with what that means evades discussion.

On the Morning Joe (2/15/2012), the normally antiwar Al Sharpton was trotted out at 5:30 AM to lend his voice to the cause of war. The MSM needed Rev. Al to shepherd his flock or constituency to the cause of war. We are being manipulated into supporting war.

" **The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country."  
\- Edward Bernays**

The BBC was caught being subsidized by propaganda agents. The Bush Administration was caught paying Armstrong Williams to go on MSM outlets to promote education policies. They also were caught  paying generals to write and appear on MSM outlets touting war with Iraq. The MSM gives the platform...for a price as they are  secretly subsidized by government agencies. That is how they are surviving the huge erosion in audience and not just in the US as the BBC and the  Dutch MSM shows.

If you have read this far and are asking "so what" then you need to understand how critical it is for governments to grab control of information. And that means the Internet. The MSM is losing its grip. Ron Paul's campaign demonstrates this point well. The MSM continued declining audience when it comes to news is losing to alternative information sources. This is the real intention behind SOPA, PIPA and ACTA. Beware of what new alphabet soup will soon be served to you.

What Middle East Uprisings Say About Online Marketing

Published 2/18/11

" **Despite our best intentions, the system is sufficiently dysfunctional that intelligence failure is guaranteed."  
\- From The Coming Intelligence Failure, Defense Intelligence Agency Analysis**

Middle East politics and online marketing are two of my passions. Whenever I get a chance to combine the two in one article, I gladly take the opportunity.

Unless you have been living in a cave, you know that there are major uprising going on in Tunisia, Egypt, Yemen, Bahrain, Libya and Iran. With the exception of Iran where Western support for protesters involves  financial subsidies, none of these organic protests were predicted.

Israel's vaunted  Game Theory and the overwhelming data mining techniques of the CIA have failed MISERABLY to predict the most massive events in modern Middle East history. Nassim Taleb would label these uprisings "Black Swan" events – occurrences that deviate beyond what is normally expected of a situation and that are extremely difficult to predict.

A simple question to ask is; "If our predictive modeling methodologies cannot foretell major, cataclysmic events, what value do these tools really have?"

The simple answer is not much.

Think of the US government's investment in Mubarak. This is not a hypothetical because we invested in him for 30 years, as we did the Shah of Iran from 1953 to 1979. Mubarak and the Shah paid off huge dividends while they reigned. Much like the huge dividends we have reaped through our support of the Bahraini, Saudi and Kuwaiti monarchies.

But these investments turn potentially toxic when we continue to pour money into them because we cannot predict the Black Swan. In essence, the Middle East is experiencing a political market crash. This analogy rings true in light of recent experience that proved data methodologies incapable of predicting, let alone preventing, a global stock meltdown.

And this is the point that behavioral targeters and those supporting this pseudo science refuse to acknowledge. These models invariably – and cataclysmically – fail when you need them most! The CIA has computers capable of doing 10 trillion calculations per second that use the SAME DATA MINING AND PREDICTIVE METHODOLOGIES favored by stock-market mathematicians. The CIA uses the SAME DATA MINING AND PREDICTIVE METHODOLOGIES touted by online behavioral-targeting marketers.

" **If you want to make a fool fail, give him information."  
\- Nassim Taleb, The Bed of Procrustes**

Marketers with significant skin in the media investment game should heed this warning: the more you "bet" on these failed methodologies, the more you are at risk when the Black Swan rears its predictably unpredictable head. If you continue to measure more and more about less and less, and rely on algorithmic reduction to predict human behavior, the only certainty is that you will fail. And you won't realize it until it happens.

The Egyptian Revolution, Media and the Internet

Published 2/3/11

OK, if you are only watching CNN/FOX/ABC/NBC/MSNBC, you probably think you know what is going on in Egypt. Right?

Wrong. Al Jazeera English was the place to get the information, except since cable operators are largely boycotting the channel in the US, you would have to be one of approximately 1 million folks who were glued to Al Jazeera's live stream.

Tin pot dictator, Hosni Mubarak decided to follow the US playbook in Iraq. After occupying Baghdad, the US occupation decided to let chaos reign, hardened criminals set free from prisons, social services suspended, museums looted all the while controlling the information landscape. This "chaos strategy" involves creating a crisis then to be followed by the "solution" of order. Iraq still has not found that order years after the fall of Saddam. But that is a different story.

In a key component of this chaos strategy, Mubarak had police in plain clothes start looting. This fact you would not hear from US media outlets, or Al Arabiya, the Saudi-owned channel. (King Abdullah of Saudi Arabia is a staunch supporter of Mubarak). The Egyptian people outwitted and largely foiled the regime and its plan. People quickly created neighborhood watch groups and protected antiquities, properties and each other.

When the initial chaos strategy failed due to citizen activism, thousands of police donned plain clothes and mounted a counter protest. They began attacking anti-government protesters with Molotov cocktails, gunfire, rocks, knives, etc.

Al Jazeera had its license revoked because it dared to expose the agent provocateurs. Mubarak's government tried to suppress this and other news by denying 22 million internet users access to online information (out of 85 million total population). This was as much an attempt to control information from getting out as it was an attempt to stop protesters from communicating and coordinating with each other.

Al Jazeera had six on-the-ground correspondents arrested, but continued to broadcast images from an undisclosed location. They continued to interview people though land line communications and satellite phones as the cell phone industry closed down by government edict.

To keep the outside world abreast of what was going on, proxy tweeters relayed information called in. Dial up accounts in France were set up since land lines had not been cut. Twitter was used as a broadcast medium as an army of worldwide sympathizers retweeted news. Al Jazeera through Creative Commons made much of its footage available for uploading.

YouTube and  RT videos provided brutal images and were shared worldwide. Hundreds of citizen journalists communicated with the outside world in 140 character bursts. New "networks" were seemingly created overnight. Audio feeds from on-the-ground protesters and citizen journalists somehow made their way from "Liberation Square" and Alexandria to websites. The URL was tweeted around the world.

Mubarak was not going to give up power easily. He decided to name a VP, Omar Suleiman. This former intelligence thug was in charge of torture and the US rendition program. Again, a piece of news you would not hear on ANY US mainstream media outlet until days later. Instead, our media gave us a steady attempt to bolster Muhammad El Baredei as a possible successor to Mubarak. El Baredei was one of the key folks who was part of the WMD charade in Iraq and was in Vienna when the revolution broke out.

The real story of the Internet and Egyptian revolution is that it was largely irrelevant to the events on-the-ground. The digital revolution helped us outside Egypt stay informed but the people on-the-ground had the best social media at their disposal; word of mouth. But I will suggest that there was one tremendous benefit of Mubarak's inability to block the flow of information; the world had a window to what was really going on. The White House was actually monitoring Twitter feeds of #Egypt.

### Is Media Privatization The New Trend?

Published 1/1/08

The title of this article is somewhat rhetorical. With Clear Channel and the Tribune Company each entering into multi-billion dollar leveraged buyouts (LBO), there are two main reasons for what some are seeing as this emerging trend. One is economic and the other is political.

The first is often spoken of freely in public discourse while the other lies largely hidden beneath the water line. As audience shares decline and future economic performance appear unstable, mainstream media assets must get higher marginal advertising rates to compensate for the new realities. How long is this sustainable? The LA Times recently said,

" **Shares of major newspaper publishers have been declining in recent months over deepening concerns about an ongoing migration of readers and advertisers to the Internet."  
\- LA Times, October 18, 2007**

"Going private" is one strategy media outlets are considering. Even the venerable Sumner Redstone, Chairman of CBS responded to the LBO trend,

"... **would we consider [going private] at some time in the future? We consider all alternatives. And if we did decide to take one of these companies private...there would be more money offered than we could possibly handle."  
\- Sumner Redstone, Chairman of CBS**

Speculation abounds that the NY Times and Virgin Media will also follow the privatization trend. But the astute reader will instantly recognize that "going private" will not solve the fundamental economic dilemma facing traditional media. Going private is no magical elixir for solving the audience shift that is afoot.

But what going private does offer is a shield for companies from prying, public eyes. Traditional media has an enormous "responsibility" that is rarely spoken about. That is to promote the prevailing worldview of the government. What? Let me say this in another way. Traditional media exists to promote acquiescence to a political agenda.

Let me use two examples to clarify.

The number one selling album in the nation last week was the new Bruce Springsteen album, Magic. Clear Channel, the largest radio network has ordered that its stations not play a single track from the album. They are publicly saying Springsteen is too old, yet they play his older tracks liberally.*

It makes no sense until you understand that Magic is intensely anti-war and Clear Channel, which is being purchased by Presidential candidate Mitt Romney's Bain Capital, has the unfortunate habit of exercising its political agenda.

It is obvious that people will gravitate toward alternative media outlets to find "The Boss". Clear Channel seems to be acting against its economic interests. This situation only makes sense when you understand that it is being loyal to its political agenda.

Another example of the media dutifully acting as a quasi-governmental arm can be seen by examining how the media en masse reacted to the September air strike on a Syrian facility. When President Bush was asked about it he curtly said, "I will not comment on that." The press corps tried one more run at the issue and the President grew more irritated. The press corps got the message and let the issue slide into obscurity.

But just a few weeks after the attack, Israel's Jerusalem Post published a report that it was not Israel who attacked Syria, but it was the US Air Force that carried out the air strike and Israel only provided air cover.

The truth or falsity of who attacked is beyond me to personally know, but the point is that when a government official can determine what is news or what is not news by dismissing important questions, then we in fact have a subservient media that is complicit with the government agenda. It should be clear to anyone with any sense of journalism that an air strike on Syria is news, whichever nation carried out the attack.

The case has been made that mainstream media audience share will continue its decline if media outlets do not break their allegiance to an overall political agenda. I have read in at least four or five alternative online media sources about our air strike on Syria, and of course have listened to Springsteen's Magic tracks on outlets other than Clear Channel. Millions have found alternatives to traditional media and will continue to do so.

What I am suggesting is that there is a connection between the economic dynamic of audience shrinkage and the overall political agenda. All media must be subsidized from advertising or other sources. In dictatorships, media is subsidized directly by the government. In democracies, media is subsidized by corporations.

The Private Equity firms leading the LBO charge have a political agenda as well as economic agenda.

" **Private-equity firms...largely unknown outside Wall Street now possess more than $2 trillion in buying power. In addition to Kohlberg Kravis, the new brand names of finance are Bain Capital, Blackstone Group, Carlyle Group and Texas Pacific Group."  
\- NY Times July 25, 2006**

If you doubt the political agenda of some of these Private Equity firms, one only needs to look at the board of directors of just one of the movers and shakers in this space:

Carlyle Group  
George H. Bush: Former President  
James Baker: Former Sec. of State  
Frank Carlucci: Former Dir. of CIA  
John Majors: Former PM of England

So the trend to privatize will continue precisely because audience shares will certainly continue to decline. The more that CNN, Fox, NY Times, Washington Post and other media outlets appear to become subservient to and act as a quasi-propaganda arm of Washington politicians, people will "exit".

Privatization will allow mainstream media outlets to follow a political agenda without the public quarterly report card. Ultimately, privatization is not a long term answer to the problem. At best it is like sweeping back the tide with the proverbial broom.

Notes:  
* Bruce: Magic Refused Radio Play
Chapter 2: On Technology

Our Faustian Bargain

Published 12/29/11

" **[A]ll technological change is a trade-off. I like to call it a Faustian bargain. Technology giveth and technology taketh away...Our unspoken slogan has been "technology über alles," and we have been willing to shape our lives to fit the requirements of technology, not the requirements of culture. This is a form of stupidity, especially in an age of vast technological change."  
\- Neil Postman**

The end of the year is always a time to take stock of the past year and if one is lucky enough to dream, we can slow down enough to wonder in the world of possibilities. As part of taking personal stock, it is fair to say that there are a few recurring themes in what I write.

After a cursory review, a pompous approach to our industry must be admitted. Trying to be more erudite than I actually am is a character flaw that can only be cured through abandoning an ego often running amok. Hopefully 2012 will bring more humility to bear.

Also after reviewing several of past essays, an old speech that Neil Postman gave came to mind. Neil Postman was a media ecologist and wrote about the intersection between culture and technology. The quote at the beginning is a nice summary of his work. It accurately summarizes the binding thread of my essays.

The legend of the Faustian bargain never has the devil [Mephistopheles] outlining the potential dangers of making a pact with him. That makes sense since the infernal region does not have any benefits to sell as the alternative to the supposed advantages. An overview of our industry trades reveals an unbridled belief in the benefits of technology. Faith in our media and technological prowess has assumed similar irrational impulses worthy of the Heaven's Gate cult. At minimum, faith in technology has assumed religious zeal.

For my part, transferring faith in a higher power to science and technology has not enriched our beings. As Thoreau said, we have an "improved means to an unimproved end." For those blinded by their faith in new technologies, they are so enamored with their tools (means) that they rarely contemplate whether the ends are improved. They assume it, but never contemplate.

So what I set out to do in my essays is explain the other side of the Faustian bargain. Our trade publications should be promoting this dialectic. But they are too busy promoting the thesis to be interested with the harmful side of the bargain. After all, our trade publications owe their existence to interests promoting media and technology. Audiences spend ad dollars and fill trade show space. This is only one reason I have never been asked to speak at an industry event. They rather have Mephistopheles extolling the virtues of technology rather than our hubris.

Our industry is chock full of hubris. How, other than hubris, do you explain Google's Eric Schmidt's words when he said, "we will be able to predict what someone will search for before they search for it"? Even if it were possible, what are the hazards or costs? How much data on us would be necessary to fulfill this promise? And what costs to our privacy and personal freedom is at risk? How might this information be transferred to a government increasingly interested in our every thought?

So as we move into 2012, yours truly hopefully will strike a more humble pose yet still determined to provide a clarion call to explore how our media and technologies have another, yes darker side. I am no Luddite and believe we should not eschew technology reflexively. We just should not accept it reflexively. Let's use our media and technology wisely. Otherwise, we will be the ones used.

Have a happy, healthy and prosperous New Year.

### Has Google's Empire Passed Its Zenith?

Published 12/8/10

" **Google's a complete f-ing mess on the inside. A total f-ing trainwreck. They don't talk to each other. They fight constantly. A lot is being pissed away. In three or four years you'll be looking back at this company and wondering what happened."  
\- Peter Kafka quoting a Valley insider**

On November 20th 2010, one of the great scholars of the past 50 years died. His name was Chalmers Johnson. Beloved by paleoconservatives and progressives alike, this third generation Navy scholar chronicled the decline of empires and specifically how and why the American Empire was crumbling.

Johnson did this through a trilogy of books, the last of the three entitled  Nemesis: The Last Days of the American Republic. And whereas Johnson doesn't address the Google situation per se, if we pay attention to the themes he writes about we will see how and why the Google Empire may be past its zenith and in decline.

So what are the telltale signs of an empire in decline?

Hubris

" **There is no safety in unlimited technological hubris."  
\- McGeorge Bundy**

Google burst onto the scene with the motto "do no evil" (as opposed to "do only good"). But has that attitude sustained itself? Witness Eric Schmidt touting the latest Google algorithm as able to predict what people will search for before they search for it. Not only is this pure hubris, it is 100% "bull Schmidt".

One report has Google penetrating 85% of the Internet's websites. How does Google treat its publishers? Arrogant disdain could be one way to describe it. Complete opacity rules the day as it is up to Google alone to decide what publishers get for their clicks, irrespective of the percentage split between them. Publishers were content to settle for Google's imperial droppings as long as the bills got paid, but most publishers agree that these droppings have become smaller and smaller — with only imperial Google's profits increasing.

As the lone online search superpower (sorry, Bing, you don't qualify), Google does what it wants when it wants — pure imperial hubris.

But Google's haughtiness towards publishers PALES in comparison to its attitude toward the great unwashed (that's you and me). Its behavioral targeting imperative hinges on the complete stalking of our every virtual move. Every click and search is chronicled in the quest to monitor our behavior for economic gain.

And all of this information is a short subpoena away from being handed over to a government ever more inclined to monitor and track its own citizens. In fact, the government abandoned its Carnivore program in favor of having the private sector do its bidding.

Below is how Eric Schmidt dismisses privacy with all the casual disregard of Marie Antoinette suggesting that we eat cake:

" **If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place, but if you really need that kind of privacy, the reality is that search engines including Google do retain this information for some time, and it's important, for example that we are all subject in the United States to the Patriot Act. It is possible that that information could be made available to the authorities."  
\- Eric Schmidt, December 2009**

Simply stated, Google's view of privacy is a prime example of unbridled arrogance and a blatant disregard for anything espoused either in the Bill of Rights to our Constitution or in their own pledge to do no harm.

Overreach

" **It's the inevitable price of imperial arrogance making leaders feel invulnerable till they no longer are, and it's too late."  
\- Stephen Lendman**

Chalmers Johnson outlined how this feeling of invincibility can catch empires blindly unaware as they spread themselves too thin. Case in point, US forces are now in over 170 countries, a clear indication of overreach without commensurate return. In fact, any sane person knows that the $1 trillion a year we spend on our military, including billions earmarked to defend Japan, Germany and South Korea, now generates diminishing returns to the American Empire.

So where is Google overreaching? How much does Google Maps make? Google Books? After five years, how much has YouTube brought to the bottom line? Or how about Google Video for that matter? Google's attempt at transforming television advertising can probably now be called a failure as prospective partners reconsider and bail. Do you think Gmail makes money? Does anybody even remember Google Wave?

While I am not a rabid Google watcher, one does not need to look very far to see its tentacles extending in every online direction, illustrated most recently in its failed bid to purchase Groupon. By turning down Google's $6 billion offer, Groupon may actually have helped save Google from itself.

Google's finances will eventually follow its attitude. One can see Google further alienating publishers to maintain their lofty profits. One can also see Google further alienating its audience while pursuing an "all knowing" algorithm. In the end, it is the attitude or Gestalt of a company that defines it. In Google's case, this attitude boils down to the existential difference between a self-serving pledge to Do No Evil and the simple promise to Do Only Good.

Can Eric Schmidt and Marketers Predict Human Behavior?

Published 9/2/10

" **We may regard the present state of the universe as the effect of its past and the cause of its future. An intellect which at a certain moment would know all forces that set nature in motion, and all positions of all items of which nature is composed, if this intellect were also vast enough to submit these data to analysis, it would embrace in a single formula the movements of the greatest bodies of the universe and those of the tiniest atom; for such an intellect nothing would be uncertain and the future just like the past would be present before its eyes."  
\- Pierre Simon Laplace, A Philosophical Essay on Probabilities**

Laplace wrote the above in 1816. This was well before the discovery of quantum physics. He and his contemporary scientists and philosophers thought that their ability to predict the future was limited by insufficient measurement tools and the resulting lack of precise information on which to base their predictions.

Since at the time of Laplace humans were considered little more than machines, predicting human behavior fell completely within the realm of observable planetary motion. But something happened in the early 20th Century: Quantum Physics. Unfortunately, too many psychologists and too many marketers never got the memo.

The foundation of quantum physics is "indeterminacy". Roughly speaking, uncertainty is built into the very fabric of reality, whether speaking of human behavior or the position of an electron. The new advances in the mathematical proofs of Heisenberg and his colleagues did not deter behavioral psychologists from their determinate, yet outdated worldviews.

 John Watson, known as the father of "Behaviorism", believed all behavior could be reduced, predicted and controlled through "proper" conditioning. His disciple, B.F. Skinner tried to perfect this folly. And let's not forget Sigmund Freud, who made behavioral reductionism fun and interesting through his obsession with a single overriding impulse that he believed controlled us all: SEX.

Of course, there were some who did incorporate a quantum understanding into their views of human behavior. For example, Erich Fromm and C.G. Jung rebelled against the reductionism sweeping their field of study. In fact, Jung, first an acolyte of Freud, eventually abandoned Freud's materialistic philosophy.

Now, fast forward to what's happening today in online marketing circles. Just a cursory glance will reveal that the place we're now in is nothing more than a return to Laplace we came from (sorry, Sigmund, but I couldn't resist)! If we only had MORE data, predicting human behavior would be a snap, right?

Wrong. Today's marketers are not marketing...they're too busy dodging customers in the rear view mirror to see the prospects in the road dead ahead. Once upon a time, marketing was all about the art of selling. But art has given way to specious science promulgated by irrational "experts" who chase the folly of prediction, seemingly impervious to the existential flies in the ointment. They strive to be like Nostradamus when they'd be better served to emulate David Ogilvy.

One of the leading gurus of this misbegotten practice is Google's Eric Schmidt. In a recent magazine article he announced that soon "...we will be able to predict what someone will search for before they search for it." Of course our government lends its imprimatur by claiming that they can catch terrorists before the fact by accumulating personal data on exactly which sites these suspects visit and what they search for.

I used to think that those selling predictive technologies were snake oil salesmen. That's because I found it hard to swallow the notion that anyone still believed in behavioral reductionism. It was easier to dismiss them as mere charlatans...and I said so at every opportunity. As you might imagine, this seemingly predictable personal behavior of my own did not endear me to my colleagues (and besides, the comparison was hardly fair to snake oil salesman and charlatans).

But I have come to the conclusion that the purveyors of voodoo behaviorism are neither snake oil salesmen, nor charlatans, merely intellectual simpletons. And while this may not score me many points at the next cocktail party, there is a little more charity, and clarity in my heart.

First, Do No Harm: How Our Need to Intervene Ruins Everything

Published 12/31/12

" **To see what is in front of one's nose needs a constant struggle."  
\- George Orwell**

If I told you that an estimated one third of all deaths in hospitals were caused by the treatments themselves, would that shock you? The term is called "iatrogenesis" which is derived from Greek meaning "brought forth from the healer".

Ever since Hypocrites, physicians had to take an oath that included "primum non nocere"; First, do no harm. This concept has utility in every field you can imagine. We make a mistake by believing the concept is domain specific to the health care industry. We will explore a few areas before exploring how supposedly cutting edge online marketing is violating the first principle of intervention.

Iatrogenesis and Foreign Policy

Who can look at the Iraq of today with over 1 million dead, 500,000 of them children, without wondering if the Hippocratic edict should have been invoked? With an interventionist foreign policy that stretches around the globe, we rarely slow down enough to even ask whether intervention itself might do more harm than good. Our foreign policy which claims to bring forth democracy and all the good that springs from it has increasingly brought death and destruction. Only the blind cannot see that we have done much more harm to Iraq by intervening.

Iatrogenesis and Media Coverage

The rule of "first, do no harm" can be asked of our media coverage of national events. Some have moved from wondering if the coverage of the Newton school massacre did more harm to our nation's psyche to concluding that there was considerable harm done by media saturation. Unfortunately our media assumes more coverage is better. Media critic Jeff Einstein questioned the iatrogenic nature of media saturation in a  recent column. He comes down clearly on the side that our media is not aiding in national healing and the saturation is overwhelmingly damaging.

Iatrogenesis and Economic Intervention

Whether you want to call them "bailouts" or the benign sounding "quantitative easings" (which now we are numbering...and if memory serves me correctly, we are up to QE IV), are policy makers other than Ron Paul questioning whether the interventions are doing more long term harm than good? Black Swan author, Nassim Taleb, has weighed in with convincing arguments that these interventions create  more harm than good. In his view, the "too big to fail" mantra will inevitably lead to even larger failures. We have shifted the responsibility for bank failures from the banks to US citizens. No harm? We shall soon see.

And then...Iatrogenesis and Online Marketing

If any readers are familiar with my  writings on behavioral targeting you will know that I believe BT is snake oil and does more harm than good. Anything that examines rewards without a thorough examination of the risks is a fool's marketing errand. Charlatans prosper by peddling this iatrogenic marketing cure while the empirical evidence is rather weak. They have no skin in their own game, preferring to sell shovels to the proverbial miners.

All one needs to examine is the steadily declining click thru rates. This decline occurs concurrently with the use of "sophisticated" targeting methodologies. Possibly because of its use.

I was at a roundtable discussion concerning online marketing when the topic of "relevance" came up. Those touting targeting one-to-one relevant offers rarely ask whether the practice is more costly than the derived benefits. In other words, is the practice of hyper targeting more harmful than helpful in terms of profits? When I raised the question at the table I was met with dumbfounded silence. Everyone at the table assumed relevance was an absolute positive that they never considered the alternative.

Almost all of the new online marketing methodologies involve the same interventionist mindset that has caused a great deal of harm in hospitals, foreign policy, economics...and do not get me started on overly prescribed psychotropic drugs.

So let me state as clearly as I can and without complicated jargon: Those peddling online targeting technologies are by and large frauds. Their "solutions" are:

1) Not scalable  
2) Are more costly employing them than the benefit derived  
3) Give a false patina of precision  
4) Increases risk in a nonlinear manner as marketing budgets increase  
5) Relying on predictive methodologies that have already been proven to be mathematically impossible.

There are many proofs for #5 above, from treatises on quantum randomness to explaining chaos theory. But the ancients have also pointed the way for understanding. In Semitic languages, the root for the word "prediction" and "prophecy" are the same. This leads to the notion of faith in predictions even though faith is an anathema to marketing reductionists. They are unaware of the irony. Online marketers with their thinly disguised faith in measuring everything are again unaware that the Sanskrit root for the word "measure" means "illusion." It seems the ancients knew a lot more about 21st Century online marketing than we do now.

From Simulated Life To Simulated Marketing

Published 7/24/12

" **Scientists at Stanford University and the J. Craig Venter Institute have developed the first software simulation of an entire organism, a humble single-cell bacterium that lives in the human genital and respiratory tracts."  
\-  NY Times article, 7/20/2012**

When you are done reading below, take a minute or two to read the NY Times article on this breakthrough. We return to a familiar theme, whether in predictive behavioral targeting methodologies, financial markets, global politics, war scenarios or now life itself.

And what is this recurring theme?

Reductionism my friends.

Isn't it the case that simulating a single-cell bacterium in a computer model, yet another attempt to reduce complex, nonlinear systems to algorithmic precision? I can't believe I just typed this sentence. What the heck does it mean?

Nonlinearity is not an easy concept to grasp for most of us, yet it is a central concept in life and the universe. Nonlinearity roughly means that outputs are not directly proportional to inputs. This makes establishing cause and effect a bit dicey. Algorithmic precision in this context refers to our desire to predict outcomes using computer programs.

Stanford (home of Google founders amongst many other online thought leaders) believes they have modeled life and can simulate it with precision...well almost. One of the doctors leading the attempt to reduce life to bits and bytes said, "Where I think our work is different is that we explicitly include all of the genes and every known gene function (emphasis added). There's no one else out there who has been able to include more than a handful of functions or more than, say, one-third of the genes."

This one-celled bacterium with 525 genes lives in the genitals. It is not terribly new for us men to contemplate the mysteries of our genitalia. But we will table that for a different discussion.

The problems with the Stanford initiative are many. First, scientists do not know every gene function. How do you model functions that remain unknown? Secondly, certain functions are actually unknowable. The spaces between what we know, what we do not know and what is inherently unknowable seems to be beyond reductionists' ability to contemplate.

Malcolm in Jurassic Park was skeptical about the strategy of forcing sterility on newly created dinosaurs when he said, "life finds a way". He was speaking about how life is creative...it mutates...it adapts...in short, life cannot be reduced. By the way, the search for a "God particle" is another attempt at reductionist science.

Hubris drives reductionism. The doctor barely can hide his self-satisfaction because "no one else has included more than a handful of functions." The number of functions of the simplest life form is unknown and even if you could identify "all" existing functions, new functions emerge all the time. Life is creative and this simulated approach does not quite understand this basic proposition. Life is more than the rules set up in a program. Computational biology and computational marketing are two sides of the same coin. They both misunderstand the fundamental nature of life.

What I am about to say may sound contradictory, but I am not against trying to understand the levels of life's existence. I am against believing that we can be reduced to these levels, be they in search of the God particle, computational biology or online marketing. And that is exactly what more and more people are doing as our computational skills grow exponentially.

Will the Tallest Midget in the Room Please Stand Up!

Published 2/19/11

" **There are two possible outcomes: if the result confirms the hypothesis, then you've made a measurement. If the result is contrary to the hypothesis, then you've made a discovery."  
\- Enrico Fermi**

The title of this article may not be the most politically correct one I've ever used, but it just might be the most descriptive. In the fifteen years of working in the online industry, I firmly believe that the industry has beaten a path to becoming more and more ridiculous.

Why do I say this?

Simply put, we have declared "measurement" as our virtual pot of gold at the end of the rainbow, a circuitously foolish pursuit that now has us measuring the metrics. Ever since Vedics instructed us that we become our attention, isn't it obvious that we have done exactly that? In fact, we have taken things to such an illogical extreme that the old carpenter's rule of "measure twice, cut once" has become "measure forever, cut never".

Our industry is awash in folks getting out their yardsticks to measure the tallest metaphorical midget in the room. And if that midget is just a quarter inch taller than the next tallest, it's as if we've encountered a veritable Manute Bol! It's like crediting a behavioral targeting algorithm for doubling the clickthrough rate on a banner ad. Sounds great until you realize that you've just increased response from .1% to .2%. Like I said, the tallest midget.

I participate in a few discussion lists with some very intellectual and capable industry veterans. But I find myself becoming increasingly bored with the topics of discussion. Discourse involving real issues that capture the sense of wonder and imagination are sacrificed on the altar of discussions about tools that, by design reveal our shortcomings instead of our potential.

" **We shape our tools and thereafter our tools shape us."  
\- Marshall McLuhan**

I have two sons taking a course at Bradley University called "The Big Questions" and we have more relevant and interesting discussions when we visit at the dinner table than we could ever hope for if we focused - as many today are wont to do - on reductionist predictive modeling that is absolutely useless in a chaotic environment.

A case in point is worth mentioning: The US government (NSA and CIA) has the most powerful computers in the world. The amount of information amassed is almost mind boggling to contemplate. The computer calculates MORE than 10 TRILLION calculations per second. The goal is to predict the events in hotspots around the world and to influence those events in a manner consistent with perceived national interests (opposed to value-driven principles).

The Egyptian revolution was not predicted. Nor was the Tunisian revolution. And the freedom virus spreading across the entire Middle East has taken the CIA and State Department completely by surprise. These "deer in the headlight" government agencies rely on the same methodologies employed by online marketers and stock market quantitative analysts. And whereas these methodologies are great at measuring the most minute details, to what end are they any reasonable means? All of the sophisticated tools ...all of the king's horses and all of the king's men couldn't keep Mubarak on his throne. Our tools were useless.

" **You can tell whether a man is clever by his answers. You can tell whether a man is wise by his questions."  
\- Naguib Mahfouz, Egyptian author**

I guess the above quote gets to what I am trying to say here. As an industry...as a nation...we are becoming less wise because we are asking the wrong questions and measuring the wrong things. We have indeed become tools of our tools, and we are all shrinking because of it.
Chapter 3: The Online Ecosystem

Sustainability

Published 6/29/10

" **Sustainability is a condition of existence which enables the present generation of humans and other species to enjoy social wellbeing, a vibrant economy, and a healthy environment, and to experience fulfillment, beauty and joy, without compromising the ability of future generations of humans and other species to enjoy the same."  
\- Guy Dauncey, speaker & author**

The title of this short essay, "sustainability" is the major concern of environmentalists and ecologists. Since I write about online media it is fair to ask what does this ecological term have to do with my area of expertise.

Simply put, the online media ecosystem is suffering under the weight of many practices that render it unsustainable. The lack of sustainability is masked by steady increases in money from advertisers coming online. But if you pay attention to the larger picture rather than one's particular situation, you can see the ecosystem as a whole is unhealthy.

What are the practices that render the online media ecosystem unsustainable?

The Targeting Meme

There are few practices more destructive to the online media ecosystem than behavioral targeting. The math underlying predictive modeling promised by BT has been proven to rest on fundamental errors and assumptions. The benefits to publishers are nil. The benefit to marketers is limited within such narrow parameters that the cost is not justified. Add the disastrous privacy issues and we have a creep factor coupled with its inherently unscalable premise; each new "advance" into complexity brings the system closer to collapse.

But that doesn't stop the BT purveyors eager to sell shovels to the hopeful miners. But it is becoming more commonplace to call BT for what it always was; snake oil.

Overwhelming Ad Clutter

The response to declining ad performance for publishers has been to increase more ad units per page. In ten years, we have beaten a path from 5% ctr to .1%. Few industry pundits acknowledge this simple fact; increasing what people want to avoid is no way to right the ship. This is a lot like trying to get out of a hole by digging ever deeper.

The online media ecosystem cannot get healthy by adding more toxic waste to the environment. And advertising has become more and more like toxic waste to offline as well as online audiences.

Erecting a Pay Wall

A paywall solution completely ignores how passion over profit trumps content owners' desire and ability to charge for information. Forget news and current events becoming a sustainable pay business model except in the rarest of instances. This boondoggle proffered by Brill and Murdoch has yet to play out in all of its inglorious permutations, but this will certainly fail. Content creation will never be the same as it experiences great deflationary pressures as citizen journalists and passionate aggregators offer a global perspective on issues from Wimbledon to Mideast news.

Agency Woes

Agencies are caught in an unsustainable position unless they drastically change. Media buying is becoming more automated and the added value of agencies becomes less and less when creative voices take a backseat to algorithmic solutions. Instead of emphasizing creative and unique online offers, agencies play to their own death march concerts. Instead of offering solutions to an unsustainable ecosystem, agencies are so busy being busy that few of them can actually slow down long enough to contemplate.

Lack of Scalability

The top 100 advertisers in the US economy reportedly account for just under 50% of the total ad spend*. Ask any one of those big advertisers and they will universally say that the problem with online advertising is the ability to scale their reach. Even though over 76% of the North American population is online**, we ought to heed their woes. How is it that with 76%+ online, top brands are saying they cannot reach audiences cost effectively?

The simple answer is that people are ignoring ads and what has passed for reach is no longer a sustainable metric. We need a new definition of reach and then a new way to execute transmitting corporate messaging if advertising can sustain the ecosystem.

Long Tail Niches

The wondrous aspect of the online ecosystem is the plethora of choice and niche interests available to audiences. The devastating aspect of our niche mentality is to believe that every niche or hobby can be turned into a business. Longtail nonsense driven by self-indulgent narcissism has led to folks wasting tremendous resources chasing the modern equivalent of the fountain of youth.

The overwhelming majority of passionate niches are not economically sustainable and advertisers will soon understand that continuing to subsidize ever more fragmented marketplaces makes their jobs more difficult. Commoditizing our passions and turning them into money might seem like a nice idea, but common sense needs to be restored.

Each portion of the online media ecosystem is facing the issue of sustainability. Over the years, I have written about many of these issues individually. But this is the first attempt to combine the themes into a manageable cohesive whole. There are solutions to be sure, but we cannot begin to fully grasp them until we first recognize that the current course is not sustainable.

* Top 100 Advertisers  
** World Internet Usage

Media...Evolve or Die?

Published 11/1/11

" **We have discovered that in an on-demand world, no one demands ads and that everyone is equipped and inclined to avoid them."  
\- Jeff Einstein, Digital Media Pioneer (and friend)**

I was having a back and forth discussion about the stress in our advertising and media ecosystem with Stefan Tornquist, the VP of Research at eConsultancy. He is charming, intelligent and articulate. In short, clearly our friendship is an attraction of opposites. I owe the title of this article to his concluding remark to me. As is often the case when we interact, his words reverberated with me long after our encounter.

It took a while before discovering that I disagreed with Stefan. Not because change is unnecessary, but because I have come to the conclusion that our ecosystem needs to be radically restructured. The time for gradual evolution is past. We cannot evolve out of the mess we're in, we must halt what we are doing ASAP and leap into the solution. Ah, the old, evolution vs. revolution dichotomy.

Thomas Friedman recently penned an article,  Something Is Happening Here. I thank Jason Heller for pointing me to it. Friedman basically outlined two competing views of our economic system. One embraces "The Great Disruption" (GD) and the other places its faith in "The Big Shift" (BS). GD explains cataclysmic change whereas BS describes an evolutionary, gradually shifting world.

Friedman's article did not speak about a third camp. I will dub this "The Ostrich Camp". Their heads stuck in the metaphorical sand, they don't want to acknowledge or actually see a problem. If you are in this camp, move on, for I have neither the time nor inclination to speak to you any longer.

It is true that Friedman was outlining two worldwide political and economic perspectives, and while I have penned many articles on global politics, this article is about our media ecosystem and its own opposing camps.

The BS camp ardently believes that we can fix plummeting relationships between audiences and brands by doing one of the following:

1) Change the size of online ad units.  
2) Develop new online metrics, including GRP and TRP (Gross Rating Points/Targeted Rating Points)  
3) Continue doing what we are doing, but with improved creative.

I am sure there are more incremental tweaks within the BS camp than those offered here, but they are illustrative of cause and effect reactions at a glacial pace.

Now the GD camp, of which I passionately belong, believes that the first rule in getting out of a hole is to stop digging...immediately if not sooner. We are disruptors who view the ecosystem as existentially flawed.

Let me be as clear as I possibly can. Any "solution" to the stress in the media ecosystem that does not "solve" the fundamental problem of audiences turning away from advertising either consciously or unconsciously is ridiculous. Making "better" ads is a tweak that has limited utility, and reducing ads to limit clutter is nothing more than a confession to failure.

Why?

One is not beating a dead horse to agree with Jeff Einstein's assertion that no one wants ads and that everyone is equipped and inclined to avoid them. Similarly, we know with the certainty of e=mc2 (the other Einstein's sage observation), that everyone wants more information and entertainment. Geoff Ramsey, CEO of eMarketer has hinted at a way out by coining the term "magnetic content". Geoff has noted what common sense has told us for years. Audiences are drawn to content and savvy brands are using content to attract audiences.

Now, if you believe that attracting audiences (like a magnet) is better than repelling them with ads, let me welcome you to The Great Disruption. There is a revolution afoot and the BS just won't cut it anymore.

After the Last Sky

Published 10/18/11

" **Where does the bird fly,  
After the last sky?"  
\- Mahmoud Darwish, Palestinian Poet**

" **I have flown up like the primeval ones...  
I appear in glory with the strides of gods...  
As for him that knows this pure spell,  
it means going out into the day after death  
and being transformed at will."  
\- Ryewolf, 'Legend and History of the Benu Bird and the Phoenix'**

Trying to make sense out of a troubled media ecosystem, it behooves us to seek answers wherever we can find them. For me, a dyed-in-the-wool direct marketing quant that pushed the limits so hard and far that in Marshall McLuhan's words, they began "to operate in reverse", poets like T.S. Eliot, Yeats, Kipling and Darwish, above, have each helped me in different ways. What an odd journey!

In both Islamic and Jewish mystical traditions, there are seven heavens. The colloquial "seventh heaven" is the final destination, if you will. In Buddhist meditation, there are seven layers of consciousness on the road to universal enlightenment, where the seventh level is the field of universal knowledge; "the last sky" so to speak.

Darwish uses "sky" and "heaven" interchangeably, and in Semitic languages they are indeed from the same root. So what is a bird to do after soaring the last heaven? And this ultimately is the question for media and marketing folks. Where do we go after we have explored all of what appears on our horizon? After we have visited the last sky?

For the handful reading these musings of mine, you know that I believe that present online marketing methodologies have hit the last sky. We marketing and media birds have migrated from search to every conceivable targeting methodology. I might have used the metaphor of Dante's descent into Hell to describe our marketing journey, but I thought the above title was catchier and more hopeful.

Some people misinterpret my writings as gloom and doom. Not true. Only if you want to continue doing what is futile will you find pessimism. But there is a way out. There is a way for this bird to stay aloft and keep flying.

What is needed is nothing short of a transformation. For any that have experienced the 'pure spell' of transformation, you know the resulting exaltation. So, what the heck am I talking about?

The present media ecosystem is dysfunctional. We all know that advertisers subsidize the ecosystem. But the ecosystem has become so unwieldy, things have gone terribly wrong. The basic problem is that the relationship between audiences and advertiser has fundamentally eroded.

Media outlets get government subsidies to stay afloat to promote the prevailing political mythologies (see Iraq WMDs as an example). But audiences are buying the propaganda less and less and fleeing the mainstream media in droves. Advertisers are in a quandary because the media landscape is so complex and fragmented that achieving authentic reach is problematic.

The great "pay wall" debacle attempts to shift the economic burden from advertiser to exhausted and financially strapped audiences. That "sky" did not take long to close. For the past few years, the targeting "sky" has attracted a tremendous flock. The behavioral targeting folks dominated the trades and conferences.

Besides employing voodoo math, targeting methodologies attempt to turn all media into accountable, direct marketing opportunities. But treating all media from a direct-marketing perspective does not scale for advertisers and certainly does not create demand. It relies on existing intent instead of creating that intent. Advertisers utilizing targeting methodologies stalk audiences, when they should be enlisting them in a common cause.

Meanwhile, audiences continue to turn a blind eye to the growing marketing clutter. As we built this on-demand media universe, we discovered that audiences have no demand whatsoever for advertising. Worse, they are repelled by it. The media ecosystem is increasingly stressed because the 'solutions' offered usually mean doubling down on what clearly has not been working - more targeting and more ads.

So where do we go from here? How can we rise from the ashes like a Phoenix?

The answer is actually quite simple, albeit transformative. Instead of putting more ads into content, put the content into the ads. Stop a moment and read that again, and ask yourself: What is the only reason anyone ever visits any website? The answer: For the content they expect to find there. Ergo, instead of using ads to attract audiences, use content instead, and surround the content with the ad! We do this with licensed video clips all the time and make six times more money than we did with pre-roll, which is why we've stopped offering pre-roll completely. We have been transformed, so-to-speak.

This can be done with text articles as well. Imagine a Drudge Report headline on "Hairy Ants" going to a Raid website. Audiences don't care where they consume the content. They just want it. Publishers should be bundling audience and content together, and delivering both to advertiser websites.

Imagine giving audiences what they really want - content - and surrounding that content with a brand message. What a great idea! Essentially this is how it was done in days of old, back in the early days of radio and television. The role of content was and has always been a means to deliver audiences for advertisers. Somehow, this simple idea has been lost over time.

So where does the bird fly after the last sky? Right back where it started, that's where. I have no illusions about the media ecosystem adopting this simple proven solution, because so many are in denial and too busy doubling down on what doesn't work.

The Internet's Boulevard of Broken Dreams

Published 4/28/10

" **All men dream: but not equally. Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity: but the dreamers of the day are dangerous men, for they may act their dreams with open eyes, to make it possible."  
\- T.E Lawrence (AKA Lawrence of Arabia)**

First, why did I choose today's title, "The Internet's Boulevard of Broken Dreams"? The simple answer is that most publishers entered the Internet space filled with dreams of carpets of gold strewn beneath their feet. The problem was, too many dreamed only at night with their eyes closed.

The first prescription today is to open your eyes when you dream. This means taking a look at reality. If you are a publisher, ask yourself the following question: Who are your customers? Seems simple, doesn't it? Yet many publishers will answer, "My audience."

Unless your audience comprises paying subscribers, they are not your customers. Whoever pays you are your customers... and in most cases, it's advertisers picking up the tab. If you feel differently, you're a hobbyist, not a businessperson. This is not to denigrate your hobby or passion. But there's no excuse for not knowing what business you're in. For online publishers who depend on ad revenue, your business is advertising, and to not understand this is an exercise in vanity, nothing more than self-indulgent dreaming at night.

Like the slew of folks peddling narcotics to keep you sleeping and dreaming at night, one-to-one marketing gurus promise publisher and advertiser alike that they have the magic formula for delivering the right ad to the right person at the right time. Their claim is to offer a better return for all parties.

Wake up! One-to-one marketing (and all of its derivative cousins like behavioral targeting) is based on the false assumption that human behavior is rational and that purchasing decisions are rational. Furthermore, these technologies want to turn your advertising ad space into direct marketing inventory.

Opening your eyes to companies turning your entire business into a direct marketing medium requires you to understand what is going on. Sleep walking your way through the day will not get you out of the mess. Few, if ANY, publishers can survive by turning their entire media inventory into DR media. Intermediaries can make a killing, but not you, the publisher.

I can hear the niche publishers now: "But long-tail marketing will save me." At least that's what Wired's Chris Anderson (author of The Long Tail) would have every marketer and publisher believing. But the era of super niches and self-indulgent narcissism is eroding far faster than you can chase your own long tail.

Publishers catering to that "long tail" must wipe the sleep from their eyes and drink some coffee. We are at the dawn of a return to mass marketing. And this marketing imperative means dollars will go to those who understand what business they're in and who their customers are. What? Sacrilegious!

Brands with huge budgets that have also been distracted by "conventional digital thinking" and offered a bed they could never be comfortable in will once again assert their needs.

But necessity is more than the mother of invention. It is the driving force of nature and the folks with the most money to spend on advertising — large brands — truly want and need to reach the masses, no matter how much lip service they pay to things like CRM and social marketing. Publishers better wake up. Solutions begin the moment we open our eyes and dream in the full light of day.

Rescuing The Internet From Infocrats

Published 8/10/99

If the true commercial possibilities of the Internet are to be realized, the medium must be rescued from the "Infocrat" who believes in "information uber alles."

It is common to hear within Internet marketing circles that the key to future commercial possibilities will be in "perfect information flow." With smart bots searching the web for the lowest prices, sites adding yet more content, and the ease of getting information from myriad sources, information is seen to be the salvation for sales.

This is simply ridiculous. Adding more information is not necessarily the key to closing the sale. In fact, too much information can interfere with the sale. The Internet may be a new medium, but it's wrong to believe that human nature will be transformed by the medium, regardless of changing behaviors. A sales transaction will always be an extraordinary event. It's an emotional decision when we humans are doing the buying.

Failing to grasp the emotional dimension of the sale leads to a sterile transaction that assumes rational behavior. It also leads to rational solutions... add just one more bit of information... lower the price just a few more pennies below my competition... and so forth. Infocrats are notoriously devoid of a transactional sales imagination.

What is a "transactional sales imagination?"

It is what comes to the heart of most sales. To complete a sale, one needs to discover what makes a potential consumer tick. One needs to find compelling, emotionally charged methods of communicating. Have you ever wondered why the 800-number Ginzu Knives commercials have so much energy? You may not like them, but they work! People need to be motivated to buy.

I remember a Triple Edge Windshield Wiper ad on television (it sold over 7 million pair) that worked because they smeared mud on the windshield and cleaned it with the wiper blades. Or remember the Crazy Glue ad with the guy (John Goodman before he was a star) hanging from his hard hat?

Nobody smears mud on their windshield or hangs from a beam stuck on with glue, but these were compelling messages. They were short, dramatic, and memorable. They exhibited a "transactional sales imagination." We believe Internet advertising messages must develop excitement to close the sale online...research be damned.

One of the problems that Internet marketers have is that too many companies are led by engineers instead of salespeople! The earliest adopters on the Internet were technically minded people who searched for technological solutions to everyday problems. It's as if they substituted personality for technology. So many times people spend too much time thinking what could be done without considering whether it should be done.

The problem permeates the entire spectrum of the industry. We have a network of email newsletters with over six million opt-in subscribers to over 200 different newsletters. Within the newsletters are text ads. We've had advertisers send us copy that's termed "subtle." They don't want to "sell" in the ad. We've had newsletter owners shriek with bold selling propositions because "this seems too much like an ad."

Disguising advertising so it doesn't look like advertising creates low conversion rates. Who is leading the charge in this march to neutering the sales message? Infocrats!

Infocrats beware... get some passion and add it to your site, add it to your sales messages, whether through email, banners, or web design. When you get a pair of eyeballs looking at your message, close the sale right then and there. That's what making a sale is all about.

Inside Plato's Digital Cave

Published 7/21/10

" **Socrates: And if he is compelled to look straight at the light, will he not have a pain in his eyes which will make him turn away to take refuge in the objects of vision which he can see, and which he will conceive to be in reality clearer than the things which are now being shown to him? And suppose once more, that he is reluctantly dragged up a steep and rugged ascent, and held fast until he's forced into the presence of the sun himself, is he not likely to be pained and irritated?"  
\- Book VII of Plato's Republic**

I had not read the allegory of Plato's Cave since my college days many years ago. When I chanced upon it the other day while surfing the web, I found it once again spoke to me as it has spoken to the world for nearly 2500 years.

What was once my basis for a theoretical treatise in college has become a profound revelation as I traverse the online media landscape. It is all but certain that many of the digerati are helplessly, and — dare I say it — nearly hopelessly chained inside the cave, unable to see the world outside.

The reality of online media and media in general is that there is a very deep problem that digital pundits apparently cannot countenance. The pain of the light proves so pervasive that they satisfy themselves by looking at shadows cast upon the cave walls.

Media agencies are the most tethered group inside the cave. They are chained to complexity that, devoid of logic and reason, dooms them and their clients to life amidst the shadows. This will remain so for the foreseeable future because complexity fosters the illusion of expertise and advertisers are now so deep inside the cave that they're willing to finance hope against hope in their desperate search for a way out.

But there is more to being inside the digital cave than the mere cause and effect of misguided self-interest. There are dire consequences that lurk in these same shadows. The entire online media ecosystem is growing increasingly unhealthy and unsustainable as seemingly smart folks continue to shy away from the light. Our long-term self interest demands an exit from the cave, but it's as if there is a collective delusion — beyond reason and rationality — that keeps us in the dark.

There are an estimated 250 million functioning websites, yet arguably less than 1% of them are financially sustainable. With more than 99% of this ecosystem economically unviable, one would expect considerable focus on this sorry state of affairs. But even just a cursory overview of our digital trade press indicates a wildly disproportionate amount of attention on the marginally viable 1% and almost no consideration whatsoever for the unsustainable parts of the ecosystem.

Can a practiced cave dweller emerge from the shadows? Plato thought so, but I am not so sure. Plato believed in the power of rational thought to overcome irrational emotion. For us to escape from the metaphorical cave that shields us from the light of reason, we must first force ourselves to look beyond the darkness of our own design.

Not until the threat of life in the shadows becomes too great will people brave the journey into the light. We can only hope that the self-inflicted pain caused by an unsustainable media ecosystem will force us out.

Perhaps the words of French author Anais Nin will help to guide us:

" **And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom."  
\- Anais Nin**

A Critical Discourse

Published 7/28/10

" **Your relentless battering of the online ad world is really tiresome. If you are so right why are SO MANY so wrong?"  
\- "Jack's pal" to Jaffer Ali**

Let me begin by thanking a critic of my last column, Inside Plato's Digital Cave, for this week's topic, and for reminding me how few among us are willing to engage in critical discourse these days, seeking comfort instead with other metaphorical cave dwellers of like mind.

Indeed this is a problem for our generation. We seek frictionless communication because it's more expedient; less threatening to our temperaments and egos. But just as friction is used to sharpen a blade, so it can be used to sharpen one's thinking.

It is in this light that I thank and commend "Jack's pal" for daring to brave the friction of opposing thought.

The first order of business is to assert that moral judgments and intellectual challenges are often mutually exclusive of majority opinion. Otherwise, slavery and "For Whites Only" lunch counters would have been morally right at certain points in history. Similarly, Einstein would have been wrong to confront a universe steeped in Newtonian physics. Henry David Thoreau perhaps said it best when he wrote, "Moreover, any man more right than his neighbors constitutes a majority of one..."

If we assume for the sake of Jack's pal that I am right and "SO MANY are wrong" then the answer is simple, because when online "experts" only experience a fraction of the ecosystem with no apparent dysfunction, they are likely to conclude that there is no problem. In fact, they become cheerleaders for their slice of good fortune and the industry that spawned it. From their narrow perspective, everything is fine.

The industry trade press, populated as it is by non-confrontational self interests, gives disproportionate voice to a multitude of misguided memes such as behavioral targeting, pre-roll advertising, video portal hype and various other dubious aspects of online advertising theory and practice. Fewer than one in ten articles offer a dissenting opinion. So if you read the online trades, it's highly likely you'll be lulled into "groupthink".

" **Advertising spending around the world is doing better than expected this year, but the real standouts are online, especially paid search, mobile and social media, according to a revised forecast for 2010 according to a report from ZenithOptimedia."  
\- Jack's pal**

As the above infers, Jack's pal draws comfort from the big picture - at least from Zenith Optimedia's perception of it. But what do the statistics really mean? Whereas some areas of advertising may be doing better than expected, we cannot rest on the laurels of compared-to-what assessments drawn in the cave. For my money, the bar has been set unacceptably low.

It's not even mildly controversial to suggest that magazines and newspapers are in business free fall. National radio and television may have done relatively well in the upfronts, but that's because there are no scalable reach alternatives, evidenced by the lack of trickle down to the local radio and TV markets. Ad Age ran an article just a few months ago on how niche cable networks were on life support due to their unsustainability.

But let's take a closer look at Jack's pal's assertions. Is search doing well? Ask Bing and Yahoo! Both are languishing. Are CPMs (eCPMs) paid to publishers rising? The answer is "no". Take Google out of the equation and Jack's pal may be forced to reconsider life in the shadows.

What about "social media"? Twitter is still looking for a viable economic model. And ad inventory on Facebook, the theoretical 800-pound gorilla, can be had for as little as $.07/M. That's only seven pennies to virtually guarantee that more than 999 out of a thousand people will avoid your ad! Sounds overpriced to me.

Jeff Jarvis recently wrote an article using Conde Nast as the foil for his conclusion that "Advertising is f@#!ed". Nobody likes advertising and as my good friend Jeff Einstein says, "Everybody is equipped now to avoid it." Business as usual has become a euphemism for unusually bad business.

Case in point: television advertising CPMs are increasing while effectiveness is declining. I spoke with an executive from one of the largest telemarketing call centers in the world and he said, "Ten years ago, a single 60-second spot on A&E would garner 2000 calls. Today, you'd be hard pressed to generate 200 calls from the same time slot. And the cost for that spot has nearly tripled."

For anyone who's counting, that's a 90% reduction in response engagement at triple the cost-a 270% decline in effectiveness. To be sure, these spots produce an increase in website traffic, but not enough to justify (let alone defend) the downside. Another example of television's diminished capacity can be found in  Yahoo's $100 million ad campaign. After the money was spent, they admitted to no increase whatsoever in traffic to their homepage.

As for online ad effectiveness, click thru rates have beat a hasty retreat to statistical zero. Ten years ago, CTRs hovered around 5% and now average less than .1%. The decline has been so precipitous that industry pundits are distancing themselves en masse from the metric in search (no pun intended) of a new, more salable illusion to promote.

" **Online advertising spending will rise from $49.8 billion and 10.5% of global spending in 2008 to $82.7 billion and 17.1% in 2012."  
\- Jack's pal**

Even giving Jack's pal the benefit of the doubt, what percentage of this spending is concentrated among Google and just a handful of others? Google's estimated revenue for 2010 is around $24 billion, and the top-10 Internet properties account for more than 80% of total revenues. The bottom line is a lifeboat that saves fewer than a dozen in a sea of 250 million drowning souls.

All things considered, including Jack's pal's thoughtful response, it would appear the digital cave of which I spoke is even deeper and darker than I thought!

One More Time - The Ad Model Is Broken

Published 7/13/12

" **I am interested in imperfections, quirkiness, insanity, unpredictability. That's what we really pay attention to anyway. We don't talk about planes flying; we talk about them crashing."  
\- Tibor Kalman, graphics designer**

I have not been writing as much as I used to. An overview of much of my writing would reveal a highly critical POV of conventional digital thinking. Tibor's quote at the beginning of this piece sums up my worldview.

There is a contradiction between my writing and the way I live my life. You see, while I relish critique, the glass is way more than half-full in my personal and professional life. I tried for a time to write like that, but stories like Digg's demise and Groupon's free fall pulls me back in.

There is no FAA to examine the crash scenes of these once digital high flyers. I am donning my FAA hat to investigate these crashes. The answer is actually simple: The online ad model is broken.

What does this mean?

It means that few people can remember the last ad they saw on the web. It is worse than benign neglect. Ads have become malignant due to many factors. We will not go into the details of malignancy again right now, but suffice it to say that the only people wanting more ads are those peddling them. And increasingly, we are equipped with the means to avoid just about any advertising thrown our way.

The industry's answer to the ecosystem's ad problem has been...now wait for this...are you ready...to double down and serve more ads. I cannot make this up. Take what does not work and double it. The great media ecologist Marshall McLuhan said when a medium 'overheats' and is taken to an extreme, it "reverses into an opposing form."

Online advertising has pushed the limits so hard that it has become an anti-advertising ecosystem. We no longer have an ad model, we have an anti-ad model. Hegel would be proud. To make matters even worse, links to advertisers' websites must compete with on average 170 additional content links that publishers insert onto an average web page.

So we take a web page, fill it with competing exit links for more content...which tries to monetize that content with too many ads...which people either ignore or block...and publishers scratch their head why they cannot meet payroll without convincing an idiot VC to pony up?

Should we be surprised that Digg crashed? I read some weak attempts to articulate why Digg dug its own grave. Most of the people looking at the sordid remains of the crash surmised there was a technological problem. Digg, according to these investigators, did not have the right technology to remain aloft.

This is absurd. Digg is out of business because it could not sell enough of what does not work; advertising. Its audience opted out of advertising from day one. Enough savvy advertisers figured that out. $46 million in VC investments kept enough wind under Digg's wings to ignore the turbulence of a failed model. And even now, after the crash, people are saying it was the technology or lack of it that did it in.

So I suggest that if we are not going to talk about planes flying, let's at least be accurate as to why they crash.

Has Online Advertising Lost Its "Schwerpunkt"?

Published 11/18/08

" **A campaign [operation] without schwerpunkt is like a man without character."  
\- Field Marshal Paul Von Hindenburg**

Ever since Sun Tzu's Art of War, business schools have borrowed concepts from great military thinkers. Miyamoto Musashi's Book of Five Rings has been used extensively to direct short and long term strategies. Patton's brilliant essay, Secret of Victory has guided my own personal business philosophy.

One of these concepts, which I contend is more timely and appropriate than ever, is the principle of schwerpunkt, first introduced nearly 200 years ago by the German philosopher, Karl von Clausewitz, in his brilliant treatise, On War. US military strategist, John Boyd, and his acolytes helped introduce the concept of schwerpunkt to the modern US military.

There is no English-language equivalent of schwerpunkt, and thus, it has been subject to varying interpretations by its practitioners. "Center of gravity" and "focus of intent" are common usages. But the phrase that seems best able to capture its essence is "weight of effort". Business is a lot like war in that resources, human as well as capital, must be deployed properly lest one lose the battle or even worse, the war.

With this in mind, does it not make sense to ask ourselves: Has online advertising lost its schwerpunkt?

The answer is a resounding "yes". And to those of us who offer a growing critique of the online industry, the question seems almost rhetorical. When the weight of our effort eschews creativity for algorithmic reduction, we have indeed lost our center of gravity; our focus of intent; our schwerpunkt.

We have fostered an attitude that devalues relationships by placing technology at the fulcrum of a perverse cause and effect. John Boyd believed that people came first; empowered by ideas that were in turn facilitated by technology. We have juxtaposed this simple recipe with an inverted order that places technology first and people, last. But technology does not dream, and without creative sustenance, relationships starve to death. Creativity can't inspire technology, it can only inspire us. Relationships, not technology, must define our schwerpunkt.

This misappropriated weight of effort is revealed in a recent survey of advertisers who were asked to prioritize the qualities they seek in an agency. The survey comes on the heels of an identical one conducted three years ago. The bottom line: a complete change in schwerpunkt in just three years! Creativity and strategic thinking and planning have become subservient to technology under the guise of analytics.

In 2005, those marketers surveyed listed the order of qualities they looked for in their agencies:  
1. Quality of Creative Content  
2. Price/Cost  
3. Innovation and Strategic value  
4. Traditional print, offline services  
5. Sophisticated analytics/measurement  
6. Proficiency in emerging/interactive

In 2008 the results of the same survey were quite different:  
1. Sophisticated analytics/measurement  
2. Proficiency in emerging/interactive  
3. Price/Cost  
4. Quality of creative (virtual tie with price/cost)  
5. Traditional print, etc.  
6. Innovation and Strategic value

The sad truth is, our "focus of intent" or where the industry is placing its "weight of effort", our schwerpunkt, has shifted dramatically away from creativity, quality and innovation. What now passes as innovation in online advertising is relegated to technological innovation.

John Boyd was not against technology. In fact, he practically designed the F-16. But he preached that technology should never come ahead of people. This is true in war as well as business. He spoke of three components in warfare:

People - Ideas - Hardware

This translates into the modern troika of:

Relationships - Creativity - Technology

It is obvious that online advertising and media have put its weight of effort into technology. The first two, "relationships" and "creativity" now carry almost no weight at all; rendered virtually impotent by a sterile, inanimate master.

Our technology stands poised to "connect us" but in reality we have become more alienated than ever before. How deep can relationships created from LinkedIn, Facebook or Twitter possibly be? How often have you found yourself competing for attention against someone's Blackberry? Is it any wonder that our children prefer to text rather than call each other on the phone? They now purposely avoid speaking in complete sentences. ROTFLMAO!

We rely more and more on technological solutions to marketing problems. We've conditioned ourselves to accept a .3% click-through rate precisely because it's so precise! As long as we arrive at such miserable click-through rates via mysterious algorithms that sift through mounds of data, the .3% holds up well.

Worse yet, there is an unending source of funding from the VC community that keeps this flawed game plan on its misguided trajectory. Money has poured into YouTube, MySpace, Digg, Facebook, and Twitter-relationships measured by the ton in 140 characters or less. Ad networks push quantity over quality and defend a 99.7% failure rate with a straight face.

We have seen the enemy, and he is us. May the best schwerpunkt win.

The Audience In The Media Ecosystem

Published 9/9/09

" **Mayo doesn't have friends, he only has customers."  
\- Louis Gossett Jr. in An Officer and a Gentleman**

" **Target has a personality all its own. And, for a multitude of reasons, Target attracts guests just as unique as its stores."  
\- From Target.com's press room**

There are many parts in every ecosystem. A natural ecosystem has six main components: soil, atmosphere, heat and light from the sun, water and living organisms.

In a media ecosystem, we have content creators, publishers/media owners, networks, agencies, advertisers and of course the audience. If the ecosystem is healthy, the audience eventually gets transformed into happy customers. This last sentence warrants repeating. If a media ecosystem is healthy, audiences eventually are transformed into customers.

With the exception of holistic thinkers like Bob Garfield and my friend Jeff Einstein, much of what we read comes from "experts" who specialize in only one aspect of the ecosystem. This results in advice that is overly compartmentalized and which generally misses the mark.

The biggest error of omission is the absence of any real attention to the audience. Let's start with an explanation of what I mean: A good working definition of "audience" is a group of listeners or spectators. Not surprisingly, the root comes from Latin and it means a "state of hearing".

Many in the media ecosystem confuse customers with audiences. The dictionary definition of "customer" is a person who purchases goods or services from another; a buyer if you will.

Do you see the difference between "customer" and "audience" when you read them back-to-back? Is there a difference between a "friend" and a "customer"? Mayo of An Officer and a Gentleman initially could not understand this.

The reason Target changed their language from "customers" to "guests" is because they wanted to compel their employees to treat those who came through their doors accordingly. Target knew that happy guests would eventually lead to happy customers if and when proper respect was paid.

But most Internet advertisers and marketers don't understand, let alone appreciate, this distinction. Advertisers stalk audiences with ever more novel, invasive and impersonal marketing technologies. Marketers bombard the audience with meaningless ad messages because there is no respect for the process that converts prospects into customers.

Publishers have become willing accomplices in this folly by adopting the latest technologies that promise far more than they can ever deliver. As a result, publishers have lost their way in their quest for a bigger piece of the advertising pie.

Agencies used to be at the forefront of audience development. Now agencies are glorified bean counters unwittingly leading the charge in their own disintermediation. Disintermediation is a highfalutin word describing their virtual elimination as middlemen in the advertising food chain.

So if arguably the most important element in the media ecosystem is the audience, then who still has their eye on the prize? The simple answer is the audience is listening to each other. Audiences do what they have always done: watch and listen ("state of hearing"...remember?).

The rise of our interaction with social media is in direct proportion to the decline in respect we receive from the rest of the ecosystem. Advertisers are finding it difficult if not impossible to break through in this new environment because they lost respect for the thoughtful listeners among us long ago.
Chapter 4: On Privacy

An Interview with George Orwell & Paddy Chayefsky

Published 8/4/09

Publisher's Note: This blogs reflects a fictional narrative.

What follows is an imaginary discussion with Paddy Chayefsky, who wrote the script for the award winning film Network, and Eric Arthur Blair, better known by his pen name, George Orwell. Whenever possible, their words were taken verbatim from their respective and considerable bodies of work. I hope you see their relevance to today's media and online marketing industries.

Jaffer Ali: Today we are honored to bring two literary giants together for a long overdue discussion. These prolific writers and social critics left behind much for us to digest. For our purposes here, we asked Mr. Orwell and Mr. Chayefsky to contrast and compare their respective seminal works, 1984 and Network,with an eye to what is happening in today's media-driven world. Thank you gentlemen for taking the time to share your thoughts with our readers.

Paddy Chayefsky: I would first like to say how much in debt I am to Mr. Orwell. I was a young man when I first read 1984 and I had regular nightmares about one day waking up in a place called Oceania.

George Orwell: That is very kind of you Mr. Chayefsky.

PC: Please call me Paddy

GO: Thank you. And I must say, when I first viewed Network, I experienced a curious sense of déjà vu.

JA: If we can break from this love-fest for a few minutes, I'm sure our readers would like to know just how prescient each of you believe you were with 1984 and Network?

GO: Well, thankfully I didn't live long enough to hear my nom de plume associated with all things oppressive. Apparently it is rare indeed these days to avoid references to this or that being "Orwellian." But on a more serious note, it is difficult to observe 21st-century thought and attitude and not conclude that societal and technological perversions have exceeded my wildest dreams...or I should say nightmares?

JA: How so?

GO: Well, for starters, this generation imagines itself to be more intelligent than the one that preceded it, and wiser than all those that will follow. As Mark Twain reminds us, this happens with every generation, but today's generation has such a lack of historical perspective, the past, for all intents and purposes, has been figuratively wiped out.

PC: George, can I call you George? I think I know why this is the case. Because less than three percent of the people read books! Because less than fifteen percent read newspapers or even consume news online! The only truth folks know is what they are fed over the television or computer. Right now, there is a whole generation that never knew anything that didn't emanate from some virtual source.

GO: It certainly is the case that to see what is in front of one's nose requires a constant struggle. I once said, "Who controls the past controls the future. Who controls the present controls the past." When I wrote 1984 sixty years ago, the techniques of controlling information were nothing like those we see today.

PC: I am glad you said that. I do not believe your novel envisioned such collaboration between government and the private sector. Back when you were writing, totalitarian governments controlled media out in the open. Everybody knew it. But not so today. Case in point, just a few years ago the U.S. government briefed 150 generals on exactly how the Pentagon wanted to sell the war in Iraq. They were then dispatched to be the sanctioned sources for all media. George, if you don't mind me saying this, you idealized the media because you trusted people like Edward R. Murrow. You never envisioned the private sector as government propagandists .You never considered how or why The New York Times would hire someone like Judith Miller (Pentagon groupie) to promote a government agenda... or imagined someone like Karl Rove paying $250,000 to a journalist (Armstrong Williams) to promote the party line. As far back as 1979, my friend Carl Bernstein broke the story that 400 journalists were on the CIA payroll. Propaganda has now become even less transparent than it was in the days of Stalin when EVERYONE knew the news was "cooked."

GO: Your point is well taken. Totalitarian government was the burning issue of the day back in 1949. Today I see the collusion between government and the private sector spawning a new breed of oppressive fascism, the offspring of an inseparable union between business and state.

PC: Precisely. You and yours perceived world events in terms of nations and peoples. But today there are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast, interwoven, interacting, multivariate, multinational dominion of currencies. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is this nameless, faceless global currency exchange that defines the totality of life on this planet. That is the nature of the world we have created for ourselves.

JA: That's quite an impassioned response, Mr. Chayefsky. Are you suggesting that the private sector has replaced the public sector as society's villain?

PC: Now is not the time for naiveté. Public officials are bought and sold like any commodity. If you wanted to maintain illusions, you should have interviewed Judith Miller and Karl Rove, rather than George and me. Those who perceive any meaningful daylight between government and big business are either not paying attention, or are selectively blind.

PC: Ask yourself: Who received $700 million in bailout money from the Bush Administration? The very same guys who received three times that amount from the Obama Administration, that's who! Our capacity for trust allows us to be easily seduced through clever political language and a media that appears free, when in reality it's all theater, bought and paid for by the highest bidder.

GO: Advertising is the rattling of a stick inside a swill bucket.

JA: Mr. Orwell, I believe you're exaggerating. Do you also feel compelled to indict the free-market processes that fuel our consumer culture?

GO: Please remember, all this cyber nonsense is new to me. But it doesn't take a genius to understand that behavioral targeting is about as bad as it gets. I'm not sure it's even advertising. What I do know for certain is that behavioral targeting represents a complete violation of our personal lives. And it gets worse the more we expose ourselves to its misguided purpose.

PC: I must caution you George, when you mention behavioral targeting, you're meddling with the primal forces of nature. You may think you've merely commented on an ill-conceived business practice, but in reality an entire online industry has placed its eggs in this one basket. Take companies like Choicepoint, Datran Media and Axciom for instance. They have accumulated huge databases of personal information on private citizens. I know that at least two of these companies have large contracts with the government to furnish this very information.

JA: Are you both in agreement that behavioral targeting technologies are unethical, perhaps even immoral?

GO: I believe the potential consequences of this new science extend beyond their moral implications. Ill-considered or unconsidered technologies are inherently dangerous. I have read what purveyors of behavioral targeting (BT) have to say about their craft and they're either impervious to the truth, or purposely silent regarding their own fears.

JA: With all due respect, Mr. Orwell, I'm not sure I agree. Isn't everyone, including Behavioral Targeting advocates, worried about government encroachment, just like YOU were?

GO: While it's true that I never envisioned the private sector assuming the role of Big Brother, what people seem to be missing is that the very act of snooping constitutes the violation, regardless of which sector – private or government – does the actual snooping. Once you go online there is no way of knowing whether you are being watched or tracked. You essentially surrender your privacy to a level of trust that hasn't been demonstrated, let alone earned. And it matters not how often or on what system you're engaged, BT can follow you and record your behavior. It's even conceivable that "they" are watching everybody all the time. Morality doesn't care who "they" are. But the fact remains that "they" can now eavesdrop on your private thoughts wherever and whenever "they" want to. We have now reached the point where we must assume that every online post, search, and Website visit is being monitored, every movement scrutinized. It is this covert scrutiny that violates our dignity and menaces our trust.

PC: There are many people who howl about America and democracy. There is no America. There is no democracy. There is only Microsoft, and Google, and AT&T, and DuPont, Dow and Exxon. They are the true power in today's world. What do you think the Russians talk about in their councils of state, Karl Marx? We no longer live in a world of nations and ideologies. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business. It has been since man crawled out of the slime.

JA: Wait a second. I am a serial entrepreneur who also happens to be libertarian. In keeping with our personal freedom of choice, couldn't we just ask online audiences to choose whether or not they want to be tracked? Wouldn't this get around the morality issue? After all, some folks are perfectly willing to have their online behavior tracked.

PC: Mr. Ali, I fear you're beginning to believe the illusions being spun here. To be morally relevant, choice must be both free and informed. For example, 75% of U.S. citizens believed Saddam Hussein had something to do with 9-11 before the U.S. attacked Iraq. What this tells us is that our opinions and the resulting choices can be manufactured, which makes them not free by design. Given enough money, you can buy off the media pundits...you can control editorial policy...you can, as my good friend Noam Chomsky suggests, manufacture consent.

GO: Those with enough resources can make lies sound truthful and even murder respectable, and to give an appearance of solidity to pure wind. Yet online audiences are far from being informed. Ever read one of those 15-page privacy agreements? I think people would be shocked to discover just how much information about them has been collected, stored, bought and sold. Informed consent is now nothing more than a lofty ideal buried somewhere in the fine print.

JA: I would like to go back to something Mr. Orwell said. "Unconsidered technology is inherently dangerous." I am not sure I understand this fully.

PC: May I jump in? When the Manhattan Project began, a cadre of twenty-something, brilliant PhDs got caught up with what was possible. They did not stop to consider the moral implications...

JA: But they eventually did if I recall. The Chicago group wanted to halt the project, didn't they?

PC: Yes, that's true. However, I was speaking of the initial rush of enthusiasm for the project. The morality of the technology was almost entirely unconsidered. Likewise, I believe the young tech marketers today have not yet considered the moral implications of BT, and few of the older generation even understand how BT works, so where are the checks and balances necessary to protect us from ourselves?

JA: But Mr. Chayefsky, many BT proponents say that they only want to deliver relevant information. They say they are doing online audiences a favor.

GO: Spare me those favors. We have seen over and over how the private sector hands over information to the government. All that is required is a subpoena. Besides, the gathering of information is not a means to an end, it is the end! The object of information is information. The object of persecution is more persecution. The object of torture is torture. The object of power is power.

GO: I have observed the growing discourse among BT proponents, and more often than not, they will admit to collecting information for which they presently have no use. They are collecting it "just in case" they ever find a buyer for it. The collection and mining of personal data has become a technological imperative.

JA: I have spoken with my oldest son who is in college and he doesn't see what the big deal is regarding Facebook, Google, Choicepoint and others engaged in the harvesting and brokering of personal information. Apparently there are a lot of young people who simply do not care about that which you both believe violates their dignity.

PC: That's understandable. Right now, there's an entire generation that never knew anything else. Technology is the gospel, the ultimate revelation. Since they have grown up under complete surveillance, they don't even notice it — kind of like an animal born and raised in captivity. It knows nothing of the joys and dignity of freedom.

GO: Just as driving while intoxicated poses a moral and legal dilemma, regardless of whether or not you crash into someone, the act of driving drunk is unacceptable and justifiably assailable behavior. Having our privacy violated through the stealth maneuvering of some faceless technology, regardless of intent or purpose, breaches our existential core in much the same manner as the drunk behind the wheel. BT's chimerical pursuit of "one-to-one" marketing can't justify the creepy practice of scrutinizing our every online movement.

GO: My fear is greater today than it was sixty years ago. Big Brother was obvious. Totalitarianism has given way to a generation that not only wears their chains gladly, but sees no reason to question the status quo.

JA: I want to thank you both for taking the time to share your thoughts with our readers. Your words and opinions are as timely today as they were when you first uttered them. It is an honor to view today's reality in light of your work.

JA: Is there anything you want to say in closing?

PC: Thanks for the opportunity to virtually speak from the grave. I know it's tough out there. Everybody's either out of work or scared of losing their job. The dollar buys a nickel's worth, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there's nobody anywhere who seems to know what to do, and there's no end to it.

GO: In a time of universal deceit, telling the truth becomes a revolutionary act. If liberty means anything at all, it means the right to tell people what they do not want to hear. Indeed, we are obligated to protect and defend our freedoms from those who would rob us of them, be it out in the open at the point of a knife, or at the hands of a technological predator lurking in the shadows.

Big Brother's Brother

Published 7/29/09

" **Big Brother in the form of an increasingly powerful government and in an increasingly powerful private sector will pile the records high with reasons why privacy should give way to national security, to law and order, to efficiency of operation, to scientific advancement and the like."  
\- Justice William O. Douglas**

My last article and theme on the immorality of "behavioral targeting" (BT) drew some interesting comments and critiques. I must say I was surprised by some of the comments. Some remarks included personal attacks, some questioned semantic terminology regarding the difference between ethics and morality, while others mostly just wanted to change the topic of discussion.

I obviously must take full responsibility for the shortcomings of my writing. Unfortunately, ideas do not necessarily end up on the page exactly as intended. Our own minds flawlessly plug in what we omit, but readers are left having to fill in the blanks.

Because the topic of the morality/ethics of what we do for a living is of great importance, I will try to clarify for whomever cares to read why BT represents a moral black hole that draws otherwise good people into its sphere.

BT has many different definitions. For the purpose of this article, let's use the FTC definition:

" **... the tracking of a consumer's activities online – including the searches the consumer has conducted, the web pages visited, and the content viewed – in order to deliver advertising targeted to the individual consumer's interests."**

Now, most marketing professionals understand that huge databases are being built comprising what was originally thought to be anonymous information. In other words, searches, Web sites visited, content viewed, and even comments left on blogs were originally considered to be unconnected to PII (Personally Identifiable Information).

That original intention and assumption has been rendered inoperative. Even though data may not reside on one server within one marketer's control, with very little effort it is conceded that PII and behavioral data can be matched.

Matched by whom you might ask? Can Google match data to PII? Can ad networks? Can the government?

" **Soon it will be possible to assert almost continuous surveillance over every citizen and maintain up-to-date complete files containing even the most personal information about the citizen..."  
\- Zbigniew Brzezinski**

The government only needs to subpoena behavioral data from multiple sources to create the fertile grounds for PII matching. Has Brzezinski's "soon" already become a reality? With the collusion between corporations and government becoming more and more apparent, this is not some fantastic conspiracy theory. As my previous article noted, we have witnessed:

1) Amazon complying with subpoenas to release transactional purchase history  
2) Phone companies turning over phone records  
3) Billions of search records turned over to government

The above illustrates the already entrenched practice of the private sector harvesting or collecting information and the government seamlessly obtaining that information. It is a mistake to think that surfing behavior, click stream data, viewed content, etc., will somehow be immune from government subpoenas. Since we already have behavioral data (transactions) being turned over to the government, the die is cast.

BT was not created with nefarious intentions. It was created to advance efficiency of marketing dollars with the intention to provide relevant ads based upon one's profile. That seems innocuous enough.

But as we've seen over and over, the road to Hell is paved with good intentions. Intentions migrate. There is always the law of unintended consequences. How many purveyors of BT actually thought that the collection of data would be used for government snooping? I bet few thought things through that far.

As a side note, since my last article, Amazon was caught deleting digital copies of 1984 without Kindle consumers' knowledge. It was strangely reminiscent of the "memory hole" envisioned by Orwell, into which books would simply disappear. In Orwell's vision back in 1949 when he wrote "1984," books were incinerated by the government. In 2009, they are deleted with a keystroke by the private sector. Amazon CEO Jeff Bezos, to his credit, was moved to apologize.

It may be the case that the government no longer needs to scrutinize our virtual, digital lives. Why? Because our lust for and pursuit of behavioral targeting does it for them. Orwell was worried about Big Brother... but to believe that the scrutiny of every movement, every thought, every behavior is only a government vice is to take leave of one's senses, and turn a blind eye to morality.

Justice Douglas had it right when he saw the twin dangers of government and the private sector assaulting our privacy. BT Marketers would like folks to concentrate on only governmental Big Brother. The subpoena makes this distinction largely moot.

There is no longer a hard edge between government and corporate information. As the bailouts demonstrated, there is barely any such distinction at all. They are merging in an unholy alliance faster than you can say 9-11. Orwell wrote his morality play in 1949. Today in 2009, we need to examine the morality of the private sector scrutinizing our digital lives.

BT is a methodology that stalks and threatens our private lives. And make no mistake, privacy and freedom are inextricably entwined. As Justice Douglas said, "The right to be let alone is indeed the beginning of all freedom."

We will leave for another time how it is even conceivable that our loss of freedom, our slavery, becomes suddenly ethical if we opt to wear the chains that keep us enslaved. Until then it is necessary for us to open the debate to the light of day as to whether the very act of digital stalking threatens, indeed violates our dignity. As author Katherine Gerould proclaims: "All violations of essential privacy are brutalizing." Will we heed her sage advice, or will our greatest fears be realized, perhaps without us even knowing?

Why Behavioral Targeting Is Immoral

Published 7/22/09

" **There was of course no way of knowing whether you were being watched at any given moment. How often, or on what system, the Thought Police plugged in on any individual wire was guesswork. It was even conceivable that they watched everybody all the time. But at any rate they could plug in your wire whenever they wanted to. You had to live—did live, from habit that became instinct - in the assumption that every sound you made was overheard, and, except in darkness, every movement scrutinized."  
\- 1984, George Orwell**

Orwell published the above words in 1949. The book has inspired generations to cherish our freedoms. These words warned us about the assault on our dignity that Big Brother represented and gave notice of what could happen if we surrendered parts of ourselves that should remain private.

A recent eMarketer projection suggested that by 2012, 24% of all online display advertising would utilize some form of behavioral targeting. This would indeed be a sad day for our nation. If predictions prove accurate, the power that Orwell presciently warned of in his seminal "1984" will have moved from the governmental Big Brother to corporate marketers.

While there is ample evidence that the promise of behavioral targeting (BT) far surpasses what it actually can deliver to marketers, the existential morality does not rest on its efficacy. Purveyors of BT begin with the "big lie" that collected data cannot be tied back to individuals. This is not an innocent white lie but the mother of all lies because BT uses it to mask a blatant invasion of privacy.

Do not be fooled. Assurances to the contrary notwithstanding, sophisticated data mining techniques can now trace surfing behavior back to the individual. Here is how the Electronic Frontier Foundation (EFF) weighs in:

" **Your Web searches about sensitive medical information might seem secret, known only to you and search engines like Google. But by logging your online activities, these companies are creating a honeypot of personal information, potentially available to any party wielding a subpoena."**

The potential for abuse is overwhelming. And don't think for a minute that the government won't have access to this information. Under several post 9-11 laws, the government has the right to subpoena corporate records of all sorts of data. The government has already done this, including:

1) The subpoena and receipt of Amazon.com purchasing records.  
2) MSN, Yahoo and AOL received and complied with subpoenas of billions of searches. (Google fought the subpoena and did not comply in the above case, but has reportedly complied with other requests).  
3) The NSA has received information on millions of phone customers directly from the carriers. Given the real-world scenario above, I am not sure the government will be in any hurry to make BT illegal. They abandoned the program "Carnivore" because the private sector was collecting data and developing data mining techniques cheaper and faster than the government could for itself. If we expect the government to protect our privacy in the face of such conflicted agendas, we really are in trouble. The sober reality is that BT's ultimate legal footing has little to do with morality. In fact, we can cite many historical laws that were manifestly immoral, yet laws nonetheless. Those upholding slavery immediately come to mind.

Behavioral targeting is an invasive, stalking behavior. If we accept BT in the private sector, we relinquish any moral standing we might reasonably claim against invasive government snooping. Indeed, our acceptance of BT makes us necessarily complicit in its abuse. Think about this. We are marching down the road of government and corporate collusion on many fronts. The recent economic bailout is evidence of this collusion: losses are socialized while profits remain private. The line between corporate data-mining and government intrusions has already been crossed too many times.

When freedoms are taken away, we are compelled to consider what we've lost. But when we give up our freedoms willingly, we've lost our sense of self. Privacy is certainly a moral issue, and any process that enables the capture and/or forced surrender of personal information is fraught with moral implications.

Article IV of the Constitution says in part:

" **The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated..."**

The above clearly suggests a moral right not to be violated. Does this extend to violation at the hands of a digital Big Brother? Of course it does. Professor of computer science Wendy Hall sums it up well:

" **There are lots of good reasons why companies and government want access to our data but there are huge downsides to that. This debate is about our digital lives. It is about who we are, what we are interested in and what is private to us."**

Behavioral Targeting: Putting Lipstick on a Pig

Published 8/10/09

The term "lipstick on a pig" has been used in one variation or another from the mid 16th century and used most recently by the Obama folks to describe John McCain's presidential campaign. The reference is to make something appear more beautiful than it really is or to make something useless appear useful.

All the lipstick in the world can't make behavioral targeting any less porcine.

Before we go any further, let's define what we mean by behavioral targeting since it means different things to different people. For the purpose of this article, the FTC definition will suffice:

" **... the tracking of a consumer's activities online – including the searches the consumer has conducted, the web pages visited, and the content viewed – in order to deliver advertising targeted to the individual consumer's interests."**

For all the hype, behavioral targeting has such limited utility that one can only shake one's head in bewildered disbelief at its growing acceptance. The army of mathematicians that once were lionized on Wall Street has invaded Madison Avenue. Computational finance wizards now seek to become computational marketing mavens.

They are finding a receptive audience among agencies, VCs, industry trade publications, ad networks and marketers across the country. Desperation has a way of bringing people together. But there is a major problem; the same underlying math that destroyed Wall Street underlies BT and will destroy online marketing (indeed, BT-inspired online performance has declined more than 95% over the past decade) . The adherents of behavioral targeting seem to be blind, deaf and overwhelmingly dumb to the metaphysical issues surrounding BT and to the existential implications confronting it.

Consider some of the specious and/or fallacious claims of BT proponents:

1) Human behavior is rational.  
2) Future behavior can be predicted on the basis of past behavior.  
3) Stalking, collecting and measuring minute surfing behavior is neutral and does not influence the behavior being measured.  
4) Behavioral data cannot be traced back to the individual.  
5) People actually want relevant ads.  
6) Behavioral Targeting will remain legal.

Let's take the issues one at a time.

1) Our economic models all assume that human beings act rationally. But today, amidst the carnage of the financial system, we see that our "animal spirits" are more highly engaged than reason. Case in point: John Nash's game theory presupposed rational behavior and he has since recanted his position.

Alan Greenspan said that there was a "fundamental error in their model of human behavior". That error was rationality. Emotions rule human actions much more than reason or rationality. By developing marketing methodologies that ignore emotion and elevate rationality way beyond what is reasonable, behavioral targeting has a flawed foundation.

2) There are many aphorisms that support the notion of predicting the future by looking back. But try driving your car looking only in the rear view mirror and see how that works for you! This, according to Nicholas Taleb, is nothing more than data bias, sometimes referred to as "data-snooping bias".

BT allows for thousands of hypotheses to be tested within a very short time frame. The statistical significance becomes more suspect the more we drill down. The idiotic "one-to-one" mantra has led us off the statistical cliff in search of "hidden" relevance. This "science" has produced a performance death spiral with CTRs now hovering around an abysmal .2%.

3) More and more people are becoming aware that their surfing behavior is being monitored. Some do not like it at all. But awareness of the practice can actually CHANGE THE BEHAVIOR. The literature on this is quite overwhelming, supported in large measure by common sense. That is why the FBI practices secret surveillance. They know that once their monitoring becomes known, behavior changes. BT literally affects behavior once those being stalked realize that Big Brother is watching.

4) Many privacy statements of BT practitioners claim that no personal surfing behavior can be tracked back to the individual. With ever growing databases of personal behavior, the potential for matching - even without direct information being stored - is now possible approximately 75% of the time. The matching will get "better and better" (or, worse and worse, depending upon your POV.)

5) Even if we could inject relevancy into the equation, it's a huge leap to suggest that people want more advertising. Marketers like to say, "if we can only deliver the right ad in front of the right person at the right time..." But as audience targeting techniques have become more refined, what has happened to performance? Once again, it bears repeating: our industry-average click-through rate has plummeted to .2%, when 10 years ago it averaged 5%! It doesn't take a genius to conclude that in an on-demand world, nobody demands more advertising, yet despite overwhelming evidence to the contrary, advertisers and marketers still insist that the Emperor is fully clothed.

6) There are many legal hurdles on the BT horizon. Professor Andrea Matwyshyn of the Wharton School said:

"... **questions are inherently intertwined not just with privacy laws, but also with contract law, computer-intrusion law[and] consumer-fraud law."**

If you are a betting person, how much would you like to wager that the practice of behavioral targeting will remain legal? We all allocate resources where we think they have the greatest chance of success. Given the hurdles confronting BT and the looming legal battles, is this really where you want to allocate your time and money? Or are you just putting lipstick on a pig?

A Brand's-Eye View of Behavioral Targeting

Published 8/20/09

" **A man must keep a little back shop where he can be himself without reserve. In solitude alone can he know true freedom."  
\- Michel de Montaigne, Renaissance Essayist**

I have been writing a lot about behavioral targeting lately. As click through rates, according to Doubleclick, have cratered at .1% on an industry average, everybody is looking for a solution to the performance crisis befalling our industry.

Is behavioral targeting (BT) the solution? The answer is a resounding "No." From faulty underlying assumptions of rational human behavior to the additional costs imposed on the marketing process, behavioral targeting is not a solution. In fact, it may very well be the problem.

One must look at BT from all angles to really appreciate its impact on the marketing ecosystem. So let's begin where the BT buck literally starts and stops and view behavioral targeting from the perspective of a consumer brand.

Could it possibly be the case that executives from well established brands are impervious to the dangers BT represents? It's not only possible but highly probable that brand stewards have little understanding of BT methodologies. Heck, they're just the poor saps paying for this folly. They lost control the moment they deferred to the legions of agency quants with no brand DNA whatsoever in their veins.

Here is the working definition of BT as offered by the FTC:

" **... the tracking of a consumer's activities online -- including the searches the consumer has conducted, the web pages visited, and the content viewed - in order to deliver advertising targeted to the individual consumer's interests."**

Those selling BT technology would have brands believe that the seemingly innocuous goal of delivering relevant ads washes clean any fundamental creepiness arising from the stalking tactics involved. Stalking? Yes, this is a loaded term.

But what does it mean to scrutinize every website visit, every search, and every blog post other than to invade one's digital private life? Is it reasonable to sacrifice privacy on the altar of efficiency? Yes, the fascists got their trains to run on time. But at what ultimate cost to humanity?

BT peddlers seek to avoid government regulation, a relatively empty concern given the collusion between the two in the collection and dissemination of personal data. It is always the case that the private sector does things more "efficiently" than the government. Orwellian snooping is no exception. The fact that our tax dollars fund this obscene espionage of ourselves is proof positive of a technology run amok in both theory and practice.

The real shortcoming of BT is in its misplaced focus, and in its resulting inability to convey the honest value of a brand.

Obviously a brand's number-one asset is its relationship with its customers. It is the trust between brand and consumer that develops over time and accrues value. Simply stated, brand value is achieved when you create a positive emotional connection with your customers.

Now ask yourself an overwhelmingly simple question: Will scrutinizing and stalking your customers enhance your relationship with them? How about doing it under stealth conditions? What they don't know won't hurt them...right?

Relying on stealth is not a strategy. The database is too large and consumers too inquiring to keep the genie in the bottle forever. History tells us that it won't be long before a consumer flash mob, utilizing Twitter, Facebook and other social media discover that they are being VIOLATED.

Once this happens, there will be a public hue and cry that will resonate throughout the corridors of corporate America. And there will be backtracking and finger-pointing galore. Case in point: When Jeff Bezos was off buying Zappos, some knucklehead at Amazon decided to digitally invade Kindle users and erase copies of 1984 and Animal Farm., leaving Bezos with digital egg on his apologetic face and more fodder for the growing ranks of BT skeptics.

The truth is that brands are exposing themselves to a consumer backlash unlike any other in history. This will happen sooner rather than later. Good relationships are not created by abridging freedoms. It was Justice Douglas who said, "The right to be let alone is indeed the beginning of all freedom."

I am aware of the trouble in which brands find themselves. They are at the crossroads of their intentions. One road leads to certain consumer backlash. The other road leads to the opportunity for enduring relationships based on trust, quality, and creativity.

The road to success requires that we champion the causes of freedom, dignity and respect. It's not easy. But it's the only path ultimately worthy of our time and consideration.

What we all need is a healthy dose of common sense. And that leads me to one of my all time favorite quotes from Thomas Paine's Common Sense, penned more than two hundred years ago:

" **Those who expect to reap the blessings of freedom must, likemen, undergo the fatigue of supporting it."**
Chapter 5: Uncertainty Reigns

The Center Cannot Hold

Published 10/31/08

" **Turning and turning in the widening gyre  
The falcon cannot hear the falconer;  
Things fall apart; the center cannot hold  
Mere anarchy is loosed upon the world..."  
\- William Butler Yeats, from The Second Coming***

There are times when poets understand and communicate so much better than those of us who can only dream of writing poetry. As we face the financial maelstrom in our markets and economy, can anyone doubt that "something" is terribly wrong?

What, exactly, is wrong?

We have chaos, volatility, and experts (the falconers in Yeats' poem) admitting that they know not where the future leads. The falcon has ceased obeying the falconer because the maelstrom is too loud and overpowering.

The online advertising world is caught in the same cacophonous vortex, despite those who still insist that the center will hold. In the face of undeniable evidence that our industry is in the eye of a storm with a manifestly uncertain direction, it is they who are delusional.

If we switch from the lyrical beauty of the poet to the real politik of renowned strategist, John Boyd, we move closer to the answer. Boyd, the chief strategist of the first Gulf War, outlined how a model of reality becomes more unstable as the second law of thermodynamics asserts itself in the form of entropy.

By definition, as entropy increases instability results. Chaos reigns and unpredictability becomes the norm. In effect, the "center cannot hold."

Boyd spoke about the dialectical process of destruction and creation. Experts can try to patch the model currently in place, but all such attempts bring more and more instability. It is like taping together a condemned house in a hurricane.

There is growing evidence that the current online model is becoming as unstable as our financial markets. For example, 10 years ago, banners would yield a 5% CTR. This was without the benefit of complex mathematical models. Today even with the most sophisticated algorithms touted by our best and brightest quants (a quant is a believer in quantitative analysis), the average CTR now reports in at around 0.3%. Viewed another way, last decade's 95% failure has devolved into a virtually complete failure. You know you're in trouble when you long for the days when only 95% of your money was wasted. What progress!

The solution to declining performance has been to cull ever more consumer data. Browsing and purchasing information have been subsumed into ever more mysterious and chic computational models that have become blueprints for precisely what doesn't work. This mathematical reduction suffers from the same uncertainty that Heisenberg proved at the subatomic level. The more we delve in the effect, the more uncertain our cause becomes. The more we invest in this data, the lower our ROI.

"Things fall apart...and anarchy is loosed upon the world."

In order to save a failed model, ever more intricate patches are created to prop up the notion that online media can utilize science and math to cure its ills. As a result, quality, beauty and soul become endangered and eventually extinct. Why? Because quality cannot be reduced to calculation. Soul cannot be reduced to quantitative erudition. Transcendence does not fit into Google's model. Google utilizes the same mathematics that has facilitated the destruction of our financial markets and the demise of our trust. Algorithms have replaced human interaction.

There are now more than 100 million websites on the World Wide Web. Has this increased choice led to an increase in quality? Has more led to better? Of course not. Before a new online model can take root, the old one must be destroyed. Look at the numbers. Look at the trends. Next stop, absolute zero.

As CPMs for banners continue their precipitous decline (RON banners can be purchased for as little as $.10/M), the proof that the "center cannot hold" becomes more compelling. But just as there were those who stubbornly defended Newtonian physics in the face of more rational quantum mechanics, many still cling to a flawed roadmap that leads us nowhere.

The sad truth is, few of us have the courage, let alone the ability, to articulate our hopes and dreams in the open market. But who can deny that our current model is hopelessly flawed. Author Anais Nin had it right when she said:

" **There came a time when the risk to remain tight in the bud was more painful than the risk it took to blossom."  
\- Anais Nin**

I do not fear the maelstrom because simple logic demands that the center cannot hold. Besides, we deserve better. The falconer deserves a clearer voice, the falcon a clearer sky.

" **The Second Coming" Complete  
"Turning and turning in the widening gyre  
The falcon cannot hear the falconer;  
Things fall apart; the center cannot hold  
Mere anarchy is loosed upon the world;  
The blood-dimmed tide is loosed, and everywhere  
The ceremony of innocence is drowned;  
The best lack all conviction, while the worst  
Are full of passionate intensity.  
Surely some revelation is at hand;  
Surely the Second Coming is at hand.  
The Second Coming! Hardly are those words out  
When a vast image out of Spiritus Mundi  
Troubles my sight: somewhere in sands of the desert  
A shape with lion body and the head of a man,  
A gaze blank and pitiless as the sun,  
Is moving its slow thighs, while all about it  
Reel shadows of the indignant desert birds.  
The darkness drops again; but now I know  
That twenty centuries of stony sleep  
Were vexed to nightmare by a rocking cradle,  
And what rough beast, its hour come round at last,  
Slouches towards Bethlehem to be born?"  
\- William Butler Yeats, January 1919**

Limits of Knowledge

Published 6/20/11

" **Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world."  
\- Albert Einstein**

I am not a philosopher, but a business executive who touches just about every point in the media ecosystem. Most of what I was taught and have read in the trades has been overwhelmingly wrong. In more than thirty years in this business, I've discovered what George Bernard Shaw meant when he urged us to 'beware of false knowledge; it is more dangerous than ignorance.'

The great pull for me of  Nassim Taleb's writings center around the limits of our knowledge. Taleb is quite fond of saying that he wakes up every morning with a firm grasp on what he does NOT know. Few things are more toxic than devotion to a course of which we are "certain" only to be proved delusional in our thinking. Ponce de Leon's vain search for the fountain of youth comes immediately to mind.

One of my hobbies since high school has been to collect quotations from folks a lot smarter than I. Having accumulated more than 25,000 quotes, and before sitting down to write this, I searched "knowledge". My search revealed some gems that will punctuate this missive.

I believe it is important to get a handle on what we do not know...and even more critical to acknowledge and appreciate what we cannot know. The more and faster things change, the more important it is to explore the limits of our knowledge.

" **I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamppost — for support, rather than for illumination."  
\- David Ogilvy**

The online media landscape has largely sold itself on the notion that given enough data it could predict the future. This misguided meme is a variation of La Place who suggested in the 1800s that if we knew all the positions of all the matter in the Universe, we could know the future with as much accuracy as we knew the past.

This idea is known as "causal determinism". Back in Laplace's day, the ethereal province of omniscience was God's alone. Today, it is data that rules the clouds, with but one purpose: to predict what we will buy and when we will buy it.

" **Those who have knowledge, don't predict. Those who predict, don't have knowledge."  
\- Lao Tzu**

Now, ask yourself a very important question. How effective have predictive algorithms been? Any honest answer would be that they have failed miserably. This is true in social sciences, finance, and of course, online marketing. Click through rates have beaten a path to statistical zero despite terabytes of information collected to predict consumer behavior. When banners were first introduced as an advertising unit, click through rates quickly reached 10% WITHOUT a scrap of data put in service of stalking audiences.

Our response to this dismal performance has been to double-down and collect even more information. We listen to the music and watch as Rome burns. Data has become an obsession.

" **Information is not knowledge."  
\- Albert Einstein**

What Einstein knew was that more data and more information do not necessarily lead to more knowledge (and certainly don't lead to more wisdom). In fact, a case can be made that this drive has made us even denser as we use it to rationalize our course of action (David Ogilvy's 'lamp post support').

A friend of mine on a discussion list recently said he did not want to hear any theory that did not have "data to back it up". I guess theoretically speaking, and with plenty of data to back it up, we can reasonably posit that online advertising simply doesn't work. Sounds pretty foolish, doesn't it?

But there is a way out of the data/information trap. We can reintroduce imagination to our world.

The Paradigm of Prediction

Published 6/2/11

" **A system that is over-reliant on prediction through leverage, (like the banking system before the recent crisis), hence fragile to unforeseen "black swan" events, will eventually break into pieces."  
\- Nassim Taleb**

I don't read many business books anymore. For years I devoured them voraciously. But something happened to me as I began to realize that the paradigms I was reading about had much more to do with faith and beliefs than real science.

Oh yes, much of it was dressed up in pseudo-scientific language to give it a patina of authority, but when I dug deeper, what emerged was a subjective POV promulgated and defended with evangelical zeal instead of scientific detachment. I am certainly not against faith-based literature. In fact, I have spent a great deal of time with the Torah, Gospels and Quran and found them all quite uplifting.

Thomas Kuhn, who coined the term "paradigm shift", defined a paradigm as a set of beliefs or views that members of a community share. Kuhn discovered over the years that paradigm stakeholders maintain their POV in a most irrational way, because faith-based worldviews – be they secular or religious - by design lie outside the realm of reason. And I say this as a person steeped in his own faith.

" **Aye, aye! and I'll chase him round Good Hope, and round the Horn, and round the Norway Maelstrom, and round perdition's flames before I give him up."  
\- Moby Dick**

Nowhere is this stranglehold of irrational exuberance more evident than in the curious love affair the digerati have with prediction and predictive-modeling memes. Billions have been invested in pursuit of this obsession, and yet prediction remains an elusive modern day "white whale".

What the zealots won't allow themselves to see is how spectacularly this paradigm has failed. It's as if they are all suffering from some collective delusion waiting for the Rapture (which by the way has been postponed to October 21st this year). How spectacular has the failure been? Two words; "Arab Spring."

This refers to the wholly unpredicted political uprisings and revolts that sprang up virtually simultaneously in Arab nations around the world recently, despite terabytes of information and the most sophisticated predictive models on the planet crunching the data.

Credit card companies armed with overwhelming amounts of data on you and me have still managed to create 30% toxic debt that they COULD NOT PREDICT. Massive financial crises in housing, healthcare, and the stock market have caught us completely flat-footed despite overwhelming attention to and investment in predictive methodologies.

The collapse of catalog-direct marketers who COULD NOT PREDICT variables or events that led to their demise should give us pause in our pursuit of the white whale, but that would require replacing irrationality with reason, and if there is one thing we can predict with certainty, it is that human behavior is not rational.

The Fukushima nuclear disaster could have been prevented if they had built a wall high enough to withstand a 24-foot tsunami. Instead, their predictive model provided for a 20-foot wave. The huge insurance company, AIG, spent millions of dollars to predict risk. Yet as we know, in 2008, they COULD NOT PREDICT the financial collapse that bankrupted them. So much for predictions.

There is no shortage of spectacular failures that can be traced to faulty predictions. And yet, instead of learning from our mistakes, instead of seeking refuge by embracing uncertainty, we react instead by doubling-down on our irrational persistence, seemingly impervious to the hazards of trying to predict human behavior. Nowhere is this more evident than in the online world where the promise of behavioral targeting has given way to utter chaos; resulting in a patchwork quilt of flawed premises with no cohesive design.

And even though the predicted day of Rapture has come and gone, followers of the delusional pastor are busy retooling their worldview to fit a new date. The digerati, too, are busy patching their quilt in a vain attempt to shroud themselves from perdition's flames.

Embracing Uncertainty

Published 3/17/09

" **To be uncertain is to be uncomfortable, but to be certain is to be ridiculous."  
\- Chinese Proverb**

My modus operandi after graduating college was to eliminate as much uncertainty in my life as possible. Maybe that's because I believed my only alternative was to be like the feather in the wind at the beginning of Forrest Gump.

After becoming the CEO of a direct marketing company, "visibility" became my magic word. I wanted predictable results, predictable processes. I craved the comfort of certainty. When uncertainty reared its head, I armed myself with all the data I could muster and fought back.

But something didn't feel quite right. I hungered and thirsted for information, yet was starved of real knowledge.

"... **rare events cannot be estimated from empirical observation since they are rare."  
\- Nicholas Taleb, The Black Swan**

Our most profitable catalog mailing ever featured over 1500 military videos. It took four months to get this catalog from product selection to mailbox.

Then one day after sending out a few million catalogs, President George Bush (the original) launched a massive military operation named Desert Storm. Our response rates plummeted 80% and nearly bankrupted us. Nobody wanted to watch videos of past wars when there was a brand new one live and in color on CNN.

Yet Albert Einstein's famous saying, "God does not play dice with the Universe," remained terra firma for me. Randomness and uncertainty could be tamed by working harder than everybody else. In those years, I often left home before my kids awoke and got home long after they went to sleep. Hey, eliminating uncertainty is hard work!

After selling the catalog operation, the non-compete provision allowed for TV direct response and online marketing. The year was 1996 and we contemplated re-purposing some of the top titles from previous DR campaigns; among which was a Shirley Temple compilation. We tested in early December of 1996 and produced a cute commercial of a very precocious 6-year-old Shirley Temple.

Then on Christmas day 1996, JonBenet Ramsey was murdered and garnered nationwide headlines. Suddenly, our little Miss Temple didn't seem so "cute" anymore. The promotion died after a promising test, brought to its knees by my old nemesis, uncertainty.

Now, here's where it gets really interesting: Concurrent to our Shirley Temple debacle, we were also in test with two Riverdance commercials. The results were marginal, but unbeknownst to us, Michael Flatley's company had made a deal with PBS to air the entire Riverdance performance in late 1996. Conventional thinking suggested that a commercial-free airing would hurt our sales. But just the opposite occurred. Sales jumped AFTER the PBS airing! Riverdance became the hit DR product of 1997, thanks in no uncertain terms to uncertainty. I was beginning to appreciate uncertainty in the context of its alter ego, otherwise known as LUCK.

Fast forward to the world of online marketing...

Online marketers are heavily vested in the notion that predictive modeling of human behavior is a rational process. This is what happens when MBA-driven venture capitalists pour billions of dollars into behavioral targeting methodologies hell-bent on eliminating — or at minimum taming — uncertainty. And yet, what does our most recent report card reveal? Industry-standard click-through response rates of .35%. That's a 99.65% failure rate for anyone who's not certain of exactly how to interpret the data.

Thankfully, life's lessons cured me of my quest for certainty. But I ended up in an online arena which still clings to the illusion that rational behavior is something that can — and should — be measured. Interestingly enough, I came to learn that in the original Sanskrit, "measurement" and "illusion" had the same meaning.

Behavioral Targeting (BT) promised a new way to accountability. But the underlying assumption that humans are rational creatures is flawed; it becomes even more specious the closer we look. We need delve no further than the stock market to see what we get when we place blind faith in BT models that tell us who, what, where and how, but never "why." As Dr. Phil would say: "How's that working for ya?"

So let me say as emphatically as I can that eliminating uncertainty is not a strategy. The way out of the mess is to EMBRACE UNCERTAINTY!

" **The quest for certainty blocks the search for meaning. Uncertainty is the very condition to impel man to unfold his powers."  
\- Erich Fromm**

We need to manage a portfolio of uncertain futures. Forget about trying to out-think chance. It is a fool's errand. We live in a quantum reality of almost infinite possibilities. We can let our creative juices flow and pursue an ongoing and unending journey guided by uncertainty.

If we wake up every day open to these possibilities, certain or not, we will go to sleep each night a little wiser. We must welcome and embrace what we do not understand. It is when we question our assumptions that we begin the creative process. It is through uncertainty that greater truths emerge. On that note, I leave you with a precious quote from Van Gogh:

" **For my part I know nothing with any certainty, but the sight of the stars makes me dream."  
\- Vincent van Gogh**

The Pretense of Knowledge

Published 4/22/09

" **The greatest obstacle to discovery is not ignorance, it is the illusion of knowledge."  
\- Daniel Boorstin**

The title of today's commentary was lifted from Friedrich August Von Hayek's acceptance speech for the 1974 Nobel Prize in Economics. He chose that August forum to rail against his discipline, for he had seen economics fall under the sway of "physics envy."

Thirty-five years later, his critique of the state of economic theory still rings true, especially in the context of the online marketing landscape. To wit, there is a branch of online marketing whose preoccupation is collecting as much data as possible on the individual and then mining that data for discernible patterns of behavior. The goal, according to Eric Schmidt of Google, is "to predict even what you will search for before you search for it." In short, the goal of behavioral data collection is to predict human behavior on a micro level.

Just as in economic theory, in which more and more variables are measured in the vain attempt to predict behavior, Hayek pointed out the human limitations inherent in such complex behaviors and predictive systems. In Hayek's own words:

" **We know... a great many facts which we cannot measure and on which indeed we have only some very imprecise and general information. And because effects of these facts in any particular instance cannot be confirmed by quantitative evidence, they are simply disregarded by those sworn to admit only what they regard as scientific evidence; they thereupon happily proceed on the fiction that factors which they can measure are the only ones relevant."**

Marketing online has followed the path of mathematical reduction. Proponents of this school of thought are not the creative ad men of days gone by, but technocrats with MBAs, engineering and yes, even physics degrees. Hayek again cautions:

" **It has led to the illusion that we can use this [math technique] for determination and prediction...and this has led to a vain search for quantitative or numerical constants. This happened in spite of the fact that founders of mathematical economics had no such illusions...Vilfred Pareto, one of the founders of this theory clearly stated, its purpose cannot be 'to arrive at a numerical calculation of prices' because as he said it would be absurd to assume we could ascertain all the data."**

Some reading this might protest that behavioral targeting is useful even if we cannot ascertain all data for prediction. After all, something is better than nothing, right? Upon closer inspection though, the answer may be perhaps not. Plausibility aside, in actual practice the false illusion of knowledge we do NOT possess has proved disastrous. Remember, marketers are making investments based upon these admittedly flawed marketing premises.

Also, that which distracts marketers from doing what they should be doing — namely marketing — is not a good thing. If creativity becomes an afterthought, you are already way behind in the game. If you are not constantly thinking about what you can offer your audience, you already have two strikes against you. Again Hayek:

" **There may be few instances in which the superstition that only measurable magnitudes can be important has done positive harm...[but] an almost exclusive concentration on quantitatively measurable surface phenomena has produced a policy which has made matters worse."**

A growing number of online marketers want to wrest control back from the quants. As self-proclaimed marketing experts, they've had their day in the sun, right alongside the legions of other soft "science" experts: the psychologists, political scientists, economists, and historians. Like everywhere else that quasi-science triumphs over common sense, the quant stamp on the online market has been a dismal failure.

We all wanted marketing to become a science when it is in fact, a lost art. Our collective delusion was that we could hand the keys to marketing over to the guys with pocket protectors. We abrogated our responsibilities as advertising and marketing professionals. We bowed to the false idol of science. Hayek, a true scientist in his own right, said:

" **Yet the confidence in the unlimited power of science is only too often based upon a false belief that the scientific method consists in application of a ready made technique, or in imitating the form rather than the substance of a scientific procedure, as if one needed only to follow some cooking recipes to solve all social problems."**

I can almost feel the daggers from the quants who are still reading this. They inevitably will try to save their discipline (and jobs) by claiming that they can truly predict behavior. But the complex interaction of inherently unpredictable human thought with unknowable events makes this "discipline" even more of a fool's errand; its relative "success" limited in time and degree.

Who better than Professor Hayek to close this piece:

" **If man is not to do more harm than good in his efforts to improve [marketing models], he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible."**
Chapter 6: Sense and Nonsense

Walking the Talk: Count on Yourself

Published: 1/21/09

" **It is easy to see that a greater self-reliance must work a revolution in all the offices and relations of men; in their religion; in their education; in their pursuits; their modes of living; their association; in their property; in their speculative views."  
\- Ralph Waldo Emerson**

Who can deny that the present economic environment presents challenges? There are many expositions of the problems but few tangible suggestions on how to get through the current down times.

Getting here was easy. Nurtured by the fertile soil of venture-backed dollars, online publishers, ad networks, agencies and clients all reaped a bountiful harvest. Life was good, and we grew complacent. We took our good fortune for granted and let our fields go fallow.

But as cowboy poet, Waddie Mitchell said, "During tough times, our attitude is often the key to whether we'll thrive or merely survive."

We are all faced with decisions. There is one entire category of the online industry, the sector I call "quants" (for those who tout the latest quantitative analysis), that operates under what mathematician Schoenfeld coined "the glorious misconception". For the quants among us, "glorious misconception" is the entrenched belief that algorithmic reduction can trump randomness in human affairs.

Unfortunately, their sheer strength in numbers (no pun intended) allows the quants to dictate how business is done online. They are so invested in their own mathematical voodoo, and so disinclined to narrative, that they've effectively shut down any real dialogue toward what could and/or should be. As a result, marketing alliances are fragile and shallow by design, doomed to failure at the hands of a "glorious misconception" that compromises rather than satisfies.

And the closer we look, the worse it gets. The ensuing cause and effect propels us straight backwards. As mathematical models are pushed ever higher, response rates retreat ever lower. As response rates decline, so does revenue per thousand impressions. The more we throw at the equation, the less we know about what works and the further we stray from the answer. But shhh, don't say that too loudly.

The entire online ecosystem is convulsing under the weight of this "glorious misconception". Each day brings a new announcement of industry layoffs. But there is a way out. Emerson pointed the way when he said, "The secret of fortune is joy in our hands."

Moving from the 19th century philosopher Emerson to the 20th century military historian, John Boyd, we see the concept of self-reliance rearing its head. Boyd believed that alliances were inherently unstable and compromising and that self-reliance was the key to strong self-defense capabilities.

Think about this for a minute. Alliances are good when interests are aligned. But when interests diverge, you have a problem. Saddam Hussein was our cherished friend when he was killing Iranians in his war. But the alliance went south when he wanted to become the next Saladin of the Middle East. As I said, alliances are unstable.

What does self reliance mean for media owners?

First of all, you need to recognize the need to take more control of your own destiny. Once you do, you must focus your weight of effort, your schwerpunkt, on ways to manufacture and utilize your OWN AD INVENTORY. This means developing proprietary databases and exclusive e-commerce initiatives that leverage the new opportunities you create from within.

Being more self reliant does not mean that you stop selling advertising. Quite the contrary, the more control you exert over your own domain, the more your own inventory will increase in value. You'll finally be able to establish pricing parameters that have a basis in logic instead of specious algorithm.

That is exactly what we did with Vidsense. We have an e-commerce division that generates millions of dollars in sales utilizing only our own media. If we never sell another ad, we will manage quite nicely, thank you. Interestingly enough though, we find the more self-reliant we become, the more strong alliances we engender.

Despite our fierce sense of independence (or perhaps because of it), we've managed to attract numerous blue-chip advertisers who share our passion for proven performance. Household names like Conde Nast, Hot Jobs, Playtex, Just For Men, Monster.com, all have benefitted by our strict attention to our own needs first and foremost. And though advertisers may come and go, our brand equity in our own product is forever. We made the decision to become self reliant a long time ago. Emerson said it best again, "Absolve you to yourself, and you shall have the suffrage of the world."

But media owners represent only one side of the coin. How do you become self-reliant if you are a marketer or advertiser?

It starts with a genuine commitment to change; one that requires outright rejection of the "glorious misconception". To wit yet another aphorism from Emerson: "Let us affront and reprimand the smooth mediocrity and squalid contentment of the times."

The online explosion has made it possible for virtually every advertiser and/or marketer to now own their own media. This is a far cry from merely renting eyeballs on someone else's site. It's a way to control the branding environment soup to nuts. It's also the only way to ensure the quality of your own communication.

Once again, this is not an idle theory. We began as a strictly e-commerce company. We bought media and lots of it. But then we resolved to create our own e-zines. We wanted to own the relationship instead of just renting or buying a fleeting impression.

Between Vidsense and our e-zines, we now own enough impressions that we are self reliant from both ends of the equation. Each side informs and determines what we do with the other side. Our fate is completely in our own hands.

Yes, self reliance has become our guiding business principle. Then again, given the alternatives, did we really have a choice? We rejected the "glorious misconception" and adopted self reliance long ago when we realized that all we ever wanted — or needed — was simple peace of mind. Emerson said it best:

" **Nothing can bring you peace but yourself. Nothing can bring you peace but the triumph of principles."**

Respecting the Rodney Principle

Published: 9/1810

" **A girl phoned me the other day and said... Come on over, there's nobody home. I went over. Nobody was home."  
\- Rodney Dangerfield**

One of my favorite comedians of all time is the late great Rodney Dangerfield. The utter simplicity of his comedy has created a rich legacy. His punchy lines always make me laugh as if hearing them for the first time.

If you're wondering what Rodney Dangerfield has to do with business, stay tuned.

"I could tell my parents hated me. My bath toys were a toaster and a radio."

Take another look at both of the jokes above. Now, try to improve them. How? First, try adding something to make them better. Bet you can't do it, can you?

Now try something even harder than adding to them. Try taking something away. Simplify the jokes; make them more verbally economical. Dollars to navy beans you can't do that either.

"I come from a stupid family. During the Civil War, my great uncle fought for the west."

A great business model is like a Rodney Dangerfield joke, and requires neither addition nor subtraction. Great business models – like Rodney Dangerfield jokes – possess a holistic beauty and elegance, described by Nobel Prize-winning physicist  Murray Gellman as essential to any fundamental understanding of the correct order of things.

Moving from comedy to business – and in today's world this may be a distinction without a difference – it's time to coin a new term: The Rodney Principle. Simply defined, The Rodney Principle describes a business model that can't be simplified any further and to which any attempt to add complexity creates more problems than it solves.

"My father carries around the picture of the kid who came with his wallet."

The Rodney Principle explains complex thoughts in simple terms. To be sure, we face a world of increasing complexities. Unfortunately, our solutions to increased complexity almost always increase complexity even more. Complexity simply begets complexity.

In the great age of titanic, complex systems, additional complexity only makes existing problems worse, and creates new problems at a pace and scale that no one can possibly anticipate. Eventually, complex systems – like far-flung empires – always collapse from the cumulative weight of their own complexity.

This is why The Rodney Principle should be taught at every MBA program from Harvard to Stanford. Classroom attendance and attention would surely pick up! Imagine if every class began with a quote from our erstwhile sage:

"I met the Surgeon General. He offered me a cigarette!"

A typical business model seeks to identify and address real or perceived needs. The essence of The Rodney Principle compels us to take a red pencil to any and every business model we envision or examine. Rodney Dangerfield used his economy of words to bring joy and laughter, and in them we discover and re-discover our most fundamental human conditions. When we apply The Rodney Principle to our business models, we seek their essential DNA first. We seek the beauty, elegance and economy of simple things...

"My uncle's dying wish was to have me sit in his lap...he was in the electric chair!"

Of course not everybody can embrace The Rodney Principle. This is especially true of many in the online digital space.Trapped as they are in an existential cave, all they can see are the dark and illusory shadows of complexity. They're too busy translating The Little Prince into The Castle to make room for the beauty, elegance and sheer simplicity of...

"My mother got morning sickness after I was born."  
Or...  
"If it wasn't for pick-pockets, I'd have no sex life at all."

Conversely, many of our new business models are like bad jokes. And just as bad jokes fade away, so do bad business models. Remember Broadcast.com? Infoseek? March First?

But a great joke is forever. So when you conceptualize your next business model, or even just tweak your present one, apply The Rodney Principle to help you step out of the cave and into the light. At minimum, it will put a smile in your heart.

"With my wife I don't get no respect. I made a toast on her birthday to 'the best woman a man ever had.' The waiter joined me."

The Algorithmic Debate Is Over- The Loser Is Clear

Published: 9/13/11

" **However beautiful the strategy, you should occasionally look at the results."  
\- Winston Churchill**

There has been a long running debate in social sciences, military strategy, online advertising and marketing circles. The language used for each field obscured the fact that the debate was really one and the same. Since few folks move from one discipline to the other, each felt that there was uniqueness to their side of the debate.

The central point of debate centered on problems of predicting human behavior and social interactions. Social sciences have been in search of an algorithm to predict human behavior, although the language may not have precisely utilized these words.

BF Skinner epitomized this algorithmic search with his behaviorism theories. Skinner believed that individual behavior could be reduced and therefore predicted by a thorough understanding of every stimulus and response. For Skinnerians, our environment and experiences just don't create who we are; they determine who we are and what we will do.

When I was in college in the 70s, E.O Wilson was busy reducing social behavior to biological drives in the attempt to predict social interactions. Reducing is the operative word.

In economics, predicting human behavior and financial market movements became the central focus for this discipline. Thousands of very bright mathematicians joined the economics fray to reduce thousands of variables in the vain hope of distancing themselves from chance. Once again, "reduce" is the operative word.

In the military, hundreds of millions of dollars are spent in designing battle scenarios in computer simulations. This is just one element in the preparation for war. Yet EVERY military strategist will tell you that one cannot reduce the complexity of the battlefield to a spreadsheet or algorithm and EVERY plan is thrown out after the first five minutes of the battle. Prediction remains not just elusive, but impossible.

So we come to online marketing.

The predictive obsession has arrived, utilizing the same reductionist methodology as its social science predecessors. And the same math wizards who could not predict their way thru the financial markets are applying disproven principles to online marketing. As Churchill said, it is a wonderful strategy but you still have to ask, "how's that working for you?"

The results have been in for a long time, only there are too many people focusing on the limited successes to be bothered with failures. But the acolytes of prediction believe they are innovators and fail to look at the history of this misguided meme. Here is Laplace's version of the issue stated back in 1816;

" **We may regard the present state of the universe as the effect of its past and the cause of its future. An intellect which at a certain moment would know all forces that set nature in motion, and all positions of all items of which nature is composed, if this intellect were also vast enough to submit these data to analysis, it would embrace in a single formula the movements of the greatest bodies of the universe and those of the tiniest atom; for such an intellect nothing would be uncertain and the future just like the past would be present before its eyes."  
\- Pierre Simon Laplace, A Philosophical Essay on Probabilities**

Modern day marketing "Laplaceans" are devoted with religious zeal. Their faith makes them believe that they can predict the future if only they had a big enough computer that would know all the past behavior of individuals. So the fool's errand of collecting "more data" became the new obsession and few looked at how the results turned out. They have been rather poor. Not surprising since the theoretical foundations of Laplace have been disproven by quantum theory. Uncertainty is a fundamental part of reality.

I spent the better part of the last three years of online debate taking the data reductionists to task. I think what was driving me was the gulf between what I knew and what I wanted as a marketer and entrepreneur. I wanted to be wrong. Uncertainty is daunting when you set out to overcome it and that is precisely what I tried to do. But the results were miserable. The journey to discover "WHY" led to studying physics, economics, philosophy, psychology and military theory.

And I discovered that this debate has long been decided and I am moving on my friends. Moving on to embrace uncertainty and develop business strategies that do not rely on what is inherently unknowable.

Long Tail Marketing – A Field of Screams

Published: 7/22/11

" **The long run is a misleading guide to current affairs. In the long run we are all dead."  
\- John Maynard Keynes**

There are few times in the economic history of man when so many people have been led astray by a meme as misguided as "long tail marketing". Considering that this ill-advised philosophy draws its intellectual inspiration – "build it and they will come" – from a Kevin Costner fantasy film, Field of Dreams, it should come as no surprise that the only long tail in sight is the one we keep chasing in vain.

And this is just one reason the online ecosystem is so overwhelmingly dysfunctional.

Case in point: Industry pundits claim that what is needed to attract big brand budgets is mass reach.

However:

\- Long Tail content is decidedly niche and works against reach and the budgets that would follow.  
\- Audience targeting methodologies further inhibit scalable reach.  
\- Producers of "long tail, niche content" have no affordable way to drive scalable traffic.  
\- Producers of niche video content have no distribution budgets BECAUSE they have no scalable traffic. Produce it and they will come...eventually, maybe, hopefully.  
\- Long tail content producers seek partnerships with others in the same boat, i.e. AOL's "bigger is better" strategy.  
\- With no big brand support, content producers can't produce and deliver a quality product.  
\- Long tail content producers fall back on the notion that they will make money in the long run...

The interesting thing about the entertainment business is that the original Hollywood moguls cut their teeth as haberdashers and small businessmen who understood the basics of supply and demand. They knew who their customers were: the folks spending money with them.

And therein lies the crux of the matter, because at the end of the day, it's not about content distribution at all. It's about advertising, to wit in today's online fantasy world, most content producers and publishers don't even know what business they're in. They think their job is to flood an infinite media supply with information and entertainment, when they should be concentrating instead on ways to satisfy a very finite consumer demand.

One thing's for certain: They aren't making money.

To illustrate this blind foolishness, let me paraphrase a recent conversation I had with a video content producer:

Me: I chanced upon your site, and I'd like to discuss your business model. I'm also writing an article about online video, and I'm curious as to how you view your role in media ecosystem. How much traffic are you getting?

Producer: About 500,000 visitors a month.

Me: How are you monetizing those views?

Producer: Well, that's a bit of a problem. Every now and then we get highly targeted ads that pay a great CPM. But we do not have enough traffic yet.

Me: Don't you have a problem with abandons of your pre-roll ads?

Producer: Yes.

Me: With our video portal, we experience up to 40% abandon rate with pre-roll. Does that jive with your experience?

Producer: Pretty much.

Me: What's your distribution strategy?

Producer: Well, most of our views take place on You Tube.

Me: How's that working out for you? Are you making money with them?

Producer: Well, that's another problem. They are not monetizing the views and will not allow me to monetize them.

Me: So, you produced this content, don't have enough views on your site and the distribution on You Tube is not yielding money. How do you plan on staying in business?

Producer: Well, in the long run...

Time for a New Thinking Cap

Published: 6/9/11

" **The usual prelude to [paradigm] changes...is the awareness of anomaly, of an occurrence or set of occurrences that does not fit existing ways of ordering phenomena. The changes that result therefore require putting on a different kind of thinking-cap'..."  
\- Thomas Kuhn, The Essential Tension**

Our online trade publications are not very good at spotting anomalies. They are more interested in cheerleading than in presenting penetrating analysis. This is just one reason why so many articles persist in promoting targeting methodologies that tout relevance and recency, despite response rates that continue to decline across the board.

This is an anomaly.

Industry trades are quick to trumpet increases in online media spending, to wit the IAB's recent press release announcing a 23% increase in ad spending for 2011. This sounds impressive until you look deeper. When industry veteran,  Dave Morgan was asked, 'What should keep publishers up at night?' His simple response was; 'The fact that impressions are growing faster than digital advertising expenditures.'

This is an anomaly.

As consumers register their growing disdain for advertising through pop up blockers, ever-lower CTRs and ever-higher abandon rates for pre-roll, marketers continue in their folly to push an immovable rock uphill.

This is an anomaly.

All things considered, perhaps it's time don a different kind of thinking cap? The paywall model is one attempt. But I believe it will fail. Besides, it doesn't address the bigger problem of how to reach an ad-phobic public.

I have a simple suggestion. It begins by first acknowledging that in an on-demand media world, no one demands more advertising, and everyone is equipped and inclined to avoid it. This means that advertising itself is lousy bait. The fish are not biting so-to-speak.

Sounds to me like what we need is better bait. And the funny thing is, we already know what to use if we just turn down the noise in our heads long enough to realize it. Content is the PERFECT bait to charm audiences. It's the only thing we want online, and the only reason any of us ever visits any website. It's the complete antithesis of advertising. Advertisers must return to their roots and wrap themselves around content like they did in the golden ages of radio and television, when content was king and advertisers knew the audience was there for the show, and not the ads.

What's more, all content should be consumed on the advertiser's site. This means publishers need to give up their traffic and deliver the bundled content and visitor to the advertiser, where all parties in the media equation are better served – the consumer, the content provider/publisher, and especially the advertiser, the guy picking up the tab.

This is not theory. It's proven practice that we've been honing with video content for three years now. We own a video portal, EVTV1.com that has delivered millions of viewers bundled with content to advertiser websites...including our own e-commerce site.

We needed to face up to the disharmonies presented by conventional online video models. This inspired us to don a new thinking cap, which allowed us to see the truth within the old Chinese proverb: Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for life.

What's My Job?

Published: 6/11/10

" **A house must be built on solid foundations if it is to last. The same principle applies to man, otherwise he too will sink back into the soft ground and become swallowed up by the world of illusion."  
\- Sai Baba, Spiritual Figure & Educator**

On a discussion list I belong to, the topic of marketing on Twitter, and specifically big-box retail tweeters, came up. I questioned the virtue of ads or relevance of retail Twitter accounts in general and was taken to task by a couple of very smart folks.

The common refrain seemed to be that it's too early to know which technologies, which platforms, which new, "new thing" will emerge from obscurity to viability. My friend Bill McCloskey suggests that it may be too early in the game to discount certain technologies.

I thought a lot about this over the past few days. Where does illusion begin and reality end? I believe in dreaming, but try to do so with my eyes open. That way it becomes easier to actually make those dreams come true.

Being an entrepreneur in an ever changing and fast moving environment requires a lot of self-analysis. A lot of energy and resources can be invested in ignorance or illusions. With so MANY opportunities having crossed my desk over the years, it has finally occurred to me that my real job is to find the line between illusion and reality represented in those "opportunities".

Executives place bets every day. We decide where to invest our time, energy, emotion and resources. But these "investments" are all gambles with shifting odds. Will mobile video on a 2" screen take off? How about iPad apps? Tweeting a daily deal? Facebook apps? How about behavioral targeting?

The list of potential platforms and technologies is growing at a dizzying pace, rendering it practically impossible to consider, let alone pursue every opportunity. I ran into a founding father quotation the other day and it hit me like a slap in the face because it spoke to what my job is as the CEO of Vidsense:

" **It is natural for man to indulge in the illusions of hope. We are apt to shut our eyes against a painful truth, and listen to the song of that siren till she transforms us into beasts... For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth, to know the worst, and to provide for it."  
\- Patrick Henry**

My job is not to indulge myself in the illusion of hope.

Without a doubt, our challenges as key executives are more complex than ever. Plotting the illusion curve against the reality curve is daunting. But we can't and shouldn't ignore the deep connection between illusion and pleasure – a nexus that philosophers and psychologists have long understood - that teaches us that placing illusion front and center in the pursuit of ephemeral gratification is nothing more than selfish vanity, and no way to run a company.

Ever mindful of this, I begin each day by reminding myself of what I don't know. This takes a tremendous amount of time because the older I get, the less I know. But it is precisely as the result of this purposeful self-examination that I am able to determine how and where my time and energy can best serve my company and me.

It has taken me many years to discover what my real job is. I hope this helps others arrive at the same conclusion more quickly and easily.

Leaked Memo from a Brand Manager – 'Discovered' by Jaffer Ali

Published: 4/30/10

[What follows is a fictional leaked memo regarding the state of brand marketing from the perspective of an imaginary insider brand manager]

Memo To: All Company Brand Managers  
Memo From: Anonymous

Fellow brand managers, it is now 2010 and unless we face up to reality, our respective brands will continue the precipitous declines they and we have experienced over the past 25 years.

Perhaps it's time to remind ourselves that we are the architects of our own shortcomings and only we have the power to rehabilitate ourselves to rekindle the vestiges of former glory. But in order to do so, we must first subject our inclined perceptions to the scrutiny of common sense.

We must reverse our all-consuming inclination to sacrifice both brand and business on the altar of the spreadsheet. The MBAs in our midst have been systematically winning the day, fiddling the same tune as Rome burns. We must confront those whose mission is to sell management on every new targeting technology and/or methodology that comes along.

The targeting meme has become so entrenched that few people even dare to raise their voice in opposition. Branding relationships have been reduced to seemingly rational, transactional metrics that fit the spreadsheet. But targeting doesn't scale. It leads to ever more niche marketing...and ultimately niche thinking. Since we become our attentions, we now think small. It is our niche mentality that obfuscates a simple truth: brand building is all about audience reach.

To understand how this misguided, uber targeting meme can destroy a brand, a simple "what if" is in order: What would happen if EVERY ad impression resulted in a sale? In other words, zero "waste"? Every ad impression would only be put in front of customers ready to buy. A 100% effective targeting campaign.

Sounds perfect, doesn't it? But this is actually the road to any brand's destruction. This would hasten the demise of the brand, as only customers would be reached...no prospects. The promise of uber targeting is to market to existing intent. What is left undone – virtually abandoned - is the act of influencing and persuading prospects – the essential brand-building blocks that targeting always misses. We have lost our brand evangelism.

Without evangelizing our brand, we are left with an ever-shrinking congregation.

Collectively, we brand managers have billions of dollars to spend to help build and foster the relationship between brand and audience. In our vain pursuit of "efficiency", we have unwittingly, albeit it purposely, fostered the fragmentation of the media marketplace.

By supporting unsustainable niche channels, niche magazines and niche websites, we have made mass reach all but impossible. We have fashioned the Internet, which is arguably the most scalable mass marketing opportunity ever devised and rendered it virtually impotent. We have subsidized the decline of our own brands. Our tepid response to our own foolishness has been to double-down in the conception and creation of new, niche brand offerings. We've built a house with 250 million rooms that no one can live in comfortably.

So what is to be done?

The first order of business is to stop encouraging the excessive narcissism that this plethora of choices has created. We have fashioned a fragmented, self-indulgent consumer and media environment. In today's hyper-paced world, change is the only constant. We must make hard decisions to move to sustainability, because business as usual cannot sustain us.

What is sustainability?

It means culling the herd and determining which brands are sustainable and which media options can best sustain them. The big box retailers are ahead of us in this respect, evidenced by their drastic reductions in stock-keeping units (SKUs). But they are making decisions based on perceived weaknesses in the media ecosystem rather than by exploring the promise and possibilities of scale. We must refuse to accept the status quo as a fait accompli; refuse to follow the path of least resistance; refuse to concede that we are fresh out of new ideas.

From our agencies, we must demand scalable media solutions. They have encouraged this niche-marketing nonsense long enough, and we have bought into it hook, line, and sinker. We need to reach people... really reach them, and we never will if we spend all of our time chasing our own long tail.

The Internet can be the next great media platform to build our brands if we change the way we think of it. But we can never achieve our goals if we continue down the same road we have traveled.
Chapter 7: The Wonder of it All

Chasing String in the Digital Era

Published: 4/13/09

" **As a man thinketh in his heart, so he is."  
-Proverbs 23:7**

Have you ever watched cats chase string? It's amazing how much time and energy they'll invest chasing a string that is offered and then withdrawn. Even if they never catch it, they still love to chase it. But cats aren't the only ones who chase string.

I participate in several online discussion groups and do a fair amount of writing. Add this to my responsibilities as the CEO of Vidsense and my duties as a husband and father (three boys ages 20, 18 and 16), and you might ask: Where do I find the time?

The answer is: I make time because I stopped chasing the other guy's string and ceased trying to entice others to chase mine long ago. You would be surprised at how much time is saved by living more deliberately. Living deliberately...how delightfully Waldenesque!

But living deliberately is not as easy as it sounds at first. Living deliberately means that we must master our tools instead of allowing them to enslave us. Living deliberately in a digital age requires us to DISCONNECT in a digital sense, in order for us to CONNECT in a literal sense.

Try this simple exercise: Keep a running tab on the next ten phone calls you make at random (without an actual appointment). See how many of the ten actually result in a connection with your intended party. Want to bet it will be less than seven out of ten?

We're using our tools to DISCONNECT. Voice message systems, email, Twitter, Facebook, LinkedIn and just about all other digital intermediaries have not streamlined our lives, they've created more stings for us to chase. Separating the wheat from the chaff has become a virtually impossible task; a chore instead of a meaningful endeavor.

Here is a second exercise: Keep a running total today of the people you speak to or communicate with that comment on how "busy" they are. Being busy is our national pastime, yet so few of us actually get anything done! I've been writing for Jack Myers for a few months now. Ever notice how few readers take the time to comment on any of the articles posted there? Why is that?

Comments are so Web 2.0. People are simply too busy to leave them. And most of those who write for Jack are too busy to answer them anyway, so why bother? We're all too busy chasing string. But it sure seems important when we're chasing it! We actually fool ourselves into confusing mindless activity with purposeful, deliberate action.

It takes concentration and/or a good nap to determine the difference. We have a running theory here at Vidsense. Eighty percent of everything we do is a waste of time. Every six months we hunt for time wasters. While the rest of the world is "busy" saving money, we do something much more important: we save time by making and taking time for ourselves. If this last line sounds overly profound, I suggest you take a nice nap to discover what it means!

I had a discussion along these lines with one of my sons recently. I told him that if he wanted to be taken seriously, he had to think serious thoughts. If we are the sum total of our thoughts and deeds, we must become more deliberate with our time, the only personal asset we can control. We must connect with those who also cherish thought, time and connection. In that spirit, if you'd like to discuss online video or how to become more deliberate, give me a call. My direct line is 708-478-4500 ext. 105.

Marketing with Wonder

Published: 8/8/11

" **The most beautiful thing we can experience is the mysterious. It is the source of all true art and all science. He to whom this emotion is a stranger, who can no longer pause to wonder and stand rapt in awe, is as good as dead: his eyes are closed."  
\- Albert Einstein**

This article was inspired by Dr. Robert Fuller of Bradley University. He is a professor of Religious Studies and my son sent me a link to his brilliant lecture which was taped and made  available online.

Some may find it odd that I could gain marketing inspiration from a religious scholar, but as I listened and watched Dr. Fuller, I could not help but think that the major problem today with marketing in general and with online marketing in particular, is the conspicuous absence of the essential and vital capacity to wonder.

Our sense of wonder has been crushed under the weight of false promises promulgated by technological clay idols of our own design. In fact, I contend that the failure of these algorithmically precise yet dispassionate media models is in direct correlation to our estrangement from that special sense of awe.

So, what is wonder? Perhaps it's easier to describe through what Jung called circumambulation...or talking around the subject. Wonder involves the unexpected, those inexplicable, spontaneous feelings that inspire our thoughts and actions. And isn't that what good advertising and marketing is all about?

Wonder invites possibilities. This is in stark contrast to algorithmic limitations. In fact, if your marketing campaign does not evoke a sense of wonder, you should immediately go back to the drawing board. Why? Two reasons: 1) Because wonder gives new meaning to the world around us, and 2) It's our job! If we decide that what we do is indeed a sacred journey, then not only will we be enriched through wonderment, we will enrich all around us.

That's because wonder connects us. We live in a fragmented world and wonder draws us into something greater than ourselves and unites us. Great marketing sustains this sense of wonder by reaching and touching something inside of us. It is an emotional connection, a transcendent state through which soul is injected into the process.

We have become so enamored of numbers that we have closed ourselves to the possibilities and potential in what we do. Wonder emanates from within. But the growing noise in our heads has all but drowned out the wondrous feelings our hearts beg to express.

It is not our possession of knowledge that threatens our sense of wonder. It is our abandonment of wonder and mystery as essential, that is destroying it. You have to remain open to the possibilities in order to experience wonder. And you need to experience those possibilities before you can articulate them.

It's a damn shame that our online industry has ceased to wonder, because we could all use a healthy dose of what could be. That being said, I find it interesting and utterly appropriate that the antidote to what ails us would come from a professor of religious studies.

Reawakening our sense of wonder is really the task at hand. If you can do this, from the inside out, you will transform your life. This inside-out transformation will manifest in your business model...in your advertising campaign...and most of all, in your relationships with others and the world around you.

Carl Jung said, "The self is our life's goal, for it is the most complete expression of that fateful combination we call individuality." Once we experience wonder for ourselves, we then can then transcend our individuality and speak to others in a shared language of the heart.

If we believe that life is a sacred journey, then wonder is our roadmap to a great life. It's also the blueprint for true marketing. If you are heading up an advertising or marketing campaign, please heed this simple advice from one of Dr. Fuller's heroes:

" **If a child is to keep alive his inborn sense of wonder, he needs the companionship of at least one adult who can share it, rediscovering with him the joy, excitement and mystery of the world we live in."  
\- Rachel Carson**

Being 'In the Zone'

Published: 10/30/12

" **The zone is a state of mind which is marked by a sense of calmness. In addition, there is a heightened sense of awareness and focus. Actions seem effortless and there is an increased belief that your dreams or goals can become achievable and real. In addition, there is also a sense of deep enjoyment when the person is in this unique, special and magical state of being."  
\- Dr. Jay Granat, Sports Psychologist**

Please forgive this opening foray into my youth but the experiences have led me to years of study and eventual application to my business. Growing up I was obsessed with sports. I played football and baseball. I knew sports meant something different to me than to my friends on the team.

In football, I read the playbook for each position on the team. Most of my friends would only pay attention to their position, but I wanted to know where everybody was supposed to be on every play. I played middle guard on defense, and at 160 pounds with pads on, this was an odd position for a little guy back then. I should also mention that we were undefeated for two straight years and had the longest winning streak in Illinois.

In my two years on the varsity, there was never a successful screen pass against our team. Not a single one! Somehow, I always "knew" when a screen pass was coming. One day after viewing the films following a victory, the coach pulled me aside and asked, "Ali, can you tell me how you always know when a screen pass is being thrown?"

I said, "Coach, I can't tell you. I just 'feel it'."

Fast-forward to the spring as football gave way to baseball. I remember one incident like it was yesterday. We were in the bottom of the last inning of a tie game. I was on deck and there was a man on second. A vivid image of me hitting a line drive right over the pitchers head up the middle overcame me.

This was very odd because I was a dead pull hitter and rarely hit the ball up the middle. It wasn't a "wish", it was a fully formed premonition. The guy in front of me struck out. Now it was my turn at bat, and on the second pitch, the premonition became a reality...exactly as imagined. We won the game...but I wasn't jubilant because the weirdness was too difficult to shake.

And these incidents weren't isolated. They happened to me dozens of times in both sports. I never spoke about those experiences then because I was afraid my teammates would think I was crazy. But I have spent the better part of my adult life trying to understand this phenomenon.

The journey took me from Maslow's "peak experiences", reading all of Jung's works, Joseph Campbell's works, Csikszentmihalyi's "Flow", and Andrew Cooper's "Playing in the Zone" to name a few intellectual pit stops along the way.

I also started to notice how others described this feeling. Here is a quote by Fast Eddie from the great movie, The Hustler:

" **But I just hadda show 'im. Just hadda show those creeps and those punks what the game is like when it's great, when it's REALLY great. You know, like anything can be great, anything can be great. I don't care, BRICKLAYING can be great, if a guy knows. If he knows what he's doing and why and if he can make it come off. When I'm goin', I mean, when I'm REALLY goin' I feel like a... like a jockey must feel. He's sittin' on his horse, he's got all that speed and that power underneath him... he's comin' into the stretch, the pressure's on 'im, and he KNOWS... just feels... when to let it go and how much. Cause he's got everything workin' for 'im: timing, touch. It's a great feeling, boy, it's a real great feeling when you're right and you KNOW you're right. It's like all of a sudden I got oil in my arm. The pool cue's part of me. You know, it's uh - pool cue, it's got nerves in it. It's a piece of wood, it's got nerves in it. Feel the roll of those balls, you don't have to look, you just KNOW. You make shots that nobody's ever made before. I can play that game the way... NOBODY'S ever played it before."**

Or here's how Billie Jean King described being in the zone:

" **It's a perfect combination of...violent action taking place in an atmosphere of total tranquility...When it happens I want to stop the match and grab the microphone and shout, "That's what it's all about." Because it is. It's not the big prize I'm going to win at the end of the match, or anything else. It's just having done something that's totally pure and having experienced the perfect emotion, and I'm always sad that I can't communicate that feeling right at the moment it's happening."**

So what does being in the zone during athletic competition have to do with me here and now well into the "third act" of my life's play? I continue to have these moments as a businessman, moments that find me. In fact, that's the only way they happen, because when I actively seek them, they resist and recede. I also know that the more fixated I become on any end prize – a liquidity event, optimizing profit, etc. – the less likely it will happen.

I've learned that these moments can't be forced. Nor can they occur when I am too busy being busy. But when we create a perfect campaign...or our entire organization is buzzing like a well-run beehive, there is magic and mystery. Yes, there are still transcendent moments in business. They are safe and waiting within the calm of the overwhelming chaos.

Dreams of the Heart

Published: 8/5/10

" **Keep your dreams closer to the fire of your heart than to the brilliance of the mind."  
\- Ahmed Habib, Iraqi journalist**

Today's offering was prompted by a post in my Twitter tweet stream. My writings have been misinterpreted as the work of a pessimistic mind. It caused me to reflect on how easily – and often - my best intentions are misconstrued.

But a thorough overview of the multitude of essays and articles I've penned reveals a style motivated more by poets and dreamers than by the sober realities of an industry steeped in "data reductionism" and spreadsheet-driven sensibilities.

Just as we experience in life and religion, there is a distinct clash of cultures that shapes our faith. On the spreadsheet side we see unbridled faith in data and technology; blind faith that transcends business as one hapless driver discovered recently when she followed her GPS directions right into Lake Michigan!

But there is a different, stronger kind of faith. It's a faith in ourselves that dwells within each of us. This is where our dreams come to be nurtured. And though their source and meaning continue to elude philosophers and philistines alike, our dreams express the very best within us when they come from the heart. Dreams are not corporeal. They are a simple matter of faith.

Those that misplace their faith in data and technology are like religious fundamentalists. They seek comfort and succor from empty ritual that neither inspires nor sustains our dreams.

The clash between dreams and data is as much a clash of words as it is a clash of wills. As is often the case with people of different religions, adherents of one tend to apply labels that marginalize the other. As a former devotee of data, I can attest to this language barrier.

Try speaking to a room full of spreadsheet-driven MBAs about your hopes and dreams. Watch them roll their eyes, and don't be surprised if one of them asks you for the numbers to support your hopes and dreams. Thoreau may have said, "Dreams are the touchstone of our character", but to quant fundamentalists, that which can't be measured for all practical purposes doesn't exist.

The older I get the less certain I am about anything, except that certainty is no longer a goal of mine, let alone a means to its own end. In fact I have embraced uncertainty. Instead of grinding away at minutiae that seeks to imprison me, I now devote more time gazing upward and seeking refuge among the stars. And as Van Gogh said, "The sight of the stars makes me dream".

For me it has been a long journey from blind faith in the numbers and science of what is to the far grander vision and art of what could be. Interestingly enough, as my heart's eyes opened, my business began flourishing in ways I could previously only imagine in my dreams.

On that note, let me end with one of my all-time favorite quotations:

" **Whatever you can do or dream you can, begin it. Boldness has genius, power, and magic in it."  
\- Johann Wolfgang von Goethe**

O Captain, My Captain

Published: 6/3/09

" **Let's not forget that the little emotions are the great captains of our lives and we obey them without realizing it."  
\- Vincent Van Gogh**

I do a fair amount of reading, but most of the quotations I reference in my writing come from personal favorites collected over the past thirty years. For more than a decade now, I have been sending them to a following that has grown to about 20,000 readers.

My writing topics are often sparked by quotes that relate to what we do for a living. The Van Gogh quotation above is one of these. I use it with the full knowledge that Van Gogh understood a great deal about emotion but very little about marketing.

He could not sell his paintings when he was alive and his way of endearing himself to the love of his life was to cut off his ear and mail it to her in a box. Dale Carnegie he wasn't. But in the spirit of trusting the tale and not the teller, Van Gogh can teach us a thing or two about online advertising...if we only listen with both ears.

The digital revolution has brought many wonderful changes to our lives. But like each and every other technology, our cherished digital tools come with a real downside to consider: the more that digital intrudes in our lives, the more emotionally disconnected we become.

Of course this is reflected in online advertising. With so little emotional capital invested, declining performance should come as no surprise. That's because our industry leaders, if you can call them that, are looking for love in all the wrong places, no surprise since love – as a purely emotional creature – falls far beyond the narrow confines of their algorithmically attuned sensibilities.

Ask yourself: As a marketing professional, how much of your time is actually spent trying to understand your audience? HOW do you engage them? WHAT motivates them? WHY do they — or you, for that matter — care? Just about every philosopher and psychologist on the planet agrees that emotions rule our lives. Not numbers, not statistics, not metrics. Emotions.

" **When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion."  
\- Dale Carnegie**

How many seminars or media conferences address the emotional component of marketing? We need to grab people's attention. Isn't this the first step in the marketing mating dance? Yet when we ignore passion and emotion, we find it difficult, if not impossible, to break through the growing clutter.

As marketers, we must recognize the need to change how we interact with the audience — not by just grabbing their attention, but by cultivating it once we have it. We must understand the crucial role emotion plays in this process, and apply its lessons accordingly.

Most brand advertisers, marketers and their agencies are too busy chasing string to focus on what needs to be done. As an industry, we perceive Web surfers as rational automatons. And the marketing models we've designed to identify and reach them involve amassing ever growing amounts of data in hopes of predicting future behavior.

Meanwhile, with virtually no emotional compass whatsoever, advertising effectiveness and content quality continue to stray from the path.

But there is a way out. It involves rethinking the way we engage audiences. It means understanding where the nexus of engagement resides. The process can begin anywhere, but by creating what author Maggie Jackson calls a climate of distraction, it becomes apparent that communication between audience and brand is best controlled and enhanced on the advertiser's own site.

An actual illustration is in order. More than 40 million people have seen a short video clip about a lion cub raised in the UK and then released into the wild. Most viewed it on YouTube. But judge for yourself whether viewers are better engaged there, or here: TheLionDVD.com.

In this example, the video snacking takes place on a site that controls the climate of distraction (or what Bill Bernbach called the environment to buy). Also notice the post roll AFTER the snacking takes place. (Full disclosure here...my sister produced this snack, the post roll and landing page.) And the other disclosure is that my media company is providing her with hundreds of thousands of online video snackers.

Let me close by asking a simple question of those of you who clicked on the above link...did you feel anything?

Abandoning Fear

Published: 12/19/11

" **We cannot banish dangers, but we can banish fears. We must not demean life by standing in awe of death."  
\- David Sarnoff**

Christopher Hitchens was not one of my favorite journalists/authors, as he moved from being an avid devotee of Trotsky to an outspoken neo-conservative warmonger. But I did read what he had to say. So when I came into the office and read that he had died of esophageal cancer after a one and a half year battle, many thoughts came to me.

You see, one year ago I, too, was diagnosed with esophageal cancer. It's a particularly nasty form of cancer with an extremely low survival rate. That's because one is generally asymptomatic before diagnosis, and by then, it has already spread or metastasized throughout the body.

In my case, the cancer was discovered quite by Providence and, thankfully, in its earliest stage. Last week, one year after initial diagnosis, I was deemed cancer free. I still live with the specter of its return and the anxiety that accompanies semi-annual endoscopic exams, but fear is not what controls my life. As I read about Hitchens, my mind drifted to the way so many people live their lives in fear.

I am not speaking about soldiers, but every day people in every field of endeavor. Subordinates live in fear of their bosses. Bosses live in fear of failure. We actually live in a culture of fear. I happened to chance upon a Republican debate and heard Newt Gingrich spreading his fear meme as to why the Patriot Act is such a good idea. And if you think Obama is above peddling the meme, one need not look further than his insistence that habeas corpus and the fourth amendment be abandoned in the recent National Defense Authorization Act. [Obama insisted that the government have the right to imprison US citizens INDEFINITELY without trial.]

I always had a distaste of my own fears. Why heights made me dizzy and afraid, I don't understand and can't explain. But it didn't stop me from parasailing four times and taking an extended hot-air balloon ride. And I think facing the odds of esophageal cancer makes me qualified to speak about fear in a new way. In fact, I now believe I can sense fear in others almost immediately.

A personal confrontation with death is an existential experience, often resulting in a heightened awareness of, appreciation for, and patience with the fears in others. The exact opposite occurred with me. Now when I speak with media buyers, I smell the fear as they try to ponder a new idea I might float their way. The online media ecosystem has such a smell of fear that I am repelled by its stench.

I belong to a few discussion groups. Fear rules the day, dominated by the safety of convention. Case in point, I recently spoke with an executive at ABC that I have known for a very long time and he mixed fear with stupidity – a devastating one-two punch – to tell me he was just responding to what his clients were asking for, regardless of whether or not it made any sense.

I believe that fear can destroy the soul. And mixed with stupidity, it destroys initiative. It destroys creativity. It destroys innovation. In Dune, they said "fear was a mind killer". Many people use "mind" and "soul" interchangeably. Mind is a secular version of soul.

If you are a businessman trying to overcome fear in the marketplace, what do you do? A natural impulse is to use reason to overcome fear. But this rarely works, because more often than not fear trumps reason and rationality. In fact, most emotional impulses trump reason and rationality. But many irrationally continue to use what they think is "reason" to overcome the mind killer despite its proven ineptness.

Some sales technicians suggest imparting even greater fear to close the sale. Politicians are experts in this technique. Remember Colin Powell at the UN speaking about non-existent WMDs in Iraq? Forget for the moment that it was a blatant lie. The purpose was to foster fear, inspired and driven by disingenuous motive. The technique was successful as the nation geared up for a senseless war.

So how can we banish fears as David Sarnoff so eloquently suggested? Few want to face the truth, let alone consider a possible answer. They're afraid of the answer, and have no faith that they'll ever find the truth. But faith can overcome fear, despite being every bit as irrational as fear. That's because true faith – in oneself, in others, in a higher calling – is stronger than fear.

I've been accused of crossing the line from critic to curmudgeon. I don't see myself as a curmudgeon simply for suggesting that the emperor is indeed naked. As soon as something becomes widely accepted, Groupthink takes over and we become blinded by a fear of bucking convention.

Online media and marketing has been my profession for the past fifteen years. I have seen so many people paralyzed by fear that I feel pity and aversion at the same time. People often reject mystery, awe and the wonder of possibilities because they fear the uncertainty attendant with them.

My hope is that people can learn to allay their worst fears without abandoning their souls in the process. David Sarnoff had it right.

Taking Flight with Black Swans

Published: 5/28/09

" **I am on the edge of mysteries and the veil is getting thinner and thinner."  
\- Louis Pasteur**

I owe the title and concept of today's article to the brilliant trader-philosopher- epistemologist, Nicholas Taleb. A "Black Swan" is Taleb's metaphor for an unpredictable, rare, large-impact event.

Taleb's notion of the Black Swan arises from ignorance — specifically the widely held albeit erroneous assumption in Europe through the 18th century that all swans were white. This belief persisted as truth until Europeans traveled to the remote and isolated new continent of Australia, where, lo and behold, they encountered something completely unexpected in the form of beautiful black swans.

Black Swans are usually associated with cataclysmic, negative events like 9-11 and stock market crashes. But Taleb speaks at length about positive Black Swans in science and technology. The discovery of penicillin was a miraculous Black Swan; the personal computer a magnificent Black Swan.

Serendipity plays a significant role in these positive Black Swans, but more than sheer luck is involved in recognizing and/or welcoming these events into our lives. In order to reap the benefits of such unpredictable events, we must first be open to the possibilities and uncertainties that spawn them. But what exactly does that mean?

Since we cannot choose which events will emerge as Black Swans nor predict when they will occur, we need to be on the lookout for these displays of curious plumage. This is easier said than done. We have to train ourselves to "lift the veil," as noted 19th century French chemist and biologist Louis Pasteur suggested, because "chance favors the prepared mind."

Accordingly, preparing ourselves for Black Swans is not quite as easy as Monsieur Pasteur makes it sound.

With so much information overwhelming our senses, it's only natural to develop ways to sift through it. But if we filter out too much information, we inhibit possibilities before they can reveal themselves. And if we don't filter extraneous data, we become paralyzed with overloaded circuits. Indeed, taking flight with Black Swans is a balancing act that requires patience, diligence and practice.

The first task at hand is to acknowledge the phenomenon of the Black Swan. Many of us choose not to acknowledge the role that chance plays in our lives. But it is an abiding belief in life's uncertainties that prepares us for unexpected events and the possibilities they portend.

This also means we must conquer the fear that surfaces whenever we venture close to the edge of the abyss. The poet and dear friend of Picasso, Guillaume Apollinaire, once composed these appropriate words:

" **Come to the edge he said.  
They said: We are afraid.  
Come to the edge he said.  
They came.  
He pushed them, and they flew..."**

In the past, I have written about embracing uncertainty and wonder. It is only after we tear down the fences of fear that inhibit us that we can welcome the mysterious and elusive Black Swans into our lives. Ask yourself WHY people like Pasteur, Taleb, Einstein, Gates and Bezos were able to seize and embrace Black Swan opportunities when they presented themselves, and you realize that they all turned a blind eye to fear in favor of what they discovered with both eyes wide open.

Our evolutionary journey is fraught with fear and uncertainty. Open your eyes and you too will discover that not all swans are white.

Fear is the Mind-killer

Published: 11/4/08

" **I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain."  
\- Frank Herbert**

The phrase that graces the title of this article was first mentioned in Aldous Huxley's novel, Island. Three years later, Frank Herbert used these same words in Dune, for the Bene Gesserit members as a litany to calm themselves in perilous times.

Do we live in perilous times?

The quick answer is, of course, "yes". But what makes them perilous has less to do with what's happening around us and more to do with what's going on inside us. When you look around, you can sense the fear. Peril breeds insecurity. Fear begets more fear.

Ralph Waldo Emerson said, "Fear defeats more people than any other thing in the world." This parses with my own experience with online industry discussion groups. The dialogue has become guarded, the fear palpable, fueled by an even greater fear to look the enemy in the eye.

Worse yet, we've empowered this demon by succumbing to it. Instead of performing to our hopes and dreams, we've surrendered to our fears. Instead of confronting our flawed logic, we've become unwitting pawns in a chess game we cannot win. Under the rubric of practicality, we've crushed the spirit that should inspire us.

Fear has led to a rush for the comfort of the herd. Online was once a place where, inspired by hopes and dreams, lions roared and innovation flowered. Yet now, with but a handful of notable exceptions, innovation has ceded control to a specious, algorithmic definition of human behavior.

Fear obscures vision. Otherwise it would be easy for anyone to recognize that "innovative" mathematical models do not translate to better response rates at all. Case in point: I was recently contacted by a major online publication wishing to sell me advertising. They claimed to offer "the most targeted" audience for our message.

They said we could expect a .35% click through rate.

The real tragedy is not the low CTR. The real tragedy is the sales rep's – indeed, our entire industry's – proud defiance of a cup that is precisely 99.65% empty! What else but fear to confront the truth could justify such utter idiocy and insanity? About 100 years ago, there was a French Prime Minister, Leon Blum, who said, "The free man is he who does not fear to go to the end of his thought." With success measured by a CTR of .35%, pretty soon there will be nothing left to think about!

There are crimes of commission, and crimes of omission, both predicated on fear. Touting a .35% response rate by any measure is a crime of commission. Refusing to note, let alone address, the companion 99.65% failure rate is a crime of omission. When we lead quiet lives of fear-based crime, the first thing we steal is always our own trust and credibility. Common sense dictates that a problem must be acknowledged before it can be solved. Similarly, we must confront our fears before we can overcome them.

Ray, the little kid in Jerry Maguire, said, "D'you know that bees and dogs can smell fear?" Let's apply this axiom to our own media ecology:

Brand managers:  
This group has become subservient to the spreadsheet, compelled to produce an ROI within a time horizon that has effectively reduced the entire marketing process to the transaction.

Agencies:  
These folks have been reduced to sycophants, afraid to tell their clients — much less, themselves — what they need to hear. Instead, agencies rework their mission statements to fit the language of the spreadsheet-driven brand managers.

Publishers:  
Faced with ever declining CPMs, media owners court the agencies who serve the brand managers who defer to the math.

Can you sense where I'm going with this modern-day version of There Was An Old Woman? You know, the song about the old woman who swallowed a fly. Where every stanza ends in "...perhaps she'll die."

There are so many brilliant minds in our industry, yet we've allowed fear to take hostage the very thinking that can free us. We've chosen to play it safe. We've sold our souls to the lowest bidder. We've consigned performance to a 99.65% failure rate. We've disengaged.

A quote from Eleanor Roosevelt might help right now:

" **You gain strength, courage and confidence by every experience in which you really stop to look fear in the face. You must do the thing which you think you cannot do."**

I am writing for my friends and for my two boys studying media in college. I want to help an industry that has fed my family for so many years. The old woman doesn't have to die. There is a way out. We can look fear right in the eye and stare it down with our hopes and dreams. We can triumph over all that comes our way.

I leave you with yet one more thought; one that reaches beyond religiosity. Please feel free to replace "faith" with "dreams" if you wish.

" **Fear imprisons, faith liberates; fear paralyzes, faith empowers; fear disheartens, faith encourages; fear sickens, faith heals; fear makes useless, faith makes serviceable."  
\- Harry Emerson Fosdick**

Media and Marketing Beyond The Algorithm

Published: 9/28/11

" **A creative genius cannot be trained. There are no schools for creativeness. A genius is precisely a man who defies all schools and rules, who deviates from the traditional roads of routine and opens up new paths through land inaccessible before. A genius is always a teacher, never a pupil; he is always self-made."  
\- Ludwig von Mises**

In my last missive,  The Algorithmic Debate Is Over, I promised to be more prescriptive for those who understand that spreadsheet-driven mathematicians and MBAs have all but lost the intellectual case for reducing human interactions to algorithmic formulas.

If you are still clinging to the premise that uncertainty can be tamed through better math, then you might as well move on and stop reading now, because I have nothing more to say to you. But if you want to understand what it means for you and your business to embrace the mystery and wonder of an uncertain future, read on.

First, we need to clarify something. I never meant to imply that historical data and information have no value. My point was merely to question the innate limitations of "rational" human behavior. If history has taught us anything, it's that too much faith placed in any man-made creation is a recipe for chaos down the line. Notice I said "faith". This word is anathema to those who preach of the science of certainty, despite their bewildering fundamentalist "faith" in the numbers.

It's difficult to prescribe precise rules of the road moving forward, especially when there are literally no rules. All of the self-help books that promise a short list of rules to success are hogwash. The road ahead is much more challenging and does not surrender to such simple prescriptions.

Rather, if we are to move beyond the algorithm, we must embrace uncertainty. We must be open to opportunities, but be ready, willing and able to say "no". We must be aggressive and yet tempered. We must be open to, yet reasonably wary of the latest "new" thing. We must embrace new technologies but understand their limitations.

In short, we must embrace a point of view that transcends the dichotomies. This is not a mixing and matching of yin and yang. It is an understanding of the implicit conflicts in what we think and do. Poets and philosophers have grasped this better than most. Sartre wrote Being and Nothingness. TS Eliot spoke of "the still point" that was neither toward nor from, neither up nor down. Mathematician/philosopher William Buyers called it "the blind spot". Artists have called it "the void". My good friend Jeff Einstein has called it "the gap".

We cannot afford to ignore the contradictions we face. As marketers, we cannot choose between data and creativity. We must understand that conflict itself is the source of the solution. It is when this dizzying array of technological and human challenges forces us into "the still point" that solutions manifest.

But we all too often become reflexive to one side of the dichotomy. How often have you had a conversation that ended, "that's not my model"? The prescription is to avoid the reflexive responses of saying "yes" to technology for technology's sake, and "no" to an idea that challenges your comfort zone and/or clashes with your business model.

Tensions abound when we pit the lessons of the past against the uncertainty of the future, when we attempt to pair business as usual with innovation. And yet it is this very creative tension from which innovation and solutions spring. Our most common form of handling contradictions is to try to mix and match from each side of the equation. But understanding that light is BOTH a wave and particle is not mixing and matching. One must recognize both aspects of reality and understand that contradiction is a fundamental part of reality and cannot be ignored.

If you are a marketer, you must understand the limitations of historical data. This alone will drive you to different solutions. It could drive you to owning your own media. It could drive you to developing new and interesting ways to engage your customers beyond stalking their every movement.

At the end of the day, we must all find the "still point", that special place that transcends, indeed defies algorithmic erudition. If history has taught us anything, it's that real genius never reveals itself in what is. Real genius resides in what could be.
About the Author

Jaffer is a serial entrepreneur and has written hundreds of articles covering the online media and marketing landscape plus three other books: _Corporate Soul_ ; _The Prisoner Home Companion_ ; and _Palestine: A Chronicle of Passion and Politics_.

_Chasing String in the Digital Era_ is his latest contribution to the ongoing debate raging within the technology community. Jaffer is known as a bit of a contrarian whether writing on politics or media.
