Yesterday’s essay is freely available. I use some new data around “employee wellness programs” to talk about selection effects – including branching off into loyalty programs, employee recruitment and the NBA.
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- Microsoft vs Google: Google is holding strong and refusing to pay large Australian media companies (i.e. Rupert Murdoch) 10% of their Australian revenue PLUS 30-days notice of any algorithm changes. Microsoft, sensing weakness, has told Australia they would be happy to become the new search engine for the country. This is a pretty evil play - Microsoft knows what is happening in Australia is wrong, but they see weakness. And this version is being evil doesn’t give them any bad PR. Very gross.
- Clubhouse clones: Clubhouse has officially blown up - its latest funding round, less than a year after founding values the company at $1B - and it is still in private beta. Now Twitter and Facebook are both launching clones. I have tried Clubhouse and I am not impressed so far, but it has clearly found a niche. And the opportunity for live audio is only beginning. Clubhouse is to podcasts as Twitter is to blogs. It is possible to killer use case is listening to a smart commentator during live events. Its coming (If any Marketing BS subscriber would like an invite to Clubhouse beta, just respond to this email). Related: Marc Cuban is also launching audio app - Fireside Chat. The app is designed for both live and recorded audio (podcasts), but focused on ways that the producers can monetize that audience.
- Airline loyalty for young people: More than 100% of the valuation of airlines can be tied to their loyalty programs. (Remember: Loyalty is not about loyalty). It makes sense that airlines want to grow their loyalty base, even if it means attracting people who do not fly very often. The WSJ has a piece on how they are appealing to younger, less affluent customers.
- Burger Loyalty: Burger King is following Starbucks and McDonalds and building their own loyalty program. It remains to be seen if they will follow the Starbucks example and build it for financial arbitrage vs loyalty per se. Being tested in five cities to start with.
- Superbowl: The Superbowl ads were not cheap this year, but the show had the smallest audience since 2017. FiveThirtyEight has a short piece trying to segment this year’s Superbowl ads. TVrev has a nice chart showing how brands advertising during the big game have been relying more and more on celebrities.
- TikTok: A short primer on how to build TikTok ads. Good data on what works and what does not.
- IDFA: Tracking is going to get harder and harder this year. Here is a nice summary of how to manage the situation.
- Convenience: Kevin Drum explores a study that looks at the impact of having “more” Fox news in a market does to attitudes like “belief that COVID is real”. Most interesting for me is how they determined which markets were most exposed to Fox News. They just looked at where Fox News fell on the dial. Turns out people watch a lot more of the stations that have lower numbers. The power of sort order strikes again!
- Expedia: Expedia is pulling VRBO listings from Google. Expedia is worth ~$21B. Airbnb is worth ~$128B. Airbnb gets almost all their traffic direct, but Expedia is still reliant on Google. The OTA (online travel agent) can’t walk away from that traffic, but they can start to build themselves into a destination for ay least their most unique inventory.
Marketing to Employees
- Rebranding: Aunt Jemima re-brand has been announced. The new name will be “Pearl Milling”. It harkens back to the origins at least, but expect this to hurt their market share a lot. I hope the employee retention was worth it. Meanwhile, the San Fransisco Symphony is also rebranding - to appeal to a younger audience. One has to ask, how much of this is for the (younger) employees rather than the (older) audience?
- What Disney Employees care about: Disney has defended their choice to film Mulan with the support of the Xingjiang Chinese province (where Uighur interment camps are located). But they were unwilling to tolerate (far) right wing tweets from Gina Carano (Cara Dune on the Mandalorian). Many people seem to be surprised by this, but it comes down to what Disney employees care about - and it is domestic politics, not international ones that matter (at least for now).
- What NYTs employees care about: This is a tougher question. 51% of the newsroom staff say they are “afraid to say what they really think”. When the workforce is that evenly divided expect there to be fireworks and battles for status and control…
- Airport Face Scans: “Despite millions of dollars spent, the feds have caught zero imposters at airports in the last year”. Or as Shakespeare once wrote, “Much ado about nothing” or was it “all the world is a stage”?
- Privacy wording: Apple is asking people if they want to be tracked. The answer is almost always “no” (so much so that Facebook is not even going to bother asking). But if these same users are asked, “Would you like personalized ads” most people answer “yes”. These are the same questions with the same effects. But one asks about the output and they other just asks about the input. People only care about privacy if the invasion does not get them anything. But they will trade it away in a second for the smallest of benefits.
- Retail space: The US is VERY over-retailed. Some forward thinking real estate owners have already started thinking ahead and have converted malls into mini theme parks. Unfortunately COVID has hurt both the old and the new business models.
- Reddit: Reddit just raised $250MM in Series E which values the company at $6B. Reddit has been a terribly mismanaged company. They are the 7th highest traffic website in America, and yet they monetize at a fraction of even “poor monetizarion” companies like Twitter. But the potential is there if good management could be put in place. Hence optimistic private valuations of $1.8B (2017), $3B (2019) and now $6B. Related: Reddit ran a 5-second Superbowl ad that was VERY text heavy. It was only really readable if the ad was paused or a picture was taken. But it got a ton of PR out of the ad - especially on social media. Well played.
- DoorDash: The delivery company is acquiring Chowbotics - a startup that builds robots that build salads. Doordash is not primarily a restaurant delivery company, they are a “food on demand” company. They have a better idea of cinsumer demand than anyone else. They have previously built their own restaurants to fill in missing supply. Why not supply their own salads in the markets where they know the demand is there?
- Minimum Wage: Minimum wage is very much in the news in the US right now with President Biden’s new plan to raise it nationally to $15/hour. Marginal Revolution shares a simple study that looked at what happened in Denmark when minimum wage was significantly higher for 18+ year olds. Result: 18 years olds make 40% more per hour vs 17 year olds, but employment rate drops by 33% and employment hours by 45%…
COVID and the New World Order
- Marriages: When you can’t have an (in-person) wedding, many people decide not to get married. Will be fascinating to see if this moved the timing or reduced the the total number of marriages altogether.
- Vitamin D: Another study - this time a RCT - shows that Vitamin D is very effective at reducing your chances of getting COVID and the severity if you do get it. Note that the study was a RCT by hospital ward instead of by individual, so the results are questionable. But the cost of taking vitamin D is very very low… So even a small signal here might be worth taking action on (our family has been taking vitamin D since last spring)
- COVID predictions: This was a good, sensible piece on what to expect next. Future predictions -
- Experts: Experts had a ver very bad time as predictors in the last year. “Experts were just as wrong as laypeople when it came time to predict the societal consequences of the COVID-19 pandemic”
- Metahumans: Unreal engine is a platform for building games. They just released their latest “character generator” and it is… unreal? [Worth stopping what you are doing right now and watching the video](https://www.unrealengine.com/en-US/blog/a-sneak-peek-at-metahuman-creator-high-f
- Bullying: Facebook invests more in moderation than anyone. Anytime they can find a way to improve automated detection they save millions on human beings. For most types of banned content they were able to catch 95% automatically. For “bullying and harassment” the algorithm only caught 13% of infractions (the rest were identified by humans). But their new AI is much better and are catching harassment almost 50% of the time. This is an arms race and AI is winning.
- Hiring bias: MIT’s technology review has a piece on auditing AI-hiring algorithms. The conclusion is it impossible to know if the hiring tool is really doing a good job or not (evaluating employees is ALSO hard - so what are you measuring against?). What is not asked - and should be - is “are algorithms MORE biased than the humans they are replacing”. There is a fear that algorithms will systematize prejudices, but at least we can audit algorythms and improve them. That is much harder to do with individuals who may be prejudiced and we never really know.
- AI Incident database: Sometimes airlines crash. When they do they get added to an aviation accident report. This allows researchers to figure out patterns for why accidents happen and eliminate the root causes. Now the same is being done for AI-errors.
- Talking to dead people: AI Dungeon already does a great job with simulating discussions with fictional characters - as long as there is enough information about the character in the data set (i.e., it worked great for my 5-year old to talk to Elsa, but not so good to chat with Rascal from the Dory Fantasmagory books). Microsoft has just patented an AI chatbot for talking to dead people. In theory if you could get enough of a person’s content creation (tweets, texts, emails) you could simulate them pretty well. So creepy there was already a Black Mirror episode on it…
- Master’s Degrees: "More than 16 million people in the US now have a master's, a 43 percent increase since 2002...master's degrees became as common now as bachelor's degrees were in the 1960s". Find a new way to compete…
- Look-ism: Looks clearly matter in many many occupations. This study shows it even matters for academic economists… Feels like a place where the hiring algorithm might solve the problem?
- Negative knowledge: I have written before about the idea that some knowledge makes you worse off. Here is another example. “Promising managers asked to do process redesign at their firm learn how messed up it all is, so they give up rising careers & become hermits at the edges of the firm” Paywalled study here.
- Weight Loss Drug: In the 1990s there were plenty of drugs that claimed to increase your libido. But the first real game changer was Viagra (and then Cialis). Weight loss is in that world now - lots of claims, but nothing that really works. But now it looks like we have the Viagra of weight-loss coming down the pipe. Semaglutide seems to really work and has minimal side effects. “The mean change in body weight from baseline to week 68 was −14.9% in the semaglutide group as compared with −2.4% with placebo”. Average impact was about a half pound a week for 68 weeks. If this continues to replicate it is really huge… (and no one seems to be talking about it… yet?)
Keep it simple,