Monthly Archives: January 2010

The self-correcting social network

Their SEO boys are not going to like this.

If you missed the Final Footwear debate this week, the shoe company apparently hired SEO experts who in turn apparently began filling blogs with spammy comments — “great blog post!” — with links back to Our blog got hit several times. (Such link building is a dirty search engine optimization tactic to try to trick Google into thinking a web site is more relevant, since many links now point back to the site, Google rates sites in part by how many links point to them, and thus Google in turn might elevate that company’s web site in search results.) We say apparently, because it is possible real people named Nike and Timberland decided to comment on blogs and link randomly back to a shoe web site. So we gave Final Footwear’s SEO plotters a little spanking.

The most interesting thing about the issue is now if anyone searches Google for “FinalFootwear” as one word, our questions about whether it is a link-spammer are now the second and fourth search results. As we wrote over at Kelly Craft’s blog:

“It shows how all brands, and all of us, must tread fairly online, since human networks are now self-correcting. When people cross lines of perceived fairness, the group communities react. It’s almost a new form of social justice — groups of humans know when something is wrong, and now social media helps them react very clearly with a response.”

Final Footwear, we’re still willing to discuss this in person. Feel free to give us a call.

When walls come down

The Haiti earthquake made us wonder: Why do we distance ourselves from others?

There are 6,796,500,000 people on this planet; most can’t see beyond self-imposed communities of politics/nationstates/racial attitudes/sports team combatants … and yet a visitor from another world would think we all look alike. Yes, humans have a few variations in hair and skin color, but outside looking in our race is far more homogeneous than butterflies, cats or dogs. A space alien, flying by on vacation, could only wonder why Homo sapiens, so similar in appearance, fusses and fights given the need for group survival.

Imagine being that alien, trying to puzzle it out. What is going on to make those little hominids below argue so much? Religion? Most humans believe in one god. Territory? An artificial construct, with no nationality lines visible from the sky above. Money? An illusory fiction used to trade goods, most of which start on one side of the world and end up on the other. Very strange, the visitor would think, observing humans who each day wear 10 bits of clothing manufactured from China to India, that we dislike or distrust anyone with a slight alteration in their spoken language. The most comical finding of all would be that when humans do go to war with each other, we often fight the cultures closest to us in similarity — the U.S. North vs. the South, the English vs. the Irish, Croatia vs. Serbia, or perhaps soon FoxNews vs. MSNBC.

Psychologists suggest our bias to liking our own kin while fearing others slightly different is related to genetics. “If a set of genes predisposes an individual toward assisting a closely related other, there is a high probability that these same genes also exist in the bodies of the recipients by virtue of common descent,” wrote Justin Park, Mark Schaller, and Mark Van Vugt in the Review of General Psychology. That is, your body is filled with the instincts of your forebears — to protect kin at the cost of others — because those selfish survival genes were the ones most likely to survive. At the same time, we often dislike people quite similar to us, like the Hatfield and McCoy feud, perhaps due to the instinct shared across species not to have sex with close cousins which can cause genetic aberrations. Thus we distrust those from distant lands but really wage war on neighbors slightly different in culture.

Still, when real disaster strikes, for a moment the artificial walls between human cultures come down. It’s painful to see people trapped and suffering. Perhaps an altruistic instinct for group survival deeper than a selfish urge to fight lies within us all. Find out yourself: The New York Times lists options for donating to Haiti here.

Ongoing updates to the 2010 Haiti earthquake at Wikipedia here. Images: United Nations photostream on Flickr.

Google’s cell phone move No. 348: Local QR codes

Like a lover who realizes his heart’s affection may be moving on, Google is eyeing the handsome new competitive world of mobile fearfully. Such tiny screens. So little room for Google ads. So apparently Google has yet another mobile beta program, this one letting you snap photos of retail locations to pull up information on your smart phone using those strange pixelated bar codes that first showed up in Japan. The deal is you see a QR code that looks like a Jackson Pollock painting, you take a picture and a message, link or video lands on your cell phone. It’s like a bookmark for mobile.

Phones that squeeze search out

You could write this off as a gimmick, or just another Google trial balloon (remember customizable search results?), yet …

… Google is worried. Consumers in the U.S. are migrating rapidly away from big laptops to smaller cell and tablet screens (yes, soon), and developing nations that hold the future of our global economy such as India and China are making mobile so big their consumers may soon forget what stodgy old desktops are. The trouble for Google is its current revenue lifeblood, Adwords, works brilliantly on big screens but not so well on tiny mobile glasspads where they cannot cram nine “sponsored links” next to every search result. That’s right: Google faces a visual inventory problem. It’s the same reason Google pushed hard to launch a mobile operating system, and why it soon may even sell mobile phones. Google wants in on the mobile space, cause it’s the future of consumer attention, and that’s the future of advertising. If it fits.

Pixelated popularity?

Google being Google, they’ve cleverly found an auction-type system to help their QR codes work. Businesses that have the most photos snapped of their codes will have future special decals shipped to them (there is no way to buy them) designating them as most popular joints. So businesses have an incentive to push QR codes in your face, so you’ll snap, so they win, so Google’s service encroaches on your cell phone. Dearest coffee shop, we had a hard enough time understanding your menu already.

Via Brandflakes and @webmetricsguru.

Seeding nature in cities with geospatial analysis

When New York City first dreamed of a great Central Park in 1844, it began a 29-year massive landscaping process over 700 acres that required the demolition of entire villages. Cities today don’t have the luxury of three-decade timelines and vast spaces to move earth, and yet with urban manufacturing fading and populations rising, the need to give citizens healthy outdoor areas to breathe, exercise and congregate is more important than ever.

Local Code : Real Estates is a proposal to use geospatial analysis (sophisticated mapping) to pinpoint tiny sections of urbanity in New York, LA, Chicago and DC that have fallen into disarray — and then consider how to build networks of green spaces at the street level. Here’s what Revere Street in San Francisco would look like before and after renovation:

It’s an intriguing dream: hundreds of small, soccer-field- or street-sized parks giving residents local opportunities to experience nature. The designs would breathe life into the blighted areas of major cities which often have higher incidence of pollution, bad air quality and poor health. And because of the hyperlocal structure, each area of residents could weigh in with the balance of trees, grass, cobblestones, benches or sports facilities they’d want most. Rather than one vast park acting as a city’s heart, you’d have thousands of green pathways acting as arteries.

WPA2 : Local Code / Real Estates from Nicholas de Monchaux on Vimeo.

Via Emmanual Vivier. Anatomy of a link-spammer

This is Surely a reputable company, and we’re certain it had no intention of hiring an SEO consultant to build fake links in blogs such as our own pointing back to its site, trying to trick Google into elevating its position in Google search results. Any such occurrence must be a coincidence. Really. I mean, geez, lying in print is almost criminal, and who would do that?

Now, this below is a link spammer, commenting on our blog, with a link embedded in the “Nike” name going back to

Nice tone, appealing to our ego. You know, the type of comment we might leave there forever, with a link … pointing to FinalFootwear. And so is this:

We’re sure it’s an honest mistake, FinalFootwear, and these comments are totally unaffiliated with you. After all, if word got out you were trying to mislead people to find your site, people wouldn’t want to shop at FinalFootwear, would they? Instead, they’d think you were a bottom feeder in the marketing universe polluting the Internet with lies, and word might get around that it’s risky to shop at such a disreputable company. That would be too bad, wouldn’t it?

And just to show we don’t think you’d do such a dishonest thing, we’ve even included a link to your site in our lede. So you’d notice. And let’s be clear with your lawyers, we ABSOLUTELY are casting no judgment or making any claim that you would conduct misleading behavior in web links to get people to your site. Really. We’re NOT saying that at all. We’re just happy that people named Nike and Timberland happen to like our blog, and they’re welcome to link back to your shoe site whenever they want. Cheers.

Syfy wins the great rebranding debate

When Sci Fi rebranded to Syfy in mid-2009 with more diverse drama content for women, fans were aghast. But the cable network is having the last laugh with ratings for women 25-54 up, new ad dollars flowing in from Hershey’s and BMW, and a leap over Lifetime in the coveted prime time slot. We’ve been debating ad guru Bill Green for a while over why we liked the rebranding, and responded to his it’s-still-wrong post today with this:

Bill, I called this back in March 2009. I think what you missed is cable TV networks don’t exist to serve content to audiences; they exist to serve *audiences* to advertisers. Syfy had to find a new audience because the old one was leaving cable TV.

You raise a good point that cable nets risk diluting their value if they broaden content too far. But think about the audience. Science fiction fans skew young and male, the earliest adopters of technology — and a wave of eyeballs leaving traditional cable TV. You seem to be a sci-fi fan. Do you spend hours in front of cable, Bill, or a computer? Young men also often have less income (since wealth is a function of age) and are focused on a limited product set (gizmos, cars, razors). Women of all stripes, on the other hand, account for 80% of discretionary spending, buy everything for the household, and are a sweet audience to serve to advertisers. Older women are more likely to have higher incomes, another draw for marketers.

I wouldn’t blame Syfy for leaving its fans. I’d fess up, and blame Sci Fi’s original fans for leaving it. TLC did the same thing a few years back (um, remember “The Learning Channel” human anatomy shows? All gone now.). If you ran a cable net and saw forecasts of your audience going out the door, the smartest thing to do is go find another audience. Syfy, very well played.

Pandoracars and tigers and bears, oh my

Want a signal that the broadcasting world may soon face the troubles newspapers do today? (Um, that’s losing audiences and advertisers.) The Wall Street Journal reports:

“Pandora Inc. has struck a deal with electronics maker Pioneer Corp. that promises to make it easier for drivers to listen to its personalized radio service in cars—bringing Internet radio one step closer to snagging a built-in spot on dashboards. The development represents a direct challenge to broadcasters of satellite and traditional radio, who have long dreaded the arrival of Internet radio in cars.”

Apparently it works like this: If you have an iPhone that receives the free Pandora music streaming service, a $1,200 auto navigation gizmo will detect the settings and pipe the music into your car. That’s a lot of dough for “free” music, but expect the prices to fall (GPS systems once cost hundreds of dollars and now are $99 from dedicated device-makers or free from Google). What happens to the world of advertising-backed radio when you can stream any songs via an interweb for free? Um. Trouble.

Image: Valentina Photography. WSJ story behind the Murdoch paywall here.

Why commuters will love Apple’s tiny videos

When we suggested in a BusinessWeek column that Apple’s emerging tablet device could encourage commuters to begin working from home, UK Guardian tech editor Charles Arthur pushed back. “No, I’m not really seeing how the iTablet makes telecommutes happen more than a laptop and a second monitor, but anyway…” he wrote. Perhaps. But it’s worth reviewing that idea, since what most people miss is we have just entered the uncharted waters of a new two-way video age.

It’s 2010. Can you guess what device you’re missing?

Quick, grab your gadget and make a video call. What? You can’t do that from the subway stop or corner deli? A bit curious, isn’t it, that in this modern age you don’t have a video transmission device (unless you like walking around with a laptop flipped open near a WiFi hot spot).

That will change this year. Video has been with us for more than a century in some form or another, but it’s only been two years since two-way video began appearing on most laptops — and just four months since Apple stuck a video camera on iPods as small as sticks of gum. Society still has no cheap, simple, small, portable device that you can carry easily that captures and shares video via wireless (well, at least in the U.S.; in parts of Europe they can video-dial Jesus). The iTablet may be that device, since analysts predict it will hold a webcam; if not, another gadget will be. As sure as you can say telephones-never-really-needed-cameras, you better believe the version creep of manufacturers trying to outsell each other will soon put tiny webcams and video screens in most handheld portable electronics.

It’s 2010. Do you still hate your commute?

As technology rushes to enable you to video-conference loved ones in Hawaii from any location, society also has a sore point that no market tool has adequately addressed: Your daily commute. In the United States, a land with 3.9 million miles of highways, 9 in 10 U.S. workers get to their employment via car, and they spend a collective 3.7 billion hours each year stuck in traffic. One of the fastest trends in the U.S. is workers leaving prior to 6 a.m. to beat the morning rush; in 2007 McDonald’s announced it would open 75% of its U.S. restaurants at 5 a.m. to help those bleary-eyed souls make it there with coffee.

The psychology of why people feel they must work together probably goes back to ancient clans instinctively huddling for shelter, or the fact most communication is nonverbal … but what if you could really see other people easily on screens, from anywhere, at any time? What if your visual community was anyone you can reach with a click?

Cheap, two-way portable video is finally coming. Travel is expensive, wastes time and stresses both individuals and the society that bears its energy, infrastructure and pollution costs. Hey. You connect the dots.

Image: Christian Spinelli

Why confusing products have high prices

The takeaway: Pricing is information. When information is missing, the price of something may be unfairly high. When information becomes prolific, prices fall, making margins unfairly thin. The only business defenses in our world of increasing information are either to quicken the pace of innovation (to move into areas where pricing information is unknown), or seek to cloud information to protect pricing.

So we cracked the cover to The Road to Serfdom by F. A. Hayek (bear with us, folks) and were reminded of the basic economic concept that pricing is a form of information transfer. Markets, you see, do more than move goods and services around to pay people money; they are actually collective hive minds of intelligence, transferring data on the relative value of things.

Which brings to mind the painful choice of extended warranties. You know, if you bought any big electronics for Christmas, the dissonance of being pitched a warranty by a slick salesperson. Part of you thinks you don’t need it; another part worries, well, a neighbor’s kid could throw a chair through that flat-panel TV, so maybe, yes?

Margins as friction

Economist Jodi Beggs explains it all with this quote from Richard Thaler and Cass Sunstein:

“The extended warranty is a product that simply should not exist. If humans realized that they were paying twenty dollars for two dollars’ worth of insurance, they would not buy the insurance. But if they do not realize this, markets cannot and will not unravel the situation. Competition will not drive the price down, in part because it takes the salesperson a while to persuade someone to pay twenty dollars for two dollars’ worth of insurance, and in part because it is difficult for third parties to enter this market efficiently.”

Shouldn’t exist? Well, yes. Most markets have enough competition that a $2 product priced for $20 won’t stay alive for long; but a few don’t. In the case of warranties, strange services offered only after you’ve purchased something else in the dark of an electronics store with little competitive information to guide you, the absence of knowledge allows margins to float to the sky. In this case, the friction that blocks comparative value data from competitors creates a sticking point of artificially high margins for the one company pitching the warranty.

The doctor’s bill will not see you now

We don’t mean to disparage the warranty industry; rather, simply to warn that price gouging of any kind always comes home to roost. Thaler calls this the point when consumers enter a “rip-off” stage of awareness. Healthcare is another vivid example. One could easily suggest the current debate over health reform is the angry reaction of a populous (or at least the liberal side of it) that has awoken to find skyrocketing medical costs are gouging society. Healthcare is really just one example of a broken competitive market; consumers don’t pay the bills, insurance companies do, and the individual who receives care has no idea what the procedure, tests and physicians are actually charging. No information, no price competition, no check on rising costs.

The problem for organizations who sell such uncompetitive wares is the Internet, and more recently social media, provides new layers of information that push down on uncompetitive pricing. Your 2,000 peers on Twitter become a virtual Consumer Reports of reviews, warning you when services aren’t what they seem. This pressure on margins has been around for a decade, and Chris Anderson has noted it most famously recently in his book Free. (We think Anderson followed the trend line too far; not everything will be priced at zero just as real estate prices in any bubble never reach infinity.)

Really, this push-and-pull is the entire competitive market at work. Companies of all stripes try to disguise their margins in order to raise them. Seeking profits is healthy, because the motive leads to growth and innovation. Yet those goods that are priced too high due to an absence of information will be forced to slide back to reality. As our new tools make value data more transparent, margins will be harder to come by. Competitors will have to respond by either increasing the pace of innovation, or finding new ways to cloud their value. Good luck, and watch out for that guy looking at televisions in Aisle 9 with a cell phone.

Image: Brooks Elliott