Through merging its commercial wind power business with that of Spanish firm Gamesa, Siemens has created a true market leader in the wind turbine market, giving a boost to Europe’s renewable energy push.
Author: Ben Debski
IKEA
At the COP21 climate summit, the Swedish furniture manufacturer made a commitment to become a net producer of renewable energy by 2020. Earlier, it also pledged to run its stores on 100 percent renewable energy by 2020
Nest Labs
Nest Labs’ intelligent thermostat can push down energy costs by regulating the energy used to heat or cool a house. It proved particularly useful to utilities firms during the unprecedented heat of summer 2016 in Europe
Bureo
Discarded fishing nets pose a major risk to sea life. Chilean start-up Bureo collects these nets and turns them into skateboards, cleaning up the oceans and giving the materials a new lease of life.
SolaRoad
In creating a road surface that is able to absorb solar energy, SolaRoad has achieved a world-first. Should its first live test road in the Netherlands prove a success, this technology could transform urban infrastructure.
Iceland
As a nation, Iceland has capitalised on its significant natural opportunities in terms of size and location, and now meets an impressive 85 percent of its primary energy needs with renewable sources.
China’s Dalian Wanda acquires Dick Clark Productions for $1bn
On October 4, Chinese property and entertainment conglomerate Dalian Wanda announced the purchase of Dick Clark Productions in a deal worth $1bn. The acquisition marks Dalian Wanda’s first foray into the world of US television production, as the company continues to ramp up its operations in Hollywood.
In a statement confirming the acquisition, the Chinese conglomerate lauded the deal as “a big step forward in expanding Wanda’s map in the entertainment industry”. The company further emphasised the significance of the purchase, saying: “obtaining top television productions rights brings about complementary and coordinated development for Wanda’s current focuses on the film, tourism and sports industries.”
US television studio Dick Clark Productions boasts an impressive portfolio of shows – including the broadcast rights to the Golden Globe Awards, the Miss America beauty pageant and the Billboard Music Awards. While Dalian Wanda has previously focused its Hollywood ambitions on the film industry, the acquisition of television giant Dick Clark Productions indicates a sustained effort to target the wider US entertainment market.
The acquisition of television giant Dick Clark Productions indicates a sustained effort to target the wider US entertainment market
The Chinese entertainment giant first began its expansion into the US film market in 2012 – purchasing the nation’s second biggest cinema chain, AMC Theatres. In January, the conglomerate purchased a controlling stake in Legendary Entertainment for $3.5bn. Next year, Legendary Pictures is set to release Great Wall – the first Hollywood film to be set, filmed and produced exclusively in China. A recent partnership with Sony – aiming to co-invest and distribute the studio’s films across its network of cinemas in China – has also helped bolster Dalian Wanda’s presence in the US.
Through partnership with Dalian Wanda, US film companies are beginning to tap into the rapid growth of the Chinese cinema market. Projections suggest the Chinese box office will overtake the US as the world’s largest film market in the next few years – with revenues up by 50 percent in the first quarter of 2016 alone.
However, Dalian Wanda are not the only Chinese company investing in the US entertainment industry, with Jack Ma’s Alibaba Pictures also setting its sights on Hollywood. In October, the Chinese film company announced that it would be collaborating with Steven Spielberg’s Amblin Partners to finance and co-produce films for both Chinese and US audiences. With Chinese investors increasingly looking to Hollywood, China’s grip on the US and global film market looks set to strengthen in the coming years.
After the deluge, venture capital funding has dried up
If you were starting up a tech company in the last few years, money was the last thing you had to worry about. Venture capital investors seemed enthusiastic to back almost any tech company with a decent idea and growing user base. The one in 10 in their portfolio that made it big would more than make up for the nine that flopped. Because tech is such an unpredictable field with a ‘fail fast’ ethos, hedging your bets, at least up until recently, made sense.
But this year, venture capital for the start-up community has been far harder to come by. As far back as 2012, PwC was tracking the amount of venture capital investment in the US through its quarterly MoneyTree report. After deals surged between 2013 and 2015, 2016 has been much quieter. In Q2 2015, venture capitalists invested a total of $17.4bn in US start-ups. In Q2 2016, the most recent data, only $15.3bn was invested. This was accompanied by a decrease in the total number of deals being done. MoneyTree recorded 1,231 deals for Q2 2015, compared to a mere 961 deals done in Q2 2016 – the lowest number in a quarter since 2013. Confidence among venture capital investors has clearly been dented.
Grow up
The problem for tech companies in particular is that a number fail to reach the scope and scale they aspire to. Many are chasing an economy of scale wherein a spectacularly large number of users will allow them to turn a profit from many small fees. This usually means running a company at a loss while a user base forms and grows – a strategy popularised by Uber. Investment is critical to getting these kinds of companies where they need to be.
Unfortunately, many have failed to reach their lofty targets. The goal of many start-ups is to reach the stage where they can launch an IPO or be purchased by a larger company, thus generating a return for early investors. However, the number of companies reaching that stage has been steadily decreasing.
The problem for tech companies in particular is that a number fail to reach the scope and scale they aspire to
According to a recent report from CB Insights, the number of technology start-up exits worldwide in the first half of 2016 was down 17 percent from the same time in 2015. The report also indicated the purchase price for these companies has also been quite small: in the period, 53 percent of companies exited for less than $50m.
This is fuelled by the fact some of the darlings of the tech start-up world have not managed to successfully reach their anticipated heights. Uber, with many questions surrounding its profitability, has so far not yet made an IPO. Spotify has also not yet been able to make the transition to public trading either. Twitter launched its IPO in 2013, and has struggled with its business model ever since. The success of Facebook, it seems, may have been the
exception rather than the rule.
Shaken confidence
Aside from the struggles of big stars, there have also been many serious high-profile failures that may have made investors more cautious. The UK’s Powa Technologies, a payment company that once claimed to be worth $2.7bn, fell into administration in February 2016 after it squandered its money.
The current climate is not dissimilar to that surrounding the burst of the dotcom bubble in 2000, when overvalued internet companies with flawed business models experienced rapid devaluation. While the market is considerably more mature now, investors are clearly becoming choosier about which start-ups they are willing to give the benefit of the doubt to. In an increasingly uncertain global economic environment, it seems, more and more start-ups are proving they just aren’t worth the risk.
Time is quickly running out for Japan’s transplant tourists
Japan’s healthcare system is world-renowned. Offering twice as many hospital beds per capita as the US, the island nation’s system is frequently ranked among the very best by the World Health Organisation. Yet, for all its pioneering use of medical technology and universal health insurance, Japan is still failing many patients.
For Japanese citizens suffering from chronic kidney failure, their diagnosis is akin to a death sentence. According to the Japan Organ Transplant Network, around 300,000 patients rely on near-daily dialysis to keep them alive, while a third of these patients are seeking a kidney transplant. For many, however, the transplant they so desperately need will remain a far-off hope. Last year, just 133 cadaver kidney transplants were performed in Japan, while a record-breaking 2,905 were carried out in Spain, the leading nation for organ transplantation.
These low transplant rates are not just limited to kidney procedures. Demand astronomically outstrips supply across the board in Japan, with as few as 44 life-saving heart transplant surgeries carried out in 2015. Pancreas transplants numbered just four, while not a single intestinal transplant has been carried out since 2013. Compounding all this, the nation’s organ donation rates remain the lowest in the developed world.
For Japanese citizens suffering from chronic kidney failure, their diagnosis is akin to a death sentence
“Organ transplantation is a serious and significant problem in Japan”, said Yasuhiro Kanatani, Director of Health Crisis Management at Japan’s National Institute of Public Health. “Between 2010 and 2015, there were only 14 cases of organ donation from persons under the age of 18.”
Culture shock
In Japan, attitudes towards life and death are largely shaped by a blend of Buddhist and Shinto beliefs, which affirm the body and soul are linked together. As a result, it is held to be important for the body to remain pure and whole after death and through to cremation. The concept of organ donation is seen by many in Japan as incompatible with this practice, and it is far from being readily accepted. However, to entirely attribute the nation’s low rates of organ donation to these unique traditions would be to ignore the complex history of transplantation in Japan.
During the 1950s and 1960s, when the global medical community first began making significant progress with transplant surgery, Japan was leading the way for the pioneering treatment in Asia. Completing its first successful kidney and liver transplants in quick succession in 1964, the country seemed set to become a world leader in the field. However, these impressive advances came to a sudden halt in 1968, after the country’s first heart transplant met with intense public outrage. The surgeon in charge of the operation, Dr Juro Wada, came under intense criticism for personally selecting the organ recipient, and performing the brain death evaluation of the donor alone. As concern over Wada’s evaluation practises mounted, a full criminal investigation into the milestone operation was launched.
While the surgeon’s murder charges were eventually dropped, the controversial incident saw a dramatic reassessment of transplantation surgeries, resulting in a 30-year ban on cadaveric organ donation. The ban was only lifted in 1997, when a new law finally legalised organ transplants from brain-dead donors. While the revised transplant law certainly marked a significant first step in reintroducing the treatment to Japan, its success has been understandably limited. Instances of brain death account for less than one percent of all deaths in Japan, while a lingering deep-rooted distrust of organ transplantation has kept donor registration numbers low. The likelihood of a brain-dead patient having registered as an organ donor, with the required blessing of their family, is therefore minute.
Transplant tourism
For the hundreds of thousands of Japanese patients currently on the organ transplant waiting list, the chances of receiving this life-saving operation seem incredibly slim. Tired of waiting, many prospective transplant recipients are opting to travel abroad to receive the surgery they need. A 2006 survey by the Japanese Health Ministry confirmed at least 522 Japanese patients had received transplants abroad, with the true figure believed to be much higher – in the 10 years since, there has been little to suggest much has changed. Popular destinations for Japanese transplant tourism include the US, Australia and, perhaps most controversially, China.
Since the early 1980s, China’s dominant source of organs has been executed death-row prisoners. Shockingly, the nation’s Deputy Health Minister, Huang Jiefu, acknowledged in 2010 that over 90 percent of organs used in transplants were taken from inmates. While two years have now passed since the nation first pledged to put an end to the controversial practice, an update to the landmark Kilgour-Matas report suggests organ harvesting continues to thrive. According to the update, extracted organs are routinely sold to both native and international patients, with kidneys fetching a price tag around $80,000.
With the additional costs of flights and convalescent accommodation pushing expenses up to hundreds of thousands of dollars, transplant tourism is an option that few can afford. For those Japanese patients lacking the financial means, their best hopes lie in the burgeoning field of regenerative medicine.
Pass the tissues
In recent years, the Japanese Government has been attempting to combat donor shortage through heavy investment in pioneering tissue regeneration projects. Unlike conventional organ transplants, which use tissue taken from donors, regenerative treatments use stem cells taken from patients themselves. These stem cells are then grown into tissue in a lab, before being transplanted back into the patient’s body. Japan Tissue Engineering, a subsidiary of Fujifilm, has been pressing ahead with epidermis culturing, while the University of Tokyo Hospital has been leading the way in bone and cartilage regeneration. Although research such as this has yielded promising results in Japan, perhaps the most significant tissue engineering breakthrough to-date has come courtesy of the Centre for Eye Research Australia (CERA).
Researchers at the Melbourne-based institution have successfully grown cornea cells on a thin layer of synthetic film in a lab, and transplanted them into the eyes of animal test subjects, thus curing them of blindness. This innovative use of a patient’s own cells in transplant operations could not only solve the issue of donor shortage, but may also put an end to another pressing transplantation issue: rejection.
“Rejection is the body’s immune system recognising foreign cells and then killing them. But, if you use autologous cells, there’s no risk of rejection”, said Mark Daniell, Head of Corneal Research at CERA. The centre’s synthetic film could revolutionise corneal transplant surgery. “The scaffold that we’ve developed is clever in that it is very robust, and so can withstand the surgery, but is also incredibly thin, keeping it transparent. It doesn’t cause any inflammatory reactions, and is also biodegradable, leaving no trace in the body and no toxic product afterwards”, Daniell said. What’s more, the possibilities for CERA’s new patented treatment extend much further than the field of corneal research, and could have a significant impact on the wider world of transplant surgery.
“That’s really the premise of tissue engineering, that you can remake people’s organs using their own adult stem cells, without any risk of rejection”, said Daniell. CERA has already suggested the same regeneration technology could be used in other surgeries, such as skin and retina transplants, although this research is still in its early stages. CERA’s previous research has largely been funded by philanthropic and government grants, but the institute is now looking for venture capital investment in order to progress to the next stage in its corneal project: human trials.
As advances in tissue engineering and stem cell research continue to ignite the world of medicine, patients may soon have an alternative to lengthy organ transplant waiting lists. In Japan, attitudes towards organ donation might be slow to change, but the science is advancing rapidly. After decades of doubt over transplant surgery, strict laws and cultural norms may soon cease to prohibit transplant surgery in Japan and beyond.
How to choose a strong password
In August, Dropbox announced it had confirmed a breach of its database. Approximately 68 million email addresses and their corresponding passwords had been leaked back in 2012. It was another example of a high-profile website that had had its password security compromised, and a reminder of why passwords are so frustrating. With many people complaining they are both inconvenient and insecure, one might wonder why there isn’t a better alternative.
Industry luminaries have long been warning passwords will eventually go the way of the floppy disk. In 2004, at the RSA Security Conference, Bill Gates famously declared passwords would soon be dead: 12 years later, his prediction is slowly coming true. At its I/O conference in 2015, Google announced Project Abacus – a complex series of checks that would gradually replace passwords on Android devices. Yahoo removed passwords from its Mail app in 2015. Apple now lets users unlock their computers by holding their Apple Watch close by.
Industry luminaries have long warned passwords will eventually go the way of the floppy disk
Despite these efforts, passwords remain a primary security measure across services as critical as bank and email accounts. Unfortunately for people who hate them, a decent replacement just doesn’t exist yet.
Security or usability
Oliver Farnan, a security researcher at the University of Oxford, said any security measure is always a compromise: “In security academia and security research, there’s always this battle with security on one hand and usability on the other. It’s easy to make things really, really secure.”
If security were the only concern when it comes to protecting user accounts, there would never be any breaches. Potentially dozens of varied measures could be used; more than enough to deter even the most dedicated of hackers. The problem is that, for every security measure, another layer of inconvenience is added. Farnan said putting up several security measures would make a website like Facebook totally unusable.
“You could make it more secure by requiring two-factor [authentication] on your phone, you could make it more secure by having a fingerprint scan, you could even make it even more secure by, say, sending Facebook a letter saying ‘I want to log on at this time’. Adding security is quite easy – the problem is you want to add it in a usable way.” By Farnan’s reckoning, this is the main reason passwords have stuck around; they strike a good balance between security and convenience.
Are, have, know
There is by no means a shortage of alternatives to passwords available. The Samsung Galaxy Note 7 has a built-in iris scanner, and since the iPhone 5S Apple has included a fingerprint scanner on its devices. Banks sometimes supply a key generator to limit access to people’s accounts, and many services are now using notifications on smartphones to authenticate login attempts. None, however, match the core qualities of passwords.
Fundamentally security measures work by confirming one of three things: ‘something you are’, ‘something you have’, or ‘something you know’.
‘Something you are’ is simultaneously the most and least convenient. The benefit of using something that you are (like your genetic material or fingerprints) as a security measure is that you always have it with you. You can’t forget it, you can never leave it behind and you don’t have to worry about someone stealing it. For many people, biometrics seems like the future. That is, until the inevitable hack. No security database or measurement is totally secure and, if widely adopted, a leak at some point is almost a certainty. If your fingerprint or iris information is made public, any account that used it has, at least theoretically, been compromised. And unlike passwords, you can’t just reset your fingerprints.
‘Something you have’ suffers from a similar issue. Whatever the thing in questions is, whether an access card or a mobile phone, you run the risk of losing it or having it stolen. It is also the most expensive and inconvenient to replace, as it involves a physical object.
Lastly, there is ‘something you know’. It cannot be stolen, it can be easily changed if it is compromised, and it doesn’t cost anything. On the user’s side, the worst that can happen is forgetting it. It’s this balance of security and usability that has allowed passwords to endure for so long. If perfectly implemented, the humble password cannot be matched.
Best of a bad bunch
Despite their benefits, passwords do have many issues. Farnan said many security researchers are cold on the idea of passwords, thanks to the security measure’s vulnerability to a number of different attacks. One of these is the interception of a network, where the content of a password is copied as it is being transmitted. However, though this is a possibility, modern transmission security standards make it uncommon.
Another threat is guessing attacks, a particular flaw of passwords supported by security questions. If a celebrity’s email or iCloud account has been breached, it was probably a result of a guessing attack; well-known people are particularly susceptible to such attacks since the information hackers are guessing – be it their mother’s maiden name, the name of the town in which they were born, or something similar – may be publicly available. For the average person, this is less of a concern; brute force attacks, where the attacker submits guesses in rapid succession, are more common.
However, Farnan said this is more or less a solved problem, thanks to lockout timers: systems that make users wait before having multiple attempts at entering a password. “So, if you fail your password three times, you’re locked out 30 seconds. If you fail it the next three times, you’re locked out for five minutes. If you fail it the next three times you’re locked out an hour. And with that you very quickly get this huge superlinear increase in time. You very soon find yourself in time periods where it’s not practical to guess any more passwords.”
The FBI found itself up against this defence when attempting to gain access to the iPhone 5C of San Bernardino gunman Syed Farook. The FBI requested Apple remove the feature through a private firmware update, allowing them to launch a brute force attack. While the FBI eventually got the password through other means, the case proved lockout timers do provide an effective defence for the average person. Making passwords longer or more complex also increases the amount of time it takes to mount a brute force attack.
Hash and salt
The last problem with passwords, and the reason behind password leaks, is the use of out-of-date hashing algorithms. If a service is doing its job correctly, it won’t actually have a copy of passwords on file, instead holding the result of a hashing algorithm: a complex equation that takes a password and converts it into a long string of characters. This is done through a pseudo-random one-way process, meaning the operator of a password service never has to store your password, but rather the resultant hash. The process is supposed to be impossible to reverse thanks to the inclusion of extra random characters in the equation, called ‘salt’. If you hack into a database of passwords, unless you can find a way to change the hash back into the original code, your information is worthless.
If a company updates its password hashing algorithm, it needs users to create new passwords
However, while it does take a substantial amount of work, hashes can be compromised, requiring companies to update their security measures. It’s not hard, but many still fail to update old systems, allowing passwords to be determined from leaked data. Farnan said this is due to a lack of awareness on the part of developers.
“This is something you come across working in security firms; developers work on something until it works. Their priority is their deadline, their budget; they want the easiest solution they can get in the time they have. They may not have security training. I’m happy talking to a developer and telling them what security algorithms they can use, or should use, when storing passwords. The problem is those security algorithms may change over time. Maybe we’ll have an advancement in cryptography or something like that and we’ll recommend switching to a different algorithm. It’s difficult for non-security-focused developers to keep on top of those changes.”
Since responsible website operators don’t store a copy of passwords on-site, if a company updates its password hashing algorithm, it needs users to create new passwords. This was what caught Dropbox out – people who hadn’t changed their passwords in a long time had them stored in a compromised format. Having passwords expire after a given amount of time would have been enough to fix this vulnerability.
Keep it together
Farnan said that, while some security researchers don’t like the idea of passwords, he is mostly supportive of keeping them as a primary security system. All of their problems are more or less already solved, as long as developers put in the work. Even the seemingly bad habits of users aren’t that much of a concern.
“Security researchers and people who work in security like to moan about users and say things like ‘education is key’, and I think that’s true, but at the same time I think often users make quite good security decisions based on the information they have.”
Farnan said many people have a hierarchy of common passwords they use, saving unique and complex ones for accounts that matter more, such as the one with their bank. Weaker and less complex passwords are usually used on accounts that are less critical, like a login for the comments section of a news site.
However, perhaps the biggest thing stopping companies ditching passwords is the extra attention that would attend something going wrong with a new system.“You’re screwed, you’re the one caught with your pants down because you used a non-standard system”, said Farnan. “So there really isn’t much motivation for individual organisations to switch to revolutionary new systems.”
In the future, Farnan said, he could see two-factor authentication playing a bigger part in security measures. Thanks to the prevalence of smartphones – which are quite powerful computers in their own right – users can run a number of different cryptographic functions remotely. Confirming login attempts on your phone could become far more common practice, especially as stealing someone’s password and phone at the same time is no easy task. In the end, such developments will be in support of passwords instead of replacing them, with a secure email account always being the key to resetting any other account should a person lose their phone.
Another possibility is an increase in the number of companies that use login information from other services, such as using a Facebook account to access Spotify. The benefit here is a reduction in the number of points where passwords can fail, since larger companies like Google and Facebook have more resources to dedicate to security. It’s also far more reasonable to expect users to remember one complex password than a dozen. Still, users would be putting all their eggs into one basket, so to speak. For those sick of passwords, a password manager program that automatically generates and saves complex passwords should remove a lot of hassle. Hate them if you must, but passwords remain the best of a bad lot.
Qualcomm acquires NXP in Europe’s biggest tech deal
On October 27, leading mobile chipmaker Qualcomm confirmed the purchase of NXP Semiconductors for $47bn – Europe’s largest tech acquisition to date. The deal brings together two of the world’s most valuable chipmakers and marks the latest move in a wave of consolidation activity within the chip industry.
“With innovation and invention at our core, Qualcomm has played a critical role in driving the evolution of the mobile industry”, Qualcomm chief executive, Steve Mollenkopf, said in a statement.
“The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale.”
According to Qualcomm, the combined company will generate annual revenues in excess of $30bn – while saving $500m within two years of closing. Following the deal’s confirmation, Qualcomm’s stock climbed 13 percent, while shares in NXP rose 22 percent.
Qualcomm’s acquisition of NXP will help quell fears of the chipmaker’s over reliance on the stagnating smartphone industry
Qualcomm has emerged as the world’s leading manufacturer of mobile chips – providing the technology for smartphone giant Apple and the competing Android market. Meanwhile, NXP has long established itself as a leading chip provider to the rapidly evolving automotive industry, with a specialism for in-car infotainment and vehicle safety systems. The Dutch chipmaker also manufactures for so-called ‘internet of things’ devices – such as home automation, traffic monitoring and cloud computing – and its chips are widely used in contactless and mobile payments.
The acquisition enables Qualcomm to expand its operations beyond a smartphone market which has cooled in the last year. According to the International Data Corporation, the first quarter of 2016 witnessed the smartphone market post its smallest year-on-year growth to date – largely led by the saturation of smartphones in developed economies. On October 25, industry leader Apple reported its first decline in annual sales and profit in over a decade, while rival Samsung saw its operating profit fall by 30 percent as a result of the well-publicised Galaxy Note 7 debacle.
Qualcomm’s acquisition of NXP will help quell fears of the chipmaker’s over reliance on the stagnating smartphone industry. In an official statement confirming the merger, Qualcomm identified the automotive, security and networking industries as areas of particular interest.
Advertising has evolved – businesses need to catch up or they risk total irrelevance
Think of the advertising images of the 1950s and 1960s – black and white VW ads spring to mind, blended in with the type of elusive, cool glamour that nostalgia trips such as Mad Men depict so well. But, as vinyl records, printed newspapers, and even the high street have shown, a heyday can only last so long. With the growth of digital platforms, the industry has undergone a decisive shift.
This is partly in response to consumer appetite; a study by the McCarthy Group found 84 percent of Millennials distrust (and dislike) traditional advertising, in part because it tends to take the form of a blatant sales pitch.
It’s little wonder, then, that brands are injecting so much investment into the digital side. Global spend in the sector is forecast to mushroom from $135bn in 2014 to $240bn by 2019, according to PwC, while communications behemoth WPP is spending at least $5bn on Google this year (compared to $4bn last year), according to CEO Martin Sorrell.
Huge potential
The shift to digital certainly has its upsides for companies as well as consumers, not least because digital platforms make customer engagement far easier to track. “Before digital, advertisers relied on loosely related indicators of campaign success”, said Liz Miller, Senior Vice President of the CMO Council. “But now we can track a customer’s engagement across multiple channels and across a web of campaigns and experiences.”
By increasing the connection brands have with consumers, digital campaigns can foster a type of trust other media might not be capable of. From Dove’s numerous beauty campaigns to Disney’s recent Make-a-Wish partnership – wherein the company agreed to donate $5 for every Twitter and Instagram post showing the iconic Mickey Mouse ears – social media campaigns provide a two-way dialogue that traditional forms of advertising do not, putting power into the hands of consumers.
Digital advertising is also, of course, far cheaper than traditional advertising, giving smaller companies significant exposure without forcing them to invest heavily. This is likely why, according to the 2011 Social Media Marketing Industry Report, SMEs stand to benefit the most from social media.
Digital landfill
However, it’s the very availability of free marketing that, according to some, is seeing consumers inundated with low-quality, ineffective content, where the focus is on getting as much out there as physically (or digitally) possible. “The low entry cost to digital has created more noise and clutter”, said marketing consultant Luan Wise. “It’s better to produce less content that’s of a higher quality than to keep chucking mud at a wall.”
She’s not the only critic. According to Brad Jakeman, President of PepsiCo’s Global Beverage Group, digital advertising is producing a “digital landfill of crap content that gets produced quickly and cheaply, and doesn’t connect to the brand’s narrative”.
“Digital has led to a mass of noise in consumers’ inboxes, and it is a noise that many are just becoming deaf to”, Miller said. “Think of it as the same reaction we used to have to mail boxes jam packed with junk mail. We just started tossing it. Now, those unopened bits of trash are digital – emails are being deleted, sponsored posts and tweets are being ignored, and customers are actively turning away from those brands that fail to understand that, regardless of channel, irrelevant content is still junk.”
That means the decent content that is being produced is being diluted. And as digital takes on an increasingly large role in the ad industry, this fact is threatening to bring down quality as a whole.
Banana peel
This junk is having a worrying effect: a survey by Business Network International found 75 percent of business owners had been “put off” an organisation because of ineffective social media marketing.Such ineffective use spans everything from ill-thought-out campaigns that do more harm than good, through to improper measurement of engagement – glancing at the number of likes or followers, rather than assessing whether a campaign is really generating enquiries. “You’ll only know if it’s effective if you actually manage and measure it properly, and I don’t think enough people are doing that”, said Wise.
It’s not hard to find recent examples of social media flops, and when a brand gets something wrong on such a stage, the world quickly knows about it. US pancake brand IHOP’s tweet last year – “flat but has a GREAT personality” – quickly spread across Twitter under a barrage of claims of gender insensitivity and sexism.
Content-driven marketing – be that videos, blog entries or social media posts – seems to be where the future lies
Bud Light’s #UpForWhatever campaign sparked similar outrage from Twitter users who considered it a reference to rape (the bottles’ tagline, “the perfect beer for removing ‘no’ from your vocabulary for the night”, didn’t help). SeaWorld found itself under severe public scrutiny after holding a poorly timed #AskSeaworld Twitter Q&A shortly after the release of a documentary criticising the theme park’s treatment of its whales. Clearly, the advantages of social media marketing come with a weighty downside when misjudged or simply taken badly.
Blocking out the noise
It’s not just social media and other content that’s causing problems, however. More and more internet users are resorting to ad-blocking tools, which caused publishers to lose $24bn in global revenue in 2015, according to estimates by research company Ovum. PepsiCo CFO Hugh Johnston outlined a need to identify the right properties on which to advertise as one of the key challenges lying ahead for the industry. “It’s not just a matter of going for pop-up ads anymore”, he said in an earnings call last year.
As that suggests, blatant, traditional adverts might no longer be doing it for the younger generation. Content-driven marketing – be that videos, blog entries or social media posts – seems to be where the future lies. But companies need to get it right if it is to work.
Death of tradition
This is likely to become even more apparent as digital platforms replace traditional forms of advertising. Wise, however, believes traditional marketing won’t ever die. “Advertising interrupts in the places that you find your audience, and we’ll always be standing on train platforms and receiving direct mail through our letterboxes”, she said.
But will we always be looking up at the walls, or will we be staring down at our screens? With the likes of YouTube and other digital media platforms vying for viewers’ attention, it’s likely that both television and print ads will, at some point, lose the power they once held. By 2018, digital media is set to overtake TV as the biggest advertising sector, according to ZenithOptimedia.
That’s not necessarily a bad thing; a world where digital marketing rules is an exciting prospect, if companies are able to harness its full potential. From cost effectiveness through to subtler messages and better brand-consumer relationships, its benefits could be significant. But its dangers are equally important, and if brands don’t learn from the mistakes of the recent past, they risk bringing down the quality of the industry as a whole, replacing traditional work with meaningless babble, and turning consumers towards apathy and ad blockers. Only time will tell which way it will go.
