MARKETING: Marketing Consulting Services – A Hardcore Truth

BUSINESS INSIDER
Restoration Hardware CEO Reveals a Startling Reality About Online Ad Spending
Tyler Dunden, Zero Hedge
Sep 12. 2017, 4:33pm

Moeller also touched on the two most common complaints about digital advertising scams: advertisers are paying for ads that are viewed and clicked on by bots, not humans; and ads are placed by thousands of automated “ad exchanges” that are out of control of the advertiser on sites and pages that don’t match the advertiser’s products.

Commenting on this, in late July, Wolf Richter summarized the state of affairs as follows:
Marketing executives of other companies too have long railed against the murkiness of digital advertising, the false promises, the intractability of the Internet, the clicks and views by bots on which advertisers are wasting their money, and the billions of dollars that get blown without results. But getting a grip on what works and what doesn’t is hard. There’s a larger issue: Retail spending (not adjusted for inflation) has grown on average 2.4% per year in the US over the past five years. Over the same period, digital advertising nearly doubled to $72.5 billion in 2016. Clearly, even digital advertising — despite the lure of Facebook and the like — cannot induce consumers overall to spend more and increase the size of the overall pie for advertisers. It can only, at best, divide up the pile differently. And when one of the most sophisticated high-tech advertisers in the world decides it is overspending on digital advertising and is able to very carefully remove the rot, thus bringing down its cost without hurting its revenues, other companies will follow, with some consequences for the relentless but often ineffective surge of digital advertising dollars.

Of course, the implications to this admission that online advertising was either being gamed by bots, or generally underperforming were significant, as it jeopardized the future revenue streams of two of the biggest companies in the world. Alphabet (aka Google) and Facebook, both almost entirely reliant on online advertising. How long before other anchor names decided to similarly cut back on
their online ad spending? In short: slowly but surely, chronic buyers online advertising space, are slowly waking up to the fact that “adtech” may be one of the biggest hype (and hope) bubbles in history. Not all of it, but a material, substantial portion: one that may be responsible for a significant chunk of Google’s or Facebook’s cash flow and market cap.

A Separate, if just as concerning problem emerged last month, when the WSJ reported that online ad giant, Google, would issue refunds to advertisers for ads bought through its platform that ran on sites with fake traffic, and generated no actionable advertising “clicks”. Just how much of Google’s ad revenue (and thus profits and market cap) had been inflated over the years by said “fake ads”?

So fast forward to last week, when during Thursday’s Global Retailing Conference organized by Goldman Sachs, Restoration Hardware delightfully colorful CEO, Gary Friedman, divulged the following striking anecdote about the company’s online marketing strategy, and the state of online ad spending in general (courtesy of @parsimony16). What Friedman revealed — in brief — was the following:

“[W]e’ve found out that 98% of our business was coming from 22 words. So, wait, we’re buying 3,200 words and 98% of the business is coming from 22 words. What are the 22 words? And they said, well, it’s the word Restoration Hardware and the 21 ways to spell it wrong, okay?

DIGIDAY
Which Facebook metrics flub are you? Ad buyers rate Facebook’s 10 measurement errors
May 17, 2017 – Ross Benes

Wronglly charged advertisers for video carousel clicks, reported in May
A bug caused Facebook to miscalculate how often users clicked through its carousel ads. But the error applied to just 0.04 percent of the platform’s impressions, according to Facebook. One ad buyer called the carousel units
“fringe”.

Rating 3.3

Miscalculated likes for Live videos, reported in December
Users were only supposed to be counted once whenever they engaged with a video, but people who responded with multiple likes to shared videos were counted multiple times. “While reactions are a nice metric to have, they are not the base of success for any of our campaigns,” said an ad buyer.

Rating 4.2

Inflated like and share counts for links posted on Facebook, reported in December
Facebook miscalculated how often users reacted to Live videos and how often users liked and shared links posted on Facebook. “The errors were ridiculous by this point, but the metrics are fluff”, said an ad buyer.

Rating 3.1

Overestimated referral traffic, reported in November
Rather than only measuring how often Facebook users were driven to an advertiser’s own properties, Facebook also counted clicks that were driven to the advertiser’s Facebook page. “When they got referral traffic wrong, they messed up metrics that really matter to our clients”, said an ad buyer.

Rating 5.3

Inflated video views, reported in September
For two years, Facebook overestimated the average time users spent watching video on Facebook. In some cases, Facebook’s numbers were 80 percent off. “In terms of the magnitude of the discrepancy, no platform should be that off”, said an ad buyer.

Rating 7

THE ATLANTIC
What We Don’t Know About What Facebook Knows
If Facebook data has such a far reach, why does it contain basic errors of
plausability?
Alexis C. Madrigal — Sep 6, 2017

Facebook claims it can reach more young people in the United States with advertisements than are actually alive, according to a new report. Last week, a trade magazine in Australia looked at the “reach” statistics that Facebook gave for that country, and found that the company estimated it could reach more young people than Australia’s census.

Now, the firm Pivotal Research has done the same thing for America. “Through Facebook’s Ads Manager we can see that Facebook claims a potential reach within the United States of 41 million 18-to-24-year-olds, 60 million 25-to-34-year-olds, and 61 million 35-to-49-year-olds”, they wrote. “By contrast, U.S. Census data indicates that last year there were a total of 31 million 18-to-24-year-olds, 45 million 25-to-34-year-olds, and 61 million 35-to-49-year-olds”.

That’s an overstatement of 10 million people among 18-to-24-year-olds, and 15 million among 25-to-34-year-olds.

The larger context is that Facebook has been eating ever larger chunks of the digital-advertising market, soaking up ad dollars in large part because of the scale of the company’s user base (a representative example of coverage: “Facebook’s Scale Casts a Shadow Over Publishers”.

MARKETING WEEK
Mark Ritson: Why you should feat the “digital duopoly” in 2018
Google and Facebook, the “digital duopoly”, account for 84% of global digital media and are growing while the rest are shrinking. That’s bad for society, but a mandatory break-up looks further away than ever.
by Mark Ritson 5 Dec 2017, 4:23pm

According to GroupM the “digital duopoly” of Google and Facebook will end the year with an 84% share of all digital media investments for 2017. Let me say that again, more slowly and with the sound of distant, menacing bongo drums in the background. Google and Facebook enjoy an 84% share of global digital media.

The decline of traditional media
It’s even more concerning for traditional media who have no option than to play ball with the duopoly. The ‘first click free’ saga is a perfect example of what market power can deliver. You know the drill. You see an article you want to read online but after a one-second glimpse the newspaper informs you that your free articles for the months are up. Rather than sign up for a subscription you simply enter the title of the article into Google and you sail right past the paywall.

And the rise of the digital duopoly has not just come at the cost of traditional news media and societal stability. You may have noticed in recent weeks that a considerable number of once-vibrant digital media titles are in retreat. Huffpost missed its targets. Mashable sold for $50m which was about $200m less than it was once supposed to be worth. Buzzfeed is slashing jobs. None of them made a profit this year.

This is all because, unlike your traditional news media, they are denied the luxury of paid subscriptions and print advertising income. When you are solely dependent on digital media advertising and Google and Facebook are hoovering up most of the dollars, like is going to prove extremely difficult.

The so-called “digital media crash”, which many predict will come in 2018 when titles like Vice and Buzzfeed will be reappraised as not the billion-dollar brands they purport to be, will happen partly because, if your source of business is digital media advertising and your name is not Google or Facebook, it is very hard to actually break even. The Daily Mail still makes four times more revenue from its newspaper business than from its global online site — despite the former being restricted to a very particular UK demographic and the latter being the most popular English language news website in the world.

And things will only get worse in the years to come. The amount of marketing money being spent on digital media will only increase, while the duopoly’s likely share of that growing pile of cash will also get bigger. Growing beyond a combined 84% share between two companies might seem impossible, but it’s definitely not. There was proof of that in the GroupM presentation: not only does the duopoly have 84% share of current digital media, it also accounted for 186% of digital growth this year, according to GroupM data.

I will pause here and give you a second to work that one out because its not an immediately obvious calculation. How can Facebook and Google have more than 100% of the growth in digital media spend outside China? The answer is if they are growing and the rest of the digital media industry is shrinking.

People also ask
What is marketing consulting services?

A marketing consultant works with companies to create and implement marketing strategies. These strategies are centered on the core of the business and what services and products they offer….They will then follow the plan through, and work to execute and implement the marketing strategy.

Key Job Responsibilites for Marketing Consultants — The Balance
https://www.thebalance.com/what-is-a-marketing-consultant-2295290

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FORBES
“Biggest Ad Fraud Ever”: Hackers Make $5M A Day By Faking 300M Video Views
Dec 20, 2016 – 09:00am

A Group of Russian criminals are making between $3 million and $5 million every day in a brazen attack on the advertising market, security firm White Ops claimed today. It’s the biggest digital ad fraud ever uncovered and perpetrated by faking clicks on video ads, the company said.

The crew, which White Ops dubbed Ad Fraud Komanda or “AFK13”, planned their machinations in meticulous detail. First, they created more than 6,000 domains and 250,267 distinct URLs within those that appeared to belong to real big-name publishers, from ESPN to Vogue. But all that could be hosted on the page was a video ad.

With faked domain registrations, they were able to trick algorithms that decided where the most profitable ads would go into buying their fraudulent web space. Those algorithms typically make bids for ad space most suitable for the advertisement’s intended audience, with the auction complete in milliseconds. But AFK13 were able to game the system so their space was purchased over big-name brands.

AFK13 then invested heavily in a bot farm, taking up space in data centers so they could fire faked traffic from more than 570,000 bots at those ads, thereby driving revenue thanks to the pay per click system they exploited. As part of what White Ops called the Methbot campaign, those bots “watched” as many as 300 million video ads a day, with an average payout of $13.04 per thousand faked views. And the fraudsters had their bot army replicate the actions of real people, with faked clicks, mouse movements and social network login information.

THE NEW YORK TIMES
Chase had Ads on 400,000 Sites. Then on just 5,000. Same Results.
March 29, 2017

As of a few weeks ago, advertisements for JPMorgan Chase were appearing on about 400,000 websites a month. It is the sort of eye-popping number that has become the norm these days for big companies that use automated tools to reach consumers online.

Now, as more and more brands find their ads popping up next to toxic content like fake news sites or offensive Youtube Videos, JPMorgan has limited its display ads to about 5,000 websites it has preapproved, said Kristin Lemkau, the bank’s chief marketing officer. Surprinsingly, the company is seeing little change in the cost of impressions or the visibility of its ads on the internet, she said. An impression is generally counted each time an ad is shown.

The change illustrates the new skepticism with which major marketers are approaching online ad platforms and the automated technology placing their brands on millions of websites. In recent years, advertisers have increasingly shunned buying ads on individual sites in favor of cheaply targeting groups of people across the web based on their browsing habits, a process known as programmatic advertising — enabling, say, a Gerber ad to show up on a local mother’s blog, or a purse in an online shopping cart to follow a person around the internet for weeks.

But as the risks around the far reaches of the web have been cast into stark relief, some advertisers are questioning the value of showing up on hundreds of thousands of unknown sites, and wondering whether millions of appearances actually translate into more sales.

“It’s only been a few days, but we haven’t seen any deterioration on our performance metrics,” Ms. Lemkau said in an interview on Tuesday. She added that the company had also pulled ads from Youtube in the past week after reports showed other major advertisers like Verizon unintentionally appearing on videos promoting hate speech and terrorism. JPMorgan aims to restrict its ads on the platform to a “human-checked” list of 1,000 Youtube Channels, which it expects to be able to do by the week of April 10, she said.

THE DRUM
Adform claims to have discovered the largest bot network, generating over 1.5 billion requests a day
by Stephen Lepitak – 21 November 2017 – 22:10pm

What is claimed to be the largest bot network ever has been discovered by Adform, which it has said was possibly four times the size of the Methbot network unearthed less than a year ago and accessing over half a million IP addresses, mainly located in the US.

The fraud team at the adtech firm has released a report explaining how it discovered the network, which it named Hyphbot, and added that it thought the impact on its platforms were limited to under $1,000 a month.

According to the report, the network was discovered using Adform’s algorithms and analytics and was generating up to 1.5 billion requests each day across 34,000 domains, which included premium publishers, and was targeting over 1 million URLs.

The inventory targeted was predominantly video at 1,578,765,000 requests, with the primary activity having begun in August and may have amounted to almost $1.5m in header bidding spend.

“We have access to the IPs of data centers where those servers are hosted. We also have direct access to advertising tags that are placed directly in the source code. This means [that] we have information on where exactly the bid requests originate from”, the company also claimed.

ADAGE
Domain spoofing costs Business Insider 10M Fake Impressions — in 15 Minutes
by George Slefo. Published on October 30, 2017

During a test that lasted just 15 minutes, Business Insider flagged some 10 million to 30 million phony impressions on various exchanges. Essentially, millions of ads purporting to be for Business Insider were sold by bad actors passing as the publication.

The findings left Jana Meron, VP of programmatic and data strategy at Business Insider, livid.

“I was pissed”, she tells Ad Age. “The reality is there is a great injustice that is being done and the more we can talk about transparency and openness then the better it is for the industry.”

In one example of detected fraud, a Business Insider advertiser thought they had purchased $40,000 worth of ad inventory through the open exchanges when in reality, the publication only saw $97, indicating the rest of the money went to fraud.

“There was more people saying they were selling Business Insider inventory then we could ever possibly imagine”, she told an audience at Ad Exchanger’s Programmatic I/O conference Thursday. “We believe there were 10 to 30 million impressions of Business Insider, for sale, every 15 minutes”.

To put the numbers in perspective, Business Insider says it sees 10 million to 25 million impressions a day.

THE DRUM
The day after tomorrow: when adblockers and GDPR kill all adtech and martech
by Samuel Scott – 17 October 2017 – 16:36pm

Crazy Egg. Facebook. Google Analytics. Google Tag Manager. Hubspot. Marketo. New Relic. Visual Website Optimizer. With Four clicks, I can bankrupt all of these platforms and others just like them.

But wait for it. So far, we have heard many great ideas on data and analytics- and now for something completely different. First, let’s review a little theory. There have always been two main categories of advertising: brand advertising and direct marketing. Brand advertising builds brands by communicating subconscious messages to mass audiences for long-term benefit. Direct marketing gets immediate, trackable responses from a specific set of people.

Now, the benefits of brand advertising are that it is creative and memorable. It’s subtle and not too annoying. People tolerate brand advertising because they are sometimes even entertaining. Just think about the Super Bowl ads in America. I remember ads that I saw thirty years ago. I don’t remember any blog posts or PPC ads that I saw yesterday.

The most important negative aspect of direct marketing is that it is annoying. When a campaign is cheap, the ads will also be cheap. People tolerate brand advertising but hate direct marketing. Across any channel or medium, direct marketing of all types is essentially a business jumping in front of you and saying, “Hey! Do this right now!” And that leads to the problem of apocalyptic proportions that I am addressing today.

Over the past 20 years, digital marketing, for better or worse, has gone all-in on direct marketing. It’s why I see online marketers imprecisely using the word ‘advertising’ to refer to ‘direct marketing’ campaigns. Most of what people have discussed at this conference so far is not advertising but direct marketing.

We had direct mail; now, we have e-mail marketing. We had informercials; now, we have online videos that want us to click. We had advertorials; now, we have blog spam or ‘content marketing’. We had fliers that would appear on walls and posts; now, we have pop-up ads. Today, we have direct response ads that interrupt our conversations with friends and family on social media as well as others that follow us around the internet.

Now, a lot of marketers probably watched that and thought, “Wow! When can we do that?” But remember, the 99.9% of people who are not marketers saw Tom Cruise getting scanned for ads and were horrified. It sounds cool to us, but Bob Tillerman in Kansas or John Smith in Cornwall will hate it. Remember, the world in Minority Report is a dystopia. The ads are about as real as Tom Cruise’s marriages.

Direct marketers love the tactic because it is trackable. But people hate it for the exact same reason. A University of Pennsylvania study found that 66% of Americans do not want direct marketing that is tailored to their interests. When told how marketers collect their data to tailor the ads, the percentage increases to 86%.

Now, the web existed for two decades without people trying to find a way to block online advertising. So, why is it happening today? Searls found the answer — direct marketing run amok and taken to an extreme.

Searls used Google Trends data to show in the Harvard Business Review that the rise of adblocking has specifically correlated with the appearance of retargeted advertising. If anyone here uses retargeting, then it is your fault that people are blocking online ads.

According to Page Fair’s 2017 Adblock Report, 20% and 18% of people in western Europe and North America are using ad blockers. Here in the UK, it’s 16%. In terms of future trends, 63% of millennials use ad blockers on at least one device. 14% use them on both mobile and desktop. Why are we so comfortable with harvesting peoples’ personal and private data? The more that people are learning how their personal data is being collected and used, the more they are opting out.

Now, a lot of people here are probably wondering, “Why should I care? I don’t do online advertising. I do SEO or martech or data analytics”.

Here’s why you should care: Ad blockers stop front-end website scripts from loading. That means that most ad blockers stop not only adtech but also martech that depends on such scripts. Here’s one example: when I visited Tech Crunch recently, I saw that the website attempted to load 22 different advertising, martech, and analytics trackers, including some of the big names that I mentioned at the beginning. My blockers rendered all of those platforms useless. Good for me, bad for them.

THE NEW YORK TIMES
We Asked Facebook 12 Questions About The Election, and Got 5 Answers
by Kevin Roose, October 11 – 2017

But there is much more to know. Facebook has addressed some election-related questions, and may share more next month when its executives testify in front of the House and Senate intelligence committees. These investigations may focus solely on Russian interference, but they could also produce valuable information about how Facebook operates as a company how it views its role on the political stage, and how it plans to safeguard its platform from malicious activity in the
future.

The conversation about Facebook would benefit from more facts, and less speculation. So this week, I sent a list of some of my unanswered questions to Facebook. Two representatives — Alex Stamos, Facebook’s Chief Security Officer, and Joe Osborne, a company spokesman — responded to several questions in some detail. The company declined to answer several other questions, but I include those here as well, in hopes that they might one day be answered.

Below are my questions, followed by Facebook’s responses, where applicable.

3. You recently announced you were adding 1,000 human moderators to the team that reviews Facebook ads. How many human ad reviewers did Facebook employ in November 2016? And what percentage of political ads that ran on Facebook during the 2016 election cycle did they review?

5. You recently told advertisers that new ad campaigns that involved “politics, religion, ethnicity or social issues” would be reviewed by humans before being approved. What guidelines will reviewers be given about which ads to allow and which to reject? Will these guidelines be made public?

6. Your advertising policies allow advertisers to opt out of appearing next to content that involves “debatable social issues”. Which social issues do you define as “debatable”, and how did you make that call? Is your definition of “debatable social issues” globally consistent, or does it vary by region?

10. You have said you are committed to protecting election integrity and supporting democratic ideals. However, there have been reports that you have built tools to censor speech in certain authoritarian countries, such as China, where you hope to be allowed to operate. How will you choose which elections and democratic processes to protect? When promoting democratic ideals conflicts with your corporate goals, which will you prioritize?

11. Mr. Trump’s digital campaign director, Brad Parscale, has said that Facebook sent “embeds” to work inside the Trump campaign offices and help them use Facebook more efficiently. (You have responded that these offers are standard for political campaigns, and that you “offered identical support to both the Trump and Clinton Campaigns.”) What kinds of work did your employees do on behalf of the Trump campaign? Were they involved in writing or editing any of the campaign’s Facebook posts? Were they given page roles or posting rights on any Trump campaign Facebook pages? Were they authorized to report any illegal or suspicious activity they found in the course of their work? If so, did they make any such reports?

BUZZSUMO
The Future is More Content: Jeff Bezos, Robots and High Volume Publishing
by Steve Rayson on September 6, 2016

Which of these sum up your view on content production?
“Content is about quality, not quantity. We should be producing high value, authoritative content regularly, not publishing lots of short posts. Less is more”

“Winning in digital media now boils down to a simple equation: figure out a way to produce the most content at as low a cost as possible” (Digiday 2013)

Do you agree with first statement? Me too, until recently. But now I think we could be wrong.

Haven’t we reached peak content?
No, not by a long way

Last week I read a post that argued the future of content marketing is ‘less content’. The author predicts “content teams will be producing far less content” albeit content that is “far more interesting”. I think whilst it is true that content will take a wider range of forms, including interactive content, the future is not less content but the opposite.

The Washington Post now publishes around 1,200 posts a day. That is an incredible amount of content. My initial reaction when I read the statistic was ‘surely that is too much, the quality will suffer, why produce so much content?’ The answer seems to be that it works. The Post’s web visitors have grown 28% over the last year and they passed the New York Times for a few months at the end of 2015.

The growth in published content is just one part of the long term strategy that Jeff Bezos has put in place to drive up the Post’s audience. The content strategy appears similar to the approach Bezos adopted at Amazon for long tail audiences. Many other sites and authors are also increasing their volume of published content. Across the web we are seeing significant content growth, the number of Google indexed pages has grown from 1 trillion to 30 trillion in the last 7 years.

Wordpress published data on the number of posts published by blogs they host, or blogs that use their jetpack plugin. This is just a single content platform but it is very popular and it gives us an indication about content growth.

Again there appears to be a steady growth in the volume of published content. In July 2016 nearly 70m new posts were published on WordPress. Over 2m each day.

It is easy to say most content is poor and can be ignored but quality content is also increasing. In addition to the high volume publishing of news sites such as The Post, in the area of science there are at least 28,100 active scholarly peer-reviewed journals publishing over 2.5m new scientific papers each year. The volume of content being published has been growing, with 4-5% more publishing scientists each year, and evidence publication growth is accelerating.

There is also increased automation of content creation as I will outline below, at this week’s Content Marketing World there is a session on ways to make your content more automated.

What is Bezos doing at the Post?
Jeff Bezos is a smart guy, and since he became the owner at the Post, their traffic has grown. In the last year from April 2015 to April 2016 their visitors grew 28% and from October to December 2015 they had higher numbers than the New York Times.

I wanted to understand how Bezos and the team has achieved their visitor growth. There appear to be a number of factors including:

– Data — Bezos employed a group of data scientists to analyze the content that gains traction
– Technology — The Post developed software called Bandito that allows editors to publish articles with up to five different headlines, photos and story treatments, with an algorithm deciding which one readers find the most engaging.
– Headlines — Using data and technology The Post has developed more viral headlines, which is arguably different from clickbait if there is substance to the content
– Video — The Post has increased its use of video
– Content Growth — The Post has adopted a content strategy which involves producing a high volume of content aimed at engaging a long tail of niche interests.

Long tail content
It seems to me Bezos is taking the same long tail approach to content at The Post. Of course we all want the big content article that garners millions of views but traffic for thousands of niche articles can collectively add up to a lot more traffic overall.

By creating over 1,000 pieces of content a day you are more likely to cater for demand in the long tail for specific niche content or simply to produce content that engages a wider audience. The Guardian has taken a similar approach and publishes similar volumes of content to the Post. The
Huffington Post was reported back in 2013 to be producing over 1,200 articles a day. Sites such as Buzzfeed have also increased their content production, The Atlantic recently reported the following figures:

April 2012 Buzzfeed published 914 posts and 10 videos
April 2016 Buzzfeed published 6,365 posts and 319 videos
That is a significant growth in content publication. The reason appears to be simply that more content on these sites drives more traffic. This appears to be the case in both B2B and B2C. In 2015 Hubspot looked at the data from their own customers and found that both traffic and leads increased with higher content volumes.

Social Media Examiner are no slouches when it comes to publishing content, they published over 400 posts in the last year and averaged over 3,900 shares per post, which is increadibly high, even discounting the automated shares by bots.

Hubspot by comparison published over 4,000 posts, ten times as many as Social Media Examiner in the same period. Their posts were shared a lot less on average, almost 600 shares a post.

So who has the better content strategy? My instinct until now has been that you are better off being Social Media Examiner than Hubspot. You can provide higher quality, give more promotion to each post, drive higher average shares and traffic; and you get a much better return on your content investment. However, Hubspot’s articles received 2.8m shares in total compared to the 1.8m shares of posts on Social Media Examiner. That is 1m more shares, over 30% more. We don’t have traffic figures for these sites but I would anticipate Hubspot also received similarly higher levels of traffic.

BUSINESS ARTICLE #77
LINK: https://bit.ly/2CcVVDL
HEADLINE: Israel’s Ailing Teva to Cut 25% Global Workforce in Recovery Effort
PUBLISHER: The Times of Israel
COMMENT: It’s seriously funny whenever I hear things like “the Market is OK” or “there’s no financial crisis coming”. It feels like I’m talking to a 5-year-old. Just in the last 3 years, IBM fired between 18,000 to 25,000 people in the US, Cisco fired 20% of its global workforce ( 14,000 ), Volkswagen fired around 30,000, Microsoft around 18,000, General Electric fired 12,000, HP fired around 28,000 to 33,000 people, and lately, Ford announced to cut 10% of its global workforce ( around 20,000 ). Now, this is only the result of 7 companies which totals almost 150,000 people already. Seven companies. Seven. I’m not even mentioning other HUGE examples like Chinese factory replacing 90% of its human workforce with robots or The Retail Apocalypse List, or Banks about to exchange 50% of its UK workforce for robots, or layoffs in other less-famous large, medium and small companies all over the world. Oh yes, and now Teva. But you know, maybe there’s no financial crisis coming, right? Let’s all relax and continue playing with our unicorns. The market is OK

WIRED
What News-Writing Bots Mean For The Future of Journalism
by Joe Kedhane – 02.16.17 – 07:00am

When Republican Steve King beat back Democratic challenger Kim Weaver in the race for Iowa’s 4th Congressional district seat in November, The Washington Post snapped into action, covering both the win and the wider electoral trend. “Republicans retained control of the House and lost only a handful of seats from their commanding majority”, the article read, “a stunning reversal of fortune after many GOP leaders feared double-digit losses”. The dispatch came with the clarity and verve for which Post reporters are known, with one key difference: It was generated by Heliograf, a bot that made its debut on the Post’s website last year and marked the most sophisticated use of artificial intelligence in journalism to date.

When Jeff Bezos bought The Post back in 2013, AI-powered journalism was in its infancy. A handful of companies with automated content-generating systems, like Narrative Science and Automated Insights, were capable of producing the bare-bones, data-heavy news items familiar to sports fans and stock analysts. But strategists at The Post saw the potential for an AI system that could generate explanatory, insightful articles. What’s more, they wanted a system that could foster “a seamless interaction” between human and machine, says Jeremy Gilbert, who joined The Post as director of strategic initiatives in 2014. “What we were interested in doing is looking at wether we can evolve stories over time”, he says.

After a few months of development, Heliograf debuted last year. An early version autopublished stories on the Rio Olympics: a more advanced version, with a stronger editorial voice, was soon introduced to cover the election. It works like this: Editors create narrative templates for the stories, including key phrases that account for a variety of potential outcomes (from “Republicans retained control of the House” to “Democrats regained control of the House”), and then they hook Heliograf up to any source of structured data — in the case of the election, the data clearinghouse VoteSmart.org. The Heliograf software identifies the relevant data, matches it with the corresponding phrases in the template, merges them, and then publishes different versions across different platforms. The system can also alert reporters via Slack of any anomalies it finds in the data — for instance, wider margins than predicted — so they can investigate. “It’s just one more way to get a tip” on a potential scoop, Gilbert says.

Rise of the Newsbots ———————
Three more AI-powered tools for journalists — Greg Barber

Wibbitz
USA Today has used this AI-driven production software to create short videos. It can condense news articles into a script, string together a selection of images or video footage, and even add narration with a synthesized newscaster voice.

News Tracer
Reuters’ algorithmic prediction tool helps journalists gauge the integrity of a tweet. The tech scores emerging stories on the basis of “credibility” and “newsworthiness” by evaluating who’s tweeting about it, how it’s spreading across the network, and if nearby users have taken to Twitter to confirm or deny breaking developments.

THE NEW REALITY ABOUT CONTENT
Artificial Intelligence has the ability to create content. Increasing the amount of content you have gives you a better chance to draw people’s attention because you’ll have more “things” pointing to your website/brand. Companies are already struggling for attention now. Add to that, the pressure to survive which the global economic crisis will put on small/medium/large companies, entrepreneurs,
startups like never before. Add to that hackers with malicious intent using bots to create more noise. And realize that there are few businesses that care about Branding and doing Marketing right. The market has many business owners, which are those who only care about numbers and money (like VCs/Investors). But very very few entrepreneurs who care about the brand, the dream and doing things like Marketing, the right way. With so much pressure coming both ways (both from the economy and from the lack of attention), almost everybody will choose to buy a nice imperfect robot to keep producing content just to get A CHANCE of getting people’s attention in an attempt to survive. That’s the real problem.

WOLFSTREET
The Stories Behind Business, Finance & Money
The ECB Morphs into The Mother of All “Bad Banks”
by Don Quijones – July 20, 2017

As part of its QE operations, the ECB continues to pour billions of freshly created euros each month into corporate bonds. – and sometimes when it buys bonds via “private placements” directly into some of Europe’s biggest corporations and the European subsidiares of non-European transnationals. Its total corporate bond purchases recently passed the €100 billion threshold. And it’s growing at a rate of roughly €7 billion a month. And it’s in the process of becoming the biggest “bad bank”.

When the ECB first embarked on its corporate bond-buying scheme in March 2016, it stated that it would buy only investment-grade rated debt. But shortly after that, concerns were raised about what might happen if a name it owned was downgraded to below investment grade. A few months later a representative of the bank put such fears to rest by announcing that it “is not required to sell its holdings in the event of a downgrade” to junk, raising the prospect of it holding so-called “fallen angels”.

Now, sixteen months into the program, it turns out that the ECB has bought into 981 different corporate bond issuances, of which 34 are currently rated BB+, so non-investment grade, or junk. And 208 of the issuances are non-rated (NR). So in total, a quarter of the bond issuances it purchased are either junk or not rated (red bars).

Under Draghi’s tutelage the ECB has morphed into the world’s biggest bad bank with over €4.23 trillion in “assets”, including:

– Toxic Greek sovereign debt
– Dubious other periphery sovereign debt
– 242 junk-rated or non-rated corporate bonds
– 149 negative-yielding bonds. The main reason those bonds bear negative yields is Draghi’s massive multi-year bond buying binge.

ZERO HEDGE
Top Hedge Funds Predict How it All Will End
by Tyler Durden – December 9, 2016 – 11:52 pm

In early 2009, roughly at the time when this blog was launched which coincided with the start of the greatest monetary experiment of all time, we warned that there are two ways it will end: either in hyperinflation, or a deflationary supernova, the failure of currency and, eventually, barter. Now, almost 8 years later, some of the world’s top hedge funds are in agreement, and they are worried.

As the WSJ reports, these prominent hedge fund managers join an increasingly bigger and louder chorus which says central bank bond buying programs that are pumping trillions of dollars into global markets will end badly.

So what happens next? Prominent managers have told The Wall Street Journal in recent interviews of their doubts about the endgame for quantitative easing around the world.

“There’s no non-messy way out of this”, said Luke Ellis, chief executive of Man Group, one of the world’s biggest hedge fund firms with $80.7 billion in assets. “There’s two versions” of how this ends, he added. Either central banks could move to so-called ‘helicopter money’, where they buy debt from the government, which then spends the proceeds or gives it to the population to spend. This “for a few years looks golden then leads to hyperinflation”, he said. Or the speed at which money circulates within the economy could grind to a halt. “Then you effectively have a barter economy”, he said.

Damage to economic growth
Rather than kick-starting growth, quantitative easing may do the reverse. Some managers fear it distorts financial markets and undermines capitalism. That system relies on profit-hungry investors to differentiate between strong and weak companies — funding the strong while letting the weak die. QE, say some managers, doesn’t differentiate.

For instance, the Bank of England is buying debt of firms it deems make a “material contribution” to the U.K. economy. That has led some investment banks and companies to create new debt especially for it to buy. The ECB has bought €48.2 billion ($51.2 billion) of corporate debt since june, but the hoped-for-private-sector investment hasn’t materialized.

“What does a market do? It’s a voting mechanism”, said Michael Hintze, billionaire founder of hedge fund CQS, which runs around $12 billion in assets. “Instead you’ve got this 800-pound gorilla out there who’s hoovering up assets. “There’s a misallocation of capital and an opportunity cost to the real economy”, added Mr.Hinze, whose portfolio is up 30% this year, ranking it one of the world’s top-performing hedge funds. “It means GDP is not growing as much as it might”.

Damage to Society
In her speech to the governing Conservative Party conference in October, U.K. Prime Minister Theresa May spoke of “some bad side effects” from quantitative easing as people with assets got richer while those without them suffered. U.S. President-elect Donald Trump has said low rates have robbed savers. Those side effects include “envy and distress” within society, “as people think ‘I can’t get out of where I am”, said Andrew McCaffery, group head of solutions at Aberdeen Asset Management, who looks after $170 billion in assets.

Ultralow interest rates mean the large part of the population with few financial assets begins to despair of how to generate income to fund retirement, he said.

Hard stop
Finally, hedge fund managers see difficulty in ending quantitative easing. “Central banks are sadly helping to create the ‘black hole’, and the sucking noise and pull is getting bigger”, said Aberdeen’s Mr. McCaffery, “but you just have to keep going as your alternative options as a central banker are just too unpalatable to consider.

BLOOMBERG
America’s Retail Apocalypse Is Really Just The Beginning
by Matt Towsend, Jenny Surane, Emma Orr and Christopher Cannon
November 8, 2017

The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry.

The industry’s response to that kind of doomsday description has included blaming the media for hyping the troubles of a few well-known chains as proof of a systemic meltdown. There is some truth to that. In the U.S., retailers announced more than 3,000 store openings in the first three quarters of this year.

The reason isn’t as simple as Amazon.com Inc., taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt — often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder — even for healthy chains.

The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what’s coming next could truly be scary.

Until this year, struggling retailers have largely been able to avoid bankruptcy for refinancing to buy more time. But the market has shifted, with the negative view on retail pushing investors to reconsider lending to them. Toys “R” Us Inc. served as an early sign of what might lie ahead. It surprised investors in September by filling for bankruptcy — the third-largest retail bankruptcy in U.S. history — after struggling to refinance just $400 million of its $5 billion in debt. And its results were mostly stable, with profitability increasing amid a small drop in sales.

Making matters more difficult is the explosive amount of risky debt owed by retail coming due over the next five years. Several companies are like teen-jewelry chain Claire’s Stores Inc., a 2007 leveraged buyout owned by private-equity firm Apollo Global Management LLC, which has $2 billion in borrowings starting to mature in 2019 and still has 1,600 stores in North America.

Just $100 million of high-yield retail borrowings were set to mature this year, but that will increase to $1.9 billion in 2018, according to Fitch Ratings Inc. And from 2019 to 2025, it will balloon to an annual average of almost $5 billion. The amount of retail debt considered risky is also rising. Over the past year, high-yield bonds outstanding gained 20 percent, to $35 billion, and the industry’s leveraged loans are up 15 percent, to $152 billion, according to Bloomberg data.

HUFFPOST
The Job Market: A Game of Musical Chairs Over Hot Coals
by Scott Santens – 06/15/2015 – 03:32pm – Updated June 14, 2016

There’s a common belief that people who don’t have jobs somehow just aren’t trying hard enough, and this belief is therefore based on the idea that there are enough jobs for everyone. To get a job, all one really needs to do is just go get one. But what’s it really like out there?

The Harsh Reality of Our Job Market
The number of unemployed people per job opening varies by year, but it’s never 1 to 1. In mid 2009 it was 7 to 1, meaning there were seven unemployed people for every one job opening. Today we hear how great the job market is and there’s still two unemployed people for every job opening. We must also keep in mind that those who have dropped out of the labor market entirely — as in they’ve given up looking for a job — means they aren’t even counted anymore as unemployed even though they aren’t employed. So there are actually more than two people for every one job right now. It’s just that some are waiting for more and better jobs to open up before they bother to start looking.

For those who are aware of this perpetual job shortage, there is then a belief that if we only break apart the data, and look at unemployment by job sector, we’ll see that those who are unemployed are actually just “fools” who went to art school, instead of “wise” STEM (science, technology, engineering, math) degree holders.

The job market is actually a game of musical chairs.

There is however a key difference between a game of musical chairs and the way our job market works, and that’s that when the music stops in musical chairs, the winner is sitting while the loser is just left standing. But because the only way to gain access to the resources we need to survive is through the earning of income, those unable to earn an income aren’t just left standing. They are left in poverty.

And poverty hurts.

So now let’s imagine a game of musical chairs played on a hot bed of coals. There are 10 people and 5 chairs, the same ratio as exists right now in 2015. Everyone is hopping around trying not to get burned, when the music stops. Five people are rewarded with security from pain, and five people begin to burn.

Let’s look closer at these five burning people. Can we say anything about them in regards to ability or education knowing what we know about job scarcity? Can we truthfully say that all five sitting are the ones who rightfully deserve to sit, and all those standing rightfully deserve to burn? Has luck played no role in this?

According to Matt Bruenig writing for Demos using Census data, 1/3 of people experience poverty in any given year, and over the course of three years only 3.5% experience it the whole time. Looking at our entire working lifetimes, 40% of us will at some point live in poverty for a full year. Is this because four out of every ten people somehow deserve it?

This data instead appears to point to a large degree of luck in sitting or standing, with only around 3% of people having some kind of personal inability to find a chair. So at the absolute most, if we choose to view poverty as being somehow a matter of personal choice, only 3% can even potentially fit this description. For the other 97% it’s really just a matter of when the music stops.