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Canceled conferences will force startups to focus on scalable lead generation

By Walter Thompson
Dan Wheatley Contributor
Dan Wheatley is CEO/co-founder of StraightTalk Consulting, a SaaS operations and growth consultancy that works with B2B founders to implement long-term, data-driven growth strategies.

Described by Sequoia Capital as the black swan event of 2020, the long-term economic fallout of the COVID-19 pandemic on startups is still to be seen. However, one effect which is sure to disrupt the MO of many early-stage startups is the cancellation of events and conferences.

According to Forbes, more than 35.3 million people who were planning to attend an event have been forced to change their plans in recent months. And while some might lament being forced to leave their Metallica T-shirts and 2020 Summer Olympics flags in the cupboard, many startup founders are biting their nails at the prospect of lost leads and connections from events and conferences.

The silver lining: Forcing founders to wean themselves off conferences and events as a “go-to” business development tactic might not be a bad thing in the long run.

Based on my experience, many early-stage startups waste lots of time and resources doing the rounds at events without clear aims, using up lots of the founder’s time, without driving much business value. At an early stage in a startup’s journey, every tactic used needs to drive real ROI and ultimately be driving new business opportunities.

So let’s look at why missing out on events might not be the end of the world, and how startups can focus their time, energy and resources on more scalable and consistent lead-gen activities.

What’s my beef with startup events and conferences?

It is worth clarifying early on that conferences and events can provide valuable ROI in terms of lead generation and business development to startups that approach them in the right way.

The silver lining: Forcing founders to wean themselves off conferences and events as a “go-to” business development tactic might not be a bad thing in the long run.

Getting involved in events as speakers, taking part in panels or showcasing projects via pitch competitions offers the “Golden Ticket” that grants access to the speaker’s lounge, side events and dinners. This facilitates conversations with the most important investors, journalists and potential partners and clients in attendance on a level setting, rather than having to bustle for attention with the rest of the masses on the conference floor.

Aside from increasing the probability of real business development opportunities, taking part in a conference normally includes a free ticket, if not accommodation and travel costs being covered too.

On the flip side, in my experience, going to startup events and conferences as a lowly attendee offers very little tangible ROI, and can accumulate into a considerable expense too. However, as Forbes contributor Sophia Matveeva puts it, even a $10 event is expensive if it doesn’t offer ROI, “because the opportunity cost of events is not just money, it is also time.”

The value of attending events has to be assessed in relation to the time commitment required. If a meetup lasts three hours and includes an hour’s travel, and a large conference is a full-day commitment or even two days in a different location, the opportunity cost of the conference should be carefully weighed against time that could be invested in other lead-generation activities.

Can we approach events/conferences in a data-driven manner?

Unless founders track and assess the ROI from events in the same way as they would any other lead-generation tactic, the chances are that a pocketful of useless business cards and some branded swag (and possibly a hangover) will be the only returns from the time and resources invested.

Unless founders track and assess the ROI from events in the same way as they would any other lead-generation tactic, the chances are that a pocketful of useless business cards and some branded swag (and possibly a hangover) will be the only returns from the time and resources invested.

So how can we assess the value of events in the same way as we would, for example, paid ads? First, founders should be placing metrics on each individual event, such as:

1) Source of lead: Was this via speed-networking, or by reaching out via an event app?
2) Customer acquisition cost (CAC): What were the total costs of this event? Yes, beers count.
3) The number of leads: Only count warm leads. Business-card confetti at speed-networking doesn’t count.
3) The number of those leads closed: How many paying customers did this event lead to?
4) Lifetime value (LTV): How big were these tickets?
5) Sales cycle: How long did the lead take to close?

Assessing the value of particular events via metrics is possible, but it would take a long time. Founders would need to record data over the course of a year, allowing them to highlight which events on the calendar offer the highest chances of returns for the next year. However, the reality is that this requires time and resources, which many early-stage companies simply don’t have. Testing the effectiveness of events also requires trying different tactics, including:

  • Paying for a booth
  • Becoming a sponsor
  • Increasing the number of representatives in attendance
  • Paying for a ticket with increased access to side events, etc.

Testing these tactics makes sense for larger-ticket businesses that can expect $50,000+ returns from successful events. But for startups, the chances are that after blasting through lots of time and resources, they will most likely only highlight one of the 10 conferences they attended that offered real ROI. For any other lead-generation activity, this would be considered a massive failure.

Why aren’t events scalable lead-gen activities?

Making lead generation scalable requires monitoring the success rate of different tactics, doubling down (scaling) the activities that are working and putting fewer resources behind those that are not.

This requires founders to be in control of the levers in the sense that they have the ability to add more, reduce or adjust the scale at which different activities are utilized.

This is not really the case for events, for a number of reasons:

  1. Conference organizers control the content tracks/side-events/activities that take place during the events themselves. Unless they are organizers/sponsors, founders have few ways to exert influence at the events they attend.
  2. Even if a founder does highlight a certain event that brings in lots of leads, there are still a limited number of events that offer access to the right target audiences and cover themes related to particular verticals/niches within their geographic region.

Focus on more scalable lead-gen activities

In my opinion, it makes more sense to focus on lead-generation activities that offer startups more control. There are many different ways for startups to experiment with different tactics within more established inbound and outbound techniques:

Inbound lead generation:

  • Content marketing: Monitoring traction of webinar versus e-book, long-form versus short-form
  • Blogging: Trying different content formats, keywords and themes
  • SEO: Changing keywords, titles, themes and user intent
  • Paid ads: Testing different platforms, target users, content styles and themes

Outbound lead generation:

  • Direct emails: Sending emails at different times, including different content formats
  • Targeted social media messaging: Targeting different positions in a company, on different platforms
  • Cold calling: Using different amounts of representatives, targeting different target users

With the aforementioned techniques, there are fewer limits on how many different variations of these techniques startups can experiment with. They are also a lot more flexible in terms of scalability, meaning startups can invest as much or as little in each technique as they please. You can spend $10 on paid ads, or $1,000. You can have two sales representatives, or 200.

When deciding how to best spend lead-generation budgets, founders should ask themselves:

  1. Can I control the levers? i.e. the tactics I am using within these tactics.
  2. Can I scale to the capacity I need to; is there room for exponential growth?
  3. Can I control the rate of scale over time?

The final point is arguably the most important, but often overlooked. Startups need to be able to control the pace at which they scale, meaning they can increase activity when things are going well, but also reduce activity if things aren’t working out, or — in the case of COVID-19 — if the company needs to tighten its belt due to unforeseen, or uncontrollable circumstances.

The best way to drive sustainable growth is by establishing sustainable internal systems and processes. If you think of a business as an engine, we don’t know what the machine can handle until we test its capabilities. We have to be able to scale processes, as this is where we will find the weaknesses in the system. However, we also need to be able to back off when we do find the weaknesses without causing further damage.

Startups need to “stress-test” lead-generation techniques gradually. If a startup is investing $100 in paid media and achieving five sales-qualified leads (SQLs) per month. The next step is not to go “hey, it’s working,” and chuck $1,000 at it. The sensible next step would be to scale up the tactic by investing $200 and aiming for 10 SQLs per month.

Summing up

So, with events and conferences canceled for the foreseeable future, and a high probability that many event organizers will not be able to recover from their losses this year, startups should use this forced pause to re-assess their processes and strategies.

As they say, slow but steady wins the race. The end goal should always be to achieve consistency in processes that are scalable. When startups approach processes in a data-driven, consistent manner, it offers the chance to scale exponentially over time.

Groupon axes CEO and COO as company looks to mount a recovery during a crisis

By Lucas Matney

While plenty of tech stocks have seen their market caps dive in the past month, Groupon has taken a harder hit than most. The company’s share price has dropped over 70% in the past five weeks.

The reckoning came for Groupon’s leadership today with both CEO Rich Williams and COO Steve Krenzer ousted. In an announcement, Groupon shared that both execs would be pushed out of their roles and that Groupon’s President of North America Aaron Cooper would serve as interim CEO.

While the impact of COVID-19 on retail across the country will certainly further negatively affect Groupon moving forward, the company was in dire trouble weeks before the crisis fully took root stateside. Groupon took a beating on its Q4 earnings report, where it widely missed expectations and showcased seriously declining revenues.

The company’s board will be leading the search for a full-time chief executive. For the time being, Cooper will be tasked with the company through an undoubtably rough period as many of its current and potential customers close up shop.

“The disruption created by the global pandemic, however, is significant, and our immediate goal is to help millions of Groupon merchants, customers and employees navigate the massive challenges they face,” interim CEO Aaron Cooper said in a statement.

Groupon’s stock was down a hair on the news, though its stock has seen some upward movement from its recent all-time low even as the rest of the market has tanked. One wonders whether investors believe that the entire market enduring a crisis could give the company an opportunity to take stock of its future or if they simply thing they found the share price’s bottom.

Declining ad rates may signal a reset for startup SEM strategies

By Danny Crichton

With limited prospects for growth, one of the iron laws of economic downturns is that advertising is among the first budgets to be cut.

Advertising revenues have already cratered at many alt-weekly newspapers, which heavily rely on local events and restaurants that have been shuttered in the wake of the COVID-19 outbreak. BuzzFeed even went so far (as they do) to label it a “media extinction event.”

Clearly it’s bad times, but I wanted to get a lot more granular around the data for ad rates, particularly around top startups. So I compiled a list of a little more than 100 unicorns across a variety of sectors and explored how the prices of their search engine keywords have changed with the global pandemic that is sparking a global recession.

The results aren’t surprising — there has been a collapse in prices for almost all ads (with some very interesting exceptions we will get to in a bit). But the variations across startups in their online ad performance says a lot about industries like food delivery and enterprise software, and also the long-term revenue performance of Google, Facebook and other digital advertising networks.

A quick overview of the data

It’s common for startups to buy their own keywords on search engines like Google and the App Store. Owning that top rank guarantees that their own company’s page is the first result a user sees and prevents competitors from buying their name, potentially intercepting customers.

What we’ve learned from building 40,000+ links for clients

By Walter Thompson
Amanda Milligan Contributor
Amanda Milligan is the marketing director at Fractl, a prominent growth marketing agency that’s helped Fortune 500 companies and boutique businesses alike earn quality media coverage, backlinks, awareness and authority.

Since our agency opened in 2012, we’ve learned a lot about how to build quality links through content marketing.

The industry has evolved for a variety of reasons, including Google’s algorithm updates and the state of digital media. We’ve had to change along with them.

Over the years, we’ve completely revamped the way we develop content ideas, report on results, identify pitch targets — everything except for our core belief: a combination of content marketing and digital PR is the best way to build top-tier links.

I want to share three of our biggest insights from our experiences adapting so you don’t have to start from scratch or wonder which of your processes needs an update.

Instead, you can get to building the best backlinks you can.

Building the best links requires original research

Break-even ads can generate free brand awareness

By Walter Thompson
Julian Shapiro Contributor
Julian Shapiro is the founder of BellCurve.com, a growth marketing team that trains startups in advanced growth, helps you hire senior growth marketers and finds you vetted growth agencies. He also writes at Julian.com.

We’ve aggregated many of the world’s best growth marketers into one community. Twice a month we ask them to share their most effective growth tactics, and we compile them into this growth report.

This is how you stay up-to-date on growth marketing tactics — with advice that’s hard to find elsewhere.

Our community consists of 1,000 startup founders and VPs of growth from later-stage companies. We have 400 YC founders, plus senior marketers from companies including Medium, Docker, Invision, Intuit, Pinterest, Discord, Webflow, Lambda School, Perfect Keto, Typeform, Modern Fertility, Segment, Udemy, Puma, Cameo and Ritual.

You can participate in our community by joining Demand Curve’s marketing webinars, Slack group or marketing training program.

Without further ado, on to our community’s advice.


How Gmail decides which emails go to spam

Vimeo’s new app helps small businesses create professional social videos

By Sarah Perez

Vimeo signaled last year its plans to move further into the social video creation and editing space with its acquisition of short-form video editor Magisto. Today, the company is unveiling the results of its work in the months following the deal’s close with the debut of Vimeo Create. The new app includes a set of video creation tools aimed at small businesses and marketers looking to tell their stories using social video, but who lack the resources, time or budget to invest in video production at the scale they need to compete.

With Vimeo Create, available on both the desktop and as an app, businesses choose from pre-made, professionally-designed video templates that can be customized to meet their needs. More advanced users could opt to start a new video from scratch, as an alternative.

The app includes a library of stock content to add to videos, including millions of HD video clips, photos, and commercially-licensed music tracks available for no extra fee, Vimeo says. Businesses can also customize their videos by selecting the colors, fonts, layouts, logos, text captions and calls-to-action they want to use.

The app then leverages A.I.-powered technology to turn the clips, photos, music, and text into a high-quality social video in minutes.

Vimeo Create also simplifies the process of designing videos for different social platforms, where aspect ratios (e.g., square, vertical, horizontal) and format requirements vary. After the video is finalized, users are able to publish across the web — including to Facebook, YouTube, Instagram, Twitter and LinkedIn — as a part of the Vimeo Create workflow.

The move into social video creation is part of Vimeo’s larger strategy of becoming a one-stop-shop for companies and individuals who publish videos online. The company has long since abandoned its plans to be a YouTube competitor, instead seeing the potential in the other side of the video market. Today, Vimeo makes money by offering tools and services to video creators both large and small. It has launched tools for uploading and livestreaming across social sites and updated its mobile app to include more features previously available only to desktop users, among other things.

Vimeo decision to prioritize social video resulted from its own research. The company found that only 22% of small business owners felt they were using enough video. The businesses complained that issues around time, cost and complexity were keeping them from going further. Nearly all (96%) of small business owners said they would create more video if all those friction points were removed.

The service was built using parts of Magisto’s backend and its A.I., but the overall app, feature set, content, user interface and integration into Vimeo’s tools were built from the ground-up, the company says.

The company hopes Vimeo Create will help it to grow its subscription revenue, as the service is offered as a part of Vimeo’s Pro, Business and Premium membership plans, instead of as a standalone paid or freemium app.

“Video is the most impactful medium we have today for human expression at scale, and businesses
need an online video strategy to reach their customers. But the research is clear: small business owners
and entrepreneurs don’t have the tools, time or budgets to make videos at the volume and quality
needed to compete,” said Vimeo CEO Anjali Sud, in a statement about the launch. “Vimeo Create levels the playing field. It’s a radically simple tool that shortens the distance from idea to execution, so more businesses can have a successful video strategy.”

Vimeo isn’t alone in addressing the social video needs of small businesses. Last fall, Facetune maker Lightricks launched a full suite of apps for small businesses to use for their social media marketing campaigns. There are also dozens of tools for video editing on the market, including those from incumbents, like Adobe and Apple, as well as from others like Magisto, Canva, PicsArt and many more that offer features craved by small business owners like templates, easy editing tools, access to stock content, and support one-click multiplatform publishing, among other things.

Vimeo first launched Vimeo Create into beta back in January, but today it’s available to all across web, iOS, and Android.

Anomalous data can lead to growth opportunities

By Walter Thompson
Julian Shapiro Contributor
Julian Shapiro is the founder of BellCurve.com, a growth marketing team that trains startups in advanced growth, helps you hire senior growth marketers and finds you vetted growth agencies. He also writes at Julian.com.

We’ve aggregated many of the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this growth report.

This is how you stay up-to-date on growth marketing tactics — with advice that’s hard to find elsewhere.

Our community consists of 1,000 startup founders and VPs of growth from later-stage companies. We have 400 YC founders, plus senior marketers from companies including Medium, Docker, Invision, Intuit, Pinterest, Discord, Webflow, Lambda School, Perfect Keto, Typeform, Modern Fertility, Segment, Udemy, Puma, Cameo and Ritual .

You can participate in our community by joining Demand Curve’s marketing webinars, Slack group or marketing training program.

Without further ado, on to our community’s advice.

No one wants your $25 referral bonus

Insights from Julian Shapiro of Demand Curve.

Even people who earn minimum wage can’t be bothered to refer a friend for a $25 referral fee. The most successful referral programs typically focus on app features that naturally incentivize users to invite friends and colleagues.

Snap accelerator names its latest cohort

By Jonathan Shieber

Yellow, the accelerator program launched by Snap in 2018, has selected ten companies to join its latest cohort.

The new batch of startups coming from across the U.S. and international cities like London, Mexico City, Seoul and Vilnius are building professional social networks for black professionals and blue collar workers, fashion labels, educational tools in augmented reality, kids entertainment, and an interactive entertainment production company.

The list of new companies include:

  • Brightly — an Oakland, Calif.-based media company angling to be the conscious consumer’s answer to Refinery29.
  • Charli Cohen — a London-based fashion and lifestyle brand.
  • Hardworkersa Cambridge, Mass.-based professional digital community built for blue-collar workers.
  • Mogul Millennial — this Dallas-based company is a digital media platform for black entrepreneurs and corporate leaders.
  • Nuggetverse — Los Angeles-based Nuggetverse is creating a children’s media business based on its marquee character, Tubby Nugget.
  • SketchAR — this Lithuanian company is developing an AI-based mobile app for teaching drawing using augmented reality.
  • Stipop — a Seoul-based sticker API developer with a library of over 100,000 stickers created by 5,000 artists.
  • TRASH — using this machine learning-based video editing toolkit, users can quickly create and edit high-quality, short-form video. The company is backed by none other than the National Science Foundation and based in Los Angeles.
  • Veam — another Seoul-based social networking company, Veam uses Airdrop as a way to create persistent chats with nearby users as a geolocated social network.
  • Wabisabi Design, Inc. — hailing from Mexico City, this startup makes mini games in augmented reality for brands and advertisers.

The latest cohort from Snap’s Yellow accelerator

Since launching the platform in 2018, startups from the Snap accelerator have gone on to acquisition (like Stop, Breathe, and Think, which was bought by Meredith Corp.) and to raise bigger rounds of funding (like the voiceover video production toolkit, MuzeTV, and the animation studio Toonstar).

Every company in the Yellow portfolio will receive $150,000 mentorship from industry veterans in and out of Snap, creative office space in Los Angeles and commercial support and partnerships — including Snapchat distribution.

“Building from the momentum of our first two Yellow programs, this new class approaches mobile creativity through the diverse lenses of augmented reality, platforms, commerce and media, yet each company has a clear vision to bring their products to life,” said Mike Su, Director of Yellow. “This class shows us that there’s no shortage of innovation at the intersection of creativity and technology, and we’re excited to be part of each company’s journey.”

New Early Stage speakers to talk fundraising strategies, growth marketing and PR

By Jordan Crook

TC Early Stage SF goes down on April 28, and we are getting pretty damn excited about it!

The show will bring together 50+ experts across startup core competencies, such as fundraising, operations and marketing. We’ll hear from VCs on how to create the perfect pitch deck and how to identify the right investors for you. We’ll hear from lawyers on how to navigate the immigration process when hiring, and how to negotiate the cap table. And we’ll hear from growth hackers on how to build a high-performance SEO engine, and PR experts on how to tell your brand’s story.

And that’s just the tip of the iceberg.

Today, I’m pleased to announce four more breakout sessions.


Lo Toney

Toney is the founding managing partner of Plexo Capital, which was incubated and spun out from GV. Before Plexo, Toney was a partner with Comcast Ventures, where he led the Catalyst Fund, and then moved to GV where he focused on marketplace, mobile and consumer products. Toney also has operational experience, having served as the GM of Zynga Poker, the company’s largest franchise at the time.

Think Like a PM for VC Pitch Success

Your pitchdeck is not just a reflection of your business, it’s a product unto itself. Your startup’s success, and avoiding the end of your runway, depends on the conversion rate of that product. Hear from Plexo Capital founding partner Lo Toney about how thinking like a PM when crafting your pitch deck can produce outstanding results.


Krystina Rubino and Lindsay Piper Shaw

Shaw and Rubino are marketing consultants for Right Side Up, a growth marketing consultancy. Prior to Right Side Up, Shaw scaled podcast campaigns for brands like quip, Lyft and Texture, and has worked with brands like McDonald’s, Honda, ampm, and Tempur Sealy. Rubino has worked with companies across all stages and sizes, including Advil, DoorDash, P&G, Lyft and Stitch Fix.

Why You Need Podcasts in Your Growth Marketing Mix

Podcast advertising is widely viewed as a nascent medium, but smart companies know it can be a powerful channel in their marketing mix. Opportunity is ripe — get in early and you can own the medium, box out competitors and catapult your growth. Krystina Rubino and Lindsay Piper Shaw have launched and scaled successful podcast ad campaigns for early-stage startups and household name brands and will be sharing their strategies for companies to succeed in this often misunderstood channel.


Jake Saper

Jake Saper, the son of serial co-founders, has been obsessed with entrepreneurialism from a young age. His origin in venture capital started at Kleiner Perkins, and he moved on to become a partner at Emergence in 2014, where he became a Kauffman Fellow. He serves on the boards of Textio, Guru, Ironclad, DroneDeploy, and Vymo, and his self-described “nerdy love” of frameworks has only grown over the years.

When It Comes to Fundraising, Timing Is Everything

There are some shockingly common timing mistakes founders make that can turn an otherwise successful fundraise into a failure. We’ll talk through how to avoid them and how to sequence efforts from the time you close your seed to ensure you find the right partner (at the right price!) for Series A and beyond.


April Conyers

Conyers has been in the communications industry for 15 years, currently serving as the senior director of Corporate Communications at Postmates . Before Postmates, Conyers served as a VP at Brew PR, working with clients like Automattic, NetSuite, Oracle, Doctor on Demand and about.me. During that time, she also found herself on BI’s “The 50 Best Public Relations People In The Tech Industry In 2014” list.

The Media Is Misunderstood, But Your Company Shouldn’t Be

With the media industry in a state of flux, navigating the process of telling your story can be confusing and overwhelming. Hear from Postmates Senior Director of Corporate Communication April Conyers on how startups should think about PR, and how to get your message across in a hectic media landscape.


Early Stage SF goes down on April 28, with more than 50 breakout sessions to choose from. However, don’t worry about missing a breakout session, because transcripts from each will be available to show attendees. And most of the folks leading the breakout sessions have agreed to hang at the show for at least half the day and participate in CrunchMatch, TechCrunch’s great app to connect founders and investors based on shared interests.

Here’s the fine print. Each of the 50+ breakout sessions is limited to around 100 attendees. We expect a lot more attendees, of course, so signups for each session are on a first-come, first-serve basis. Buy your ticket today and you can sign up for the breakouts we are announcing today, as well as those already announced. Pass holders will also receive 24-hour advance notice before we announce the next batch. (And yes, you can “drop” a breakout session in favor of a new one, in the event there is a schedule conflict.)

So get your TC Early Stage: San Francisco pass today, and get the inside track on the sessions we announced today, as well as the ones to be announced in the coming weeks.

Possible sponsor? Hit us up right here.

FTC votes to review influencer marketing rules & penalties

By Josh Constine

Undisclosed influencer marketing posts on social media should trigger financial penalties, according to a statement released today by the Federal Trade Commission’s Rohit Chopra. The FTC has voted 5-0 to approve a Federal Register notice calling for public comments on questions related to whether The Endorsement Guides for advertising need to be updated.

“When companies launder advertising by paying an influencer to pretend that their endorsement or review is untainted by a financial relationship, this is illegal payola,” Chopra writes. “The FTC will need to determine whether to create new requirements for social media platforms and advertisers and whether to activate civil penalty liability.”

Currently the non-binding Endorsement Guides stipulate that “when there is a connection between an endorser and a seller of an advertised product that could affect the weight or credibility of the endorsement, the connection must be clearly and conspicuously disclosed.” In the case of social media, that means creators need to note their post is part of an “ad,” “sponsored” content or “paid partnership.”

But Chopra wants the FTC to consider making those rules official by “Codifying elements of the existing endorsement guides into formal rules so that violators can be liable for civil penalties under Section 5(m)(1)(A) and liable for damages under Section 19.” He cites weak enforcement to date, noting that in the case of department store Lord & Taylor not insisting 50 paid influencers specify their posts were sponsored, “the Commission settled the matter for no customer refunds, no forfeiture of ill-gotten gains, no notice to consumers, no deletion of wrongfully obtained personal data, and no findings or admission of liability.”

Strangely, Chopra fixates on Instagram’s Branded Content Ads that let marketers pay to turn posts by influencers tagging brands into ads. However, these ads include a clear “Sponsored. Paid partnership with [brand]” and seem to meet all necessary disclosure requirements. He also mentions concerns about sponcon on YouTube and TikTok.

Additional targets of the FTC’s review will be use of fake or incentivized reviews. It’s seeking public comment on whether free or discounted products influence reviews and should require disclosure, how to handle affiliate links and whether warnings should be posted by advertisers or review sites about incentivized reviews. It also wants to know about how influencer marketing affects and is understood by children.

Chopra wisely suggests the FTC focus on the platforms and advertisers that are earning tons of money from potentially undisclosed influencer marketing, rather than the smaller influencers themselves who might not be as well versed in the law and are just trying to hustle. “When individual influencers are able to post about their interests to earn extra money on the side, this is not a cause for major concern,” he writes, but “when we do not hold lawbreaking companies accountable, this harms every honest business looking to compete fairly.”

While many of the social media platforms have moved to self-police with rules about revealing paid partnerships, there remain gray areas around incentives like free clothes or discount rates. Codifying what constitutes incentivized endorsement, formally demanding social media platforms to implement policies and features for disclosure and making influencer marketing contracts state that participation must be disclosed would all be sensible updates.

Society has enough trouble with misinformation on the internet, from trolls to election meddlers. They should at least be able to trust that if someone says they love their new jacket, they didn’t secretly get paid for it.

4 factors to consider before entering international markets

By Walter Thompson
David Liu Contributor
David Liu is founder and CEO of Deltapath, a communications company whose technology helps businesses collaborate internally and with customers. Deltapath’s solutions have been adopted by brands such as Campbell’s, Volkswagen and Nokia.

As sales increase, most founders tend to double down on what already works to keep growing. But few consider expanding laterally — taking a business model or product that already works and bringing it to a new geographical market. After all, it can seem like a risky move at first, as customers often differ drastically culturally and socioeconomically across borders.

Despite their core differences, people around the world inevitably share many of the same pain points in their daily lives and while doing business. Sure, you might not be able to tap into your domestic relationships, keep your existing go-to-market strategy or even reuse your messaging while entering a new market. But that’s why expanding internationally is hard and something few founders can do well.

When I first started Deltapath, we focused primarily on the U.S. market. But since 2001, we’re now serving customers in 94 countries.

Each time my team expands to a new market, we consider four primary factors before we launch. These considerations will help you avoid costly hurdles and allow you to achieve the best results possible without having to reinvent the wheel with every new launch.

How do culture and market viability differ?

UK Council websites are letting citizens be profiled for ads, study shows

By Natasha Lomas

On the same day that a data ethics advisor to the UK government has urged action to regulate online targeting a study conducted by pro-privacy browser Brave has highlighted how Brits are being profiled by the behavioral ad industry when they visit their local Council’s website — perhaps seeking info on local services or guidance about benefits including potentially sensitive information related to addiction services or disabilities.

Brave found that nearly all UK Councils permit at least one company to learn about the behavior of people visiting their sites, finding that a full 409 Councils exposed some visitor data to private companies.

While many large councils (serving 300,000+ people) were found exposing site visitors to what Brave describes as “extensive tracking and data collection by private companies” — with the worst offenders, London’s Enfield and Sheffield City Councils, exposing visitors to 25 data collectors apiece.

Brave argues the findings represent a conservative illustration of how much commercial tracking and profiling of visitors is going on on public sector websites — a floor, rather than a ceiling — given it was only studying landing pages of Council sites without any user interaction, and could only pick up known trackers (nor could the study look at how data is passed between tracking and data brokering companies).

Nor is the first such study to warn that public sector websites are infested with for-profit adtech. A report last year by Cookiebot found users of public sector and government websites in the EU being tracked when they performed health-related searches — including queries related to HIV, mental health, pregnancy, alcoholism and cancer.

Brave’s study — which was carried out using the webxray tool — found that almost all (98%) of the Councils used Google systems, with the report noting that the tech giant owns all five of the top embedded elements loaded by Council websites, which it suggests gives the company a god-like view of how UK citizens are interacting with their local authorities online.

The analysis also found 198 of the Council websites use the real-time bidding (RTB) form of programmatic online advertising. This is notable because RTB is the subject of a number of data protection complaints across the European Union — including in the UK, where the Information Commissioner’s Office (ICO) itself has been warning the adtech industry for more than half a year that its current processes are in breach of data protection laws.

However the UK watchdog has preferred to bark softly in the industry’s general direction over its RTB problem, instead of taking any enforcement action — a response that’s been dubbed “disastrous” by privacy campaigners.

One of the smaller RTB players the report highlights — which calls itself the Council Advertising Network (CAN) — was found sharing people’s data from 34 Council websites with 22 companies, which could then be insecurely broadcasting it on to hundreds or more entities in the bid chain.

Slides from a CAN media pack refer to “budget conscious” direct marketing opportunities via the ability to target visitors to Council websites accessing pages about benefits, child care and free local activities; “disability” marketing opportunities via the ability to target visitors to Council websites accessing pages such as home care, blue badges and community and social services; and “key life stages” marketing  opportunities via the ability to target visitors to Council websites accessing pages related to moving home, having a baby, getting married or losing a loved one.

This is from the Council Advertising Network's media pack. CAN is a small operation. They are just trying to take a small slide of the Google and IAB "real-time bidding" cake. But this gives an insight in to how insidious this RTB stuff is. pic.twitter.com/b1tiZi1p4P

Johnny Ryan (@johnnyryan) February 4, 2020

Brave’s report — while a clearly stated promotion for its own anti-tracking browser (given it’s a commercial player too) — should be seen in the context of the ICO’s ongoing failure to take enforcement action against RTB abuses. It’s therefore an attempt to increase pressure on the regulator to act by further illuminating a complex industry which has used a lack of transparency to shield massive rights abuses and continues to benefit from a lack of enforcement of Europe’s General Data Protection Regulation.

And a low level of public understanding of how all the pieces in the adtech chain fit together and sum to a dysfunctional whole, where public services are turned against the citizens whose taxes fund them to track and target people for exploitative ads, likely contributes to discouraging sharper regulatory action.

But, as the saying goes, sunlight disinfects.

Asked what steps he would like the regulator to take, Brave’s chief policy officer, Dr Johnny Ryan, told TechCrunch: “I want the ICO to use its powers of enforcement to end the UK’s largest data breach. That data breach continues, and two years to the day after I first blew the whistle about RTB, Simon McDougall wrote a blog post accepting Google and the IAB’s empty gestures as acts of substance. It is time for the ICO to move this over to its enforcement team, and stop wasting time.”

We’re reached out to the ICO for a response to the report’s findings.

Customer feedback is a development opportunity

By Walter Thompson
Kyle Lomeli Contributor
Kyle Lomeli is the CTO and a founding engineer at CarGurus.com.

Online commerce accounted for nearly $518 billion in revenue in the United States alone last year. The growing number of online marketplaces like Amazon and eBay will command 40% of the global retail market in 2020. As the number of digital offerings — not only marketplaces but also online storefronts and company websites — available to consumers continues to grow, the primary challenge for any online platform lies in setting itself apart.

The central question for how to accomplish this: Where does differentiation matter most?

A customer’s ability to easily (and accurately) find a specific product or service with minimal barriers helps ensure they feel satisfied and confident with their choice of purchase. This ultimately becomes the differentiator that sets an online platform apart. It’s about coupling a stellar product with an exceptional experience. Often, that takes the form of simple, searchable access to a wide variety of products and services. Sometimes, it’s about surfacing a brand that meets an individual consumer’s needs or price point. In both cases, platforms are in a position to help customers avoid having to chase down a product or service through multiple clicks while offering a better way of comparing apples to apples.

To be successful, a company should adopt a consumer-first philosophy that informs its product ideation and development process. A successful consumer-first development resides in a company’s ability to expediently deliver fresh features that customers actually respond to, rather than prioritize the update that seems most profitable. The best way to inform both elements is to consistently collect and learn from customer feedback in a timely way — and sometimes, this will mean making decisions for the benefit of consumers versus what is in the best interest of companies.

Google’s latest user-hostile design change makes ads and search results look identical

By Natasha Lomas

Did you notice a recent change to how Google search results are displayed on the desktop?

I noticed something last week — thinking there must be some kind of weird bug messing up the browser’s page rendering because suddenly everything looked similar: A homogenous sea of blue text links and favicons that, on such a large expanse of screen, come across as one block of background noise.

I found myself clicking on an ad link — rather than the organic search result I was looking for.

Here, for example, are the top two results for a Google search for flight search engine ‘Kayak’ — with just a tiny ‘Ad’ label to distinguish the click that will make Google money from the click that won’t…

Turns out this is Google’s latest dark pattern: The adtech giant has made organic results even more closely resemble the ads it serves against keyword searches, as writer Craig Mod was quick to highlight in a tweet this week.

There's something strange about the recent design change to google search results, favicons and extra header text: they all look like ads, which is perhaps the point? pic.twitter.com/TlIvegRct1

— Craig Mod (@craigmod) January 21, 2020

Last week, in its own breezy tweet, Google sought to spin the shift as quite the opposite — saying the “new look” presents “site domain names and brand icons prominently, along with a bolded ‘Ad’ label for ads”:

Last year, our search results on mobile gained a new look. That’s now rolling out to desktop results this week, presenting site domain names and brand icons prominently, along with a bolded “Ad” label for ads. Here’s a mockup: pic.twitter.com/aM9UAbSKtv

— Google SearchLiaison (@searchliaison) January 13, 2020

But Google’s explainer is almost a dark pattern in itself.

If you read the text quickly you’d likely come away with the impression that it has made organic search results easier to spot since it’s claiming components of these results now appear more “prominently” in results.

Yet, read it again, and Google is essentially admitting that a parallel emphasis is being placed — one which, when you actually look at the thing, has the effect of flattening the visual distinction between organic search results (which consumers are looking for) and ads (which Google monetizes).

Another eagle-eyed user Twitter, going by the name Luca Masters, chipped into the discussion generated by Mod’s tweet — to point out that the tech giant is “finally coming at this from the other direction”.

They're finally coming at this from the other direction:https://t.co/XYkHjVrE8X

— Luca K. B. Masters (@lkbm) January 21, 2020

‘This’ being deceptive changes to ad labelling; and ‘other direction’ being a reference to how now it’s organic search results being visually tweaked to shrink their difference vs ads.

Google previously laid the groundwork for this latest visual trickery by spending earlier years amending the look of ads to bring them closer in line with the steadfast, cleaner appearance of genuine search results.

Except now it’s fiddling with those too. Hence ‘other direction’.

Masters helpfully quote-tweeted this vintage tweet (from 2016), by journalist Ginny Marvin — which presents a visual history of Google ad labelling in search results that’s aptly titled “color fade”; a reference to the gradual demise of the color-shaded box Google used to apply to clearly distinguish ads in search results.

Those days are long gone now, though.

Color fade: A history of Google ad labeling in search results https://t.co/guo3jc4kwz pic.twitter.com/LMYqhmgfyE

— Ginny Marvin (@GinnyMarvin) July 25, 2016

 

Now a user of Google’s search engine has — essentially — only a favicon between them and an unintended ad click. Squint or you’ll click it.

This visual trickery may be fractionally less confusing in a small screen mobile environment — where Google debuted the change last year. But on a desktop screen these favicons are truly minuscule. And where to click to get actual information starts to feel like a total lottery.

A lottery that’s being stacked in Google’s favor because confused users are likely to end up clicking more ad links than they otherwise would, meaning it cashes in at the expense of web users’ time and energy.

Back in May, when Google pushed this change on mobile users, it touted the tweaks as a way for sites to showcase their own branding, instead of looking like every other blue link on a search result page. But it did so while simultaneously erasing a box-out that it had previously displayed around the label ‘Ad’ to make it stand out.

That made it “harder to differentiate ads and search results,” as we wrote then — predicting it will “likely lead to outcry”.

There were certainly complaints then. And there will likely be more now — given the visual flattening of the gap between ad clicks and organic links looks even more confusing for users of Google search on desktop.

We reached out to Google to ask for a response to the latest criticism that the new design for search results makes it almost impossible to distinguish between organic results and ads. But the company ignored repeat requests for comment.

Of course it’s true that plenty of UX design changes face backlash, especially early on. Change in the digital realm is rarely instantly popular. It’s usually more ‘slow burn’ acceptance.

But there’s no consumer-friendly logic to this one. (And the slow burn going on here involves the user being cast in the role of the metaphorical frog.)

Instead, Google is just making it harder for web users to click on the page they’re actually looking for — because, from a revenue-generating perspective, it prefers them to click an ad.

It’s the visual equivalent of a supermarket putting a similarly packaged own-brand right next to some fancy branded shampoo on the shelf — in the hopes a rushed shopper will pluck the wrong one. (Real life dark patterns are indeed a thing.)

It’s also a handy illustration of quite how far away from the user Google’s priorities have shifted, and continue to drift.

“When Google introduced ads, they were clearly marked with a label and a brightly tinted box,” says UX specialist Harry Brignull. “This was in stark contrast to all the other search engines at the time, who were trying to blend paid listings in amongst the organic ones, in an effort to drive clicks and revenue. In those days, Google came across as the most honest search engine on the planet.”

Brignull is well qualified to comment on dark patterns — having been calling out deceptive design since 2010 when he founded darkpatterns.org.

“I first learned about Google in the late 1990s. In those days you learned about the web by reading print magazines, which is charmingly quaint to look back on. I picked up a copy of Wired Magazine and there it was – a sidebar talking about a new search engine called ‘Google’,” he recalled. “Google was amazing. In an era of portals, flash banners and link directories, it went in the opposite direction. It didn’t care about the daft games the other search engines were playing. It didn’t even seem to acknowledge they existed. It didn’t even seem to want to be a business. It was a feat of engineering, and it felt like a public utility.

“The original Google homepage was recognised a guiding light of purism in digital design. Search was provided by an unstyled text field and button. There was nothing else on the homepage. Just the logo. Search results were near-instant and they were just a page of links and summaries – perfection with nothing to add or take away. The back-propagation algorithm they introduced had never been used to index the web before, and it instantly left the competition in the dust. It was proof that engineers could disrupt the rules of the web without needing any suit-wearing executives. Strip out all the crap. Do one thing and do it well.”

“As Google’s ambitions changed, the tinted box started to fade. It’s completely gone now,” Brignull added.

The one thing Google very clearly wants to do well now is serve more ads. It’s chosen to do that deceptively, by steadily — and consistently — degrading the user experience. So a far cry from “public utility”.

And that user-friendly Google of old? Yep, also completely gone.

Where top VCs are investing in adtech and martech

By Arman Tabatabai

Lately, the venture community’s relationship with advertising tech has been a rocky one.

Advertising is no longer the venture oasis it was in the past, with the flow of VC dollars in the space dropping dramatically in recent years. According to data from Crunchbase, adtech deal flow has fallen at a roughly 10% compounded annual growth rate over the last five years.

While subsectors like privacy or automation still manage to pull in funding, with an estimated 90%-plus of digital ad spend growth going to incumbent behemoths like Facebook and Google, the amount of high-growth opportunities in the adtech space seems to grow narrower by the week.

Despite these pains, funding for marketing technology has remained much more stable and healthy; over the last five years, deal flow in marketing tech has only dropped at a 3.5% compounded annual growth rate according to Crunchbase, with annual invested capital in the space hovering just under $2 billion.

Given the movement in the adtech and martech sectors, we wanted to try to gauge where opportunity still exists in the verticals and which startups may have the best chance at attracting venture funding today. We asked four leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in marketing and advertising:

Several of the firms we spoke to (both included and not included in this survey) stated that they are not actively investing in advertising tech at present.

Shadows’ Dylan Flinn and Kombo’s Kevin Gould on the business of ‘virtual influencers’

By Eric Peckham

In films, TV shows and books — and even in video games where characters are designed to respond to user behavior — we don’t perceive characters as beings with whom we can establish two-way relationships. But that’s poised to change, at least in some use cases.

Interactive characters — fictional, virtual personas capable of personalized interactions — are defining new territory in entertainment. In my guide to the concept of “virtual beings,” I outlined two categories of these characters:

  • virtual influencers: fictional characters with real-world social media accounts who build and engage with a mass following of fans.
  • virtual companions: AIs oriented toward one-to-one relationships, much like the tech depicted in the films “Her” and “Ex Machina.” They are personalized enough to engage us in entertaining discussions and respond to our behavior (in the physical world or within games) like a human would.

Part 2 of 3: the business of virtual influencers

Today’s discussion focuses on virtual influencers: fictional characters that build and engage followings of real people over social media. To explore the topic, I spoke with two experienced entrepreneurs:

  • Dylan Flinn is CEO of Shadows, an LA-based animation studio that’s building a roster of interactive characters for social media audiences. Dylan started his career in VC, funding companies such as Robinhood, Patreon and Bustle, and also spent two years as an agent at CAA.
  • Kevin Gould is CEO of Kombo Ventures, a talent management and brand incubation firm that has guided the careers of top influencers like Jake Paul and SSSniperWolf. He is the co-founder of three direct-to-consumer brands — Insert Name Here, Wakeheart and Glamnetic — and is an angel investor in companies like Clutter, Beautycon and DraftKings.
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