Uber is facing a class-action lawsuit over Proposition 22 that alleges the company is illegally coercing its drivers to support the ballot measure that seeks to keep workers classified as independent contractors. The suit was brought forth by two Uber drivers, Benjamin Valdez and Hector Castellanos, as well as two California nonprofit organizations, Worksafe and Chinese Progressive Association.
“Let’s be absolutely clear,” David Lowe, an attorney for the plaintiffs, said in a statement. “Uber’s threats and constant barrage of Prop 22 propaganda on an app the drivers must use to do their work have one purpose: to coerce the drivers to support Uber’s political battle to strip them of workplace protections.”
“Uber’s solicitations have the purpose and effect of causing drivers to fear retaliation by Uber if they do not support Uber’s political preference and may induce many drivers to falsely state that they support being deprived of the rights that California law guarantees to statutory ’employees,’ ” the suit states.
“This is an absurd lawsuit, without merit, filed solely for press attention and without regard for the facts,” Uber spokesperson Matt Kallman said in a statement to TechCrunch. “It can’t distract from the truth: that the vast majority of drivers support Prop 22, and have for months, because they know it will improve their lives and protect the way they prefer to work.”
Prop 22 is the most-funded campaign in California’s history. To date, the Yes on 22 side has put north of $185 million into the initiative. Uber, Lyft and DoorDash are the biggest contributors on the yes side. Meanwhile, the No on 22 campaign has contributed $12,166,063.
California’s Proposition 22 is the most funded and perhaps one of the most contentious ballot measures in the state’s history.
To date, the Yes on 22 side has put north of $185 million into the initiative. The proposition, funded by Uber, Lyft, DoorDash, Instacart and Postmates, would ensure workers remain independent contractors. A Prop 22 defeat would reconfigure fully how gig-working companies classify their workers.
On the first episode of Season 3 of Mixtape, we talked to two gig workers, one on each side of the proposition.
Vanessa Bain is an Instacart shopper who is opposed to Proposition 22. Earlier this year, she co-founded Gig Workers Collective, a nonprofit to fight for fair pay and better treatment for gig workers.
She says the future of labor is at stake.
“I would argue the future of our democracy as well. The reality is that it establishes a dangerous precedent to allow companies to write their own labor laws,” Bain continues. “There’s an obvious conflict of interest there … This policy was created to unilaterally benefit companies at the detriment of workers.”
Surprising exactly no one, Doug Mead, an Uber Eats and Postmates driver who lives in Palm Springs and sits squarely in the Yes on 22 camp, feels differently.
“It’s really the government — their intent to remove a person’s control over how they want to be compensated. And that to me just makes no sense whatsoever,” Mead told us. “I should be in control of how I want to be compensated and by who.”
Uber, which was one of the three original companies (along with Lyft and DoorDash) to fund the proposition with $30 million, would see its business model change drastically if the proposition is defeated.
Earlier this month, Megan spoke with Shin-pei Tsay, Uber’s director of policy, cities and transportation, about a number of topics, including Proposition 22. She says she understands the dilemma that drivers grapple with on both sides but ultimately believes that the flexibility drivers currently have is worth protecting.
“But it isn’t perfect,” Tsay says. “We should be supporting workers more than the existing system enables currently, and so this is sort of a middle way of, you know, protecting that flexibility but also offering some benefits.”
The benefits Tsay is referring to is the 120% of minimum wage, 30 cents per engaged mile and healthcare subsidies dependent upon the number of hours worked if Prop 22 passes.
And if it doesn’t pass? Or if the company is forced to devise some magical hybrid classification that benefits all drivers, whether they want to be full employees or independent contractors?
“I think it’d be really challenging in our analysis. Essentially, we would have to start to ensure that there’s coverage, to ensure that there’s the necessary number of drivers to meet demand. There would be this forecasting that needs to happen — we would only be able to offer a certain number of jobs to meet that demand, because people will be working in set amounts of time.”
Tsay says that the matter at hand is to make the situation better rather than trying to “tinker around with two kinds of imperfect definitions.”
“This is something that a lot of companies have to look at. And what we’re trying, what we’re going up against is [that the] current system in place is very binary. And so I think it has to be, again, in partnership with cities, with states, with the federal government — we have to solve this together. This is not something that we just can come up with. And I don’t think the private sector should just come up with it on its own.”
Both Bain and Mead are also thinking about the potential impact the proposition will have on the future of labor outside of your Ubers and Lyfts. They both invoked Starbucks of all places and for very different reasons.
“I understand the other side’s point of view in terms of, there are apparently some drivers out there who don’t feel like they’re making enough money,” Mead told us. “But they’re asking for things, to me, that are just ridiculous. They want to get paid for waiting for a ride? Really? Who gets paid to wait on a job?
“If I’m a barista at Starbucks, there are going to be times when there are no customers in the store. However, I’m also taking that time to present the product that’s being sold to the customers, to set up the displays in the stores, to help clean the store. So I’m still working, even if there’s no customers. Now all of that work has already been done, and there are still no customers. Guess what? The manager is going to send me home. They’re not going to allow me to stay there while there’s nothing to do. So I’m not going to get paid to wait. Why should I get paid to wait now as an independent contractor? That makes zero sense to me.”
Bain uses the same example but in a drastically different way. And one that takes the labor movement head on.
“I have no doubt that … if Prop 22 were to succeed, we would see similar types of maneuvers from companies like Starbucks or Walmart, where we’re gonna end up with piece rate work in all of the service industry. Where we’re going to be paid per transaction that we bring up if we’re a cashier. Or we’re going to be paid per latte that we craft, if we’re a barista.
“If all it takes is putting the hiring process and the bossing into an app on your phone to rewrite labor laws, every company on the planet is going to be doing that. There’s so much more, unfortunately, at stake here than just Uber and Lyft and ride share and grocery delivery and how you’re going to get your DoorDash orders. Literally the future of labor is at stake.”
Instacart is making its grocery delivery and pickup services more accessible to lower-income customers by offering customers the ability to pay for groceries using their SNAP (Supplemental Nutrition Assistance Program) benefits. This is the first time Instacart shoppers have been able to use government assistance programs when paying for groceries, and follows earlier moves by larger retailers, including Amazon, Walmart, and others in extending SNAP EBT to online grocery.
In Instacart’s case, the option is being made available in partnership with ALDI, which will offer the ability for SNAP EBT participants to access fresh food and other staples using the online service.
When shopping, Instacart users will be able to add ALDI’s EBT SNAP-eligible items to their cart, then select how much of their benefits they want to allocate to their order before checking out.
Image Credits: Instacart
The program will launch over the new few weeks, and will first arrive at ALDI’s over 60 Georgia stores before expanding to over 570 stores across Illinois, California, Florida and Pennsylvania in the months ahead.
Instacart says it runs its Customer and Shopper Care team from Atlanta, which one reason why it selected Georgia as the debut market — adding it was important to first support the communities where its own employees live and work.
Today, online grocery shopping is often seen as a luxury service, but that should not be the case. Often, it’s just as affordable to shop online than in-store (if using the pickup option, at least), as customers can more easily compare prices with other retailers online. For some lower-income customers, online shopping can also save time when they’re stretched between jobs and family commitments.
The pandemic has now further complicated access to food for those on SNAP benefits, and in particular, for high-risk individuals. These customers now have to take risks with their lives and health to shop in-store, making online grocery more of a necessity.
“The introduction of Instacart’s EBT SNAP payments comes at a time when food insecurity in the U.S. has compounded as the nation continues to be impacted by COVID-19,” Instacart stated in its announcement. “According to Feeding America, due to the effects of the pandemic, more than 54 million people may experience food insecurity in 2020, which includes a potential 18 million children. In Georgia specifically, food insecurity impacts 12.5% of the population and disproportionately affects communities of color,” it noted.
Instacart is now one of several online retailers supporting SNAP EBT for groceries.
Before the coronavirus outbreak, the U.S. Dept. of Agriculture had been working to make online grocery more accessible to SNAP recipients through an online purchasing pilot program with support of retailers including Amazon, Walmart, ShopRite, and others. The pilot retailers have made it possible to shop for groceries online, then pay using SNAP EBT.
ALDI and Instacart are not listed on the USDA’s website as program participants, however.
The EU parliament has backed a call for tighter regulations on behavioral ads (aka microtargeting) in favor of less intrusive, contextual forms of advertising — urging Commission lawmakers to also assess further regulatory options, including looking at a phase-out leading to a full ban.
MEPs also want Internet users to be able to opt out of algorithmic content curation altogether.
The legislative initiative, introduced by the Legal Affairs committee, sets the parliament on a collision course with the business model of tech giants Facebook and Google.
Parliamentarians also backed a call for the Commission to look at options for setting up a European entity to monitor and impose fines to ensure compliance with rebooted digital rules — voicing support for a single, pan-EU Internet regulator to keep platforms in line.
The votes by the elected representatives of EU citizens are non-binding but send a clear signal to Commission lawmakers who are busy working on an update to existing ecommerce rules, via the forthcoming Digital Service Act (DSA) package — due to be introduced next month.
The DSA is intended to rework the regional rule book for digital services, including tackling controversial issues such as liability for user-generated content and online disinformation. And while only the Commission can propose laws, the DSA will need to gain the backing of the EU parliament (and the Council) if it is to go the legislative distance so the executive needs to take note of MEPs’ views.
The mass surveillance of Internet users for ad targeting — a space that’s dominated by Google and Facebook — looks set to be a major battleground as Commission lawmakers draw up the DSA package.
Last month Facebook’s policy VP Nick Clegg, a former MEP himself, urged regional lawmakers to look favorably on a business model he couched as “personalized advertising” — arguing that behavioral ad targeting allows small businesses to level the playing field with better resourced rivals.
However the legality of the model remains under legal attack on multiple fronts in the EU.
Scores of complaints have been lodged with EU data protection agencies over the mass exploitation of Internet users’ data by the adtech industry since the General Data Protection Regulation (GDPR) begun being applied — with complaints raising questions over the lawfulness of the processing and the standard of consent claimed.
Just last week, a preliminary report by Belgium’s data watchdog found that a flagship tool for gathering Internet users’ consent to ad tracking that’s operated by the IAB Europe fails to meet the required GDPR standard.
The use of Internet users’ personal data in the high velocity information exchange at the core of programmatic’s advertising’s real-time-bidding (RTB) process is also being probed by Ireland’s DPC, following a series of complaints. The UK’s ICO has warned for well over a year of systemic problems with RTB too.
Meanwhile some of the oldest unresolved GDPR complaints pertain to so-called ‘forced consent’ by Facebook — given GDPR’s requirement that for consent to be lawful it must be freely given. Yet Facebook does not offer any opt-out from behavioral targeting; the ‘choice’ it offers is to use its service or not use it.
Google has also faced complaints over this issue. And last year France’s CNIL fined it $57M for not providing sufficiently clear info to Android users over how it was processing their data. But the key question of whether consent is required for ad targeting remains under investigation by Ireland’s DPC almost 2.5 years after the original GDPR complaint was filed — meaning the clock is ticking on a decision.
And still there’s more: Facebook’s processing of EU users’ personal data in the US also faces huge legal uncertainty because of the clash between fundamental EU privacy rights and US surveillance law.
A major ruling (aka Schrems II) by Europe’s top court this summer has made it clear EU data protection agencies have an obligation to step in and suspend transfers of personal data to third countries when there’s a risk the information is not adequately protected. This led to Ireland’s DPC sending Facebook a preliminary order to suspend EU data transfers.
Facebook has used the Irish courts to get a stay on that while it seeks a judiciary review of the regulator’s process — but the overarching legal uncertainty remains. (Not least because the complainant, angry that data continues to flow, has also been granted a judicial review of the DPC’s handling of his original complaint.)
There has also been an uptick in EU class actions targeting privacy rights, as the GDPR provides a framework that litigation funders feel they can profit off of.
All this legal activity focused on EU citizens’ privacy and data rights puts pressure on Commission lawmakers not to be seen to row back standards as they shape the DSA package — with the parliament now firing its own warning shot calling for tighter restrictions on intrusive adtech.
It’s not the first such call from MEPs, either. This summer the parliament urged the Commission to “ban platforms from displaying micro-targeted advertisements and to increase transparency for users”. And while they’ve now stepped away from calling for an immediate outright ban, yesterday’s votes were preceded by more detailed discussion — as parliamentarians sought to debate in earnest with the aim of influencing what ends up in the DSA package.
Ahead of the committee votes, online ad standards body, the IAB Europe, also sought to exert influence — putting out a statement urging EU lawmakers not to increase the regulatory load on online content and services.
“A facile and indiscriminate condemnation of ‘tracking’ ignores the fact that local, generalist press whose investigative reporting holds power to account in a democratic society, cannot be funded with contextual ads alone, since these publishers do not have the resources to invest in lifestyle and other features that lend themselves to contextual targeting,” it suggested.
“Instead of adding redundant or contradictory provisions to the current rules, IAB Europe urges EU policymakers and regulators to work with the industry and support existing legal compliance standards such as the IAB Europe Transparency & Consent Framework [TCF], that can even help regulators with enforcement. The DSA should rather tackle clear problems meriting attention in the online space,” it added in the statement last month.
However, as we reported last week, the IAB Europe’s TCF has been found not to comply with existing EU standards following an investigation by the Belgium DPA’s inspectorate service — suggesting the tool offers quite the opposite of ‘model’ GDPR compliance. (Although a final decision by the DPA is pending.)
The EU parliament’s Civil Liberties committee also put forward a non-legislative resolution yesterday, focused on fundamental rights — including support for privacy and data protection — that gained MEPs’ backing.
Its resolution asserted that microtargeting based on people’s vulnerabilities is problematic, as well as raising concerns over the tech’s role as a conduit in the spreading of hate speech and disinformation.
The committee got backing for a call for greater transparency on the monetisation policies of online platforms.
Other measures MEPs supported in the series of votes yesterday included a call to set up a binding ‘notice-and-action’ mechanism so Internet users can notify online intermediaries about potentially illegal online content or activities — with the possibility of redress via a national dispute settlement body.
While MEPs rejected the use of upload filters or any form of ex-ante content control for harmful or illegal content. — saying the final decision on whether content is legal or not should be taken by an independent judiciary, not by private undertakings.
They also backed dealing with harmful content, hate speech and disinformation via enhanced transparency obligations on platforms and by helping citizens acquire media and digital literacy so they’re better able to navigate such content.
A push by the parliament’s Internal Market Committee for a ‘Know Your Business Customer’ principle to be introduced — to combat the sale of illegal and unsafe products online — also gained MEPs’ backing, with parliamentarians supporting measures to make platforms and marketplaces do a better job of detecting and taking down false claims and tackling rogue traders.
Parliamentarians also supported the introduction of specific rules to prevent (not merely remedy) market failures caused by dominant platform players as a means of opening up markets to new entrants — signalling support for the Commission’s plan to introduce ex ante rules for ‘gatekeeper’ platforms.
The parliament also backed a legislative initiative recommending rules for AI — urging Commission lawmakers to present a new legal framework outlining the ethical principles and legal obligations to be followed when developing, deploying and using artificial intelligence, robotics and related technologies in the EU including for software, algorithms and data.
The Commission has made it clear it’s working on such a framework, setting out a white paper this year — with a full proposal expected in 2021.
MEPs backed a requirement that ‘high-risk’ AI technologies, such as those with self-learning capacities, be designed to allow for human oversight at any time — and called for a future-oriented civil liability framework that would make those operating such tech strictly liable for any resulting damage.
The parliament agreed such rules should apply to physical or virtual AI activity that harms or damages life, health, physical integrity, property, or causes significant immaterial harm if it results in “verifiable economic loss”.
Amazon has launched a new program that directly pays consumers for information about what they’re purchasing outside of Amazon.com and for responding to short surveys. The program, Amazon Shopper Panel, asks users to send in 10 receipts per month for any purchases made at non-Amazon retailers, including grocery stores, department stores, drug stores and entertainment outlets (if open), like movie theaters, theme parks, and restaurants.
Amazon’s own stores, like Whole Foods, Amazon Go, Amazon Four Star and Amazon Books do not qualify.
Program participants will take advantage of the newly launched Amazon Shopper Panel mobile app on iOS and Android to take pictures of paper receipts that qualify or they can opt to forward emailed receipts to firstname.lastname@example.org to earn a $10 reward that can then be applied to their Amazon Balance or used as a charitable donation.
Amazon says users can then earn additional rewards each month for every survey they complete. The optional surveys will ask about brands and products that may interest the participant and how likely they are to purchase a product. Other surveys may ask what the shopper thinks of an ad. These rewards may vary, depending on the survey.
The program is currently opt-in and invite-only, and is also only open to U.S. consumers at this time. Invited participants can now download the newly launched Shopper Panel app and join the panel. Other interested users can use the app to join a waitlist for an invite.
Image Credits: Amazon
Consumer research panels are common operations, but in Amazon’s case, it plans to use the data in several different ways.
On the website, Amazon explains it “may use” customer data to improve product selection at Amazon.com and Whole Food Market, as well as to improve the content selection offered through Amazon services, like Prime Video.
Amazon also says the collected data will help advertisers better understand the relationship between their ads and product purchases at an aggregate level and will help Amazon build models about which groups of customers are likely to be interested in certain products.
And Amazon may choose to offer data to brands to help them gain feedback on existing products, the website notes.
Image Credits: Amazon
The program’s launch follows increased scrutiny over Amazon’s anti-competitive business practices in the U.S. and abroad when it comes to using consumers’ purchase data.
Amazon came under fire from U.S. regulators over how it had leveraged third-party merchants’ sales data to benefit its own private label business. When Amazon CEO Jeff Bezos testified before Congress in July, he said the company had a policy against doing this, but couldn’t confirm that policy hadn’t been violated. The retailer may also be facing antitrust charges over the practice in the E.U..
At the same time, Amazon has been increasing its investment in its advertising business, which grew by 44% year-over-year in Q1 to reach $3.91 billion. That was a faster growth rate than both Google (13%) and Facebook (17%), even if tiny by comparison — Google ads made $28 billion that quarter and Facebook made $17.4 billion, Digiday reported.
As the pandemic has accelerated the shift to e-commerce by 5 years or so, Amazon’s need to better optimize advertising space has also been sped up — and it may rapidly need to ingest more data that what it can collect directly from its own website.
In a message to advertisers about the program’s launch, Amazon positioned its e-commerce business as a small piece of the overall retail market — a point it often makes in hopes of avoiding regulation:
“In this incredibly competitive retail environment, Amazon works with brands of all sizes to help them grow their businesses not just in our store, but also across the myriad of places customers shop. We also work hard to provide our selling partners—and small businesses in particular—with tools, insights, and data to help them be successful in our store. But our store is just one piece of the puzzle. Customers routinely use Amazon to discover and learn about products before purchasing them elsewhere. In fact, Amazon only represents 4% of US retail sales. Brands therefore often look to third-party consumer panel and business intelligence firms like Nielsen and NPD, and many segment-specific data providers, for additional information. Such opt-in consumer panels are well-established and used by many companies to gather consumer feedback and shopping insights. These firms aggregate shopping behaviors across stores to report data like average sales price, total units sold, and revenue on tens of thousands of the most popular products.”
The retailer then explained that the Shopper Panel could help it to support sellers and brands by offering additional insights beyond its own store.
Amazon doesn’t say when the program waitlist will be removed, but says anyone can sign up starting today.
Klar, a new online bank based in Mexico City, has become the first big bet that Prosus Ventures (the firm formerly known as Naspers Ventures) is taking in Latin America outside of Brazil.
Founded by Stefan Moller, a former consultant at Bain & Co. who advised large banks, Klar blends Moller’s work experience in Mexico with his connections to the German banking world and the tech team at Berlin -based n26, to create a challenger bank offering deposit and credit services for Mexican customers.
The Mexican market is woefully underserved when it comes to the finance industry, according to Moller. Only 10% of Mexican adults have a credit card, something Moller said is the cheapest consumer lending instrument around.
That’s why Klar launched last year with both credit and debit services. The company has 200,000 banking customers and roughly 27,000 of those customers have taken out loans through the bank. A typical loan is roughly $110, according to Moller, and each loan comes with a 68% annual percentage rate.
If that sounds usurious, that’s because it is — at least by U.S. standards. In the U.S. a typical credit card will run somewhere between 16% and 24%, according to data from WalletHub. In Mexico, Moller said the typical interest rate is 70% (no wonder only 10% of adults have credit cards).
Still, the opportunity to expand credit and debit services made sense to Prosus, which led the company’s Series A round alongside investors including the International Finance Corporation and former investors Quona capital, who led Klar´s SEED round, Mouro Capital (formerly Santander Innoventures) and aCrew.
Banafsheh Fathieh, the Prosus Ventures principal who led the investment for the firm, said that the commitment to Klar will likely be the first of many investments that her firm makes in the region — both in fintech and likely in Mexico’s tech ecosystem more broadly.
Prosus is famous for making early bets on emerging technology companies in developing markets. Perhaps most famously the firm’s parent company was an early investor in Tencent — a multi-million dollar bet that has generated billions in returns.
“Prosus Ventures partners with entrepreneurs that are solving big societal problems with technology, in a uniquely local way. We invest in sectors of the economy where technology can lead to meaningful change in the lives of consumers. Klar has identified a massive need in the Mexican financial market and brings a unique solution through their credit and debit offering,” said Banafsheh Fathieh from Prosus Ventures, in a statement. “In less than a year, the team has shown an ability to build a world-class digital bank for the masses, one focused on financial access and inclusion. We are very excited to partner with them on that mission.”
In the suit, the Justice Department is expected to argue that Google used anticompetitive practices to safeguard its monopoly position as the dominant force in search and search-advertising, which sit at the foundation of the company’s extensive advertising, data mining, video distribution, and information services conglomerate.
It would be the first significant legal challenge that Google has faced from U.S. regulators despite years of investigations into the company’s practices.
A 2012 attempt to bring the company to the courts to answer for anti-competitive practices was ultimately scuttled because regulators at the time weren’t sure they could make the case stick. Since that time Alphabet’s value has skyrocketed to reach over $1 trillion (as of today’s share price).
Alphabet, Google’s parent company, holds a commanding lead in both search and video. The company dominates the search market — with roughly 90% of the world’s internet searches conducted on its platform — and roughly three quarters of American adults turn to YouTube for video, as the Journal reported.
In the lawsuit, the Department of Justice will say that Alphabet’s Google subsidiary uses a web of exclusionary business agreements to shut out competitors. The billions of dollars that the search giant collects wind up paying mobile phone companies, carriers and browsers to make the Google search engine a preset default. That blocks competitors from being able to access the kinds of queries and traffic they’d need to refine their own search engine.
It will be those relationships — alongside Google’s insistence that its search engine come pre-loaded (and un-deletable) on phones using the Android operating system and that other search engines specifically not be pre-loaded — that form part of the government’s case, according to Justice Department officials cited by the Journal.
The antitrust suit comes on the heels of a number of other regulatory actions involving Google, which is not only the dominant online search provider, but also a leader in online advertising and in mobile technology by way of Android, as well as a strong player in a web of other interconnected services like mapping, online productivity software, cloud computing and more.
MOUNTAIN VIEW, UNITED STATES – 2020/02/23: American multinational technology company Google logo seen at Google campus. (Photo by Alex Tai/SOPA Images/LightRocket via Getty Images)
A report last Friday in Politico noted that Democrat Attorneys General would not be signing the suit. That report said those AGs have instead been working on a bipartisan, state-led approach covering a wider number of issues beyond search — the idea being also that more suits gives government potentially a stronger bargaining position against the tech giant.
A third suit is being put together by the state of Texas, although that has faced its own issues.
While a number of tech leviathans are facing increasing scrutiny from Washington, with the US now just two weeks from Election Day, it’s unlikely that we are going to see many developments around this and other cases before then. And in the case of this specific Google suit, in the event that Trump doesn’t get re-elected, there will also be a larger personnel shift at the DoJ that could also change the profile and timescale of the case.
In any event, fighting these regulatory cases is always a long, drawn-out process. In Europe, Google has faced a series of fines over antitrust violations stretching back several years, including a $2.7 billion fine over Google shopping; a $5 billion fine over Android dominance; and a $1.7 billion fine over search ad brokering. While Goolge slowly works through appeals, there are also more cases ongoing against the company in Europe and elsewhere.
Google is not the only one catching the attention of Washington. Earlier in October, the House Judiciary Committee released a report of more than 400 pages in which it outlined how tech giants Apple, Amazon, Alphabet (Google’s parent company) and Facebook were abusing their power, covering everything from the areas in which they dominate, through to suggestions for how to fix the situation (including curtailing their acquisitions strategy).
That seemed mainly to be an exercise in laying out the state of things, which could in turn be used to inform further actions, although in itself, unlike the DoJ suit, the House report lacks teeth in terms of enforcement or remedies.
One big technology by-product of the Covid-19 pandemic has been a much stronger focus on online education solutions — providing the tools for students to continue learning when the public health situation is preventing them from going into physical classrooms. As it happens, that paradigm also applies to the business world.
Today, a startup out of Dublin called LearnUpon, which has been building e-learning solutions not for schools but corporates to use for development and training, has raised $56 million to feed a growth in demand for its tools, particularly in the U.S. market, which currently accounts for 70% of LearnUpon’s sales.
The funding is coming from a single investor, Summit Partners . LearnUpon’s CEO and co-founder Brendan Noud said the capital will be used in two areas. First, to add more people to the startup’s engineering and product teams (it has 180 employees currently) to continue expanding in areas like data analytics, providing more insights to its customers on how their training materials are used on via its learning management system (commonly referred to as LMS in the industry). Second, to bring on more people to help sell the product particularly in countries where it is currently growing fast, like the U.S., to larger corporate clients.
LearnUpon already has some 1,000 customers globally, including Booking.com, Twilio, USA Football and Zendesk. And notably, eight-year-old LearnUpon was profitable and had only raised $1.5 million before now.
“We’ve been growing organically pretty fast since we started but especially for the last 4-5 years using a SaaS model, but now we’re at a scale where the opportunity is vast, especially with more people working from home,” he said. “We want to give ourselves firepower.”
Corporate learning has followed similar but not identical trajectory to that of online education for K-12 and higher learning. In common, especially in the last 8 months. has been a growing need to engage and connect with learners at a time when it’s been challenging, or in some cases impossible, to see each other in person.
What’s different is that corporate learning was already a very established market, with organizations widely investing in online tools to manage training and personal development for years before any pandemic necessitated it.
Areas like employee onboarding, personnel development, customer training, training on new products, partner training, sales development, compliance, and building training services that you then sell to third parties are all areas that count as corporate learning. One researcher estimated that the corporate learning market was valued at an eye-watering $64 billion in 2019, with LMS investments alone at over $9 billion that year, and both are growing.
That has been a boost for companies like LearnUpon, which provides services in all of those categories and says that annual recurring revenues have grown by more than 50% year-on-year for each of the last 12 quarters.
But that also underscores the challenge in the market.
“It’s definitely a very crowded space, with maybe over 1000 LMS’s out there,” said Noud, although he added that it only has about 10-15 actually direct competitors (which to me still sounds like quite a lot). They include the likes of Cornerstone, TalentLMS from the Greek startup Epignosis, the Candian publicly-traded Docebo, and 360Learning from France.
But also consider those that have moved into corporate learning from other directions. LinkedIn has made big moves into learning to complement its bigger recruitment and professional development profile; and companies originally built to target the education sector, such as Coursera and Kahoot, have also expanded into business training and education. Both represent further competitive fronts for companies like LearnUpon natively built to service the business market.
Noud said that one reason why LearnUpon is finding some traction against the rest of the pack, and why it’s better, is because it’s a more comprehensive platform. Users can run live or asynchronous (on-demand) learning or training, and the SaaS LMS is designed to handle material and learning environments for multiple “students” — be they internal users, partners of the organization, or customers. In contrast, he said that many other solutions are more narrow in their scope, requiring organizations to manage multiple systems.
“And the legacy platforms are overly bloated, with bad customer support, which was a key area for us,” he said, recalling back to eight years ago when he and co-founder Des Anderson were first starting LearnUpon. “Our first hire was in customer support, and that has carried through to how we have grown.”
One area where LearnUpon not doing anything right now is in content development. It does offer tools to construct tests and surveys, but users can also import content created with other e-learning authoring tools, Noud said. Similarly, it’s not in the business of building its own live teaching platforms: you can import links from others like Zoom to provide the platform where people will teach and engage.
That’s not going to be a focus for now for the company, but given that others it competes with are providing a one-stop shop, for those that are looking to simplify procurement and have a more direct hand in building training as well as managing it, you can see how this might be an area that LearnUpon might develop down the line.
“In today’s knowledge economy, we believe corporate learning has become a key requirement for all organizations of scale – and the added challenge of remote working has only accelerated the importance of delivering learning digitally,” said Antony Clavel, a Principal with Summit Partners, in a statement. “With its modern, cloud-based learning management system, strong product development organization, demonstrated dedication to customer success and capital efficient go-to-market model, we believe LearnUpon is strongly positioned to serve this growing and increasingly critical market need. We are thrilled to support Brendan and the LearnUpon team in this next phase of growth.”
Clavel is joining the LearnUpon Board of Directors with this round. The startup is not disclosing its valuation.
Dear Mr. Zuckerberg, Mr. Dorsey, Mr. Pichai and Mr. Spiegel: We need universal digital ad transparency now!
The negative social impacts of discriminatory ad targeting and delivery are well-known, as are the social costs of disinformation and exploitative ad content. The prevalence of these harms has been demonstrated repeatedly by our research. At the same time, the vast majority of digital advertisers are responsible actors who are only seeking to connect with their customers and grow their businesses.
Many advertising platforms acknowledge the seriousness of the problems with digital ads, but they have taken different approaches to confronting those problems. While we believe that platforms need to continue to strengthen their vetting procedures for advertisers and ads, it is clear that this is not a problem advertising platforms can solve by themselves, as they themselves acknowledge. The vetting being done by the platforms alone is not working; public transparency of all ads, including ad spend and targeting information, is needed so that advertisers can be held accountable when they mislead or manipulate users.
Our research has shown:
While it doesn’t take the place of strong policies and rigorous enforcement, we believe transparency of ad content, targeting and delivery can effectively mitigate many of the potential harms of digital ads. Many of the largest advertising platforms agree; Facebook, Google, Twitter and Snapchat all have some form of an ad archive. The problem is that many of these archives are incomplete, poorly implemented, hard to access by researchers and have very different formats and modes of access. We propose a new standard for universal ad disclosure that should be met by every platform that publishes digital ads. If all platforms commit to the universal ad transparency standard we propose, it will mean a level playing field for platforms and advertisers, data for researchers and a safer internet for everyone.
The public deserves full transparency of all digital advertising. We want to acknowledge that what we propose will be a major undertaking for platforms and advertisers. However, we believe that the social harms currently being borne by users everywhere vastly outweigh the burden universal ad transparency would place on ad platforms and advertisers. Users deserve real transparency about all ads they are bombarded with every day. We have created a detailed description of what data should be made transparent that you can find here.
We researchers stand ready to do our part. The time for universal ad transparency is now.
Jason Chuang, Mozilla
Kate Dommett, University of Sheffield
Laura Edelson, New York University
Erika Franklin Fowler, Wesleyan University
Michael Franz, Bowdoin College
Archon Fung, Harvard University
Sheila Krumholz, Center for Responsive Politics
Ben Lyons, University of Utah
Gregory Martin, Stanford University
Brendan Nyhan, Dartmouth College
Nate Persily, Stanford University
Travis Ridout, Washington State University
Kathleen Searles, Louisiana State University
Rebekah Tromble, George Washington University
Abby Wood, University of Southern California
Over the next five years consumers will return an estimated 40 million to 50 million pieces of furniture that more than likely will end up in landfills, creating tons of unnecessary waste, according to Chris Richter, the founder of a new Austin-based furniture startup, FloorFound.
To reduce that waste, and give retailers another option for their used goods, Richter has launched FloorFound. The company is designed to manage furniture returns and resale for online merchants. So far, companies like Floyd Home, Inside Weather, Outer and Feather (the furniture rental company) are using FloorFound’s services.
“We have a very large pipeline and we’ve been operating since April first,” said Richter. “We can pick up in any major metro locally and inspect it locally. We have a platform layer where we can run inspections against those items.”
As consumers look to reduce their environmental footprint, an easy place to start is by buying used items, Richter said, and he expects that most brands will start to incorporate used and new products in their virtual and real showrooms. “Every brand will commingle new items with resale items,” he said. “We are trying to put retailers in the resale business with their own return inventory.” To prove his point, Richter pointed to companies like REI and The Gap, which have partnered with ThredUp to sell used clothes.
To complement its returns business and give online sellers a way to work more seamlessly with local vendors, the company has logistics partnerships with providers including Pilot Freight Services, Metropolitan Warehouse and Delivery and J.B. Hunt Transport.
Working with co-founder Ryan Matthews, the former director of technology for the Austin-based high-end retailer Kendra Scott, Richter has set up a business that can tap into both the demand for better customer service for the return of large items and the growing call for greater sustainability in the furniture industry.
It was an attractive enough proposition to attract a pre-seed investment from Schematic Ventures, a venture fund focused exclusively on technological innovations for supply chain management.
“The broken experience of oversized e-commerce has kept a multi-billion-dollar category offline. It’s not a simple problem: oversized items require coordination of a hyper-fragmented micro carrier network, complex physical processing, and then re-injection into an e-commerce channel that aligns with the brand,” said Julian Counihan, a general partner at Schematic Ventures. “UPS and FedEx just aren’t going to cut it. FloorFound is tackling this challenge with a team tailor-made for the task: Chris Richter, Ryan Matthews and Shannon Hardt have backgrounds spanning supply chain, delivery, e-commerce and enterprise software. FloorFound will be the final push that moves the remaining offline categories, online.”
Brighteye Ventures, the European edtech venture capital firm, recently announced the $54 million first close of its second fund, bringing total assets under management above $112 million. Out of the new fund, the 2017-founded VC will invest in 15-20 companies over the next three years at the seed and Series A stage, writing checks up to $5 million.
Described as a thesis-driven fund investing in startups that “enhance learning” within the context of automation and other new technologies, coupled with changes in the way we live, Brighteye plans to disrupt the $7 trillion global education sector “as educators and students are adapting to distance learning en masse and millions of displaced workers are seeking to upskill,” according to a press release.
The firm’s investments to date include Ornikar, an online driving school in France and Spain serving more than 1.6 million students; Tandem, a Berlin-based peer-to-peer language learning platform with over 10 million members; and Epic!, a reading platform said to be used in more than 90% of U.S. schools.
To dig deeper into Brighteye’s thesis and the edtech sector more broadly, I caught up with managing partner Alex Latsis. We also discussed some of the findings in the firm’s recent European edtech funding report and how more venture capital than ever is set to flow into educational technology.
TechCrunch: Brighteye Ventures backs seed and Series A startups across Europe and North America that “enhance learning.” Can you elaborate a bit more on the fund’s remit, such as subsectors or specific technologies and what you look for in founders and startups at such an early stage?
Alex Latsis: We invest in startups that use technology to directly enable learning, skills acquisition or research as well as companies whose products address structural needs in the education sector. For example, Zen Educate addresses the systemic issue of teacher supply shortages in the U.K. via an on-demand platform that saves schools money whilst allowing educators to earn more. Litigate is an AI-driven coach and workflow tool improving results for legal associates, while Ironhack, the largest tech bootcamp in Europe and Latin America, gives young professionals the skills needed to enter the innovation economy and connects them to employers with a 90% job placement rate.
As education is a complex field we always seek to establish a degree of founder market fit, but more importantly that the founding teams themselves are a good fit internally. No startup succeeds on the merits of a founder alone, even if they may be driving the momentum.
In “The European EdTech Funding Report 2020,” you note that Europe is gaining momentum with a healthy increase in VC investments in local edtech startups. Specifically, you say that edtech VC investment has experienced 9.2x growth between 2014 and 2019 in terms of money invested. What is driving this and how does Europe compare to other major tech regions for edtech, such as Silicon Valley/U.S. or China?
Both Europe and the U.S. saw about 2% of venture capital invested in edtech in 2019. Growth in edtech investment in these markets to date has been driven largely by increased willingness to pay for training that is unavailable, unengaging or too expensive in legacy institutions and to a lesser extent by increased digital penetration in schools and universities that has enabled SaaS products to scale.
Given the rapid evolution of online education in the face of the pandemic, we expect funding for edtech will trend closer to 3%-5% of venture funding in the coming years on both sides of the Atlantic. This will mean billions in incremental investment, hundreds of new promising companies and incredible learning opportunities, particularly for those looking to upskill/reskill. In countries like India and China where school and university student populations are growing more rapidly, we expect 5%+ of VC funding to go into edtech as there is more growth in core demand.
Zoom, Microsoft Teams and Google Meet have become standard tools for teachers who have had to run lessons remotely since the start of the Covid-19 pandemic. But they’re not apps necessarily designed for classrooms, and that fact has opened a gap in the market for those looking to build something more fit to the purpose.
Today, a startup called Engageli is coming out of stealth with a service that it believes fills that need. A video conferencing tool designed from the ground up more as a digital learning platform, with its own unique take on virtual classrooms, Engageli is aiming first at higher education, and it is launching with $14.5 million in seed funding from a Benchmark partner and others.
If that sounds like a large seed round for a startup that is still only in pilot mode (you can contact the company by email to apply to join the pilot), it might be due in part to who is behind Engageli.
The startup is co-founded by Dan Avida, Serge Plotkin, Daphne Koller and Jamie Nacht Farrell. Avida is a general partner at Opus Capital who in the past co-founded (and sold, to NetApp) an enterprise startup called Decru with Plotkin, who himself is a Stanford emeritus professor. Koller is one of the co-founders of Coursera and also an adjunct professor at Stanford. And Farrell is a former executive from another pair of major online learning companies, Trilogy and 2U.
Avida and Koller, as it happens, are also married, and it was observing their kids in the last school year — when they were both in high school (the oldest is now in her first year at UC Berkeley) — that spurred them to start Engageli.
“The idea for this started in March when our two daughters found themselves in ‘Zoom School.’ One of them watched a lot of Netflix, and the other, well, she really improved her high scores in a lot of games,” he said wryly.
The problem, as he and Koller saw it, was that the format didn’t do a good enough job of connecting with individual students, checking in with them to make sure they were paying attention, understanding, and actually interested in what was being taught.
“The reason teachers and schools are using conferencing systems is because that was what was out there,” he said. But, based on the team’s collective experiences across past e-learning efforts at places like Coursera — which built infrastructure to run university courses for mass audiences online — and Trilogy and 2U (which are now one company that covers both online learning for universities and boot camps), “we thought we could build a better system from the ground up.”
Even though the idea was inspired by what the pair saw playing out with their high school-attending children, Engageli made the decision to focus first on higher education because that was where it was getting the most interest from would-be customers to pilot the service. But also, Avida believes that because higher ed not already has a big market for remote learning, it represents a more significant opportunity.
“K-12 schools will eventually go back to normal,” he said, “but we’re of the opinion that higher education will be a blend with more and more online learning,” one of the reasons also for the founding of the likes of Coursera, Trilogy and 2U. “Younger kids need face-to-face contact, but in college, many students are now juggling work, family and studying, and online can be much more convenient.”
Also there is a very practical selling point to providing better tools to university classrooms: “People pay those tuitions to have access to professors and other students, and this is a way to provide that in a remote world,” he said.
As it appears now, Engageli lets teachers build and run both synchronous (live) and asynchronous (recorded) lessons, giving students and teachers the option to catch up or replace a live lesson if necessary.
The startup’s idea is also to make it as easy to integrate into existing workflows as possible: no need to install special desktop or mobile apps, as the platform works in all major browsers, and Avida notes that it’s also designed to integrate with the software systems that many universities are already using to organise their educational content and track students’ progress. (Making the barrier to entry low is not a bad idea also considering that many institutions are already using other products, making them more entrenched and increasing the challenges of getting them to migrate to something else.)
But perhaps Engageli’s most unique feature is how it views the virtual classroom.
The platform lets teachers create “tables” where students sit together in smaller groups, where they can work together. With tables, the idea is that either an instructor — or in the case of large classes as you might get with university seminars, teaching assistants assigned to tables — can engage with students in a more personalised way.
When a class is delivered asynchronously (that is, recorded), it means that students sitting at a table can still partly be involved in a “live” experience where they can talk about the work with others in their groups. The tables are also opened up before a class starts, and students can go from one to the other to chat with others before the class begins.
On top of the tools that Engageli has built to record and consume lessons, it’s also building a set of analytics that lets professors (or their assistants) monitor how well audio and video and working both for themselves as we as for their audience, and also collect other kinds of “engagement” information, which could come in the form of getting people to ask or answer questions or take polls and other interactive media.
Together, these features create better feedback to make sure that everyone is getting as much out of the remote experience as possible.
Education has not always been one of the buzziest areas in the world of startups — it’s been something of a boring cousin to more headline-grabbing segments like social media, or those taking on giants like Amazon and Google.
But the pandemic has thrown a spotlight on the opportunities in the field, both to fill a sudden surge of demand for remote learning tools, and to create more innovative approaches to doing so, as Engageli is doing here.
Just yesterday, Kahoot — a platform for building and using gamified learning apps — raised $215 million from SoftBank; and other recent rounds have included Outschool (which raised $45 million and is now profitable), Homer (raised $50 million from an impressive group of strategic backers), Unacademy (raised $150 million) and the Indian juggernaut Byju’s (most recently picking up $500 million from Silver Lake).
On top of the recent spotlight on education, it’s also been interesting to see the proliferation of startups that are also coming out of the woodwork to provide new takes on videoconferencing.
Last week, a startup called Headroom — also started by already-successful entrepreneurs — launched with an AI-driven alternative to Zoom and the rest providing not just automatic transcriptions of conversations, but automatically generated highlights and insights into how engaging your webinars and other video content really was.
Apps like Headroom and Engageli are just the tip of the iceberg, with other innovative approaches also stepping out and raising significant funding. The big question will be whether they will get much attention and time from would-be customers who are already “happy enough” with what they already use.
But in a tech world that thrives on the concept of disruption and companies creating businesses out of simply being better approaches to entrenched markets, it’s a bet worth making.
“Dan, Serge and Daphne have repeatedly built fast-growing, extremely successful companies. I am so fortunate to be working with them again,” said Alex Balkanski, a partner at Benchmark who is investing individually, in a statement. “Investing in a company linked to education is incredibly important to me on a personal level, and Engageli has the potential to enable a truly transformative learning experience.”
Updated to clarify that Balkanski is investing privately, not through Benchmark.
Year after year, a lack of transparency in how ad traffic is sourced, sold and measured is cited by advertisers as a source of frustration and a barrier to entry in working with various providers. But despite progress on the protection and privacy of data through laws like GDPR and COPPA, the overall picture regarding ad-marketing transparency has changed very little.
In part, this is due to the staggering complexity of how programmatic and other advertising technologies work. With automated processes managing billions of impressions every day, there is no universal solution to making things more simple and clear. So the struggle for the industry is not necessarily a lack of intent around transparency, but rather how to deliver it.
Frustratingly, evidence shows that the way data is collected and used by some industry players has played a large part in reducing people’s trust in online advertising. This is not a problem that was created overnight. There is a long history and growing sense of consumer frustration with the way their data is being used, analyzed and monetized and a similar frustration by advertisers with the transparency and legitimacy of ad clicks for which they are asked to pay.
There are continuing efforts by organizations like the IAB and TAG to create policies for better transparency such as ads.txt. But without hard and fast laws, the responsibility lies with individual companies.
One relatively simple yet largely spurned practice that would engender transparency and trust for the benefit of all parties (brands, consumers and ad/marketing providers) would be for the industry to come together and have all parties open their SDKs.
Open-source software is code that anyone is free to use, analyze, alter and improve.
Auditing the code and adjusting the SDKs functionality based on individual needs is a common practice — and so too are audits by security companies or interested parties who are rightly on the lookout for app fraud. By showing exactly how the code within the SDK has been written, it is the best way to reassure developers and partners that there are no hidden functions or unwanted features.
Everyone using open-source SDKs can learn exactly how it works, and because it is under an open-source license, anyone can suggest modifications and improvements in the code.
The main risk from opening up an SDK code is that third parties will look for ways to exploit it and insert their own malicious code, or else look at potential vulnerabilities to access back-end services and data. However, providers should be on the lookout and be able to fix the potential vulnerabilities as they arise.
As for the rewards, open-sourcing engenders trust and transparency, which should certainly translate into customer loyalty and consumer confidence. After all, we are all operating in a market where advertisers and developers can choose who they want to work with — and on what terms.
Selfishly but practically speaking, opening SDKs can also help companies in our industry protect themselves from others’ baseless claims that are simply intended to promote their products. With open standards, there are no unsubstantiated, false accusations intended for publicity. The proof is out there for everyone to see.
All of these companies have decided to use an open-source approach because they recognize the importance of transparency and trust, especially when you are placing the safety and reputation of your brand in the hands of an algorithm. However, the majority of SDKs remain closed.
Relying on forward-thinking companies to set their own transparency levels will only take our industry so far. It’s time for stronger action around trust and data transparency. In the same way that GDPR and COPPA have required companies to address privacy and, ultimately, to have forced a change that was needed, open-sourcing our SDKs will take the ad-marketing space to new heights and drive new levels of trust and deployment with our clients, competitors, legislators and consumers.
The industry-wide challenge of transparency won’t be solved any time soon, but the positive news is that there is movement in the right direction, with steps that some companies are already taking and others can easily take. By implementing measures to ensure brand-safe placements and helping limit ad fraud; improving relationships between brands, agencies, and programmatic partners; and bringing clarity to consumer data use; confidence in the advertising industry will improve and opportunities will subsequently grow.
That’s why we are calling on all ad/marketing companies to take this step forward with us — for the benefit of our consumers, brands, providers and industry at large — to embrace open-source SDKs as the way to engender trust, transparency and industry transformation. In doing so, we will all be rewarded with consumers who are more trusting of brands and brand advertising, and subsequently, brands who trust us and seek opportunities to implement more sophisticated solutions and grow their business.
There’s another entrant in the startup race to provide financial services to Latin America’s small and medium-sized businesses.
Financial services have been a huge opportunity for startups coming out of Brazil, Colombia and Mexico in recent years, and now Xepelin, a new company from Chile, is looking to join the fray.
Xepelin’s founders, Sebastian Kreis and Guillermo Molina Carvallo, launched their company with the vision of creating a new kind of online bank for Latin America’s small businesses.
Sebastian Kreis, chief executive officer, Xepelin. Image Credits: Xepelin
The company’s pitch to business owners depends on a variation of the lending tool known as factoring, where small businesses can take out loans based on the income they’re expecting to receive. In Latin America, where small businesses have limited avenues to traditional loans, according to Kreis, factoring represents a novel solution.
Xepelin already has a multimillion dollar credit line on the books in addition to a small round of initial financing and the company will be using both the credit line to bring customers in and the equity infusion to continue developing revenue management and resource planning tools for its customers.
Starting in Chile and Mexico, where the two founders have a long history in the financial services world, the company expects to become a player across the continent in line with the growth of private debt services for small businesses.
Kreis estimates that debt financing in Latin America could grow to 70 times its current size given changes to the regulatory environment and increasing demand for digital financial services over the next decade.
In the first stage we developed the new standard for SMBs’ working capital financing in LatAm, focusing on our client’s user experience, financial needs (not only transactions) and the way they manage their working capital. Xepelin gives SMBs access to capital in an easy and efficient way.
Mexico is a good indicator of the potential size of the market, according to Kreis. There only 300,000 businesses — out of more than 6 million registered companies — have sales and account executives offering revenue management and credit lines.
These money managers have a portfolio of 300 companies that they work with, while midmarket companies may work with as many as 1,000 to 5,000 small businesses.
So far, Xepelin has raised $3.5 million in early-stage funding from investors including Oskar Hjertonsson, Manutara Ventures, Ignacio Canals, Gonzalo Rojas, FJ Labs, Diego Fleischmann, and Daniel Undurraga. The most recent capital infusion, a $2.5 million round led by Impact Ideas VC closed earlier this month.
According to details from a shocking new affidavit, the FBI uncovered a group planning “violent action against multiple state governments,” including a detailed plot to capture or kill Michigan Governor Gretchen Whitmer. Individuals involved in the plot organized across Facebook groups, in-person events and at least two encrypted chat apps that the FBI did not name.
Whitmer, a Democrat, became a major target of pervasive anti-lockdown sentiment on the political right earlier this year when states imposed restrictions to slow the spread of the coronavirus. According to the affidavit, at a June in-person meeting, members of the group “talked about murdering ‘tyrants’ or ‘taking’ a sitting governor.”
The group sought to grow its numbers, contacting a Michigan-based militia group known as the Wolverine Watchmen that shared overlapping interests. Facebook removed the Wolverine Watchmen group from its platform in June when it purged a number of groups connected to the anti-government boogaloo movement.
“Today we are designating a violent US-based anti-government network as a dangerous organization and banning it from our platform,” Facebook wrote at the time, drawing a distinction between violent boogaloo groups and the “loosely-affiliated” boogaloo movement.
Facebook says it played a “proactive” role in the FBI investigation, first reaching out to law enforcement six months ago. The FBI said it became aware of the activity through social media and also relied on an informant to collect information from within the group.
“We remove content, disable accounts and immediately report to law enforcement when there is a credible threat of imminent harm to people or public safety,” a Facebook spokesperson told TechCrunch. “We proactively reached out and cooperated with the FBI early in this ongoing investigation.”
TechCrunch asked Facebook if the individuals connected with the Michigan militia through Facebook groups but the company did not provide an answer to that question. In August, Facebook identified and banned a number of other Michigan-based militarized groups from Facebook and Instagram, including the Michigan Liberty Militia and the Michigan Militia Corps, as well as another group that uses the “Wolverine” name.
Adam Fox, one of the group’s alleged organizers, live-streamed to a private Facebook group earlier this year, complaining that Michigan’s restrictions were keeping gyms closed. In the video, Fox referred to Governor Whitmer as “this tyrant bitch,” and stated, “I don’t know, boys, we gotta do something.”
In April, Trump cheered on protests against those measures in Virginia, Minnesota and Michigan, three states with Democratic governors. Many of these early events were organized on Facebook, but anti-Whitmer sentiment quickly became ubiquitous on the right across social networks and traditional media.
I love Michigan, one of the reasons we are doing such a GREAT job for them during this horrible Pandemic. Yet your Governor, Gretchen “Half” Whitmer is way in over her head, she doesn’t have a clue. Likes blaming everyone for her own ineptitude! #MAGA
— Donald J. Trump (@realDonaldTrump) March 28, 2020
By July, the group considered attacking a Michigan State Police location but landed on abducting Whitmer from her private vacation home or governor’s summer residence. The same day that decision was made, Fox wrote on a private Facebook page “We about to be busy ladies and gentlemen . . . This is where the Patriot shows up. Sacrifices his time, money, blood sweat and tears . . . it starts now so get fucking prepared!!”
The group alternated between planning to kidnap Whitmer for a private “trial” and killing her on sight. Over the course of the coming months, they conducted surveillance of Whitmer’s vacation home, collected supplies and planned detailed logistics for the kidnapping plot, including the idea of blowing up a nearby bridge to divert police attention. The group discussed those detailed plans in an encrypted chat.
According to the affidavit, “On several occasions, FOX has expressed his intention and desire to kidnap Governor Whitmer before November, 3, 2020, the date of the national election.”
The affidavit also details some of the training exercises the plot’s members engaged in with militias in Wisconsin and Michigan, where they practiced making IEDs “using black powder, balloons, a fuse, and BBs for shrapnel,” and conducted firearm and combat training drills. They shared photos and videos of their techniques through “Facebook discussions,” according to the affidavit.
Facebook’s attitude toward some forms of extremist activity changed radically in recent months. While armed political groups had long been flourishing on the platform, the company cracked down on what it calls “militarized social movements” in August. Just this week, Facebook announced both a broader ban on the pro-Trump conspiracy known as QAnon and a new policy for voter intimidation efforts that use militaristic language.
When asked if the terror plot had an impact on the company’s recent spate of surprising policy changes, Facebook did not provide a direct response. It’s also not clear if the domestic terror plot used Facebook groups to recruit and connect online or just to communicate among members who already knew each other in real life.
Researchers who study extremism have long expressed concerns that Facebook’s algorithmic recommendations can push users toward dangerous ideas — and dangerous behavior.
Militias and other kinds of domestic extremist groups have increasingly leaned on Facebook for recruitment in recent years. Once members are connected and vetted, often through public groups, they are allowed into an inner circle, sometimes in the form of a private Facebook group. The Proud Boys, a violent far-right group with ties to white supremacists, were a prominent example of this recruitment strategy.
Users can be ushered into these extremist groups by Facebook’s algorithmic suggestions, which previously appeared in a box next to a group’s activity. For Facebook pages, those suggestions still appear to the side of the main stream of content, directing users toward “related pages.”
Facebook banned the Proud Boys from its platform in late 2018. But groups interested in violence that kept a lower profile have maintained a large presence on the platform well into 2020, including a number of state “patriot” organizations and anti-government boogaloo groups that coordinate firearm and combat trainings through the platform.
In June, Facebook banned a “violent network” of boogaloo groups, but other groups remain, organizing under code words related to the boogaloo movement. One boogaloo page TechCrunch identified calling itself “definitely not boogaloo” was selling “Boogaloo Boys” patches and posting violent memes as recently as this week.
Unfortunately for researchers and reporters tracking this kind of activity, Facebook recently removed the option to see how many members are in a public group at a glance from the search page.
Facebook recently announced a plan to actually expand the reach of its public groups, surfacing them to more users. “Public Group posts may now get more distribution on and off Facebook so that more people can discover and join in on the conversation,” Facebook wrote in the announcement.
Podcast advertising growth is inhibited by three major factors:
Because of these limiting factors, it’s currently more of an art than a science to piece disparate data from multiple sources, firms, agencies and advertisers, into a somewhat conclusive argument to brands as to why they should invest in podcast advertising.
There were several resources that released updates based on what they saw in terms of consumption when COVID-19 hit. Hosting platforms, publishers and third-party tracking platforms all put out their best guesses as to what was happening. Advertisers’ own podcast listening habits had been upended due to lockdowns; they wanted to know how broader changes in listening habits were affecting their campaigns. Were downloads going up, down or staying the same? What was happening with sports podcasts, without sports?
Read part 1 of this article, Podcast advertising has a business intelligence gap, on TechCrunch.
At Right Side Up, we receive and analyze all of the available research from major publishers (Stitcher, aCast), to major platforms (Megaphone) and third-party research firms (Podtrac, IAB, Edison Research). However, no single entity encompasses the entire space or provides the kind of interactive, off-the-shelf customizable SaaS product we’d prefer, and that digitally native marketers expect. Plus, there isn’t anything published in real-time; most sources publish once or twice annually.
So what did we do? We reached out to trusted publishers and partners to gather data around shifting consumption due to COVID-19 ourselves, and determined that, though there was a drop in downloads in the short term, it was neither as precipitous nor as enduring as some had feared. This was confirmed by some early reports available, but how were we to evidence our own piecewise sample with another? Moreover, how could you invest 6-7 figures of marketing dollars if you didn’t have the firsthand intelligence we gathered and our subject matter experts on deck to make constant adjustments to your approach?
We were able to piece together trends we’re seeing that point to increased download activity in recent months that surpass February/March heights. We’ve determined that the industry is back on track for growth with a less steep, but still growing, listenership trajectory. But even though more recent reports have been published, a longitudinal, objective resource has not yet emerged to show a majority of the industry’s journey through one of the most disruptive media environments in recent history.
There is a need for a new or existing entity to create cohesive data points; a third party that collects and reports listening across all major hosts and distribution points, or “podcatchers,” as they’re colloquially called. As a small example: Wouldn’t it be nice to objectively track seasonal listening of news/talk programming and schedule media planning and flighting around that? Or to know what the demographics of that audience look like compared to other verticals?
What percentage increase in efficiency and/or volume would you gain from your marketing efforts in the channel? Would that delta be profitable against paying a nominal or ongoing licensing or research fee for most brands?
These challenges aren’t just affecting advertisers. David Cohn, VP of Sales at Megaphone, agrees that “full transparency from the listening platforms would make our jobs easier, along with everyone else’s in the industry. We’d love to know how much of an episode is listened to, whether an ad is skipped, etc. Along the same lines, having a central source for [audience] measurement would be ideal — similar to what Nielsen has been for TV.” This would also enable us to understand cross-show ad frequency, another black box for advertisers and the industry at large.
There are sizable, meaningful gaps in the knowledge collection and publication of podcast listening and engagement statistics. Coupled with still-developing advertising technology because of the distributed nature of the medium, this causes uncertainty in user consumption and ad exposure and impact. There is also a lot of misinformation and misconception about the challenges marketers face in these channels.
All of this compounds to delay ad revenue growth for creators, publishers and networks by inhibiting new and scaling advertising investment, resulting in lost opportunity among all parties invested in the channel. There’s a viable opportunity for a collective of industry professionals to collaborate on a solution for unified, free reporting, or a new business venture that collects and publishes more comprehensive data that ultimately promotes growth for podcast advertising.
Podcasts have always had challenges when it comes to the analytics behind distribution, consumption and conversion. For an industry projected to exceed $1 billion in ad spend in 2021, it’s impressive that it’s built on RSS: A stable, but decades-old technology that literally means really simple syndication. Native to the technology is a one-way data flow, which democratizes the medium from a publishing perspective and makes it easy for creators to share content, but difficult for advertisers trying to measure performance and figure out where to invest ad dollars. This is compounded by a fractured creator, server and distribution/endpoint environment unique to the medium.
Because podcasts lag other media channels in business intelligence, it’s still an underinvested channel relative to its ability to reach consumers and impact purchasing behavior.
For creators, podcasting has begun to normalize distribution analytics through a rising consolidation of hosts like Art19, Megaphone, Simplecast and influence from the IAB. For advertisers, though, consumption and conversion analytics still lag far behind. For the high-growth tech companies we work with, and as performance marketers ourselves, measuring the return on investment of our ad spend is paramount.
Because podcasts lag other media channels in business intelligence, it’s still an underinvested channel relative to its ability to reach consumers and impact purchasing behavior. This was evidenced when COVID-19 hit this year, as advertisers that were highly invested or highly interested in investing in podcast advertising asked a very basic question: “Is COVID-19, and its associated lifestyle shifts, affecting podcast listening? If so, how?”
We reached out to trusted partners to ask them for insights specific to their shows.
Nick Southwell-Keely, U.S. director of Sales & Brand Partnerships at Acast, said: “We’re seeing our highest listens ever even amid the pandemic. Across our portfolio, which includes more than 10,000 podcasts, our highest listening days in Acast history have occurred in [July].” Most partners provided similar anecdotes, but without centralized data, there was no one, singular firm to go to for an answer, nor one report to read that would cover 100% of the space. Almost more importantly, there is no third-party perspective to validate any of the anecdotal information shared with us.
Publishers, agencies and firms all scrambled to answer the question. Even still, months later, we don’t have a substantial and unifying update on exactly what, if anything, happened, or if it’s still happening, channel-wide. Rather, we’re still checking in across a wide swath of partners to identify and capitalize on microtrends. Contrast this to native digital channels like paid search and paid social, and connected, yet formerly “traditional” media (e.g., TV, CTV/OTT) that provide consolidated reports that marketers use to make decisions about their media investments.
The lasting murkiness surrounding podcast media behavior during COVID-19 is just one recent case study on the challenges of a decentralized (or nonexistent) universal research vendor/firm, and how it can affect advertisers’ bottom lines. A more common illustration of this would be an advertiser pulling out of ads, for fear of underdelivery on a flat rate unit, missing out on incremental growth because they were worried about not being able to get download reporting and getting what they paid for. It’s these kinds of basic shortcomings that the ad industry needs to account for before we can hit and exceed the ad revenue heights projected for podcasting.
Advertisers may pull out of campaigns for fear of under-delivery, missing out on incremental growth because they were worried about not getting what they paid for.
If there’s a silver lining to the uncertainty in podcast advertising metrics and intelligence, it’s that supersavvy growth marketers have embraced the nascent medium and allowed it to do what it does best: personalized endorsements that drive conversions. While increased data will increase demand and corresponding ad premiums, for now, podcast advertising “veterans” are enjoying the relatively low profile of the space.
As Ariana Martin, senior manager, Offline Growth Marketing at Babbel notes, “On the other hand, podcast marketing, through host read ads, has something personal to it, which might change over time and across different podcasts. Because of this personal element, I am not sure if podcast marketing can ever be transformed into a pure data game. Once you get past the understanding that there is limited data in podcasting, it is actually very freeing as long as you’re seeing a certain baseline of good results, [such as] sales attributed to podcast [advertising] via [survey based methodology], for example.”
So how do we grow from the industry feeling like a secret game-changing channel for a select few brands, to widespread adoption across categories and industries?
Below, we’ve laid out the challenges of nonuniversal data within the podcast space, and how that hurts advertisers, publishers, third-party research/tracking organizations, and broadly speaking, the podcast ecosystem. We’ve also outlined the steps we’re taking to make incremental solutions, and our vision for the industry moving forward.
In search of a rationale to how such a buzzworthy growth channel lags behind more established media types’ advertising revenue, many articles will point to “listener” or “download” numbers not being normalized. As far as we can tell at Right Side Up, where we power most of the scaled programs run by direct advertisers, making us a top three DR buying force in the industry, the majority of publishers have adopted the IAB Podcast Measurement Technical Guidelines Version 2.0.
This widespread adoption solved the “apples to apples” problem as it pertained to different networks/shows valuing a variable, nonstandard “download” as an underlying component to their CPM calculations. Previous to this widespread adoption, it simply wasn’t known whether a “download” from publisher X was equal to a “download” from publisher Y, making it difficult to aim for a particular CPM as a forecasting tool for performance marketing success.
However, the IAB 2.0 guidelines don’t completely solve the unique-user identification problem, as Dave Zohrob, CEO of Chartable points out. “Having some sort of anonymized user identifier to better calculate audience size would be fantastic — the IAB guidelines offer a good approximation given the data we have but [it] would be great to actually know how many listeners are behind each IP/user-agent combo.”
A second area of business intelligence gaps that many articles point to as a cause of inhibited growth is a lack of “proof of delivery.” Ad impressions are unverifiable, and the channel doesn’t have post logs, so for podcast advertisers the analogous evidence of spots running is access to “airchecks,” or audio clippings of the podcast ads themselves.
Legacy podcast advertisers remember when a full-time team of entry-level staffers would hassle networks via phone or email for airchecks, sometimes not receiving verification that the spot had run until a week or more after the fact. This delay in the ability to accurately report spend hampered fast-moving performance marketers and gave the illusion of podcasts being a slow, stiff, immovable media type.
Systematic aircheck collection has been a huge advent and allowed for an increase in confidence in the space — not only for spend verification, but also for creative compliance and optimization. Interestingly, this feature has come up almost as a byproduct of other development, as the companies who offer these services actually have different core business focuses: Magellan AI, our preferred partner, is primarily a competitive intelligence platform, but pivoted to also offer airchecking services after realizing what a pain point it was for advertisers; Veritone, an AI company that’s tied this service to its ad agency, Veritone One; and Podsights, a pixel-based attribution modeling solution.
Last, competitive intelligence and media research continue to be a challenge. Magellan AI and Podsights offer a variety of fee and free tiers and methods of reporting to show a subset of the industry’s activity. You can search a show, advertiser or category, and get a less-than-whole, but still directionally useful, picture of relevant podcast advertising activity. While not perfect, there are sufficient resources to at least see the tip of the industry iceberg as a consideration point to your business decision to enter podcasts or not.
As Sean Creeley, founder of Podsights, aptly points out: “We give all Podsights research data, analysis, posts, etc. away for free because we want to help grow the space. If [a brand], as a DIY advertiser, desired to enter podcasting, it’s a downright daunting task. Research at least lets them understand what similar companies in their space are doing.”
There is also a nontech tool that publishers would find valuable. When we asked Shira Atkins, co-founder of Wonder Media Network, how she approaches research in the space, she had a not-at-all-surprising, but very refreshing response: “To be totally honest, the ‘research’ I do is texting and calling the 3-5 really smart sales people I know and love in the space. The folks who were doing radio sales when I was still in high school, and the podcast people who recognize the messiness of it all, but have been successful at scaling campaigns that work for both the publisher and the advertiser. I wish there was a true tracker of cross-industry inventory — how much is sold versus unsold. The way I track the space writ large is by listening to a sample set of shows from top publishers to get a sense for how they’re selling and what their ads are like.”
Even though podcast advertising is no longer limited by download standardization, spend verification and competitive research, there are still hurdles that the channel has not yet overcome.
The conclusion to this article, These 3 factors are holding back podcast monetization, is available exclusively to Extra Crunch subscribers.
The Kroger Co., one of the biggest grocery chains in the Midwest is dipping its toe into on-demand delivery and the ghost kitchen craze through a partnership with an Indianapolis-based startup, ClusterTruck.
Supermarkets would seem to be logical places to site the kinds of ghost kitchens that have caught investor’s eye over the past few years and it wouldn’t be the first time that business models from startup companies bubbled up into large national brands, who are better positioned to capitalize on the trends.
Think about the various meal prep kits that launched and raised millions of dollars before being taken over or copied by big retail groceries. Meal prep kits are everywhere in the grocery store these days and supermarkets have had hot food counters dating back decades at least.
Through the partnership with ClusterTruck, Kroger is expanding on a pilot conducted last year, where the grocer set aside 1,000 square feet at participating stores in Carmel and Indianapolis, Indiana and Columbus, Ohio for ClusterTruck staff to cook meals for delivery and in-store pickup.
“Kroger remains focused on providing our customers with fresh food and experiences enabled by industry-leading insights and transformative technology,” said Dan De La Rosa, Kroger’s group vice president of fresh merchandising, in a statement. “The new on-premise kitchen, in partnership with ClusterTruck, is an innovation that streamlines ordering, preparation and delivery, supporting Kroger as we meet the sustained customer demand for quick, fresh restaurant-quality meals, especially as we navigate an unprecedented health crisis that has affected every aspect of our lives, including mealtime.”
The idea, according to Kroger, is to continue to capitalize on the shift to digital deliveries and sales. In the second quarter of the year, the company said it saw over 100% growth in its digital sales.
Ghost kitchens (or cloud kitchens) caught investors’ attention when Uber co-founder and former chief executive Travis Kalanick raised over a hundred million dollars to make the idea his next big bet after Uber. Interest and investment into the model, which sees companies offer food prep and storage spaces for would-be food truck and delivery entrepreneurs, soared. Kalanick’s CloudKitchens have gone on to raise several hundreds of millions of dollars and spawned competitors like the Pasadena, Calif.-based company Kitchen United.
Not everyone is convinced that the dark kitchen or cloud kitchen trend is all that it’s made out to be. My colleagues at TechCrunch have taken the idea to task for its reliance on some WeWork -ian assumptions around margins.
But if anything could make the model go, it’s the combination of existing infrastructure and digital efficiencies. That’s likely what Kroger is hoping to leverage.
It’s an interesting experiment at least and one worth tracking.
Bitpanda, a crypto assets platform, has closed a $52 million Series A funding round form Valar Ventures, a venture capital firm backed by Peter Thiel. Vienna-based VC Speedinvest also participated, alongside other unnamed investors. Claiming 1.3 million users, Bitpanda has previously been trading digital assets and tokenizing precious metals.
The Vienna-based company will use the cash to expand internationally. It expanded to France, Spain and Turkey in 2020 and plans to enter additional European markets this year and next. It has 300 employees.
Essentially, Bitpanda is a crypto exchange which can support other kinds of assets in a tokenized form. To date, it’s not very well known or used in the Crypto world.
What this represents is an interesting move by a crypto exchange, effectively expanding into real-world assets. At the other end of the spectrum, platforms like eToro, Robinhood and Revolut, which came from traditional assets world, and are now adding Crypto world assets. Eventually, the two will meet, in some shape or form.
As part of the investment, Valar Ventures founding partner, Andrew McCormack, will also join Bitpanda’s board. McCormack was previously with PayPal in its early years and supported Peter Thiel during its IPO and eventual sale to eBay in 2002. Valar has previously invested in European fintechs including Transferwise and the Germany-based digital bank, N26.
Even when you’re excellent at making the sale, you still need people to know you exist in the first place.
Content is excellent at making the case for your product or service, but it also excels at providing value to potential customers in a more tangential way, introducing them to your brand and building awareness and authority.
Here’s how utilizing content marketing and digital PR can make huge strides in getting your brand name out there.
When on-site content you created ranks well in the search engine results pages (SERPs), that doesn’t just mean you get more traffic (although that’s certainly a major benefit).
You’re also getting your brand name in front of searchers because you’re appearing in the results. You’re building authority because Google appears to believe you have the best answer for their query. You’re giving the searcher and answer to their question and beginning to build trust.
So how do you know which keywords/topics to target and what kind of content to create? You perform keyword research, which basically means examining what keywords people are searching for, how many people search for them per month and how hard it’ll be to rank for them.
When your goal is to build awareness, it’s important that the keywords and topics you target have high volume. In other words, they’re searched a lot. Awareness objectives mean reaching as many people as possible so more people know that your brand exists and begin to understand what it’s about.