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Walmart Buys a Jet When Jet.com launched, some tech industry observers suggested that this was founder Marc Lore’s attempt to get revenge for the hardball tactics Amazon had employed when they had purchased his earlier e-commerce company Quidsi. If so, then Mr. Lore is playing a very long game. This week Jet.com announced that it was being purchased by Walmart for approximately $3 billion. The deal makes sense for Walmart because Walmart gains Mr. Lore and his technology, improving their chances to fight Amazon. The deal makes sense for Jet because they gain the economies of scale that come with being Walmart. So their 2020 goal for profitability might move forward a bit. But the real benefit from Marc Lore’s perspective may be that he unites the two biggest threats to Amazon’s dominance. Assuming he really is motivated by revenge. Application to Marketing: Consumer packaged goods companies will benefit from the competition between Amazon and Jet (now powered by Walmart.) True, both entities are margin-squeezers. But Amazon may need to respond to an invigorated Jet by being more responsive to retail partners. Normally, I like to cheer for the underdog. But these two entities are both overdogs. A smart consumer packaged goods company will act like Gamal Nasser of Egypt and play these two antagonists against one another. (Egypt under Nasser manipulated both the USSR and the United States by encouraging them to compete for his loyalty.) Next Steps: If I were a CPG brand I would have one team renegotiate deals with both companies. Read More Ad Injection Sucks Recently, Google published a post on their Security Blog about the Ad Injection economy (link below.) Ad Injectors are little bits of malware that users download accidentally. The Injectors serve ads on web pages without paying the publishers of those pages. Frequently, these ad injectors also steal private information and track user behavior online. This is software that steals your privacy, pushes more ads in your face and steals money from the publishers who actually produce the content. In the entire digital ad ecosystem, there is no lower life form than the ad injector. They are scum. Application to Marketing: Are you or your clients doing business with scum? Actually, you might not even know if you are. Advertising inventory gets sold and resold so many times and ad serving frequently has multiple redirects that there is little transparency for advertisers on where and when their ads are placed. Because of the price-sensitivity built into programmatic trading, you might actually be selecting for the worst kind of partners. Ad injectors are going to be cheap (because they don’t actually have the overhead of content production.) But what kind of message does it send to consumers when your ads are accompanied by a message that they may contain malware? Next Steps: Superfish, Jollywallet and all of their affiliates. If they are your partners, you need to find better friends. Read More Mission-Critical and the Cloud At 2:30 on Monday morning, there was a power failure at Delta Airlines headquarters in Atlanta. Two days later, the company was still canceling hundreds of flights as they struggled to get their systems back online. To anyone with an even rudimentary understanding of cloud computing, this story is bizarre. Why would a major US corporation set up their mission-critical systems so that a power failure at a single location could crash the systems? Most of the web apps we build wouldn’t crash unless multiple data centers across the country went down simultaneously. The only explanation is that Delta’s mission-critical systems were housed within servers they kept at their corporate headquarters with no redundancy. Why would anyone make such a strange decision? Well, there are still a cohort of old-school CIO’s who don’t trust the cloud. They worry about security, even though there is no evidence that cloud-computing is less secure. And they just like to physically control their own servers. Application to Marketing: Old-school CIO’s can be intimidating. They’ve been around for a long time and they are experienced at dismissing new-fangled technologies that might threaten their peace of mind (and the fiefdoms they’ve created.) If you are dealing with technical staff that insist that certain functions are “too important” to be housed on the cloud, do not allow yourself to be intimidated. Delta has lost millions of dollars because someone at headquarters likes to have his own server room. Don’t become the next cautionary tale. Next Steps: Ensure you at least have cloud backup for all mission-critical systems. Read More Realistic AI Recently, the White House submitted a request for information about “Preparing for the Future of Artificial Intelligence.” Given the level of hysteria often attached to any discussion of artificial intelligence, I’m sure they received many fanciful replies from the tinfoil-hat crowd. However, the reply from IBM (link below) is notable for its intelligence, prudence and modesty. IBM begins by rejecting the notion of “artificial intelligence” in favor of their own preferred descriptors “augmented intelligence” and “cognitive computing.” This is notable since IBM is a leader (some might say the leader) in AI research and application. They have a much better awareness of the capabilities and limitations of current technology. They understand we are nowhere close to producing systems that can mimic, let alone replace human intelligence. As a result, their focus is practical; they express a desire for better access to large, unbiased data sets, particularly in the medical field. They hope to facilitate “a fact-based dialogue on the capabilities and limitations of AI technologies.” Amen. Application to Marketing: In the past, I have taken IBM to task for some of their marketing materials which I believe promote expensive, new technologies when inexpensive old technologies would suffice. However, if you require a partner to help with image, speech, or pattern recognition, natural language processing, or machine learning, I believe IBM is the best partner right now. And if you have allowed yourself to get caught up in some of the AI hype (superintelligence, singularity, etc.), it is worth studying this document so you can understand what scientists on the absolute bleeding edge have to say about these technologies. Next Steps: If you absolutely, positively need cutting edge technology, talk to IBM. If you don’t, save your money. Read More

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