Back to work

The holidays have officially wrapped up, as evidenced by all of my co-workers reporting back to their desks this morning.  Stories, funny and tragic were shared and now it’s back to the matter at hand, which for me is, “What is the future of payments?”

Consumer expectations around the shopping experience continue to favor more convenience and for years consumers have told us they want their payments to be “fast, secure, and convenient”.  The response was the launch of “The Pays” – ApplePay, Samsung Pay and Android Pay, along with a multitude of mobile wallets that fulfill on what consumers told us they wanted.  

The trouble is, after the initial hype and uptake my bleeding edge types, the new adoption rates have been falling.  Why?

As I see it, there is a struggle in the minds of consumer between convenience and trust.  Trust goes beyond security in that while I believe Google (for example) will hold me information secure, I don’t know that I trust it will not use my information in ways I either don’t know or don’t approve of.  

Financial institutions have built this trust up over centuries sine the days of the Medici’s.  I believe consumers feel their data is another asset, just like the car or house title, or the stock certificates.  It’s clear to me retailers are applying technology to make the shopping experience very convenient and secure.  It’s a matter of time before they build trust among their customers.  

The implications for financial institutions isn’t that payments will move to retailers – financial institutions will do this for the foreseeable future.  It’s a battle of brand influence and who is perceived to deliver value.  This is important because those who deliver value will be those who can charge a premium.

The boy in the (internet) bubble

The more time I spend researching on the internet, the more aware I’ve become of a “bubble” that surrounds my internet experience.  My searches for specific products launches a barrage of ads on a sidebar for that which I just researched and a search of a different facet of an issue returns virtually the same sources I’ve already visited.  

The area where it is most noticeable to me is when I’m researching recent news.  It appears my bookmarks to the NY Times and Washington Post influence what site I see when I search.  I feel as though I get a list of sources that are biased toward my point of view.  I want to understand and consider possibilities, not be comforted in my views.  

Don’t believe me?  Check out Wall Street Journal’s Blue Feed, Red Feed, which lets readers see exactly how divergent social media feeds have become, depending on someone’s media diet. How did we get here and what are the implications?

Before the internet, We got our news from the major television networks and national, regional, and local newspapers who employed journalists and reporters who competed on scooping each other on the facts of a matter.  The facts weren’t in question, but opinions surrounding these facts were largely limited to the editorial pages.  These editorials formed the mainstream thinking.

With the internet came tools for individuals to democratize this traditional monopoly on the facts and social media sites that built the news feed.  It quickly changed from a fairly simple way to read posts from friends to one based on an algorithm that optimized for ‘engagement.’

This shift from information to engagement is significant because it shifted the purpose of presenting content from pure relevance to keeping people happy and on that site (to present to advertisers).

This strategy by social media sites is effective. 62% of Americans with internet access consume a big portion of their news through Social Media . Facebook’s news feed is now the primary driver of traffic to news sites.

Most of the events that people read about will come through this feed. The danger is that most opinions will be shaped by a stream of information that is curated and limited by the things that will not make people uncomfortable — and certainly will not provide equal airtime to opposing viewpoints.

I don’t want the internet to console and comfort me.  I want to connect to other cultures, other viewpoints, other ways of seeing the world.  I want the sites I rely on to fulfill the promise of the internet, which is to connect with virtually anyone else on earth.   

2017’s gonna be different…let me count the ways

The end of the year most often finds me reflecting on the year that’s ending and planning for the year ahead.  I can’t help it.  It’s just the way I’m wired.  Over the past ten years or so my year end reflection considers what I’ve accomplished and how I handled (or not) situations and people that used to have me baffled, frustrated or both.

I love Producthunt.com for the work they to do track new apps.  I subscribe to their Daily Digest and one this week caught my eye because it calls out the trend of Quantified Self: the ability to collect data on yourself for the purpose of tracking aspects of your life you feel need tracking.  Believe me when I tell you that you can track almost any aspect of yourself.  A sample from the site include:

Capsule.ai – the app that helps you remember everywhere.

8,760 Hours 2.0 – How to get the most out of next year.

Forksy – А chat bot for tracking calories and eating healthy.

JoyTrack and improve your mental health.

FitmealKeep track of what you eat via Messenger.

Instant 4.0Google Analytics for your life, now with a chatbot coach.

The Gyroscope AppSee the complete story of your life.

GratefulnessLearning to be grateful, one text reminder at a time.

Exist for iOSPersonal analytics to help you understand your life.

DreampireThe first audiovisual dream-sharing network.

Releaf – a thoughtful approach to cannabis treatment.  Mindful management of your medical marijuana.

On one hand I see the attractiveness of having an app track a piece of yourself or your whole self, however it begs the question: Now that you have all that data, what are you going to do with it?  

I see the same thing in the small business realm – the tools and means are available for most small businesses to capture relevant data about their operation and their customers, but once they capture it the data sits on a hard drive with no one to review it, analyze it, think about the implications of the analysis, and take steps to improve the business as a result of the analysis.

I’m not knocking the apps above or any app that can provide a person data on an aspect of their life they find important, however if the individual isn’t prepared to review the data, analyze it objectively, develop conclusions and take steps to improve their life, maybe resolutions are the easier, quicker way to go.  For me, I’ll grab another cup of tea and finish my reflection and begin my plan for 2017.  

Happy New Year.

Anyclip anyone?

Have you heard about Anyclip?  I had not until I read a recent brief about the company.  According to their website, AnyClip is the world’s first personalized, content-driven video advertising platform.

Our team is on a bold mission to personalize video ads by blending them with relevant content. We identify consumers and their preferences on the most relevant digital media and deliver them a personalized video ad experience.

From a single video ad, the company is able to recreate anywhere from 10 to 30 new versions that stay true to the tone and messaging of the brand. Each version is catered and customized for different target audiences and publisher sites.

Companies like Anyclip will contribute to the high-growth slice of advertising.  Digital video ad revenue is forecast to rise from $8.5 billion in 2016 to $23 billion in 2021, according to BI Intelligence estimates. 

It’s not assumed that consumers will embrace video ads.  By 2020, the number of people in the US using ad blockers is expected to more than double from 44 million in 2016 to over 100 million, causing a loss of as much as $12 billion in ad revenue, according to analytics firm Optimal.

For those consumers who are open to receiving video ads, they abandon non-relevant videos at alarming rates.  According to Wistia, 3% of people abandon a 30 second video within the first second, over 50% abandon after the first second but before the wrap-up and less then 1% abandon at the video’s close.  For a video lasting between 30 seconds and a minute, the abandon rates are 5%, 56%, and 5%.  

Even if the video is seen as relevant the first time, abandon rates approach those above for repeated showings.

The amount of advertising in its various formats clamoring for our attention are fighting an uphill battle.  Relevancy, repeat impressions, timing, ad blocking and avoidance all conspire against the advertising efforts of retailers and service providers.  

Anyclip hopes to answer the relevancy question with artificial Intelligence-assisted content in a video format.

Deep Work

I devoured Cal Newport’s latest book Deep Work over the last two days.  He believes that in this age of technology knowledge workers, ones who make their living from creating value from the thoughts they think are increasingly replacing deep thinking through a problem with what he terms “shallow work”, logistical-style work that is not cognitively demanding with frequent breaks of distraction.  

I recognized myself for the untold number of times daily that I grab my phone to check my email, the stock and currency markets, and the latest news.  This led me to reflect on the following, “How do I consume the news?”  I love paper and when I can, that’s how I get the news.  Before the Internet that’s how I got all my news (except the weather).  Today I rely on newspapers and magazines for depth on the few stories I find interesting,  My go-to sites end up being the online sites of newspapers mostly – the NY Times, Wall St. Journal, Washington Post, Chicago Tribune, Minneapolis Star Tribune, Des Moines Register, and LA Times.

I really try to stay away from social media sites (more on this another day) because, frankly, I don’t trust those sites for news. The reporters at the major newspapers may have biases (after all, who doesn’t), but many of the feature stories are well researched and provide multiple perspectives on the issue, allowing me to think deeply about issues in a way I can’t with the information provided on social media sites.

For me, I need to have a perspective and think about the implications of what I’ve read to feel as though I’m performing deep work.

 

How Much is Your Data Worth?

Did you ever think of your personal data as an asset like your car or home or investments?  If not, think again.  In the data broker industry, everything from personal identifying data to social media data to health data is packaged and sold to the highest bidder for annual revenues of almost half a billion dollars per year. That would be $1.76 for every adult 18 and older in the US.  But what data is sold? Where is it collected? The following infographic from MBA@UNC looks at the business of data brokers, how they get their data, and what they sell it for.

The Business of Data Brokers Infographic brought to you by MBA@UNC

But this is not the end of the story.  Sources of highly detailed and granular information can be very valuable to companies.  

Take the digital advertising market. Google and Facebook dominate the digital advertising market by using your data to allow marketers better targeting options.  They use the personal data they acquire to enhance users’ experiences and provide more personally relevant services. In addition, online platforms allow businesses to market their products/services to selected audiences, and reduce the noise of irrelevant advertising for those audiences by enabling interest-based advertising that is based on users’ personal data and demographic characteristics.

This is a very lucrative market.  In 2014, 2013, and 2012, advertising accounted for 92 percent, 89 percent and 84 percent, respectively of Facebook’s revenues.  Advertising is also a major revenue generator for Alphabet (Google), contributing more than 90 percent of the company’s total revenue within the last decade. In 2015 advertising revenues reached nearly $76 billion in 2015, or $276.68 for every adult 18 and over in the U.S.

Firms not only pay for data-based advertising on online platforms. They are also actively expanding their user databases and analyzing qualitatively the trends on the demand side. This can lead them to increase their market shares by designing new products and services that better suit consumer preferences. 

It is difficult to quantify the added value of such processes for firms. But projections seem to indicate the increasing importance of personal data for private and public organizations. 

It’s estimated that in Europe applications built on personal data can provide quantifiable benefits of as much as €1 trillion annually by 2020, with a third of the total accruing to private and public organizations, and two thirds accruing to consumers. This means a benefit for firms of about €330 billion annually by 2020.

Personal data is the oil that lubricates the e-commerce machine.  How do you as a consumer feel about that?

Farwell, Carrie Fisher

The news today of the death of Carrie Fisher hit me particularly hard.  I think it’s because we grew up together – not that we knew each other, but to me she was THE character that defined THE movie franchise of my generation.  I went to the show a handful of times to enjoy the adventures of Luke, Hans, and Princess Leia.  5 years later the very first home video release of any Star Wars film came in May 1982 when 20th Century Fox Video released Star Wars: Episode IV A New Hope on VHS, Betamax, LaserDisc, and CED VideoDisc.

Over time not only have media formats changed, but the way we consume media continues to evolve.  According to a recent survey from Hub Research more viewers are flocking online to find their favorite shows.  The survey, which questioned 1,200 US consumers aged 16-74 about their TV consumption habits, found that online sources are becoming the go-to destination for video viewing. When asked which is the main source for watching their favorite TV show, 53% of respondents said a set-top box – the pathway for live TV, DVR, and video-on-demand (VOD). While this remained the top source for consuming TV content, it’s down from 64% in 2014. On the other hand, online sources – such as Netflix, Hulu, or Amazon Prime – grew from 31% to 40% over the same period.

Original content is paramount to online video success. Sixty-nine percent of respondents said that subscription-video-on-demand (SVOD) originals make them more likely to keep their video subscription.

Personalization and on-demand content is driving the way we purchase and view films and television, driven by our expectation of increasing convenience and time efficiency.  As Princess Leia said, “May the Force be with you.” 

A Broader Perspective

This year I have followed a path in my personal research that has broadened my perspective.  

Previously, my interest was in technology, data processing, and artificial intelligence converging to provide us tools to help us make better decisions.  In the financial service realm, this tool would take the form of a personal financial management tool to help us capture more value as we purchase products and services and keep more of what we earn as we make the purchasing decision.

This year I presented on the future of privacy and data security in financial services at the World Future Society conference.  The interest the topic generated and took me aback and I began to think about the amount of privacy and personal data sharing consumers are willing to undergo for convenience.  I also began to think about the bubble being created around each of our online experiences based on the data trails we leave online.

Finally, in October I was fortunate to attend The Futures School put on by Kedge Consulting which gave me exposure to the art of foresight.  From these experiences, I have settled on becoming a student on the future of consumption – what we consume, how we consume it, how we educate ourselves on products and services, what data we’re willing to provide in exchange for the “best” products and services for us, and the concerns we have in sharing personal data.

The conversation I hope to promote is one of trust – how we as consumers, businesses looking to build relationships with consumers, and policymakers who need to establish policy to govern the online world a resource of information, attitudes, emerging values, and implications of possible futures.

I look forward to your comments.  

Fear of financial insecurity or financial literacy – why is it such a difficult choice?

Here it comes – every April since 2004 has been designated National Financial Literacy Month by the U. S. Government.  According to surveys that track this issue, U.S. adults are at best in the middle of the pack compared to the rest of the world when it comes to understanding basic financial concepts such as compound interest.  Yet efforts to educate Americans is hard to encourage, as evidenced by financial literacy survey results.  According to the Wall St. Journal, only 57% of Americans passed a basic financial literacy test.  For the average American the fear of financial insecurity is very real and permeates their daily thinking.  It can affect their mental health and the stress  associated with financial insecurity can lead to physical health issues as well.

Financial-Literacy-1We owe it to ourselves to become educated on financial matters because we are our financial advisor.  From monthly budgeting and bill paying to retirement planning, we are our own best advocate to ensure our financial well-being both today and in the future.  It’s not that Americans don’t want to become starter about money. Most adults wish they had financial coursework. Only 5 percent say they were taught about money by a teacher, and 40 percent say they would give themselves C’s, D’s and F’s on their grasp of personal finance concepts. A full 85 percent of American parents believe that financial education courses should be a requirement for high school graduation. And 52 percent of teenagers want to learn more about money, and they’re most interested in budgeting, saving and investing.

How to get started on the road to better financial self-knowledge?

  1. List questions you have about your personal finances.  Making a list of things you’d like to know more about allow you to free your mind and get your fears on paper and out of your head.
  2. Start a financial journal.  If you don’t know where you are you’ll never get where you want to go.  Track your spending for a month.  Then total up where you spend your money and what you spend it on.  Ask yourself if your money is going to things you truly value.  Which expenses can you do without?  Which expenses can you cut?  Is there any opportunity to save a little money, even 10% of your take-home pay?
  3. List your financial goals.  Everything from this summer’s vacation to how much you want to retire with.  This list of goals is your financial roadmap.
  4. Meet with a trusted advisor to answer your questions and discuss your goals.  For most people, an hour with a personal banker at your local financial institution will be enough time to answer your questions and help you become familiar with the products and services they offer that can help you achieve your financial goals.

The Life Cycle of a Credit Card

Credit card use has a life cycle with three distinct phases, according to a Federal Reserve Bank of Boston study of Equifax data, which plotted out how credit card debt and credit limits change over time for Americans ages 20 to 80.

Youths start out with not much credit, but they quickly gobble up most of it. From there, credit card debt starts rising, but credit card limits rise even faster.

A cardholder’s late 40s see the start of phase two, where median debt begins tapering downward. Because credit limits continue rising to a peak in people’s mid-60s, credit utilization — or the percentage of available credit being used — drops from 16 percent at age 47 down to 8 percent by age 64.

The third and last phase typically begins in an Americans’ late 60s, when credit limits stop climbing and begin to descend. With debt declining as well, credit utilization falls below 5 percent around age 74.

The study, “Consumer Revolving Credit and Debt Over the Life Cycle and Business Cycle,” by Scott L. Fulford and Scott Schuh, drew from a 5 percent sample of every credit account in the United States from 1999 to 2014 from the credit reporting agency Equifax. Demographics of the sample were determined to match the overall population very closely since the vast majority of Americans over the age of 18 has a credit bureau account.