Archive for the 'Uncategorized' Category

Are Ad Sales People Obsolete? No!

Monday, February 18th, 2013

Got this question from Adotas, and answered it along with a few other folks. Here’s my answer:

“Ad sales people bring unique value from premium publishers to smart marketers that an algorithm cannot duplicate. The ad sales people know their audiences best, and can craft packages and placements that are more valuable to the marketer than a few cherry-picked impressions. Better yet, marketers can work with sales to take advantage of first party data, both implicit and explicit, that would never be available on an exchange. Algorithms are great for bottom-funnel direct response outcomes, but as long as ads are designed to affect human emotions, we’ll need humans at both publishers and agencies to craft and place them for maximum effect.”

What do you think?

Defaults matter

Wednesday, July 11th, 2012

Disclosure: Yieldex is not directly in the interest-based targeting business, although some of our customers are.  Nevertheless, the opinions below are my own, not my employer’s.

A very few people care a lot about online cookies, on both extremes: some our outraged and some think everything’s fine.  And an extremely large percentage of people don’t seem to care much one way or the other.  I don’t think anybody seriously argues with the idea of choice – if you want to make a choice about your privacy, you should be able to.  And I’d argue opting out of interest-based advertising has been made very easy – every major browser allows opt-out and/or has an incognito mode for anonymous browsing.  If you stipulate that the choice exists, then the debate becomes not about choice, but about defaults.

Defaults are really important.

Here’s a real life example from a study by Eric Johnson and Dan Goldstein: In Germany, citizens check a box to opt-in as an organ donor, but in Austria (a very similar country), they check a box to opt-out. The results? In Germany only 12% consent to organ donation, while in Austria nearly 99% do. Defaults in Austria are saving lives – that’s pretty important.

The default for the first 15 years of the Internet has been for browsers to accept third party cookies, which are often used for interest-based advertising.  Apple’s Safari browser was the first to alter that default, and now Microsoft is effectively changing it (by enabling Do Not Track) in Internet Explorer 10.  There is also legislation that has passed in the EU and pending in the US to restrict the use of cookies.  This means there is a very real possibility that the majority of browsers in use in a few years will have the default reversed.  This could have important repercussions, so let’s analyze the pros and cons of changing this default:

On the “change” side, no data can be collected.  A few people are happy, most don’t really care. Ads are less relevant, and less valuable to the advertiser.  Publishers make less money.  New legislation often has unforeseen and usually negative consequences.  And one more thing: we don’t actually know what the internet looks like without third party cookies, so we’re pretty much flying blind.

On the “leave it alone” side, non-personally-identifiable data is collected.  A few people are forced to click an extra time to opt-out.  Most people don’t really care.  Ads are more relevant. Publishers make more money. Does some of that money go into the pockets of corporate fat-cats who then buy yachts?  Yes.  But does the competitive market also provide incentive for reinvesting a good chuck of that money into more and better free content? You bet. This is not a zero-sum game. By the way, no new laws. And we already know it works.

So, let’s recap.

Incognito default:
  • Most people don’t care
  • Sites might require people to opt-in to get content
  • Less relevant ads
  • Less high-quality free content
  • Fewer yachts
  • More legislation, with possible negative consequences
Anonymous data default:
  • Most people don’t care
  • A few people have to click to opt-out
  • More relevant ads
  • More high-quality free content
  • More yachts
  • Less legislation
I believe that the potential downsides of changing these defaults far outweigh the potential danger of privacy violations. Don’t change the defaults.

Some things actually do change

Sunday, June 10th, 2012

Anyone who has met me knows that one of the most memorable things about me is that I’m 6’7″ tall.  Leading to the most common small-talk question I get: “Do you play basketball?”  For most of my life, the answer has been very simple.  No.  And if I’m feeling particularly vexed, I’ll answer “No, do you play miniature golf?”

When I was in ninth grade, I grew six inches in one year, which resulted in a tall and comically uncoordinated teenager. On the playground, team captains would always pick me first to be on their basketball team, even though I would protest that I was not good at basketball. “You’re tall – just stand there and shoot!” they would say.  Then, about halfway through the game, after I missed my 10th layup, somebody would say “Dude, you suck at basketball!” Needless to say, it didn’t take long before I swore a vow to never play basketball again.  Ever.

This was one of those rash teenage decisions that somehow stuck.  I kept that vow for nearly 30 years. I rowed crew in high school and college, then learned volleyball after I moved to California, but never played basketball again.  Until last year.

Last year, a friend organized a group of dads more as a social experiment than as a sporting event, and the activity was basketball.  I tried to bow out, but was persuaded to join by the fact that a number of the guys had never played basketball before. Much to my surprise, I found I really enjoyed the game.  I was still terrible, but playing with friends – real friends, who would keep passing to me even as I missed shot after shot – made me want to keep trying. I now play with this group as often as I can, about every other week or so, combining great exercise and bonding time. And now I don’t suck at basketball nearly as much.

This experience made me think about what other assumptions I am carrying from 30 years ago (or 20, or even 10 years ago). Ruts come in many different shapes and sizes, and sometimes can be hard to recognize, but they all benefit from regular re-visiting to see if they’re still taking you the direction you want to go.

Now when people ask me if I play basketball, I still answer “not really.”  But now instead reminding me of failure, it makes me think of spending time with friends and learning new things.  Some things actually do change.

A Sermon on Cognitive Bias

Thursday, January 26th, 2012

This is a talk I gave to a group of friends who periodically gather to present TED-style talks. I dressed in a dark suit (uncharacteristic for me) and adopted a solemn demeanor.

Welcome brothers and sisters, to the sermon of the evening. As with many sermons, let us start with a reading from scripture. In this case, my bible is a book called “Thinking Fast And Slow” by Nobel prize winner Daniel Kahneman.

A reading from the book of Daniel: (slightly edited for brevity)

An inconsistency is built into the design of our minds. We want pain to be brief and pleasure to last. But our memory has evolved to represent the most intense moment of an episode of pain or pleasure (the peak) and the feelings when the episode was at its end, but ignores the duration of pain or pleasure. This is called duration neglect, and the peak-end rule.

We designed an experiment using a mild form of torture that I will call the cold-hand situation. Participants are asked to hold their hand up to the wrist in painfully cold water until they are invited to remove it. Each participant endured two cold-hand episodes: The short episode consisted of 60 seconds of immersion in water at 14° Celsius, which is experienced as painfully cold, but not intolerable. The long episode lasted 90 seconds. Its first 60 seconds were identical to the short episode. At the end of the 60 seconds, the experimenter opened a valve that allowed slightly warmer water to flow into the tub. During the additional 30 seconds, the temperature of the water rose by roughly 1°, just enough for most subjects to detect a slight decrease in the intensity of pain.
After the second trial, the participants were given a choice about the third trial. They were told that one of their experiences would be repeated exactly, and were free to choose whether to repeat the experience they had had with their left hand or with their right hand. Of course, half the participants had the short trial with the left hand, half with the right; half had the short trial first, half began with the long, etc. This was a carefully controlled experiment.

Fully 80% of the participants who reported that their pain diminished during the final phase of the longer episode opted to repeat it, thereby declaring themselves willing to suffer 30 seconds of needless pain in the anticipated third trial. If we had asked them, “Would you prefer a 90-second immersion or only the first part of it?” they would certainly have selected the short option. We did not use these words, however, and the subjects did what came naturally: they chose to repeat the episode of which they had the less aversive memory. The subjects knew quite well which of the two exposures was longer—we asked them— but they did not use that knowledge. Rules of memory – the peak-end rule, and duration neglect – determined how much they disliked the two options, which in turn determined their choice.

Now think about this in the context of some of the decisions you have seen at work, at home, in your social life. When your friend decides to manage another product launch, they are remembering that the last product launch was successful, not the fact that they worked with jerks every day for 3 years. People endure tedium in line for hours to get a glimpse of their favorite celebrity, but only remember how exciting the experience was.

So, now that you know about the peak-end rule, and duration neglect, and I’ve given you some examples, you’ll never make these kinds of mistakes again, right? Wrong.

Here’s the real problem: not only are we blind to these cognitive biases, but we are blind to our blindness. We are confident, even when we are wrong. The only way to avoid them is to constantly question our own thinking, would would be impossibly tedious and inefficient.

But here’s the good news: it is easier, and more fun, to recognize other people’s mistakes than our own. The problem here is it is hard to talk about errors in judgement with other people. Most people would naturally respond with rationalization and defensiveness.

So here’s what I am giving you: a name for this cognitive bias, duration neglect. By naming it, we make it easier to recognize and talk about. And instead of being a mistake, it’s more like a medical condition. Gently saying you’re suffering from duration neglect is more like saying you’re suffering from a runny nose, it’s something over which you have no control, and we can work together to mitigate the effects. And hopefully make better decisions.

To come back to the book of Daniel: “My hope is that by giving you the vocabulary to discuss these and the ability to recognize and name them, we can create a community in which we can help each other avoid or at least mitigate these challenges and limit the potential damage.”

Your brain has blind spots, one of these is duration neglect, which can sometimes result in poor decision making. Avoiding these kinds of biases is almost impossible – they are hardwired into your brain. However, you can often see them in others, and with a little humor and humility, you can sometimes help them avoid bad decisions.

So here is the lesson I leave you with: to err is human. To – gently, candidly, humbly – help someone avoid an error, divine.