Google is a social media addict and it has fallen off the wagon again

Googlers just don’t know when to give up when it comes to social media as the internet giant attempts to crack the market once again with Shoelace.

It’s been almost six months since the team decided to shut-down Google+ but the search behemoth hasn’t given up just yet. We’ve lost track at how many times Google has attempted to crack this lucrative market, and the latest attempt will put much more of a hyper-local twist on the social networking euphoria.

“Shoelace is a mobile app that helps connect people with shared interests through in person activities,” the team has written in the new platforms FAQs. “It’s great for folks who have recently moved cities or who are looking to meet others who live nearby.”

Coming out of Google’s Area 120, an experimental group within the R&D business, the team will look to create a platform which will focus on uniting people in local communities and neighbourhoods depending on their interests and experiences. It is a slightly different twist to and the Google team will be hoping its fifth time lucky as it attempts to crack the code.

Starting in New York with an invite-only private test, the platform will hope to push events out to users and encourage them to create their own. This might be as simple as checking to see if anyone within a five-minute walk would want to join a kick-about in the park, or it could be to promote a comedy-night in the local pub.

On the commercial side, it makes sense. Should Google be able to scale adoption to a suitable level there will certainly be demand from advertisers, from small pubs hoping to promote bingo to larger music venues hoping to sell tickets. However, if Google can’t convince enough users to engage with the platform, what’s the point.

This is where Google has struggled before; user adoption. Google+, Google Buzz and Google Friend Connect are all examples of platforms which failed because no-one actually used them aside from Google employees. Shoelace is the latest act of defiance from a company which does not know when to quit, and it is presenting a niche idea.

Users will be able to make use of a mapping feature to browse the local area for events, yoga in the park for instance, irrelevant as to whether they are connected to an individual who is attending or not. This is where it is slightly different from other platforms, it is activity driven not connection driven. This might sound like a good USP, but it relies on the assumption users will be OK spending their time with strangers.

Each time Google has attempted to crack the social media world, there seems to be a groan from the cynics and unimaginative who have decided there are enough social media platforms already. Google does not want to give up the potential gold-mine which is social media and the fortunes of competitors demonstrate why.

Alongside Google, Facebook is recognised as a leader in the world of online advertising. The core platform, as well as Instagram and WhatsApp, are making billions for Zucks and his cronies, but they are not alone. Twitter is starting to hoover up profits while Snap is looking like a genuine business and over in China, WeChat is perhaps the most complete offering around, combining social, communication, payments and eCommerce all in one place. You can see why Google has such a fascination with social media.

Samsung dropped in the deep-end for Aussie smartphone lies

The Australian Competition and Consumer Commission has opened up legal proceedings against Samsung suggesting it made false, misleading and deceptive claims over water resistance.

The claim from Samsung is a relatively simple one; S10 devices are IP68 water resistance, meaning the devices are good for up to 1.5 metres for a period of 30 minutes. Advertising for the S10 also depict a number of different scenarios from swimming pools to the beach, suggesting the device performs effectively in different environments.

The ACCC believes Samsung did not test or know of testing to substantiate these claims, and therefore mislead Australian consumers through more than 300 advertisements.

“The ACCC alleges Samsung’s advertisements falsely and misleadingly represented Galaxy phones would be suitable for use in, or for exposure to, all types of water, including in ocean water and swimming pools, and would not be affected by such exposure to water for the life of the phone, when this was not the case,” said ACCC Chair Rod Sims.

“Samsung itself has acknowledged that water resistance is an important factor influencing Australian consumer decisions when they choose what mobile phone to purchase.

“Samsung’s advertisements, we believe, denied consumers an informed choice and gave Samsung an unfair competitive advantage. Samsung showed the Galaxy phones used in situations they shouldn’t be to attract customers.”

Samsung Pool

Interestingly enough, Samsung seems to have dug itself into a whole with this one. Despite suggesting to the consumer on billboards, social media and TV advertising, a statement on its website confirms the images are misleading:

not advised for beach or pool use.

Interestingly enough, phones which had been advertised as water resistant were sold at a higher price. This is all well and good is you fancy taking your phone into the bath but don’t plan on living any form of Australian stereotype; no beaches and no pools for Samsung users.

Unfortunately for those who believe the advertising and don’t have the eagle eyes to spot small print on websites, Samsung also denied warranty claims for phones which were damaged when used in water.

Despite the fact Samsung has clearly misled consumers about the performance of S10 devices in non-fresh water, the firm is standing by its marketing and plans to fight the case. This is a slightly tricky area however, as there is some flexibility build into advertising rules. No-one expects to get a burger which matches the images on McDonald’s adverts, but this exaggeration is accepted.

Samsung might be able to squeeze out of this situation and consumers might continue to be lied to. That said, people should be able to put their phone down for a couple of minutes if they fancy a dip.

Samsung surfboard

UK steps up its consumer protection crusade

The UK government has announced it wants to give some regulators the power to fine companies unilaterally without involving the courts.

The main beneficiary of these proposed new powers will be the Competition & Markets Authority, which exists to regulate markets. The plan was unveiled by Business Secretary Greg Clark as outgoing Prime Minister Theresa May rushes through a bunch of commitments in an apparent bid to have something to show for her time in charge. Specifically this refers to claimed ‘loyalty penalties’ in which existing customers are given insufficient information about available deals.

A key part of this initiative seems to be to give the CMA the power to interpret and enforce the law itself, without needing to trouble the judiciary. Why the matter of a few punters paying a bit more for their utilities is a matter of sufficient gravity to suspend the rule of law is not made clear, but Clark seems to want the CMA and possibly other regulators to be able to fine companies whenever they feel like it.

The Government has already committed to legislate in order to give consumer enforcers the power to impose fines on companies for breaches of consumer law by applying to the courts,” wrote Clark in his letter to the CMA. “We will follow this through and also want to go further to ensure that enforcers have the powers they need to incentivise firms to comply with the law. This will include empowering the CMA to decide itself whether consumer protection law has been broken and then impose fines for wrongdoing directly.”

“I strongly believe that consumer loyalty should not be exploited and nor should consumers have to work so hard to get a fair deal,” said Clark in the press release of the announcement. “We have already shown our willingness to take action through our energy price cap, which means every household is protected from unjustified price rises.”

The system as it stands not only lets consumers down but it also lets down the vast majority of businesses who play by the rules,” said May. “It is high time this came to an end and today we are confirming our intention to give much stronger powers to the CMA, to strengthen the sanctions available and to give customers the protection they deserve against firms who want to rip them off.”

All this agonising over the plight of hapless UK consumers isn’t limited to the government. The Advertising Standards Authority thinks UK companies shouldn’t be allowed to portray claimed ‘gender stereotypes’ in their ads because they might cause some unspecified harm. Even the prospect of harm is now sufficient justification for state censorship, it seems.

“Our evidence shows how harmful gender stereotypes in ads can contribute to inequality in society, with costs for all of us,” said ASA boss Guy Parker. “Put simply, we found that some portrayals in ads can, over time, play a part in limiting people’s potential.  It’s in the interests of women and men, our economy and society that advertisers steer clear of these outdated portrayals, and we’re pleased with how the industry has already begun to respond”.

So we’re not even talking about harm here, just ‘playing a part in limiting people’s potential’. Parker is so concerned about this blight on UK society that he has sat on his claimed evidence for two years before acting. Here are the ‘outdated portrayals’ advertisers are no longer allowed to depict.

  • An ad that depicts a man with his feet up and family members creating mess around a home while a woman is solely responsible for cleaning up the mess.
  • An ad that depicts a man or a woman failing to achieve a task specifically because of their gender e.g. a man’s inability to change nappies; a woman’s inability to park a car.
  • Where an ad features a person with a physique that does not match an ideal stereotypically associated with their gender, the ad should not imply that their physique is a significant reason for them not being successful, for example in their romantic or social lives.
  • An ad that seeks to emphasise the contrast between a boy’s stereotypical personality (e.g. daring) with a girl’s stereotypical personality (e.g. caring) needs to be handled with care.
  • An ad aimed at new mums which suggests that looking attractive or keeping a home pristine is a priority over other factors such as their emotional wellbeing.
  • An ad that belittles a man for carrying out stereotypically ‘female’ roles or tasks.

That’s all nice and clear isn’t it? Presumably it’s OK to have a bloke doing the washing up in an ad, or a woman chopping down a tree, so long as it’s not also considered to be taking the piss. It looks like ads now have to feature unattractive people being fancied by everyone, but it’s unclear whether beautiful people are allowed to be fancied too. Lastly the ASA advises that banned gender stereotypes are allowed as a means to challenge their negative effects, so the Gillette ad below is presumably OK.

At this rate it’s possible to imagine a time when no UK consumers will ever come to any harm whatsoever and everyone will be free to explore their full potential, unencumbered by dispiriting imagery. Anyone who has a problem with UK agencies unilaterally fining and censoring companies in the name of the public good clearly doesn’t understand the danger we’re in.

 

Huawei launches UK charm offensive while US President Trump is in town

Embattled Chinese vendor Huawei has picked the middle of the US President’s visit to launch an ad campaign highlighting how important it is to the UK.

The new Huawei UK corporate ad campaign is themed: ‘A Fully Connected Britain is a Fully United Britain’ (see poster below). While there’s plenty of evidence on the internet and especially social media to call that claim into question, the point Huawei is presumably trying to make is that the country would be worse off without Huawei’s help in building its networks.

Huawei says it has played a pivotal role in helping to shape the UK’s digital future since 2001. The campaign claims Huawei contributes £1.7 billion of value to the UK economy, including 26,000 jobs and £470 million of tax revenues. The two points about the importance of connectivity and Huawei’s contribution to the UK economy are quite distinct, but the purpose of this campaign seems to be to conflate them.

“We have operated in the UK since 2001 and supply all the major telecom operators with our products and solutions,” said Jerry Wang, Huawei’s UK CEO. As long-term investors we are committed to helping create jobs and opportunities, building partnerships and supporting local communities across the UK.”

It surely can’t be a coincidence that this campaign is being launched on the second day of US President Trump’s state visit to the UK. The Prez is expected to pressure UK leaders into taking a harder line against Huawei than they currently seem inclined to and Huawei is sensibly getting its retaliation in first.

Whether a bunch of posters going on about how great it is will do Huawei any good is another matter, however. While Huawei has doubtless been an important contributor to the UK economy, there are plenty of other networking vendors to choose from. More importantly, Trump knows he’s in a strong negotiating position as the UK is desperate to foster closer ties with non-European countries thanks to Brexit.

Trump has been downplaying the prospect of pressuring the UK in his public statements, but it’s hard to see how he would be happy with anything short of an outright ban of Huawei gear in the 5G network. The issue has become symbolic of the strength of the relationship between the US and its allies and UK leaders may well end up concluding the value of staying in Trump’s good books is considerably more than £1.7 billion.

Huawei UK ad small

YouTube censorship contributes to disappointing Google numbers

Google holding company Alphabet saw its share price fall by 8% after it announced disappointing Q1 numbers.

The company was fairly elusive about the reasons for a deceleration in its revenue growth on the subsequent revenue call, but many commentators picked up on comments around YouTube as significant.

“YouTube’s top priority is responsibility,” said Google CEO Sundar Pichai. “As one example, earlier this year YouTube announced changes that reduce recommendations of content that comes close to violating our guidelines or that misinforms in harmful ways.”

“…while YouTube Clicks continue to grow at a substantial pace in the first quarter, the rate of YouTube Click growth decelerated versus what was a strong Q1 last year reflecting changes that we made in early 2018, which we believe are overall additive to the user and advertiser experience,” said CFO Ruth Porat.

At least one analyst on the call expressed frustration at the lack of further clarity on the reasons why Google’s revenues aren’t what they expected them to be, but the YouTube stuff seems fairly self-explanatory. Pichai made it clear that YouTube is all about reducing perceived harmful content on the platform, while Porat referred to changes made at YouTube in early 2018.

So what were those changes? To YouTubers they were one of many wholesale restrictions on the types of content that are monetised (i.e. have ads served on them), broadly referred to as ‘adpocalypse’. Every now and then a big brand found its ads served against content it disapproved of, resulting in it pulling its ads from YouTube entirely. In the resulting commercial panic YouTube moved to demonetize broad swathes of content.

While this is an understandable immediate reaction to a clear business threat, it also undermines the central concept of YouTube, which is to provide a platform for anyone to publish video. On top of that YouTube increasingly censors its platform, including closing comments, tweaking the recommendation algorithm and sometimes even banning entire channels. These restrictions must surely have contributed to the amount of ad revenue coming in, but Google seems to have decided it’s worth it to keep the big brands sweet.

Here’s some further analysis from prominent YouTuber Tim Pool followed by an example of just the kind of indie creativity YouTube has built its success on (which, to be fair, doesn’t seem to have been demonetised this time). A move towards favouring big corporates over independent producers is a much bigger risk than you might imagine for YouTube, as Google’s disappointing Q1 numbers imply.

 

UK advertising watchdog ties itself in knots over broadband marketing

The UK Advertising Standards Authority has ruled that Vodafone’s ‘Gigafast’ service was misleading because some people might reckon that means 1 Gbps.

In reality the brand referred to a range of broadband packages, the fastest of which could still only manage an average of 900 Mbps. Virgin Media thought this was a bit cheeky and so grassed Vodafone up to the ASA, which today upheld the complaint on the grounds that, while some people wouldn’t read much into it, some punters might reckon they would be getting at least 1 Gbps when they weren’t.

“The ASA considered that many consumers would likely understand the prefix ‘Giga’ to be a hyperbolic description of speed, and would therefore generally understand ‘Gigafast’ internet was very fast broadband,” satated the ruling. “However, we considered that a significant proportion of consumers would have sufficient knowledge of broadband terminology to understand Gigafast Broadband as a reference to a service capable of providing speeds of 1 Gbps (1000 Mbps).”

Contrast this with the ASA’s previous ruling on the use of the term ‘fibre’ in broadband marketing. Its conclusion in that case was that hardly anyone would think fibre meant 100% fibre, so it’s fine to just chuck the term around even if loads of the connection was actually over copper. How come people understand giga to mean 1000 Mbps but don’t think fibre means fibre?

To be fair to the ASA there was an additional complicating factor in this case, which is that Vodafone apparently kept banging on about the £23 price point in its Gigafast marketing, when that price only gets you an average speed of 100 Mbps, with the 900 Mbps one costing £48 per month. That seems to be the thing that the ASA most objected to, implying it’s fine with a 900 Mbps average service being called gigafast despite having previously ruled that ‘up to’ claims weren’t allowed.

“Although we considered that the website made clear that Vodafone Gigafast referred to a range of packages which were not all capable of providing 1Gbps, because it implied that consumers could get a service that offered speeds of 1Gbps for £23 per month, when that was not the case, we concluded that it was likely to mislead,” concluded the ruling.

The ASA seems to be increasingly confused about broadband marketing. It seems fine with labelling a package of services, the fastest of which only averages 900 Mbps, as Gigafast and with calling a partly copper connection fibre. At the same time it objects to the use of ‘up to’ in describing broadband speeds and is touchy about ambiguous pricing claims. It needs to either be laissez faire or authoritarian, but right now it seems to jump between those positions on a case by case basis.

CityFibre calls BS on high court fibre ruling

The UK high court has rejected CityFibre’s appeal against an ASA ruling that it’s OK to market copper connections as ‘fibre’.

Back in 2017, while ruling that the use of ‘up to’ speed claims was misleading, the Advertising Standards Authority also concluded it’s fine for advertising to refer to fixed line connections that contain some copper as ‘fibre’. The rationale seemed to hinge on some research that concluded consumers aren’t very influenced by the term and that it’s just a generic indicator of superior speed anyway.

These are clearly highly questionable conclusions. Fibre obviously refers specifically to optical technology that produces far superior performance to even the most advanced copper. Furthermore if consumers don’t know that surely at least part of the reason because they’ve seen copper referred to as fibre. Lastly if it’s of so little consequence in influencing consumer buying decisions then why is it so widely used in marketing?

Fibre specialist CityFibre wasn’t happy with this woolly definition of fibre, quite reasonably concluding that it presented a direct threat to its main unique selling point, and managed to get the high court to conduct a judicial review of the ASAs conclusions on fibre marketing. Yesterday Justice Murray announced his conclusion that he had no problem with the ASA’s decision.

“I am not persuaded by the claimant that the Decision was irrational,” wrote Murray. “It is clear from the evidence that the ASA had regard to the recognised benefits of full-fibre. The differential between part-fibre and full-fibre broadband services was, in fact, reflected in the guidelines set out in the ASA’s conclusions in the Decision. The ASA’s conclusion that the technical superiority of full-fibre over part-fibre was not relevant to the question it had set itself (namely, what consumers understand by fibre claims in broadband advertisements) was not irrational.”

“We are disappointed by today’s result because we continue to believe it is not right for consumers to be misled into thinking copper-reliant connections are ‘fibre’ broadband,” said Greg Mesch, CEO of CityFibre. The decision is particularly disappointing in light of the recent progress made in other countries which have restricted misleading advertising and established clear rules to distinguish full fibre from inferior copper-based services. We are currently considering appealing the judgement and would like to thank the thousands of people that joined our campaign and signed our petition for change.

“Full fibre infrastructure is being deployed at pace in the UK and will soon be within reach of millions of consumers. We welcome the Government’s recognition of the need for clarity in broadband advertising to ensure consumers can make an informed choice. We are also encouraged by DCMS’s focus on this critical issue in its proposed Statement of Strategic Priorities. The technical benefits of full fibre infrastructure are unquestioned and we will continue to work closely with DCMS, Ofcom and the ASA to ensure consumers are able to distinguish full fibre networks from copper-based alternatives.”

“We welcome the Court’s decision which finds in the ASA’s favour on all grounds and dismisses CityFibre’s arguments,” said an ASA statement. “The review of the evidence we undertook to arrive at our position on the use of the term ‘fibre’ to describe part-fibre services in ads was based on robust methodology and open minded analysis of all of the arguments. The process we followed to test if the average consumer is being misled by the use of the term “fibre” to describe part-fibre services is the one we have used to protect UK consumers from misleading advertising for many years and we are pleased that the Court has supported our approach after a hard fought legal process.”

While we’re the first to call out Mesch and CityFibre for excessive moaning it’s hard not to feel sympathy for them in this case. While the average consumer probably won’t know much about the underlying technology, if they buy something sold as fibre, they presumably expect it to be fibre. Since it’s known that the presence of and copper significantly reduces the performance of an otherwise fibre connection, for the term to mean anything it should surely mean 100% fibre.

Europe fines Google another €1.5 billion after belated Android concession

US search giant Google has received yet another fine from the European Commission, this time for abusing its dominant position in online advertising.

Specifically this ruling refers to ads served against Google search results embedded in third party websites. The EC doesn’t like the way Google used to go about this and, having reviewed loads of historical contracts between Google and these other websites, found the following:

  • Starting in 2006, Google included exclusivity clauses in its contracts. This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages. The decision concerns publishers whose agreements with Google required such exclusivity for all their websites.
  • As of March 2009, Google gradually began replacing the exclusivity clauses with so-called “Premium Placement” clauses. These required publishers to reserve the most profitable space on their search results pages for Google’s adverts and request a minimum number of Google adverts. As a result, Google’s competitors were prevented from placing their search adverts in the most visible and clicked on parts of the websites’ search results pages.
  • As of March 2009, Google also included clauses requiring publishers to seek written approval from Google before making changes to the way in which any rival adverts were displayed. This meant that Google could control how attractive, and therefore clicked on, competing search adverts could be.

EC google ad graphic

Taken at face value this would appear to be a clear abuse of Google’s dominant position and it seems to have got off pretty lightly, since it got a much bigger fine for abusing Android’s dominant position last year, on which more below. The EC has been pretty consistent in its position on dominant US tech players deliberately seeking to restrict competition, just ask Microsoft and Intel, so none of this can have come as a surprise to Google.

“Today the Commission has fined Google €1.49 billion for illegal misuse of its dominant position in the market for the brokering of online search adverts,” said Commissioner in charge of competition policy Margrethe Vestager. “Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites. This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate – and consumers the benefits of competition.”

As the quote indicates, Google isn’t doing this anymore, but only packed it in once the EC flagged it up in 2016, so that’s still a decade of naughtiness. For some reason Google also chose today to show some belated contrition for one of the things it got fined for last year: forcing Android OEMs to preinstall Google Search and the Chrome browser.

In a blog post amusingly entitled Supporting choice and competition in Europe, Google SVP of Global Affairs Kent Walker started by stressing there’s nothing he loves more than healthy, thriving markets. Having said that he went on to make it clear that its most recent move to improve competition was taken solely to get the EC off its back.

“After the Commission’s July 2018 decision, we changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search,” wrote Walker. “In doing so, we maintained the freedom for phone makers to install any alternative app alongside a Google app.

“Now we’ll also do more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones. This will involve asking users of existing and new Android devices in Europe which browser and search apps they would like to use.”

How touching. Presumably today was some kind of deadline for Google to comply or else. The matter of browser choice is highly reminiscent of Europe’s case against Microsoft for bundling Internet Explorer with Windows. The prime beneficiary of that was, you guessed it, Google, which now accounts for around two thirds of European desktop browser share (see chart), achieved through merit rather than cheating. How sad then, so see history repeating itself on mobile.

So that takes the total amount Europe has fined Google to €8.25 billion. In response to a question after her announcement (below) Vestager revealed the EC has some kind of fine ceiling of 10% of annual revenues so, since Google brought in around €120 billion last year that still leaves plenty of room for further fines if Google keeps getting funny ideas. Incidentally she also revealed that the fines get distributed to member countries, not trousered by the EC itself, which is reassuring.

Source: StatCounter Global Stats – Browser Market Share

Nick Clegg defends Facebook’s business model from EU’s privacy regulation

Facebook’s head of PR reportedly had a series of meetings with EU and UK officials aiming to safeguard the social network’s business model heavily relying on targeted advertising.

Sir Nick Clegg, the former UK Deputy Prime Minister, now Facebook’s VP for Global Affairs and Communications, met three EU commissioners during the World Economic Forum in Davos and shortly after the event in Brussels, according to a report by the Telegraph. These commissioners’ portfolios include Digital Single Market (Andrus Ansip), Justice, Consumers and Gender Equality (Věra Jourová), and Research, Science and Innovation (Carlos Moedas). Clegg’s mission, according to the Telegraph report, was to present Facebook’s case to defend its ads-based business model in the face of new EU legislation related to consumer privacy.

According to a meeting minutes from the Ansip meeting, seen by the Telegraph, “Nick Clegg stated as main Facebook’s concern the fact that the said rules are considered to call into question the Facebook business model, which should not be ‘outlawed’ (e.g. Facebook would like to measure the effectiveness of its ads, which requires data processing). He stated that the General Data Protection Regulation is more flexible (by providing more grounds for processing).”

In response, Ansip defended the proposed ePrivacy Regulation as a complement to GDPR and it is primarily about protecting the confidentiality of consumers’ communications. In addition, the ePrivacy Regulation will be more up to date and will provide more clarity and certainty, compared with the current ePrivacy Directive, which originated in 2002 and last updated in 2009. Member states could interprete and implement the current Directive more restrictively, Ansip warned.

Facebook’s current security setup makes it possible to access users’ communication and able to target them with advertisements based on the communications. Under the proposed Regulation, platforms like Facebook need to get explicit consent from account holders to access the content of their communications, for either advertisement serving, or effectiveness measuring.

There are two issues with Facebook’s case. The first one is, as Ansip put it, companies like Facebook would still be able to monetise data after obtaining the consent of users. They just need to do it in a way more respectful of users’ privacy, which 92% of EU consumers think important, according to the findings of Eurobarometer, a bi-annual EU wide survey.

Another is Facebook’s own strategy announced by Zuckerberg recently. The new plan will make it impossible for Facebook to read users’ private communications with its end-to-end WhatsApp-like encryption. This means, even if consumers are asked and do grant consent, Facebook in the future will not be able to access the content for targeted advertising. Zuckerberg repeatedly talked about trade-offs in his message. This would be one of them.

On the other hand, last November the EU member states’ telecom ministers agreed to delay the vote on ePrivacy Regulations, which means it will be highly unlikely that the bill will be passed and come into effect before the next European Parliament election in May.

The office of Jeremy Wright, the UK’s Secretary of State for Digital, Culture, Media and Sport, did not release much detail related to the meeting with Clegg, other than claiming “We are at a crucial stage in the formulation of our internet safety strategy and as a result we are engaging with many stakeholders to discuss issues pertinent to the policy. This includes discussions with social media companies such as Facebook. It is in these crucial times that ministers, officials and external parties need space in which to develop their thinking and explore different options in a free and frank manner.”

The Telegraph believed Clegg’s objective was to minimise Facebook’s exposure to risks from the impending government proposals that could “place social media firms under a statutory duty of care, which could see them fined or prosecuted” if they fail to protect users, especially children, from online harms.

It is also highly conceivable that the meeting with the UK officials was related to influence post-Brexit regulatory setup in the country, when it will not longer be governed by EU laws. Facebook may want to have its voice heard before the UK starts to make its own privacy and online regulations.

Telcos need to seriously think about how to sell to consumers

Following the news that Sky has been slapped on the wrist for misleading claims during a 2018 advertising campaign, marketers need to have a long and hard think about whether they are doing a good job.

The most recent assault against the marketing strategies of the telcos comes from the Advertising Standards Authority (ASA), with the group ruling Sky’s push to suggest customers would be able to receive stronger wifi signal throughout the house because of its routers, was misleading. The campaign features characters from ‘The Incredibles’ franchise, running across TV and through mainstream press.

The campaign was originally challenged by BT and Virgin Media, with both suggesting the claims were misleading as there was no way to substantiate the assertion. And the ASA agreed. In some cases, Sky’s router might be able to improve wifi signal throughout the home, but due to the breadth of different homes, each with their own structural design, it is an impossible claim to justify. The ad was far too generalist and deemed misleading.

“Unfortunately for Sky, its promise of a strong wifi signal all over your house has been shown to be misleading, and while it is by no means unique in falling foul of the ASA, it will be stung by this ruling the regulator has upheld against it,” said Dani Warner of uSwitch.com.

“Broadband providers are no longer allowed to make such exaggerated claims about potential speeds following the ASA’s major clampdown at the end of 2017, so they have had to become more imaginative in how they stand out from the pack with their advertising.”

This is an area the ASA has been quite hot on in recent years; telcos should not be allowed to make such generalist claims, intentionally misleading customers over performance. Especially in an age where advertising can be personalised on such a dramatic scale, at best it is lazy and incompetent, at worst it is directly and intentionally lying.

What is worth noting is that Sky can potentially boost signal throughout the home, though additional equipment would be required to make this possible. This is not mentioned during the advertising campaign however. The ASA ruled that some of the claims made in the ad could be substantiated, however it is no longer allowed to run in its current form.

Sky incredibles

This is of course not the only area where telcos are being challenged in the world of advertising. ‘Fibre’ claims are another, the ‘up-to’ metric has been removed and the telcos are being forced to detail speeds during peak times. Another factor to consider is the up-coming 5G service. Do any of the telcos have a clue how they are going to sell the service to consumers, as we do not believe the idea of ‘bigger, faster, meaner’ will not work, at least for the first few years.

Starting with the ‘up to’ claim, this is one which plagued the consumer for years. Masses of customers were duped into buying promised services which could only be delivered to a fraction. Thankfully, the ASA changed rules, forcing the telcos to be more accurate in how they communicate with potential customers.

Not only did this ruling mean the ‘up to’ claim had to be avoided, but it also forced the telcos to claim speeds during peak times. This also more readily informs the consumer of services which they are likely to experience, as opposed to the dreamland which most telcos seem to think we live in.

The term ‘fibre’ and ‘full-fibre’ has also been challenged, though telcos can still get away with some nefarious messaging. Irrelevant of whether there is fibre in the connection, and there generally always will be at some point, the ‘last mile’ is where the difference is made to broadband speeds. If it is copper, you will never get the same experience as fibre, however, telcos are still able to mention fibre in advertising.

The ASA has done some work to clear this up, in all fairness, though we still feel there is opportunity to abuse the trust of the consumer. And the telcos have shown that when there is an opportunity to be (1) at best lazy or (2) at worst directly misleading, they will take it.

The final area which we want to discuss takes us into the world of mobile and 5G. The telcos have always leant on the idea of ‘faster, bigger, meaner’ to sell new services to customers, or lure subscriptions away from competitors, but 5G presents a conundrum for the marketers; do consumer need faster speeds right now?

EE

4G delivers a good experience to most, and if it doesn’t, there generally is a good reason for this (i.e. congestion, interference, remote location, indoor etc.). 4G will continue to improve both in terms of speed and coverage over the next few years, and as it stands, there are few (if any) services which supersede what 4G is or will be capable of.

Another factor to consider is the price. Many consumers will want the fastest available, even if they don’t need it, but the premium placed on 5G contracts might be a stumbling block. EE has already hinted 5G will be more expensive than 4G, though details have not been released yet. In the handsets segment, consumers have shown they are more cash conscious, especially when there is little to gain through upgrades, and this is heading across to the tariffs space as purchasing savviness increases.

“I don’t think there are many great telco brands out there most consumers see them more as a utility,” said Ed Barton, Chief Analyst at Ovum. “T-Mobile USA is an exception with their customer champion, ‘un-carrier’ positioning but there no branding even approaching the effectiveness of, say, Apple’s.

“If 5G is sold only as a faster G, sales will be slow and it’s up to the entire ecosystem to create the apps, services and use cases which can only exist because of 5G network capabilities. These will probably rely on some combination of edge computing, high volume data transfer, low latency and maybe network slicing. An early use case is domestic broadband however as 5G networks evolve the use cases should proliferate relatively quickly.”

If consumers are becoming more cash conscious and have perfectly agreeable speeds on their 4G subscriptions, the old telco marketing playbook might have to be torn-up. The big question is whether the ideas are there to make the 5G dream work. Differentiation is key, but few telcos have shown any genuinely interesting ideas to differentiate.

Priority

One excellent example is over at O2 with its Priority initiative. Through partnerships with different brands, restaurants, gig venues and companies, customers are given freebies every week (a Nero coffee on a Tuesday) or special discounts periodically (£199 trip to Budapest). It leverages O2’s assets, the subscription base, allowing O2 to add value to both sides of the equation without monstrous expense. This has been a less prominent aspect of O2 advertising in recent years; perhaps the team is missing a trick.

Another, less successful, example of differentiation is getting involved with the content game. BT has been pursuing this avenue for years, though this expensive bet has seemingly been nothing more than a failure, with former CEO Gavin Patterson heading towards the door as a result.

This is not to say content cannot be a differentiator however. The content aggregator business model is one which leverages the exclusive relationship telcos have with their subscribers, streaming-lining the fragmented content landscape into a single window. Again, it uses assets which the telco already has, adding value to both sides of the equation. It also allows the telcos to get involved in the burgeoning content world without having to adopt a risky business model (content ownership) to challenge the existing and dominant members of the ecosystem.

In France, Orange is a making a place for ownership of the customers ‘smart ecosystem’, offering new services such as storage and security, while the same play is being made by Telefonica in South America through Aura. These offerings will offer differentiation, as well as an opportunity to make more revenues through third-party services. It’s a tough segment, as it will put them head-to-head with the likes of Google and Amazon’s digital assistants, but it is a differentiator.

By having these initiatives in place, marketers have something unique to go to market with, enticing consumers with promises which are genuinely different.

Three is a company which is taking a slightly different approach, hitting the consumers appetite for more data as opposed to speeds. Here, the team is leaning on ‘binge-watching’ trends, offering huge data bundles, but you have to wonder whether this is sustainable in the long-run when it comes to profitability and customer upgrades. There is only so long a company can persist in the ‘race to the bottom’.

Go Binge

“There are too many claims in an attempt to stand out in a crowded market,” said Paolo Pescatore, Tech, Media & Telco Analyst at PP Foresight.

“This is not the first time and wont be the last. It will only proliferate with the rollout of fibre broadband and 5G services. Consumers are happy to pay for the service they’ve signed up for, not to be misled. In essence, telcos are struggling to differentiate beyond connectivity. There’s a role for a provider to be novel and provide users with value through additional services and features.”

With the ASA chipping away at what marketers can and cannot say, as well as the traditional playbook becoming dated and irrelevant, telcos need to take a new approach to selling services to the consumer. The winners of tomorrow will not necessarily be the ones with the best network, O2 currently sits at the bottom of the rankings but has the largest market share in the UK, but the telco who can more effectively communicate with consumers.

5G offers an opportunity for telcos to think differently, as does the emergence of the smart ecosystem. Other product innovations, such as AI-driven routers, which can intelligently manage bandwidth allocation in the home, could be used as a differentiator, but it won’t be long before these become commonplace.

At the moment, all the bold claims being made by telcos, each competing the game of one-up-manship, are merging into white noise. The telcos have lost the trust of the consumer, many of which has cottoned onto the claims being nothing more than chest-beating. The telcos need to get smarter, and it will be interesting to see whether there are any unique approaches to capture the imagination of today’s cash conscious, technologically aware and savvy consumer.

Failure to do so, and the telcos might as well start calling themselves utilities.