The three unknowns of the modern advertising age

"AS WELL AS a louche mystique, there has always been something murky about advertising. From P.T. Barnum's "Mammoth Fat Infant: only three years old and weighing 196 POUNDS" to three-martini lunches at the dawn of the TV era, it was never quite clear whether the adman was artist, scientist, strong-livered schmoozer or con man. For all the wit and wiliness on Madison Avenue, the economic cycle had a much more direct impact on ad spending. And it was a wonder companies embraced the medium at all. As far back as 1904, the Atlantic, an American magazine, wrote that an estimated 75% of advertisements did not pay; yet the other 25% paid so well "there is scarcely a businessman who is prepared to stand idly by."

In the digital age the guesswork should have become a thing of the past. User IDs, device-tracking technology and electronic marketplaces handling billions of transactions a day have turned the targeting of individuals into a drone strike rather than a hit-or-miss barrage. Costs have come down, so millions of online businesses, instead of renting premises, have turned digital ads into the Yellow Pages on steroids. People are spending more time glued to screens, giving advertisers more scope to seduce them. The result has been stunning growth. MoffettNathanson, a research firm, says digital ads have grown from 27% of all dollars spent on advertising in America in 2015 to 52% (TV, the second-biggest category, has dropped from 42% to 33%). Until recently, the main question asked on Wall Street was not whether the feast would continue but how soon the digital share would reach 80%?

For the first time, the past week has dented those convictions. On October 21st Snap, a photo-sharing platform, revealed that it had been caught flat-footed in the third quarter by new privacy measures introduced by Apple to enable users of iPhones and its other devices to stop advertisers tracking them across the web. Though revenues of $1.07bn were only just shy of expectations, it lost a quarter of its value in a day. Facebook, a social-media giant, recorded $28.3bn in ad revenues, a third higher than the prior year, but that was lower than expected. It is having to increase spending next year partly to improve its targeting and measurement techniques to counteract Apple's restrictions. Alphabet, which owns Google, bucked the trend, recording its highest sales growth in more than a decade in the third quarter; its search engine, source of almost all of its ad revenue, seems immune to Apple's changes.

For all of them, the underlying digital-ad market still looked vibrant. But their divergent performances raise three big questions about the future of advertising. For all its aura of precision, it's an industry still full of unknowns.

The first one concerns the correlation between advertising and economic growth. Sir Martin Sorrell, chairman of S4 Capital, an advertising agency, notes that digital ads easily outperformed their analogue counterparts during the pandemic, indicating a break in the age-old link with GDP because of a structural shift as the economy moves online. But whether that shift continues is a matter of faith, not fact. Economic factors may already be re-emerging. Both Facebook and Snap said tangled supply chains would diminish the incentives to advertise in the lucrative holiday period because of fewer goods on shelves. Moreover, even if the link with GDP has frayed, online ads appear to correlate closely with growth in e-commerce, which Facebook says is slowing as the pandemic fades. In America, there is growing evidence that consumer confidence is on the wane, which could affect one of the biggest factors believed to be fuelling the ad boom--the explosion of new businesses, many of them small-time online retailers.

The second unknown is the extent to which consumers will continue to tolerate advertisers stalking them. According to Flurry, an app-analytics firm, only about one in five app users have opted in to being tracked since Apple's iOS 14.5 launch in April gave them the option to choose. That suggests a keen embrace of privacy, which vindicates Apple's hunch. That said, Apple may be benefiting at its rivals' expense. The opt-in only applies to third-party apps. Meanwhile Apple's advertising business is booming, especially in relation to searches on its App Store, according to Bernstein, an investment firm. Moreover, its privacy push is provoking rivals, such as Facebook, to make counter-moves into virtual-reality headsets and 3D digital worlds it calls the metaverse, in order to create a parallel universe to that dominated by Apple. Bernstein's Mark Shmulik calls such domains "walled gardens". If consumers discover they are just a way of better bombarding them with ads, the gardens will soon feel more like prisons.

The third unknown is the firms paying for all the ads. The tech giants provide little detail about where they come from, what size of firms they are, and on what they are spending their money. The result is a lot of frustrating sleuthing and guesswork. Brian Wieser of GroupM, the world's largest media buyer, estimates from Facebook's billing-address data that Chinese manufacturers selling abroad account for approaching $10bn of advertising on the social network this year.

 

He points to third-party data suggesting that more than 40% of Amazon's marketplace sellers are from China, but Amazon does not disclose such information.

 

There is scant reporting quantifying the number of small versus large advertisers, and whether they are paying for brand-related advertising or for direct sales. The industry remains as murky as ever.

From grey-flannel suits to just flannel

The platforms promise precision to their advertisers based on consumers' data. But they fail to reveal anything like enough information to enable outsiders to gauge the robustness of the digital-ad craze. The result, shared by many in the industry, is blithe optimism that the market will continue to grow like Topsy. The past few days have provided a welcome opportunity to re-examine that thought." [1]

·  ·  ·  1. "Mad Men v machines; Schumpeter." The Economist, 30 Oct. 2021, p. 72(US).

 

Nuotolinis darbas užvaldo turtingąjį pasaulį. Vis daugiau tyrimų rodo, kodėl

"2020 M. VASARIO MĖN. amerikiečiai namuose praleido vidutiniškai 5% savo darbo valandų. Gegužės mėn., plintant karantinams, ši dalis išaugo iki 60% – tai tendencija, kuri atsispindėjo ir kitose šalyse. Daugelis žmonių, galbūt, manydami, kad darbas iš namų iš tikrųjų reiškė išsisukinėjimą nuo darbo, spėliojo, kad biuro gyvenimas greitai grįš į priešpandeminę normą. Teigti, kad taip nepasirodė, būtų labai nuvertinta.

 

    Dauguma biuro darbuotojų išlieka „pirmieji nuotoliniu būdu“ ir didžiąją dalį savo apmokamo laiko praleidžia ne biure. Nors didelė dalis žmonių neturi kito pasirinkimo, kaip tik fiziškai eiti į darbą, 40 % visų Amerikos darbo valandų vis dar praleidžiama namuose. Spalio viduryje Amerikos biurai buvo užpildyti kiek daugiau, nei trečdaliu, rodo saugos įmonės „Kastle Systems“ duomenys. Nuo Turino iki Tokijo komercinės miestų zonos išlieka daug tylesnės, palyginti su normomis prieš koronavirusą, nei gyvenamosios zonos. Ekonomistai bando išsiaiškinti, ką visa tai reiškia produktyvumui.

 

    Suvokimas apie biuro darbo ateitį keičiasi. Praėjusiais metais Didžiosios Britanijos vyriausybės ministrai paragino darbuotojus grįžti į biurą; dabar ministrai tylesni. Volstryto bankai, dažnai entuziastingiausi darbo biure šalininkai, sušvelnina retoriką. Remiantis trijų ekonomistų, Jose Maria Barrero, Nicko Bloomo ir Steveno Daviso, kasmėnesine apklausa, viršininkai tikisi, kad pasaulyje po pandemijos vidutiniškai 1,3 dienos per savaitę bus dirbama namuose – ketvirtadaliu daugiau, nei tikėjosi paklausti apie tą patį sausio mėnesį. Netgi, laikui bėgant, tai gali pasirodyti nepakankamai įvertinta. 

 

Darbuotojai tikisi, kad prie virtuvės stalo praleis beveik pusę savo darbo valandų.

 

    Keletas veiksnių paaiškina, kodėl darbas nuotoliniu būdu išlieka dominuojantis. Daugelis žmonių vis dar bijo užsikrėsti COVID-19, todėl nori vengti viešųjų erdvių. Kita galimybė yra ta, kad darbuotojai turi didesnę derybinę galią.

 

    Pasaulyje, kuriame trūksta darbo jėgos, reikia drąsaus viršininko, kuris priverstų žmones prakaituoti, važinėjant į darbą ir atgal penkias dienas per savaitę (darbuotojai mano, kad priverstinis buvimas biure visą darbo dieną prilygsta 5 % atlyginimo sumažinimui). Tačiau yra ir daugiau intriguojančių galimybių. Darbas, kuris daugiausia atliekamas nuotoliniu būdu, gali būti efektyvesnis, palyginti su modeliu, kuris naudojamas pirmiausia biure.

 

    Praėjusiais metais buvo atliktas darbo namuose ekonomikos tyrimų sprogimas. Ne visi straipsniai randa, kad nuotolinis darbas teigiamai veikia produktyvumą. Neseniai paskelbtame Michaelio Gibbso iš Čikagos universiteto ir jo kolegų dokumentas tiria Azijos IT paslaugų įmonę. Praėjusiais metais įmonei perėjus dirbti nuotoliniu būdu, darbo valandų vidurkis padidėjo, tačiau produkcija šiek tiek sumažėjo. Dalį produktyvumo mažėjimo autoriai priskiria „didesnėms komunikacijos ir koordinavimo išlaidoms“. Pavyzdžiui, vadovams, kurie kažkada buvo įkišę galvą pro kažkieno duris, galėjo būti sunkiau tiksliai pasakyti, ko jiems reikia, kai visi dirbo nuotoliniu būdu.

 

    Tačiau dauguma tyrimų randa daugiau teigiamų rezultatų. J. Barrero ir jo kolegų apklausos apima daugybę įmonių, o ne vieną. Tik 15% namuose dirbančių žmonių mano, kad tokiu būdu jie dirba mažiau efektyviai, nei dirbo verslo patalpose prieš pandemiją, teigiama balandį paskelbtame dokumente.

 

    Kanados statistikos departamento tą mėnesį paskelbtame tyrime nustatyta, kad daugiau nei pusė „naujų“ nuotoliniu būdu dirbančių darbuotojų (t.y. tų, kurie prieš pandemiją paprastai dirbo ne namuose) pranešė, kad per valandą atlieka maždaug tiek pat darbo, kaip ir anksčiau, o trečdalis pasakė, kad padaro daugiau.

 

    Ekonomistai turi mažiau supratimo, kodėl nuotoliniai darbuotojai gali būti produktyvesni. Viena iš galimybių yra ta, kad jie gali lengviau susikoncentruoti ties užduotimis, nei biure, kur kyla pagunda plepėti su bendradarbiu. Be to, kelionė į darbą ir atgal vargina. Kitas veiksnys yra susijęs su technologijomis. Nuotoliniai darbuotojai, esant būtinybei, labiau pasikliauja tokiais įrankiais, kaip „Slack“ ir „Microsoft Teams“. Tai gali leisti viršininkams veiksmingiau koordinuoti komandas, jei biure alternatyva būtų nurodymai iš lūpų į lūpas, kuriuos būtų galima lengvai pamiršti arba neteisingai interpretuoti. Patentinių paraiškų, skirtų darbo iš namų technologijoms, skaičius sparčiai auga, o Amerikos privataus sektoriaus investicijos į IT kasmet auga 14 proc.

 

    Vis dėlto nuotolinio darbo populiarumas kelia galvosūkį. Jei tai taip nuostabu, kodėl yra mažai įrodymų, kad pereinama prie „visiškai nuotolinio“ darbo, kai įmonės apskritai uždaro savo biurus? Tai padaryti nusprendusių įmonių yra nedidelė mažuma. Žmonių, persikeliančių į tokius miestus kaip Talsa, Oklahomoje, kuri save laiko pasauline nuotolinio darbo sostine, skaičius išlieka mažas.

 

    Galbūt tai tik laiko klausimas, kada visi, kurie gali, visiškai nutols. Tačiau naujame „Nature Human Behaviour“ tyrime teigiama, kad įmonės turi rimtų priežasčių išlaikyti savo biurų pastatus, net jei jie naudojami rečiau. Straipsnyje nagrinėjamas 60 000 „Microsoft“ darbuotojų bendravimas (įskaitant momentinius pranešimus ir vaizdo skambučius) 2019–2020 m. Nustatyta, kad darbas nuotoliniu būdu daro žmonių bendradarbiavimo praktiką „statiškesnę ir silpnesnę“. Žmonės daugiau bendrauja su artimiausiais kontaktais, bet mažiau su marginalesniais savo tinklų nariais, kurie gali pasiūlyti jiems naujų perspektyvų ir idėjų. Tai, tikriausiai, kenkia naujovėms. Išvada yra tokia, kad visiškai nutolusioms komandoms trumpuoju laikotarpiu gali pasisekti gana gerai, bet galiausiai nukentės, nes naujovės išnyks.

 

    Koks būdas užsidirbti pragyvenimui

 

    Kaip tada geriausia bendradarbiauti nuotoliniame pasaulyje? Daugelis įmonių mano, kad užtenka visiems ateiti į biurą keletą dienų per savaitę, nes tai privers žmones susidurti ir kalbėti apie idėjas. Kiti, paremti tvirtesniais įrodymais, teigia, kad vadovai turi būti sąmoningesni ir suburti žmones, turėdami aiškų tikslą aptarti naujas idėjas. Firmos turės eksperimentuoti, kol pripras prie naujo darbo būdo, o tikslus išdėstymas gali skirtis, priklausomai nuo darbo pobūdžio. Tačiau atrodo aišku, kad biurai po pandemijos vis tiek turės savo vaidmenį, net jei jie dažniausiai bus tušti.“ [1]

1. "The pyjama revolution; Free exchange." The Economist, 30 Oct. 2021, p. 78(US).

Remote-first work is taking over the rich world. A growing body of research hints at why

"IN FEBRUARY 2020 Americans on average spent 5% of their working hours at home. By May, as lockdowns spread, the share had soared to 60%--a trend that was mirrored in other countries. Many people, perhaps believing that working from home really meant shirking from home, assumed that office life would soon return to something like its pre-pandemic norm. To say it has not turned out that way would be a huge understatement.

Most office workers remain steadfastly "remote-first", spending most of their paid time out of the office. Even though a large share of people have little choice but to physically go to work, 40% of all American working hours are still now spent at home. In mid-October American offices were just over a third full, suggest data from Kastle Systems, a security firm. From Turin to Tokyo, commercial areas of cities remain substantially quieter, compared with pre-covid norms, than residential ones. Economists are trying to work out what all this means for productivity.

Perceptions about the future of office work are changing. Last year British government ministers exhorted workers to get back to the office; now they are quieter. Wall Street banks, often the most enthusiastic advocates for in-office work, are toning down the rhetoric. According to a monthly survey by Jose Maria Barrero, Nick Bloom and Steven Davis, three economists, bosses expect that in a post-pandemic world an average of 1.3 days a week will be worked from home--a quarter more than they expected when asked the same question in January. Even that could in time prove to be an underestimate. Workers hope they will spend closer to half their working hours at the kitchen table.

A few factors explain why remote-first work remains dominant. Many people remain scared of contracting covid-19, and thus wish to avoid public spaces. Another possibility is that workers have more bargaining power.

 

In a world of labour shortages, it takes a brave boss to make people take a sweaty commute five days a week (workers view being forced to be in the office full-time as equivalent to a 5% pay cut). There is a more intriguing possibility, however. Work that is largely done remotely may be more efficient compared with an office-first model.

 

The past year has seen an explosion of research on the economics of working from home. Not all the papers find a positive impact on productivity. A recent paper by Michael Gibbs of the University of Chicago and colleagues studies an Asian IT-services company. When the firm shifted to remote work last year average hours rose but output fell slightly. The authors ascribe part of the decline in productivity to "higher communication and co-ordination costs". For instance, managers who had once popped their head round someone's door may have found it harder to convey precisely what they needed when everyone was working remotely.

Most studies, however, find more positive results. Mr Barrero and his colleagues' surveys cover a large number of firms, rather than just one. Only 15% of home-workers believe they are less efficient working in this way than they were on business premises before the pandemic, according to a paper published by the team in April.

 

A study released that month by Statistics Canada finds that more than half of "new" remote workers (ie, those who normally worked outside the home before the pandemic) reported completing about the same amount of work per hour as before, while one-third said they got more done.

 

Economists have less insight into why remote workers might be more productive. One possibility is that they can more easily focus on tasks than in an office, where the temptation to gossip with a co-worker looms large. Commuting, moreover, is tiring. Another factor relates to technology. Remote workers, by necessity, rely more on tools such as Slack and Microsoft Teams. This may allow bosses to co-ordinate teams more effectively, if the alternative in the office was word-of-mouth instructions that could easily be forgotten or misinterpreted. Patent applications for work-from-home technologies are soaring, while American private-sector investment in IT is growing by 14% year-on-year.

Yet the popularity of remote-first work presents a puzzle. If it is so wonderful, then why is there little evidence of a shift towards "fully remote" work, where firms shut down their offices altogether? Companies that have chosen to do this are in a tiny minority. The number of people moving to cities such as Tulsa, in Oklahoma, which is positioning itself as the global capital of remote work, remains small.

Perhaps it is only a matter of time before everyone who can goes fully remote. A new study in Nature Human Behaviour, however,suggests that firms have good reason to hold on to their office buildings, even if they are used less frequently. The paper studies the communications (including instant messages and video calls) of 60,000 Microsoft employees in 2019-20. Remote work makes people's collaboration practices more "static and siloed", it finds. People interact more with their closest contacts, but less with the more marginal members of their networks who can offer them new perspectives and ideas. That probably hurts innovation. The upshot is that fully remote teams might do quite well in the short term, but will ultimately suffer as innovation dries up.

What a way to make a living

How best to collaborate, then, in a remote-first world? Many firms assume it is enough for everyone to come into the office a few days a week, since this will lead to people bumping into each other and talking about ideas. Others, backed by stronger evidence, say that managers must be more intentional, and bring people together with the express purpose of discussing new ideas. Firms will have to experiment as they get used to a new way of working, and the precise arrangement may vary depending on the type of work. What seems clear, though, is that offices will still have a role after the pandemic--even if they are mostly empty." [1] 

·  ·  ·  1. "The pyjama revolution; Free exchange." The Economist, 30 Oct. 2021, p. 78(US).