Can Smartphones Give You Horns? Would You Stay at a ‘Tacoasis’? And How Google Profits From Fake Listings

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MARKETING

Google is profiting from millions of fake listings on Google Maps: “The repairman had hijacked the name of a legitimate business on Google Maps and listed his own phone number. He returned to Ms. Carter’s home again and again, hounding her for payment on a repair so shoddy it had to be redone. Three years later, Google still can’t seem to stop the proliferation of fictional business listings and aggressive con artists on its search engine. The scams are profitable for nearly everyone involved, Google included. Consumers and legitimate businesses end up the losers.

“Google handles more than 90 percent of the world’s online search queries, fueling $116 billion in advertising revenue last year. In recent years, it has extended that dominance to local search queries, emerging as the go-to source on everything from late-night food deliveries to best neighborhood plumbers. Yet despite its powerful algorithms and first-rate software engineers, the company struggles to protect against chronic deceit on Google Maps. Once considered a sleepy, low-margin business by the company and known mostly for giving travel directions, Google Maps in recent months has packed more ads onto its search queries. It is central to Google parent Alphabet Inc.’s hope to recharge a cresting digital-advertising operation.”

Gabriel Weinberg, the founder of DuckDuckGo, says the big ad-tech companies know how to sell ads without being creepy; they’re just not interested: There are “two kinds of highly profitable online ads: contextual ads, based on the content being shown on screen, and behavioral ads, based on personal data collected about the person viewing the ad. Behavioral ads work by tracking your online behavior and compiling a profile about you using your internet activities (and even your offline activities in some cases) to send you targeted ads.

“Contextual advertising doesn’t need to know anything about you: Search for ‘car’  and you get a car ad. Over the past decade, contextual ads have been displaced by behavioral ads, aided by the rise of real-time bidding technology that auctions off each ad on a site based on user profiling. These behavioral ads are the ones that leave a bad taste in your mouth. They follow you around from website to mobile app based on your private information and, intentionally or not, enable online discrimination, manipulation and the creation of filter bubbles. Strong privacy laws will force the digital advertising industry to return to its roots in contextual advertising. That’s a good thing, since contextual advertising does not affect privacy in the same way. (My company uses only contextual advertising, and we compete with Google.)”

RETAIL

Here’s why Taco Bell is experimenting with, yes, the hotel business: “The coming ‘tacoasis’ in Palm Springs, CA, may just be a short-term publicity stunt, but retail, fashion and even fitness brands are crossing over into the hotel world in big ways, giving travelers choices beyond the everyday Marriott, Hilton or Hyatt. The question now is: Will travelers choose to stay at names associated with something other than hospitality?

“Next month, the first Equinox hotel is set to open in New York City, with more on the horizon in Seattle, Houston, Chicago, Los Angeles and Santa Clara, CA. The furnishings brand RH, formerly known as Restoration Hardware, plans to open RH Guesthouse in New York in the fall. West Elm, another furniture store, says it will open its first hotel next year—later than originally planned—but has locations coming in Detroit; Minneapolis; Indianapolis; Oakland, CA; and Portland, ME. They will join a smattering of hotels already operating around the world under names more associated with fashion, jewelry, crystal or home goods, including Armani, Versace, Bulgari, Baccarat, Ikea, Muji and Shinola. ‘Hotels are the new showrooms for retail,’ said Chekitan Dev, a professor of marketing and branding at Cornell University’s School of Hotel Administration. ‘It’s a dynamic, interactive, profitable showroom.’”

Following in the footsteps of direct-to-consumer brands like Warby Parker, which has opened nearly 100 stores, and Casper, which has plans to open 200, Parachute has raised $30 million to open 20 stores by 2020: “For direct-to-consumer brands, physical stores are important in driving sales as well as brand awareness: A dozen DTC brands told Digiday last year that their online sales were higher in cities where they had physical stores. And as once DTC-friendly channels like Facebook are becoming more expensive, brands are investing in channels that are more expensive upfront, but less volatile, like stores.

“CEO and founder Ariel Kaye said that she believes that in a category like home, it’s particularly important for brands to have a physical retail space in order for customers to touch and feel a product in-person. Parachute started in bedding, and now also sells pillows, towels, rugs and tablecloths. In January, the company started selling a mattress. Although the category is filled with plenty of DTC brands, from Casper to Tuft & Needle, Kaye said she thought there was still an opportunity for a premium, eco-friendly mattress. Parachute’s mattress starts at $1,299, while Casper’s starts at $395.”

STARTUPS

Israeli start-up Eviation says it already has an order from a US carrier for its all-electric airliner: “Company CEO Omer Bar-Yohay said the plane, called Alice, is the first of its kind in the world. … Eviation displayed a prototype of the nine-seat plane at Paris’ Le Bourget Airport. It’s designed to fly as fast as 650 mph and has a cruise speed of 276 mph. The goal, Eviation said, is not to replace long-haul commercial air travel, but capture a growing market of short-distance flyers. The plane has a list price of about $4 million each, which is far cheaper than conventional jet-powered airliners, and roughly 900 kilowatts of power split by three MagniX engines.” Eviation says the plane has a range of 650 miles and views 1,000-mile trips as a ‘sweet spot for electric aircraft.’”

Three co-founders have raised more than $12 million to design a new kind of cemetery: “This month, they launched their first 20-acre forest, located in Mendocino, CA. Instead of spending thousands on a funeral plot, families can spend thousands for the exclusive ash-spreading rights to one of the thousands of trees on the property (private trees start at $2,900, and the rights to put ashes underneath an old redwood tree can cost up to $36,000). The trees are guaranteed to be permanently protected, because the duo’s venture-backed startup, Better Place Forests, purchases the land and then donates the development rights to a permanent land trust. The process by which the company is doing this, in which the company owns the land and a land trust owns the easement, or the right to develop it, is very well-established and has been used to create national parks in Hawaii and Colorado.”

Brooklyn-based production company Overtime found a market in creating highlight reels in the age of social media and wants to expand into a full-fledged sports network. “[The] rise of social media, and a corresponding shift in our viewing habits, has turned this practice into a tech-driven business opportunity. Overtime, which aims to become the predominant sports network for Generation Z—the post-Millennials, the kids who’ve grown up with iPhones in their pockets—specializes in producing short videos, like the one described above, that give a semi-professional gloss to the world of high-school, and even middle-school, sports. … Overtime’s ambitions are based on a premise slightly contrary to the conventional wisdom. Their idea is that the old model of live televised sports requires a patience and interest in sustained engagement that the younger demographic might not ever develop.”

REGULATION

After years of improvement, air quality in the US is slipping: “President Donald Trump has repeatedly claimed just the opposite, saying earlier this month in Ireland: ‘We have the cleanest air in the world, in the United States, and it’s gotten better since I’m president.’ That’s not quite the case.

“There were noticeably more polluted air days each year in the president’s first two years in office than any of the four years before, according to new Environmental Protection Agency data analyzed by The Associated Press. The Trump administration is expected to replace an Obama-era rule designed to limit emissions from electric power plants on Wednesday. Called the Clean Power Plan, it would have gradually phased out coal-burning power plants that emit both air pollutants and heat-trapping gases responsible for climate change.”

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY  

FAT Brands Inc., a global franchising company, has acquired Elevation Burger, an operator of a hamburger restaurant chain, for a total consideration of $10 million. “Los Angeles-based FAT Brands, which owns the Fatburger concept and others, said the acquisition of Elevation Burger, a Falls Church, VA-based chain and an early pioneer of the ‘healthful’ organic burger, takes the parent company’s unit count to more than 400 restaurants worldwide.”

SOCIAL MEDIA

Instagram and Facebook ban gun companies from running ads on its platforms, but that has made way for influencers to profit off promoting retailers’ firearms: “There are dozens of women (it is mostly women who are gun influencers) making partial or complete livings off Instagram grids full of guns and perfect smiles. Some of them are hunters, some of them are veterans, some participate in professional shooting sports, some also swing-dance, some play soccer. Some look really good in a pair of camouflage overalls or a red, white, and blue onesie or wearing almost nothing, and all of them have come up with their own rules about how best to monetize these physical realities. They’ve done something that the companies in the firearm industry cannot do on their own: make the gun lifestyle as attractive and aspirational as all the others on Instagram.”

HUMAN RESOURCES

There’s a good chance that people who work in tech will relocate for a job: “New trade group research reviewed by Axios shows that three out of four tech workers will relocate for a job, suggesting most tech employees will work from anywhere. Now, as workers gear up to chase lower costs of living, companies will have to decide whether or not to follow. When picking a place to live, 82 percent of tech workers prioritize cost of living more than any other factor (weather, commute times, and affordable housing follow closely behind).

“[Notably, women seem to be more particular about location than men: 55 percent of women consider job location very important, while only 43 percent of men feel the same way]. As these tech veterans start new companies, many will do so outside of expensive hubs like Silicon Valley… because they know people are more willing than ever to follow them anywhere, particularly to places where the rent’s cheap and the weather’s balmy.”

TECHNOLOGY

Can smartphones give you horns? “New research in biomechanics suggests that young people are developing hornlike spikes at the back of their skulls—bone spurs caused by the forward tilt of the head, which shifts weight from the spine to the muscles at the back of the head, causing bone growth in the connecting tendons and ligaments. The weight transfer that causes the buildup can be compared to the way the skin thickens into a callus as a response to pressure or abrasion. The result is a hook or hornlike feature jutting out from the skull, just above the neck.”

And that’s what’s ahead.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com.

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