Good morning. It’s Monday, August 20th. This is Spotlight #265. The VMAs are tonight so you’ll have an opportunity to hear music on MTV, the Academy of Country Music has its awards on Wednesday, and college football returns Saturday.

Today’s Spotlight takes about 3 minutes to read.

Highlights

• • A memo written by an executive whose company was purchased by Facebook was leaked this week. The document  revealed “a psychological trick” to build up high school user interest. We’ll unpack it below.

• • Brazil, the fourth largest Internet market in the world, has passed a tough new data protection law. Enforcement begins in 18 months, shortly before California’s data protection law takes effect.

• • Google said six months ago that its Verily health care subsidiary could detect heart disease by analyzing a person’s eyes. Now comes news that its DeepMind AI outperforms doctors in diagnosing more than 50 eye diseases and conditions.

“We eventually identified a psychological trick”

A good number of attorneys receive Spotlight each week. Would one of you please tell the folks at Facebook what to put in writing and what to skip?

Facebook bought tbh, an “anonymous” social media app focused on high school students, last September. The well-funded company had launched only one month earlier. Their app collected anonymous compliments by allowing users to select one of four classmates to receive an accolade.

“It’s like your high school senior superlatives writ large and in real time,” we wrote then.

Students could only vote on people in their school and had to create an account with a real name. There were many human moderators, and the app’s usage exploded among high schoolers, reaching 2 million active users in only a couple of weeks. That prompted Facebook to swoop in and buy the company before there was time to even launch an Android version.  And then Facebook killed off the app within a few months.

But where they messed up was allowing tbh’s founders to write about how the company accessed users’ Instagram accounts, made people curious, and targeted users in the high school with cryptic messages set to go off on students’ phones as classes dismissed for the day.

The strategy was pure guerilla marketing. Even the memo’s authors, the company’s founders, wrote that their idea wasn’t scalable. For now, their identities remain secret, and Facebook won’t comment on the story, which was scooped by BuzzFeed News.

Our take is that the trick–a simple example of cryptic messaging that stoked interest–was creative but oversold with the “psychological trick” description. All of marketing, including sales, is psychological. But the move hurts Facebook’s reputation among people who didn’t do what you did in learning about the issue. See, psychological trick.

The BuzzFeed story, including the complete memo, is here.

And Facebook had some good news. You’ve probably seen birthday announcements on Facebook that feature your acquaintances and friends asking you to donate to a charity to celebrate their birthday.

In the program’s first year, Facebook users donated $300 million to charities that way. We’ve experimented with the process, especially since Facebook quickly waived processing fees and began forwarding 100% of donations to charities. There are even tools now to ask people to give recurring gifts.

Talk with us if you want to learn more about implementing the program.

Amazon Market Share up 29% since 2016

Amazon is poised to crack 50% share of the $252 billion spent by U.S. shoppers in e-commerce retail. And the company is now raking in 5% of all retail according to Visual Capitalist.

Amazon is also exploring an acquisition of the Landmark movie theater chain that has 50 theaters in major markets including NY, LA, and Chicago.

Check out the VC infographic about e-commerce here

Good Monday morning. It’s July 30th. Lots more financial news ahead this week: the July jobs report is out Friday morning and the Fed meets to tackle monetary policy starting Tuesday.

Today’s Spotlight takes about 3 minutes to read.

Highlights

• • Wall Street pummeled tech stocks last week. We’ll break down why Facebook, Amazon, and Google have reason to be optimistic.

• • A national privacy law similar to the EU’s GDPR is attracting more attention in Washington. Remember that California has already passed its own stringent legislation with an 18 month window.

• • Google’s guidelines for its search raters is newly revised.Biggest news: more focus on a website’s “Expertise / Authoritativeness / Trustworthiness”. Yes, EAT.

Thanks for your responses!

Your responses to last week’s question about images in Spotlight were great. Many suggested only showing images when they’re relevant to understanding news. We have the smartest readers! That’s what we’ll be doing. We responded to everyone so let George know if you emailed us and didn’t receive a response.

Straight Shooting on Tech

Facebook is Fine

Headline writers trumpeted the plunging price of Facebook stock last week, but skipped two important contextual facts: Facebook stock is down 4% since the beginning of 2018 and the company reported 42% revenue growth with 2.5  billion accounts. Facebook’s growth rate slowed. It’s hard to think that 42% revenue growth is bad.

The growth rate slowed because 81% of U.S. adults who have Internet access have a Facebook account. Don’t forget that India, not the U.S., has the most Facebook accounts. Meanwhile, the number of daily U.S. users is up, revenue is up, and the company owns three other wildly popular platforms: Instagram, Messenger, and WhatsApp. Your organization ignores Facebook at its own peril.

Long-term bet: Human interfaces with devices. Think sub-vocalizing, optical imaging, the whole direct-brain interface of last year’s conference. It’s not science fiction. Facebook is funding dozens of engineers and has agreements in place with Johns Hopkins, UC Berkeley, and others.

Google is Great

Yes, the company received its second hefty fine from the EU in two years, this one for $5 billion. But we also learned that Google parent Alphabet has $14 billion plus in cash-on-hand and quarterly operating income was $7.8 billion.

Google’s advertising model is being tweaked hard for local mobile advertising–searches on a mobile device about local activity. That’s especially true for retail. If your organization has any retail presence, you need to be looking at the new advertising offerings Google has rolled out this year.

Long-term bet: Google Translate handles 143 billion words each day. Business Insider has a great piece on monetizing that traffic.

Amazon Ads Are Its Secret Weapon

Remember the joke about Amazon never making a profit? That stopped three years ago. The company has a high margin (25%+) business in cloud computing services and a North American retail business that has been over 3.7% margin since Q4 2017. We continue to be thrilled with Amazon Web Services, where our websites are hosted, and what else can you say about a company that takes in about half of all digital retail spending in the U.S.?

Amazon’s ad business is also leveraging direct sales with big brands while keeping ad agencies busy with the rest of the market beyond the Fortune 500. The Google-Facebook duopoly isn’t over yet, but Amazon is the only tech company positioned to make it a three company race.

Long-term bet:  The health care industry is in full-on panic about what Amazon could do to their world.

Spotlighted

Some of Yelp’s restaurant listings have scores based on health department health inspection. VentureBeat reports that Yelp is expanding that program to 750,000 listings in 42 states.

None of Google’s 85,000 employees have been successfully phished since the last year when the company began requiring “security keys”, a USB device used instead of passwords or codes. Security guru Brian Krebs has details.

We’ve written several times about advertisers on Facebook acting improperly if not illegally when using indicators about a person’s race to choose whether ads were displayed to that person. Facebook is now prohibiting race as part of its selection criteria.

Nextdoor CEO and founder Nirav Tolia announced that he is stepping down. A new player in hyperlocal advertising, Nextdoor has raised a lot of money and is a unicorn–one of those tech companies with a billion dollar value. There are now 200,000 Nextdoor neighborhoods of mini social networks in five countries. (Full disclosure: Sue and George were contractors at Tolia’s first company and worked with some of the Nextdoor team)

Great Data

Good Monday morning. It’s July 16th, Amazon Prime Day. Today’s jaw-dropping statistic: Amazon has 49% of e-commerce market share in the U.S. and 5% of all commerce.

Highlights

• • Google’s search rankings will now be influenced by page speed for every website. The long-staged Google change is now in effect for all website pages on every site. More below.
  • Google AdWords is now called Google Ads. The change is subtle but an important reminder that a lot of search now occurs via images or by voice. And with a $100 billion revenue line, this branding change was not done lightly.
  • You’ll be able to use Google Ads for new hotel formats(!) and via its new retail partnership with Shopify as Google scrambles to catch up to Amazon.

Google: Hotel Ads & Page Speed Update

Here is a look inside a Google Ads campaign creation screen that the company announced during its marketing show last week. Notice that “Hotel” will be the only industry type shown out of all the industries that exist. Google Hotel Ads have existed for years, but moving into the main campaign screen is a big vote of interest from the company.

Google also announced that its “page speed update” is now rolling out to all websites. This means that webpages will be ranked, in part, based on how fast they render on a mobile device. These are important to point out because Google is notoriously circumspect about most changes. Its most clear signals come from its actions and sporadic announcements. When those are made, the entire marketing ecosystem takes note.

This is especially true when Google shares news about search language. We heard last week that searches for “[something] near me” are up 10-fold. Google has hammered on the near me phrase and put it into our lexicon. Google often uses this phrase to signal local or retail intent.

The final big Google announcements dealt with small business reluctance to engage online. Google says that about half of all small businesses still don’t have a website. The new twist is that Google Ads will create landing pages automatically based on what it knows about the prospect and your organization. Here’s the kicker: the ads have to be in an automatic campaign run by Google.

The changes show Google looking to grab the market from the next size tier of small businesses while also staking its claim to hotel advertising, retail, and mobile device speed.

Spotlighted

Facebook was fined $664,000 by the U.k. for its role in the Cambridge Analytica data scandal. More fines are coming. We’re also looking for Facebook to launch new news shows starting today.

Moz co-founder Rand Fishkin has unveiled SparkScore, a new software tool that gauges a Twitter account’s influence.

Having killed net neutrality protection in the U.S., the FCC has changed its complaint processes. The FCC argues that it hasn’t changed the rules, but they made a similar argument about net neutrality. Bottom line: it will now cost $225 to file a “formal complaint” against an Internet Service Provider. The agency does not review informal complaints and only forwards them to the companies involved.

Watch This

Five new ads have been nominated for Emmy Awards this year. You can read about them at this AdWeek link and watch my favorite below.