How Marketing Infects all Media Sources

Executive Summary

  • G2Crowd as a Puppet for Software Vendors
  • Profit Maximization and Media and the Best Possible Outcomes?
  • What is the Best Way to Maximize Shareholder Value in Media
  • How Profit Maximization in Media Leads to the Propagation of Bad Information

Introduction

In a recent article where we critiqued the quality of reviews on the G2Crowd site, we discussed the problem with IT media entities that are industry-funded. In this article, we will elaborate on a subject related to marketing influence on media entities, which is at the heart of the G2Crowd story.

G2Crowd as a Puppet for Software Vendors

G2Crowd was always designed to be nothing more than a puppet for software vendors. All of their funding comes from software vendors, and G2Crowd discloses none of this to readers. G2Crowd’s only objective is to make money. People think that is just great. But is it great? And great for whom?

A comment was made that G2Crowd’s application reviews have been “gamed” as the following quotations attest.

“Any unmoderated peer review site, from TripAdvisor upwards, will inevitably be gamed by those who gain by doing so.”

But this implies that G2Crowd does not want to publish low quality and false reviews. That would imply that the G2Crowd reviews are “gamed.” But G2Crowd does want low-quality reviews if they are positive. G2Crowd could easily eliminate obviously fake reviews, but they choose not to.

So their ratings are not very difficult to game if they don’t moderate the comments. Therefore this would be like saying that one “gamed” a car wash by driving their car through the car wash and ending up with a clean car. That is not gaming a car wash, that is the design of a car wash. G2Crowd wants the highest possible ratings without seeming fake, as this is what their funders (the software vendors) want.

Profit Maximization and Media and the Best Possible Outcomes?

A major problem is a concept that profit maximization leads to good outcomes. It is amazing how often this is proposed and is accepted as an assumption, even though the negative outcomes from this are obvious.

Look at this outcome from media profit maximization. A company like G2Crowd employs virtually no content creators and no moderators. But it pulls in millions every year from vendors that use G2Crowd as a marketing automation frontend. This model ends up with a tiny elite with enormous income, meanwhile, its readers are left reading a large number of reviews written by consultants whose primary motivation is to increase the popularity of software in which they specialize. So big money for a tiny few, and false information for the many. 

What is the Best Way to Maximize Shareholder Value in Media?

That is easy. By selling your media output to the highest corporate bidder. This is the same way you maximize shareholder value in financial advisement but selling out the interests of your customer. The customer here is the reader. Therefore, one must necessarily accept that if the goal is profit maximization in media, then one must be comfortable with literally all published information being engineered to this end. This will mean thinking of how much money the publication can make, and changing the messaging in order to maximize that profit.

This means emphasizing profits over everything else, including first and foremost truth. For example, people prefer hopeful information over the unhopeful. Therefore, to maximize profits, it will mean providing hopeful information, even when that is not the correct conclusion based on the evidence. Hollywood knows all about this, changing the ending of even movies based on historical events to be more positive and helpful. Romantic movies stop once the couple has fallen in love, typically culminating in a final wedding scene. This is because a movie about actual marriage would send the suicide rate skyrocketing. And after all, you should leave the movie theater feeling good about the money you just spent. What better way than with a happy ending, who cares what happened in reality?

Truth is the first casualty of profit maximization.

How Profit Maximization in Media Leads to the Propagation of Bad Information

When it comes to providing information, it leads to giving false information. False information has a very high ROI. Truthful information has a very low ROI. Of all the research entities in enterprise software, Brightwork Research & Analysis, when accounting for normal measurements of popularity, has the worst income statement. But I think we provide the most honest information. Literally, we cannot find another site in the area that writes exactly what we think is true, regardless of not only financial implications but also without considering whether the readership will even like or find the published information offensive.

If we were to have even a single corporate sponsor, the honesty of what we cover would be greatly diminished. And we get offers all the time. Marketing departments seek out information sources to corrupt them. It starts with compliments and just a few articles emphasizing “getting the word out,” and then enlarge as more and more control seeps into the relationship. You begin to depend on the income and then they have you.

Conclusion

Marketing seeks to ruin all information sources, turning them into advertising machines and pushing as much false information through them as they can. Mail normally was for sending things that the recipient wanted. However, that was unacceptable to marketing departments, hence the creation of junk mail. Email was designed for things that people wanted to receive, but marketing automation and spam infiltrated inboxes with messages that were unwanted. LinkedIn developed the ability to share messages; my feed is now filled with mostly promotional information and shares brimming with false information, designed to drive income for the sharer.

Websites were originally designed to share truthful information, but now corporate websites are chocked filled with false information, and online media entities have been infiltrated by marketing money which substantially alters and censors their content. At one point the only thing that used to run before movies in movie theaters were movie trailers. Now advertisements very frequently run before the movie, a movie that you paid to go and see.

Marketing seeks and often does end up substantially controlling every medium.

References

https://en.wikipedia.org/wiki/Shareholder_value

https://www.forbes.com/sites/stevedenning/2017/04/27/harvard-business-review-the-pernicious-nonsense-of-maximizing-shareholder-value/#39a9835271f0

https://www.forbes.com/sites/stevedenning/2014/09/19/the-economist-blue-chips-are-addicted-to-corporate-cocaine/#6b7f15d7264f

The Evidence that Diversity Does Not Improve innovation

Executive Summary

  • It is considered politically correct and broad-minded to state that diversity improves innovation.
  • However, there is no evidence for this diversity improving innovation.

Introduction

It is sometimes proposed that diversity improves innovation. In this article, we review the academic literature to determine what it says on the topic.

The Studies

We performed a search for academic articles on this topic we found the following:

  1. Diversity & Inclusion and Innovation: A Virtuous Cycle (Vol 47 No. 1 2015 pp 1-7)
  2. Diversity of Systematic Innovation Thinking (IMP Journal, Volume 9, No 1, 2015)
  3. Board Diversity and Innovation Performance in Malaysia (Int J Business Governance and Ethics Vol 12, No 3 2017)
  4. R & D Collaborations: Is Diversity Enhancing Innovation Performance? (Technological Forecasting and Social Change, Volume 118 – May 1, 2017)
  5. Diversity is Strategy: The Effect of R&D Team Diversity on Innovation (R&D Management, Volume 47 (2) Mar 1, 2017)
  6. Driver or Inhibitor of Innovation? (Kybernetes, Volume 47, 10 – Feb 5, 2018)
  7. Does Cultural Diversity of Migrant Employees Affect Innovation (International Migration Review, Volume 48 – Sep 1, 2014)
  8. The Nexus Between Labor Diversity and Firm’s Innovation (Journal of Population Economics, Volume 27(2) – Oct 23, 2013)
  9. Workforce Composition and Innovation (Journal of Product Innovation Management, Volume 34(4) – July 1, 2017)
  10. Diversity and Innovation (Applied Economics Letters, 2016 Vol. 23, No 14, 1037 to 1041)
  11. Can Diversity Lead to Innovation? (Journal of Leadership Studies, Volume 10, Number 1, 2016)

Here are some quotes from many of the studies. A few of the studies did not seem like real research studies, but more white papers, and calls for more research.

Study: Diversity is Strategy

  • (Pro) “Diverse teams are less prone to groupthink.”
  • (Neutral) “The diversity literature offers inconsistent results regarding the relationship between gender diversity and performance outcomes.”
  • (Con) “Some scholars have reported that generate heterogeneous groups tend to exhibit increased conflict, low cohesion and increased turnover.”
  • (Pro) “On the other hand, several scholars have found that gender diversity promotes innovation, creativity, and productivity.”
  • (Pro) “Innovation studies show R&D teams gain significant personal experience from interactions amongst team members with different knowledge bases and skill sets.”
  • (Neutral) “Diversity studies have shown inconclusive results regarding the impact of educational diversity.”
  • (Neutral) “R&D team size has a significant positive effect on the likelihood of introducing radical and incremental innovation; however the quadratic effect is negative indicating that additional increases in R&D team size will reduce the probability of additional radical and incremental innovations.)
  • (Neutral) “that although larger firms tend to introduce more incremental innovations than small firms, the oversize can general monitoring costs and management problems that decrease the probability of introducing incremental and radical innovations.”

Study: Driver or Inhibitor for Innovation?

  • (Neutral) “Empirical studies who contradictory effects of functional diversity in teams. While teams with high functional diversity have a higher potential for creative and innovative ideas, they also show more conflicts and communication barriers than teams with low or medium diversity.”

Study: Does Cultural Diversity Effect Innovation?

  • (Neutral) “We argued that the impact of cultural diversity of employees on innovativeness is theoretically indeterminate due to the coexistence of a range of positive and negative influences.”

Study: The Nexus Between Labor Diversity and Firm’s Innovation

  • (Pro) “Ethnic diversity seems to facilitate firms’ patenting activity in several ways….we find that a 10% change in ethnic diversity increases the number of firms’ patent applications by approximately 2.2%.”
  • (Neutral) “Regarding the results of education and demographic diversity on innovation, their effects typically vanish when we include the full set of controls or once we instrument the diversity measure.”

Study: Workforce Composition and Innovation

  • (Pro) “Higher education diversity is also positively correlated to more incremental innovation.”
  • (Con) “Ethnic diversity, however, does not seem to be correlated to incremental innovation. This outcome could be rationalized by recent findings that suggest that ethnic diversity is more exposed to generating conflicts due to social categorization.”

Study: Board Diversity and Innovation Performance in Malaysia

  • (Pro) “The call for board composition that consists of individuals with a broad range of criteria, such as diversity of age, gender, and education level is made due to the advantages that can be offered by having a diverse group of decision makers.”

However, the study seems to think that innovation occurs in boards of directors. Boards of directors do no innovative work themselves. Therefore the study is only focused on the makeup of BODs. The question is whether diversity in the work teams increases innovation.

Study: Diversity and Innovation

  • (Con) “Ethnic diversity may have a negative effect on national innovation if a significant portion of a nation’s resources is used to manage inter-ethnic conflicts. Alesina and Ferrara (2005) explained that diversity could result in individuals giving preference to or transacting exclusively with members of their own group.”
  • (Pro) “Conversely, it is also likely that ethnic diversity can contribute towards innovation by increasing levels of creativity leading to better performance of companies.”

Study: R&D Collaborations

  • (Con) “Despite the opportunities that external collaborations offer to acquire or to access complementary and supplementary knowledge, the literature finds mixed evidence on their role in innovation performance.”

Homogeneous Examples of Innovation and a Lack of Innovation

Let us take Germany as an example.

Germany has the highest percentage of innovation and invention in the field of chemistry. Many of the most fundamental discoveries in chemistry are German and developed in a time when few non-Germans lived in Germany.

Therefore, those inventions were created by a mostly homogeneous culture.

On the other hand, there have been homogeneous cultures that had produced so little innovation that they were in the stone age when outside civilizations came into contact with them. The American Indians and Hawaiians would be good examples of this. Therefore, does this argue in favor of homogeneous cultures or against?

Conclusion

It should be noted and recognized that nearly all of the studies started with the hypothesis that diversity increases innovation.

Why?

The reason is simple. Proposing that diversity is negative for innovation is not politically correct. Therefore the hypothesis is “bounded” by what is an appealing outcome, not by what would be expected — which is hypothesis on in each direction.

However, even with this hypothesis, the only diversity dimension that could be found to improve innovation outcomes consistently is the diversity of educational background — which is normally not included as part of corporate diversity initiatives. Secondly, it brings up the question of “how much.” For example, does it increase innovation outcomes to involve trained anthropologists or people educated in animal husbandry with technologists?

The research does not describe how far afield the educational background is supposed to be.

It should also be recognized that corporations do not have any particular objective to be innovative. Their corporate charters state very clearly that their goals are increasing shareholder wealth and increasing profitability. These objectives can be met more easily and a lower cost through posing as innovative (as is common in the pharmaceutical and software industries) and engaging in anticompetitive business practices.

For example, the return on investment through political lobbying is far and away far superior to any return from investments in innovation. With a return of 76,000% on lobbying funding, there is a very weak argument to redirect those funds to innovation.

How Companies Fake their Interest in Innovation

Furthermore, there are all manner of things that could be done to increase innovation in all countries that aren’t done. One major factor that would cause a dramatic rise in innovation is to break up companies, particularly the largest companies with the most monopoly power. However, this is not even proposed. And it is not proposed because it would reduce the profits of monopolistic entities. Many of these entities use fake innovation as a cover for what are actually anti-competitive rents extracted from the economy.

Therefore, there is not only no consistent evidence that diversity outside of educational diversity leads to higher innovation, there is no evidence that corporations actually have it as a goal to be innovative.

References

Corporations Lobbying Government Reap 76,000% Return On Investment

How IDG Works to Provide Inaccurate IT Information

Executive Summary

  • Through ComputerWorld, IDC writes ridiculously inaccurate articles that are paid placements from SAP. IDC is owned by IDG is owned by a Chinese conglomerate with an overwhelming focus on advertising.
  • In this article, we cover another ComputerWorld article about SAP and verify its accuracy.

Introduction

ComputerWorld published the article What Does SAP’s Next Generation ERP Mean for Customers? on July 28, 2017.

This article my ComputerWorld is a series of falsehoods that is controlled by SAP. In this article, we will review how ComputerWorld’s parent company seems to work in providing information to the IT space.

Who Writes ComputerWorld’s SAP Articles

It is most accurate to say that the article is written by SAP and dictated to ComputerWorld. Let me give an example.

If SAP were to provide me with information, and I was to publish it without checking anything, and with simply adding something like…

Then SAP said…

SAP also thinks….

With me wrapping up a conclusion based upon the quotations, and questioning nothing….then who wrote the article?

I would say SAP wrote it.

McDermott and Hasso Plattner are highly compensated to push out information that allows SAP to make the most possible money. McDermott and Plattner are highly unreliable sources, therefore everything they say must be checked from every angle.

Analyzing ComputerWorld’s SAP Articles

These articles influence people and provide them with false information, as the readers do not realize that IDG/ComputerWorld simply rents out their publication to SAP.

This article was not declared as promoted content. Only the middle portion, which are ads that are declared as promoted content.

If you look at the software produced by BuySellAds, the placement of an advertisement in the middle of the page is called a “Promoted Content” slider. But that is a standard term for a middle page ad. ComputerWorldUK uses the RevContent ad serving software. That text most likely came across in the software as the added description.

But you are speaking not per the software’s definition of promoted content, but regarding the media definition, which means ComputerWorldUK was paid to publish it.

I can’t prove that they were, but ComputerWorldUK just about always publishes uncritical SAP articles. So it certainly looks fishy.

What I have found is that trade publications like this don’t have any requirements for accuracy. They exist to promote and to profit maximize.

And this gets into who actually owns ComputerWorldUK. ComputerWorldUK is owned by a media conglomerate named IDG.

Who and What is IDG/IDC?

IDG is a conglomerate that focuses on tech media. Their website declares that they are the number one tech media company in the world. That part may or may not be true, but there is no doubt that many people get information about information technology from IDG, or more specifically its publications.

There is sometimes confusion as to whether IDG and IDC are the same company. The relationship is covered in the following quotation from Wikipedia.

“International Data Group, Inc. (IDG) is a Chinese-owned, American-based media, data and marketing services and venture capital organization. IDG evolved from International Data Corporation (IDC) which was founded in 1964 in Newtonville, Massachusetts, by Patrick Joseph McGovern. IDC provides market research and advisory services and is now a subsidiary of IDG.”

Therefore, IDC is just another of IDG’s offerings. IDC performs research. Although, after reviewing IDC comments, we question this. One of IDG’s low-quality quotations is covered in the article How to Understand Why Fiori Won’t Be Able to Survive.

Also, I have a problem with obtaining information of any kind from an entity that is owned by a Chinese company. China has no freedom of the press, and journalists are quite limited in what they can write. According to Reporters Without Borders, China ranks 176th out of 180 countries in the world in press freedom. RWB calls China the “world’s leading prison for citizen journalists.”

How IDG Works

I wrote a book that described in part how Gartner receives undeclared funding from vendors and how it impacts their media output. This is covered in the book Gartner. IDG was always in the background for me, and I never investigated them. Now it seems they own a publication like ComputerWorldUK that is simply marketing for IT entities.

So with ComputerWorldUK, the article itself is in many cases a paid placement, but then there are advertisements on the page as well.

I counted eight advertisements on the several of the article pages, which means that IDC is getting paid to have people write this article. That may not be a problem, but the article is inaccurate. So money is pushing out bad articles.

The method is obvious. Put no effort into writing the article. Repeat whatever a source tells you verbatim. Pick up money from both the vendor and then the ads.

The best way to put out the most articles with the fewest writers is to simply report whatever the vendor or other paying entity wants you to say.

IDG’s Overwhelming Focus on Advertising

It is interesting to observe this quotation from their website. Here is where they appeal to advertisers.

Who We Are

“We monitor behavior at an account-based level to identify in-market purchase intent and buying teams researching technology products and services across the globe.”

So the readers are being surveilled for purchasing cues? Is that communicated to readers whey visit the site?

“Our customers know they can rely on IDG to deliver the right buyers at scale exactly when they are most receptive to a marketer’s message, wherever they may be in the world.”

Are readers “readers” or are they, buyers? IDG seems to call their readers buyers. So their view of a person reading their content is that they are buyers?

Well, let us ask this question. If readers are simply viewed as buyers, then what is the incentive to provide accurate information. The question is pertinent because accurate information is not always promotional.

Pretending to do Research?

One of the curiosities in the IDG stable is IDC. IDC presents itself as a research entity. But how can it be a research entity if:

But how can it be a research entity if:

  1. It is owned by a Chinese company, a country which is the bottom of the barrel in terms of press freedom?
  2. If IDG distributes highly suspect information through media entities like ComputerWorldUK and CIO, etc…then how dedicated are they to publishing truthful information.

Conclusion

IDG is another one of these media conglomerates that is focused on profit maximization. And when you do that, the quality of information declines. This article should explain why we don’t pay attention to what IDG publishes, except to understand what is being written about technology, and what readers often consume.

Accessing Honest Information on SAP

  • Questions About This Area?

    The software space is controlled by vendors, consulting firms and IT analysts who often provide self-serving and incorrect advice at the top rates.

    • We have a better track record of being correct than any of the well-known brands.
    • If this type of accuracy interests you, tell us your question below.

References

[S/4HANA: What does SAP’s next generation ERP mean for customers? | Applications | Computerworld UK](https://www.computerworlduk.com/applications/s4-hana-what-does-saps-next-generation-erp-mean-for-customers-3596790/)