Google’s new “Finding Choices” initiative will directly ask web users who encounter sites where content is funded by adverts to turn off their ad blocker or pay a subscription to view the content without adverts.

Why Ad-Blockers?

Ad-blockers are programs that work through browsers / as browser extensions (or on the network for some mobile operators). The industry narrative says that ad-blockers are used because they filter out the kinds of adverts that are intrusive (videos playing automatically, adverts between the content, multiple sponsored links etc) , slow the page load time down, and even extract personal data, and that the ad-blockers can, therefore, deliver a better experience to the user.

Ad-Blockers are now thought to be used by 22% of UK adults (IAB figures), and globally the number of ad-blocker users is thought to be as much as 100 million.

A report by AdBlock Plus and Global Web Index in the US has, however, shown that consumers use ad-blockers not just to filter out certain adverts / adverts of a certain quality, but because they don’t want to see any adverts at all on any of their devices.

Adverts Fund Content

The big problem with ad-blockers is that many content creators, content publishers, (and to an extent platforms) rely upon advertising revenue for their funding i.e. without the revenue generated by the advertising on their web pages, it would not be commercially viable for them to produce and show the content on their website.

Adverts Fund Google

The Filtering out of adverts is also bad news for Google which makes a large part of its revenue through advertising e.g. AdWords. This year for example, Google is expected to account for 78% of U.S. search ad revenue and 12.5% of display revenue.

Google is, therefore, tackling ad-blockers in 2 new ways. One way is “Finding Choices”, and one is creating its own version of an ad-blocker (with its own rules for what adverts get through) for Google Chrome.

Funding Choices

The Google “Funding Choices” idea (now in beta testing) is reminiscent of some online news sites where visitors can see a bit of the content and must sign-up or pay to see the full content. With Funding Choices a visitor to a web page who is using an ad-blocker is shown a message by the publisher that asks the visitor to either enable ads on their site (whitelist them), or pay a subscription to allow the visitor to view the website with all the adverts removed.

Google’s Own ‘Ad-Blocker’ For Chrome

Google’s other idea to protect its revenue streams by tackling the ad-blocker problem is to create its own ad-blocker which will be added to the Chrome Browser. This will reportedly block ads that don’t meet with Google’s own quality standards. Google is part of the Coalition for Better Ads (along with News Corp, Facebook and Unilever), and this coalition essentially decides what kinds of adverts will be blocked by Chrome.

Google is helping publishers get ready for the change to Chrome by giving them an Ad Experience Report tool. This gives them videos and screenshots of unacceptable ad experiences, thereby making it easier for them to find and fix issues in advance of the Chrome ad-blocker’s introduction next year.

What Does This Mean For Your Business?

Businesses need advertising, and TV channel, radio stations, and websites also fund themselves, and therefore their ability to advertise businesses, by serving adverts to consumers. There is clearly a need for advertising, but as Internet users, we are often frustrated by the kind of advertising that wastes time and disrupts. It is clearly in Google’s interests to make sure that some advertising gets through, and making its own ad-blocker that encourages advertisers to improve the advertising standards and the user experience does, therefore, seem like a move that would be approved of by many consumers.

If you enjoy and value the content from a certain website, then the “Funding Choices” model is likely to be acceptable, but many of us have been too used for too long to getting content for free. In reality, many content creators have already turned to systems like Patreon where they can get funding directly from their viewers without worrying about ad-blockers.

Although these are two interesting initiatives, the battle against ad-blockers is not over yet and it remains to be seen how the ad industry tackles the issue next.

Amazon is reported to have extended its business reach into fresh grocery provision and is operating a trial of the ‘Amazon Fresh Pickup’ service from two ‘bricks-and-mortar’ locations in its home city of Seattle.

Order Online and Pickup From Fresh Food Warehouse

The Amazon Fresh Pickup pilot service is now being offered to Amazon Prime members who can shop online for fresh groceries and then drive to pick them up (as quickly as 15 minutes after the order has been placed) from warehouses in the Ballard and Sodo neighbourhoods of Seattle in the US.

The obvious difference to the Amazon Fresh service, which already operates in 16 cities (14 US metropolitan centres, Tokyo, and London) is that customers are invited to come and pick their shopping up themselves, rather than having it delivered to their door.

What?

As the name suggests, the produce offered in this pilot service includes meats, fresh produce, bread, dairy, and other household essentials.

Initial reports indicate that users of the service in Seattle need to select delivery or pickup before browsing on the website, and that customer choice of produce is limited by the region and by which distribution agreements Amazon has in that region at the time i.e. prices and available items vary between their pickup and delivery services.

Advantages

Some of the advantages of the Amazon Fresh Pickup service (apart from the convenience of online ordering, which is not unique to Amazon) are that there is no minimum order, there are no extra shipping, handling, or any store-related fees (other than the cost of your own petrol and a proportion of Prime membership), and Amazon staff will also load the order directly into your car if you choose not to pick it up yourself from the ‘waiting room’.

There is also the fact that rather than having to wait in for the shopping delivery to arrive, you can control when you go and pick it up, and you may decide to combine it with other business that you have along the same route.

Some customers, most likely those who order online anyway and / or don’t want / aren’t able to walk around e.g. a large supermarket and wait in long checkout queues, are likely to see the benefits of the service.

Fingers In A Lot Of Pies

This move into fresh groceries is not unexpected from a company that has extended its brand and its reach into many different markets. For example, there is now a physical Amazon-branded bookstore in New York City (Manhattan), the new digital subscription service ‘Subscribe With Amazon’ opened last month, as did the ‘Amazon Business’ online ‘trade counter’ service in the UK.

Some analysts have also mentioned a possible move into clothing plus there are reports that Amazon may be close to launching an own-brand fashion label. These reports have been fuelled by news of Amazon creating a fashion photography studio in London.

Amazon is also reportedly creating 5,000 new full-time jobs at its new head office in London, its Edinburgh customer service centre, and at three more new warehouses / fulfilment centres in Tilbury, Doncaster and Daventry.

What Does This Mean For Your Business?

Amazon’s global scale (and its economies thereof), the success of its business model and its ability to run pilots in major locations, plus the ability, strength and reach of its delivery network and its distribution and packing expertise, coupled with the power of its brand and the ease of online shopping for customers now make it a serious competitor for many companies in many different markets. Amazon is also at the forefront of innovation for distribution e.g. drone and autonomous robot deliveries, which could also be a source of competitive advantage in the future.

Where fresh groceries are concerned, UK supermarket brands’ experience and expertise, and delivery services will still give Amazon some serious competition, plus, many UK consumers enjoy the physical experience of shopping, and online ordering gives retailers (which could now include Amazon) less control over the shopping environment, and less ability to cause customers to make the unplanned purchases that are vital to bricks-and-mortar grocery retailers’ profits.

Projected figures from payments industry trade body ‘Payments UK’ have shown that by as soon as next year, more payments will be made using debit cards than using cash.

Driven By The Popularity of Contactless Payments

The convenience and effectiveness of contactless payments are the drivers behind a trend that will see cash payments taking a backseat to debit card payments years earlier than expected.

Payments UK figures show that UK contactless payments in 2016 nearly trebled in 2016 compared to 2015 (to £2.9 billion), and they accounted for 7% the total number of payments.

By 2018 it is predicted that contactless payments will account for one-third of all debit card payments and that there will be more debit card payments (13.4 billion) than cash payments (13.3 billion).

If the trend continues, payment commentators predict that contactless debit card payments could account for more than 25% of payments by 2026.

Contactless Technology

Contactless technology enables users to ‘tap and pay’ without entering a PIN for items up to £30 at a time. This is achieved using a special chip in the customer’s credit / debit card / key fob, smart card (also a smartphone or other mobile device) that emits radio waves in the form of radio-frequency identification (RFID), near field communication (NFC), or Samsung Pay (MST). The shop terminal picks up the radio signal and then processes the transaction.

Contactless Cash Machines Trial

Back in November 2016, Barclays conducted a trial of a new system which allowed customers to use their normal PIN in combination with leaving their smart-phone handset near to the bank machine, thereby enabling “contactless” near-field communication (NFC) transmission for cash withdrawal.

Concerns

Despite the obvious popularity of contactless and the bold predictions by Payment UK, not all customers trust the system. A Which? survey in August 2016 for example, showed that although 73% of people think that contactless cards make it quicker to pay for things, 69% are concerned about their contactless card being stolen and used to make purchases.

These concerns may not be completely unfounded because a recent Which? investigation into the contactless card security of 12 leading credit and debit cards found that they did have some security flaws.

Research has also shown that, even though banks pledge to refund any fraudulent purchases, this can often take some time, and refunds can be wrongly refused.

What Does This Mean For Your Business?

The decline in the use of cash is a worldwide trend and card issuers have essentially been driving the change in customer behaviour by introducing innovations like contactless payments. For retail businesses this has meant the need to invest heavily in new payments technology in order to make it easier and quicker for customers to securely complete transactions in-store. Retailers have, however, benefited from cost and time savings (and having to deal with less cash).

Although cash is declining in relation to card payments, in the real world (especially with small businesses), cash payments from customers are still very practical and preferable. From a customer’s point of view, although many now find contactless convenient for small purchases, some groups of society need to use cash to manage their finances, and some people prefer the anonymity of cash, as EPOS style systems have long-allowed companies and marketers to gather data about us and to profile us.

Experts predict that cash will not be dying out anytime soon and most businesses realise that they need to take account of the fact that people will always want to choose the payment method that best suits them.

With UK businesses needing to comply with the European Union’s (EU’s) General Data Protection Regulation (GDPR) by 25 May 2018 (when enforcement begins), should it be seen by businesses as an more of an opportunity to get the data protection house in order, and find new competitive advantages for the future?

Who / What Does GDPR Apply To?

The General Data Protection Regulation (GDPR) will apply to all UK (and worldwide) companies that store, process and use the data of EU citizens. The UK was very involved in the drafting of the regulation which was designed to make companies take the issue of data protection more seriously and to strengthen the rights that EU citizens have over their data.

What About Brexit?

GDPR will still come into force long before Brexit matters are concluded, and since it applies to companies that deal with the data of EU citizens, it (or something very similar) will apply after Brexit. UK Information Commissioner, Elizabeth Denham has said that she supports the UK adopting the EU regulation even post-Brexit because if the UK is to continue doing business with Europe, British businesses will need to share information and provide services for EU customers. It should (according to Ms Denham) therefore follow that the UK data protection law should be equivalent.

Threat

Up until now, the introduction of GDPR has made many businesses view it as more than a threat than an opportunity because:

• There is perceived complexity in compliance. For example, a Compuware survey has shown that 75% of organisations said the complexity of modern IT services means that it is not always clear where customer data actually resides, and many organisations don’t believe they can locate individual customer data quickly enough (which could lead to penalties). Companies will also need to analyse carefully what data they are collecting and how they are using it
• There are perceived challenges in ensuring data quality to achieve compliance.
• Much has been made in the news about the size of the penalties for non-compliance e.g. PCI Security Standards Council threats that that under GDPR, groups of companies could face fines of up to €20m or 4% of annual worldwide turnover, whichever is greatest for data breaches (fines could exceed the current £500,000 mark).
• There are perceived extra costs e.g. from implementing new systems and procedures, and from potentially having to a hire an in-house data security specialist manger.
• There is no clear perception of the scale of the effort needed to comply (the effort and planning needed), or how far to go with compliance to satisfy regulators.

Advantages

Security commentators have pointed out that larger companies and those which store and use large amounts of data e.g. companies in the finance, health and retail sectors, are most likely to have started early (out of perceived necessity) in planning for GDPR. It is likely that companies that have been more proactive and have started early in their preparations, and / or have focused on privacy before, and have a framework in place that defines roles and responsibilities, will have an advantage when GDPR comes into force.

Opportunities

Some security experts have highlighted the fact that the preparation for, and the focusing on compliance with GDPR could, in fact, be an opportunity because:

• It will motivate companies to face and tackle data security challenges that they may have been putting off or ignoring i.e. finally getting their house in order.
• Using data in a transparent, privacy-friendly way could be seen as a competitive advantage by customers in the future, thus allowing companies to grow their customer base, collect more data and monetise it more, and build their brand through trust.
• Adopting good data handling practices could help companies to avoid damage to brand reputation through doing something consumers would not want to happen to their data.
• Spending more on data protection compliance and doing a better job of protecting data in the company could improve the cyber security posture of the company too.

What Does This Mean For Your Business?

Not only is compliance with GDPR (or its very similar successor) necessary, but it could actually make sound commercial sense, through providing competitive advantages (because data security is valued by customers), and could have knock-on effects to the cyber resilience of companies.

Companies that have been proactive and moved quickly on this issue could therefore be the ones most likely to minimise the threat of penalties (the law profession is already geared-up to respond to customer complaints), and gain advantages in a marketplace.