The death of the click - Axios
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The death of the click

Illustration Lazaro Gamio / Axios

For the past 10 years, we've operated on the premise that the most important digital metric is the click that refers a person to a website. That click usually comes from a social distribution channel, like Facebook or Twitter, or a search engine, like Google or Bing. But according to industry experts, the click referral is becoming an idea of the past, soon to be replaced by content exposure.

Why it matters: Most publishers have designed their websites to measure user interaction through clicks, not scroll rates or time spent on stories. As the industry moves away from click-through rates (CTR's) as the most meaningful marketing metric, those publishers will have a difficult time justifying the effectiveness of their platforms for marketers.

How did we get here? When AT&T created the first banner ad in 1994, the ad had about a 44% CTR, according to a report by AdRoll. That's around 40x higher than the average banner CTR today. Two factors have led to the decline in clicking:

  1. New web formats, used by apps like Facebook and Twitter, that replace clicking navigation with passive scrolling navigation.
  2. A saturated digital ecosystem that makes users feel lost if they click out of the window or app that they're in (Hence the introduction of in-platform news formats, like Facebook Instant Articles and Snapchat Discover).

Who's to blame? Using click referrals as the most successful marketing metric was largely influenced by a free click referral measuring tool created in 2005 called Google Analytics. The tool was built to attribute successful marketing campaigns around referral clicks because referral clicks often come from Google Search, which Google monetizes.

What's next? "Clicks look like a high-performing tactic, but a lot of work is done to get you to type something into a search bar to begin with," AdRoll President Adam Berke tells Axios. Marketers are starting to attribute marketing success towards content exposure that drives you to click something, instead of the click itself. Two key formats increase content exposure: video and passive scrolling. Google and Facebook are investing heavily in products that embody these formats: YouTube and Instagram.

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Autonomous driving startup Drive.ai raises $50 million

Courtesy of Drive.ai

Drive.ai, a self-driving car startup founded by former Stanford artificial intelligence researchers, has raised $50 million in Series B funding.

A.I. celeb: The company is also adding Andrew Ng, one of the best known deep learning experts in the world, to its board of directors. Ng founded the Google Brain division, online education company Coursera, and most recently worked at Chinese Internet giant Baidu as its chief scientist. Ng is married to Drive.ai co-founder and president Carol Reiley.

Approach: Drive.ai is banking on the application of deep learning—a subset of artificial intelligence—to all parts of autonomous driving software. Instead of simply teaching the car's software sets of "if/then" rules, the company is using techniques to teach it how to recognize objects, what's right and what's wrong, what's safe, and so on.

Drive.ai is developing self-driving car kits that can be retrofitted to vehicles, and plans to make them available to business customers (ride-hailing services, etc.). It's currently working with sensors that include LiDAR, radar, and cameras, though the company says it wants its software to be flexible and work with what combinator of sensors its partners prefer. (Check out Axios' dive into the debate over LiDAR and self-driving cars here and here.)


Funding: New Enterprise Associates (NEA) led this latest funding round, with GGV Capital and existing investors like Northern Light Venture Capital also participating. Along with Ng, NEA's Carmen Chang is also joining Drive.ai's board as well as GGV's Jenny Lee as an observer.
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People will spend 3.5 trillion hours on mobile apps by 2021

If you thought people were glued to their smartphones already, just wait: App Annie projects that the total number of hours spent using mobile apps will rise to 3.5 trillion hours by 2021, up from the already considerable 1.6 trillion hours logged last year.

The average user in France spends just over 1.5 hours per day using mobile pass, compared to more than 3 hours per day in South Korea.

All that screen time adds up to lots of revenue in the form of app sales, in-app advertising and mobile transactions. Added together, App Annie says the mobile app economy drove $1.3 trillion in spending last year, a figure that should approach $6 trillion by 2021, again including app purchases, advertising and mobile purchases.

Data: App Annie; Chart: Andrew Witherspoon / Axios

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FedEx CEO proposes his own tax plan amid delayed WH action

Carolyn Kaster / AP

FedEx founder and CEO Fred Smith is pushing his own alternative tax plan as Washington remains divided over the tax plans proposed by Congress and the Trump administration, per Bloomberg.

"We at FedEx, like many major U.S. companies, are concerned the window for tax reform is closing," said Smith. "Our current federal tax system is simply not globally competitive, retarding investment and the high paying jobs that follow."

FedEx's proposal places greater emphasis on revenue-raising programs, such as increasing employer Medicare taxes and gasoline taxes to create more spending for infrastructure. It would also place restrictions on the tax cut available to high-income "pass-through" entities, and would eliminate the controversial border-adjusted tax.

Why it matters: The move reflects a major concern held by big businesses that tax reform isn't really coming any time soon, so they're acting on their own.

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Trump mocks CNN for retracting Russia-related story

President Trump went on a Twitter rant Tuesday morning targeting "FAKE NEWS!" CNN who recently had three reporters resign after the network retracted one of their Russia-related articles:

His third tweet, which was deleted then reposted once a typo was corrected: "So they caught Fake News CNN cold, but what about NBC, CBS & ABC? What about the failing @nytimes & @washingtonpost? They are all Fake News!

CNN's reply to POTUS: "@realDonaldTrump CNN just posted it's most-watched second quarter in history. Those are the facts."

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Unilever is using algorithms to make key hiring decisions

Marcio Jose Sanchez / AP

Unilever is handing over an important part of its hiring process to a computer program in an attempt to increase diversity, The Wall Street Journal reports.

Why it matters: Research shows that humans possess biases that both make us pretty poor judges of a job applicant's capabilities, and also reinforce workplace diversity problems. Companies like Unilever are betting that by removing human judgement from part of the hiring process, they can both attract better and more diverse workers.

What it's doing: The maker of Lipton tea and Dove soap is placing ads on social media and job sites to find candidates for early-career positions, expanding its reach far beyond the roughly eight schools from which it typically recruits. Candidates who click on the ads are directed to a career site, where more than 250,000 candidates have applied for jobs and internships.

How it works: An algorithm weeds out roughly half of the respondents, with the other half asked to play a series of 12 online games that test skills like concentration under pressure and short-term memory. The top third scorers are then asked to submit a video interview where they answer questions about how they would respond to various on-the-job challenges.

Only after this third step is a culled list of candidates handed over to the human resources department, which brings in candidates for a final interview. Andy McAllister, a Unilever director of supply chain, told the Journal that despite his initial skepticism of the plan, his recent batch of interns was as strong or stronger than those he handpicked the year before.

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U.S. image plunges

Jae Hong / AP

Pew Research Center: "According to a new Pew Research Center survey spanning 37 nations, a median of just 22% has confidence in Trump to do the right thing when it comes to international affairs. This stands in contrast to the final years of Barack Obama's presidency, when a median of 64% expressed confidence in Trump's predecessor to direct America's role in the world."

Reuters: "[T]he survey showed that 58 percent of respondents had a positive view of Americans in general. And in many regions of the world, a majority or plurality of respondents said they expected relations with the United States to stay roughly the same in spite of Trump."

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Conservative media gets even bigger under Trump

Some fascinating data points I picked up while investigating how partisan media has changed under Trump:

Right-wing killing it on Facebook and online: In studies done for Axios by Newswhip, which measures social media engagement, and Chartbeat, which measures website engagement, it is conservatives — not liberals — who have seen the bigger explosion of new, high-traffic sites and pages taking off in the Trump era. While everyone obsesses about Trump on Twitter, his Facebook fan base was much larger and probably more consequential in shaping public opinion. (Roughly half of U.S. adults say they get news from Facebook, per Pew.)

Fun Fact: Drudge drives more traffic to news sites than all but five companies in the world — and MORE than Google News.

Leftwing resistance growing: Several liberal groups most people never heard of are surging on Facebook: The Other 98%, Occupy Democrats, Proud Liberals, News and Guts. They are often early indicators of growing protests and pull Democrats to the left with a mix of emotion and movement.

The advertiser conundrum: There is a growing trend of advertisers being caught in the crosshairs of partisan media forces, and that pressure is particularly strong from liberal activists. Advertisers fled Breitbart, Hannity and O'Reilly in droves when faced with left-wing pressure, and most recently, a few boycotted Megyn Kelly's Sunday night interview with Infowars leader Alex Jones. Expect this trend to intensify on both sides.

The lesson learned? "Brand safety is becoming just as, if not more important, than ROI (return on investment)," says Steve Passwaiter, VP at Kantar Media, an advertising measurement firm. "It used to be that a controversial interview was a good thing. Go for the big-name interview and take advantage of the numbers. But that's just not the case anymore."

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Confidence in U.S. president drops — except in Russia & Israel

In an annual survey, Pew asked respondents from around the world whether they had confidence the U.S. president would "do the right thing regarding world affairs."

  • Confidence dropped in 35 of 37 countries since Barack Obama left office. In European countries, confidence in President Trump is as low as 7%. Sweden had the biggest drop, from 93% under Obama to 10% now.
  • The outliers: Confidence increased by 7% in Israel, and a staggering 42% in Russia since Trump took office.
  • Why it matters: Trump is the "America First" president, and proudly so, but it's a problem when only tiny slivers of populations in closely allied countries like France, Germany and the U.K. have faith in the U.S. president. It won't help those alliances, and it certainly won't help the U.S. project soft power around the world.
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EU slaps Google with massive $2.7 billion fine

AP

European antitrust officials slapped Google with a massive $2.7 billion fine on Tuesday for abusing its search practices, more than double what was expected.

This has been a long time coming: smaller firms like Yelp and have spent several years lobbying the EU to act as U.S. regulators have been reluctant to take on Google.

In a statement, competition regulators say Google has abused its market dominance as a search engine to steer customers to its own Google Shopping platform. The company has 90 days to pay up or will face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet (Google's parent company). Google says they think the EU undervalues Google's shopping and search experience for consumers, arguing that its success doesn't mean it favors itself — "it's the result of hard work and constant innovation."

Why it matters: In Europe, the tech titans are facing rising scrutiny: European regulators — whose countries have lost the game of tech, pipes and content — are getting aggressive in trying to constrain the behemoths. The latest penalty represents rising tensions between E.U. regulators and U.S. tech giants. The fine, while much larger than expected, won't make that much of a dent in Google's bank account. The bigger concern for Google is that the EU regulators' aggressive move will nudge U.S. counterparts to take a closer look at industry dynamics and whether the dominant tech firms use their growing troves of data and increasingly sophisticated algorithms to skew competition more broadly. A strong rebuke from Brussels will be noticed by influential Trump administration officials who are already interested in reigning in the power of tech giants like Google.

What's next: Google said it's reviewing the decision and considering an appeal.
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Podcast trend: Finally real money (and going upscale)

Podcasts, once a curiosity, are now big business: An industry forecast says they'll draw $220 million in ads this year.

Why it matters: A new Interactive Advertising Bureau study also found that while three-quarters of podcast ads are direct-response (like ordering on Stamps.com), there's been an increase in brand awareness ads. These are the ads you typically see aligned with high-quality TV/video content.

Data: Interactive Advertising Bureau; Chart: Chris Canipe / Axios

How it happened: The growth reflects an audio streaming boom, made possible largely through mobile apps like Apple Music and Spotify.

The audience: Edison Research and Triton Digital estimates 98 million U.S. adults listen to podcasts.

For kicks: Consumers prefer host-read ads over pre-produced ads 60%-40%, according to the study.