SodaStream CEO Daniel Birnbaum has an incentive to disparage his rivals — but nontheless he made a strong argument as to why Coke and Pepsi are “antiquated” and “insane.”
Some unusual candor in an interview with WSJ’s Simon Zekaria:
“Coca-Cola Co. and PepsiCo will have to face the reality that their business model cannot be preserved forever. The world is changing and we’re going to call it out,” says the CEO of SodaStream.
“If the beverage industry had to create itself now from scratch, it wouldn’t do it the way it is. You don’t need factories, trucks, bottles and cans,” he says. “Transportation for carbonated drinks in the world utilizes 100 million barrels of oil every year. That is 20 times the BP disaster that hit the Gulf of Mexico.”
“I think it is criminal that the industry, led by two big companies, will do anything to protect their antiquated business model. They are generating 35 million bottles and cans every single day in the U.K. alone. World-wide it is one billion bottles and cans, most of which just go to trash, landfill, the oceans or parks. It’s insane,” Mr. Birnbaum added.
Now that he mentions it, that does seem wildly inefficient.
Of course, inefficient companies can last a long time thanks to all of that infrastructure in place. And if the industry is disrupted by a new company, there’s no guarantee that company will be SodaStream (which is one of the most shorted stocks on the market).
Don’t miss: The Complete HIstory Of Sodastream >
The Wall Street Journal is reporting that Baidu, China’s biggest search company, is sacking staff because they’ve been deleting users’ posts for cash.
The “professional post-deleting”, as it’s come to be called, is a way of removing negative press and reviews from websites. The deletion is a major problem in China, but cross referencing a record of original posts with the deletions its employees make has allowed Baidu to identify the culprits. The company told The Global Times:
“Baidu has fired the four. If we discover such cases, we will severely punish staff. Baidu will close the loopholes by strengthening management to maintain order in our communication platform.”
The Global Times points out that payments for post deletion can range from around $150 to delete a single forum post, $450 to delete a news story—a news story!—and up to $30,000 a year for what’s referred to as a long-term “maintenance service”, which sees any negative mentions of a company deleted immediately.
Image by Getty
O, how the mighty
fall have an asthma attack and roll off the side of a cliff. Digg, erstwhile king of the internet, just sold itself for a mere $500,000. In 2008, it turned down Google’s offer of two hundred million.
Of course, in 2008, Digg was one of the top sites on the entire internet. Now, not so much. As Gizmodo alumnus Mat Honan points out, this is exactly .0005 Instagrams. That’s pretty much a “we’re not giving you zero dollars, now shut up and die” offer in tech land, and certainly not enough to keep Digg going as anything that resembles the Digg of today: WSJ says “None of Digg’s remaining employees will join Betaworks as part of the acquisition.” Frankly, Digg should be glad it wasn’t offered a free bowl of warm soup and some Hollywood Video gift cards.
The site, which once carried the massive internet clout of Reddit in 2012—able to make or break (literally) entire websites with its gigantic traffic tsunamis—was just acquired for less than it costs to buy a tiny apartment in New York. The Wall Street Journal reports that the “New York technology development firm Betaworks,” which ” intends to fold Digg into News.me Inc. a digital media startup that Betaworks launched in April 2011.” Considering nobody knows what the hell News.me is, this is goodbye for Digg, which drifts off to join Blockbuster, CompUSA, Sam Goody, and MySpace’s lower torso under some shadowy rock in hell. Bye, Digg! You’ll long remind us of the late 2000s, when Rihanna was busy capturing our hearts, and you were worth actual attention, and maybe even money. [WSJ]
The effectiveness of Facebook ads has always been a big question-mark, with some data suggesting that the ads just don’t perform well.
According to Sharon Terlep, Shayndi Rice, and Suzanne Vranica of the Wall Street Journal, GM decided to pull the ads after meeting with Facebook executives and coming away unconvinced that they were effective.
GM currently spends $40 million a year on its Facebook presence.
Importantly, however, only $10 million of that spending goes went to Facebook.
The other $30 million goes to pay ad agencies and others to create content for Facebook and maintain GM’s pages and presence on Facebook.
In other words, GM has just killed the only part of its Facebook advertising presence that it was paying Facebook for.
Here’s the key section of the WSJ article:
Asked about the move, GM marketing chief Joel Ewanick said the auto maker, “is definitely reassessing our advertising on Facebook, although the content is effective and important.” Content refers to the unpaid Facebook pages many companies use to promote their products.
GM, started to re-evaluate its Facebook strategy earlier this year after its marketing team began to question the effectiveness of the ads. GM marketing executives, including Mr. Ewanick, met with Facebook managers to address concerns about the site’s effectiveness and left unconvinced advertising on the website made sense, according to people familiar with GM’s thinking.
Importantly, GM’s skepticism about Facebook is not due to a skepticism about digital advertising overall. GM spends about $300 million a year on digital brand advertising–just not on Facebook.
The growth of Facebook’s advertising business has slowed sharply in recent quarters, and the business achieved growth of only 37% year over year in Q1.
Advertiser skepticism may be one reason for this.
Although some people are convinced that Facebook will eventually be a bigger company than Google, there is very little evidence to support this contention. At the same time, there is much to suggest that this conclusion is simply unwarranted:
- Facebook is growing significantly more slowly than Google was at this stage of its development
- Advertising on Facebook, however well-targeted, is like advertising on walls at a party (people are there to socialize, not buy stuff). Advertising on Google, meanwhile, is advertising to people who have explicitly expressed interest in your product (See: “Like Hell Facebook Is Killing Google“)
Facebook just rolled out a suite of new impressive-looking ad products, which will include large ads in users’ news feeds. These new units seemed to be well-received by advertisers, at least to the extent that they were excited about hearing more about them.
But GM appears to have gone to the trouble to hear a lot about them–and still came away unimpressed.
The loss of a $10 million deal obviously won’t dent the ~$5 billion of revenue Facebook is expected to generate this year. But the loss of lots of clients like GM will begin to dent it. And for a company whose growth rate is already decelerating, there’s no way this can be construed as good news.
Groupon is bleeding in the water, and the sharks are circling.
On Friday, we learned that Groupon under reported the number of returns it had in Q4, and that the company had to revise its earnings.
Then Groupon’s auditor filed a “statement of material weakness,” basically telling the SEC it would not vouch for the company’s numbers.
That’s not all the company has to worry about.
Institutional investors put big money into Groupon’s IPO.
Since that day’s highs, the stock is down more that 50%. It tanked 16% yesterday alone.
If those institutions can blame somebody else for those losses and recoup any of their own investor’s money, they will.
That means if those investors catch even slight whiffs of fraud out of Groupon – and trust me, they are sniffing – the lawsuits and subpoenas will come in rapid succession.
Ever seen a shark frenzy?
- Groupon’s Andrew Mason: We Were ‘Toughened Up’ By Quiet Period
- Groupon Eyes Foursquare Territory And Acquires Location Database Startup, Hyperpublic
- San Francisco Puts Hackers To Work Fixing The Horribly Broken Taxi System
According to the Chicago Booth/Kellogg School Financial Trust Index (h/t WSJ’s Sudeep Reddy), only 23% of Americans trust the financial system. And 62% are either “angry” or very “angry” about the state of the economy.
Trust in the financial system hasn’t been this low and anger in the economic situation hasn’t been this high since March 2009. And March 2009 was when the S&P 500 hit that horrific low of 666.
“In an election year, this certainly indicates the importance of the economy to the political agenda,” wrote Paolo Sapienza. Sapienza co-authored the index with Professor Luigi Zingales.
Then again, March 2009 turned out to be an amazing time to buy stocks.
- Nassim Taleb: ‘The Only Candidate I Trust Is Ron Paul’
- This Is The Best Explanation Of Davos By The Numbers We’ve Seen
- President Obama Mentions An Energy Company In His Big Speech And It Goes Bankrupt Instantly
Penn found that IKEA customers, following the signature yellow path, walk through the entire warehouse store. They get lost, encounter products they weren’t looking for and spend enough time shopping that they feel justified making impulse purchases.
Here’s a customer heatmap from Penn’s presentation, followed by the video.
- TURN YOUR LIFE AROUND: 14 Ways To Make Better Decisions And Strengthen Your Willpower
- 19 Tips And Tricks On How To Read People
- This Vietnam Study About Heroin Reveals The Most Important Thing About Kicking Addictions
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
Collaborators – Digital Profs
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- Coke vs Pepsi vs Dr Pepper
- Marketing Costs Normalized to CPM Basis for Comparison
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