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Data Sheet—Thursday, July 2, 2015

Happy Thursday, Data Sheet readers. As expected, Hewlett-Packard has filed more details with the Securities and Exchange Commission about plans for the new enterprise company after the split this fall. Yahoo is testing new search services with Google, and Chicago is charging a hefty new tax for online services. I’ll be skipping Friday’s edition in observance of Independence Day. Enjoy the long weekend!

TOP OF MIND

You can print your own boarding pass, why not your own bag tag? Aside from the hefty fees most airlines charge, there’s a very good reason travelers drag so many handbags, parcels and suitcases onboard: the current luggage check-in and handling system is horrible. Among the potential solutions: self-service kiosks and permanent luggage tags containing digitized information about the owner and his or her journey. “Home-printed and electronic bag tags are the low-hanging fruit for U.S. airlines,” Stephanie Taylor, a manager with trade group Airlines for America, told the Wall Street Journal. “We’re expecting multiple carriers to adopt these solutions by the end of the year.”

TRENDING

HP files more details of break-up plan. Investors can now review financial details related to the enterprise division. The group would have generated $55 billion in 2014 as a separate company, down from $57 billion the previous year. Information about the other company, focused on printing and personal computers, won’t be revealed until after the split is completed.

Google and Yahoo, perfect together? Yahoo’s revised partnership with Microsoft gave it the freedom to work with other search engine providers. So, the two rivals are testing scenarios for both mobile and desktop applications. 

Voice control as the “interface” for the Internet of things? Why the rise of Amazon’s Echo home automation device makes this far more likely.

Facebook will finally pay video creators, just like YouTube. The move will inspire (and reward) far more sponsored and premium content.

PayPal’s international ambition. It is paying $890 million for Xoom, which sells technology enabling cross-border money transfers.

It looks like China’s Xiaomi might blow its forecast. The world’s most valuable company—with a valuation of more than $46 billion—sold 37.5 million mobile phones during the first half. That makes it unlikely to reach 100 million shipments before the end of the year.

What you need to know about Chicago’s aggressive “cloud tax.” Businesses and consumers in the Windy City are liable for a 9% tax on streaming or cloud services such as Netflix or Amazon Web Services.

THE PITCH

There’s a ticking time bomb inside the online advertising market

Half of all online ads are never seen by a human being, huge amounts of traffic and clicks come from bot networks, and fraud is rampant. Fortune‘s Mathew Ingram exposes some of the reasons why.

The media industry has no shortage of things to worry about. Audiences are going elsewhere, whether it’s to social networks like Facebook or digital-only competitors such as BuzzFeed, and so advertising revenues continue to fall—not just for print, but for digital and video and pretty much everything. But there’s an even bigger problem for ad-based media that doesn’t get talked about much: Namely, the fact that a massive chunk of the advertising market is based on smoke and mirrors, or even outright fraud.

Department store magnate John Wanamaker famously said: “I know half the money I spend on advertising is wasted, I just don’t know which half.” He was talking about traditional ads in print newspapers and magazines and other formats, which were notoriously difficult to measure. As a result, media companies were able to charge huge sums based on the assumption that lots of people saw an advertiser’s message.

That was all supposed to change when advertising and media went digital, since one of the benefits of the internet is that you can track almost every aspect of someone’s behavior—whether it’s the amount of time they spend on a page, where they came from, what browser they use and what they clicked on.

That doesn’t mean measuring the effectiveness of advertising has gotten any easier, however. In fact, it’s arguably gotten even harder, for a number of reasons. One is that no one can seem to agree on what exactly media companies should be measuring: Clicks? Page-views? Unique monthly visitors? Time spent on a page? Many advertisers are still attached to the idea of page-views or visitors as representing eyeballs, although analytics companies like Chartbeat are trying to wean them away from these metrics.

And that’s only the beginning of the problems with the $14-billion online ad business, as Sam Scott pointed out in a recent post at Moz. Another issue is that, according to some estimates, more than half of the advertising on the Internet is never actually seen by a human being.

Read the rest of Ingram’s article, detailing why that’s happening.

THE DOWNLOAD

Too many customer requests on social media fall on deaf ears

Congratulations! Your marketing and customer support teams have amassed thousands of followers on the company’s Facebook and Twitter accounts. Now, they might actually want to start paying attention to these service channels.

It turns out that while people may put up with waiting on telephone hold for 15 minutes (or so) or be willing to bide their time for an email response, they’re not so patient with social media.

Close to 42% of consumers expect resolution within an hour of posting a question or issue. The problem is, right now social media represents one of the least responsive ways for someone to get an answer, according to data from consulting firm Northridge Group. (Registration required.)

Indeed, about two-thirds of the 1,000 consumers surveyed by the company report they’ve had to reach out at least twice to get an answer. Notes Northridge CEO Therese Fauerbach in comments about the findings:

“Nearly half of consumers plan to use social media for customer services issues the same or more than they currently do. There are clearly opportunities for companies to provide excellent customers service on all channels, including social media. Consumers want to use social to resolve problems, but the experience is inconsistent compared to other channels.”
In fact, U.S. brands are actually among the worst offenders, finds separate research by another strategy firm, Socialbakers.

The response rates calculated as part of its quarterly “Socially Devoted” index were downright abysmal: 59.4% for queries posted via Facebook and just 18.1% for those communicated through Twitter. The average response rates for companies globally were 74% and 30% globally. The analysis tracked brands received at least 10,000 questions on social channels during the quarter.

Which companies are getting things right?

On Twitter, Socialbakers points to Nike, which was actually represented by several regional accounts. The Boston division, for example, had close to an 84% response rate. Meanwhile, T-Mobile USA scored well from a sheer volume standpoint.

When it comes to Facebook interaction, look to Fitbit for inspiration. It wasn’t as fast as the other companies cited—which happened to be the top four U.S. wireless carriers—but the wearables technology company responded to almost 84% of the inquiries left on its page, according to the analysis.

The takeaway? Using social channels to serve customer service needs is natural, because of the efficiencies it promises and the positive notoriety your brand can receive when things go right. But an organization needs to think social to succeed. That takes far more than simply establishing an account.

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ALSO WORTH SHARING

What Elon Musk, Stephen Hawking, and Bill Gates have in common. They’re all donors to the Open Philanthropy Project. The organization is dedicated to exposing the ethical and regulatory questions poised by emerging technologies, particularly artificial intelligence.

More sharing economy startups are putting employees on the payroll. Delivery service Shyp is reclassifying contract workers in the name of a better customer experience. But the legal pressure to do so is also increasing. Among targeted companies: Caviar, Uber, Lyft and Postmates.

Former cloud software partners go separate ways. Red Hat used to be an investor in Mirantis, a specialist in Open Stack technology. Now the two are competing for the same accounts.

It’s been a rough week for Donald Trump, and now it looks like he’s got another potential problem: a potential credit card data breach.

Sprint’s CEO has had it up to here with rival T-Mobile’s rhetoric. That time when Marcelo Claure called out John Legere on Twitter.

China’s new national security policy is officially law. It calls for a vague “review” of the technology industry. That’s triggering new concern over what intellectual property companies might be asked to share for the right to sell into domestic accounts.

MY FORTUNE BOOKMARKS

Meet the women shaping the future of the drone business by Matt McCue

Here’s what Mark Zuckerberg thinks about the future of news by Mathew Ingram

Greylock wants techies to schmooze more in person, not just online by Leena Rao

Yes, you do need a CIO. And here’s why by Barb Darrow

Here’s everything we know about Tesla Model X by Katie Fehrenbacher

The crazy economics of inflight Wi-Fi by Kevin Fitchard

ONE MORE THING

Goodbye Dick Costolo. Tuesday was the former Twitter CEO’s last day there. Here’s his last promise, voiced in an editorial for The Guardian: “We will deal with issues at the intersection of ethics, content and technology that have not been confronted before. We will make difficult decisions every day to ensure that as many people as possible have access, and that the smallest voices in the world can be heard. And what we ask of you is that you use this access responsibly and with empathy.”

MARK YOUR CALENDAR

Brainstorm Tech: Fortune’s invite-only gathering of thinkers, influencers and entrepreneurs. (July 13 – 15; Aspen, Colorado)

Esri Business Summit: Mapping the value of data. (July 18 – 21; San Diego)

LinuxCon North America: All about open source. (Aug. 17 – 19; Seattle)

SuccessConnect: Simplify the way the world works. (Aug. 10 – 12; Las Vegas)

VMworld: The virtualization ecosystem. (Aug. 30 – Sept. 3, 2015; San Francisco)

Dreamforce: The Salesforce community. (Sept. 15 – 18; San Francisco)

.conf2015: Splunk’s “get your data on” gathering. (Sept. 21 – 24; Las Vegas)

Cassandra Summit: Largest gathering of Cassandra database developers. (Sept. 22 – 24; San Francisco)

BoxWorks 2015: Cloud collaboration solutions. (Sept. 28 – 30; San Francisco)

Workday Rising: Meet and share. (Sept. 28 – Oct. 1; Las Vegas)

HP Engage: Big data, big engagement. (Oct. 4 – 6; San Diego)

Gartner Symposium ITxpo: CIOs and senior IT executives. (Oct. 4 – 8; Orlando, Florida)

I Love APIs 2015: Apigee’s annual conference. (Oct. 12 – 14; San Jose, California)

Grace Hopper Celebration of Women in Computing: World’s largest gather of women technologists. (Oct. 14 – 16; Houston)

Oracle OpenWorld: Customer and partner conference. (Oct. 25 – 29; San Francisco)

TBM Conference 2015: Manage IT like a business. (Oct. 26 – 29; Chicago)

QuickBooks Connect: SMBs, entrepreneurs, accountants and developers. (Nov. 2 – 4; San Jose, California)