Monday, February 7, 2011

Super Bowl - Groupon - Crowd Sourcing

The Super Bowl, of all places, raised two issues related to trends trends in economics and corporate governance.  In the first instance, the New York Times raised the issue of: "Did Groupon Cross the Line in Super Bowl Ad Debut?" In that ad, Groupon blatantly uses the suffering of Tibetans as a commercial marketing gimmick.

8/30/2011 UPDATE:  I noticed that the video clip originally here has been made "private", whatever that means.  Attached is another link to the video: Goupon Superbowl Tibet Ad.

Like many I was shocked. When I read the New York Times' article, it reiterated my belief that the real shock was how morally corrupt our advertising is. All that Groupon did was take an advertising concept to an extreme logical conclusion.

There is an old joke where a guy asks a woman if she will sleep with him for $1 million dollars and she responds with an affectionate yes. He comes back with an offer of $1 and the woman is offended and with moral indignation: "NO! What kind of woman do you think I am." His response was the classic line of "We already established that, now we are just haggling price."

Peter Principle had a somewhat terse response: "The utter vacuity and moral nihilism of 21st century corporate capitalism on full public display."

The Dilbert Cartoon below also provides an pithy summation.

At lunch time, CNBC news also reviewed the Groupon ad. But they also raised another unexpected issue, that of user generated content (crowd sourcing).

David Faber asks Miles Nadal (of MDC Partners, the guest speaker) the question of what happens to professional advertisers if amateurs can produce ad content. Mr. Nadal skillfully parries the question.

Why is Mr. Faber's seemingly innocuous question important? In today's economic system, though we profess to follow free-market principles, those who are classified as professionals attempt to "lock-out" amateurs. Copyright law and patent law have morphed into mechanisms to protect business monopolies and discourage "amateurs" from generating new innovative content. Whether Mr. Faber was intending to go down that path with his question, I do not know. But the point is that the free-market should not protect a corporate income stream. If people seek to produce content for free, great.

12/27/2016 UPDATE: The CNBC video clip that I had here is no longer available.

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