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"If you are a small company and need to get your goods through customs, it is a difficult moral choice," says Sir Mark Moody-Stuart, the former chairman of both the oil giant Shell and the global mining company Anglo-American, two of the biggest companies in the world.

However, if you do pay a bribe you will be responsible for perpetuating corruption and you will almost certainly be committing a criminal offence.

Moral paradox

Furthermore, you will be adding an additional cost to your business.

"When it is your business, the employment of your people, then I think paying a bribe is the lesser of two evils," Sir Mark says.

However, to avoid paying "you just say no", he says - even though there could be situations where you will lose business if you do not pay, and that business could go to rivals.

"Nobody has got a gun at your head - or only on rare occasions," Sir Mark says. "But generally you just say no, and then see what the consequences are.

Citing an example he says: "We were asked by the Venezuelan ministry for $35m for them not to revoke our license. It was blatantly corrupt and the answer was no, and we've still got the nickel mine."

Gary Busch, a logistics expert who has worked for companies that own and operate cargo vessels and aircraft in Africa, maintains it is not the job of business people such as him to try to change the culture of the countries in which they operate.

"There is no moral obligation for anyone to refuse to pay bribes," he says.

"But there are moral obligations to make sure that workers have work to do and that they are not starving.

"It is very easy to stand up and cast your moral vote against corruption, but that doesn't help anyone get a job, it doesn't help them survive."

Mr Busch insists that companies have responsibilities to the workforce and their families in addition to their responsibilities to the shareholders.

"That is also a moral responsibility," he says.

Prudent payments

Sir Mark admits that he did once pay a bribe.

"I was driving back from a camping holiday in Nigeria," he explains.

"I had my family in the back and they had chickenpox and a policeman stopped me.

"We had a long negotiation and in the end I bought them two cases of beer for the police Christmas party. When I'd done that, I told the guy to give my regards to the police commissioner.

"He said that if I'd mentioned the police commissioner's name before, we wouldn't have had this problem," he continues.

"That would have been equally corrupt."

There was also a time when Anglo American paid money in South Africa, but Sir Mark insists it was only to support the political process.

"It was a growing democracy and the parties needed funding," he says.

"In that particular case, we broke our rule about not making donations and said we will make them, and declare them openly and publicly and we will give half the donations to the government and half to the opposition."

The extractive industry operates over 30 or 40 years, so having a deal and signing the contract is just the beginning.

"After that a lot of money flows into the country and as a mine or an oil well cannot be moved, it is better to get on with the folk in the country," Sir Mark says.

Backdoor bribes

A bribe inevitably involves cash or expense at some point.

If a company wants to better its relations with a country, it might be suggested that the president's wife runs a cultural organisation and if a donation into what just happens to be a bank account in Switzerland was to be made then this cultural organisation would flourish.

It might sound like a good proposal, but it is a form of corruption.

Likewise, a company could start a community project that is not related to its business, but happens to be in a particular minister's home constituency, just before an election.

"It is an infinitely complicated subject," says Sir Mark.

"Bribery has lots of ramifications and complexities and different people draw the line in different ways."

He acknowledges, however, that big companies are better resourced to refuse to do business if it means paying bribes and that smaller companies may not be able to afford to take the moral high ground.

 

Consumers Can and Do Control Who Targets Them When Online, and That's a First for Advertising

Posted by Jay Habegger

This must seem a radical statement given The Wall Street Journal's "What They Know" series, the New York Times editorial calling for a federal Do Not Track list, and December's FTC report on privacy, all of which sound a shrill alarm on the risks to consumer privacy from online, interest-based advertising.

 

Cookies, anyone?
The fact is that online, interest-based advertising is the only form of advertising that puts the control 100% in the hands of the consumer. Ours and other companies that provide targeted online advertising services adhere to privacy best practices, and we all provide a simple opt-out for consumers. The backstop to all of these efforts is the fact that the targeting in question fundamentally depends on a cookie placed on the consumer's computer -- and therefore fully under his or her control at all times.

To end targeted advertising -- at any moment a consumer chooses -- consumer need only delete their cookies. A consumer can even delete selected cookies. Privacy advocates say this feature is "hidden" or too complicated for the average consumer. But popular browsers, such as Firefox, provide menu items one click away from the main menu that enable anyone to delete cookies and browse in private. Popular security software provides built-in features for regularly scheduled cookie deletion. Any consumer who knows how to buy something online knows how to manage cookies or even manage his or her browsing history. This isn't as complicated as the so-called privacy advocates would have us think.

No other form of advertising offers consumer the level of control this implies. I can't control the print advertisements I see in magazines or newspapers that are targeted based on data collected offline (other than by not reading the publications). I can't avoid targeted direct mail, or control which direct mail I get, despite various attempts by the DMA to institute a Do Not Mail list. Let's face it, none of us can avoid spam, despite Can-SPAM, and the "Do Not Call" list only applies to certain firms, but not to nonprofits and certainly not to the political campaigns whose recorded messages so often interrupt our family dinner. Compared to just about every other form of advertising, online, cookie-targeted display advertising looks pretty consumer friendly.

Where is the market failure?
Most regulation is driven by market failure. The idea is that there are situations where the market can't deliver the outcome desired by a plurality because of an inherent flaw in institutions or incentives. These situations, market failures, require a government to step in.

There is an increasing drumbeat from government agencies and politicians about the need to regulate online cookie-targeted advertising. The implication is that the market has failed, so the government needs to protect the consumer.

The history of regulation is replete with robust debates as to whether the market had or had not failed in a particular instance, and therefore whether or not the government truly needed to intervene. The situation around cookie-based online ad targeted is not one of these cases. There is simply no market failure. The companies involved have provided mechanisms for managing any targeted ads that may be displayed, and consumers themselves have easy and absolute control over any cookies placed on their computer.

No, really: Where is the failure?
The only failure that I'm aware of is the failure of privacy advocates and certain legislators to find any harm done to consumers. Even the aforementioned NY Times editorial confused data-scraping with behavioral advertising -- and the Times should know better, because it employs more behavioral tags on its site than most publishers.

We're told that the opt-out facilities provided by interactive media and marketing companies are too complicated. We're told that cookie deletion in the browser is too difficult. But, as described above, these steps are pretty easy. The real frustration of privacy advocates seems to be that most consumers don't care enough even to take these steps. This frustration is driving the desire for the government to step in and "fix" a failure that doesn't exist.

I don't believe consumers are as dumb as privacy advocates make them out to be. An alternative interpretation of the current situation is that consumers can manage their own browsing experience, and they've by and large voted with their mice. Consumers have concluded that tons of free content and great applications coupled with full control of their browsing experience via their browsing software is a pretty fair deal.

A Payments System and Social Ad Network Will Take It to a $100 Billion Valuation

David Pakman

Facebook, at over 500 million users, has transformed the web, and indeed the planet, by connecting us all in ways we weren't before. At their current growth rates, they will finish this year at around 600 million users and will be larger than Google by the end of next year (if they aren't already, see here). (As Facebook's head of growth once told me, the nice thing about growth being truly viral is that it becomes very easy to predict your future growth. Facebook actually employs several epidemiologists to measure and predict growth.) Once Facebook has a true web-wide view (i.e., is connected with nearly all 1.1 billion people on the web), their scale becomes completely un-ignorable by all major advertisers. They are already at this point today in many markets, but this will become true next year in essentially all online geographic markets.

Today, we understand that Facebook generates about $2 to $3 per user per year in revenues. Google, however, generates about $25 per user per year (more than $25 billion in revenue from about 1 billion users). The gap is considerable, but Facebook is just getting started with their monetization efforts. Their main forms of revenue today are engagement ads and self-service ads. The non-self-service ads are sold by a large and competent sales staff around the world that caters to brands and agencies. They are selling these ads largely on a CPM basis. That is, they are not positioned as performance-oriented ads, but sold more like TV. Reach and frequency are the main measurements and selling points. Self-service ads are sold more to the mid-tail of advertisers and are sold more like Google AdWords on a CPC basis. These ads allow for extremely rudimentary targeting. The targeting criteria is based on the info you, the user, have put in about yourself. I am a male in my early 40s in New York City and I like tennis. So, I see ads targeted at these keywords.

There are pros and cons to these forms of advertising. First, Facebook's reach is undeniable and advertisers love the idea of appearing on everyone's Facebook page for an entire day. The CPM ads are targeted more at brand advertisers that are less interested in demand fulfillment and more in awareness generation and demand creation. As Sheryl Sandberg has pointed out many times, this "brand advertising" market is many times larger than search/display "performance" marketing. They have their eyes set on TV.

I think the main reason they are focused on this is because, quite frankly, ads on Facebook don't perform very well. We know that the effective CPM of these ads on Facebook is well under $1. Advertisers understand that social media has proven, thus far, to be a place where people don't seem to want to be interrupted to click an ad. In addition, the performance of rudimentary ad targeting doesn't nearly beat the efficacy of search targeting or good display behavioral targeting for that matter. That makes it less attractive to advertisers who measure performance by clicks, and also to a company who expects to be paid per click. Hence, sell CPMs! Facebook has lots of growth in these two ad strategies. But that is not what will get them to $20 billion in revenue quickly.

What will? Two things: payments and off-site social targeting.

Facebook payments, with Facebook getting 30% of all virtual good sales, will generate several billion dollars a year once it is ramped. This can become a $4 billion revenue line for Facebook within three years. But the other often under-discussed opportunity is an off-site socially targeted ad network.

We know from our investment in Media6Degrees that the most effective form of ad targeting after search is social targeting. These are ads that are targeted essentially at the friends of a brand's existing customers. Your customer's friends show extremely similar brand affinities as you. Of course, these prospects don't have to be the actual friends of your customers...they just have to have similar social signatures to your customers. And Media6Degrees is the leading company pioneering this form of targeting. Other companies exist trying to do the very same thing. Frankly, the results are staggeringly good.

The issue for Facebook is that applying this advanced form of targeting on their site would be uninteresting, owing to the lack of performance of advertising on social media. This is where Facebook Connect comes in.

Already, more than 2 million sites have implemented Facebook Connect. I believe what Facebook will do is to offer to every one of those sites essentially an AdSense replacement. Pull out your AdSense ads and replace them with socially-targeted Facebook ads. When a friend of a brand's existing customer appears on a publisher's site, they can see ads for that brand. I believe these results will perform considerably better than AdSense's contextual/semantic targeting and hence provide publishers with larger payouts than Google provides them. Facebook already has the large social data set to understand the connections necessary for this targeting. Of course, this will further encourage more sites to implement Facebook Connect and Like buttons, since Facebook can make these requirements to be in the social targeting ad network.

By the way, this form of targeting is proving to work equally well for video. Video is likely to be the most important form of ad creative deployed for brand advertisers. But to whom do you show the commercials? The friends of your existing customers.

At scale, with, say, 5 million sites in this network, Facebook could operate the largest off-site ad network (display and video) that outperforms all others. At this scale, I can see this generating $15 billion a year in revenue.

What's stopping them today from doing this? Well, first, they don't have to. They have plenty of headroom left in growing the existing businesses. In addition, the data science necessary to pull this off at scale is profoundly challenging. It's not as easy as it sounds, particularly if performance matters -- there is a cost to showing an ad to someone who may be connected to a customer, but not close enough. It takes years to perfect this form of targeting. Finally, the current privacy scrum needs to further settle out. I think we could see Facebook launch products like this in the second half of next year. This will get them to $20 billion in revenue and worth at least $100 billion in market cap. Stay tuned.

ISLAMABAD: According to a Gilani Research Foundation survey carried out by Gallup Pakistan, 85% believe that having children is very important for a pleasant life. This is a slight change from 9 years back, in 2001; a similar Gallup and Gilani poll had found that 90% believed that children were essential to lead a happy life. In two different surveys, a nationally representative sample of men and women from across the country were asked the following question: In your opinion how important are having children for a pleasant life? In 2010 85% say it very important, 13% believe important to some extent, 1% consider children to be not important at all. 2% gave no response. The comparable figures in response to the same question in 2001 were: 90% said children are very important, 8% important to some extent and 2% not important at all. A detailed analysis of the recent data showed that more of the ruralites (89%) believe that children are very important for leading a pleasant life as compared to their urban counter parts (79%). There was no significant difference in the opinion by gender. It can also be seen that with age the perception that children are important for a pleasant life increases. 82% of the under 30 and 90% of over 51 years believed in this notion.

LONDON: "Shall I compare thee to a Summer's day?," asked Shakespeare. Now, women of the world have replied: "No, just tell me I have beautiful lips." A new survey of online flirting by dating website Badoo has found that the best Internet chat-up line for men to use is: "You have beautiful lips." "We have found the Holy Grail of flirting," said Badoo Director of Marketing Lloyd Price. The site, which boasts 87 million registered users worldwide, analysed the success rates of opening lines from nearly 200,000 online flirtations in 11 languages over the course of one month to come up with a "Compliment Success Index." Site users were invited to use one of 12 different chat-up lines. Each complimented an aspect of a woman's body or appearance. Researchers measured the success rate of each line in two ways: first, their success at prompting any response at all; second, their success at launching a longer conversation -- one going back and forth at least four times. Complimenting a woman's lips was the most successful overall, but other lines worked best in particular countries. American, French, Italian or Brazilian women were more responsive to "You dress beautifully." Brits preferred praise for their legs, Spaniards responded to compliments about their hair, while Germans and Canadians preferred skin praise. Dutch and Portuguese women liked: "You have beautiful ears." Jo Hemmings, a British behavioural psychologist said women responded best to compliments about their lips because it's a bold approach that seems more personal. "What many women want is for men to take the initiative and not be wishy-washy," Hemmings said in a statement accompanying the survey. "A lot of men on dating sites send a sort of generic message and women recognize something that hasn't been customised for them." David Givens, American author of the book, "Love Signals: A Practical Field Guide to the Body Language of Courtship" said the results made sense because women focus a lot of attention on their lips. "From adolescence onwards, they cosmetically adorn their lips, applying lipstick and colours. They have been doing so since ancient Egypt."

WASHINGTON: Crimes committed on ­Facebook have soared 7,400% in the past three years. The website has been used by perverts to groom victims and by criminals to make threats, intimidate, bully and harass people. Campaign groups claim sex offenders use such websites to conceal their identity to snare children and women. The figures were released by police in Cambridgeshire, where 1,640 Facebook crimes have been reported this year, compared to 22 in 2007. Facebook was linked to 255 incidents of domestic violence, 426 of malicious nuisance and 210 of anti-social behaviour in the county this year. A force spokesman said: “Everyone seems to be using it. It’s used to make threats.”