IBM And Facebook Team Up To Make Ads That Know Even More About You

A partnership between the two tech giants will give brands even more firepower in making hyper-personalized digital ads.

Jon Simon/Feature Photo Service for IBM

It's a sign of the times that it wasn't too creepy for a PR person for IBM to refer to the company's new partnership with Facebook as a marriage of data "that will let retailers put a face on every customer."

"Sometimes it feels like brands are targeting people like Sapna who work at BuzzFeed instead of you, Sapna, who works at BuzzFeed," she wrote. Isn't it frustrating?

Help is on the way. IBM Commerce, which works with thousands of brands from Staples to David's Bridal, said today that it's teaming up with Facebook to help its clients serve up increasingly personalized ads to customers. IBM will pair data from its "marketing cloud," including weather, location, previous purchases, and web browsing behavior, with Facebook's user data, to give marketers more information with which to target shoppers in the relentless quest for relevant messaging.

IBM offered the following example: If a company is launching a new line of running gear, it could use Facebook's Custom Audiences and ad-targeting tools to pull users who are interested in distance running. Data and analytics from IBM will help brands go deeper on that group, identifying their preferences around running gear and the weather they tend to train in. The end result would be "highly tailored" deals and ads for the new running line on Facebook and other platforms.

"This whole trend towards personalization is gathering steam," Deepak Advani, general manager at IBM Commerce, said in an interview with BuzzFeed News. Most consumers aren't getting personalized messaging online and feel their experience is "very generic," he said, citing a recent survey conducted by the company.

Retailers, who have massive amounts of customer data, have been cautious in deploying that information in a way that's "cool," and not "creepy," as Gap's CEO put it in a presentation last year. But IBM says its own survey data shows that marketers are actually not doing enough in the way of personalization — or "relevance" as some companies prefer to call it — and may be losing customers to competitors as a result.

The openness with which IBM and Facebook are touting the new ad-targeting capabilities reflects the growing industry belief that all is forgiven among consumers so long as they're seeing something they care about, and that privacy is a lower-ranking concern than it used to be.

Tailoring ads to individual users and serving them up at the right time could help drive higher sales and also make customers more loyal to the brands delivering them, IBM's Advani said. In the future, that could mean showing consumers deals right before they're about to go on a big vacation or after they get a large bonus at work, based on knowledge gleaned from Facebook status updates and cookies, he said.

Facebook already allows businesses to target ads by location, demographics, interests, and behaviors — flower shops can advertise to people who recently got engaged, sporting goods chains can focus on those who "like" baseball-related topics, and food brands can aim for people who have purchased children's cereal.

IBM says its technology will help advertisers "more accurately identify which of their customers are among the 1.44 billion people active on Facebook and surface correlations between their interests and interactions across multiple channels," and work with them to deliver more personalized messages.

The partnership "will help top brands achieve personalization at scale," said Blake Chandlee, vice president of partnerships for Facebook, in a statement.

Advani said that one client with stores in a stadium envisioned a situation in which IBM's geofencing software notes that a potential customer is in the vicinity. Then, the potential customer opens Facebook to post about being at the stadium. Thanks to the partnership, that person might see a deal in their timeline offering 10% off at the store, which is a "meaningful" message, he said.

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Macy's Backstage Wants To Be The Next Nordstrom Rack

Macy’s has announced four locations for its new “off-price” chain, Macy’s Backstage. The stores, which will open this fall, will be similar to T.J. Maxx and Nordstrom Rack.

Macy's / Via Facebook: Macys

Macy's is venturing forth with its own version of T.J. Maxx and Nordstrom Rack this fall, when it will open four Macy's Backstage stores.

The pilot stores, all in the New York area, will carry Macy's clearance items along with "special buys from well-recognized fashion brands," at 20% to 80% discounts from original and comparable prices, the company said in a release Tuesday. The stores will average about 30,000 square feet. Regulatory filings show the average T.J. Maxx is about 29,000 square feet, while the average Marshalls measures 30,000 square feet. (Both are owned by the same parent company, TJX.)

Macy's is looking to capitalize on America's enthusiasm for outlets and off-price shopping, which has skyrocketed in a post-recession world. Outside of the treasure-hunting appeal, stores like Marshalls and Nordstrom Rack are thriving away from traditional malls, where Macy's is often a mainstay. Earlier this year, TJX, which also owns Home Goods, reported annual sales that surpassed Macy's for the first time ever. Nordstrom, which has been doubling down on Nordstrom Rack, has indicated that its reputation as a "nicer" department store has been unaffected by its expansion of the discount chain.

Sapna Maheshwari/BuzzFeed / Via Chartbuilder

Macy's Chief Financial Officer Karen Hoguet said on a February earnings call that an off-price chain "may help bring a whole new customer to Macy's."

It's unclear how much of a bargain customers are getting at off-price chains, given their similarity to outlet stores. Many brands admit to making cheaper, lower-quality goods for their outlet locations, which were once destinations for authentic clearance goods or slightly damaged merchandise. TJX says that its buyers are always searching for order cancellations, manufacturer overruns, and closeouts, but that it also seeks "special production direct for brands and factories."

Nordstrom said in 2013 that only 18% to 19% of its merchandise at Rack is transferred from full-line stores; other goods are special closeout buys from vendors.

Macy's, too, noted it will carry "special buys" from major brands at Macy's Backstage stores.

The chain will "deliver a whole new level of value to customers who appreciate fashion and love to hunt for a bargain," Peter Sachse, Macy's chief innovation and business development officer, said in Tuesday's statement. "As with all of Macy's innovations, we will test and learn to see what resonates most with customers so we can adjust before rolling out additional locations."

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Australian CEOs Come Out For Marriage Equality

“Marriage has evolved. We’re asking for the next stage of evolution.”

The introduction of marriage equality could boost productivity, attract overseas talent, and improve company culture, according to a panel of prominent business leaders.

Marty Melville / Getty Images

Organised by lobby group Australian Marriage Equality, speakers included Qantas CEO Alan Joyce, Diversity Council CEO Lisa Annese, Carnival Australia CEO Ann Sherry and SBS CEO Michel Ebeid, along with Australia Marriage Equality national director Rodney Croome.

Croome said that if the upcoming referendum in Ireland and Supreme Court decision in the United States decide in favour of marriage equality, Australia will be the only developed, English-speaking nation in the world where same-sex couples cannot marry.

Lane Sainty / BuzzFeed News

"We want all the people who come to work every day to feel equal. To feel that they can contribute equally in the organisation, and in the country," Joyce said.

"So any piece of legislation that still says 'You're different', 'You're second class', 'You don't have the same rights as everybody else', is bad for everybody's position."

"One of the biggest things we can do as a society, as a community, is say 'It's alright to be gay'."

He added that diversity within a company strengthens business strategy, and making LGBT people feel welcome can only be a good thing.

"The broader market supports [marriage equality] and a good company would get behind it."

Michael Ebeid also said supporting marriage equality would benefit businesses by making Australia a more attractive location to work and invest.

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"Avengers: Age Of Ultron" Earns Second Biggest Opening Weekend Ever

UPDATED: Its estimated $187.7 million domestic debut could not quite surpass The Avengers’ all-time record.

Chris Hemsworth, Robert Downey Jr., and Chris Evans in Avengers: Age of Ultron.

Marvel

Everyone knew that Avengers: Age of Ultron was going to be massive at the box office on its opening weekend in North America. The question was whether it could match or surpass the $207.4 million debut of 2012's The Avengers, the largest domestic opening weekend ever.

Even after a record-breaking opening day, however, Age of Ultron could not quite catch its predecessor — it will just have to settle for reaching the second biggest domestic opening weekend of all time, with an estimated $187.7 million.

When Age of Ultron debuted late Thursday night and Friday, it appeared to have the all-time record in sight, earning an estimated $84.5 million, which surpassed the $80.8 opening day of The Avengers, and ranked second only to Harry Potter and the Deathly Hallows – Part 2's record opening day of $93.1 million — even when adjusting for inflation.

Saturday night's Mayweather–Pacquiao fight clearly took a bite out of Age of Ultron's audience, however, with a reported 3 million pay-per-view purchases totaling a whopping $400 million in revenue. Saturday was a giant sports day all around, with the Kentucky Derby and the NBA playoffs also pulling people away from movie theaters.

That could actually boost Age of Ultron's box office numbers a bit, as people who missed the film on Saturday go see it on Sunday, pushing the film's final debut grosses past the estimate released Sunday morning of $187.7 million — but almost certainly not past The Avengers' all-time record.

But let's be clear here: This is a major win for Marvel Studios, which can now boast holding the record for the top three domestic opening weekends of all time, including Iron Man 3's $174.1 million debut in 2013. Age of Ultron is also clearly outperforming its predecessor overseas. The film opened on April 22 in just over half of all international markets with $201.2 million, well past the $185.1 million The Avengers made in its international debut. To date, Age of Ultron has made $439 million overseas — that is already better than the international total for Thor: The Dark World, and within spitting distance of the overseas totals for Captain America: The Winter Soldier and Guardians of the Galaxy.

Worldwide, Age of Ultron has earned $627 million in just 12 days.

Adam B. Vary / BuzzFeed / Via boxofficemojo.com

The question now is just how much of a giant money pit Age of Ultron can make this summer. Movies that become genuine box office phenomenons reach that status thanks to repeat business — die-hard fans going back to the theater for a second, third, and fourth helping of the movie, especially if there isn't much else to offer otherwise. And in 2012, The Avengers indeed benefitted from underperforming box office competition in May and June en route to a $623.4 million final domestic haul. By comparison, in the coming weeks Age of Ultron will have to contend with Mad Max: Fury Road, Tomorrowland, Spy, and Jurassic World, all of which could siphon away repeat business from family audiences and hardcore action fans alike.

Meanwhile, for those parsing Age of Ultron's rarefied box office horse race with 2012's The Avengers down to the dollar, the sequel's momentum seemed to be just slightly behind its predecessor's even on its opening day. When calculating Friday grosses, late evening and midnight showings on Thursday are always added to the total. If Thursday screenings are factored out, however, then Age of Ultron's $56.9 million gross on Friday proper is $5.2 million less than The Avengers' $62.1 million gross that day.

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A Crowdfunding Platform Wants to Do Venture Capital, Too

The experimental arrangement creates a structure more often seen on Wall Street than in Silicon Valley, with a single company having to manage potentially conflicting interests.

Seed Equity Ventures

An experimental new strategy for startups to raise money is gaining adherents in Silicon Valley.

A handful of technology dealmakers have adopted a twist on equity crowdfunding — where a large group of investors back a startup through a private fundraising round — by introducing funds that offer exposure to a range of startups instead of just one at a time.

The latest company to take this step is Seed Equity Ventures, a broker in Salt Lake City, Utah, that operates a crowdfunding platform for startups. It is expected to announce today that it is seeking to raise $10 million for a venture capital fund. The new fund, Seed Equity Capital Partners, which will charge management fees and cut of profits, will invest in tech startups alongside other investors using the Seed Equity Ventures crowdfunding platform.

The arrangement creates at least the appearance of a conflict of interest. Seed Equity Ventures, a registered broker that was launched last year by Todd Crosland, earns fees from startups based on the amount of money it helps them raise. The new Capital Partners fund, which includes $1 million of Crosland's own money, will be participating in those same funding rounds and should try to get the best deal possible for its investors. That could, in theory, mean sending less in fees to the broker. Or, it could mean trying to maximize the broker's fees at investors' expense.

But Crosland, who previously founded Interbank FX, an online currency broker, said he would be able to keep the two parts of his business separate. He added that having a venture capital fund would more closely align his interests with those of the investors on the broker platform.

"It's really an arm's length transaction," Crosland told BuzzFeed News. Startups, he added, "will have a set of expectations as far as valuation and terms for a deal. And then we'll negotiate with that company for what we feel are the best terms for both ourselves and our investors."

Crosland is not the first financier to try to combine elements of venture capital with equity crowdfunding, a business that took off after the passage of the JOBS Act of 2012. That law made it legal for privately held startups to ask for capital in public, expanding the universe of potential investors beyond those who have contacts in the tech industry. (For now, only wealthy "accredited investors" are allowed to participate.)

Some equity crowdfunding pioneers argue that certain investors would rather own part of a diversified fund than individual stakes in startups. A fund, they say, can reduce the hassle of vetting companies and can increase the chances of betting on a winner.

Another crowdfunding firm, CircleUp, which launched in 2012, quietly introduced a fund at the beginning of this year that commits capital to startups alongside investors on the platform, according to Rory Eakin, the CircleUp co-founder. Compared with the Seed Equity fund, however, the CircleUp fund is more passive, automatically following other investors in certain deals and matching their commitments.

Perhaps the best known equity crowdfunding platform, AngelList, has since 2013 offered funds that allow investors to commit capital to startups alongside prominent angel investors. Unlike the other two, AngelList is not a broker, so it does not get paid by startups that raise money.

The new Seed Equity fund creates a structure more commonly seen on Wall Street than in Silicon Valley, in which a single company has to manage potentially conflicting interests. Crosland even drew a comparison to Goldman Sachs, which has lots of experience managing conflicts.

But onlookers worry about the implications for investors. "Everything about the crowdfunding industry suggests that conflicts of interest will be rampant and that the insiders will be playing fast and loose with investors' funds. This is but one case in point," John C. Coffee Jr., a securities law professor at Columbia University, told BuzzFeed News in an email. Still, he said, "if appropriate disclosures are made, a conflict of interest does not make the transaction illegal."

Crosland argued that getting a good deal for the investors on the platform would also benefit the startup selling the equity, by encouraging the investors to come back for more at a later date. His fund already has three startups in its portfolio, he said.

"We want the best deal for our investors," Crosland said. "The better the investors do, when this company goes to raise the next round at a higher price, they'll feel that they were dealt with fairly. And then they'll be interested in investing in the series A or B round."

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Goldman's Newest Business: Online Lending To The Little Guy

The investment bank looks to get into the booming online lending business, with a new unit that will target small businesses and consumers.

Goldman Sachs chairman and CEO Lloyd Blankfein.

Nicholas Kamm / Getty Images

To get a loan from Goldman Sachs, you have to be a big trader, investor, company, or very wealthy individual. But that could change: The investment bank said in a memo today it has hired Harit Talwar, a former Discover executive, to head up a small-business and consumer lending unit.

Goldman has an FDIC-insured bank, Goldman Sachs Bank USA, with $73 billion in deposits across the company, and no branches. The bank largely works with corporate and private wealth management clients.

"The firm has identified digitally led banking services to consumers and small businesses as an area of opportunity for GS Bank," the memo from CEO Lloyd Blankfein and the firm's president, Gary Cohn, said. "The traditional means by which financial services are delivered to consumers and small businesses is being fundamentally re-shaped by advances in technology, maturity of digital channels, use of data and analytics, and a focus on customer experience."

Startups that lend to small businesses and individuals like Prosper, OnDeck, and Lending Club have raised hundreds of millions of dollars from private and public investors. While many of these companies originate the loans through another bank and then sell them off to investors, Goldman would do the loans from their bank's balance sheet.

Talwar's hiring and the new business was first reported by Bloomberg News.

A report published by the bank's equity research staff in March said that $1.6 billion in banking industry profits was at risk of being taken away by upstart nonbank lenders like Kabbage and OnDeck. The researchers said $178 billion in loans were "at risk" of leaving the banking system due to competition from these new lenders.

For personal lending, Goldman estimated that $209 billion of loans could leave the bank system along with $4.6 billion in profits.

Goldman's potential new line of business is only just getting started with the hiring of Talwar, and likely will not be getting started soon, a person with knowledge of the program said. And while Goldman has a bank, it does not have many of the legacy costs — like the real estate and staffing associated with branches — that many traditional banks do.

"We see an opportunity to leverage our competencies in technology and risk management to capture this opportunity at accretive returns and without the burdens of legacy costs and fixed infrastructure," Cohn and Blankfein said in the memo.

The move comes as Goldman has shrunk the size of its balance sheet and sold off some businesses and investments, including its metal warehousing business and a majority stake of its reinsurance business.

LINK: How Online Lenders Could Take Billions Of Profit Away From Big Banks

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A CEO's Challenge: Can You Fix McDonald's Without Fixing The Food?

Steve Easterbrook has promised to turn the struggling fast food giant around. But can corporate reorganization alone get the job done?

Hannelore Foerster / Getty Images

McDonald's seemed to have big plans in the works when it announced on April 22 that it would be releasing a turnaround plan on May 4. The burger chain has been struggling to reverse falling sales not only in the U.S. but worldwide, and it seemed that only a serious rethink of the business would be enough to get things back on track.

So it came as a surprise when Monday's announcement focused on corporate restructuring, rather than new ideas about food and service. It's those kind of big, new ideas, onlookers had said, that the company needs to fight back against the growing number of competitors that have been stealing market share via better food and service, and trendier store designs.

The central problem is that "McDonald's attraction is declining," said Darren Tristano, executive vice president at restaurant consultancy Technomic. The 75-year-old chain needs to focus on transparency about its food, overall food quality, and health trends, he said.

McDonald's stock closed the day down 1.7%.

While new CEO Steve Easterbrook recognized that consumers are reframing the conversation about food, he focused his initial steps on a corporate reorganization, changing the way the company segments its markets from geographic regions to stages of market maturity. It will also refranchise about 3,500 stores through 2018 — selling off many of the restaurants it owns to third-party franchisees. Easterbrook said this would make leaders more nimble in making decisions and make it easier for restaurants to roll out new initiatives.

McDonald's will also start testing a delivery service in New York City. But the rest was old news. The company said it plans to reverse its losing streak by becoming a faster, high-tech burger chain. In the U.S., it will continue to implement plans set forth months ago, which include customizable burgers, new ways to order such as in-store kiosks and apps, redesigned stores, and improved customer service. The chain has been struggling against falling comparable store sales in the U.S., which still accounts for 40% of the company's operating income.

Yet the plans, which are already being rolled out, will take years to be fully implemented — too long for most restaurant operators. Franchisees so far are not impressed — they had a poor short-term business outlook in a recent Janney Capital Markets survey. "It's hard to believe what McDonald's customers want is to order through kiosks," Tristano said.

Implementing a global turnaround plan may also be difficult as McDonald's also gives up control of thousands of company-operated stores. Brands that aggressively franchised haven't performed as well as those that control their own stores, according to Tristano.

What today's consumers do value is speed and provenance of ingredients. McDonald's recent marketing campaigns have praised the freshly cracked eggs in Egg McMuffins and answered consumer questions on social media about its food, though these early efforts have yet to reverse the decline in comparable store sales. More changes are on the way — McDonald's recently announced that the chicken it serves in the U.S. will be free of antibiotics and is also developing new standards for beef.

Easterbrook said on a call with reporters that the company has laid out a "compelling vision."

"We want to work on those steps in terms of strategy to go from where we are today to where we want to be in the future," he said, and build for next decade. The immediate future, however, continues to look tough for the new CEO.

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