The Cookies Are Done
Ready or not, it’s time to find other ways to reach customers online.
Good Morning!
Here are today’s highlights:
Ami Kassar is holding a webinar to review tools that manage collaboration.
Gene Marks says accounting firms are talking a lot about artificial intelligence, but so far at least, it’s mostly just talk.
Has Cleveland figured out how to revive a downtown?
MARKETING
Google is finally killing the cookie: “The changes, among the biggest in the history of the $600 billion-a-year online ad industry, center on the use of cookies, technology that logs the activity of internet users across websites so that advertisers can target them with relevant ads. Starting Thursday, Google will start a limited test that will restrict cookies for 1 percent of the people who use its Chrome browser, which is by far the world’s most popular. By year’s end, Google plans to eliminate cookies for all Chrome users. Marketers, advertising technology companies and web publishers are working to ensure their businesses can weather the transition. They said Google, which has introduced software tools designed to help replace cookies, hasn’t done enough to prepare the market.”
“The industry is nowhere near ready, said Anthony Katsur, chief executive of the IAB Tech Lab, an ad-tech industry trade group that is funded by its members including Google. He said Google should give people more time to test its replacement technologies before eliminating cookies and that Google’s planned timing for the full ban—near the crucial fourth-quarter advertising blitz—would be brutal for the industry.”
“Google’s changes target third-party cookies the online ad industry places on websites to track users around the internet. For instance, a clothing manufacturer can use the technology to target someone reading articles on a news outlet’s website after that person clicked a competitor’s ad on another site. Google’s changes don’t affect the kinds of cookies sites use to store basic information such as login details.”
“Jamie Seltzer, an executive vice president at ad agency Havas Media, said its tests with advertisers have shown a mix of alternatives to cookies can produce similar or better results most of the time. It is difficult to tell how well they will work in higher volumes until Google moves forward with its plans, she added.” READ MORE
MANAGEMENT
Ami Kassar is still trying to manage his inbox: “In August, I shared my Plan A to give up control of my email. I had asked one of my teammates to go through my inbox three times a day and try to clear out everything she did not think was necessary. The goal was to clear the clutter out of my life and open up brain space and time to work on more strategic issues. When I wrote about this, I felt like I was withdrawing from the daily speed and rhythm of hundreds of emails. As with many addictions, my first plan to change my behavior did not work. Within two weeks, I was back to my old habits.”
“And now it’s time for Plan B. A few weeks ago, I hired a full-time chief of staff we call ARC, based on her initials. While ‘chief of staff’ could mean different things in different organizations, her primary assignment is to guard and protect my time. It’s a full-time job. While we are only a few weeks in, it’s going well.”
“What’s next? We need a good app or tool to manage priorities and lists and collaborate. So we put together a webinar scheduled for noon EST today (Thursday, January 4) with demos of five of the most popular apps. Please join us if you’re interested.” READ MORE
ARTIFICIAL INTELLIGENCE
Perplexity is betting that AI will revolutionize internet search: “Perplexity, a startup going after Google’s dominant position in web search, has won backing from Jeff Bezos and venture capitalists betting that artificial intelligence will upend the way people find information online. Started less than two years ago, Perplexity has fewer than 40 employees and is based out of a San Francisco coworking space. The company’s product, which it calls an answer engine, is used by about 10 million people monthly.”
“Perplexity’s founders said their advantage is using advances in AI to provide direct answers, instead of website links, in response to search queries, without some of the limitations felt by larger companies. ‘If you can directly answer somebody’s question, nobody needs those 10 blue links,’ [Chief Executive Officer Aravind Srinivas] said.”
“Perplexity maintains its own index of web pages, which it combines with a mixture of AI technology it has designed itself and purchased from outside providers such as OpenAI. The company charges $20 a month for a more powerful version of the search engine that uses GPT-4, OpenAI’s most advanced technology.”
“Perplexity isn’t profitable and makes about $5 million to $10 million in annual revenue from subscriptions and selling its AI software to other businesses, Srinivas said. The company hasn’t ruled out introducing ads in the future.” READ MORE
Gene Marks says AI will have a big impact on accounting—but not yet: “The profession’s biggest firms — like EY and PwC — are deploying AI technology in their auditing and financial review procedures in order to identify irregular transactions or patterns of inconsistency. The technology could ultimately be used to perform a much deeper level of auditing analysis that can offer both investors and financial statement readers a more accurate and complete picture of a company’s finances and at a more affordable cost.”
“SAP is already building an AI foundation layer with Joule sitting on top in order to help customers do things like create job descriptions and interview questions as well as analyze financial data, forecast sales trends and help with decision making.”
“Other major providers from Sage to Epicor to Microsoft Dynamics, Xero and QuickBooks are doing similar, exciting things. But take note of the words in all of these statements, press releases and news articles: they are ‘could’ and ‘will’ and ‘building’ and ‘promises.’”
“It’s all just starting. Accountants should be aware: none of this stuff is ready yet for prime time.” READ MORE
TAXES
Here’s a quick reminder that there are a lot of tax credits available to businesses: “Small-business owners had a lot to juggle in 2023: a shifting landscape of workplace rules, a tighter credit market thanks in large part to the Federal Reserve's interest-rate hikes and an often-chaotic labor market. It would be easy through all of that to lose sight of tax credits that could help your business. That's why we've compiled here a list of some of the prime tax credits available as the new year begins.”
“Business owners with 100 or fewer employees could get a tax credit worth 50 percent off the startup costs of setting up a qualified retirement plan such as a Simple IRA or 401(k), up to $5,000. For businesses with fewer than 50 employees, there is a startup credit of 100 percent of administrative costs up to $5,000.”
“A tax credit for qualifying electric vehicles of up to $7,500 for vehicles weighing less than 14,000 pounds, and up to $40,000 for vehicles that weigh more than that, is available to business owners, subject to certain limitations. The credit is slated to last until the end of 2032, according to the Inflation Reduction Act.”
“A tax credit is available for paying employees during family and medical leave time. If an employer pays 100 percent of the worker's wages, they get 25 percent of the wages paid as a tax credit. If it's 50 percent, they get 12.5 percent of those wages in the form of a tax break.” READ MORE
OPPORTUNITIES
Is Cleveland the best model for reviving America’s downtowns? “Our year-long project studying how to revive downtowns has identified three keys to success: First, to focus on a few blocks at a time (what urban planners call a ‘node’). Second, to make it as easy as possible to convert old office towers for new uses, via tax incentives and expedited permitting. Third, to offer unique amenities for residents, workers and tourists. Cleveland did all three in the area around Public Square.”
“Cleveland epitomized the Rust Belt; businesses were leaving, and people were fleeing. Initial attempts at revival focused on a new convention center, spruced-up sports stadiums and a downtown casino. But something was missing: a great public space for everyone to gather.”
“The push to renovate Public Square began in 2011. Anthony Coyne, a lawyer who chaired the city’s Group Plan Commission, kept handy a PowerPoint deck with a vision for a square as vibrant — and green — as New York City’s Bryant Park or Chicago’s Millennium Park. He showed it to any business executive, civic leader and philanthropist who would listen.”
“The makeover had an immediate impact. Families brought kids to play in the water park. Office workers and students came to sit on benches and grab lunch at REBoL, an organic eatery on the square. Rallies and festivals such as Pride in CLE filled the square. And real estate developers began to buy the surrounding (mostly vacant) office buildings with a plan to turn them into rental apartments.” READ MORE
UPDATE
A gay couple has sold the restaurant at the center of a small-town dispute: “In December, corporate officer Dan Myers decided that the Front Porch Market and Grill should close at the start of the new year. It was just a matter of convincing owner William Waybourn, a longtime gay-community activist, to raise the surrender flag at the restaurant in The Plains, Va., which has been in a years-long conflict with neighbors on the opposite end of the political spectrum. After factoring in legal fees, the Front Porch was losing tens of thousands of dollars a month, said Waybourn and Myers.”
“What’s more, they added, after months of relative calm in the wake of a July 2023 article in The Washington Post about the conflict, the Front Porch was once again experiencing tensions with its next-door neighbor, ICS Financial, a family-run company led by Mike and Melissa Washer, self-described conservative Christians.”
“But a surprising thing happened on the way to shuttering the Front Porch: Almost a year after Waybourn and his husband and co-founder, Craig Spaulding, put the restaurant on the market because of the conflict, a buyer came along and purchased it. The sale closed on Dec. 26, although the staff wasn’t told until Tuesday.”
“While Waybourn and others at the Front Porch have alleged the Washers have been motivated in part by homophobia, the Washers have denied any such motivation, saying politics and ideology don’t have anything to do with their complaints.” READ MORE
THE 21 HATS PODCAST
This Is What It Takes to Build a Business, Vol. 2: This week, we take a look back at the conversations we had last year, highlighting some of our happiest, smartest, funniest, and most difficult exchanges. Along the way, we discuss topics such as escalating salary demands, how much profit a business should make, a new way to sell a business, the problems with ESOPs, how to sell cookies on LinkedIn, breaking a million dollars in annual revenue, escaping the valley of death, and the pain of having to fire a long-time employee.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren