> Almost every decision in life is made on a cost-benefit basis. You weigh up your
> projected benefits, measure them against your projected costs, and if the benefits
> outweigh the costs (with suitable certainty) then you go for it.
The problem is that all young buck management and execs think they’ve cracked this, think they understand this and press ahead on a "cost/benefit" grounds.
BUT - many fail to properly factor in costs and benefits that only occur over a longer period of time, e.g. staff goodwill and brand image/brand damage. Research and Development is another good example.
Short-term thinking is encouraged by the stock market, where execs are hired to provide "shareholder value". But the stock market is inherently short-termist, so shareholder value comes from short-term measures which inevitably lead to a stagnation of share value or a spiral of decline.
This whole sorry tale smacks of short-term or flawed thinking:
1.) Targeted advertising has limited value. For ubiquitous products in a saturated market maybe, but some of the best results come from adverts that catch their viewers unaware or introduce them to products they hadn't even thought about.
2.) Targeted advertising already exists. Advertisers compete for space on websites based on the topic of that website. Phorm is not offering anything unique - it is trying to gatecrash a party, so why is their product deemed so valuable?
3.) Whilst customers (and staff) oppose the tie-up with Phorm, the ISPs risk damaging their long-term value.