Mobile Diary: successful online ads and other imaginary creatures

If you’re looking for an enjoyable read, I recommend The Ad Contrarian, a blog about all things advertising from ad industry veteran Bob Hoffman. This is a great place to read contrarian opinions about online and mobile advertising, and the tendency of advertisers and other marketing types to focus on “youth” markets instead of other demographics (who may have more money to spend).

Here’s a recent post about the lack of real data about any aspect of online advertising. I thought about this after checking out a new feature in Facebook that claims to allow you to opt out of some targeted ads on that service. FB links you to a service (still in beta) that lets you see which companies use behavioral techniques to target ads to you, and opt out of those services.

The fun part for me, especially in the context of the above article (and the related Slate piece it quotes) was visiting the web sites of a bunch of behavioral advertising companies, and seeing how they spin their services and technologies. There seem to be an awful lot of smart (or at least well-educated) people out there applying all sorts of sophisticated computer models to delivering the right ad to you at the right time, all in hopes of increasing click-through rates from negligible to almost-negligible (as I remember, one company trumpeted its success in increasing CTR to 0.42%).

I suppose that as an advertiser, you have to spend your budget on something, but it’s amazing to see how little benefit seems to come from all that analysis.


Mobile diary: who do you trust?

According to the New York Times, Facebook is rolling out an improved social login platform that will let users control how much information they share with sites they log into. Of course, Facebook will still collect lots of info about which sites you choose to connect with, but that’s to be expected. One goal of this, obviously, is to make social login with Facebook preferable to social login with other services (or creating unique accounts for each service) so that Facebook has that much more data and a more important part in your activities on the Web.

Google phone

This got me thinking; I tend to not use social login much, preferring to just set up separate accounts with different services. I’m not sure this really matters, but at least I have the perception that I’m sharing less data that way. When I do set up social login, I generally prefer to use Twitter rather than other services. For some reason, I am less worried about Twitter (compared to Facebook and Google) using my personal data for aggressive marketing and other purposes.

Is this justified? Am I just fooling myself? I’d love to hear what you think.

Note: I included this image (from 2006) in part to commemorate the official closing of the Nokia/Microsoft deal, and the end of the Nokia mobile phone era. I spent 10 years at Nokia, developing software, writing standards, and marketing platforms through the rise and fall of Nokia’s smartphone business. I’m proud of the company and my role in it; I learned a lot and we changed the world.

Technology of the future…

I’ve been reading some of the coverage in the tech press about the Facebook acquisition of Oculus VR, including the always excellent insights from Michael Mace in his Mobile Opportunity blog. One thing that’s clear from the commentary and the acquisition itself is a shared belief that there’s a virtual reality “killer app” out there beyond gaming, the (so far) primary use case for the Oculus Rift headset and other similar VR gear. As Mace puts it:

Isn’t it interesting how companies impose their own mental paradigms on technologies? Google looks at glasses and sees a way to search and consume web services on the go. Facebook looks at goggles and sees a new means for social communication.

Investors, I imagine, see dollar signs, and hope that one of those big smart companies figures it all out. Meanwhile, as Mace notes, the fans of Oculus just want a great gaming experience, as the founder of Minecraft explains.

What if, though, there is no “killer app” for VR? I’m not convinced that there is another compelling use case for immersive virtual reality (as opposed to “augmented reality”, of which more below) beyond games and specialized engineering and simulation uses.

I write this based on some experience, having been very active in the last round of the VR “revolution” in the late 1990’s. True, the technology was far inferior to what we have now, and the resolution of the headsets was poor, but as we discovered at the time, there are many limitations to 3D immersive computing that are human, not technological.

VR demo, 1994

The last VR “revolution”, circa 1994

Mace disagrees, predicting a new age of “sensory computing” that includes 3D displays, 3D interfaces, 3D gestures, and 3D printing. This prediction is based on an assertion that humans are comfortable in a 3D environment:

In the real world, we remember things spatially. For example, I remember that I put my keys on my desk, next to the sunglasses. We can tap into that mental skill by creating 3D information spaces that we move through, with recognizable landmarks that help to orient us.

In fact, we humans are very much 2D creatures. Gravity keeps us constrained in the Z-axis, as it were, so we mostly move around in two dimensions (X and Y, to continue to metaphor), and so (I believe) relate better to two-dimensional concepts and interfaces. To Mace’s example, you put your keys on the desk (a 2D space) next to your glasses (and not above them). This “3D” model takes place on on a 2D plane.

In addition to the cognitive limitations, there are other limits to the immersive VR experience, at least today, starting with the odd experience of being able to look around you but not see your own body.

Of course, I may be completely wrong, and not able to see the true potential of immersive virtual reality. I am, though, much more excited about augmented reality (AR), where instead of removing yourself to a virtual world, you add information and interactivity to the real one. This is a case where better technology will make for a completely different experience. Current AR “browsers” like the Wikitude app are cool but cumbersome on a phone. A more seamless AR experience will require more seamless hardware. Google Glass (for better or worse) is one big step in that direction, supported by AR software like Wikitude, Metaio, and many others to come.

Mobile Diary: Who’s failing whom?

The word from the ad biz: Facebook is not your friend. Forrester reports that “Facebook is still failing marketers“, referring to a piece on Digiday that interviews disgruntled ad agency execs about the “failure” of Facebook to give them the reach and results they want.

One quote seemed odd, from James Del, head of Gawker’s content studio:

“Facebook may be pulling off one of the most lucrative grifts of all time; first, they convinced brands they needed to purchase all their fans and likes — even though everyone knows you can’t buy love; then, Facebook continues to charge those same brands money to speak to the fans they just bought.”

Hold on: if “everyone knows” you can’t buy love, why did a bunch of brands buy fans and likes in the first place? Sure, Facebook wanted them to do that, but why would experienced marketing and advertising professionals believe a bunch of kids from northern California?

Dear Facebook: show me the money!

The cover story in the latest Technology Review, “What Facebook Knows,” provides a glimpse into the work of Facebook’s “Data Science Team,” a crack group of software and social science experts who are mining the enormous pool of data that the service has collected, in search of “insights that they hope will advance Facebook’s business and social science at large.” Even though the article focuses on the science side of Facebook, it can’t escape the business side, returning at the end to the challenge the company faces to generate “new sources of income to meet investors’ expectations.”

If current analyses are correct, Facebook won’t be able to generate the profits it needs from advertising alone. The ad business is constrained by members using Facebook from mobile devices. They have less patience to be interrupted by ads and less space on which to see them. The business may also be constrained by regulators (and members) who see Facebook’s need for more personal data as an invasion of privacy.

The Tech Review article, however, hints at another business model that could offer a way around these constraints:

[Greylock Partners scientist DJ] Patil points out that Facebook could become a data source in its own right, selling access to information compiled from the actions of its users. Such information, he says, could be the basis for almost any kind of business, such as online dating or charts of popular music. Assuming Facebook can take this step without upsetting users and regulators, it could be lucrative.

Traditional consumer surveys are expensive, and as the Pew Research Center found, becoming more difficult to conduct, leading to even more expense and less accurate results. It makes perfect sense for Facebook to offer their data as a better (and cheaper?) alternative to telephone polls and other traditional methods.

But what to do about the users and regulators? Here’s a suggestion: if you want to sell my data, give me a piece of the action. Facebook already treats its members as “the product being sold,” so why not take the next logical step and include us in the value chain? Facebook annoys members and regulators, I think, because of its secrecy and unclear policies, and not the data collection and sharing itself. Here’s a chance for Facebook to come clean, and present a clear commercial proposition to members: you give us permission to sell your info, and we’ll give you cash.

This idea is not really new. Consumer research companies already pay people in the US and other industrialized countries to participate in focus groups and other studies. Jana recruits thousands of consumers with mobile phones in developing countries to participate in surveys and marketing campaigns, in exchange for mobile minutes and coupons. Why should Facebook be any different?

What do you think? Would you agree to share more on Facebook and get paid for it? Or could this turn you off to the service completely?

Can’t resist writing about Facebook: Mobile is as mobile does

Alongside all of the media excitement about today’s Facebook IPO, there is plenty of concern about the company’s ability to deliver profits that will justify its new valuation, especially as more of its eyeballs are coming from mobile devices instead of desktop computers. Facebook itself identified this risk in its SEC filing, noting that its mobile software currently generates no “meaningful revenue.”

The challenge of mobile devices to the Facebook revenue model is clear. At the simplest level, mobile device screens are just smaller than desktop screens, which means it’s harder to show ads to users on a web site without blocking their view of their friends’ updates. In addition, the Facebook mobile app for iPhone, according to Bloomberg’s Tech Blog, doesn’t show any ads at all, meaning even less money for Mr. Zuckerberg and his new eager shareholders.

I don’t think this is a case of Facebook not “getting” mobile, as Nick Bilton from the New York Times recently concluded. Facebook clearly “gets” mobile technology, and has famously developed a flexible and efficient strategy for delivering the Facebook experience on the web to almost every mobile device on the planet. What they (and many other companies) haven’t “got” yet is how to make money from mobile technology.

As we learned in the last tech bubble, it’s surprisingly hard to turn eyeballs into cash. For example, there’s this suggestion from ReadWriteMobile, for “location-aware push notification based on your interest graph”:

For instance, I like sports, I am passing a sports bar that is offering happy-hour specials, I get a push notification. Facebook makes money, the location makes money, I get beer. Everyone is happy. 

Of course (as someone close to me has observed), the sports bar could just put a sign in the window advertising the happy hour. Much simpler (and probably cheaper).

Whatever the logic of this sort of solution, I expect to see lots of experiments like this from Zuckerberg & co. in the weeks and months to come. Should be interesting…