Personalized experiences? Give me Consent, Control, Trade-off & Trust – A SXSW recap

March 17, 2012 Leave a comment

A vivid conversation

SXSW came and went – and so did the second installment of our discussion about personalization in “How to personalize without being creepy” on Sunday – a vivid conversation with journalists and marketers alike (search Twitter for #sxnotcreepy for the play-by-play):

The room was packed, to break the ice we kicked off with a few examples of personalized content and advertising “in the wild”, using green (not creepy) and red (creepy!) voting cards to gauge the mood in the room: What is acceptable, when does personalization start to feel creepy? We never made it through the Top10 that we had prepared, because after a few “warm-up” examples we put re-targeting and the recent Target story to the vote – and that’s when the real room discussion kicked off:

You can read the complete story by Charles Duhigg on the NY Times website, but the essence of the story is that a teenage girl suddenly received coupons for diapers and other pregnancy-related items in the mail, and her upset father accused Target of trying to encourage her to get pregnant. When Target called a week later to apologize once more, the father had to apologize instead – and declared that his daughter was indeed pregnant but hadn’t told him at the time. Target knew that his daughter was pregnant before he did – how did they?

Voting: Green = not creepy, red = creepy

Target habitually collects all customer data from credit cards, coupons, online orders, etc. It turned out that Target had hired statisticians to identify how shopping habits could be used to predict if a woman was pregnant and what their due date would be. The statisticians identified a number of products that were good indicators (think unscented soaps, lotions, etc.) and their algorithm had determined that said girl was most likely pregnant at the end of her first trimester.

Target learned their lesson from this PR disaster, however. Instead of sending more girls pregnancy-related coupons, they have now taken to obfuscate their knowledge by sprinkling in other, completely unrelated and largely useless, items into the same coupons – thus making the appearance of pregnancy related items “random”. But does that make it better or worse?

In the following discussion a few nuggets crystallized as important when discussing the topic of targeting, privacy, and personalization:

  • The “black box magic” breeds a lot of the concerns and rejection around personalization: If it isn’t obvious to a user how data was obtained, it starts getting creepy. If it turns out you’ve been collecting data secretly all along, even a very transparent opt-in to personalization has a foul taste (e.g. applying personalization for your news feed on all the stuff you’ve read in the past before opting in and didn’t know was tracked).
  • Context and the relationship with the user matter. Customers are much more at ease getting personalized experiences from a brand they trust and to which they have a relationship which warrants deeper knowledge (that’s why eHarmony’s “black box” matching algorithm appears much less creepy than it could).
  • There is distinct value in creating more relevance for the user. Cutting out stuff users don’t want to see or don’t care about is inherently a good thing, but getting this right is difficult: Intent is a fleeting state and once it has passed relevance changes dramatically (Amazon was cited as a great example which continues to suggest related items years after having bought something e.g. as a once-off present; recently they have added the option to “Fix this recommendation” to give users greater control).
  • Your data is the currency that buys a lot of the free experiences – applications, news, services. You can’t expect a discussion on internet privacy to remain inseparable from a discussion on monetization, advertising, and subscriptions. This isn’t a binary link, but there is a relationship that consumers need to understand.
  • We all like free stuff, especially on the internet. Of the entire audience (a group acutely aware of privacy and data usage for advertising) only 2 people paid for their email service – everyone else used a free service monetized with behavioral or contextual advertising. This isn’t inherently bad – but it’s important to remember “If you’re not paying for it, you’re not the customer – you are the product”.

The themes that emerged from the discussion that would aid making an experience not creepy revolved around four main pillars:

  1. Consent – Let the user opt-in (or at least opt-out).
  2. Control – Allow the user to change their mind, control the depth and breadth of data being used; be transparent about what and how it’s being used. This is where re-targeting appears creepy – no opting-in, and few people know how to control it.
  3. Trade-off – People understand that even free stuff has a cost. Should advertising-financed offerings offer users a choice between increased costs and no tracking, or decreased costs and tracking? Let users participate in this trade off decision.
  4. Trust – Consensus appeared to be that for a company a user has a trusting relationship with or sees an authority in a field, personalized experiences are much more palpable.
There were a few big questions that remained at the end of the session that Mat and I will explore a bit deeper over the next few weeks on our blogs – there simply wasn’t enough time to get to the bottom of these:
  • Creepy or not – does it even matter? Do people use less Facebook because they see their friends pictures on ads? Will there be a dip in sales at Target because of above story?
  • How does all this personalization work? Where does the data come from? Do companies just identify my behavior, or do they actually know “me”? How does re-targeting work?
  • How can I navigate this topic as a company? What are the industry initiatives? Are there best practices and guidelines for using data? Most importantly – how is the legal framework changing in the US and in Europe?

Stay tuned on this blog for some posts delving deeper into these questions!

Filed under Ad Targeting, Personalization, Privacy, SXSW

The bad rep of personalization

March 10, 2012 1 Comment

Just ahead of our SXSW about “How to personalize without being creepy”  Pew Internet published the findings of a study on Search Engine Use in 2012 yesterday (here) with some interesting data on users’ preferences for personalized search results and targeted advertising.

Unsurprisingly, the key takeaway of the report is that: “Most search users disapprove of personal information being collected for search results or for targeted advertising“

More specifically, 73% of the polled say that they do NOT want a “search engine keeping track of your searches and using that information to personalize your future search results because you feel it is an invasion of privacy” and 68% stated that “I’m NOT OKAY with targeted advertising because I don’t like having my online behavior tracked and analyzed”.

It gets really interesting when putting these numbers into context with some of the other findings in the report – and I’d love to see the above variables cross-tabled with these other statements:

  • Most internet users don’t know how to control or limit the information that is being collected about them
  • “55% of search engine users say that, in their experience, the quality of search results is getting better over time, while just 4% say it has gotten worse”
  • 86% of search users “learned something new or important that really helped them or increased their knowledge”

It seems there is a theme here – people don’t like the “black box” of personalization and behavioral targeting and have often little idea of what is collected, how it is being used, and most importantly how to control what a website can or cannot do.

Looking at examples of personalization that theme seems to hold up: Personalization is welcomed and appreciated if it’s derived in obvious manners and can be easily controlled – but if it’s “magic” pieced together from unknown sources we get scared. A few examples:

  1. News aggregators or personalized newspapers (e.g. Zite, Washington Post’s Personal Post, etc.) – The user declares the sections he or she is interested in, and the consumption and ongoing rating of content continues to shape the news stream for the user. Hugely transparent, full control.
  2. Dating websites occupy both ends of the spectrum: While Match.com is rather straightforward with allowing users to set their “preferences” explicitly, other companies like eHarmony pride themselves for their proprietary algorithm to match people with results that are largely opaque to the users.
  3. Amazon’s recommendation lists and emails are an odd one – while they are very clearly based on stuff you’ve looked at or bought in the past (augmented with a bit of clearly flagged collaborative filtering) it seems to be impossible to effectively control by the user (even long after the original “intent” for the item has gone)!
  4. Music streaming services and video rentals – often flagged “because you viewed/listened to this, you might enjoy that). While the “magic” behind it (mostly collaborative filtering) is opaque to the user, the connection is easily made for the user. Not creepy at all.
  5. The infamous “following shoes” – re-targeting (while effective) is personalization at it’s worst. Looking at an item on a website without completing the purchase, and then finding that this very item shoes up featured in banner ads on completely different websites later. Black-box magic with no apparent way to control it.
In the future the possibilities for these “black box” magic tricks will be even more substantial. Just look at a few things that have recently been announced by some of the big data players out there:
  1. Facebook – for sponsored stories and social ads: Seeing your friend’s face used in an ad for a company he “liked” on Facebook was just the first step, together with sponsored stories this form of advertising is bound to step up.
  2. Targeted TV advertising through DVRs, based on behavior. Based on your TV viewing behavior the ads you see during the superbowl might not be the same ads your friends see – with little or no way to control it.
  3. Lastly Google+ is now a social layer across all of Google’s products with knowledge of a user’s real identity, demographics, likes, and behaviors – and judging by the recent Safari break-in with little regard for a user’s choice in opting out. This will be a huge playground for targeting and personalizing at scale (Susan Wojcicki seems to confirm this)

Now I am not at all opposed to personalization or targeting at all – I believe it is a useful application of technology to eliminate waste advertising (I really don’t need to watch TV ads for female products, I don’t want to buy golf clubs, and there is no point pitching a vacation in Mallorca to me) and provide me with relevant offerings (Do tell me about the outdoor gear sale, do pitch that sailing trip to me, and yes it’s noon and I’m downtown – so it’s ok to talk to me about restaurant lunch offers).

What is paramount, however, is that (a) you have my consent – so you better be a company I trust and that I’m ok with holding some of my personal information, (b) you’re transparent about the data use – so don’t go off selling it to third parties or do stuff behind my back that I didn’t consent to, and (c) you let me control this relationship – I’m happy to share a lot if I think my data is safe and I trust the company, I might share more if there is something in it for me in return, and I want the ability to turn it off completely at any time.

No need to be creepy!

Filed under Ad tech, Personalization, Privacy, SXSW Tagged with , , , ,

Ad tech: Someone fix this mess, please?

January 13, 2012 Leave a comment

Just to get this out of the way first – I love advertising technology; I’ve worked in marketing and ad tech for a number of years and I love what technology can do today. Ad tech is an industry evolving at blistering pace that has taken us from the blinking banners of geocities through the lows of pop-up banners and the current heights of deeply interactive, highly personalized brand experiences that no longer feel like advertisements but rather content in their own right.

That said – as a whole, advertising technology is a nightmare to deal with at the moment.

Over the last years billions of venture capital money have been poured into this sector creating an industry landscape with countless players, each of them adding some value or preventing some costs along the value chain of the advertising and money flowing from advertisers to publishers to their audiences. How fragmented and cluttered this industry has gotten is probably best demonstrated in the LUMA charts (created by the Luma Partners) which have been wildly circulated in articles and presentations alike. These charts show (conveniently for each major subsector of the advertising ecosystem) the main players and their types of play.

(For a publisher the Search LUMAscape isn’t as relevant).

For anyone trying to find their path from the left side through to the right – it’s a huge, cluttered mess screaming for consolidation.

Having previously worked on the agency and the technology sides of the industry, I have come to find that working on the publisher side might be the most challenging of all for any number of reasons:

(1) A maze with a million valid options

Fundamentally, choices are good. Nobody wants to go back to world in which a single player dominates an entire market. That said – in today’s world publishers have to make a decision what service or product they want to buy or offer and how it will add value to their value chain or product lineup, and then usually run a lengthy investigation to ensure that it (a) actually improves performance and/or bottom line, (b) works with the incumbent advertising solutions, and (c) doesn’t conflict with your product roadmap.

Quite often there is more than one vendor offering a largely similar service, and often enough what’s offered by one is mutually exclusive with something else in your existing lineup (or doesn’t “talk” to one of your existing systems). It’s poorly standardized (i.e. how data is exchanged or described) and requires a lot of creative engineering to set up properly. 

(2) Everything nibbles on *your* bottom line

The revenue waterfall for a publisher’s CPM is quite staggering – between the ad serving, the audience segmentation, the third party data, the DMP, the SSP, and a whole slew of other acronyms a CPM can erode quite quickly. Once you start using these services and technologies not only on the “good” premium inventory but also on the “bulk” inventory, an already slim CPM might result in zero or negative yield once you really factor in all costs. 

I get it – each of the tools adds value or makes audiences or buyers available that otherwise might not have been. But for each of these tools there is the question: Is the marginal revenue or cost prevention of employing this tool for this piece of inventory greater than the cost. Which brings me to #3:

(3) You never *really* know how well you’re doing

Most publishers have a rough idea when they are doing well on raw CPM, and what their floor is where revenue turns into bad revenue (with close to zero or negative yield). Sure, it’s easy to see that at $25 CPM you’re doing well for that inventory, and selling remnant with $0.15 is still more revenue than $0.

But what does your average eCPM look like? And how do you know it’s spot on where it could be? What if you had bought that new data sharing tool? Or decided to kick the creative optimization out the door again? Even with the best modeling the choices in designing and running your ad tech ecosystem will always remain only part science – and part art.

If nothing else, the ongoing investments in this space have ensured that an entirely new consulting branch has sprung to life – monetization audits and ad tech best practices.

Luckily consolidation of the market has started and is ongoing (such as Google buying Teracent, AdMeld, etc. or InMobi buying Sprout), and increasingly we will be able to buy more comprehensive solutions instead of individual puzzle pieces – but new ventures are springing up every months and consolidation is likely to take time.

Until then: Please dear venture capitalists – when you kick off your next technology funds and investment rounds, how about funding some meta-solution providers that help publishers identify the best possible design of an ad tech ecosystem in order to manage your inventory most profitably!

.. or at the very least an audit tool that tells you how well you are doing compared to what’s possible!

Filed under Ad tech, Monetization, Personalization, Technology Tagged with , , , , , ,

SXSW: How To Personalize Without Being Creepy 2

December 18, 2011 Leave a comment

It’s official – the advanced second stage of our quite successful “How to personalize without being creepy” panel at the 2011 South by Southwest Interactive festival (linked here) has been accepted as a core conversation for SXSW 2012.

Core conversations are relatively new formats – introduced in 2008 they seek to provide some form and guidance around the “hallway conversations” that occur between sessions: Discussions around particular concepts, sharing of viewpoints across industries, and arguing the pros and cons of a particular solution.

We’re thrilled to take the discussion about personalization in this new year of Facebook Open Graph to a new level: Beyond the core demographics and simple personal trivia that were the foundation of our SXSW2011 panel, the level of insight all of us are offering other people – and companies – has surged dramatically to heights few of us would have imagined not long ago.

No longer is it just “who I am” and “where I’ve been”, but companies like Spotify let me share in real time every track I’m listening to; every news article I’m reading online is instantly visible to all my friends and open for commenting, and video streams I’m watching quickly make their way onto the suggestion lists of my friends as well.

In just a short year our understanding of what constitutes an in-depth, comprehensive view of “our data” has been dwarfed by a new level of capability and detail that monitors us and our behavior in real time, makes it accessible to friends, and provides companies with insights that allow them to react in real-time and present us with a tailored message of offering.

Now this can be really, really cool and powerful and offer value and service to us customers in never-before-seen ways – but it also has the potential for malice and being really, really creepy (!).

There is a lot to talk about! Over the next months Mat (@matharris) and  I will be preparing the ground for our core conversation on our blogs – so stay tuned here or follow us on twitter (@muuque).

In the meantime I’ll see how on earth I’ll find a hotel room in Austin for March!

Filed under Personalization, SXSW, Technology Tagged with , , ,

Yahoo Living Ads – rich media ad format of the future?

December 6, 2011 Leave a comment


Yahoo’s Livestand isn’t available in the UK (yet), but as the Internet giant’s answer to the likes of Flipboard and Zite I figured it would be well worth playing around with it through my US iTunes account.

A week ago Yahoo lit up the industry wires with releases about their new ad format – “Living Ads” – that debuted on Livestand with a flagship Toyota Prius ad. Priced north of $200,000 the ad format is intended to deliver rich, interactive advertisements spotting video and deep usage of the device’s features like touch, accelerometer, etc.

Finally the immersive, rich ad experience that we are all hungering for on the tablet? Something that could deliver the broad adoption of deep rich media by advertisers and deliver deep, meaningful brand engagement (the kind that can be measured and monetized) at the same time? The silver bullet in display advertising that works for advertisers and publishers alike?

Without seeing the backend of engagement/performance, my gut feel is: Not quite; unfortunately the ad (and format) manages both to overdue it AND to fall short at the same time.

The ad sits inconspicuously in the third column of the layout, and expands upon click to a full page experience. So far so good – nothing earth shattering or revolutionary, a behavior that is expected from many formats today. But that’s when things start spinning out of control.

Once the full page experience has opened with a short animated film sequence, every element no the screen appears to be in slow motion – yet irritatingly instead of in a complete, smooth animation loop, the sequence undergoes a hard reset every 15 seconds. This makes the animation look like it’s stuck like a broken record. This could be a whole lot smoother.

Interactivity is a key theme for these ads – yet there is no clear indication where any hotspot is (and equally important – which hotspot progresses the “storyline” of the ad versus simply showing a little stat about the new Prius). To prevent a frustrated reader from hammering completely aimlessly on the ad to try and locate one of these hot spots, the initial opening animation contains a sequence of a few rings and hand symbols outlining where to tap – but you better remember all these hotspots in 2 seconds, because their location isn’t shown to you again.

Then again – don’t even bother trying to find the hotspots; the response elicited from the system is so mundane and superficial that the hunt for additional hot spots quickly loses its appeal.

All in all the ad feel unpolished, poorly thought through in what it wants to accomplish for the reader, and a tad too glitzy and shiny – in love with the form factor and capabilities yet completely missing a real value to the user.

Of course, a lot of the falling down could be in the execution of this specific ad – not necessarily the “living ad” format as a whole.

This leaves the question – what exactly IS the core of Yahoo’s “new” ad format? I fail to see any ground breaking innovations that can’t be accomplished with an existing rich media toolkit today. Where are revolutionary ways to interact with the content, exciting new ways to guide an interested person through the narrative, and most importantly – where is the data innovation? Hosted in an app that requires me to have a Yahoo or Facebook login to even get started, I would have hoped for some rich double-blind data sharing that instantly makes the ad more relevant to me and who/where/what I am (of which some I might have admittedly missed since my IP address is located in London).

Ultimately it appears that engagement is all the rage in today’s advertising performance measurement, and publishers have been more than happy to encourage their advertisers to start experimenting with (more expensive) rich media ad formats (and it’s really not all that surprising Yahoo discovered that users are more likely to interact with a “living ad” over a static ad…)

The sour taste that remains is that this ad format has a lot of capabilities to deliver immersive, interesting rich media content, but is (right now) largely executed as a way to maximize dwell time and engagement as proxy measurements for performance – while unfortunately dramatically falling short….

… but I’m willing to wait for a few more living ads and see how well they deliver.

Filed under Ad tech, Tablet, Technology Tagged with , , ,

Really all doom and gloom for a Windows tablet in 2012?

November 29, 2011 Leave a comment

Forrester has spoken and all tech news sites have been packed with articles declaring that Microsoft’s tablet OS will arrive too little too late to be successful in the market place (Paidcontent has one here, and all things D here for example). But I can’t believe that it is really all doom and gloom for Microsoft in the tablet space (disclaimer: I am an ex-Microsoftie (2001-2007), so my views might be influenced by that a little…)

It is easy to forget that it is still incredibly early in the tablet game – this is a market that didn’t exist as such until a year and a half ago (if you exclude the relatively short-lived stint of stylus-operated tablet PCs based on Windows XP). A few months ago the media was ready to declare a lasting victory for Apple in this new space, only to in recent week turn around and declare Amazon to become a major player in the low-end of the market with the heavily subsidized Kindle Fire (and Amazon being Amazon, we haven’t seen any actual sales numbers since the US launch on Nov 15 – it’s still listed as “in stock” and available to ship, so if the big 5 Mio unit expectation will be met remains to be seen).

The big data point is that from an initial 46% of respondents desiring a Windows tablet, only 25% remain today – with an outlook of even less being so inclined when Win8 actually ships. That’s a big drop in numbers – but it’s comparing products that are in the market, displaying benefits and synergies day by day, with something that won’t ship for a while; of course people are inclined to favor an existing product with visible benefits over something that might remain tomorrow and deliver abilities that today’s consumers can’t quite fathom yet.

I think there are a few items playing into Microsoft’s hands that don’t get the consideration they deserve in all this gloomy talk for a Win tablet:

D rightly points out that tablet market pen is just around 5% in the US today. That means we’ve just left the early adopters behind and are on the initial slopes of the early majority. There is A LOT of market to go around still, and the tech industry is ripe with examples of early adopters not forecasting the preferred technology the majority ultimately settled on. Too early to really call it just yet.

It is also rightly pointed out that the app ecosystems of both Android and iPad are incredibly well developed – thousands of applications stand at the beck and call of any tablet use here to do anything from Facebook-ing to imitating a Zippo, from accessing my HRM system to playing Bingo. Worse yet, a countless number of these apps have a well-developed relationship for the mobile phone powered by the same OS (an opportunity that Microsoft appears to have missed – or deliberately passed on). Play Scrabble with an iPad and 4 iPhones. Tag interesting articles on your phone and retrieve and read them later on your tablet. Great scenarios that enhance both devices.

But what if Microsoft deliberately side-stepped the phone/tablet scenario to create new scenarios that neither incumbent is doing at all today: Enhance the relationship between your PC and your tablet? Creating a PowerPoint deck on your PC and using your tablet to present it? Creating pivot tables in Excel and surfacing the scenarios and data on the tablet? Nobody will argue that the application ecosystem for Microsoft PCs dwarfs any other – now imagine the next versions of applications for this ecosystem not only seamlessly working between these two device types, but mutually enhancing the experience.

Tablets by their very nature are mainly consumption or manipulation devices – but the creation of content is still largely done on computers with keyboards. PCs, laptops – still mainly Windows-powered devices. The EXACT same apps used to initially create content on your PC/Laptop will offer a different, optimized experience to present and manipulate the content on the tablet?

This line of thinking opens up an entirely new consideration of where the value of the Win tablet proposition could lie. Microsoft might not want to go after the same scenarios that Apple and increasingly Google are sitting quite pretty at – but instead go and create new scenarios that drive entirely new desire in the market. Desire that might yet entice the 95% that don’t have a tablet to go out and get a Win tablet.

Is it a sure thing? Or course not  - but certainly vastly superior to doing nothing and conceding the space altogether, or worse yet: playing eternal catch-up by Apple’s rules.

 

Of course to keep things honest I have to confess that I wrote this on my MacBook air after reading the doom&gloom articles on my iPad earlier today.

Filed under Tablet, Technology Tagged with , , ,

Playing with Fire

November 24, 2011 Leave a comment

This week my friend Ilana from Seattle was over in London – and had the courtesy to bring her brand-new Kindle Fire with her. At the quite affordable price point of $199 (or £130) I had been quite eager to get my hands on one – after all most of the other devices playing in this space cost easily $200 more than that.

I wasn’t quite sure what to expect from the Kindle – whether it was going to be a next-generation e-reader, a budget tablet, or simply a larger second screen for content. It turns out it’s all and neither of these.

The initial impression was quite good – it feels solid (almost to the point where it is quite heavy, actually) and it is an elegant device that feels polished. There is only a single hardware button at the bottom (power) and a USB as well as a headphone plug.

What I didn’t like was some of the look&feel – for example the animation that scrolls through the content library is neat, but burdened with a lack of precision. To open content I have to stop scrolling, wait for a second to let the animation finish completely, and only then can I tap on the displayed cover art. Tapping on a cover before the animation has come to a complete stop very easily opens the previous or next item, or I found myself tapping a few times on it before the Fire actually recognized my input.

Scrolling in general feels a bit jagged, which I wouldn’t expect from a device that is specifically geared to consume all sorts of digital content – including movies.

The reading experience is substantially less gratifying than on a traditional Kindle – the weight of the device makes holding it while reading burdensome, the touchscreen has a huge sensitive area that flips pages involuntarily back or forth, and changing pages doesn’t appear to be smooth. While this Kindle can finally be read in the dark (my biggest gripe with the traditional Kindle), it comes at a price of being substantially harder on the eyes. Maybe having a small external light is better after all.

Trying the New York Times app I was a bit disappointed – it was essentially a larger smartphone experience. With a 7″ screen a traditional Android Tablet app is unlikely to render correctly, but the screen is a good size bigger than a smartphone. If the Kindle shows that it can sell well over the holidays and establishes this new format, I’m sure publishers will have to start developing a new bespoke app  in the new year.

All that said, playing Plants vs. Zombies on it was entirely enjoyable, and given the low price point I might still decide to get one for myself after all.

Filed under Gadget, Tablet, Technology Tagged with , , ,

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