Chatbots to help sort thur the zettabytes of data...

There was an interesting article about ChatBots this week. Bots can augment human interaction, create greater business efficiencies, and remove friction from customer interactions. The bot market is about a $24b market. Industry leaders from IBM and Facebook are encouraging developers to create new bots that enable more personalized customer interactions. The real question comes down to what can we do with the tons of data we now have; well ecommerce can take advantage of bots to automate these new data sets. Natural language processing can be a driver in analysis “the ability for users to instantly interact with data via a bot interface. One can immediately see the practical value of this with larger data sets that would take a longer time to process — the efficiency of the bot architecture combined with the underlying power of big data analytics can deliver significant value in a short period of time”.

Bots can also be used to automate data collection, they can “automatically add to the knowledge about a customer by progressively asking for more information during interactions with your application or website”.

There are some downsides to bots; they still require human reviews throughout the process and they are subject to the human biases of the programmer.

Facebook looking to cut out the middlemen...

Audience Direct is a new Facebook tool being tested to help media companies sell video advertising on their own websites, apps, and other digital properties. Marketer can log on to the system purchase ad space from specific publishers (self service). This has the potential of cutting out the middleman and streamlining the process.

Additionally, marketers can also specify which type of users they would like to reach, based on Facebook’s data. You can target specific demographics with your ads using this tool.

Video publishers, Hearst, A+E Networks and Scripps Networks Interactive; are currently trialing the system with their advertising clients, according to Facebook. The terms of these agreements are still a work in progress, but it is likely Facebook will take a piece of the action (revenue) from the transactions it helps facilitate. This has the potential to become profitable depending on how many ads it can put in your news feeds.

Facebooks advertising is evolving; it is looking to license sporting rights to feature videos separate from users’ feeds, and it is also introducing mid-roll advertising within video across its platform. The slice Facebook gets from these strategies are TBD, but it was a $10b market last year. These tools come at the same time Facebook is reconciling the questionable content ads sometimes windup beside.

Creepy Data...Always for Sale

Interesting article in today’s WSJ regarding data collection and it nefarious uses. It starts off telling the story of an anonymous woman who had her ex use social media against her. Posting her personal information (address and physical attributes) on dating sites and other more secretive sites; men we are propositioning her at her home (harassment).The article further explains that data can be weaponized. Geoffrey Folwer explains further that “Meanwhile, data aggregators send their bots to collect anything and everything they can about you: addresses, browsing habits, even estimated net worth. Then they glue it all together, facts and wild guesses alike, into dossiers. That’s the legal side of data collection. Things get scarier when your tax accountant, credit-card company or email provider gets hacked”. The article touches on so points I have made earlier in my Blog about the prevalence of AI. There is an entire industry making billions of dollars mining you and it has tripled in size in the last 5 years. The FCC has rolled back restrictions on the data your internet service provider can collect. It’s about self-determination. “If people don’t have the ability to control or understand how their data is being used, it can lead to severe difficulties,” says Julie Brill, a former FTC commissioner and current partner at the law firm Hogan Lovells, who helped lead a big investigation of data collectors. Ms. Brill goes on to point out the current laws only protect your health and financial data (which are very important indeed), but still not enough. Fowler for the column took a half dozen volunteers and submitted them to a study to see how much “creepy data” he could find on his subjects in an hour; he managed to “shock everyone”. He sorted the searches into 3 levels; “level one was calling up what’s out there and totally public. Lots of people have googled themselves, but fewer are familiar with “people search engines” like FamilyTreeNow.com and Spokeo, which pull together and cross-reference public data, such as property records and court reports, into one place. Anyone can use them to look for birth dates, current and former addresses, phone numbers, gobs of relatives—even ex-lovers and roommates. Although FamilyTree and Spokeo have their legitimate uses they are the go to source for online harassers and impersonators. Level two Folwer used Google Maps, Maps TimeLine which demonstrates how “Google is gathering a dossier about you that would make a spy jealous. Depending on how much you use Google products, there could be an hour-by-hour map of everywhere you’ve ever visited. Yes, everywhere. On Google’s My Activity site, you can see everything else they’re cataloging: searches, websites you visit in Chrome, YouTube videos you watch, even recordings of your voice to Google’s Assistant”. This article/study further demonstrate what I think most of us who follow this technology and data analytics, realize already, there is no such thing as privacy anymore. If you look at media your average citizen can become a star or be destroyed depending on if someone records you and if it goes viral or not. These are extraordinary times where everyone in connected and mostly anything Is for sale (data). My hope is that the FCC starts to develop common sense legislation to assist people who are having their lives destroyed, or have the possibility of having their lives destroyed. Fowler plans to expand next week further on this topic and I will look to follow-up on this discussion.

Facebook's EU problem

In the news today the EU's antitrust watchdog group is going to fine Facebook for providing misleading information to investigations who were trying to authorize the purchase of WhatApp in 2014. There is likely to be a significant fine imposed on Facebook, to make them an example for other companies looking to have mergers approved.
The lie Facebook is caught in is it informed investigators it was unable to reliable match user accounts between Facebook and WhatsApp; something it did shortly after the merger was approved. This comes as the second fine by the EU this week; the other was by French authority's alleging its privacy policy violates French Law.
It is interesting; my earlier blog post commended Facebook for its ability to be proactive and elsewhere in the world it is up to unethical behavior.

When it comes to Online...what's old is new again

I found an interesting article in the WSJ that stated that Web based retailer are moving toward brick and mortar retail stores after they have reached a certain degree of success. The example they give is Casper the online mattress company partnering with Target stores. The strategy for Casper was initially to target millennials online with smart video ads and traditional advertising and in of all places, subways.

A similar strategy was employed by Warby Parker their co-founder Dave Gilboa said “E-commerce is taking share but it’s doing so more slowly than I think we thought when we launched,” Mr. Gilboa said “If we were just to focus on online at this time, we’d only be able to address about 3% of the overall eyewear market.”

With higher than expected online ad spending, brick-and-mortar retail looks more appealing than before, despite the added costs that come with it. Ben Lerer, an early-stage investor in numerous retailers including Casper and Warby Parker, said “that three to five years ago there was a gold rush of direct-to-consumer companies that bought cheap online ads, largely through Facebook. Now it’s gotten harder”. On Google, he said “a rush of new competitors and imitators have pushed up the cost of an ad that appears alongside the result of a search for mattresses”

I myself am somewhat surprised that the online market place is getting so expensive and competitive that physical space is become attractive again.

Facebook does the right thing...and admits it's not perfect

In yesterday’s WSJ article Facebook explained yesterday it will be issuing refunds to some advertisers after discovering an issue in its system that led it to overstate the number of clicks on marketers’ websites, an omission that comes as ad firms are demanding better and more transparent measurement from the social networks.

In their blog post published Tuesday, the social network said “the discrepancy was minor. It occurred when users visited the site on mobile browsers—not in the Facebook app or on desktops—and clicked on its “video carousel” ad formats to expand them in size. Those clicks were inadvertently registered as website clicks. The carousels allow advertisers to place multiple images, videos and text within one ad unit, which users can swipe across to view”. Facebook says “the bug affected advertisers specifically paying for ads that resulted in clicks to their websites. Over the period Facebook was monitoring, 0.04% of all impressions on the social network were impacted”. Carolyn Everson, Facebook’s vice president of global marketing solutions, said “the bug was uncovered as part of a recently introduced review process and the company is committed to transparency with its partners”.

Facebook’s disclosure comes during this week’s annual U.S. television “upfront” season,” when the biggest TV networks throw glitzy events and parties showcasing their programming in the hopes of securing billions of dollars in advertising commitments from marketers. It will play into the narrative among media executives that TV offers a safer and more predictable environment for marketers than digital platforms. Facebook has now acknowledged on five separate occasions since September that it has either overstated or understated the metrics advertisers and publishers use to get a sense of the effectiveness of their posts and ads on the platform”. Until now, there have been no instances of billing credits based on publicly confirmed metrics. Facebook in the past has issued some refunds to individual advertisers in the past for reported bugs. Unilever PLC, the consumer packaged-goods giant that owns brands such as Dove and Hellmann’s, was one of the advertisers affected by the latest error and is receiving a full, but small, refund, they also reported their company will be reducing advertising by 30% in the future. . Keith Weed, Unilever’s chief marketing and communications officer, said “Facebook had been proactive to address the bug as quickly as possible, but that it nonetheless highlights the need for more transparency and third-party verification in the digital space to track both advertising effectiveness and whether advertising transactions are working as agreed”. Mr. Weed added: “It highlights once again that while there has been progress, there is still further improvement needed.”

Facebook in November launched a blog to provide updates on errors and bugs it comes across, as part of its commitment to transparency.  The company also announced a measurement council, “consisting of marketers and ad agency executives who provide feedback on how it is performing on the metrics front”. In addition, Facebook has brought on board several new independent measurement partners since making the disclosures about the mistakes in its metrics. This past February, Facebook committed to an independent audit by the Media Rating Council, “an industry body that oversees measurement standards”.

It’s reassuring to see Facebook is taking significant steps to be transparent about errors, and has actively resolved overbilling promptly. I wish this was the tact other media and technology companies would take. Usually these issues are revealed after consumer complaints, and a government regulatory body gets involved. Facebook has spent resources wisely in my opinion to be proactive about this metric system’s accountability.

The "Social" Tech Bubble?

In my last post, I reiterated a lot of what the ADWEEK article laid out for Snapchat’s analytics. The hope is that they can use these tools to generate revenue; revenue however is not the same as profitability and Return of Investment (ROI) Is another situation entirely.

The data tools, if used properly, can allow Snap’s outside advisers to guide it to new customers; unfortunately, Snap is looking to invest in the UK and US markets. The ROI component comes from (usually) emerging markets. It will remain to be seen if not going truly global will be detrimental to the future of Snap Inc.

When dealing with these tech companies that are so reliant on ad revenues for their existence it is hard to see how a photo app and camera sales equate to an 18 multiple on valuation Facebook was a 9 (multiple) to put it in perspective. The investors who deviled heavily into this companies IOPs are going to need to see Snap generate somewhere around $20b in the next 3 years; it’s likely those consumer dollars are not currently in the market at least not for a company reliant on mainly on Western sales. These overvaluations and poor returns are lost investors equity, and its fund managers and pensions gambling with everyday people’s money, that’s the bubble I’m afraid of.