Monthly Archives

December 2007

The uncanny valley – from robots to behavioural targeting

By | Advertising, Widgets | 9 Comments

I attended Ivan Pope’s Widgety Goodness conference in Brighton yesterday – and I had a great day.  There were lots of interesting speakers and I returned to London more educated than ever before on the widget-sphere.

As I checked my notes this morning though I found myself wanting to write not about widgets, but about Russell Davies’s idea that the uncanny valley concept from robotics might have application in the ad world.

From Wikipedia:

The uncanny valley is a hypothesis about robotics concerning the emotional response of humans to robots and other non-human entities. It was introduced by Japanese roboticist Masahiro Mori in 1970.

Mori’s hypothesis states that as a robot is made more humanlike in its appearance and motion, the emotional response from a human being to the robot will become increasingly positive and empathic, until a point is reached beyond which the response quickly becomes that of strong repulsion. However, as the appearance and motion continue to become less distinguishable from a human being, the emotional response becomes positive once more and approaches human-to-human empathy levels.

This area of repulsive response aroused by a robot with appearance and motion between a “barely-human” and “fully human” entity is called the uncanny valley. The name captures the idea that a robot which is “almost human” will seem overly “strange” to a human being and thus will fail to evoke the empathetic response required for productive humanrobot interaction.

The diagram below is an attempt to capture the idea diagramatically.


Russell’s idea is that we have a similar emotional response to targeted/personalised advertising.  According to this school of thought when an advertiser knows a little bit about us we get slightly more relevant ads and that seems fine, but when they start to know a lot about us it freaks us out.  Interestingly enough that takes us to the point marked ‘zombie’ on the graph above.  What is unknown at this stage is whether if the advertiser gets still more information about us we will get over our aversions and come out the other side of the uncanny valley.

I think there is a lot of merit in this idea.  Personalised ads run the risk of being like people who pretend to know you, but don’t really, and constantly betray that fact by making little mistakes.  If they didn’t make the mistakes (and I would include sending me too many ads in this) then I can see how the experience could come out of the depths of the valley and into positive territory.

There are two forces at play here though – the first and most obvious one is whether the advertisers will ever get it right enough that the personalisation will stop being annoying and start feeling useful.  The second is whether the populace at large will give them enough time to do so.  My view is an emphatic yes on the first point and that it is a close call on the second.

Company growing pains

By | From mobile | 2 Comments

Posted by mobile phone:
Many of you will have observed how companies go through a big personality shift as they grow. I’ve always explained that by the simple logic of size – as a company gets bigger there is more stuff going on and as it gets too much for people to keep in their heads you get a shift to a more process oriented culture.

Reading Gladwell’s Tipping Point yesterday I thought his ‘law of 150’ added something to this assessment. Simply put, the law is based on empirical observation that in groups larger than 150 people communication starts to break down and schisms start appearing. It seems that with groups up to that size we can cope mentally with knowing everyone and keeping a check on all the relationships within the group, but at around 150 we hit some kind of natural limit and it becomes too complicated. (Incidentally, the 150 limit is apparently a function of the size of our neocortex – other primates with smaller neocortex’s live in correspondingly smaller groups.)

In my experience the change comes for startups somewhere in the 50-100 employees range (and it is often a traumatic change). As most small companies depend on intimate relationships with a number of people who aren’t on payroll it is unsurprising that this is less than Gladwell’s 150.

Tangentially related is the notion that we subconciously use each other as external memory devices. As Gladwell explains it, we naturally optimise by remembering the things that stick in our brains most easily and relying on people close to us to remember the things that stick naturally with them. This resonates with me and I can easily see how my wife and I divide up the list of things we need to remember between us (it is actually embarrassingly gender stereotypical so I won’t go into it here, but you get the picture). The interesting thing is that as a result you become bad at remembering the things that other people are good at. The optimal solution for you (and the group) is for you not to bother with that stuff – so you’re brain simply doesn’t.

I bring this up here for the insight it gives into the notion of of organisational memory and the wrench a small company feels when a founder or long-standing senior exec leaves the business.

Now Facebook apologises

By | From mobile | No Comments

Posted by mobile phone:
Earlier this week the anti-Facebook furore hit such heights in the blogosphere that I wrote yesterday how they were becoming a case study in how not to do PR. (I’m on my Blackberry so no link.)

And then this morning I read in the FT that Mark Zuckerberg has apologised and announced they would soon give users the option to opt out of Beacon altogether.

Good stuff. If they can get this to work it will be good for all of us who participate in this industry.

That said, it remains to be seen whether this apology and policy change will be enough to stop the backlash gaining real momentum. That will ultimately depend on how genuine the apology is.

Entropia to IPO

By | From mobile | No Comments

Posted by mobile phone:
MindArk the company behind space based virtual world Entropia announced yesterday that it plans to IPO next year – which will make it the first such company to list. Expect lots of corny headlines around the virtual world/real shares theme…

Entropia is free to play and makes money only from sales of virtual items. Turnover in 2006 was $9.3m, up over 100% on 2005.

They have had two virtual item sales at the $100k level – an asteroid resort (now apparently worth $1m) and more recently a virtual banking license.

Entropia dollars convert to real dollars at a rate of 10 to 1 and players can withdraw their money from real world ATMs.

Also in the MindArk portfolio is a deal with China to build a virtual world that will make it easier to work from home.

All reported in the FT.

Facebook is becoming a case study in how not to manage PR

By | Advertising, Blogging, Facebook | 4 Comments

Back on November 7 when Alan Patrick asked Facebook Ads: do they have a cluetrain? I thought he was being harsh and a little premature.  Fast forward one month to today, December 5, and he is starting to sound understated.

The Facebook backlash continues apace.  As Fred Wilson pointed out a couple of days ago that is in part an inevitable result of their recent success, but at the same time they are really not helping themselves right now.

As I wrote when Facebook Beacon was announced, I think they did the right thing.  They need to grow revenues, and the obvious way to do that is to leverage the information they have about us (including our friends lists) to target adverts more effectively.  I still think it was a smart move, but since the announcement, and maybe even before it, the implementation has been bungled.

They are playing with people’s private data and they must have known this would be a sensitive area – when I blogged about the announcement (same link as above) a couple of you commented that Facebook would most likely abuse the system, and that reaction was common around the blogosphere.  I replied that I hoped and thought they would be clever enough to get it right.

One of these days I will learn to stop being so optimistic.

A couple of weeks ago I wrote about how they were getting some of the details badly wrong, and around that time was when they needed to go into damage limitation mode.  That is something they have totally failed to do.

It is incredible that they seem to be forgetting the lessons of Cluetrain and not engaging the public in a conversation.

This post was prompted by Scoble’s Where the hell is Mark Zuckerberg and Facebook?:

It’s just totally amazing to me how badly Facebook is handling the PR around its new Beacon system.

This story is NOT going away. Even if this particular story goes away, there’s a bad taste in our mouths because Facebook tried to do something that clearly wasn’t for the users. When David Weinberger, one of the authors of the Cluetrain Manifesto, says that you have a real PR problem.

…….

Do the press conference. Admit you screwed up. Take your shots. Look into the camera and say you’re sorry.

They are not doing any of these things and they will suffer unless they change that policy.

Trust is a fragile thing, easily broken and very hard to mend – this post on Read/Write Web shows how people have already stopped believing the things that Facebook is telling them.

It is a reminder of how fast things change these days that a company which just a couple of months ago was generally regarded as one of the most web savvy on the planet is fast becoming public number one.  It might have been predictable though – with hindsight the controlling mentality of Facebook has been evident for a while and perhaps that always meant they would struggle once they hit a crisis.  Umair takes this point a step or two further in his recent posts about their evil DNA.

As a caveat, I’m sure Facebook is still growing rapidly.  I think it is too early to estimate the impact of this crisis, which will ultimately depend on the extent to which all the anger and indignation spreads from the blogosphere to the world at large.  At this stage all I feel I can say with confidence is that the company will look back on this period as time when things took a definite turn for the worse – whether they can weather the storm remains to be seen.

Social search – an innovation waiting to happen

By | Google, Search | 4 Comments

More and more people are saying that search is broken, and social search – i.e. employing the wisdom of the crowds to generate search results is an obvious way to try and fix it.  Behind this link there is a CNN video of the Wikipedia guys talking about how many people share the opinion that search needs fixing and then offering some thoughts into a potential solution.  It’s a good video and if you are into this topic it is well worth the 4mins to watch it.

There is nothing new about this idea though – it is at least as old as del.icio.us, and here is a post from Fred Wilson on the subject from last December.

All of which makes me wonder why we haven’t seen more progress in this area.

For some reason Yahoo! seem to have neglected the opportunity since they acquired del.icio.us, and there hasn’t been much from Google either.  In fact, this post was prompted by one from Stowe Boyd in which he talks about Google’s Experimental Search – which shows in a single stroke that they have an interest in this area, but haven’t made much progress.

There are lots of interesting startups in this space, including Nsyght here in the UK, but search is a difficult market with Google dominating and the top four having a total market share of something like 99.9%.  That is almost a textbook definition of a hard market to break into.  Yet the prize is huge – in fact Google is almost the definition of ‘huge opportunity’ these days, and we should never forget that fortune favours the brave.  Furthermore, Mike Morritz of Sequoia, who knows a thing or two about search having invested in Yahoo! and Google is having another tilt at this market via his recent investment in Mahalo.

Stowe concludes his post by saying that it will be hard for these startups to beat Google.

I would say hard, but not impossible.

Buy.at and advertising in the long tail – including on TheEquityKicker

By | Advertising, Content, Portfolio, Social networks, WAYN | 16 Comments

BuyAt logo

I have been thinking for a while now that I should start experimenting with advertising on TheEquityKicker – and the observant amongst you who have visited my site rather than just reading me in a feed will have noticed that there is now a banner for Lovefilm in my left sidebar. This is an all portfolio affair as the ad is an affiliate link from buy.at and we have also invested in Lovefilm. Because it is an affiliate link it is performance only – i.e. the advertiser (in this case Lovefilm) only pays if they get a new customer (in this case defined as someone signing up for a free trial).

All money I make from advertising on this blog will be donated to charity. In the first instance that will be a nightshelter scheme operated by churches where I live in North London (or rather the charity that runs it). The NightShelter provides accommodation for homeless people during the post Christmas winter months. It is a worthwhile cause where I have volunteered for the past couple of years and if/when the money starts flowing I will post some photos so you can all see what you have helped with.
I am making the move into monetisation for two main reasons. Firstly if there are advertising dollars to be had it seems wrong to just leave them on the table, and secondly it will be fun to experiment with the different options available.

As I say I have been thinking about doing this for a while, I got around to doing it now because of a cool new widget coming from buy.at that we hope will help push the affiliate advertising model much further down the long tail of websites. (Today I have put up a simple banner, but the widget will follow soon.)

The drive at buy.at to push monetisation further down the long tail isn’t only about blogs, it extends to social networks as well. Last week buy.at announced a deal with travel focused social network WAYN. Through this initiative the ten million WAYN members will be able to promote products on their own profile pages and get a cut of any advertising revenues generated. It is early days, but this is could be huge and I will write more on it another time, but this just might be the way to unlock the advertising potential of social networks.

For full disclosure, we also have an investment in WAYN.