The technology buzzwords of the day are “social, mobile, local“, but personalization and
online-offline better describe the broader trends.
Personalization
Personalization
technology can be roughly fit into a few groups - targeting, collaborative
filtering, social, and customization of creative, although in the real world these
are often integrated and inseparable. If the internet started with the
contextual and broad-based targeting of the offline world, and then moved to
backlink-based search, personalization has long been taking market share from
search as the mechanism to drive the online world from advertising to content to
commerce (although search itself is becoming ever more personalized than more
or less deterministic PageRank-style algorithms). The shift was enabled by the
vast and accelerating rate of data online services collect about their users,
but it only succeeds because of entrepreneurs who can figure out how to turn this
data into information and then to action.
In
ad-tech this has taken the form of behavioral, demographic, psychographic, and
semantic targeting, in rough chronological order. My recommendation to premium
publishers is to create halo and valence data to integrate into ad targeting
ASAP to monetize the incremental value of their own brands vs. lower quality
sites, and I think this represents an interesting void for ad-tech startups to
fill. Collaborative filtering is invading the ad-tech world, with AdKeeper recently
telling PaidContent that “The
way to understand the ‘good’ ads from the ‘bad’ ones is to let consumers
actually come out and tell us what they are.” Social ad-targeting is on
everyone’s radar but cultural barriers remain as illustrated by LinkedIn’s
misstep with social ads in August. Opt-in social recommendations have been far
more successful, primarily in the form of Facebook likes and Twitter mentions,
but this is not quite advertising. Personalization of creative is taking
ad-tech beyond the question of what product to advertise where and to whom, but
also what that ad should look like as the where and to whom vary. Companies
such as SundaySky and EyeView customize video creative on the fly on a per-user
basis, while Dapper and Tumri do the same for display.
In
content personalization has primarily taken the form of collaborative filtering
by companies such as Netflix, Taboola, Outbrain, Sailthru, and nRelate, with
some recommendations from the social graph although this again raises privacy issues.
Online
commerce is increasingly personalized, with Amazon leading the way in applying
collaborative filtering to suggest purchases, and practically every e-commerce
site of any scale following in their footsteps. FourSquare is lead the way
towards location-based analytics for brick and mortar merchants, while niche
sites like BirchBox and Fitocracy can offer incredibly rich data to such
mammoth industries as beauty and fitness, respectively.
Online-to-Offline
I have long postulated that online-to-offline is a basic axiom of media, whose appearance in
digital media and the mobile web are the natural evolution of these
technologies rather than a paradigm shift. Every form of mediated human
communication, from the printing press through the telephone to the various
incarnations of the internet (Web 1.0, Web 2.0, mobile Web) has been about
facilitating and optimizing real world results, rather than some sort of
masturbatory self-referential information exchange (jokes about internet
pornography aside). As technology matures it ceases to be technology per se but
rather becomes just another tool to enable the satisfaction of our eternal human needs:
food (Yelp, Menupages, Zagat), shelter (AirBNB, HomeAway, HotelTonight),
transportation and navigation (ZipCar, GetAround, Garmin), in-person social
interaction (Meetup, Evite, Paperless Post), work (LinkedIn, TheLadders.com,
Indeed.com), sex and intimacy (JDate, HowAboutWe, PlentyofFish) and finance
(Mint, BankSimple, LearnVest), sports (RunKeeper, Fitocracy, DailyBurn),
entertainment (Netflix, Hulu, CollegeHumor), etc. Email and sms are no more
intermediated than letters and telegrams, and the technology of previous
generations such as airplanes, ATMs, and microwaves were no less wondrous or
disruptive when they were launched than the internet, smartphones, and tablets. This concept is neatly summed up by the Alan Kay quote that “Technology is anything invented
after you were born. Everything else is just stuff.” It is true that the pace of disruption has accelerated, but I don't believe this represents a discontinuous break with the past.
The
long-term trend in the world of digital media products or services – be they apps,
software, hardware, etc. – is therefore not determined by feature sets or tech
specs but by utility as a tool for solving a real-world problem, defined as effectiveness
in creating real-world results with the least real-world effort. The digital
media companies that succeed in transforming their “technology” into everyday
“stuff” will be those that heed the above. Apple is the pinnacle of this transformation, but there is room for plenty more companies to get this (if they can).
