Crypto currency – there is still time to get in on the gold rush

Ben Milne is the Head of Platforms and Partnerships for Posterscope

5 – 7 minute read


Most will no doubt have heard of bitcoin and the blockchain that enables the cryptocurrency to function. Clay recently explored the disruptive power this technology could have on the media supply chain in a piece he wrote for Campaign Asia you can read here.

For this article I intend to focus not on the encryption and blockchain but instead on the currency aspect of Cryptocurrency, through the lens of my own personal experience.

To me the idea, that exists at the heart of Crypto currencies, that vast power structures such as central banks can be disintermediated and their functions decentralised breaking down monopolies and accelerating the transition to a more just & equal society is the idea that got me hooked.

My first experience of cryptocurrency began around 7 or years ago. It was a spring evening in 2010 and I read an online article about a virtual currency that was going to completely transform the global banking system and the way we all trade with each other. A few days and a lot of articles later the decision was made, I had become a Bitcoin miner. Donating my spare computing power to a lofty goal wasn’t new to me – I was already participating in SETI@home (the decentralised search for extra-terrestrial intelligence). At this stage the monetary reward didn’t really factor into decision making at all, Bitcoin was valued at $0.08 then,  earning a few cents every day or so wasn’t a big motivator.

Once I had setup an old gaming PC at home correctly it began its job of processing transactions on the bitcoin blockchain and in return I was rewarded periodically with bitcoins. The great thing was that once setup you could forget about it. After a few months the constant computer fan noise became annoying and I got bored with the project so I turned off the machine and made a mental note to check the results some day later.

Fast forward to today and somewhere along the journey the old mining PC has either been sold or lost and having moved house and country three times in that time the chances of locating the data intact are next to zero. I have no way of knowing how many bitcoins I was rewarded, I never did get round to checking, although most of my investigations suggest it would be somewhere around 100  bitcoins which would have been worth around $8 then but would be valued at just under $400,000 today!

The next time my life intersected with Bitcoin was November 2013. The FBI shut down The Silk Road, a darknet black market and consequently Bitcoin was back in the news.  At this point one bitcoin was valued at around $100 and it had become economically unviable for single users to mine them using amateur hardware (the cost of electricity outstripped the value you would potentially receive in return). Having recently read a convincing economic article that argued a single bitcoin would end up valued at $20,000 (based on the cap of 21 million bitcoins that exists) I decided the time was right to buy in, a good decision it seems as I have theoretically seen 4000% growth, although if I will ever cash out is another question and another article all together.

As a currency I think it is still really early days and there is a long way to go. There aren’t really that many ways to acquire or spend it and the main economic activity happening seems to be Cryptocurrency trading. The rare few times I have been presented with the opportunity to use bitcoin to pay for something I have instead opted to hold it and pay with ‘fiat’ currency (normal government backed money).

The only thing I have ever bought with Bitcoin is other Cryptocurrencies, known in the market generically as ‘altcoins’ and that is only because for many of them it’s the only way to buy in.

Bitcoin is just the tip of the Cryptocurrency iceberg, the more involved you get you will come across digital wallets, cold storage offline wallets, Cryptocurrency exchanges, ICO’s (initial coin offerings – like an IPO but unregulated!) and more, each adding a new layer of complexity to the landscape that you previously thought you understood. Making big bets is not for the faint hearted, daily swings of up to 50% in either direction are currently quite normal for some altcoins meaning you could effectively beat the casino or you might just lose your shirt and your house if you were that way inclined!

Since the success of that small investment in 2013 and the realisation that I missed out big time on the early days of Bitcoin I have made small investments into other crypto currencies, hoping to recapture the opportunity, such as Ethereum, Litecoin, Nav Coin, Ripple and others. Some of those have turned out to be great others not so and recent regulatory overreach in China has led to a lot of instability in the market which has sent portfolio’s tumbling however despite this I am bullish on the future of Cryptocurrencies in general and I don’t mind making a few bold predictions about how I think this could impact our business or industry (over and above the Blockchain applications pointed out by Clay).

So here we go with my Cryptocurrency predictions;

  • If not already then by 2020 we will encounter a client or supplier who wants to pay or be paid in Cryptocurrency so before then we will need to establish rules around this.
  • One of the big technology companies will launch their own Cryptocurrency (my bet would be Google first) and maybe even begin to pay staff in this. The ICO will be huge too!
  • At least one person in our global network will become a cryptocurrency millionaire, I am doing my best to make it me but its early days still so there is time for everyone to get involved.
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Porn and advertising – Will there ever be a hook-up?

Vivekanand Salunke is the Regional Associate Director of Strategy of Carat APAC.

5 – 7 minute read


Did you know porn receives more regular traffic than Netflix, Amazon, & Twitter combined? 
35% of all internet downloads are porn movies.
Porn accounts to at least 30% of all data transferred across the internet.

Yes, it’s not secret that porn is one of the leading industries driving website traffic online. Pornographic websites are responsible for up to 30% percent of all visits on the internet worldwide. Porn sites are clearly the favoured choice, as it outranks gambling, beauty and fitness, travel, health, and recreation. And its not just a male thing; over 30% of traffic is female.

For this article I am going to take you through how advertising has started to open up when it comes to advertising on porn and its foreseeable future.

As taboos about online porn break down and new generations of singles see dating sites and apps as their first stop in the search for love, marketers have spotted an opportunity. These digital venues have become the next logical place for advertising to grow and reach an expanding audience. Since the rise of advertising via dating apps or porn sites many big brands, organisations and innovative start-ups are choosing to launch campaigns on hook-up apps and, more controversially, porn sites that were once the preserve of seedier promotional content.

Some bold brands have understood the audience potential porn industry can unlock and they have started running campaigns specific to porn environment. Fashion brand Diesel ran a campaign on Pornhub and Grindr. Diesel’s campaign on Pornhub and Grindr showing a toned model with killer abs in nothing but his underwear, with the words ‘No Filter!’ written down his leg, was a perfect fit for a particular segment of the brand’s audience, and brilliantly targeted. This campaign was one of their most effective campaigns with pornhub becoming their number referring site for Diesel.com.

The reasons for this effectiveness is quite clear, these channels are much cheaper than advertising on Google, Twitter or Facebook, and with the chance to stand out from the crowd. Content from the porn industry enjoys a much higher rate of user engagement, and massive traffic volumes far in excess of anything else online, to make it a relatively uncluttered marketing space for legitimate brands to reach men/women of all ages.

Diesel was a great example but there is a thin line since not every brand can embrace this trend as the medium would be too controversial for some. Brands should be rightly wary of aligning themselves to the sector.

Interestingly, food-to-go start-ups have embraced porn-site advertising. However, their experiences vary widely and demonstrate that nobody can make assumptions and nobody can take their audience for granted.

US app Eat24 took the plunge and credited its porn-site campaigns (plus the ensuing publicity) for taking it from a cash-strapped, me-too start-up to its $134m acquisition by Yelp.

The brand had managed to reach many more potential customers than if it had advertised on Google, Facebook or Twitter, and at about 10% of the cost. It generated massive traffic from first-time users (a claimed 90%), with customer retention four times that of Facebook

Conversely, Zomato, a restaurant-search and food-ordering site that was founded in India and now operates in more than 20 countries, made a highly publicised entry into advertising on porn sites last December – a decision it reversed, equally publicly, days later. It had seemed to make sense. India is the third-biggest source of traffic to Pornhub worldwide. Yet, despite Zomato’s humorous ads generating millions of clicks and a rise in order volumes, all at a very low cost, the backlash was instant and intense.

While there are a lot of pros for advertising on porn sites there are a lot of cons as well. In a lot of countries porn is illegal so when a brand is seen on a porn site it might face a massive legal action. Ad fraud is one of the biggest concerns as it happens in normal digital environment then what can happen when you go advertising on porn sites. My prediction advertisers will be cautious till the time there are more global and organised porn websites such as pornhub etc. who can assure quality brand environment. This is no small feat considering the often written about industry difficulties in ensuring transparency.

Our predictions for marketers who may consider porn as a viable space.

Its not going mainstream anytime soon. I have been on porn websites and the conditions in which the brands get advertised are not really the best. Brands need to and will be staying away from the local porn sites which are not commercialised yet as they don’t have the right environment as a pornhub has. I couldn’t see any branded ads on offer such as an ad for an apparel brand or a perfume or deo. While consumers may be loosening up about sexual content they consume online, it’s going to take a while for mainstream brands to consider this as a route to market. The businesses that should be using this ad space right now are the cheeky challenger brands that want to make an entrance and get talked about.

To get the share of increasing ad revenue the porn industry will get more organised and innovative – The global players like pornhub and youporn have already organised their sites and are trying to be more ethical by getting rid of abusive content. More and more players need to follow this trend to start getting the ad revenues. Unless then those sites have to be on their own which won’t be a sustainable model for them.

Will there ever be a mainstream hook-up between porn sites and advertisers? Some say necessity is the mother of all invention and in slow growth periods brands often seek new growth opportunities. There may be a real first to market advantage for courageous brands who see a potential fit and make the leap. However first to market can also be a double edged sword.

Whether advertising and porn will ever intersect really boils down to its mainstream acceptability in our moral consciousness.

 

 

Darknet – a light in the dark, or a place to avoid?

Vivekanand Salunke is the Regional Associate Director of Strategy of Carat APAC.

5 – 7 minute read


The DARKNET, by virtue of its name and also how you access it sounds like a murky world where bad things happen.  It sounds like something the Imperial Forces from Star Wars would have invented for their evil purposes. Yes, there are those illegitimate elements, such as sites for illegal trading, the infamous Silk Road drug exchange, and sadly even sites related to human tracking and child pornography rings have been thankfully busted. In reality 95% of the activity is a force for positive, such as NY Times site dedicated to anonymous whilst blowing to combat corruption etc.

Most of us don’t know about this unexplored, unknown side of internet. I have been on darknet during my university days hosting and accessing our study material, projects and even sharing computer games.

A while back I stumbled upon an article about Target (retail giant) been hacked and the customer credit card details appeared on darknet or sold in black market. The hackers gleaned through the customer names, credit and debit card numbers, expiration dates, and three-digit security codes from customers, data that can then be burned onto counterfeit cards and sold on the darknet typically for $20 to $45 apiece.

This is when I started to think and explore more about this topic. Darknet is an overlay network that can be accessed only with specific software, configurations, or authorization. Jamie Bartlett (journalist and tech blogger) nicely summarized the harsh reality of Darknet,

“The dark net is a world of power and freedom: of expression, of creativity, of information, of ideas. Power and freedom endow our creative and our destructive faculties. The dark net magnifies both, making it easier to explore every desire, to act on every dark impulse, to indulge every neurosis”

The dark net sits at the deepest layer of the World Wide Web which is split in to three layers; the top layer is the surface web which is what we have access to using Chrome or Safari, the second layer is the ‘Deep Web’ which are those sites which cannot be searched using a search engine. This doesn’t mean that these sites are suspicious. The deepest layer is called Darknet. In short we can say they are the different parts of the World Wide Web (WWW) where websites have different access rights. Darknet is the darker side of the web while Surface web is the clearer side. Yes, there are a lot of things which we don’t know.

Did you know that only about 4% of internet is accessible through search engines like Google, Bing or Baidu and remaining 96% of web contents only accessible with special tools and software – browsers and other protocol beyond direct links or credentials? Let’s have a glimpse of the rest of the web.

Ironically, darknet was initially used for anonymous communications within the Military, to keep messages encrypted and secret. The Darknet platform is designed to be invisible to any ordinary browser and you need specially designed browsers like TOR, I2P etc.

The darknet has often been portrayed in Hollywood movies as the murky realm where the baddies do bad things such as Hacking, drug and arms dealing, illegal access to webcams, and general espionage and subterfuge. In some instances this is true. There are also incidences of the shoe being on the other foot, as detailed in the recent documentary film Zero Days by Alex Gibney. The film details how the dark net was used by the secret services of the US and Israeli governments to (illegally?) bring down Iran’s supposedly peaceful nuclear power programme.

In reality a lot of people do benefit from the relative secrecy in darknet. The obvious use cases are for journalists and nonconformists to communicate with each other or to share their opinions without censorship. It is filled with activists’ websites, anonymous stock traders, and information databases for journalists, political chat rooms, instant messaging services, artist platforms, as well as the WikiLeaks portal where whistleblowers can submit information anonymously.

Having accessed (not through my work laptop) the darknet with some trepidation and poked around I found the following sites that re-enforces the positive forces.

A safe place: Like Quora, the dark web offers opportunities for individuals to share their personal stories. On some sites, survivors of abuse can discuss their experiences, name their aggressors, or console their peers who would otherwise feel uncomfortable talking about their experiences.

Shared experiences: Some countries subjugate their citizens on an arbitrary basis, including sexuality or religion. The dark web offers opportunities for people to form communities in a less extensively policed forum, where they can share experiences.

Access to information: Access to books can also be restricted for a variety of factors, and the dark web offers plenty of opportunities to read books that may either be doctored or entirely prohibited in the analog world. Have you read the original Grimm’s Household Tales (more often known as Grimm’s Fairy Tales)? They are not in many bookstores or libraries, but are available on the dark web. For billions of people, access through the open web is restricted, leaving only one option

The darknet is becoming increasingly more popular as evidenced in the rapidly increasing traffic numbers and related TOR downloads across the globe (TOR is the access point for entering the darknet). The following site provides interesting stats by country related to TOR.

https://metrics.torproject.org/userstats-relay-country.html

The stigma often attached to the darknet is starting to lift and in my own experience the darknet can be used to gain valuable insight into subcultures and trends. In fact I recently put a proposal together to dredge (crawl) the darknet for consumer insight for a well-known insurance company.

Whether the darknet surfaces as a morally acceptable place to gain access to valuable information remains to be seen. We do believe more and more users will try to be invisible using darknet – Keeping in mind the trend towards people wanting more data privacy more users will switch to TOR or equivalent browsers to hide their identity. In some countries, accessing certain internet platforms is illegal for some segments of society. This is visible by the fact that Tor users in UAE has increased exponentially.

In coming years, governments will be tasked with drafting and implementing better cyber laws that detail what kind of encryption and privacy tools can be used, by whom, and for what purposes. We should expect the same results from darknet, which in turn will pose its own set of social questions, including about how much we value our right to privacy, from the individual level to the organisational level.

Many governmental organisations are also taking action against these infamous and illegal marketplaces found on the darknet. Every shutdown spawns dozens of other work arounds. The anonymity in the supply chain is their strength.

For those curious about the various going’s on in the darknet but not wanting to actually enter it, there is a news blog accessible through the surface web which provides daily news updates related to all things darknet (https://darkwebnews.com).

Suffice to say, the darknet is difficult to pin down in terms of providing a definite “is it good” or “is it bad”. In many ways the darknet is a place that reflects the best and worst of our human traits and imagination, where good and evil co-exist.

Programmatic Pants

Clay Schouest is the Chief Strategy Officer of Carat APAC.

3 million years’ worth of human development and the spirit of inquisitiveness had been reduced to which colour underpants Wayne would select that morning.

5 – 7 minute read


 

It’s 2050. Advertising as an industry has long been dead. That’s because choice, preference and conscious decision making is no longer a practiced human activity. It’s been replaced by the complete automation of our lives.

The last day of the last active choice was registered on the 10th December 2049 by Wayne Clayton in Singapore. The automation of decision making had reached the point where everything in life was managed through machine-based algorithms. By 2030 everyone on the planet, save for a few self-proclaimed luddites, had already fully embraced this automated life.

Wayne also practiced life automation apart from one single conscious decision – he reserved the right to choose his underpants every morning. This was his sole act of self-expression and his only remaining mechanism of protecting his individual identity.  His right to choose was not an act of political defiance, rather it was his way of reminding himself that he was still part human. He treasured his multi-coloured, multi-patterned pants collection in the same way an art collector treasures the uniqueness of craft in today’s context.

But on that 10th of December morning Wayne woke up feeling tired and slightly hungover from the previous night’s soma binge. He decided he didn’t have the energy nor the straight sight to choose his pants. Upon waking up and realising he would probably be late for work, he rolled over and capitulated the last act of human free will. “Alexa”, he croaked, “please select my pants”. And that was how the last active choice on earth was given up to an algorithm. That is how programmatic conquered pants and with it, the last choice in the world.

That is how programmatic conquered pants and with it, the last choice in the world.

The futurist Ray Kurtzweil’s dream had finally become reality.

So how did we get here? Most experts trace back the point of departure to the last ever Olympic games in Tokyo 2020 – this was the first occurrence of real time deterministic data combined with the known genetic code of each individual athlete to accurately predict the outcome of every sporting event. The IBM Watson’s algorithm was so accurate that it was not only 100% correct in predicting the Gold, Silver and Bronze medallists, but also the exact placement of the remaining athletes. The act was hailed as a breakthrough in predictive technology.

But in 2020 life automation was still in its infancy. Artificial intelligence and machine learning was still largely restricted to the automation of industries and large scale projects such as IBM Watson. Its exponential growth would soon gradually start prevailing in all aspects of life thereafter.

Initially the promise of machine-learning-based algorithms was celebrated as an ingenious way to improve life and a testament to the spirit of human progress.  In the beginning the algorithms offered limitless choice. In a world where everything was connected and predictive, the possibilities to enhance life seemed endless.

The use of algorithms in advertising provided the ability to customise exact offers and brand messages specified to meet the exact needs of the know individuals’ preferences, habits and predilections. It was a marvel of prediction. In fact, algorithmic advertising had become so accurate that it was able to predict and stimulate behavioural consumption demand before individuals actually knew themselves.

The use of algorithms in advertising provided the ability to customise exact offers and brand messages specified to meet the exact needs of the know individuals’ preferences, habits and predilections.

Gradually by 2030, machines had become so intelligent and predictive that choice had begun to reduce and narrow. The advertising industry was the first affected by this reduction of choice. The algorithms had become so smart at predicting and stimulating future demand that people started to become less inquisitiveness, less spontaneous and more passive. It was more convenient to let algorithms make choices for them. The result was a self-perpetuating bubble whereby the machines started narrowing down choices and reducing randomness based upon its excellent predictive optimisation techniques. Like abandoned gold mines of the old west, advertising and marketing as industries ceased to be productive and were shut down completely.

This narrowing down of choice was the beginning of Singularity.

At this stage not all were happy with the increasing automation of life– artists and religious leaders being particularly sensitive. By 2040 these two seemingly incongruous groups had formed a strange bedfellow’s alliance called the “Spirit of Randomness”.  They argued for spontaneity and inquisitiveness and practiced random acts of kindness as demonstrations of the human spirit.  But things turned dark and the alliance was eventual disbanded after the machine learning intelligence agency predicted and prevented random acts of terrorism that had been planned by the group to hack and sabotage the world’s central neural computing network system.

The automation of life had become so predictive and optimised that almost no choice remained. The sheer accuracy of predictive optimisation had reduced choice to a single point.

By 2045 the writing was on the wall. The automation of life had become so predictive and optimised that almost no choice remained. The sheer accuracy of predictive optimisation had reduced choice to a single point. The repercussions from this was a sea of sameness. Almost everyone wore exactly the same clothes, had exactly the same driverless car model, lived in exactly the same apartment layout, listened to exactly the same music and worked in exactly the same industry – mining solar energy to help fuel the ever-increasing power needs of the super computers.

And by 2049 it was only Wayne left with his single conscious choice of which pants to wear in the morning – 3 million years’ worth of human development and the spirit of inquisitiveness had been reduced to which colour briefs Wayne would select that morning… The end of self-conscious thought and choice happened not with a bang, but with a morning fart and a whimper.

Fast-track Facade

Christine Liu is the assistant insights manager for Carat APAC.

Imagining what’s to come for makeup junkies in quest of progressively quickened paths-to-purchase.

5 minute read



Not long ago, I uncovered a stack of Seventeen magazines from my teenhood: My prized possessions and authoritative beauty bibles from a decade ago! Every issue stood for each excruciating monthly wait for fresh content on the latest and greatest in cosmetics, for which I was willing to fork out from my allowance to receive.

A quick flip through the issues hit me with another realisation of how patient I used to be with getting dibs on makeup: There were dog-eared articles and ads introducing new makeup products, bookmarked until I happened to get into a physical store to test and buy them.

1
Blast from the past! Back when product smeared on pages was enough to pique my desire to go to a store to try it out.

What a stark contrast to the magazine-eschewing, tech-reliant millennial I’ve grown into. It has become second nature to do a zippy self-source on Google for trending lipsticks, click on the image search tab for real-life user-contributed previews of my chosen lipstick, go straight to Sephora.com to verify my choice with others’ reviews, and cart out my selection immediately to receive it within the same day. I can’t help turning testy when it takes longer, or if a cosmetic brand I’m interested in is absent from the WWW, as if they’d much prefer swatting away my outstretched hand of cash.

RAPID ROUGE
It’s not just me: My hastened tendencies are habitual of most Under-30s, especially when it comes to beauty products: Euromonitor reports that digital channels have been essential to strong global growth of the cosmetics category, driven chiefly by the young, digitally-savvy demographics embracing makeup as an online hobby [1]. They are flexing their wallets obligingly for the clever brands who are paying attention to their demand for hyper-accelerated beauty discoveries and purchases in the digital arena.

2
Fast-forward 10 years: Tapping through video makeup tutorials and swatches on Instagram stories are a daily habit for me, and I’ve grown to expect nothing slower than a click/swipe to purchase featured products
3
One lip, a million lipsticks: It’s common to see millennials fulfilling their love for makeup online, readily sharing their product reviews and gargantuan makeup collections on social media. There’s never enough makeup for a crowd that’s fed with new shades and formulas daily, at relatively inexpensive prices.

Adding to that, the makeup industry is characterised by a proliferation of choice for the consumer’s incessant hunt for their ultimate “holy grail” products. The return to consideration after purchase could take mere minutes, enough time to swipe on a new bullet of lipstick and realise it looks different on your skin than it did in other people’s Instagram swatches. (Bummer.) The speed that digital platforms and innovations can offer to such a category is a godsend, and it’s a rare vertical where consumers have adopted and embraced futuristic upheavals so quickly and easily.

7
L’Oreal’s AR Makeup Genius app.

Live face filters powered by augmented reality have been a gladly-received response to this demand for swiftness, especially in the trial stage which is typically most time-consuming and what handicaps  the makeup purchase journey. L’Oreal launched a mobile app called Makeup Genius, which scans the consumers’ faces to impose a realistic, live reflection of what a wide range of L’Oreal’s products looks like on their own skin, as if the phone is a mirror. Sampling cosmetics can now be done anytime and anywhere, with the additional aid of product recommendations, and then bought instantly, all in one platform and sitting.

5
LOOKS by LINE facilitates the virtual trial of products from numerous hot beauty brands such as 3CE, Clinique and Etude House in a single app.

LOOKS by chat app LINE takes this one step further, enabling multi/cross-brand recommendations, trials and purchases, and Shiseido Japan’s Telebeauty face filters can be shown real-time during Skype calls, which presents opportunities for quick feedback from friends.

10
Maybelline/Garnier X Grab’s beauty bar on-the-move.

Of course, being able to test-drive the actual cosmetic before buying it would take the cake. Maybelline Singapore took a cue from that literally, teaming up with Grab to install beauty stations inside GrabShare cars, allowing consumers to order a ride where they can test products while getting to the next destination. Perfect for touch-ups on makeup-melting hot days, and solving the inconvenience of finding time for testing trips to physical stores.

PRIMPING PROSPECTS
It’s hard to see this need for speed slowing down anytime soon. Let’s peer into the marketing crystal ball and have a go at charting where this accelerated purchase journey is headed in 10 years.

Automated advertising that predict our product preferences is currently based on past purchases, but imagine that in 10 years it may be established from our actual usage instead, because the physical product can be tracked. Manufacturers are likely to realise that for cosmetics, the frequency of post-purchase use is a better indicator of re-purchasing than just the order itself.

11
A “smart hairbrush” from Kerastase that diagnoses your hair health, suggests personalised care tips, and offers real-time product recommendations.

For example, foundation bottles may be equipped with sensors to monitor usage and formula preferences, but disguised for consumers as a means for analysing their skin type or health, so as not to freak them out (L’Oreal’s Kerastase is already headed in that direction).

Also, with all minds on virtual reality and constant progress in that space, perhaps the technology will advance into a full sensory experience. Brands may just be able to stimulate textures and smell, shortening and improving the trial of cosmetics even further. Visualise being able to feel the effectiveness of a lip balm on demand—And hygienically too.

But hold up: As social parameters rapidly redefine, and technology permeates all forms of communication (think vacating offices and relying on video calls to connect, getting information from chatbots instead of salespeople, the future of social media as interacting with avatars in VR instead of a webpage), will we even need to wear physical makeup in the future, if no one will see our bare faces any longer? Perhaps we will be buying customised face filters and makeup for our VR avatars instead, which fits into the projected trend of accelerated purchasing of makeup—All it takes is a click to apply a full face of makeup to my cartoon self!

Perhaps we will be buying customised face filters and makeup for our VR avatars instead.

Obviously, the aid of technology can be a dream or a disaster. Delving into tech innovations just to be part of the industry trend, without careful consideration of whether it will improve the customer’s experience isn’t just a waste of resources, but can make a brand come off as gimmicky. Being a first mover may be tempting an accolade, but it should be less of a priority than making sure these visionary contraptions meet an apparent consumer want or need.


References:

[1] Euromonitor Passport Beauty Survey: Evolution of Beauty Routine Becomes a Key Innovation Driver, January 2017

Photos:

Magazine article picture: Harper’s Bazaar 2014. Taken from https://rmsbeautyblog.files.wordpress.com/2014/08/rms-beauty_harpers-bazaar_september-2014.jpg

L’Oreal Makeup Genius picture: Taken from https://hautemakeup.wordpress.com/2014/08/07/loreal-makeup-genius/

Maybelline X Grab photo: Taken from @thesmartlocalsg on Instagram

L’Oreal Smart Brush picture: Taken from http://www.adweek.com/digital/loreal-made-smart-hairbrush-analyzes-beauty-habits-and-suggests-products-175350/

 

Artificial Intelligence: The Age of the Many, of Mediocrity… And the Realisation That Bob Marley Could Still Be Alive

Jasper Distel is the Regional Associate Strategy Director for Carat APAC.

Essentially, I still see advertising as an arty-farty, craft industry, not an automated factory. It’s humans that create and inspire; however, it’s undeniable that technology is here to help us do our jobs ‘better’. But what will that mean in the long run?

8-10 minute read


 

We could all be living in an alternative Matrix-esque reality where Bob Marley is still alive and singing—at least I seriously hope so because today’s music needs a bit of a “Redemption” from its present banality. That random thought is what I woke up with, along with a dry mouth and slight hangover, from the previous night’s beer-fuelled, marathon discussion.

During a recent trip to Korea, I had the pleasure of meeting some really interesting tech peeps. We then decided to continue the evening at a Korean-Mexican restaurant…because that’s what you eat when you’re in Korea. After at least six a couple of drinks, we started deliberating over Artificial Intelligence…as one does during a night out.

For those of you who do not know what Artificial Intelligence is about exactly, don’t worry. It’s just something that will most likely take over your job in the next few years. And it’s HUGE. So huge, it’s true. Believe me. There is a reason they’ve already labelled it as the next industrial revolution. According to ‘specialists,’ AI will have a bigger impact than the previous three revolutions combined. For now, all you need to know is that Artificial Intelligence is H-O-T as hell and will have an impact on everything we do. Impact is not the right word—it will redesign entire industries, from the ground up. I can hear you thinking, “Jasper, stop with that futuristic Terminator mumbo jumbo bullshit”. Fair point; so let’s get back to Bob Marley and his current whereabouts.

 

Our geek-out session had reached a lull and was just on the verge of dying off when—as if on cue—we received a redemption in the form of pop star Hatsune Miku when one of her songs started pumping through the restaurant sound system. Our conversation was immediately revived and took on a new dimension.

After one of my new techy friends told me more about her, I was transfixed by the potential she represents. Never mind that her music is actually pretty shit, Hatsune Miku is possibly the best thing I’ve heard about in a long time. How the hell could I have missed something this big and significant? I felt like Cersei Lannister during her walk of atonement.

For everyone who doesn’t know who Hatsune Miku is (and I truly hope I’m not the only ignorant one) she is a 16-year-old pop star from Sapporo, Japan. Hatsune has impossibly long, turquoise hair held in place by two pigtails and big, bright blue eyes that seem to take up half her face. She started her career in 2007, opened for Lady Gaga and partnered with Pharrell Williams in 2014, and sold out ten major US venues during her 2016 world tour. She has millions of fans around the globe and has already produced over 100,000 songs. Yes—you read that correctly—100,000 songs in only 10 years. That’s an incredibly high rate of productivity. One could say she has a machinelike efficiency…and one wouldn’t be wrong in thinking that.

That’s because she isn’t real. Did I forget to mention that? Well she’s not real in the flesh and blood sense of being ‘real’. She’s actually a piece of code with an avatar and a voice that is completely programmed like a synthetic instrument, processed and smoothed by algorithms. Think Max Headroom for the digital economy…on steroids.

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We know AI can already recognize emotions based on people’s facial expressions and general body language, as well as discern what songs will be popular among an audience. Hatsune, as a non-human, can capitalize on machine learning, adapting as new data comes along, even without being explicitly programmed.

Imagine being at one of her concerts and halfway through the show, she scans the crowd and realizes that they’re not 100% feeling it. On the spot she will be able to change her repertoire, based on machine learning, and get people excited again. Yep, machines toying with your emotions…live.

This is when Hatsune becomes more ‘real’ and brings up philosophical questions about what actually is real. Music has always been about the artist conveying and evoking emotions from an audience. As a Nirvana fan, it’s their raw, somewhat unbridled emotion that stirs the human spirit inside me. I love the emotional rollercoaster; it makes me feel alive. If Hatsune’s music stirs an emotion in her audience and if she can interact with and alter those emotions, then isn’t that real?

Music has always been about the artist conveying and evoking emotions from an audience. If Hatsune’s music stirs an emotion in her audience and if she can interact with and alter those emotions, then isn’t that real?

This is why I was so mesmerised: Could we programme a Bob Marley AI-fuelled avatar and get him to start producing music again? He would compose new and original songs and hold concerts—and he would be real because he would be capable of interacting with audiences and evoking emotions from them.

Call me old school, but something about this thought disappoints me. And it starts a bigger conversation about the impact technology has on different industries, like our own. Essentially, I still see advertising as an arty-farty, craft industry, not an automated factory. It’s humans that create and inspire; however, it’s undeniable that technology is here to help us do our jobs ‘better’.

Many agencies have already been experimenting with facial recognition and deep learning in digital OOH screens. In 2015, Posterscope experimented with a fictional coffee brand in ‘the world’s first ever artificially intelligent poster campaign’. These bus stop ads could read the reactions of its audience and adapt its artwork and ad copy accordingly over time. Actually, not that much time was needed; in less than 72 hours, the campaign was creating posters in line with what’s considered current best practice in the advertising industry—insights that took decades of human trial and error.

In less than 72 hours, the AI-aided campaign was creating posters in line with what’s considered current best practice in the advertising industry—insights that took decades of human trial and error.

In the long run, what effect might this have on the people responsible for ground-breaking, creative work?  Could algorithms and AI produce work of the same calibre as our creative, human geniuses? Will machines be able to deliver stories that amaze us, that make us laugh or cry? Possibly.

In the beginning, AI could provide—en masse—an artificial crutch that enhances the creativity of those who are less inclined. However, a tipping point may come about when we rely too heavily on the aid of algorithms at the expense of human creativity. Remember the pre-Google Maps era, when we still had to rely on paper maps to get from A to B? We had to think on our own and figure out the best route to arrive at where we wanted to be, if we arrived there at all.  Could a creativity-enhancing AI actually make everyone less creative and even more mediocre?

How might this play out over time? In my mind, this conjures up the somewhat strange metaphor of Fat Bastard from Austin Powers. Stay with me here: His head represents truly ground-breaking, innovative work done by a select few creative masters, while his body represents the newly AI-enhanced creative masses. In time, with the aid of AI, his belly will get bigger and bigger, while his head will remain the same, or may even shrink. Got that? Welcome to the age of Mass Mediocrity.

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Hatsune’s cheery pop song eventually ended, and I half expected a newly created Bob Marley tune to follow. It didn’t happen, at least not yet.  We finished our Korean-Mexican food and one of my lovely companions turned to me and said the magic words, “back to the future”.

 

Muchas gracias to Clay Schouest for connecting the dots and with the edits.

Retiring the Canary

Clay Schouest is the Chief Strategy Officer of Carat APAC.

Are we entering a ‘new norm’ for advertising where growth in ad spend and economic growth enter a new relationship? It seems we might be.

5 – 7 minute read


Global advertising spend has generally always acted as the canary in the coalmine for the general state of the global economy. When ad spend goes up so does economic growth, and when spend contracts so generally does the economy. This is the first year in many that global economic forecasts for growth are going up whilst the advertising growth rate is less than the previous year. To be exact, the overall economy is predicated to grow 3.6% in 2017 versus 3.1% actualised in 2016, whilst advertising growth rates are forecasted to be lower with a 3.5% increase in 2017 versus 4.1% actualised in 2016.

This scenario suggests a couple potential scenarios:

1.  That economic growth may be about to slow, or that advertising may actually exceed its initial forecast.

2.  That we are entering a ‘new norm’ for advertising where growth in ad spend and economic growth enter a new relationship.

Could it be that less advertising spend is required to achieve growth?

It’s the latter that I would like to explore. Perhaps we are starting to see a new norm for advertising. Could it be that less advertising spend is required to achieve growth? This would suggest advertising investment is becoming more effective at achieving like-to-like sales.

One could assume this may be down to the influence of the peer-to-peer economy. In other words, the power of fully-scaled social media whereby ‘earned’ media is becoming increasingly more influential on achieving sales.

It could also be attributed to the increasing shift toward addressable advertising—advertising that serve ads directly based on demographic, psychographic, or behavioral attributes associated with the consumer instead of projecting what content a particular audience will be consuming.

To use this Adweek example: Whether your target audience is watching TBS at 2 p.m. or ESPN at 10 p.m., they’ll be served your ad. And it is served to your target whether they’re a heavy or a light TV viewer because the ad finds the audience versus the old model of having the viewer come across the ad. And advertisers are only charged on impressions that are served to their target audience.

Over the past few years, the impact of new ad technology has increased the prevalence of addressable advertising with better, and more accurate targeting and optimisation that requires less advertising spend to achieve sales, and in turn reduces wastage.

The growth in advertising investment allocated to addressability has increased over 2,000%. Currently only 10% of all advertising is invested in this way – and analysts predict it will be exponential in the coming years (30% by 2018 and almost 50% in the US by 2020). The scalability of addressability is on our doorstep.

It could be attributed to the increasing shift toward addressable advertising with better, and more accurate targeting and optimisation that requires less advertising spend to achieve sales, and in turn reduces wastage.

Does addressability equate to better effectiveness? There is also evidence to suggest yes. In a recent study by the analytics group D2D the effectiveness of addressable advertising was measured versus a control group panel. Those plans that contained elements of addressability outperformed those that did not. The study concluded addressability done in the correct way can influence effectiveness by a factor of 10X. This will most likely increase as it becomes more scaled.

As more platforms and media goes addressable, traditional ‘fixed inventory’ advertising will become less and less. This coupled with the fact that people also consume less advertising and have more ad blocking technology installed might ultimately spell the death of advertising as we know it.

The creation and distribution of brand messages will be addressable and largely embedded in entertainment-based content or embedded in general utilitarian aspects of our daily lives. Reminders will pop up on our digital screens and household items – such as a message from our favourite yogurt brand on our digital fridge door, or a message about allergy relief medication relayed by Alexa in the morning when we ask for the day’s weather forecast.

It feels like the old adage of “half the money I spend on advertising is wasted; the trouble is I don’t know which half” may be coming to an end all together. Coming back full circle: are we entering a ‘new norm’ for advertising where growth in ad spend and economic growth enter a new relationship? It seems we might be.