B&T – The ABC of DSPs

Demand-Side Platforms (DSP) are one of the most confusing concepts yet to appear in online advertising. An DSP essentially enables a media buyer to operate its own virtual advertising network, acquiring inventory on a real-time basis to fulfill the needs of its clients.DSPs work symbiotically with another new phenomenon, ad exchanges, which enable the real-time buying and selling of the advertising inventory that is used by DSPs.

Confused yet? The March 4 edition of B&T carries my cover story on DSPs and tries to explain what they are all about. While the story is not yet online, it should still be in newsagents for a few more days.

While this may not seem like the most stunning topic, DSPs and ad exchanges are part of a broader movement that I’m referring to as the Era of Big Data. What makes DSPs effective is the consumer behaviural data that is fed into them from a myriad of sources such as BlueKai (whose chief executive Omar Tawakol is quoted in A Faster Future). Services such as BlueKai enable the buying and selling of anonymous browser data, helping advertisers know a little more about how to make the placements effective.

It is this kind of technology that drives the effectiveness of online advertising, and is helping planners make much more strategic decisions about where they spend their media budget. In some ways it brings elements of the one-to-one advertising model created by search advertising to the display market.

As Tawakol says in A Faster Future; We believe that data is becoming more valuable than media”.

CarGrabber.com.au wants to level the playing field

Today I caught up with digital media entrepreneur Chris Noone. I first met Chris some years back when he was running the mobile division at ninemsn. After stepping out to set up local arms of international mobile games companies, he has now turned his attention to shaking up the online market for used cars.

CarGrabber.com.au takes information from dozens of other used car sites and displays the results together on one page. Hence a search for Nissan Hilux vans can bring together the results from many other sites. It’s great for the consumer, who now doesn’t need to keep track of the listings of different sites.

It may not be so great for some of the car sales sites, particularly the larger ones, whose legals teams have been pestering Noone since CarGrabber.com.au’s launch back in November last year.

The reason is simple. Larger car sites tend to attract more traffic, and hence charge more for listings. However, Noone’s site enables cars from a small site to be displayed alongside those from the premium sites. Should CarGrabber.com.au grab enough traffic it essentially levels the playing field and reduces the premium site’s ability to charge a higher price.

Noone is not yet ready to reveal how he is going to monetise CarGrabber.com.au, but expect an announcement around the middle of the year. That is of course if others in the industry don’t find a way to shut him down first.

BRW TV features A Faster Future #AFasterFuture

The latest edition of BRW TV sees co-authors Brad Howarth and Janelle Ledwidge interviewed by BRW’s Jean-Vida Douglas on the topic of the future of sofware innovation in a broadband-enabled society. In the interview we talk about the impact of broadband and the way that more and more of the actions we perform and the services we use are being mediated by software, and about the rise of collaboration software that is reshaping the way that businesses interoperate and manage themselves.

Other topics include online outsourcing and mobile broadband communications, and exploration of the opportunities for new entrepreneurs to enter the market. For the full interview, click here.

A Faster Future is also referenced in Jean-Vida’s story “It’s the maganificent seven” in the March 10 edition of BRW, along with profiles of A FasterFuture-featured companies Aconex and MyCyberTwin.

Notes from FST Media’s Future of Security conference

The third annual FST Media Future of Security in Banking and Financial Services conference took place this week in Sydney and Melbourne and featured a wide variety of speakers from across Australia’s financial services organisations.

The opening address was from ANZ Banking Group’s head of alliances and emerging payments, consumer cards and unsecured lending retail products, Greg Drumm, whose presentation covered the issues of securing financial transactions and information in a mobile environment. After running through a brief history of the mobile industry to set the context, he described a world where mobile devices have become a mainstream mobile financial services tool. The newness of mobile payments mean few risks have yet emerged, but Drumm said you can guarantee that they would, especially as fast and reliable identification methods are not yet available in the wider world. He also cautioned that identity fraud costs Australia $4 billion each year, while in the US it is apparently more lucrative than the drug trade. Voice verification shows promise as an authentication tool, but is still not a perfect solution in all situations. Drumm also called for a re-energizing of the partnership between the private sector and government to ensure that issues of security are handled in an effective manner.

The second session was presented by IBM and delivered by Paul Watters, a research director for the Internet Commerce Security Laboratory (ICSL). Watters led the audience through a thought experiment where he asked them to put themselves in the shoes of those on the ‘dark side’, to think about how criminals actually run their business. His presentation demonstrated how cybercrime organisations have many of the same attributes of legitimate businesses in terms of having budgets and targets. They will go after the richest targets but follow the path of least resistance, and many have developed specialisations. They also tend to keep business hours as well.

The third session was the Leaders Panel, where four industry specialists discussed trends relating to electronic security and fraud, under the leadership of Fortify founder and CTO Roger Thornton. Amongst the numerous discussion threads was the notion that cyber-criminals will tend to be opportunistic and will move to different markets and organisations as weaknesses are detected and remedied. They will always target the path of least resistance, but as the defences become more complex, so too do the complexity of the attacks. Threats are also evolving quickly, leading financial services companies to have to increase their research and intelligence work to better anticipate what is coming. But even relatively unsophisticated attacks can get past complex security systems in the right circumstances. While fraudsters are getting cleverer, the panel agreed that to date the good guys are one step ahead, and may have even increased the gap slightly in the past year.

After the morning tea break Suncorp’s executive manager for group financial crimes, Marty Latimer, talked through the details of how Suncorp deals with online fraud. Latimer said that in almost every case the fraud involves a new IP address and a larger than normal amount transferred into a new account. But recent attempts are becoming more complex. He said his team was constantly battling ‘speed’ in responding to new threats, while man-in-the-middle attacks are emerging that get around two-factor authentication, and social media is also becoming a more prevalent attack vector. The big question is whether fraud detection systems can keep up, as he pointed out that the next generation of users live their entire life online. He said the key was in developing fluid analytics that could model on-the-fly to intervene only in high-risk transactions, with real time intelligence sharing to detect more complex fraud indicators such as authentication bypasses.

The final presentation was from Zlatko Hristov, regional head of IT security at MF Global. He opened with the statistic that 65 percent of web surfers had fallen victim to cybercrime, and then took the audience through a possible scenario involving a business user being infected while on a public WiFi network, demonstrating how the malware package could perform functions from key-logging bank details to acting as a router when it connects to a business network and alerting a command and control host to create a breach through which an attack could be launched. He also took the audience through a live hacking demonstration, where a computer was exploited and a malicious payload uploaded. What was most surprising was how easy he made it appear. “User awareness is the most powerful weapon, but it is the most difficult to implement,” Hristov said.

Cisco’s Connected World report shows the new nature of working

Today saw the launch of Cisco’s Connected World report, which examined the needs and expectations of the global workforce. The report surveyed 2600 workers in 13 countries, including Australia. There were some interesting gems amongst the findings, including that 74 percent of Australians would take a pay cut in order to get a more flexible working life – higher than the 60 percent reported on average around the world – and reflecting the importance that many Australians place on lifestyle over just earning money.

More than one third of respondents indicated that being able to work remotely was more than a privilege – it was a right.  The report also found however that 43 percent of Australian workers still believed it was necessary to be in the office to make decisions more effectively and efficiently.

Cisco’s vice president for Australia and New Zealand Les Williamson opened with the assertion that technology has already delivered the ability to create a more flexible working environment.

“Technology is by no means the the issue that we have … we can safely deliver on the vision,” said Williamson. “Its the cultural, business process, and governance aspects that we should be focusing on.”

The report was launched with a panel discussion featuring futurist Ross Dawson, the Parliamentary Secretary to the Prime Minister and Parliamentary Secretary for Immigration and Multicultural affairs, Senator Kate Lundy, the general manager of the distributed contact centre organisation Salmat@Home, Jacob Murray-White, and the national chair of the Australian Psychological Society’s College of Organisational Psychology Fernanda Afonso.

Dawson discussed how the business environment is changing with new pressures and competition.

“The organisations that will be successful will have to look dramatically different to the ones of today,” Dawson said. “They will have to build the responsiveness and adaptability to fit into their environment. What is required is flexible work structures which bring out the talent of the people working in those organisations.”

Fernanda Afonso said there was work to be done in thinking terms of managing diversity in the workforce.

“Human beings tend to think the way they are wired is the way that everyone else is wired,” Afonso said.

Senator Kate Lundy discussed how the government’s decision to invest in a high bandwidth network would further enable this flexibility in the workforce.

“The profound thing for Australia in closing the digital divide is that people will have choice about where they work and how productive that work will be,” Senator Lundy said. “And the timing of it sets Australia to be a fascinating test bed for changing work practice around the world.”

Murray-White’s business already uses a distributed workforce, which he said enabled him to select from a broader talent pool.

“It enables people who have made a lifestyle choice about where they want to live to make a choice,” Murray-White said. “We get incredibly well qualified people … that have no other way of participating in this workforce.”

Dawson also pointed to significant opportunities for sectors such as professional services, while Senator Lundy talked about the opportunities in digital media production, and creative industries.

“Standard process work and data processing is still a huge part of the workforce,” she said.

Live from Digital Directions 2011 – Tan Le from Emotiv (@TanTTLe) #DD11

The final session of the day was from Australian-born entrepreneur Tan Le, president of the brain interface control device maker Emotiv. Tan Demonstrated the EPOC, a device that reads brain waves and interprets them in such a way that thought can be used to drive actions, such as moving a virtual object on a screen.

“There are so many possible applications of this new form of interface,” Le says. “You can imaging a character being naturally and intuitively controlled by your facial expressions. Or to move objects with your mind. Or you emotional experience can be used to dynamically change the game environment.”

Both Tan Le and Robert Tercek are quoted extensively in the new book, A Faster Future.

Live from Digital Directions 2011 – Robert Tercek #DD11

The next speaker was  X Media Lab favourite Robert Tercek, whose presentation focused on the changes that are happening in the television industry. He said that 20 years ago the cable television industry had planned out dozens of new services for sales and interaction, and then did nothing for 20 years.

“While the cable industry did nothing to innovate, you had all this activity happening on the Internet,” Tercek said. “All this value was created, but it was not created inside the colsed system of the cable.”

He talked about the difference between open systems – which are designed fro value creation – versus closed systems, that are deisgned for revenue extraction. It’s the model of cooperation versus coercion. The ultimate expression of this is the wall garden.

But the Internet has torn down the walled gardens online. It is now doing the same thing to the cable TV walled gardens, as consumers start cutting the cords in favour of al la carte offerings delivered over the top of the Internet.

“The companies are afraid of their customers,” Tercek says. “And they have reason to be afraid of them, because their customers hate them. Record numbers of peopel are dropping the services.”

Increasingly consumers are switching to online video services, with Netflix consuming 20 percent of prime time bandwidth, and other video services consuming another 17 percent, and 40 percent of traffic on 3G networks is video. Netflix has now broken 20 million subscribers. In the 18 months since they introduced streaming video they have switched over 61 percent of their subscribers to that model. It is now closing in on HBO, when 10 years ago HBO could have brought Netflix. Apple and Google have also introduced services, and Amazon has introduced Amazon Prime as a similar service to Netflix.

Tercek describes it as the unbundling of the television industry, as channels are unbundled from packages, and programs are unbundled from channels.

“The power of the socail Web is millions of people doing small things,” Tercek said  “If you search for Tahrir Square there were 23 million photos taken in a month. Every minute of the day, a day and a half of video is uploaded to YouTube.”

He also called out five trends to keep an eye on:

  • Audience is data – context is not a proxy for audience. We have the ability to target exactly with precision the audience.
  • Social TV viewing – yap.TV, GetGlue and Miso – can identify what you are watching and sync up and check in and pull in the Twitter stream.
  • Remix culture – Disney decided to hire someone who was mashing up clips rather than sue him. Machinima.com is getting 50 million unique viewers per month.
  • Crowdsource creative – “If you are going to squeeze your margins you are going to have to find new ways to get things done.” Poptent is crowdsourcing ads, and MYVS is helping people become video-literate.
  • Virtual cable operators: ivi TV has turned cable into an IPTV stream – it could also let cable companies transmit outside of their footprint.

 

 

Live from Digital Directions 2011 – Riyaad Minty from Al Jazeera @Riy #DD11

The first speaker after the break at Digital Directions 2011 was Riyaad Minty (@Riy), the head of social media at Al Jazeera. Minty discussed the role of social media in the recent Arab country revolutions and how it has enabled a stream of information to come out of these regions.

“The key to success is getting in early,” Minty says. “We started building a list of bloggers that we could get in touch with. Once governments start clamping down on protesters, the first thing they do is cut off communications. We might have gotten hold of people via social media, but then we call then up and use them on our live blog.”

He also talked about the process of educating mainstream journalists of the value of social media tools, often by starting with small examples that demonstrate the value.

“Over the last two years there has been a big uptake in it,” Minty says.

Al Jazeera also distributed Flip cameras to trusted people, with much of the content used on screen.

He also cautioned not to yet technology hijack the revolution.

“It is pockets of people that are using these tools, but where there is injustice in the world people will turn to the tools available to get the message out,” Minty says.

The recent revolutions have seen traffic for Al Jazeera spike by 2500 percent, with Twitter and Facebook contributing 70 percent of referrers. About 45 percent of its audience is in the US where it does not have cable distribution.

Live from Digital Directions 2011 – Bartunde Thurston from The Onion @baratunde #DD11

The director of digital from US satirical website Baratunde Thurston (@baratunde) introduced himself as a comedian and did not fail to live up to his billing, running through a bunch of headlines from The Onion over the years.

The Onion went online in 1996 and now gets more than 7 million unique viewers per month, 15 percent from mobile users. The site has 2.6 million Twitter followers and 1.5 million Facebook fans, and has started using these for live event coverage. Interestingly it doesn’t now follow anybody back: “That’s why they’re called readers … most people have nothing interesting to say,” Thurston said. “What the Onion does is not necessarily comment on the news of the day – what it does is create an alternative universe.”

 

Live from Digital Directions 2011 – Tony Chen @ GroupM Interaction #DD11

Tony Chen started by delivering a sobering assessment of the success (or failure, more aptly) of Western online companies in China. For instance, while yahoo! Started in China in 1999 it had less than 1 percent of market share in2010. ebay entered China in 2001 and acquired the number one competitor in 2006, but was sold to Tom.com in 2006. MSN is a distant number 2, while Amazon.com is unprofitable and losing share and MySpace is going nowhere.

“Stop sending executives to China and hiring McKinsey and BCG people – listen to the local people,” Chen said. “Hear their voices and react to the market in a local way.”

He also talked about the sensitivities of the media industry and dealing with the government. YouTube was blocked in 2008, along with Facebook, and Twitter was blocked in 2009 along with foursquare.

He also talked about the phenomenal success of many of the Chinese companies, which he attributes to their stronger understanding of local characteristics. Twitter alternative Wei bo now has 70 million users, and 227,232 messages sent in the first one second of the Chinese New Year. It had reached 3071 tweets per second in only 10 months – it took Twitter four years to reach that figure. The top three celebrities have more than 5 million followers each. There were also 1000 group buying sites launched in China in 2010.