The Experience is the Brand

@TrueMobileData says 59% of mobile web use is social. I say, “prove it.”

One of the things you learn early on in any intro-level statistics course is that the mathematics behind data analysis is, by itself, fairly sanguine about how it is used. Formulae are not terribly picky about the ends to which they’re put to work, and so any professional statistician takes care to apply those formulae, and present results, with discretion and care.

Data are easy to manipulate, precisely because there’s usually more than one way to perform an analysis. And because, “no significant effect could be determined” rarely makes for interesting reading, there’s a great temptation to dig deeper, and see if another analytic approach can’t “tease out” the truth.

When I read a headline like, “Half of all time spent on mobile internet is spent on social networking sites,” one big question comes to mind: what was the sample?

GroundTruth’s release claims that the sample size is about 3 million mobile phone subscribers. Which sounds appreciably huge, until you realize that there are about 285 million mobile phones in the US (see CTIA Semi-Annual Wireless Survey, PDF.) So their sample covers about 1% of US Mobile handsets.

That’s certainly still a reasonable sample size, if the sample is representative. And to determine whether or not it is, we need to know at least something about the networks on which these handsets operate.

Why? According to Ground Truth, “…Ground Truth™ captures usage directly from network data provided by mobile operators and other data partners.” That’s a rich and reliable source of data, to be sure: but it says nothing about the representativeness of the handset users on those networks, as compared to the US population at large.

Ground Truth isn’t being very forthcoming about these data sources. In response to a question of mine, they tweeted: “We have a large sample of mobile phone users from a diverse group of mobile operators. Confidentiality limits disclosure.”

Well. Confidentiality is fine and understandable, but if you can’t cite your sources, don’t publish your conclusions.

The press release regarding this “study” is fairly vague in terms of data, but perhaps offers one or two clues. They go out of their way to mention that “mobile-centric social networking sites such as MocoSpace and AirG are better at engaging consumer than are with PC heavyweights like Facebook and MySpace.”

MocoSpace is an “off deck” social networking website, which means that access is not restricted to or sponsored by any particular network operator. They have a mobile-ready site, which renders well on an iPhone (although they do not have an iPhone app.)

AirG is a somewhat different story. It’s a mobile-based chat service, more or less an instant messenger client for your phone. It is marketed under about two dozen different brand names, including Virgin Vibe, Boost Hookt, Amp’d Chat, TELUS Chat Central, Amp’d Lounge….

Hey, wait a minute! These all have something in common. Most of these seem to be affiliated with pre-paid or pay-as-you-go mobile phone providers. That might tell us something about the audiences using these social networking sites, as well as whether or not these users’ behavior is representative of the mobile internet audience as a whole.

It might also be important to know whether or not either of these two site operators are clients of Ground Truth.

Social networking usage on mobile is important, there is no doubt about that. But publishers and advertisers need the whole story if they are going to make an informed decision about where to commit resources. To say that pre-paid mobile subscribers spend 60% of their time on social networking sites is important, relevant, and useful. But it is not the same thing as saying that “Half of all time spent on the mobile internet is spent on social networking sites.”

For a company with “Truth” in their name, Ground Truth ought to be going out of their way to tell the whole story, if for no other reason that to ensure that their data are taken seriously.

Non-virtualized interaction: an order of magnitude improvement

Of all of the things that the iPad either is (a big iPod Touch, a giant remote control, an internet connected photo frame, a digital bookstore/magazine rack) or is not (a phone, a laptop, a desktop, a device for creating), few people seem to be talking about what it accomplishes. Finally, we have a piece of computing hardware which has managed to become as close to invisible as anything we’ve ever seen.

Applications on desktops have long transformed the way we work, play, create and interact. But the way in which we interact with them has made their presence inherently, and annoyingly, obvious. The main method of interacting with our computers – the keyboard – has not changed much since the invention of the QWERTY layout in 1875. Arguably, the point-and-click interface and the computer mouse were a giant leap forward… in the 1970s. Our computing devices have always been, and have continued to be, inescapably fixed to these very artificial methods of input.

Put more simply: when you want to slice a zucchini, you pick up the knife, hold down the zucchini, and do it. Try to accomplish something similarly straight-forward on a computer, and you find yourself wrestling with a 3 dimensional task projected onto a 2 dimensional surface. Worse still, you have to manipulate a virtualized version of yourself projected onto the screen in front of you, while sliding a mouse around on a flat surface off to your side.

Haven’t we long dreamt of the day when machines could understand us on our own level – voice and gaze recognizing super computers would helpfully pull our chair out from our desks, materialize steaming hot cups of tea with just the right touch of sugar, and bring to our attention only the most pertinent, salient bits of information we’d need at the time.

We’re not there yet, but the iPad is an order of magnitude improvement over other computing devices, precisely because it is neither a phone nor a computer, but something entirely different: It is an intelligent device with which we can interact directly, without the intermediation of other devices.

The implications are rather huge, but not really for the reasons most commentators seem to be focused on. Yes, we will have better email applications. Yes, typing on an onscreen keyboard will feel less natural than typing on a physical one. Both are besides the point: applications on the iPad (and, for that matter, any device which can replicate the fundamentally revolutionary differences in the input mechanisms it allows) allow you to interact directly with content. When you want to turn a page on the Kindle, you press the “next page” button. When you want to turn the page on the iPad, you turn the page with your finger, just as you would with a real book. How long before you see people on the train absent-mindedly licking their index finger each time they go to turn the page?

To some extent, the iPhone’s multi-touch interface began this revolution, but size matters: the iPhone’s screen is too small to allow most people to use more than two or three fingers to interact at a time. At that point, some 10-15% of the UI is covered up by your fingers, and the space becomes too cramped to operate. Do not underestimate the importance of being able to interact with both hands, and all ten fingers at once.

Virtual objects displayed on the iPad’s screen become much less virtual-seeming. They seem more real, not because the screen is larger and higher-resolution, or brighter. They seem more real because we can interact with them with the full spectrum of our hands, the most precise tools which have ever existed. Because we can use our own hands right “out of the box”, we forget that we’re interacting with devices and their virtualized representations of real things.

That’s going to be really, really important.

The Future Was Then: Micropayments Again

As Facebook begins to rollout a PayPal-driven micropayment system, and various other vendors attempt yet another land-grab on the “future of money”, I thought it’d be helpful to review some of the issues surrounding micropayments.

On the one hand, there are the very significant usability issues that must be addressed, but there are various approaches to that.

And while there is some speculation that increasing regulation of the credit card industry, or economizing by consumers hit hard in this recession, will drive people to adopt more micropayment schemes, I think the issues are somewhat more subtle than that.

And I don’t think credit card companies need to worry.

Until Facebook buys a bank.

Micropayments have a long history of falling flat (the earliest I remember was “Virtual Coin”, and I think that was back in 1995.) If you do a Google search for “Wired future of money”, there are maybe a dozen articles stretching back close to 20 years. So there have been a lot of attempts, and they run into all the same issues.

Essentially, the problem is this: it takes money to move money.

Granted, that’s not because the technology is expensive, or that costs scale up with volume: moving $1 between two banks costs about the same as moving $1 billion. The “problem” is that there are so many intermediaries who want a cut, albeit small ones.

Any micropayment scheme needs to deal effectively with three challenges:

1. It needs to be low friction (friction defined as the difficulty of moving money from one place to another)
2. It needs to be ubiquitous (everyone needs to accept it)
3. It needs to handle fraud effectively

Friction

There are basically two types of friction in payment systems: ease of use, and transfer costs. Rendering payment (me giving you money) needs to be as simple as possible. That’s a usability problem, and not very difficult to solve (you need to follow some standard conventions for handling sign-in/authentication, communicating the value of what you are purchasing, and communicating the end of the transaction (the receipt.)

Transfer costs are more difficult: Visa/Mastercard want 3% of every transaction, plus a base fee – and it’s this base fee that kills every micropayment platform. If V/MC wants $0.25 per transaction, you’re not going to do any transactions valued at less than a few dollars. And true micropayments would be dealing in transactions of less than a penny (i.e., 1/10th of a cent to read an article on the WSJ. 1 cent to print it, etc.)

Bank interchange fees come into play there too (that’s the fee one bank charges another to send money electronically.) Again, these fees are small, but significant to a sub-$1 transaction.

As soon as you try to move lots of small transactions between two banking institutions, you’re dead in the water. The embedded costs are too high (and the players have no incentive to make them lower. Remember: the cost is not a function of the transaction size, but transaction volume, and the banks prefer it that way.)

So if moving small amounts money between banks is too expensive, what do you do? You try to create your own ecosystem.

Ubiquity

What do PayPal, EZPass and SecondLife all have in common?

They are all semi-closed payment ecosystems.

Each one works basically the same way: you deposit “real” money from a “real” bank into a payment account with the vendor, and you’re given credits. Sometimes these credits are called “dollars”,  and sometimes they are called “Lindens.” But they all have the same basic characteristic: they can be exchanged readily, and at a near-zero transaction cost, between any two members of the ecosystem.

Moving money from one account to another at any of these “banks” is simply a matter of making a ledger entry. It’s instantaneous, and involves no other outside intermediary. The intermediary only comes back into play when you try to move money out of the ecosystem, back into the banking system. Notice that PayPal doesn’t charge the payer to fund a transaction from a credit card or bank account, but *does* charge the recipient. PayPal bakes these “external” costs into their internal system transactions, because this opens up their ecosystem to be used by non-members. I don’t need to have a PayPal account to pay someone with PayPal.

Sadly, however, baking in this external cost makes micropayments impossible. PayPal’s micropayments fee is 1.9% +$0.05. If I sell a digital good for $0.10, my profit margin (assuming 0 production costs) is only 30%. In the world of digital goods, that’s shameful.

However, once an ecosystem is ubiquitous enough (oh, say, 500 million to 1 billion users), the ratio of internal-only transactions way outstrips I/O transations (with users outside the ecosystem), and the ecosystem manager can afford to remove the external processing charges from these internal transactions.

Why does this matter? Because no one buys eggs from their bank. Eventually you want your money *out* of the ecosystem, so that you can go use it somewhere that the ecosystem doesn’t reach. (And forget the argument about “just putting it on a PayPal debit card”, and going grocery shopping. That debit card lives in Visa/Mastercard’s ecosystem, not PayPal’s.)

So, let’s assume that you’ve got a billion users in your system, and they’re all charging up spending accounts with external funds (for which the funding institutions – the banks – charge a small fee, which you decide to eat), and exchanging Credits with each other in 1/10th of a penny increments. And you take 1.5% of each transaction as your fee (that’s 1/2 what any other merchant card processor charges, and you don’t even charge a per-transaction flat fee, so hardly anyone notices), and so on every transaction you’re making  of a penny. Chump change, right?

1 Billion Users * 100 transactions/day * $0.001/transaction * 1.5% =  $548 million/year in fees.

Yeah, I think that might be worth exploring. And that’s assuming that these users spend an average of $0.10/day online within this ecosystem.

OK, you’ve got $100,000,000/day sloshing around in your ecosystem, which your users have deposited with you, what’s the problem? They are not going to let you hold on to their “real” money for free, so you have to pay interest on those deposits.

And now you are a bank. And that brings with it a host of complications, but it also gets you direct access to the global banking system, which is important if you want to do things like enable cross-border transactions, EFT transfers to other banks, etc. And there’s lower costs to doing those things, which you pass on to your users.

Fraud

I won’t go into it here in too much detail, except to state this: Visa/Mastercard exist for a host of reasons, and one of the big ones is fraud detection and reduction. Recently I read that about  7 cents of every $100 in credit card transactions is fraudulent, which in the above example means that about $25MM/year is fraudulent. And consider, Visa/Mastercard’s stats are from an ecosystem where many transactions are done face-to-face, with signature verification, mailing addresses, etc. In the above example ecosystem, there’s much less in the way of identity verification, so the risk for fraud is higher.

It’s far from clear whether or not there exist any emerging micropayment ecosystems which will meet these challenges. But I think Facebook at least stands a chance of getting there, because it has three things:

• Low friction: paying another user in Facebook can be a single button click, or even a wall post: “Ben pays 1 credit to Patrick”
• High ubiquity: 300MM users and growing, many internationally.
• Good leg up on fraud detection: Facebook knows an awful lot more about your identity than even Visa/Mastercard, and given good pattern matching can probably figure out quickly if you’re setting up a profile as a front.

I wasn’t impressed by the first gen iPhone, either.

When the first generation iPhone was introduced, my first thought was, “what do you mean, no 3g?” At the time, I’d already had a 3G smart-phone for about a year, and the lack of a speedy always-on connection was a baffling omission.

So, too, is my reaction to the iPad, which really does look like nothing more than an over-sized iPhone (sans camera, and phone, that is.) But the reality of how Apple develops and launches devices should make clear that the first generation of anything may not live up to the hype, but almost always catches up.

To wit:

• The first generation iPhone, in addition to lacking 3G, had no 3rd-party applications (just the dozen or so that Apple provided.)
• The first generation iPod had a 4-shades-of-grey screen, a mechanical and a UI that made Pong look like the sequel to Avatar.
• The first generation iMac had a 15″ CRT, and came in a teal-colored case.
• The first generation Mac Portable would fail today’s maximum carry-on luggage restrictions.

The fact is that, for the most part, Apple gets the concept right, even if the execution takes some refinement before it hits its stride. (More often than not, anyway. The Newton was a notable exception, though one could argue that Apple merely took it off the market for a couple of decades while they refined their execution into the iPad of today.)

Devices – especially mobile ones – are always the end product of a number of design trade-offs. Battery life, form-factor, weight, etc. – these things add up to make the difference between a truly revolutionary device, and another also-ran.

There is one seemingly obvious piece of hardware missing from the iPad, and that is a camera. But the omission actually makes sense. This is not a device that needs or would benefit from a forward-facing camera; you are not going to hold the thing up to someone and take a picture, and there are other devices that would work quite a bit better and always will (because of their pocket-friendly size.)

Nor are you going to use a user-facing camera to do video iChat. People, let’s face it: if we preferred to talk with our fellow humans face-to-face, we wouldn’t be sending IMs and text messages to colleagues in the next cubicle. (And I know for a fact that I am not the only person in the world who has emailed a link to his spouse, who also happens to be sitting on the same couch with her laptop.) Besides, adding a video camera for video chat to a handheld tablet means that the camera will need image stabilization, that is unless you everyone you’re chatting with to think you’re permanently stuck in a Blair Witch remake.

In the end, as with most computing platforms, the hardware is only half the story. Truth be told, there is probably a very large niche for the iPad: as a browser, an image and media viewing/light-editing platform, book reader, multimedia content consumption device – these things make sense, and the existing suite of options out there all fail in one form or another: too heavy, too hot, too clumsy, too colorless, what-have-you.

But what’s missing from the story so far is the compelling apps: scaling iPhone apps up to a larger screen is certainly nice; I’ve developed enough concepts myself to know that more screen real estate is going to make some apps easier to use, and more compelling. But this doesn’t justify the purchase of a whole separate platform for most people. (Yes, apps I’ve already purchased on my iPhone will work on my iPad. But will the app-specific data transfer? Will it sync? Will all those app developers need to create new syncing services?)

What’s missing – what will make this device an absolute game-changer – is a series of apps for creative professionals and the business class. Yes, I can use iWork. What about Adobe CS? iMovie? Dreamweaver? Garage Band? iPad-ready (and optimized) versions of these apps will turn a souped-up iPhone with a honking-huge screen into something truly extraordinary: a truly mobile computing platform for consuming AND creating content.

After all, it’s the intersection of these two elements – creative consumption – that will propel widespread iPad adoption.

Three issues with all the Apple tablet predictions

Besides the obvious – that I will want one – I have a few thoughts about the tablet Apple will supposedly unveil tomorrow. There are three areas which I think deserve some attention:

The Case
An enlarged iPhone-like tablet seems troubling. The case and screen of the iPhone seem unlikely to scale well to three or four times their current size, the end result of which would be a device which seems somewhat brittle. iPhone screens seems to crack like a pile of dry leaves, so increasing the surface area by two orders of magnitude seems a recipe for continual breakage.

The Weight
Again, simply scaling the iPhone up larger isn’t going to work – especially if the display uses the same optical glass and the case materials are similar. Assuming that the intent is to provide a device which, at least in some instances, can be held like a paperback book or magazine, the device has to be lighter per square inch than the iPhone – and significantly so.

It’s simply a matter of ergonomics: while you cradle an iPhone in your palm with your fingers and palm wrapped around the four edges, the weight of the device is distributed through your wrist and into your forearm. With a magazine-sized tablet, you can’t wrap your hands around it that way – you have to pinch the device with four fingers on the back, and your thumb on the front. While this is easy enough to do for extended periods with a magazine weighing less than an ounce, just try it with a tablet weighing a pound or more. Which brings us to the third quandry:

The Input “Device”
There are a number of intriguing possibilities, but one thing is nearly certain: your hands are involved. Voice control is clever, but pointless: in the best case scenario, complete and instant voice recognition still leaves you with a low-bandwidth control channel which can’t be used very well in public. (Most people can only say one thing at a time.) And some sort of facial recognition system is very futuristic sounding, but baffling: exactly what facial gesture does one make to “check email” or “empty the trash” or “redo last filter”?

And for anyone who wants to suggest some sort of eye-tracking technology, let me put that one to rest: even the best systems (my company owns one) require calibration each time you sit down in front of it, and the triangulation assumes that the screen itself remains fairly stationary.

OK, so you’re hands are involved. There are a couple of issues:

If you’re holding the tablet in landscape mode, with one hand on either side, then the UI controls need to be arrayed up and down each side. Ditto in portrait mode:

That’s all well and good, but while you’re holding the tablet with both hands, what are you using to control the applications?

The other possibility is that you hold it with one hand, and interact with the other. There are problems with this, too: single-handed interaction with a multi-touch display limits the kinds of applications you can have, and each tap with your free hand increases the fatigue on the other hand holding the device up.

So what about putting the device on a surface? Well, this frees up your hands, which is great: fully interactive display, multi-touch, virtual keyboard – all of these things become feasible and reasonable. But there’s another problem – with the device on a flat surface, you’d have to be hovering above it directly in order to have a good, clean view of the screen. At an angle (even assuming you don’t lose brightness and contrast) the perspective is going to make interacting with any application rather frustrating.

So, what’s the solution?

One possibility is the integration of a laser-based projected keyboard, and an integrated stand for propping the screen up on a surface. The former is already widely available, and the latter could be accomplished with with a built-in “wing” that worked much like the flap on the back of a picture frame backing, or as an optional wrap-around case.

It will be interesting to see what solution Apple chooses.

Social: To get something you want, you have to give up something you have

It seems we may one day regret the coining of terms like “social media” or “social marketing”. In their use, the very essence of the social conversation is muddled, tainted with notions of media plans, placements, strategy, and ROI.

Traditional media marketers are struggling to adapt to a world where the global conversation is beginning to eclipse the tried-and-true push of interruptive marketing. It is still probably too soon to declare the advertising of the last 100 years dead and buried: TV, radio and print, in-store display advertising and other out-of-home media still consume the vast, vast majority of advertising dollars, and they still command the vast, vast majority of people’s attention.

Still, we all recognize that this is changing, and the drumbeat of “social marketing” is speeding its cadence in large part because the changes in behavior among the Connected Class has been as rapid as the growth of that group itself. But consider:

• 5 years ago Facebook was a student-only closed network with little to no advertising, and there was no such thing as Twitter.
• 10 years ago, AOL was still the predominant method through which most people accessed the Internet, and Google was an unruly 2 year old with a piddling share of the search market.
• 15 years ago, people still bothered to distinguish between the Internet, and the World Wide Web.
• 20 years ago there was no widely accessible World Wide Web.
• 60 years ago, the first multi-episode TV series supported by a single sponsor aired, and next year, the last P&G-produced soap opera will end.
• This year single-sponsor episodic TV became a novelty again.

It took an entire generation to kill a successful marketing channel, and it’s not even dead. Social media may be the darling of 2010, again, but it’s a long way from being the dominant form of media.

And that, perhaps, is the point. What we call social media, and what we are attempting to solidify as a practice in social marketing, is something so incredibly basic that it’s a shame that we had to come up with a new name for it.

Let’s call it: Being Human.

The majority of social network communication is exclusive of any brand, just as the majority of online communication is exclusive of any brand. We talk, chat, tweet and text, and most of the time it has nothing to do with any product or service or company or brand.

Not only are they a manufactured artifice, brands – in their attempt to embody the physical, mental and spiritual attributes to which we are supposed to aspire – are themselves an attempt at control. “Drink This!” “Eat That!” “Smoke These!” they cry, plead, command. “Be Like Him!” “Lust for Her!” “Try these Cookies!” they implore. Brands want to guide you, cajole you, drive you. The language of brand marketing reflects this well, in its aim to drive engagement, upsell, cross-sell and build loyalty. This the language of command and control, marshaling ones forces towards a common goal.

People tend to distinguish between that kind of language, and the more natural, human conversation typical of their interactions with friends, family, coworkers – even people they pass on the street. So when the conversation moves from the street to online, it retains much of its original character.

How out of place, then, is Marketing-Speak. It is “mission-statement-speak”, ill-suited for carrying on a conversation with a human. Marketing-Speak seeks an audience, eyeballs, clickthroughs and conversions. But it cannot communicate with people.

To participate in the social conversation – to at least have a hope of being a welcome participant – you will need to leave behind the dubious comfort of your marketing plan, your media plan, TRPs, and GRPs.

You will need to relinquish control over your message.

You will have to give up ownership of your brand.

The Power of (Almost) Free

Or, “if it’s truly worth something, offer to give it away.”

2D Boy, makers of World of Goo, recently published the results of a little experiment: they offered to sell anyone a copy of their game for whatever an individual user was willing to pay for it.

About all that can be said about the extraordinary nature of the response has been said here. Summary: 2 blog posts | 57,000 copies sold | average price: $2.03.

That’s $114,000 in incremental revenue, for a game that had already been on sale for a year. No additional development effort, just a couple of blog posts.

Of course, it helps to have a product that people want and love.

There is a lesson here for anyone who sells digital products: if it wasn’t immediately clear already, you are at the complete and total mercy of your audience. The point is not that 17% of people chose to pay as little as possible for World of Goo; it’s that 83% chose to pay more. Most chose to pay, in their own words, “about what they could afford.”

For physical products, this pricing model does not work: it does not matter what you can afford to pay for that BMW, it’s going to cost what it’s worth. Granted, there are intangibles factored into that price (prestige, reputation, bragging rights… things that, you know, comprise a brand), but by and large the constraint on pricing is a matter of physics.

Not so with digital merchandise, where the only contributors to value are intangible: that is, value is measured inconsistently across the range of possible uses and users, and those able to pay more are likely to do so only if their perception of value is consistent with their budget. That is:

price = (budget / value)

Note that this is different from the give-away-the-razors-and-we’ll-sell-the-blades model that EA Games offered with Sims 3, or that seems to be the business model du jour. (Hey, the value’s in the community, so we’ll just charge for that!) In that model, centralized control of the economic model is still sought out. When the content creator seeks to control both its distribution and consumption, they often find that the marketplace responds in “irrational” ways: piracy at best, indifference at worst.

Putting your product into the hands of the people who will love it, and giving up control, does two things. First, it enables at least the possibility of outsize rewards, if you truly deserve them. Second, it simply acknowledges reality: you don’t have control anyway.

What a relief this should be for people who are actually passionate about what they’re creating: the monetary and intangible rewards become much more intricately linked with the true value you create, rather than the “message” you’re able to sell.

“2/3 of american web users object to online tracking.” Really? That few?

Reading a study recently written up in the NYTimes (ht, @TheGrok), I find the results amusingly obvious.

Question: when you shop online, or visit a website, or view an ad – who owns the data describing that activity?

At first glance, the question seems to be easy to answer, until you actually start asking people. Anyone in marketing or eCommerce would be hard pressed to say that they had no right to keep and use that data. Many would say that, if they’re a participant in the transaction (regardless of whether a purchase was consummated), that they had at least as much right as the individual to that data.

Privacy advocates and civil libertarians will maintain that the individual’s data is their own, and that maintaining control over how it is used and maintained is a matter of personal liberty (in the constitutional sense.)

Consider some alternative scenarios:

If you walk into The Gap and buy a pair of jeans, does The Gap have the right to keep a record of you doing that? Does the answer change if you pay with cash, as opposed to a credit card? What if the cashier just happened to ask you your name, and commits it to memory? (Try this variation: you live in a small town with a general store, run by Harold, who makes a habit of remembering what you buy, so he can keep the store stocked. How uncomfortable does that make you feel?)

Let’s say you walk into The Gap and don’t buy anything. But the surveillance cameras record everything you do, including every item of clothing you examine. Do you have the right to demand that those tapes be erased? What if the manager makes a habit of watching those tapes, and committing to memory the items you spend the longest time looking at, so she can be ready to recommend something the next time you come in?

What if The Gap uses facial-recognition technology to match up surveillance video of what you browse to compare that against what you actually buy, several visits later? Does this feel more or less uncomfortable? What if Harold just happens to have a photographic memory, and is particularly observant?

Your answer might be expected to shift somewhat based on the introduction of technology into the scenario; we tend to be more comfortable with a level of intimate knowledge about us being maintained by another human being, as opposed to an impersonal system. But why? How can we hold Harold more accountable to use his knowledge responsibly? Suppose Harold is a bit of a gossip, and suddenly everyone in town knows that you have a fondness for Fruit Loops and Vaseline. You might stop shopping there, and pretty soon Harold starts losing business.

Introducing technology into the picture may increase the extent and scope of the tracking that’s possible, and it might make you uncomfortable, but it also adds an unexpected dimension: the possibility of more control over your data.

You can’t make Harold forget what he sees; you could make DoubleClick lose track of what sites you’ve visited, and where you’ve purchased. (And trust me, DoubleClick isn’t going to go out of their way to reconstruct your browsing history; as a single individual, you’re just not worth the effort.)

You can’t erase your shopping history at the general store, but you can clear your Amazon cookie. You can stop using a credit card, and pay for everything with cash. You can turn off cookies and Javascript and install an ad-blocker. You will never be completely anonymous, but you need only raise the bar ever so slightly for most marketers and merchants to give up on tracking your behavior.

Though changes may be afoot for the legal framework which governs what ad networks and merchants may collect, how they may use that data and what kind of disclosure will be necessary, I’d be willing to bet that that framework will trail the advent of privacy-enhancing technology by a couple of years. If the outcry is loud enough to warrant legislation, it can’t be very long before PayPal or some other enterprising entrepreneur introduces a Privacy-Enhanced browser/credit card/pop-up blocker that gains wide adoption.

The technology is perfectly feasible; all that’s missing is the demand.

Mass Individualized Marketing

Convergence has almost become a dirty word in the advertising and media world, kind of like “synergy”: you hear someone use the term, and you want to punch them in the face, but usually you can’t because they tend to be people with body guards.

Still, I find it interesting to think about where the confluence (not exactly a synonym) of technology and marketing and media platforms might eventually lead. I wonder about how combining the targetability of digital advertising might mesh with a mass-medium like TV; addressable advertising is coming, soon, though most of the practical examples I’ve seen involve little more than dynamically inserting the address of your nearest Pep Boys into a commercial during a baseball game – applications that basically make the advertiser’s job easier, but do very little for the viewer.

Technologically, something like the following ought to be possible: While watching the Phillies game, a commercial for Pep Boys comes on. It plays, and I don’t change the channel – Comcast takes note of that. The game comes back on, and Comcast triggers their ad server to display an ad via Google AdWords, overlaid on the bottom 1/4 of the screen.

Now, maybe I’ve surfed online in the last 14 days and searched on Google for “car repair.” Google, having a record of this, and knowing that a Pep Boys commercial just played on my set, serves an in-video ad for Pep Boys, customized with a note that a new location has opened up around the corner, and offering a 15% off coupon on an oil change if I click “Yes.”

Either they send the coupon to my mobile phone (perhaps the on-screen prompt asks me to enter it in), or they mail to to my house; Comcast of course knows my billing address.

Redemption can be a tricky issue, but there are options: a code can be typed into a point of sale system and validated; a barcode could be displayed on my phone and scanned. If the security of the validation isn’t a concern (and for a %-off coupon, it often isn’t – the important part was getting the customer in the door), then simply showing the cashier a code displayed in a text message will work fine.

Stringing together all these technologies isn’t terribly far-fetched. Some cable companies are already placing “pop-up” ads in television programming, with viewer-initiated coupon “clipping”. It is clearly Google’s intention to move, eventually, into serving targeted video and text advertising on television, and “addressable” cable boxes makes the specter of personalized advertising all the more real.

The largest barriers are likely to be legal ones: the kind of data sharing necessary to enable the scenario I’ve outlined above would require some pretty explicit opt-ins from viewers, and rightly so.

Other scenarios wouldn’t, though: for Pep Boys, enabling this kind of direct response has some obvious benefits, but it’s far from the only way to build a customer base. Building brand awareness and favorability are equally important, and for campaigns which focused on these goals, getting a hold of personally identifiable information for each viewer (cell phone numbers, mailing address, etc.) isn’t necessarily all that helpful. Instead, the technology might be used to serve more traditionally-styled television spots that were triggered by viewing behavior: you’ve watched The Closer on TNT 12 times in the last year, you might be interested in the new CSI:Poughkeepsie. Or maybe you’re a frequent viewer of The Travel Channel. American Express would like to pitch you on a Platinum card with extended travel protections. But only if you’ve never missed a payment on your cable bill, and subscribe to HBO and Showtime.

If you think this all sounds vaguely – or explicitly – creepy, you’re not alone. I’m always torn between my desire to help my clients explore what’s possible with technology, while doing everything possible to make sure I’m no where near the receiving end of it.