Sir Martin Sorrell, CEO of ad holding company WPP, weighed in on the digital media landscape today at the IAB MIXX conference in New York. One of his main arguments: That tech companies are also in the media business.
That may seem pretty obvious, since companies like Facebook and Google make most of their money from ads. However, Sorrell recalled being at an industry event where he asked representatives from big tech companies whether they considered themselves to be a media company or a tech company. (Tech executives seem to hate this question.) They all went with tech, but Sorrell said, “Of course that’s not true. … In our view, they are all, to some extent or not, media owners.”
That’s important for WPP’s business, Sorrell said, because “you wouldn’t entrust your media plan to a legacy media owner,” so why would you trust Facebook or Google? “Google sells Google, Facebook sells Facebook, Twitter sells Twitter. They are not agnostic. We are agnostic.” In other words, as technology creates new ad platforms, businesses will still need to work with agencies: “The more complicated it becomes, the more important we become.”
He returned to this point later, when interviewer Randall Rothenberg asked about Facebook or Google adding “agency-like services.” Sorrell countered, “Where we are is a very small business for them. They have bigger fish to fry and a lot of pressure on their sales organization.”
Oh, and even though I’m writing about ad holding companies and ad agencies, Sorrell said he dislikes the term “advertising”. His objection? That it makes people think of the world of Don Draper and Mad Men, when, in fact, “We’ve moved on from that.” In fact, he suggested that of WPP’s revenue, “Don Draper would recognize” the business model behind about $4 billion, while the remaining $14 billion comes from new areas.
Sorrell added that WPP and its competitors need to find new sources of revenue because the consumer goods companies who pay for ads are taking a closer look at their spending (as result of relatively little price inflation at the point of purchase for consumers compared to the price of commodities).
“That has put tremendous pressure on us as part of the supply chain,” he said.
As for what’s next, Sorrell said “the trite answer is mobile and data,” so instead he pointed to the success of Chinese companies like Alibaba, Baidu, Tencent, and Xiaomi.
“If you said to me, ‘What’s the next big thing?’ I would say it’s Chinese business models,” he said. “We in the West think we have a monopoly on this wisdom, but we don’t.”
California has passed a well-intentioned law allowing teens to scrub their youthful indiscretions from the Internet. Starting in 2015, any minor can request that a digital service provider delete pictures of themselves passed out drunk at a Justin Bieber concert. The law doesn’t make a whole lot of sense, since nearly every imaginable service offers a delete button.
Perhaps more importantly, it ignores the reality that it’s nearly impossible to delete information from the net: embarrassing photos spread virally, and Internet archives automatically create copies of nearly every piece of information on the web.
Yet, as written, it appears to create a head-on collision between privacy law and the First Amendment. There are no clear rules on what will survive when a friend comments or interacts with a given piece of regrettable content that will inevitably end up being deleted.
The web is chaotic, viral, and interconnected. Either the law is completely toothless, or it sets in motion a very scary anti-information snowball.
The Law As Written
California SB 658 requires “the operator of an Internet Web site, online service, online application, or mobile application to permit a minor who is a registered user of the operator’s Internet Web site, online service, online application, or mobile application, to remove, or to request and obtain removal of, content or information posted”.
The law kicks in on January 1st, just in time for hung-over minors to delete their New Year’s Eve shenanigans. It also prohibits websites from targeting minors with a host of fun, yet regrettable products, such as e-cigarettes and tattoos.
If a vengeful ex-boyfriend shares a naughty picture of his former lover with the Facebook universe, SB 658 doesn’t give a minor the right to erase it. Users can only delete data they upload. Also, if a teenage mother posts a picture of her toddler toking weed out of a bong, that’s also exempt: law enforcement can subpoena the information.
Perhaps most importantly, more and more of the social media world is automatically archived. The Sunlight Foundation, for instance, automatically archives tweets in case a politician deletes one. Some deleted tweets are pretty hilarious.
On top of all this, nearly every website imaginable permits users to delete a post. So, in reality, the law is completely unrealistic/unnecessary. Still, James Steyer, chief executive of child advocacy group, Common Sense Media, calls the law “a very important milestone.”
4th Vs. 1st Amendment
As written, the law is about giving a specific group, prone to stupid decisions, the ability to delete information they don’t like. In this, in comes dangerously close to the European Union’s proposed “right to be forgotten“.
“The right to be forgotten could make Facebook and Google, for example, liable for up to two percent of their global income if they fail to remove photos that people post about themselves and later regret, even if the photos have been widely distributed already,” explains Jeffrey Rosen, a law professor at George Washington University.
While SB 658 attempts to restrain court orders to information that hasn’t been reposted by other users, it’s not clear how that would work in practice. If, for instance, I “like” a photo of my friend at a strip club, but he later wants it erased, what should happen? Facebook “likes” are now protected as First Amendment speech.
To have any sort of teeth, the law will eventually have to permit the erasure of data that has been reposted, archived, or interacted with. And, as a result, must create a grow a whole new body of case law dedicated to choosing when the right to be forgotten trumps our right to share and discuss information.
The French, have already made their decision on this matter. “le droit à l’oubli—or the “right of oblivion”—a right that allows a convicted criminal who has served his time and been rehabilitated to object to the publication of the facts of his conviction and incarceration,” explains Rosen. If EU proposals go through, this type of censorship will extend to the Internet.
Realistically, the only thing SB 658 did was open up a can of worms on the right to erase information from the Internet. From here, things are only going to get more bizarre.
Yesterday Microsoft announced two new Surface tablets and a set of accessories designed to help its more expensive tablet-hybrid slot into enterprise business environments. The new Surface Pro 2, the Power Cover, and the docking station form a trio of products that Microsoft hopes will drive corporate sales of its hardware.
Microsoft’s new tablets are now up for pre-order, though the Power Cover and dock will not be released until the early part of next year.
It’s worth noting the price of the get-up, however. The Surface Pro 2, sans any accessory, starts at $899 in its most basic format. That SKU has a modest 64 gigabytes of internal storage. The highest-end Surface Pro 2, with 512 gigabytes of storage, costs $1,799, or double the price of its cheapest build.
The docking station and the Power Cover will cost another $199 apiece when they are released. Therefore, to pick up the flagship Surface Pro 2 SKU, along with the hardware that Microsoft is building for the extension of its use inside the corporate realm, you will spend three dollars under the $2,200 mark. That’s a high price.
So, Microsoft is more than willing to charge for its enterprise-facing Surface Pro 2. At the other end of the scale, Microsoft is selling its original Surface RT tablet for $349, and first generation Touch Cover for $79. It is also selling the Surface RT as part of a discounted bundle that includes a black Touch Cover for as little as $400.
In case you hadn’t seen the full list, here’s the pricing for the Surface line moving forward:
64 GB $449
32 GB with black Touch Cover: $399
64 GB with black Touch Cover: $499
Surface Pro 2
You can buy just over 5 Surface RT devices for the price of a single, highest-end Surface Pro 2.
The new question is how the new Surface devices together will sell, and how they will sell in relation to one another. The Surface 2 is cheaper than the Surface Pro 2, but Microsoft appeared to have an easier time selling the Surface Pro than the Surface RT, the two devices’ predecessors.
It’s too early to have any sort of sales indicators, but our radar is up. More as it happens.
YouTube today announced a new commenting system that will be powered by Google+. The system, which is launching on channel discussion tabs this week before rolling out to all videos over the next few weeks and months, will automatically rank comments and feature threaded and private conversations.
Right now, YouTube comments are a hotbed for spam and idiocy, something Google is painfully aware of. The new system aims to fix this by personalizing and ranking comments for each individual user.
Last year, YouTube started asking its users to connect their YouTube and Google+ accounts so more users would use their real names on the site. Today’s integration goes quite a bit deeper. The new system will switch away from the current, recency-based system and instead rank comments according to a wide range of factors.
As Nundu Janakiram, a YouTube product manager who worked on this project, told me earlier this week, comments from the video creator will be ranked very highly and surfaced more regularly, for example. The system will also push comments from popular personalities on YouTube and people in your Google+ circles higher up the comment chain, as well as highly engaged discussion about the video. Just like before, you will be able to vote comments up or down, too, and those votes will also influence the ranking.
Users who want to go back to the old experience can always switch back to the recency-based view (though unless you are a troll, I’m not sure why you would want to do that). The new system also allows you to just see comments from people in your Google+ circle.
As Janakiram told me, the team realized that the current system is flawed. At the same time, though, YouTube also realized that the comments are a vibrant part of the YouTube experience. Despite its flaws, the team remained positive about the general concept of comments – just not in its current form.
As part of the Google+ integration, YouTube will now also aggregate public comments about a video from Google+ and display them on YouTube. Private messages, of course, will remain private. Thanks to the Google+ integration, users on YouTube itself will now also be able to have private conversations on the site by leaving comments that can only be seen by people in their Google+ circles or individual users.
Once YouTube switches to the new system, all of the old comments will still be in the system and intermixed with the new ranked and threaded comments.
Given that the new system further integrated Google+, users are almost obliged to disclose their real identities when they comment, which should lift the quality of the discussion on YouTube. It’s worth noting, however, that they can still create a Google+ page for any name, pseudonym or existing YouTube channel and use that as they identity on YouTube.
New Tools For Managing Comments
For channel owners, YouTube is also introducing a number of new tools for managing comments on their videos.
Just like before, they will still be able to open their videos up for all comments, hold them in moderation and manually approve them or disallow them completely. Now, however, they will also be able to create a list of approved users who can always comment on a video based on their Google+ circles. These users will be able to comment even when other YouTube users have to go through the moderation process. If you are a celebrity, for example, you could use this to always allow comments from your “greatest fans” circle on Google+, as Janakiram told me.
In addition, YouTube is also allowing video owners to create a blacklist with words that automatically push comments into review and just like before, they can also block users. As for blocking users, YouTube is making a small but significant change now: it will stop telling users they’ve been blocked and will continue to show them their own comments when they are logged in. This, the team hopes, will fool them into believing that their comments were posted and stop them from creating new accounts after they’ve been blocked.
The Pittsburgh-based mobile waitlisting service for restaurants, NoWait, which raised $2 million in Series A funding just over a year ago, is now rolling out its first consumer-facing product with the launch of its iOS app for restaurant goers. The new app shows a list of nearby restaurants, wait times and distances, and lets you join the waiting list from your phone.
The ability to virtually “get in line” ahead of your arrival works also for some restaurants that don’t offer online reservations, such as through OpenTable, for example. The NoWait consumer app lets you browse through its supported restaurants, see how busy they are, and enter in your party size to grab your spot.
Initially, the app will only work around Pittsburgh as the company scales its operations, but the plan is to have the consumer version working nationwide by January 2014 – just a few months away.
NoWait operates in a competitive space, where others including OpenTable, NoshList, Livebookings, Timeview, DinerConnection, WaitList Manager, TurnStar, Table’s Ready, BuzzTable and more are also attacking restaurant customer management from various angles. But NoWait’s value proposition goes beyond just replacing the “hockey puck” buzzer system restaurants favor today. Instead, it’s about not only bringing seating management to mobile, but also providing business owners with more analytics and data about how the restaurant is running, even when they’re not able to be physically present in each location.
At the time of the company’s Series A round, it had begun to service some big-name customers including Texas Roadhouse, Red Robin and TGI Friday’s. Though Red Robin seems to no longer be involved, Texas Roadhouse is expanding with NoWait, as are some TGI Friday’s franchises, and the company has since signed up other larger customers including Chili’s, Buffalo Wild Wings (franchises again), and Hal Smith Restaurant Group (includes Red Rock Canyon, Mama Roja, Charleston’s Restaurant, Mahogany Prime Steakhouse, Toby Keith’s I Love this Bar and Grill).
Today, NoWait has 3,500 restaurants using its Floor Map application to manage their tables and waitlists, including also Iron Chef Jose Garces’ Village Whiskey and Hubert Keller’s Burger Bar in Las Vegas. In total, the company has over 12 national restaurant chains on board.
To date, NoWait has sat over 19 million diners, up from 4 million last August. The company also says it’s currently seating over 2 million diners per month, and is on track to seat 3 million monthly by year-end. For comparison purposes, in January 2013, the company was seating 700,000 diners monthly. And to position against a reservations giant: OpenTable is now seating over 12 million diners per month across 28,000 restaurants worldwide.
Restaurants under 200 waitlist parties can use the app for free, while those with more have to step into NoWait’s premium pricing plans, which start at $59/month, and include features like text-based marketing, message customization, and other core features like the floor maps, multiple device sync, daily analytics emails, and more.
The new consumer-facing app was in private beta testing over the past week, but is now available to all Pittsburgh locals, and others soon.
Content discovery service StumbleUpon is announcing that it has acquired 5by, a video startup based in Montreal.
The financial terms of the deal aren’t being disclosed, but the companies say the entire six-person 5by team will be moving to San Francisco to work out of StumbleUpon’s headquarters, where it will continue to develop 5by as a standalone product — so this isn’t just a talent acquisition.
“Initially, it’s about getting 5by out there and introducing it to the community,” StumbleUpon CEO Greg Bartels said.
So for purposes of introduction, I should mention that 5by describes itself as “your video concierge” and recommends online videos that you’ll probably enjoy, based on the category you’ve selected (such as “Geeking Out” and “Music Lovers”) and on your actions while using the service.
Bartels described the deal as “a directional bet on mobile and video” — that’s where advertising is moving, and he said StumbleUpon believes video will account for the majority of online content consumed by 2016. This is an area where the company faced a “build versus buy” decision: “We saw how fast video was growing, and we wanted to move faster.” Ultimately, he’s hoping to link 5by’s “corpus” categorizing different types of video content with StumbleUpon, so that the core StumbleUpon product gets smarter about video, too.
“Video and mobile and mobile video is its own beast,” added 5by founder Greg Isenberg.
This is StumbleUpon’s first acquisition, which is a bit surprising since the company was founded back in 2001. Bartels said StumbleUpon now has the freedom to look at these kinds of deals because revenue is doing well (it was $30 million last year and projected to be $35 million to $40 million this year) and the company is profitable, which is what it was aiming for when it laid off 30 percent of staff and restructured the team earlier this year.
One the one hand, Jay Levy , as a partner in Zelkovo Ventures, is a conventional New York City tech VC with investments in promising start-ups like Fab, Klout and Crimson Hexagon. But Levy, as the founder of the Napa based Uproot Wine, is also an entrepreneur himself, using his knowledge of online technology, particularly social media, to develop a northern Californian direct sales wine company that focuses on the consumer experience.
Levy – who is now commuting between his New York City office and the Uproot Wine headquarters in Napa – sees Uproot Wine as primarily a marketing company which is able to provide what he calls “transparency” for the production and selling of wine. Not surprisingly, perhaps, Levy sees social media as critical to Uproot’s business, acknowledging that a third of all his business comes from social media, saying “it’s all about Facebook” when it comes to building lasting relationships with wine drinkers.
Full Disclosure: Jay did give me a bottle of his Sauvignon Blanc and, while the jury may still be out on the scalability of his business model, I don’t think anyone will be disappointed with the excellent quality of Uproot’s vintage or the design of its labels with their very cool infographic describing the taste of the wine.