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RELEVANCE IN ADVERTISING

August 23, 2007 Leave a comment

By Lai Kok Fung, BuzzCity CEO

John Wanamaker, a US merchant in the late 1800s, famously once said “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”

We are much closer today to solving Wanamaker’s dilemma. Internet metrics and computer algorithms make it possible to target ads to users who are likely to act on them.

Providing the parameters to computers to analyse the data and filter out the white noise has been a passion of mine since grad school. Back then, I wrote a PhD dissertation on “adaptive learning” with the somewhat clunky title “Deformable contours : modeling, extraction, detection and classification”.

For example, I would feed a database of images into a computer and directed it to locate the ones shaped as keys. The first lesson was that you need to start with some assumptions and a model, otherwise it takes too long for the computer to find what you’re looking for. Second, you have to realise that your initial model is not perfect. You need it to adapt based on experience.

The picture above was taken from my thesis. In clockwise direction, it shows the original “noisy” image, the intermediate processing step called the “edge magnitude”, the final and initial boundaries.

My research applies directly to internet advertising. I’ve even had to dust off some of my old reference books, particularly “Adapative Filter Theory” by Simon Haykin.

Let me show you an abstract example and then move to the real world.

CIRCLES & SQUARES
Suppose there are two types of people who visit a website — circles and squares (which are you?) — and two types of advertisers. Advertiser A wants to reach circles; Advertiser B is looking for squares. Each advertiser has a $2 budget and is willing to pay $1 per valid lead.

Since the audience is evenly split between circles and squares, there is a 50% chance the website publisher will deliver the right audience. It has to provide four leads to each advertiser, effectively at $0.50 per lead. After selling the entire audience, the publisher earns $4.

With perfect targeting, though, the publisher can deliver two circles to Advertiser A, two squares to Advertiser B to earn $4 AND it will still have four leads left to sell, giving it the potential to maximise revenue at $8 – twice as much as it was earning before. So the advertisers are happy because they are reaching the intended audience, the publisher is happy because it is making more money and users are happy because the ads are more relevant to them.

TARGETING MOBILE ADS
The basis of matching advertisements to consumers on the internet is probably common knowledge now to many readers – put sporting shoes ads on sports sites, movie ads on entertainment news sites and new car ads just about everywhere.

In reality, though, ad placement is a lot more complicated.

There may be hundreds of companies placing ads that target sports fans. Which ads though are likely to receive the most click-throughs and subsequently the most online purchases?

Information about a publisher’s content and an ad’s content provide an initial guess. But to determine an ad’s relevancy to users, placement algorithms take into account more variables, such as

• the country where a user is coming from (based on IP addresses)
• user demographics (normally obtained from registration forms)
• user interests (inferred from surfing history, types of ads clicked, search terms used), and
• type of mobile phone.

We also constantly observe how a class of users behave to certain ads. For example, if we see that music ads work well on one page of a publisher’s site, but gaming ads work better on another, we adjust the placement accordingly. Our experience shows us that modifications based on incoming data can easily double or triple ad revenue for a publisher.

With nearly one million clicks per day, our engineers have tons of data – more than I ever could have dreamed about when I was working on my dissertation – that can be used to optimise ad performance. And then there’s the anecdotal feedback as well. When a new mobile site is launched – or if a new ad campaign is launched – publishers are quick to call me if the ads are not producing.

DOLLARS AND CENTS
The buzz surrounding online advertising is reflected in recent acquisitions. AOL bought TACODA, a company that delivers targeted rich media and video ads based on consumers’ internet surfing habits, for US$275 million. And Google bought DoubleClick for more than US$3 billion, despite some controversy surrounding DoubleClick’s use of sypware to track and record which advertisements users view while browsing. Within two to three years, online ad spending will surpass newspaper advertising in the US.

Advertising on the mobile internet becomes more exciting because (1) there’s more data to work with (mobile device, telecom carriers, even location) and (2) we’re reaching a new demographic in developing countries and among blue collar workers.

Advertisers can specify their targeting parameters and control how much they spend by opting for CPM (cost per thousand impressions) or CPC (cost per click). Then the algorithms kick in to optimise revenue for publishers. And since myGamma is one of the largest mobile communities in the world, BuzzCity can provide sophisticated click analytics based on user demographics. Users win out as well since they are more likely to see ads that meet their needs and interests. At the same time, though, the industry needs to exercise caution to avoid infringing on consumers’ privacy.

As a computer and modeling geek, it’s a thrill for me to be part of this new wave. We are continually learning and adapting.

Categories: Lai Kok Fung, Tours

BuzzCity-NUS Digital Media Forum

August 17, 2007 Leave a comment

We’d like to announce the launch of The Digital Media Forum, a collaborative effort between BuzzCity and NUS to advance the conceptualization and development of digital media products. The Digital Media Forum aims to foster creative and entrepreneurial advancement among developers who work in newly emerging media, particularly mobile media.

By providing a platform for the critical review of emerging digital media tools, applications and practices, we aim to increase the visibility and presence of digital media developers in Singapore. The forum is centred around the NUS Entrepreneurship Centre and features budding technopreneurs and the prototypes they’ve developed from research in the area of Digital Media. The forum also provides industry with a first look at emerging media technologies and services.

This bi-monthly interaction between academics, industry players and researchers is a feedback platform that will act as an early proving grounds for soon to be launched services.

Programme for 2007-2008

17 August 07
Connecting the Unwired
Dr Lai Kok Fung, CEO, BuzzCity

19 October 07
More than Voice at the Bottom of Pyramid?
Professor Rohan Samarajiva, Executive Director, LIRNEasia

25 January 08
“It’s an Asian Thing”: Cosplay and Singaporean Fan Culture
Dr. Thang Leng Leng and Dr. Elizabeth Maclachlan, Department of Japanese Studies, National University of Singapore

11 April 08
Against All Odds
Steven Gan, Founder & Editor-in-Chief, Malaysiakini

Categories: Uncategorized

BuzzCity-NUS Digital Media Awards

August 13, 2007 Leave a comment

The BuzzCity-NUS Digital Media Forum will provide support for market validation of prototypes via a series of awards to promising start-ups and research teams.

Finding the right marketing channel and getting market validation are always challenging for start-ups. With a small domestic market, Singapore companies face additional difficulties to market their products internationally. These awards provide companies with a channel to distribute and charge for mobile content products or services internationally. Companies will receive support in the form of technical assistance, marketing knowledge, cash and advertising credits.

Over a period of a year, 8 awards, each valued at $5,000 will be given away. Panelists from academia and industry will select awards for mobile content related products or services, including:

1. Prototypes that are ready for market testing
2. Business models ready for market validation in order to secure more funding (i.e. validated track record)
3. All start up projects, including but not limited to those from NUS or HOTSpots.

The award is not:

1. Funding of research and development of ideas for new products;
2. A funding scheme in exchange for equity stake in start-ups.

Judging criteria
A panel of judges led by BuzzCity will review all applications submitted for the award. After initial evaluation, short-listed projects will be asked to turn up for presentation and interview. Projects that are sound and promising will be given the award. Schedule for Submission of application:

1) 21 Sept 2007

2) 18 Jan 2008

3) 18 Apr 2008

Please email all applications and enquiries to dma@buzzcity.com . Download application form here

Categories: Uncategorized

INNOVATION

August 6, 2007 Leave a comment

By Clifford Chew, Vice President (Engineering)

Hi. I’m Clifford and I head up BuzzCity’s Engineering team. I’d like to give you a behind-the-scenes look at how we think about technology and at some of the innovations we’ve implemented, both to optimise the myGamma user experience as well as to make it easier and quicker for us to roll out new services.

Four years ago when we first conceptualised myGamma, we faced major design decisions. Should we use Linux or Microsoft Windows, Open Source or Oracle, Java or some other platform? While there were advantages to working with the big names, we opted for the cost-effective route and began writing code optimised for Linux.

We also prototyped and built myGamma as a Java-based (J2ME) application. There was a lot of hype surrounding Java at the time and most telecom companies would only partner with us if we were Java-based. However we quickly ran into problems. First, there are no standardised specs for mobile phones. Different makes and models have unique screen sizes, processor speeds, memory capabilities and menu options. When we tried to take account of all these variables using Java, our application became heavy and it took too long for users to download.

We then asked ourselves, what in retrospect seems like an obvious question: “What’s more important: technology or user-uptake?”

We had to make the user experience fast and easy if people were going to sign up and use myGamma. So we went back to the drawing board and redesigned the service to make it as simple as possible. It had to work on all phones, regardless of the operating system or other technical specifications, and it had to run quickly. The best way to do this was to programme for the lowest common denominator – and this meant using WAP technology.

The decision to go with WAP was the one of the most important choices made by BuzzCity. It wasn’t an easy choice though. At the time, most people believed WAP was inherently less interactive than Java. However, through an innovative use of WAP and server-side features, we have been able to simulate the interactivity and develop the fast simple user interface we desired.

Today myGamma is accessible in more than 50 countries on almost all GSM mobile phones and virtually every PDA. myGamma automatically detects the handset device and formats the pages accordingly. Users enjoy a personalised experience each time they sign in. More recently, we’ve added an HTML interface so PDA users have a more colourful experience.

The constant challenge is to make the technology transparent to the end user. So before every new product or feature release, we spend a lot of time testing ways of presenting information and choices. Remember that many of our users have never used a PC before. They’re not familiar with Windows and probably wouldn’t have given myGamma a second look if we had given them a Windows-like interface.

After implementing the basics – refining how users can send and receive messages and exchange rich media, such as photos – we turned our attention to other services.

For example, in some of our partner pages, you can click on a link and it triggers a standard mobile phone call to the retail outlet of a store. Once the call is over, the user is returned to the WAP page.

We’ve also recently introduced a mobile version of the popular online encyclopedia Wikipedia. It’s quite a challenge to take so much information – written for display on a computer screen – and adapt it for easy access and viewing on mobile phones.

myGamma members can easily sell products and services or advertise online. Depending on the country, users can be billed through their mobile phone provider (ie the charge will show up on their next phone bill), via SMS or credit card. We’re likely the first company in Asia to integrate multiple payment platforms like these into our mobile system.

One of our most important innovations has been a behind-the-scenes initiative to make it easier for engineers to test and roll out new applications. Often, when an engineer has a great idea, he gets bogged down in the setup and programming. The application needs to work on a range of platforms and phones with different screen sizes and device limitations, so the coding becomes a bottleneck. To overcome this, we created a development platform called Gamma 2.0. Our engineers can now quickly express their ideas within this coding skeleton. It takes fewer lines of programming to create a new application and we can test the user experience within just a few days.

Furthermore, since the user and payment features are already online, it takes less than a day to receive feedback as to whether a new service is popular or profitable. In addition, the Gamma 2.0 platform links the new program to all our other applications, so users can enjoy a consistent personalised experience.

At BuzzCity, we know that INNOVATION is key. We need to constantly seek and produce new and better services for our members, which is why our team members are encouraged to dream in our 20 Percent Projects. Our engineers can spend twenty percent of their time – one day a week – working on ideas and new projects of their choice. We provide our engineers with the resources to foster their own creativity and experiment with new ideas. We realise that most 20-Percent Projects will not make it online. But that’s fine. Every month we identify promising prototypes that add value to the myGamma experience.

BuzzCity is also partnering with the National University of Singapore (NUS) to advance the conceptualisation and development of digital media products. Kok Fung will kick off the Digital Media Forum on 17 August and over the next year, we will give away eight S$5000 awards to innovators with new mobile ideas.

I enjoy my job. It’s creative, it’s exciting and most of all I know that the programmes and applications we develop are transforming the way people communicate and connect to information around the globe.

Categories: Clifford Chew