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Targeted ads offer little extra value for online publishers, study suggests

Posted by on May 31, 2019 in Adtech, Advertising Tech, Alphabet, behavioral advertising, digital advertising, digital marketing, display advertising, Europe, Facebook, General Data Protection Regulation, IAB, Marketing, Media, Online Advertising, Privacy, programmatic advertising, Randall Rothenberg, Richard blumenthal, targeted advertising, United States | 0 comments

How much value do online publishers derive from behaviorally targeted advertising that uses privacy-hostile tracking technologies to determine which advert to show a website user?

A new piece of research suggests publishers make just 4% more vs if they were to serve a non-targeted ad.

It’s a finding that sheds suggestive light on why so many newsroom budgets are shrinking and journalists finding themselves out of work — even as adtech giants continue stuffing their coffers with massive profits.

Visit the average news website lousy with third party cookies (yes, we know, it’s true of TC too) and you’d be forgiven for thinking the publisher is also getting fat profits from the data creamed off their users as they plug into programmatic ad systems that trade info on Internet users’ browsing habits to determine the ad which gets displayed.

Yet while the online ad market is massive and growing — $88BN in revenues in the US in 2017, per IAB data, a 21% year-on-year increase — publishers are not the entities getting filthy rich off of their own content.

On the contrary, research in recent years has suggested that a large proportion of publishers are being squeezed by digital display advertising economics, with some 40% reporting either stagnant or shrinking ad revenue, per a 2015 Econsultancy study. (Hence, we can posit, the rise in publishers branching into subscriptions — TC’s own offering can be found here: Extra Crunch).

The lion’s share of value being created by digital advertising ends up in the coffers of adtech giants, Google and Facebook . Aka the adtech duopoly. In the US, the pair account for around 60% of digital ad market spending, per eMarketer — or circa $76.57BN.

Their annual revenues have mirrored overall growth in digital ad spend — rising from $74.9BN to $136.8BN, between 2015 and 2018, in the case of Google’s parent Alphabet; and $17.9BN to $55.8BN for Facebook. (While US online ad spend stepped up from $59.6BN to $107.5BN+ between 2015 and 2018.)

eMarketer projects 2019 will mark the first decline in the duopoly’s collective share. But not because publishers’ fortunes are suddenly set for a bonanza turnaround. Rather another tech giant — Amazon — has been growing its share of the digital ad market, and is expected to make what eMarketer dubs the start of “a small dent in the duopoly”.

Behavioral advertising — aka targeted ads — has come to dominate the online ad market, fuelled by platform dynamics encouraging a proliferation of tracking technologies and techniques in the unregulated background. And by, it seems, greater effectiveness from the perspective of online advertisers, as the paper notes. (“Despite measurement and attribution challenges… many studies seem to concur that targeted advertising is beneficial and effective for advertising firms.”

This has had the effect of squeezing out non-targeted display ads, such as those that rely on contextual factors to select the ad — e.g. the content being viewed, device type or location.

The latter are now the exception; a fall-back such as for when cookies have been blocked. (Albeit, one that veteran pro-privacy search engine, DuckDuckGo, has nonetheless turned into a profitable contextual ad business).

One 2017 study by IHS Markit, suggested that 86% of programmatic advertising in Europe was using behavioural data. While even a quarter (24%) of non-programmatic advertising was found to be using behavioural data, per its model. 

“In 2016, 90% of the digital display advertising market growth came from formats and processes that use behavioural data,” it observed, projecting growth of 106% for behaviourally targeted advertising between 2016 and 2020, and a decline of 63.6% for forms of digital advertising that don’t use such data.

The economic incentives to push behavioral advertising vs non-targeted ads look clear for dominant platforms that rely on amassing scale — across advertisers, other people’s eyeballs, content and behavioral data — to extract value from the Internet’s dispersed and diverse audience.

But the incentives for content producers to subject themselves — and their engaged communities of users — to these privacy-hostile economies of scale look a whole lot more fuzzy.

Concern about potential imbalances in the online ad market is also leading policymakers and regulators on both sides of the Atlantic to question the opacity of the market — and call for greater transparency.

A price on people tracking’s head

The new research, which will be presented at the Workshop on the Economics of Information Security conference in Boston next week, aims to contribute a new piece to this digital ad revenue puzzle by trying to quantify the value to a single publisher of choosing ads that are behaviorally targeted vs those that aren’t.

We’ve flagged the research before — when the findings were cited by one of the academics involved in the study at an FTC hearing — but the full paper has now been published.

It’s called Online Tracking and Publishers’ Revenues: An Empirical Analysis, and is co-authored by three academics: Veronica Marotta, an assistant professor in information and decision sciences at the Carlson School of Management, University of Minnesota; Vibhanshu Abhishek, associate professor of information systems at the Paul Merage School of Business, University California Irvine; and Alessandro Acquisti, professor of IT and public policy at Carnegie Mellon University.

“While the impact of targeted advertising on advertisers’ campaign effectiveness has been vastly documented, much less is known about the value generated by online tracking and targeting technologies for publishers – the websites that sell ad spaces,” the researchers write. “In fact, the conventional wisdom that publishers benefit too from behaviorally targeted advertising has rarely been scrutinized in academic studies.”

“As we briefly mention in the paper, notwithstanding claims about the shared benefits of online tracking and behaviorally targeting for multiple stakeholders (merchants, publishers, consumers, intermediaries…), there is a surprising paucity of empirical estimates of economic outcomes from independent researchers,”  Acquisti also tells us.

In fact, most of the estimates focus on the advertisers’ side of the market (for instance, there have been quite a few studies estimating the increase in click-through or conversion rates associated with targeted ads); much less is known about the publishers’ side of the market. So, going into the study, we were genuinely curious about what we may find, as there was little in terms of data that could anchor our predictions.

“We did have theoretical bases to make possible predictions, but those predictions could be quite antithetical. Under one story, targeting increases the value of the audience, which increases advertisers’ bids, which increases publishers’ revenues; under a different story, targeting decreases the ‘pool’ of audience interested in an ad, which decreases competition to display ads, which reduces advertisers’ bids, eventually reducing publishers’ revenues.”

For the study the researchers were provided with a data-set comprising “millions” of display ad transactions completed in a week across multiple online outlets owned by a single (unidentified) large publisher which operates websites in a range of verticals such as news, entertainment and fashion.

The data-set also included whether or not the site visitor’s cookie ID is available — enabling analysis of the price difference between behaviorally targeted and non-targeted ads. (The researchers used a statistical mechanism to control for systematic differences between users who impede cookies.)

As noted above, the top-line finding is only a very small gain for the publisher whose data they were analyzing — of around 4%. Or an average increase of $0.00008 per advertisement. 

It’s a finding that contrasts wildly with some of the loud yet unsubstantiated opinions which can be found being promulgated online — claiming the ‘vital necessity’ of behavorial ads to support publishers/journalism.

For example, this article, published earlier this month by a freelance journalist writing for The American Prospect, includes the claim that: “An online advertisement without a third-party cookie sells for just 2 percent of the cost of the same ad with the cookie.” Yet does not specify a source for the statistic it cites.

(The author told us the reference is to a 2018 speech made by Index Exchange’s Andrew Casale, when he suggested ad requests without a buyer ID receive 99% lower bids vs the same ad request with the identifier. She added that her conversations with people in the adtech industry had suggested a spread between a 99% and 97% decline in the value of an ad without a cookie, hence choosing a middle point.)

At the same time policymakers in the US now appear painfully aware how far behind Europe they are lagging where privacy regulation is concerned — and are fast dialling up their scrutiny of and verbal horror over how Internet users are tracked and profiled by adtech giants.

At a Senate Judiciary Committee hearing earlier this month — convened with the aim of “understanding the digital ad ecosystem and the impact of data privacy and competition policy” — the talk was not if to regulate big tech but how hard they must crack down on monopolistic ad giants.

“That’s what brings us here today. The lack of choice [for consumers to preserve their privacy online],” said senator Richard Blumenthal. “The excessive and extraordinary power of Google and Facebook and others who dominate the market is a fact of life. And so privacy protection is absolutely vital in the short run.”

The kind of “invasive surveillance” that the adtech industry systematically deploys is “something we would never tolerate from a government but Facebook and Google have the power of government never envisaged by our founders,” Blumenthal went on, before a few of the types of personal data that are sucked up and exploited by the adtech industrial surveillance complex: “Health, dating, location, finance, extremely personal details — offered to anyone with almost no restraint.”

Bearing that “invasive surveillance” in mind, a 4% publisher ‘premium’ for privacy-hostile ads vs adverts that are merely contextually served (and so don’t require pervasive tracking of web users) starts to look like a massive rip off — of both publisher brand and audience value, as well as Internet users’ rights and privacy.

Yes, targeted ads do appear to generate a small revenue increase, per the study. But as the researchers also point out that needs to be offset against the cost to publishers of complying with privacy regulations.

“If setting tracking cookies on visitors was cost free, the website would definitely be losing money. However, the widespread use of tracking cookies – and, more broadly, the practice of tracking users online – has been raising privacy concerns that have led to the adoption of stringent regulations, in particular in the European Union,” they write — going on to cite an estimate by the International Association of Privacy Professionals that Fortune’s Global 500 companies will spend around $7.8BN on compliant costs to meet the requirements of Europe’s General Data Protection Regulation (GDPR). 

Wider costs to systematically eroding online privacy are harder to put a value on for publishers. But should also be considered — whether it’s the costs to a brand reputation and user loyalty as a result of a publisher larding their sites with unwanted trackers; to wider societal costs — linked to the risks of data-fuelled manipulation and exploitation of vulnerable groups. Simply put, it’s not a good look.

Publishers may appear complicit in the asset stripping of their own content and audiences for what — per this study — seems only marginal gain, but the opacity of the adtech industry implies that most likely don’t realize exactly what kind of ‘deal’ they’re getting at the hands of the ad giants who grip them.

Which makes this research paper a very compelling read for the online publishing industry… and, well, a pretty awkward newsflash for anyone working in adtech.

 

While the study only provides a snapshot of ad market economics, as experienced by a single publisher, the glimpse it presents is distinctly different from the picture the adtech lobby has sought to paint, as it has ploughed money into arguing against privacy legislation — on the claimed grounds that ‘killing behavioural advertising would kill free online content’. 

Saying no more creepy ads might only marginally reduce publishers’ revenue doesn’t have quite the same doom-laden ring, clearly.

“In a nutshell, this study provides an initial data point on a portion of the advertising ecosystem over which claims had been made but little empirical verification was completed. The results highlight the need for more transparency over how the value generated by flows of data gets allocated to different stakeholders,” says Acquisti, summing up how the study should be read against the ad market as a whole.

Contacted for a response to the research, Randall Rothenberg, CEO of advertising business organization, the IAB, agreed that the digital supply chain is “too complex and too opaque” — and also expressed concern about how relatively little value generated by targeted ads is trickling down to publishers.

“One week’s worth of data from one unidentified publisher does not make for a projectible (sic) piece of research. Still, the study shows that targeted advertising creates immense value for brands — more than 90% of the unnamed publisher’s auctioned ads were sold with targeting attached, and advertisers were willing to pay a 60% premium for those ads. Yet very little of that value flowed to the publisher,” he told TechCrunch. “As IAB has been saying for a decade, the digital supply chain is too complex and too opaque, and this diversion of value is more proof that transparency is required so that publishers can benefit from the value they create.”

The research paper includes discussion of the limitations to the approach, as well as ideas for additional research work — such as looking at how the value of cookies changes depending on how much information they contain (on that they write of their initial findings: “Information seem to be very valuable (from the publisher’s perspective) when we compare cookies with very little information to cookies with some information; after a certain point, adding more information to a cookie does not seem to create additional value for the publisher”); and investigating how “the (un)availability of a cookie changes the competition in the auction” — to try to understand ad auction competition dynamics and the potential mechanisms at play.

“This is one new and hopefully useful data point, to which others must be added,” Acquisti also told us in concluding remarks. “The key to research work is incremental progress, with more studies progressively adding a clearer understanding of an issue, and we look forward to more research in this area.”

This report was updated with additional comment


Source: The Tech Crunch

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Get ready for a new era of personalized entertainment

Posted by on Apr 13, 2019 in Amazon, Artificial Intelligence, Column, computing, Content, Facebook, machine learning, Marketing, Multimedia, personalization, smart devices, Spotify, Streaming Media, streaming services, Twitter, virtual reality, world wide web | 0 comments

New machine learning technologies, user interfaces and automated content creation techniques are going to expand the personalization of storytelling beyond algorithmically generated news feeds and content recommendation.

The next wave will be software-generated narratives that are tailored to the tastes and sentiments of a consumer.

Concretely, it means that your digital footprint, personal preferences and context unlock alternative features in the content itself, be it a news article, live video or a hit series on your streaming service.

The title contains different experiences for different people.

From smart recommendations to smarter content

When you use Youtube, Facebook, Google, Amazon, Twitter, Netflix or Spotify, algorithms select what gets recommended to you. The current mainstream services and their user interfaces and recommendation engines have been optimized to serve you content you might be interested in.

Your data, other people’s data, content-related data and machine learning methods are used to match people and content, thus improving the relevance of content recommendations and efficiency of content distribution.

However, so far the content experience itself has mostly been similar to everyone. If the same news article, live video or TV series episode gets recommended to you and me, we both read and watch the same thing, experiencing the same content.

That’s about to change. Soon we’ll be seeing new forms of smart content, in which user interface, machine learning technologies and content itself are combined in a seamless manner to create a personalized content experience.

What is smart content?

Smart content means that content experience itself is affected by who is seeing, watching, reading or listening to content. The content itself changes based on who you are.

We are already seeing the first forerunners in this space. TikTok’s whole content experience is driven by very short videos, audiovisual content sequences if you will, ordered and woven together by algorithms. Every user sees a different, personalized, “whole” based on her viewing history and user profile.

At the same time, Netflix has recently started testing new forms of interactive content (TV series episodes, e.g. Black Mirror: Bandersnatch) in which user’s own choices affect directly the content experience, including dialogue and storyline. And more is on its way. With Love, Death & Robots series, Netflix is experimenting with episode order within a series, serving the episodes in different order for different users.

Some earlier predecessors of interactive audio-visual content include sports event streaming, in which the user can decide which particular stream she follows and how she interacts with the live content, for example rewinding the stream and spotting the key moments based on her own interest.

Simultaneously, we’re seeing how machine learning technologies can be used to create photo-like images of imaginary people, creatures and places. Current systems can recreate and alter entire videos, for example by changing the style, scenery, lighting, environment or central character’s face. Additionally, AI solutions are able to generate music in different genres.

Now, imagine, that TikTok’s individual short videos would be automatically personalized by the effects chosen by an AI system, and thus the whole video would be customized for you. Or that the choices in the Netflix’s interactive content affecting the plot twists, dialogue and even soundtrack, were made automatically by algorithms based on your profile.

Personalized smart content is coming to news as well. Automated systems, using today’s state-of-the-art NLP technologies, can generate long pieces of concise, comprehensible and even inventive textual content at scale. At present, media houses use automated content creation systems, or “robot journalists”, to create news material varying from complete articles to audio-visual clips and visualizations. Through content atomization (breaking content into small modular chunks of information) and machine learning, content production can be increased massively to support smart content creation.

Say that a news article you read or listen to is about a specific political topic that is unfamiliar to you. When comparing the same article with your friend, your version of the story might use different concepts and offer a different angle than your friend’s who’s really deep into politics. A beginner’s smart content news experience would differ from the experience of a topic enthusiast.

Content itself will become a software-like fluid and personalized experience, where your digital footprint and preferences affect not just how the content is recommended and served to you, but what the content actually contains.

Automated storytelling?

How is it possible to create smart content that contains different experiences for different people?

Content needs to be thought and treated as an iterative and configurable process rather than a ready-made static whole that is finished when it has been published in the distribution pipeline.

Importantly, the core building blocks of the content experience change: smart content consists of atomized modular elements that can be modified, updated, remixed, replaced, omitted and activated based on varying rules. In addition, content modules that have been made in the past, can be reused if applicable. Content is designed and developed more like a software.

Currently a significant amount of human effort and computing resources are used to prepare content for machine-powered content distribution and recommendation systems, varying from smart news apps to on-demand streaming services. With smart content, the content creation and its preparation for publication and distribution channels wouldn’t be separate processes. Instead, metadata and other invisible features that describe and define the content are an integral part of the content creation process from the very beginning.

Turning Donald Glover into Jay Gatsby

With smart content, the narrative or image itself becomes an integral part of an iterative feedback loop, in which the user’s actions, emotions and other signals as well as the visible and invisible features of the content itself affect the whole content consumption cycle from the content creation and recommendation to the content experience. With smart content features, a news article or a movie activates different elements of the content for different people.

It’s very likely that smart content for entertainment purposes will have different features and functions than news media content. Moreover, people expect frictionless and effortless content experience and thus smart content experience differs from games. Smart content doesn’t necessarily require direct actions from the user. If the person wants, the content personalization happens proactively and automatically, without explicit user interaction.

Creating smart content requires both human curation and machine intelligence. Humans focus on things that require creativity and deep analysis while AI systems generate, assemble and iterate the content that becomes dynamic and adaptive just like software.

Sustainable smart content

Smart content has different configurations and representations for different users, user interfaces, devices, languages and environments. The same piece of content contains elements that can be accessed through voice user interface or presented in augmented reality applications. Or the whole content expands into a fully immersive virtual reality experience.

In the same way as with the personalized user interfaces and smart devices, smart content can be used for good and bad. It can be used to enlighten and empower, as well as to trick and mislead. Thus it’s critical, that human-centered approach and sustainable values are built in the very core of smart content creation. Personalization needs to be transparent and the user needs to be able to choose if she wants the content to be personalized or not. And of course, not all content will be smart in the same way, if at all.

If used in a sustainable manner, smart content can break filter bubbles and echo chambers as it can be used to make a wide variety of information more accessible for diverse audiences. Through personalization, challenging topics can be presented to people according to their abilities and preferences, regardless of their background or level of education. For example a beginner’s version of vaccination content or digital media literacy article uses gamification elements, and the more experienced user gets directly a thorough fact-packed account of the recent developments and research results.

Smart content is also aligned with the efforts against today’s information operations such as fake news and its different forms such as “deep fakes” (http://www.niemanlab.org/2018/11/how-the-wall-street-journal-is-preparing-its-journalists-to-detect-deepfakes). If the content is like software, a legit software runs on your devices and interfaces without a problem. On the other hand, even the machine-generated realistic-looking but suspicious content, like deep fake, can be detected and filtered out based on its signature and other machine readable qualities.


Smart content is the ultimate combination of user experience design, AI technologies and storytelling.

News media should be among the first to start experimenting with smart content. When the intelligent content starts eating the world, one should be creating ones own intelligent content.

The first players that master the smart content, will be among tomorrow’s reigning digital giants. And that’s one of the main reasons why today’s tech titans are going seriously into the content game. Smart content is coming.


Source: The Tech Crunch

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Adobe announces deeper data sharing partnership with Microsoft around accounts

Posted by on Mar 26, 2019 in Adobe, Adobe Summit 2019, Cloud, Enterprise, LinkedIn, Marketing, Microsoft, TC | 0 comments

Microsoft and Adobe have been building a relationship for some time, and today at Adobe Summit in Las Vegas the two companies announced a deeper integration between the two platforms.

It involves sharing Marketo data, the company that Adobe acquired last September for $4.75 billion. Because it’s marketers, they were duty-bound to give it a new name. This data-sharing approach is being dubbed Account Based Experience, or ABX for short. The two companies are sharing data account data between a number of sources, including Marketo Engage in Adobe Experience Cloud and Microsoft Dynamics 365 for Sales, as well as the LinkedIn, the business social platform Microsoft bought in 2016 for a whopping $26.2 billion.

Microsoft has been trying to find ways to put that LinkedIn data to work, and tools like Marketo can use the data in LinkedIn to understand their account contacts better. Steve Lucas, former CEO at Marketo, who is now senior vice president and head of the Marketo team at Adobe, says accounts tend to be much more complex sales than selling to individuals, involving multiple decision makers. It’s a sales cycle that can stretch on for months, and having access to additional data about the account contacts can have a big impact.

“With these new account-based capabilities, marketing and sales teams will have increased alignment around the people and accounts they are engaging, and new ways to measure that business impact,” Lucas explained in a statement.

Brent Leary, principal at CRM Essentials, who has been working in CRM, customer service and marketing for years, sees this as a useful partnership for customers from both vendors. “Integrating Microsoft Dynamics and LinkedIn more closely with Marketo gives Adobe’s Experience Cloud some great data to leverage in order to have a more complete picture of B2B customers,” Leary told TechCrunch.

The goal is to close complex sales, and having access to more complete data across the two product sets can help achieve that.


Source: The Tech Crunch

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Polis, the door-to-door marketer, raises another $2.5 million

Posted by on Feb 26, 2019 in Alexis Ohanian, api, boston, Business, digital advertising, distribution, garry tan, initialized capital, Marketing, NRG Energy, polis, Recent Funding, sales, Semil Shah, Startups, targeted advertising, TC, texas | 0 comments

Polis founder Kendall Tucker began her professional life as a campaign organizer in local Democratic politics, but — seeing an opportunity in her one-on-one conversations with everyday folks — has built a business taking that shoe leather approach to political campaigns to the business world.

Now the company she founded to test her thesis that Americans would welcome back the return of the door-to-door salesperson three years ago is $2.5 million richer thanks to a new round of financing from Initialized Capital (the fund founded by Garry Tan and Reddit co-founder Alexis Ohanian) and Semil Shah’s Haystack.vc.

The Boston-based company currently straddles the line between political organizing tool and new marketing platform — a situation that even its founder admits is tenuous at the moment.

That tension is only exacerbated by the fact that the company is coming off one of its biggest political campaign seasons. Helping to power the get-out-the-vote initiative for Senatorial candidate Beto O’Rourke in Texas, Polis’ software managed the campaign’s outreach effort to 3 million voters across the state.

However, politically focused software and services businesses are risky. Earlier this year the Sean Parker-backed Brigade shut down and there are rumblings that other startups targeting political action may follow suit.

“Essentially, we got really excited about going into the corporate space because online has gotten so nasty,” says Tucker. “And, at the end of the day, digital advertising isn’t as effective as it once was.”

Customer acquisition costs in the digital ad space are rising. For companies like NRG Energy and Inspire Energy (both Polis clients), the cost of acquisitions online can be as much as $300 per person.

Polis helps identify which doors for salespeople to target and works with companies to identify the scripts that are most persuasive for consumers, according to Tucker. The company also monitors for sales success and helps manage the process so customers aren’t getting too many house calls from persistent sales people.

“We do everything through the conversation at the door,” says Tucker. “We do targeting and we do script curation (everything from what script do you use and when do you branch out of scripts) and we have an open API so they can push that out and they run with it through the rest of their marketing.”


Source: The Tech Crunch

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Freshworks launches a load balancer for handling customer inquiries

Posted by on Feb 21, 2019 in base crm, Cloud, CRM, customer relationship management, customer support, Freshdesk, freshworks, Marketing, omnichannel, Zendesk | 0 comments

Customer engagement service Freshworks, which was valued at about $1.5 billion in its last funding round, today launched Omniroute, the latest product in its portfolio of tools for customer service agents.

Omniroute is essentially a load-balancer for routing multi-channel customer inquiries. Freshworks argues that earlier customer support solutions made it hard for agents to switch between inquiry types and for managers to efficiently route traffic.

“Modern consumers are able to reach out to brands across multiple channels and devices, and simply put, customer service teams are under siege,” Freshworks CEO and co-founder Girish Mathrubootham explained.

The promise of Omniroute is that it can automatically route a query to the right agent who has the bandwidth to handle it, based on what it knows about that agent’s skills and the nature of the inquiry. And if you regularly want to hang up your phone when an agent asks you for your order number right after you typed it into the system, then you’ll be happy to hear that the Omniroute will surface this information right on the agent’s screen.

Omnichannel is one of the biggest buzzwords in the marketing world, of course, but there can be little doubt that customers do expect to be able to reach a company across multiple channels, be that an online chat, phone call, text message or a Twitter DM (or, for those who still go outside, a sales agent in a store). Companies want to give customers a consistent experience across those channels, but they don’t always have the tools to do so.

It’s worth noting that Zendesk recently acquired Base, a CRM solution for salespeople that puts it into direct competition with Freshwork’s sales tools. Unsurprisingly, the Freshwork team is not overly impressed. “What Zendesk has done with Base CRM is too little too late,” Freshwork CMO David Thompson said. “You need your Sales CRM and Support CRM to integrate out of the box in order for customers to get the benefit. Bolt-on acquisitions don’t accomplish that seamless flow of data between marketing, sales and support.”


Source: The Tech Crunch

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Warung Pintar raises $27.5M to digitize Indonesia’s street vendors

Posted by on Jan 21, 2019 in Asia, Bukalapak, China, digital-garage, East Ventures, economy, funding, Fundings & Exits, go-jek, Indonesia, Jakarta, kiosks, line ventures, Marketing, online marketplaces, president, Southeast Asia, Tokopedia, traveloka, United States, Yahoo | 1 comment

The digital revolution in Indonesia, Southeast Asia’s largest economy, continues to attract big money from investors. Hot on the heels of a $50 million round for Bukalapak, a billion-dollar company helping street stall traders to tap the internet, so Warung Pintar, another startup helping digitize the country’s vendors, has pulled in $27.5 million for growth.

Bukalapak is one of Indonesia’s largest e-commerce services and it began catering to local merchants, those who sell product via road-side kiosks, last year, but eighteen-month-old Warung Pintar is focused exclusively on those vendors.

Bukalapak helps them to gain scale through online orders — it claims to have a base of 50 million registered users in Indonesia — but Warung Pintar digitizes kiosk vendors to the very core. At the most basic level, that means aesthetics; so all Warung Pintar vendors get a bright and colorfully-designed kiosk. They also get access to technology that includes a digital POS, free Wi-Fi for customers, an LCD screen for displays, power bank chargers and more.

It’s a ‘smart kiosk’ concept, essentially.

The project was founded in 2007 by East Ventures, a prolific early-stage investor that has backed unicorns like Tokopedia, Traveloka and Mercari. This new money means that Warung Pintar has now raised just over $35 million from investors to date.

The round — which is a Series B — included participation from existing backers SMDV, Vertex, Pavilion Capital, Line Ventures, Digital Garage, Agaeti, Triputra, Jerry Ng, and EV Growth — the joint fund from East Ventures and Yahoo. They were joined by OVO — a payment firm jointly owned by Indonesian mega-conglomerate Lippo — which has signed on as a new investor and is sure to be highly strategic in nature. OVO works with the likes of Grab, and it is battling to gain a foothold in Indonesia’s fledgling digital payments space, which is tipped to boom among the country’s 260 million population.

A Warung Pintar kiosk in Jakarta, Indonesia

These investors are all betting that Warung Pintar can take off and provide greater functionality for street vendors and consumers alike.

The startup is in growth mode right now so it isn’t fully focused on monetization. The only fee is $5,000 from the vendor, which covers the cost of a new prefab kiosk, while all the tech appliances are provided without fee to help kiosk owners engage with the local community. For example, East Ventures noticed that drivers for Go-Jek or Grab tended to hang around the kiosk store near the VC firm’s office and they were curious how to grow engagement to benefit both parties.

“There are going to be a lot of ways to charge and make money,” East Ventures co-founder and managing partner Willson Cuaca told TechCrunch in an interview. “Once we have built enough, we can manage the supply chain and then figure out of how to make money.”

Indeed, monetization might not be via fees to the kiosk owners themselves, explained Cuaca — who is president of Warung Pintar. Since the company maintains touch points with consumers, it is a commodity that can appeal to brands, manufacturers and others when it reaches nationwide scale.

While there has been promising progress and product market fit in Jakarta, Cuaca and his team see significant growth potential still to be realized.

When we spoke to Warung Pintar just under a year ago, it had just raised a seed round and had been in operation for under six months. Today, the business counts 1,150 kiosks in Jakarta. However, it recently opened up in Banyuwangi, East Java, which, alongside other planned expansions, is aimed to increase its reach to 5,000 kiosks before the end of this year, Cuaca said.

There’s no plan for regional expansion at this point, he added.

The business and model is fascinating but it is conceived and executed in Indonesia, that’s to say it isn’t a problem that could be identified, mapped and solved from the U.S, China or other markets. It’s the type of tech and startup that is helping change daily lives in Indonesia, the world’s fourth largest country by population. Home-grown solutions have been rare in Southeast Asia, but there are increasing opportunities that only local players can cater to and now the region’s VC corpus is substantial enough to provide the capital needed.


Source: The Tech Crunch

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Putting the band back together, ExactTarget execs reunite to launch MetaCX

Posted by on Dec 6, 2018 in alpha, api, business software, chief technology officer, cloud applications, cloud computing, computing, customer relationship management, exacttarget, indianapolis, Kobie Fuller, Los Angeles, Marketing, pilot, president, Salesforce Marketing Cloud, salesforce.com, scott dorsey, software as a service, TC, upfront ventures | 0 comments

Scott McCorkle has spent most of his professional career thinking about business to business software and how to improve it for a company’s customers.

The former President of ExactTarget and later chief executive of Salesforce Marketing Cloud has made billions of dollars building products to help support customer service and now he’s back at it again with his latest venture MetaCX.

Alongside Jake Miller, the former chief engineering lead at Salesforce Marketing Cloud and chief technology officer at ExactTarget, and David Duke, the chief customer officer and another ExactTarget alumnus, McCorkle has raised $14 million to build a white-labeled service that offers a toolkit for monitoring, managing and supporting customers as they use new software tools.

If customers are doing the things i want them to be doing through my product. What is it that they want to achieve and why did they buy my product.

“MetaCX sits above any digital product,” McCorkle says. And its software monitors and manages the full spectrum of the customer relationship with that product. “It is API embeddable and we have a full user experience layer.”

For the company’s customers, MetaCX provides a dashboard that includes outcomes, the collaboration, metrics tracked as part of the relationship and all the metrics around that are part of that engagement layer,” says McCorkle.

The first offerings will be launching in the beginning of 2019, but the company has dozens of customers already using its pilot, McCorkle said.

The Indianapolis -based company is one of the latest spinouts from High Alpha Studio, an accelerator and venture capital studio formed by Scott Dorsey, the former chief executive officer of ExactTarget. As one of a crop of venture investment firms and studios cropping up in the Midwest, High Alpha is something of a bellwether for the viability of the venture model in emerging ecosystems. And, from that respect, the success of the MetaCX round speaks volumes. Especially since the round was led by the Los Angeles-based venture firm Upfront Ventures.

“Our founding team includes world-class engineers, designers and architects who have been building billion-dollar SaaS products for two decades,” said McCorkle, in a statement. “We understand that enterprises often struggle to achieve the business outcomes they expect from SaaS, and the renewal process for SaaS suppliers is often an ambiguous guessing game. Our industry is shifting from a subscription economy to a performance economy, where suppliers and buyers of digital products need to transparently collaborate to achieve outcomes.”

As a result of the investment, Upfront partner Kobie Fuller will be taking a seat on the MetaCX board of directors alongside McCorkle and Dorsey.

“The MetaCX team is building a truly disruptive platform that will inject data-driven transparency, commitment and accountability against promised outcomes between SaaS buyers and vendors,” said Fuller, in a statement. “Having been on the journey with much of this team while shaping the martech industry with ExactTarget, I’m incredibly excited to partner again in building another category-defining business with Scott and his team in Indianapolis.”

 


Source: The Tech Crunch

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Facebook is still facing ‘intermittent’ outages for advertisers ahead of Black Friday and Cyber Monday

Posted by on Nov 21, 2018 in ad network, adwords, api, digital marketing, Facebook, Facebook ad network, Marketing, Online Advertising, spokesperson, TC, world wide web | 0 comments

One day after experiencing a massive outage across its ad network, Facebook, one of the most important online advertising platforms, is still seeing “intermittent” issues for its ad products at one of the most critical times of the year for advertisers.

According to a spokesperson for the company, while most systems are restored there are still intermittent issues that could affect advertisers.

For most of the day yesterday, advertisers were unable to create and edit campaigns through Ads Manager or the Ads API tools.

The company said that existing ads were delivered, but advertisers could not set new campaigns or make any changes to existing campaigns, according to several users of the network.

Reporting has been restored for all interfaces, according to the company, but conversion data may be delayed throughout the day for the Americas and in the evening for other regions.

The company declined to comment on how many campaigns were affected by the outage or on whether it intends to compensate or make up for the outage with advertisers on the platform.

Some advertisers are still experiencing outages and are not happy about it.

This is a bad look for a company that is already fighting fires on any number of other fronts. But unlike the problems with bullying, hate speech, and disinformation that don’t impact the ways Facebook makes money, selling ads is actually how Facebook makes money.

In the busiest shopping season of the year (and therefore one of the busiest advertising seasons of the year) for Facebook to have no response and for some developers to still be facing intermittent outages on the platform is a bad sign.


Source: The Tech Crunch

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India’s Hansel raises $4M to bring its app development platform to the US

Posted by on Aug 8, 2018 in Apps, Asia, ceo, Facebook, Flipkart, Fundings & Exits, hansel.io, India, Marketing, North America, personalization, product development, Uber, United States, Zynga | 0 comments

Hansel, an India-based startup that enables more agile product development inside companies, has pulled in $4 million as it seeks to expand its business to the U.S..

The startup was founded in 2015 and it operates a real-time mobile app development platform that simplifies the process of product iteration inside companies. That’s to say that once a product is launched there’s a lot of work that is done to develop it, test new ideas and optimize but many companies overlook the process or lump it with the general engineering, which includes initial product development.

Hansel argues that product development and iteration are different, and its wider aim is to enable dedicated ‘product ops’ inside companies that until now never considered the process to be distinct from app development, or perhaps don’t have the budget.

“Product iteration is often neglected as people want to move to the next thing, but that means product building is only half done,” Varun Ramamurthy, CEO of Hansel, told TechCrunch in an interview. “We want to significantly accelerate product iteration and provide a platform for ‘product ops.’”

“Big firms like Facebook and Uber champion product ops teams inside their business but they have already built the infrastructure and have dedicated specialists. That allows them to move at breakneck on launched product and features, their competitive advantage is speed to market,” he added.

The Hansel ‘Lake’ platform is a single repository that decouples product development from the code itself, allowing teams to create a range of different experiences — iterations — that can be pushed out to different user segments. The company charges users based on end-user numbers, such as monthly active user bases,  but it also includes customized pricing for some premium features, too.

Ramamurthy is formerly of Zynga in the U.S. among other places, and he met his Hansel co-founders Mudit Krishna Mathur and Parminder Singh while the trio were at Flipkart, the Indian e-commerce giant.

“We got together at Flipkart and saw a huge difference in speed between Facebook, other top firms and the rest of the world,” Ramamurthy recalled. “When it comes to speed of personalization and iterations of product, the rest of the industry had a lot of catch up. We want to help separate iterations and personalization from general engineering… today it is all confused.”

Hansel founders Varun Ramamurthy, Parminder Singh and Mudit Krishna Mathur

The startup has focused on India to date where Ramamurthy said it has large mid-market companies and enterprises as clients, including Uber rival Ola, Paytm and Magicpin. That work has given the team of 23 people a good grounding on what to expect for clients, how to work with them and how to package its service, and now the next phase is to do more business in North America.

Hansel is using the new funding to open an office in the Bay Area, where it has recruited its first two hires to drive business development and sales. Ramamurthy himself plans to spend more time in the U.S. as part of the effort, which will also see a product marketing team hired Stateside. R&D and product development will remain anchored out of Hansel’s India office.

This new round takes Hansel to $5.4 million raised to date. Vertex led this Series A with participation from existing backers IDG Ventures India and Endiya Partners.


Source: The Tech Crunch

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MallforAfrica goes global, Kobo360 and Sokowatch raise VC, France explains its $76M fund

Posted by on Aug 3, 2018 in africa, android, B2B, Business, ceo, Column, designer, dhl, E-Commerce, east africa, economy, Emmanuel Macron, Entrepreneur, France, Ghana, Honeywell, kenya, kobo360, Lagos, Marketing, mobile phones, Nigeria, paris, president, Proparco, Rwanda, senegal, SMS, sokowatch, Tanzania, TechCrunch, Uber, unilever, Village Global, wi-fi, Y Combinator | 0 comments

B2B e-commerce company Sokowatch closed a $2 million seed investment led by 4DX Ventures. Others to join the round were Village Global, Lynett Capital, Golden Palm Investments, and Outlierz  Ventures.

The Kenya based company aims to shake up the supply chain market for Africa’s informal retailers.

Sokowatch’s platform connects Africa’s informal retail stores directly to local and multi-national suppliers—such as Unilever and Proctor and Gamble—by digitizing orders, delivery, and payments with the aim of reducing costs and increasing profit margins.

“With both manufacturers and the small shops, we’re becoming the connective layer between them, where previously you had multiple layers of middle-men from distributors, sub-distributors, to wholesalers,” Sokowatch founder and CEO Daniel Yu told TechCrunch.

“The cost of sourcing goods right now…we estimate we’re cutting that cost by about 20 percent [for] these shopkeepers,” he said

“There are millions of informal stores across Africa’s cities selling hundreds of billions worth of consumer goods every year,” said Yu.

These stores can use Sokowatch’s app on mobile phones to buy wares directly from large suppliers, arrange for transport, and make payments online. “Ordering on SMS or Android gets you free delivery of products to your store, on average, in about two hours,” said Yu.

Sokowatch generates revenues by earning “a margin on the goods that we’re selling to shopkeepers,” said Yu. On the supplier side, they also benefit from “aggregating demand…and getting bulk deals on the products that we distribute.”

The company recently launched a line of credit product to extend working capital loans to platform clients. With the $2 million round, Sokowatch—which currently operates in Kenya and Tanzania—plans to “expand to new markets in East Africa, as well as pilot additional value add services to the shops,” said Yu.

MallforAfrica and DHL launched MarketPlaceAfrica.com: a global e-commerce site for select African artisans to sell wares to buyers in any of DHL’s 220 delivery countries.

The site will prioritize fashion items — clothing, bags, jewelry, footwear and personal care — and crafts, such as pictures and carvings. MallforAfrica is vetting sellers for MarketPlace Africa online and through the Africa Made Product Standards association (AMPS), to verify made-in-Africa status and merchandise quality.

“We’re starting off in Nigeria and then we’ll open in Kenya, Rwanda and the rest of Africa, utilizing DHL’s massive network,” MallforAfrica CEO Chris Folayan told TechCrunch about where the goods will be sourced. “People all around the world can buy from African artisans online, that’s the goal,” Folayan told TechCrunch.

Current listed designer products include handbags from Chinwe Ezenwa and Tash women’s outfits by Tasha Goodwin.

In addition to DHL for shipping, MarketPlace Africa will utilize MallforAfrica’s e-commerce infrastructure. The startup was founded in 2011 to solve challenges global consumer goods companies face when entering Africa.

French President Emmanuel Macron <a href=”https://pctechmag.com/2018/05/french-president-emmanuel-macron-launches-a-usd76m-africa-startup-fund/”>unveiled a $76 million African startup fund at VivaTech 2018 and TechCrunch paid a visit to the French Development Agency (AFD) — who will administer the new fund — to get details on how it will work.

The $76 million (or €65 million) will divvy up into three parts, AFD Digital Task Team Leader Christine Ha told TechCrunch.

“There are €10 million [$11.7 million] for technical assistance to support the African ecosystem… €5 million will be available as interest-free loans to high-potential, pre-seed startups…and…€50 million [$58 million] will be for equity-based investments in series A to C startups,” explained Ha during a meeting in Paris.

The technical assistance will distribute in the form of grants to accelerators, hubs, incubators and coding programs. The pre-seed startup loans will issue in amounts up to $100,000 “as early, early funding to allow entrepreneurs to prototype, launch and experiment,” said Ha.

The $58 million in VC startup funding will be administered through Proparco, a development finance institution — or DFI — partially owned by the AFD. “Proparco will take equity stakes, and will be a limited partner when investing in VC funds,” said Ha.

Startups from all African countries can apply for a piece of the $58 million by contacting any of Proparco’s Africa offices.

The $11.7 million technical assistance and $5.8 million loan portions of France’s new fund will be available starting in 2019. On implementation, AFD is still “reviewing several options…such as relying on local actors through [France’s] Digital Africa platform,” said Ha. President Macron followed up the Africa fund announcement with a trip to Nigeria last month.

Nigerian logistics startup Kobo360 was accepted into Y Combinator’s 2018 class and gained some working capital in the form of $1.2 million in pre-seed funding led by Western Technology Investment.

The startup — with an Uber like app that connects Nigerian truckers to companies with freight needs — will use the funds to pay drivers online immediately after successful hauls.

Kobo360 is also launching the Kobo Wealth Investment Network, or KoboWIN — a crowd-invest, vehicle financing program. Through it, Kobo drivers can finance new trucks through citizen investors and pay them back directly (with interest) over a 60-month period.

On Kobo360’s utility, “We give drivers the demand and technology to power their businesses,” CEO Obi Ozor told TechCrunch. “An average trucker will make $3,500 a month with our app. That’s middle class territory in Nigeria.”

Kobo360 has served 324 businesses, aggregated a fleet of 5480 drivers and moved 37.6 million kilograms of cargo since 2017, per company stats. Top clients include Honeywell, Olam, Unilever, and DHL.

Ozor thinks the startup’s asset-free, digital platform and business model can outpace traditional long-haul 3PL providers in Nigeria by handling more volume at cheaper prices.

“Logistics in Nigeria have been priced based on the assumption drivers are going to run empty on the way back…When we now match freight with return trips, prices crash.”

Kobo360 will expand in Togo, Ghana, Cote D’Ivoire and Senegal.

[PHOTO: BFX.LAGOS] And finally, applications are open for TechCrunch’s Startup Battlefield Africa, to be held in Lagos, Nigeria, December 11. Early-stage African startups have until September 3 to apply here.

More Africa Related Stories @TechCrunch

More Africa Related Stories @TechCrunch

·         CowryWise micro-savings service opens high-yield government bonds to everyday Nigerians


African Tech Around the Net

·         More Than Half of Sub-Saharan Africa to Be Connected to Mobile by 2025, Finds New GSMA Study
·         Ethiopia’s Gebeya acquires Coders4Africa to accelerate its growth
·         Rwanda, Andela partner to launch pan-African tech hub in Kigali
·         Google’s free public Wi-Fi initiative expanded to Africa
·         Accounteer wins 2018 MEST Entrepreneur challenge
·         SafeBoda completes expansion to Kenya, now live in Nairobi
·         Uganda government sued over social media tax


Source: The Tech Crunch

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