Imagining the potential of a Google AdWords for the physical world

Imagining the potential of a Google AdWords for the physical world

BY MATT MCFARLAND

February 26 at 9:27 am

Advertisements in public places come in one variety: one-size fits all. Signs, posters and billboards are generally the same no matter who you are. This is an inherently wasteful model. It brings to mind the John Wanamaker quote, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

But with the rise of smartphones and digitally connected sensors in the physical world, there’s potential to offer so much better.

“The out-of-home advertising information market is truly about to change from that sort of broadcast model where you don’t have really good insight into who if anyone is going to see your information to intelligent and data driven,” said Damian Gutierrez, an associate partner at Control Group in New York City. “We really feel it’s the greatest opportunity since the beginning of the Internet.”

The future is one in which the world automatically reacts to us. We’re seeing early examples of this such as Google Now, which learns that you leave the office about 5 p.m. on weekdays and automatically shares information about traffic on your route home as you step away from your desk. Sensors such as iBeacons have the potential to turn on a favorite playlist when we walk into a given room, or to let us know a bike or car is no longer in our garage. These sensors can help deliver hypertargeted advertisements to consenting consumers.

To get a sense of the scope and potential of a Google AdWords-esque network for the physical world, it’s important to grasp just how powerful, game-changing and successful Google’s advertising is. In 2013 Google raked in $50.58 billion in ad revenue, making up 31.9 percent of all online advertising. Google struck gold here because its ads are incredibly relevant. If you search for a digital camera, you’ll see advertisements for digital cameras. The AdWords network eliminated much of the waste of traditional advertising.

While modern online advertising is a 21st-century technology, much of the ads in the physical world are a relic of the 20th century. The Internet of Things will change this. It is a huge force in our current world as everyday objects, from phones to smoke detectorsguns and watches are taking on the power of digital, connected devices. It’s logical to expect signs to be swept away in this tide.

Gutierrez and the Control Group are working on a case that sheds light into the potential of untapped potential in physical advertising in the real world.

They’re installing 90 47-inch touchscreens at 15 New York City subway stations by this summer. The kiosks will offer electronic system maps, and they’ll also feature beacons that run on Qualcomm’s Gimbal platform.

Control Group expects brands to soon use the platform and data available to launch tailored ads that make traditional ads on public transit look dated. If a group of coffee lovers stand near a digital sign, it might alert them that the next train is in six minutes, so they have time to get a cup at the shop just outside the stop.

Or the kiosk could realize that a train has just arrived, and display an easy-to-read ad that could be digested by a group of riders who are speed walking toward the exit. When the smart sign senses that riders have been waiting — and will continue to wait several minutes for a train — a longer-form advertisement that requires more attention could be shown.

As smart sensors learn more about our habits and personal desires, physical ad worlds can be more effective. Control Group  was confident enough in the technology to pay for the installation of the kiosks, and plans to make money via a revenue sharing agreement with New York’s Metropolitan Transit Authority.

“All of those tremendous conveniences we take for granted on the Web will be translated into the physical spaces,” said Gutierrez said, referring to cookies, which are the reason you don’t have to enter a password every time you open your favorite social network or e-mail inbox. “My phone knows I’m going to transfer to another train not in the station I’m in. If there’s a delay on the second leg of that it can respond before I even walk into the subway.”

There are significant hurdles to this real-time information utopia. Consumers will need smartphones, and they will need to turn on Bluetooth. They’ll need to download the relevant app or apps and accept push notifications and location tracking from these apps. Avoiding the creepiness factor, and respecting privacy is essential too. Scenes like this from Minority Report are not what people want:

“If it was ever that creepy for anyone, people would react very negatively to it,” Gutierrez said.  Eventually, count on a few smart entrepreneurs to create revolutionary services that address privacy concerns and ultimately appeal to consumers. Until then,  plenty of ads will remain in 20th-century form.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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