In August 2014 German blogger Daniel Kuhn wrote on Netzpiloten.de about the cooperation between Tumblr and an unknown company called Ditto Labs which is adding structure to social media’s unstructured visual content. At LeWeb I met Ditto Labs founder David Rose and did an interview with him about the future of advertising, what Ditto Labs is doing for Tumblr and the upcoming era of enchanted objects.
Tobias Schwarz: David, you are one of the founders of Ditto Labs and you analyze user pictures that were posted on social networks. You are looking at more than 2500 single patterns in order to create links to related content. How does it work?
David Rose: The problem we aim to solve concerns those many companies that care about how their products are being used in the world. They are using social listening tools by about 50 different companies including Adobe and Radion6. Radion6 is owned by Salesforce in order to look at the text of how the people are writing about the company. So if somebody has a good flight on British Airways they will say something about it. These companies are really interested in seeing what is the sentiment about the brand and how people are experiencing the products. Increasingly social media is going towards being a photographic medium. People are certainly on Instagram, on Tumblr and even on Twitter. People are posting photos without describing what is happening on the photo – they just let the photo speak for itself.
That is a black box that really marketers have not been able to open without image recognizing technology. So what Ditto Labs does: We have a team of people that are experts applying computer vision and machine learning to the problem of what is in the photo that is being shared on social media. So in each photo we exhaustively look for the set of patterns like fabric patterns or consumer package good brands or logos that people wear, like sports logos. Than we sell the data back to those companies who are pictured in those photos.
Tobias Schwarz: Your last company before Ditto Labs was Vitality which had been acquired by Patrick Soon-Shiong. Vitality had designed an intelligent pill bottle that could remind people when it was time to take their medication, and track missed doses. That sounds so much more useful than advertising. Why did you change the business area?
David Rose: Well, I have sold the company. There are both big needs in terms of companies that are very interested in how people see their products. I actually think that Ditto Labs using the photos people are already posting is in some ways similar to Vitality. We are taking an existing behavior – which is people opening a cab and taking medication – and trying to add sensing to that everyday gesture. What Ditto Labs is doing is just trying to add sensing to the everyday gesture of taking photos. I do think it has some positive disruptive potential how changing people are discovering new products and services and take actions on those recommendations. What I mean by that: We call it Ditto because when you do something and want to share this experience you take a picture of it and share it on social media – whether it is a dinner at a restaurant, a vacation spot or a new pair of shoes. I believe that the future of advertising will not be sending messages to a massive number of people but instead enable peer-to-peer, word-of-mouth E-Commerce. So my Vision is that people won’t go to the store and buy and they won’t listen to advertising, but instead you will do what your friends are doing and you do that through photos. Do you think that is being pro?
Tobias Schwarz: I think it is pro. But let me get more concrete in the next questions: On your company website you wrote that it is your dream to make photos automatically linked to products and experiences. Photos taken of products link to Amazon, shoes link to Zappos, people to LinkedIn, etc. ‚Dream‘ is a huge word for something like that. Why did you choose this wording? What would be so dreamlike about that?
David Rose: Well that is in the context of how we could change Ad-Tech. My dream for the future of E-Commerce is that it turns into a peer-to-peer sort of carsharing experience or apartment sharing experience. It feels like more words-of-mouth and less like companies are doing things to you. So I feel like in some respect apps like Yelp or Foursquare allow you to fast follow your friends and use your friends advise rather than a big advertising budget that is trying to promote things to people. I am hoping that companies who have large ad-budgets will stop spending as much money on advertising to people and instead enable the peer-to-peer recommendation world using photos.
Tobias Schwarz: In an interview with Boston.com’s columnist Scott Kirsner you said: ‚This is a way of rethinking advertising. Instead of text ads in the sidebar, it’s a way of getting peer-to-peer recommendations‘. As someone from the media business I know how important advertising is to earn money. Where will we see ads in the future?
David Rose: I hope that we do not see ads in the future. That is the dream that advertising goes away and brands focuse on making better products. Products that people find value in and talk about with their social network. That is a better world if the viral spreading of messages through people is the way people are discovering the great things in the world. It is already happening through blogs or tweets. People are discovering a lot of products in this way and it makes more sense to focus on making better products than advertising about shitty products.
Tobias Schwarz: Ditto Labs is a young company and I have heard first about it when Yahoo’s blogging platform Tumblr announced that Ditto Labs will get access to Tumblr’s photo data to parse all those images for clues to users‘ brand affiliations. There was an uproar in the community. Our editor Daniel Kuhn asked if there were any consequences for the Tumblr users because of that partnership, but didn’t find a satisfying answers. Now I have the chance to talk to you. What are you responding to this concern? Is Ditto Labs a danger to data security?
David Rose: I think it is important that the people understand the line between the photos which are published privately and which are shared publicly. One of the reasons we do not scan Facebook photos is that we can’t. We only can scan the photos where people agree to post in a public domain. That is by default Tumblr, Instagram and Twitter. Now you can set up your account on all three of these platforms so that it is not public and in that case we cannot look at your photos. It was also important to Tumblr that people understand that the 130 Million photos we look at every day, that the data from those is really valuable to brands as a research tool. They want to know at what time people are drinking Red Bull or Monster Energy, wearing North Face or Gucci. That big data base of affinities that we have compiled in the last two years shows what things correlates with what other things. That is really valuable for brands.
Tobias Schwarz: Do you have any German company as your customer?
David Rose: There are many companies who have German presence. The companies which are using the product are consumer package goods like Nestlé, Kraft, car brands, sport- and fashion brands. Everything that appears in photos. What we are finding too is that even brands which never appear in photos like financial brands are really interested in the data.
Tobias Schwarz: At LeWeb you introduced the term „Enchanted Objects“. In July you published your book „Enchanted Objects: Design, Human Desire, and the Internet of Things“ in which you are creating a vision of the future where technology atomizes and combines itself with the objects that make up the very fabric of daily living. Do you have an example of what you are thinking about?
David Rose: I am very interested in the opportunity for all the apps that are on your screen to be distributed more thinly in our live. I think the medicine packaging that I have worked on is an example of it. The ‚glow cab‘ knew what your schedule was, it knew if you’ve opened it, it could send a text reminder or an email to a loved one, in order to help you do the right thing. There is a cabinet in my living room that my 6 year old can open and have an immediate skype connection to my parent’s kitchen. It allows them to talk several times per day with a video chat. So I think almost any category of a nerd object whether it is a coffee table, carpentry, furniture, luggage, even some of the wearable. I think there is a bigger opportunity in fixtures than in wearables. Cause wearables you always have the battery question, right? You have both the encumbrance of having to wear something, but people have all kinds of real estate on the walls, on the ceilings or the furnaces for sensing and display. That is actually a much bigger opportunity in ambient furniture than there is in iGlasses that have batteries and displays.
David Rose visited Google’s Cambridge, MA office to discuss his new book, „Enchanted Objects“:
Tobias Schwarz: As a German blogger I have to come back to the ‚German-Angst‘. Why should people not be scared of enchanted objects? Isn’t it dangerous that my coffee table could spy on me?
David Rose: Everywhere there is the “German-Angst” question. How long is the data around? Who has access to data? Could it reveal things? I know a lot of people who worry about this. I am not worried for this reason. I think the companies that are doing this are doing a good job of Internet of Things. They are doing two things. One: They are transparent about what they are collecting and making something where you can reset all the data and wipe the memory. Two: They are also using encryption just to make sure that they cannot be sniped.
Tobias Schwarz: You wrote on your blog that Google and Facebook has the most to lose from Enchanted Objects. Why is this?
David Rose: The world of Display-Advertising will be challenged to figure out how to get into an object that communicates through touch or sound. The indigenous business model of the web has been display ads. I think that they are threatened if you have a haptic device that can tell you whether you belong to your budget based on how hard it is to open your wallet for example. You can communicate information and I tried to encourage my students at MIT to really embed information in almost every surface or gesture throughout the day. I really do not see a way for the companies that succeed based on display advertising to make money – which is a good thing.
Tobias Schwarz: Wouldn’t it be more likely that Google, Facebook, etc. will react by adjusting their business models and we will see Google Ads on the covering of our fridges?
David Rose: Yes, Yes!
Tobias Schwarz: That was a clear answer. Thank you for the interview.