No Such Thing as a Free Virtual Lunch

In January 2009, if you were listening to one of twenty-five radio stations in Mexico, you might have heard the accordion ballad “El mas grande enemigo.” Though the tune is polka-ish and cheery, the lyrics depict a tragedy: a migrant seeks to illegally cross the border, is betrayed by his handler, and is left in the blistering desert sun to die. Another song from the Migra corridos album tells a different piece of the same sad tale:

To cross the border I got in the back of a trailer There I shared my sorrows With forty other immigrants I was never told That this was a trip to hell.

If the lyrics aren’t exactly subtle about the dangers of crossing the border, that’s the point. Migra corridos was produced by a contractor working for the U.S. Border Control, as part of a campaign to stem the tide of immigrants along the border. The song is a prime example of a growing trend in what marketers delicately call “advertiser-funded media,” or AFM.

Product placement has been in vogue for decades, and AFM is its natural next step. Advertisers love product placement because in a media environment in which it’s harder and harder to get people to pay attention to anything—especially ads—it provides a kind of loophole. You can’t fast-forward past product placement. You can’t miss it without missing some of the actual content. AFM is just a natural extension of the same logic: Media have always been vehicles for selling products, the argument goes, so why not just cut out the middleman and have product makers produce the content themselves?

In 2010, Walmart and Procter & Gamble announced a partnership to produce Secrets of the Mountain and The Jensen Project, family movies that will feature characters using the companies’ products throughout. Michael Bay, the director of Transformers, has started a new company called the Institute, whose tagline is “Where Brand Science Meets Great Storytelling.” Hansel and Gretel in 3-D, its first feature production, will be specially crafted to provide product-placement hooks throughout.

Now that the video-game industry is far more profitable than the movie industry, it provides a huge opportunity for in game advertising and product placement as well. Massive Incorporated, a game advertising platform acquired by Microsoft for $200 million to $400 million, has placed ads on in game billboards and city walls for companies like Cingular and McDonald’s, and has the capacity to track which individual users saw which advertisements for how long. Splinter Cell, a game by UBIsoft, works placement for products like Axe deodorant into the architecture of the cityscape that characters travel through.

Even books aren’t immune. Cathy’s Book, a young-adult title published in September 2006, has its heroine applying “a killer coat of Lipslicks in ‘Daring.’”That’s not a coincidence— Cathy’s Book was published by Procter & Gamble, the corporate owner of Lipslicks.

If the product placement and advertiser-funded media industries continue to grow, personalization will offer whole new vistas of possibility. Why name-drop Lipslicks when your reader is more likely to buy Cover Girl? Why have a video-game chase scene through Macy’s when the guy holding the controller is more of an Old Navy type? When software engineers talk about architecture, they’re usually talking metaphorically. But as people spend more of their time in virtual, personalizable places, there’s no reason that these worlds can’t change to suit users’ preferences. Or, for that matter, a corporate sponsor’s.

A Shifting World

The enriched psychological models and new data flows measuring everything from heart rate to music choices open up new frontiers for online personalization, in which what changes isn’t just a choice of products or news clips, but the look and feel of the site on which they’re displayed.

Why should Web sites look the same to every viewer or customer? Different people don’t respond only to different products—they respond to different design sensibilities, different colors, even different types of product descriptions. It’s easy enough to imagine a Walmart Web site with softened edges and warm pastels for some customers and a hard-edged, minimalist design for others. And once that capacity exists, why stick with just one design per customer? Maybe it’s best to show me one side of the Walmart brand when I’m angry and another when I’m happy.

This kind of approach isn’t a futuristic fantasy. A team led by John Hauser at MIT’s business school has developed the basic techniques for what they call Web site morphing, in which a shopping site analyzes users’ clicks to figure out what kinds of information and styles of presentation are most effective and then adjusts the layout to suit a particular user’s cognitive style. Hauser estimates that Web sites that morph can increase “purchase intentions” by 21 percent. Industrywide, that’s worth billions. And what starts with the sale of consumer products won’t end there: News and entertainment sources that morph ought to enjoy an advantage as well.

On one hand, morphing makes us feel more at home on the Web. Drawing from the data we provide, every Web site can feel like an old friend. But it also opens the door to a strange, dreamlike world, in which our environment is constantly rearranging itself behind our backs. And like a dream, it may be less and less possible to share with people outside of it—that is, everyone else.

Thanks to augmented reality, that experience may soon be par for the course offline as well.

“On the modern battlefield,” Raytheon Avionics manager Todd Lovell told a reporter, “there is way more data out there than most people can use. If you are just trying to see it all through your eyes and read it in bits and bites, you’re never going to understand it. So the key to the modern technology is to take all that data and turn it into useful information that the pilot can recognize very quickly and act upon.” What Google does for online information, Lovell’s Scorpion project aims to do for the real world.

Fitting like a monocle over one of a jet pilot’s eyes, the Scorpion display device annotates what a pilot sees in real time. It color-codes potential threats, highlights when and where the aircraft has a missile lock, assists with night vision, and reduces the need for pilots to look at a dashboard in an environment where every microsecond matters. “It turns the whole world into a display,” jet pilot Paul Mancini told the Associated Press.

This is augmented-reality technology, and it’s moving rapidly from the cockpits of jet planes to consumer devices that can tune out the noise and turn up the signal of everyday life. Using your iPhone camera and an app developed by Yelp, the restaurant recommendation service, you can see eateries’ ratings haphazardly displayed over their real-world storefronts. A new kind of noise-canceling headphone can sense and amplify human voices while tuning other street or airplane noise down to a whisper. The Meadowlands football stadium is spending $100 million on new applications that give fans who attend games in person the ability to slice and dice the game in real time, view key statistics as they happen, and watch the action unfold from a variety of angles—the full high- information TV experience overlaid on a real game.

At DARPA, the defense research and development agency, technologies are being developed that make Scorpion look positively quaint. Since 2002, DARPA has been pushing forward research in what it calls augmented cognition, or AugCog, which uses cognitive neuroscience and brain imaging to figure out how best to route important information into the brain. AugCog begins with the premise that there are basic limits as to how many tasks a person can juggle at a time, and that “this capacity itself may fluctuate from moment to moment depending on a host of factors including mental fatigue, novelty, boredom and stress.”

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