Via Dave King at The Royals, here is a great example of that: Volkswagen for the new VW GTI have teamed up with the Real Racing game - an existing iPhone app with an existing (and large) user base:

“Providing a highly playable 3D game with fairly lavish production values in exchange for this kind of brand exposure seems fair. And now, in the last day or so, the developers of Real Racing have pushed the VW content into the massive install base for the original game. This strikes me as one of the smartest digital media investment strategies I’ve seen. Rather than fund the complete creation of they leverage something with an existing fan base and add great content with virtually no need for media spend at all.”

It’s all about Demand Media - the link itself is an article in Wired magazine, a profile on the company - a company that decides what video content to produce based on an algorithm that looks at a) demonstrated user demand for specific content, based on search engine and ISP data , b) value of specifically-related keywords - including life-time value not just immediate value, and c) the level (lack of) competition around that specific content.  And then they use a system not unlike Amazon’s Mechanical Turk to actually get the video content made by freelance workers.

Why do I like it? Because both its scale and its core reason for existing is simply something that, before “the internet”, could not have been dreamed up, let alone executed.

But what Demand has realized is that the Internet gets only half of the simplest economic formula right: It has the supply part down but ignores demand. Give a million monkeys a million WordPress accounts and you still might never get a seven-point tutorial on how to keep wasps away from a swimming pool. Yet that’s what people want to know.

Here’s something I wanted to point out today (I found the news of the app itself here on NMA) – not because it’s another iPhone app, but because it illustrates one use of some  fundamental differences in economic models possible because of the internet and unlimited scaleability through bits & bytes.

The background:

For those who don’t know Amazon don’t just do books and e-tailing :

• Quite some time ago they realised that they could take their prowess in computing, and their sheer size and economies of scale, open them up to small to medium (to large) companies who had a need for on-demand storage and processing power, and start making additional revenue that way.
• That’s where Amazon S3 and EC2 have come from – storage and elastic computing products respectively. S3 particularly is very widely used amongst new and not so new web start-ups as it provides them a simple, scaleable, cheap way to, for example, hold a bunch of user images or data (Twitter for example does some of its storage with Amazon).

In a similar way, Amazon have an offering called Mechanical Turk:

• Like S3 and EC2 above, it came from their own needs but is now available to any developer that wants to make use of it.
• What is Mechanical Turk?  It’s a system that lets you send out little tasks to humans spread all/anywhere over the world to complete. These tasks are things that computers just cannot handle yet - things like image recognition, or transcription of audio files, or de-duping of complicated data such as book titles with different ISBNs.
• You get to set a price for each task and the workers get to pick and choose which tasks to work on.
• The results of the tasks can then be fed back into your own programme or database or site.

(You can find out more about Mechanical Turk at Amazon’s website)

Amazon’s own iPhone app below is one awesome way this is being put to use.

Using Mechanical Turk in an iPhone app

Amazon have just released an iPhone app here in the UK. It has the usual search and buying functionality that you’d expect; account history etc etc.

But it has a cool extra functionality:  You can take a photo of something you want to “remember”, and it will find that product in its catalogue, so you can purchase right then and there.

I just tried 3 different products, and got the answer back for all 3 in well under 4 mins.   (They’re calling the feature “Amazon Remembers”.)

How does it work?

• Automatically Amazon’s system approximates the image to a shortlist of images from potential matching products (maybe 3 or 4 I would guess, depending on how complex the image is)
• Using Mechanical Turk, my exact image and the shortlist of potential match candidates is added to the jobs queue. This jobs queue is the thing that 1000s of people keep an eye on – they select any job they like to work on. Their task for this particular job is to pick which of the shortlist is in fact the product I took a photo of.
• The answer is then sent back to Amazon, and to my phone.
• Because of the scale of all of this, there’s every probablity in reality an extra “safeguard” that Amazon implements, to increase accuracy of the result sent to me:  my picture will in fact be duplicated as a number of different jobs (who knows the number, but the economics of it all mean it could easily be 10 or 20  or 30 times). The Amazon automated system will then see how much all the different answers from the different jobs are in agreement, and send me the one that fits their criteria of “right” (so it might be the most popular one, or the one that 90% of their task responses said).

• PaidContent UK has a good interview here with Daniel Ek from Spotify where he talks about the need for a mix of ad-supported and paid models, as well as the future of Spotify aiming for an “integration into existing billing methods” (eg buy a TV, get a year’s worth of access to Spotify through that device).
• Tim at Made by Many has a great blog post on what the “optimal platform job” might look like (make sure you read all the comments from people too). There’s a lot I’d quote here, like the four elements needed, and the part about needing to breathe digital, but I’d suggest you just go and read the whole post instead.
• Simon has a great blog post about media myopia where he highlights that while anything can be media, the industry is still too stuck in its ways (not least because of commission-based revenue structures resulting in an over-reliance on bought media). One part of his post: “It highlights a ‘menu’ approach that continues to stifle media planning; an apporach that erodes the value we should be adding to our clients’ businesses, and destroys their trust in our work.”

As I’ve done before, I turned once again to the handy BannerBlog - for those who don’t know it, it’s definitely one to add to the feed reader as a great creative resource - only to find this VW example posted just this week. It’s a lovely execution in a standard creative size (ie under 40k file size).

I’ve gone through the bannerblog site, to arrive at the list below, sorted roughly speaking in subjective order of impressive-ness of effect compared to banner size.

All of the banners linked below are standard creative - under either 30k or 40k file size - that Banner Blog have posted in the past.

• VW - Golf - “road puzzle”
• Coruba - “gold party”
• Toyota - “Yaris”
• HSBC - “Polar Bear”
• Sky - “Dual record”
• Workopolis - “Clean sweep”
• Canon - “endless imagination”
• EA - “Burnout dominator”
• 3 - “Soccer”
• Cheestrings - “Mr Strings” (rollover the characters as they run)
• Realestate.com.au - “Blinds”
• Pedigree - “Puppy pack”
• CW Jobs - “IT Career”

(All of the agency credits are on the pages linked to.)

• BrandRepublic: “Mobile phone network 3 has signed a deal with mobile software provider Monitise to allow customers to manage their bank accounts with their handset. Users will be able to receive bank balance alerts by text message and to download a mobile money application enabling real-time balance enquiries from 3 UK’s ‘My 3′ portal. The service applies to customers of HSBC, Lloyds TSB, first direct, Alliance & Leicester, Royal Bank of Scotland and NatWest.”
• Lufthansa have intro’d MySkyStatus - sending your flight info incl altitude & arrival times to your social graphs (found via Armano on Twitter)
• Read Write Web: “Gmail users get real-time updates in their email messages.”

It talks about the very high percent of advertisers who are planning on increasing their online video spend by very high percentage amounts. As we all know though, of such a tiny base you are always going to get nice, plump % growth figures.

That’s not my problem here though (and besides, it’s hardly like Web TV Ent, or The Guardian, or web video stakeholders are the only ones guilty of that little trick).

The issue I have with articles lately about online video is that when they talk about revenue or profitability, they fail to acknowledge that without the TV networks’ contributions re production costs, the so-called “more profitable” online video would have to incur such massive absolute costs that it would not be able to exist, let alone be profitable.

One of the best examples: from said blog post:

“We are hugely pleased with the numbers for ITV.com on revenue,” ITV’s director of online content, Ben McOwen Wilson, told Reuters at the Edinburgh Television Festival. “We get 8 pence per hour on TV. Online, we are getting more than that.”

Yes, you might make more in “pence per hour” revenue from online video than broadcast video, but last time I looked**, ITV’s online revenues were approx 1.4% of their TV revenues. Let’s take away 98.6% of The X Factor’s budget and see what sort of show Simon Cowell can make with that.

(* Written by one Mercedes Bunz incidentally. Srsly. Not sure if thats a nome de plume or not. )

(** ITV’s interim results for the 6 months to June 2009 - itv.com revenue rather than all of ITV’s online revenue as that included non-VoD activities such as the fantastically successful Friends Reunited)

Both quotes are from a Business Week / CMO Club survey on marketers’ intentions to switch agencies in the near future - the full article can be found here.

“Like any vendor/partner, the key is to seek out, demand and work with the stars in the agency. I am getting my acceptable share of their time so have a strong, strategic relationship.”

(That’s my added emphasis in that one.)

“I will be replacing my agency within the next 6 months. Too much fighting change in media and technology, and not enough insights on true differentiation and customer engagement.”

Instapaper - Absolutely indispensable. Lets you mark pages & articles etc in your browser as “Read later”, and then makes these available on your iPhone for portable and offline reading. There’s a free version, but the paid version at something like £3 is definitely worth it - it lets you store more, but more importantly lets you share articles via email, tumblr, twitter etc.

TubeExits - One only for Londoners, this app tells you which carriages to get on to, so you’re closest to the best spot for a line change, or to the destination station exit. Simple idea, backed up lots of good data.

TweetDeck - the iPhone app of the most popular Twitter client. The app is far nicer than the desktop service in fact. I switched from Twhirl to Tweetdeck on the desktop because of this app.

1. BackTweet - for finding URLs used in tweets - particularly handy because of the URL shorteners (like Bit.ly) that are so heavily used, meaning a normal search in Twitter search won’t pick up a URL string.
2. Bitly - good for shortening your own links into any tweets of your own, but if you ever wanted to see the usage stats behind anyone else’s bit.ly link you can also easily do this: just add “info/” in the URL - eg http://bit.ly/AqQxD becomes http://bit.ly/info/AqQxD. This lets you see number of clicks, location, and importantly the different tweets the link was used in - which can help show propogation and passing around of a tweet/link.
3. BackType - for comments on blogs etc - useful because a lot of the free blog search sites tend to focus mostly, or exclusively, on main blog posts and not any comments made on the posts.
4. Feedburner - for those that know Feedburner, its core use is for simple RSS feed management and measurement. But it can also come in very handy for turning RSS feeds into email subs for those clients, or colleagues, who don’t use RSS readers. Plug the RSS feed of a Twitter search result into Feedburner for example, and send your client the email subscription link from Feedburner.
5. Touchgraph - A great tool for both finding and visualising relationships. There’s versions for Amazon titles, Facebook connections, and Google searches.
6. Chartbeat - One of many emerging offerings revolving around real time site analytics. Literally real-time. View an example here.

The next tools post will probably be all about the best iPhone apps I’ve found.