Openbook is the latest dream of a digital life beyond Facebook

As tech’s social giants wrestle with antisocial demons that appear to be both an emergent property of their platform power, and a consequence of specific leadership and values failures (evident as they publicly fail to enforce even the standards they claim to have), there are still people dreaming of a better way. Of social networking beyond outrage-fuelled […]

As tech’s social giants wrestle with antisocial demons that appear to be both an emergent property of their platform power, and a consequence of specific leadership and values failures (evident as they publicly fail to enforce even the standards they claim to have), there are still people dreaming of a better way. Of social networking beyond outrage-fuelled adtech giants like Facebook and Twitter.

There have been many such attempts to build a ‘better’ social network of course. Most have ended in the deadpool. A few are still around with varying degrees of success/usage (Snapchat, Ello and Mastodon are three that spring to mine). None has usurped Zuckerberg’s throne of course.

This is principally because Facebook acquired Instagram and WhatsApp. It has also bought and closed down smaller potential future rivals (tbh). So by hogging network power, and the resources that flow from that, Facebook the company continues to dominate the social space. But that doesn’t stop people imagining something better — a platform that could win friends and influence the mainstream by being better ethically and in terms of functionality.

And so meet the latest dreamer with a double-sided social mission: Openbook.

The idea (currently it’s just that; a small self-funded team; a manifesto; a prototype; a nearly spent Kickstarter campaign; and, well, a lot of hopeful ambition) is to build an open source platform that rethinks social networking to make it friendly and customizable, rather than sticky and creepy.

Their vision to protect privacy as a for-profit platform involves a business model that’s based on honest fees — and an on-platform digital currency — rather than ever watchful ads and trackers.

There’s nothing exactly new in any of their core ideas. But in the face of massive and flagrant data misuse by platform giants these are ideas that seem to sound increasingly like sense. So the element of timing is perhaps the most notable thing here — with Facebook facing greater scrutiny than ever before, and even taking some hits to user growth and to its perceived valuation as a result of ongoing failures of leadership and a management philosophy that’s been attacked by at least one of its outgoing senior execs as manipulative and ethically out of touch.

The Openbook vision of a better way belongs to Joel Hernández who has been dreaming for a couple of years, brainstorming ideas on the side of other projects, and gathering similarly minded people around him to collectively come up with an alternative social network manifesto — whose primary pledge is a commitment to be honest.

“And then the data scandals started happening and every time they would, they would give me hope. Hope that existing social networks were not a given and immutable thing, that they could be changed, improved, replaced,” he tells TechCrunch.

Rather ironically Hernández says it was overhearing the lunchtime conversation of a group of people sitting near him — complaining about a laundry list of social networking ills; “creepy ads, being spammed with messages and notifications all the time, constantly seeing the same kind of content in their newsfeed” — that gave him the final push to pick up the paper manifesto and have a go at actually building (or, well, trying to fund building… ) an alternative platform. 

At the time of writing Openbook’s Kickstarter crowdfunding campaign has a handful of days to go and is only around a third of the way to reaching its (modest) target of $115k, with just over 1,000 backers chipping in. So the funding challenge is looking tough.

The team behind Openbook includes crypto(graphy) royalty, Phil Zimmermann — aka the father of PGP — who is on board as an advisor initially but billed as its “chief cryptographer”, as that’s what he’d be building for the platform if/when the time came. 

Hernández worked with Zimmermann at the Dutch telecom KPN building security and privacy tools for internal usage — so called him up and invited him for a coffee to get his thoughts on the idea.

“As soon as I opened the website with the name Openbook, his face lit up like I had never seen before,” says Hernández. “You see, he wanted to use Facebook. He lives far away from his family and facebook was the way to stay in the loop with his family. But using it would also mean giving away his privacy and therefore accepting defeat on his life-long fight for it, so he never did. He was thrilled at the possibility of an actual alternative.”

On the Kickstarter page there’s a video of Zimmermann explaining the ills of the current landscape of for-profit social platforms, as he views it. “If you go back a century, Coca Cola had cocaine in it and we were giving it to children,” he says here. “It’s crazy what we were doing a century ago. I think there will come a time, some years in the future, when we’re going to look back on social networks today, and what we were doing to ourselves, the harm we were doing to ourselves with social networks.”

“We need an alternative to the social network work revenue model that we have today,” he adds. “The problem with having these deep machine learning neural nets that are monitoring our behaviour and pulling us into deeper and deeper engagement is they already seem to know that nothing drives engagement as much as outrage.

“And this outrage deepens the political divides in our culture, it creates attack vectors against democratic institutions, it undermines our elections, it makes people angry at each other and provides opportunities to divide us. And that’s in addition to the destruction of our privacy by revenue models that are all about exploiting our personal information. So we need some alternative to this.”

Hernández actually pinged TechCrunch’s tips line back in April — soon after the Cambridge Analytica Facebook scandal went global — saying “we’re building the first ever privacy and security first, open-source, social network”.

We’ve heard plenty of similar pitches before, of course. Yet Facebook has continued to harvest global eyeballs by the billions. And even now, after a string of massive data and ethics scandals, it’s all but impossible to imagine users leaving the site en masse. Such is the powerful lock-in of The Social Network effect.

Regulation could present a greater threat to Facebook, though others argue more rules will simply cement its current dominance.

Openbook’s challenger idea is to apply product innovation to try to unstick Zuckerberg. Aka “building functionality that could stand for itself”, as Hernández puts it.

“We openly recognise that privacy will never be enough to get any significant user share from existing social networks,” he says. “That’s why we want to create a more customisable, fun and overall social experience. We won’t follow the footsteps of existing social networks.”

Data portability is an important ingredient to even being able to dream this dream — getting people to switch from a dominant network is hard enough without having to ask them to leave all their stuff behind as well as their friends. Which means that “making the transition process as smooth as possible” is another project focus.

Hernández says they’re building data importers that can parse the archive users are able to request from their existing social networks — to “tell you what’s in there and allow you to select what you want to import into Openbook”.

These sorts of efforts are aided by updated regulations in Europe — which bolster portability requirements on controllers of personal data. “I wouldn’t say it made the project possible but… it provided us a with a unique opportunity no other initiative had before,” says Hernández of the EU’s GDPR.

“Whether it will play a significant role in the mass adoption of the network, we can’t tell for sure but it’s simply an opportunity too good to ignore.”

On the product front, he says they have lots of ideas — reeling off a list that includes the likes of “a topic-roulette for chats, embracing Internet challenges as another kind of content, widgets, profile avatars, AR chatrooms…” for starters.

“Some of these might sound silly but the idea is to break the status quo when it comes to the definition of what a social network can do,” he adds.

Asked why he believes other efforts to build ‘ethical’ alternatives to Facebook have failed he argues it’s usually because they’ve focused on technology rather than product.

“This is still the most predominant [reason for failure],” he suggests. “A project comes up offering a radical new way to do social networking behind the scenes. They focus all their efforts in building the brand new tech needed to do the very basic things a social network can already do. Next thing you know, years have passed. They’re still thousands of miles away from anything similar to the functionality of existing social networks and their core supporters have moved into yet another initiative making the same promises. And the cycle goes on.”

He also reckons disruptive efforts have fizzled out because they were too tightly focused on being just a solution to an existing platform problem and nothing more.

So, in other words, people were trying to build an ‘anti-Facebook’, rather than a distinctly interesting service in its own right. (The latter innovation, you could argue, is how Snap managed to carve out a space for itself in spite of Facebook sitting alongside it — even as Facebook has since sought to crush Snap’s creative market opportunity by cloning its products.)

“This one applies not only to social network initiatives but privacy-friendly products too,” argues Hernández. “The problem with that approach is that the problems they solve or claim to solve are most of the time not mainstream. Such as the lack of privacy.

“While these products might do okay with the people that understand the problems, at the end of the day that’s a very tiny percentage of the market. The solution these products often present to this issue is educating the population about the problems. This process takes too long. And in topics like privacy and security, it’s not easy to educate people. They are topics that require a knowledge level beyond the one required to use the technology and are hard to explain with examples without entering into the conspiracy theorist spectrum.”

So the Openbook team’s philosophy is to shake things up by getting people excited for alternative social networking features and opportunities, with merely the added benefit of not being hostile to privacy nor algorithmically chain-linked to stoking fires of human outrage.

The reliance on digital currency for the business model does present another challenge, though, as getting people to buy into this could be tricky. After all payments equal friction.

To begin with, Hernández says the digital currency component of the platform would be used to let users list secondhand items for sale. Down the line, the vision extends to being able to support a community of creators getting a sustainable income — thanks to the same baked in coin mechanism enabling other users to pay to access content or just appreciate it (via a tip).

So, the idea is, that creators on Openbook would be able to benefit from the social network effect via direct financial payments derived from the platform (instead of merely ad-based payments, such as are available to YouTube creators) — albeit, that’s assuming reaching the necessary critical usage mass. Which of course is the really, really tough bit.

“Lower cuts than any existing solution, great content creation tools, great administration and overview panels, fine-grained control over the view-ability of their content and more possibilities for making a stable and predictable income such as creating extra rewards for people that accept to donate for a fixed period of time such as five months instead of a month to month basis,” says Hernández, listing some of the ideas they have to stand out from existing creator platforms.

“Once we have such a platform and people start using tips for this purpose (which is not such a strange use of a digital token), we will start expanding on its capabilities,” he adds. (He’s also written the requisite Medium article discussing some other potential use cases for the digital currency portion of the plan.)

At this nascent prototype and still-not-actually-funded stage they haven’t made any firm technical decisions on this front either. And also don’t want to end up accidentally getting into bed with an unethical tech.

“Digital currency wise, we’re really concerned about the environmental impact and scalability of the blockchain,” he says — which could risk Openbook contradicting stated green aims in its manifesto and looking hypocritical, given its plan is to plough 30% of its revenues into ‘give-back’ projects, such as environmental and sustainability efforts and also education.

“We want a decentralised currency but we don’t want to rush into decisions without some in-depth research. Currently, we’re going through IOTA’s whitepapers,” he adds.

They do also believe in decentralizing the platform — or at least parts of it — though that would not be their first focus on account of the strategic decision to prioritize product. So they’re not going to win fans from the (other) crypto community. Though that’s hardly a big deal given their target user-base is far more mainstream.

“Initially it will be built on a centralised manner. This will allow us to focus in innovating in regards to the user experience and functionality product rather than coming up with a brand new behind the scenes technology,” he says. “In the future, we’re looking into decentralisation from very specific angles and for different things. Application wise, resiliency and data ownership.”

“A project we’re keeping an eye on and that shares some of our vision on this is Tim Berners Lee’s MIT Solid project. It’s all about decoupling applications from the data they use,” he adds.

So that’s the dream. And the dream sounds good and right. The problem is finding enough funding and wider support — call it ‘belief equity’ — in a market so denuded of competitive possibility as a result of monopolistic platform power that few can even dream an alternative digital reality is possible.

In early April, Hernández posted a link to a basic website with details of Openbook to a few online privacy and tech communities asking for feedback. The response was predictably discouraging. “Some 90% of the replies were a mix between critiques and plain discouraging responses such as “keep dreaming”, “it will never happen”, “don’t you have anything better to do”,” he says.

(Asked this April by US lawmakers whether he thinks he has a monopoly, Zuckerberg paused and then quipped: “It certainly doesn’t feel like that to me!”)

Still, Hernández stuck with it, working on a prototype and launching the Kickstarter. He’s got that far — and wants to build so much more — but getting enough people to believe that a better, fairer social network is even possible might be the biggest challenge of all. 

For now, though, Hernández doesn’t want to stop dreaming.

“We are committed to make Openbook happen,” he says. “Our back-up plan involves grants and impact investment capital. Nothing will be as good as getting our first version through Kickstarter though. Kickstarter funding translates to absolute freedom for innovation, no strings attached.”

You can check out the Openbook crowdfunding pitch here.

Founder Zain Jaffer may be looking to take back control of Vungle

Zain Jaffer may be gearing up for a fight to take back control of Vungle, the mobile ad company he founded. Jaffer was removed from his role as CEO role last fall, following his arrest on charges of assault with a deadly weapon and performing a lewd act on a child. However, a San Mateo […]

Zain Jaffer may be gearing up for a fight to take back control of Vungle, the mobile ad company he founded.

Jaffer was removed from his role as CEO role last fall, following his arrest on charges of assault with a deadly weapon and performing a lewd act on a child.

However, a San Mateo County judge subsequently dismissed the charges. The district attorney’s office released a statement offering more context for the dismissal, saying that they did not believe there was any sexual conduct on the evening in question, and that “the injuries were the result of Mr. Jaffer being in a state of unconsciousness caused by prescription medication.”

So what’s next for Jaffer and Vungle? There are hints in a recent letter from Jaffer’s attorney John Pernick, which was sent to current Vungle CEO Rick Tallman.

TechCrunch has obtained a copy of the letter, which requests access to Vungle’s records, specifically the names and addresses of company shareholders. Pernick’s letter suggests that this could be a prelude to further action (emphasis added):

Mr. Jaffer is considering various options with respect to Vungle and his shares of Vungle. He has considered selling some portion of his Vungle shares. However, he is also considering pursuing a leadership change at Vungle through calling for a shareholders meeting for the purpose of voting on a new board of directors and/or purchasing shares of additional Vungle stock. Communicating with Vungle shareholders with respect to their interest in purchasing or selling Vungle stock or in a change in the board of directors is an entirely proper purpose for Mr. Jaffer’s request to inspect the shareholder information that will enable him to make these communciations.

When TechCrunch contacted Pernick, he confirmed the authenticity of the letter but declined to comment further. A spokesperson for Jaffer also declined to comment, and Vungle did not respond to our inquiries.

As you can see in the quote above, the letter indicates that Jaffer is considering multiple courses of action.

But if he decides to pursue a leadership change at Vungle, either by winning over existing shareholders or by purchasing a controlling stake in the company, it sounds like there are investors willing to back him — for starters, Jun Hong Heng at Crescent Cove Capital Management confirmed that his firm is working with Jaffer.

“We think Zain and Vungle have incredible potential,” Heng said in a statement. “We look forward to working with Zain and giving him the support he needs to help him regain control of his company.”

We also reached out to Anne-Marie Roussel, who recently resigned from Vungle’s board of directors. Roussel said via email that “the Vungle controversy is an interesting proxy for a much larger debate: the fuzziness surrounding ethical conduct in the tech industry.”

She added, “My personal prediction is that boards of tech companies will be held increasingly accountable for the ethics of the key decisions they make.” As for how that applies to Vungle, she said:

How does it reflect on ethical values when a CEO is dismissed based on presumption of guilt?  Don’t we live in a democracy where one of the key legal right is “presumption of innocence” (as in a defendant is innocent until proven guilty). Upholding that principle by collaborating with his defense team was what led to my resignation from Vungle’s board.

Letter to Vungle by TechCrunch on Scribd

Blippar is using AR to help customers find their way indoors

Remember the scene in Minority Report where Tom Cruz walks through the mall and thousands of holographic ads pop up around him? That reality may not be as far off as we thought. Blippar, the augmented reality startup that launched back in 2011, is today announcing the launch of a new product that would let […]

Remember the scene in Minority Report where Tom Cruz walks through the mall and thousands of holographic ads pop up around him? That reality may not be as far off as we thought.

Blippar, the augmented reality startup that launched back in 2011, is today announcing the launch of a new product that would let retailers, airports, commercial real estate owners, etc. place augmented reality content across their space.

The product is called the Blippar Indoor Positioning System, and it uses computer vision and augmented reality to help customers, tenants, etc. find their way through a large indoor space such as a grocery store, department store, or stadium.

This isn’t Blippar’s foray into AR navigation. The company launched the AR City app in the summer of 2017, which uses the camera of the phone to pinpoint a user’s location with better accuracy than GPS, according to the company. Blippar rolled out functionality for AR City in more than 300 cities.

But the indoor positioning system should prove more lucrative. Location services is one critical piece of our digital lifestyle that hasn’t been completely overwhelmed by advertisements. But it’s not hard to imagine advertisements popping up within a department store or sports stadium as a user looks for the beauty department or the closest hotdog, respectively of course.

Blippar sees an opportunity to use this for retail and shopping, entertainment and gamification, tourism, and even design, giving interior designers a chance to check out AR furniture, paint colors, etc.

But there’s also a huge play here around data. Facebook may know just about everything about you, but the advertising behemoth hasn’t made the most of leveraging a user’s location. Blippar might stand a chance at doing just that with the new indoor positioning system, giving retailers unprecedented information around the way that customers move through a store.

Because the system uses computer vision to determine a user’s location, the product can be used in offline mode.

Blippar uses blueprints, photography, and 3D models of buildings to build out the indoor visual positioning system, and can turn around the project almost immediately if they have access to CAD files of the building’s layout. Adding content, however, takes as long as designers and other project leaders need to figure out what that content should be and how it should look.

Blippar has been through a number of evolutions as a company. The startup first launched as a tool for brands and publishers, laying AR content on top of real-world objects that were tagged with a Blipp (a little sticker to trigger the AR content).

The company then moved into visual search, letting users point their phone at a car or a flower and learning more about what that real-world object is.

That has all laid the foundation for this latest B2B iteration around navigation. Blippar hasn’t yet disclosed the exact cost of using this new product, but did say that it will range between $300K and $1 million. Thus far, the company has signed on two major clients, one retailer and one commercial real estate owner, though Blippar didn’t disclose which companies it’s working with.

Blippar has raised more than $100 million since launch.

Spark Neuro raises $13.5M to measure your emotional response to ads and movies

I’m not immune to compliments, and Spencer Gerrol, founder and CEO of Spark Neuro, offered a real winner as he demonstrated his technology. “I love your brain,” he told me.  This was after the startup’s vice president of research Ryan McGarry had strapped sensors to my fingers and head, then showed me an intense movie […]

I’m not immune to compliments, and Spencer Gerrol, founder and CEO of Spark Neuro, offered a real winner as he demonstrated his technology.

“I love your brain,” he told me.  This was after the startup’s vice president of research Ryan McGarry had strapped sensors to my fingers and head, then showed me an intense movie clip, with my attention level and emotional response displayed on a screen for all to see.

That, in miniature, is what Spark Neuro does: It helps companies study the audience response to things like ads, movies and trailers.

The goal is to replace things like focus groups and surveys, which Gerrol said are subject to a variety of biases, including group pressure and the desire to give the answer that you think the researcher wants to hear.

For example, he showed me a Mr. Clean ad that had performed poorly among men in focus groups. Spark Neuro, in contrast, found that it actually had “beautiful performance” among both men and women, and it ended up being one of the best-received ads at last year’s Super Bowl. (Apparently the guys just didn’t want to admit that they enjoyed watching a seductive cartoon man.)

We’ve also written about startups that try to measure ad effectiveness using technology like eye tracking and studying facial expressions. Gerrol said those are valuable data points, and indeed, they’re part of Spark Neuro’s research. But they have their limitations, which is why the company also looks at brain and electrodermal activity.

Gerrol highlighted the EEG data (i.e., data about the electrical activity in your brain) as offering “such richness and such depth.” The challenge is that “the data is incredibly noisy.” So Spark Neuro has developed tools to automatically remove the noise and make the data easy to understand.

At the same time, it’s not just relying on technology — Gerrol said his researchers also do one-on-one interviews with participants afterwards to get a better understanding of their responses.

“The most important thing, by 100 fold, is the intellectual property around the algorithms,” he added. “The algorithm take a mess of data that’s meaningless to the human eye and turns it into something you can just understand as a marketing executive.”

My own readings looked daunting at first, but they quickly became comprehensible as Gerrol walked me through them, showing me where my attention and emotions spiked.

Spark Neuro is already working with a long list of clients that includes Anheuser-Busch, General Motors, Hulu, JetBlue,  Paramount and Walmart. It’s also announcing that it’s raised a $13.5 million Series A led by Thiel Capital, with participation Will Smith (yes, that Will Smith) and former Disney CEO Michael Eisner.

Eventually, Gerrol suggested that the technology could be applied in other ways, like measuring student attention in the classroom.

“There’s a million applications,” he said. “We’re very focused on being a dominating force in a discrete industry, but it’s also important to our future to set ourselves up for further applications.”

Google slowly lifting ban on addiction center ads after adding vetting process

Google will soon allow ads to run on addiction-related keywords and phrases after a nearly year-long ban instituted to crack down on shady providers cashing in on vulnerable patients. A small group of providers vetted by a third party have been approved by the company to appear in results for searches like “help quitting pills” or “meth addiction.”

Google will now allow ads to run on addiction-related keywords and phrases after a nearly year-long ban instituted to crack down on shady providers cashing in on vulnerable patients. A small group of providers vetted by a third party have been approved by the company to appear in results for searches like “help quitting pills” or “meth addiction.”

The ban on these ads was rolled out in stages starting in September of last year in the U.S. and going global in January. It was provoked by a series of reports showing that people looking for help were being essentially traded like commodities and sent to incredibly expensive “addiction centers” that often provided little recovery help at all.

At the time Google pledged to keep the ban in place until it could find a way to reintroduce ads safely and ethically, and it has taken its time doing so. All addiction-related ad words were shut off completely, and while this introduced problems of its own (people searching for “help quitting pills” don’t want the WebMD page for addiction) it was probably the only logical choice.

Following this, Google partnered with LegitScript, a Portland company that specializes in verifying medicine-related businesses online. It has a 15-point checklist to make sure businesses are licensed and compliant, list medications and treatment plans, demonstrate qualifications and professionalism (i.e. not a quack operating out of their living room), have no shady history or what have you and so on. The whole list is here.

Only recovery and addiction centers vetted by LegitScript will be allowed to run ads against addiction-related queries on Google.

Recovery Centers of America (RCA), which has a handful of facilities around the country, is one of the first wave of approved advertisers.

“What they were trying to get rid of were these ‘lead aggregators’ that were posing as treatment centers, but were basically selling the patients,” said RCA’s director of marketing strategy and operations, Grant McClernon. “They wanted people who were operating under state scrutiny, providing real treatment.”

“It was a wild wild west out there,” added Bill Koroncai, the company’s director of communications. “So we support Google’s work to weed out the unethical providers in the industry.”

They explained that Google originally planned to greenlight 30 providers — which is to say facilities, of which a provider like RCA might have just one or dozens — but they were inundated with applications and had to expand the first wave of the program to closer to 100.

That’s not necessarily indicative of a rush on Google’s part; it seems more likely that the larger number turned out to be the realistic one if most regions and most needs were to be served. With 30 facilities you wouldn’t even have one in every state.

Addiction treatment providers won’t be treated any differently from other keyword purchasers, except that there will have to be a yearly check-up process through LegitScript to make sure they’re still worthy of being included.

It’s probably wise that Google didn’t get into the vetting process itself; this sets an easier precedent for the ad giant in that when conflicts like this one come up, it doesn’t have to hire a specialized team dedicated to combating fraud in that specific domain.

A Google representative said that ads should start running as soon as the companies paying for them are certified, which could be right now depending on the region and keyword.

Short video service Musical.ly is merging into sister app TikTok

Musical.ly, the short video app that’s popular among teens and young people, is going away. Kinda. The app and all user data and accounts is being merged with Toktok, a sister app that’s owned by ByteDance, the Chinese company that acquired Musical.ly for around $1 billion last year. The switch-over happens today (Thursday) and it should […]

Musical.ly, the short video app that’s popular among teens and young people, is going away. Kinda.

The app and all user data and accounts is being merged with Toktok, a sister app that’s owned by ByteDance, the Chinese company that acquired Musical.ly for around $1 billion last year.

The switch-over happens today (Thursday) and it should be relatively seamless. Users of Musical.ly will see their app switch to TikTok once they update the app, and they should find their account, videos and personal settings inside the new app as per usual.

One notable new addition is a setting that alerts a user when they have been active in the app for two hours that day. Its addition comes just a day after Facebook added similar ‘well-being’ features to its core social network and Instagram.

ByteDance is making the move to consolidate its audiences on both apps. Four-year-old Musical.ly, which is particularly popular in the U.S., has around 100 million users while TikTok, which was created in 2016 and operates worldwide minus China, claims 500 million monthly active users. In China, the sister product is Douyin, while the company also offers news apps Toutiao in China and TopBuzz across the rest of the world.

“TikTok, the sound of a ticking clock, represents the short nature of the video platform. We want to capture the world’s creativity and knowledge under this new name and remind everyone to treasure every precious life moment. Combining musical.ly and TikTok is a natural fit given the shared mission of both experiences,” said Alex Zhu, co-founder of Musical.ly and Senior Vice President of TikTok, in a statement.

The app merger follows the closure of Musical.ly’s standalone live-streaming app Live.ly in June. That was part of the deal agreed to for the Musical.ly acquisition, and the company directed its users to Live.me, an app that counts ByteDance among its investors.

It makes sense that ByteDance is consolidating its sibling apps since Facebook is stalking out the short video space. The social network giant has tested a Musical.ly style app and just this week we found hints that it is planning to launch “Talent Show,” which would allow users to compete by singing popular songs then submitting their audition for review.

There’s also the revenue side. A global platform plays better for advertisers rather than forcing them to pick either Musical.ly or TikTok, or going through the added rigmarole of working on both.

Techmeme introduces contextual ads tied to news topics

Tech news aggregator Techmeme is trying out a new way to make money — ad units that are directly tied to the stories on the front page. The idea is that advertisers can specify company names or news categories that they want to target, then Techmeme will automatically include their message below relevant news stories. […]

Tech news aggregator Techmeme is trying out a new way to make money — ad units that are directly tied to the stories on the front page.

The idea is that advertisers can specify company names or news categories that they want to target, then Techmeme will automatically include their message below relevant news stories.

For example, as I write this, the top story on the site is about Google’s potential plans to launch in China a censored version of the search engine, and underneath, there’s an ad from Yelp arguing that Google is “hurting the open internet.”

Techmeme founder Gabe Rivera tweeted that this could be a good way to “antagonize a particular company” or “hijack all news concerning that company on Techmeme to insert your rebuttal.” Or you could do something that’s a little less confrontational, like crypto wallet company BRD, which will run ads alongside cryptocurrency news.

Techeme contextual ad

The idea of using advertisers to take on your competitors or hijack their message isn’t new — for example, it’s a normal tactic to target competitors’ brand names and other keywords in search campaigns. But this allows advertisers to do so in a way that’s both automated and centered on the latest headlines.

“Why is Techmeme the right venue for ads that react to news in this way? Because it’s where readers go to see ideas in conflict,” Rivera wrote in his announcement. “Techmeme is, after all, the arena where industry-driven news meets critical reaction and analysis. So by letting companies speak out and confront issues in this manner, we provide an additive, even entertaining experience for readers.”

Of course, it can be hard to predict when or how a company or topic will pop up in the news (and to be clear, Rivera said the editorial news mix on Techmeme won’t be affected by who’s purchasing ads). The idea, though, is to keep running the ads alongside relevant stories until Techmeme has delivered the placement hours committed to the advertiser.

And to provide a little extra incentive, Rivera noted that Techmeme won’t allow anyone to buy negative ads targeting current advertisers.

“Gabe has kept Techmeme mostly free of advertising since its inception,” BRD VP of Global Marketing Spencer Chen told me via email. “Despite his Twitter persona, the man actually loves his readers. So anytime he rolls out a new ad product, there’s always a buzz to get in early to reach Techmeme’s highly influential and elevated audience.”

WhatsApp finally earns money by charging businesses for slow replies

Today WhatsApp launches its first revenue-generating enterprise product and the only way it currently makes money directly from its app. The WhatsApp Business API is launching to let businesses respond to messages from users for free for up to 24 hours, but will charge them a fixed rate by country per message sent after that. […]

Today WhatsApp launches its first revenue-generating enterprise product and the only way it currently makes money directly from its app. The WhatsApp Business API is launching to let businesses respond to messages from users for free for up to 24 hours, but will charge them a fixed rate by country per message sent after that.

Businesses will still only be able to message people who contacted them first, but the API will help them programatically send “shipping confirmations, appointment reminders or event tickets. Clients can also use it respond to manually respond to customer service inquiries through their own tool or apps like Zendesk or Twilio. And small businesses who are one of the 3 million users of the WhatsApp For Business app can still use it to send late replies one-by-one for free.

After getting acquired by Facebook for $19 billion in 2014, it’s finally time for the 1.5 billion-user WhatsApp to pull its weight and contribute some revenue. If Facebook can pitch the WhatsApp Business API as a cheaper alternative to customer service call centers, the convenience of asynchronous chat could compel users to message companies instead of phoning.

Only charging for slow replies after 24 hours since a user’s last message is a genius way to create a growth feedback loop. If users get quick answers via WhatsApp, they’ll prefer it other channels. Once businesses and their customers get addicted to it, WhatsApp could eventually charge for all replies or any that exceed a volume threshold, or cut down the free window. Meanwhile, businesses might be too optimistic about their response times and end up paying more often than the expect, especially when messages come in on weekends or holidays.

WhatsApp first announced it would eventually charge for enterprise service last September when it launched its free WhatsApp For Business app that now has 3 million users and remains free for all replies, even late ones.

Importantly, WhatsApp stresses that all messaging between users and businesses, even through the API, will be end-to-end encrypted. That contrasts with the Washington Post’s report that Facebook pushing to weaken encryption for WhatsApp For Business message is partly what drove former CEO Jan Koum to quit WhatsApp and Facebook’s board in April. His co-founder Brian Acton had ditched Facebook back in September and donated $50 million to the foundation of encrypted messaging app Signal.

Today WhatsApp is also formally launching its new display ads product worldwide. But don’t worry, they won’t be crammed into your chat inbox like with Facebook Messenger. Instead, businesses will be able to buy ads on Facebook’s News Feed that launch WhatsApp conversations with them…thereby allowing them to use the new Business API to reply. TechCrunch scooped that this was coming last September, when code in Facebook’s ad manager revealed the click-to-WhatsApp ads option, and the company confirmed the ads were in testing. Facebook launched similar click-to-Messenger ads back in 2015.

Finally, WhatsApp also tells TechCrunch its planning to run ads in its 450 million daily user Snapchat Stories clone called Status. “WhatsApp does not currently run ads in Status though this represents a future goal for us, starting in 2019. We will move slowly and carefully and provide more details before we place any Ads in Status” a spokesperson told us. Given WhatsApp Status is over twice the size of Snapchat, it could earn a ton on ads between Stories, especially if it’s willing to make some unskippable.

Together, the ads and API will replace the $1 per year subscription fee WhatsApp used to charge in some countries but dropped in 2016. With Facebook’s own revenue decelerating, triggering a 20 percent, $120 billion market cap drop in its share price, it needs to show it has new ways to make money now more than ever.

Fake news inquiry calls for social media levy to defend democracy

A UK parliamentary committee which has been running a multi-month investigation into the impact of online disinformation on political campaigning — and on democracy itself — has published a preliminary report highlighting what it describes as “significant concerns” over the risks to “shared values and the integrity of our democratic institutions”. It’s calling for “urgent […]

A UK parliamentary committee which has been running a multi-month investigation into the impact of online disinformation on political campaigning — and on democracy itself — has published a preliminary report highlighting what it describes as “significant concerns” over the risks to “shared values and the integrity of our democratic institutions”.

It’s calling for “urgent action” from government and regulatory bodies to “build resilience against misinformation and disinformation into our democratic system”.

“We are faced with a crisis concerning the use of data, the manipulation of our data, and the targeting of pernicious views,” the DCMS committee warns. “In particular, we heard evidence of Russian state-sponsored attempts to influence elections in the US and the UK through social media, of the efforts of private companies to do the same, and of law-breaking by certain Leave campaign groups in the UK’s EU Referendum in their use of social media.”

The inquiry, which was conceived of and begun in the previous UK parliament — before relaunching in fall 2017, after the June General Election — has found itself slap-bang in the middle of one of the major scandals of the modern era, as revelations about the extent of disinformation and social media data misuse and allegations of election fiddling and law bending have piled up thick and fast, especially in recent months (albeit, concerns have been rising steadily, ever since the 2016 US presidential election and revelations about the cottage industry of fake news purveyors spun up to feed US voters, in addition to Kremlin troll farm activity.)

Yet the Facebook-Cambridge Analytica data misuse saga (which snowballed into a major global scandal this March) is just one of the strands of the committee’s inquiry. Hence they’ve opted to publish multiple reports — the initial one recommending urgent actions for the government and regulators, which will be followed by another report covering the inquiry’s “wider terms of reference” and including a closer look at the role of advertising. (The latter report is slated to land in the fall.)

For now, the committee is suggesting “principle-based recommendations” designed to be “sufficiently adaptive to deal with fast-moving technological developments”. 

Among a very long list of recommendations are:

  • a levy on social media and tech giants to fund expanding a “major investment” in the UK’s data watchdog so the body is able to “attract and employ more technically-skilled engineers who not only can analyse current technologies, but have the capacity to predict future technologies” — with the tech company levy operating in “a similar vein to the way in which the banking sector pays for the upkeep of the Financial Conduct Authority”. Additionally, the committee also wants the government put forward proposals for an educational levy to be raised by social media companies, “to finance a comprehensive educational framework (developed by charities and non-governmental organisations) and based online”. “Digital literacy should be the fourth pillar of education, alongside reading, writing and maths,” the committee writes. “The DCMS Department should co-ordinate with the Department for Education, in highlighting proposals to include digital literacy, as part of the Physical, Social, Health and Economic curriculum (PSHE). The social media educational levy should be used, in part, by the government, to finance this additional part of the curriculum.” It also wants to see a rolling unified public awareness initiative, part-funded by a tech company levy, to “set the context of social media content, explain to people what their rights over their data are… and set out ways in which people can interact with political campaigning on social media. “The public should be made more aware of their ability to report digital campaigning that they think is misleading, or unlawful,” it adds
  • amendments to UK Electoral Law to reflect use of new technologies — with the committee backing the Electoral Commission’s suggestion that “all electronic campaigning should have easily accessible digital imprint requirements, including information on the publishing organisation and who is legally responsible for the spending, so that it is obvious at a glance who has sponsored that campaigning material, thereby bringing all online advertisements and messages into line with physically published leaflets, circulars and advertisements”. It also suggests government should “consider the feasibility of clear, persistent banners on all paid-for political adverts and videos, indicating the source and making it easy for users to identify what is in the adverts, and who the advertiser is”. And urges the government to carry out “a comprehensive review of the current rules and regulations surrounding political work during elections and referenda, including: increasing the length of the regulated period; definitions of what constitutes political campaigning; absolute transparency of online political campaigning; a category introduced for digital spending on campaigns; reducing the time for spending returns to be sent to the Electoral Commission (the current time for large political organisations is six months)”.
  • the Electoral Commission to establish a code for advertising through social media during election periods “giving consideration to whether such activity should be restricted during the regulated period, to political organisations or campaigns that have registered with the Commission”. It also urges the Commission to propose “more stringent requirements for major donors to demonstrate the source of their donations”, and backs its suggestion of a change in the rules covering political spending so that limits are put on the amount of money an individual can donate
  • a major increase in the maximum fine that can be levied by the Electoral Commission (currently just £20,000) — saying this should rather be based on a fixed percentage of turnover. It also suggests the body should have the ability to refer matters to the Crown Prosecution Service, before their investigations have been completed; and urges the government to consider giving it the power to compel organisations that it does not specifically regulate, including tech companies and individuals, to provide information relevant to their inquiries, subject to due process.
  • a public register for political advertising — “requiring all political advertising work to be listed for public display so that, even if work is not requiring regulation, it is accountable, clear, and transparent for all to see”. So it also wants the government to conduct a review of UK law to ensure that digital campaigning is defined in a way that includes online adverts that use political terminology but are not sponsored by a specific political party.
  • a ban on micro-targeted political advertising to lookalikes online, and a minimum limit for the number of voters sent individual political messages to be agreed at a national level. The committee also suggests the Electoral Commission and the ICO should consider the ethics of Facebook or other relevant social media companies selling lookalike political audiences to advertisers during the regulated period, saying they should consider whether users should have the right to opt out from being included in such lookalike audiences
  • a recommendation to formulate a new regulatory category for tech companies that is not necessarily either a platform or a publisher, and which “tightens tech companies’ liabilities”
  • a suggestion that the government consider (as part of an existing review of digital advertising) whether the Advertising Standards Agency could regulate digital advertising. “It is our recommendation that this process should establish clear legal liability for the tech companies to act against harmful and illegal content on their platforms,” the committee writes. “This should include both content that has been referred to them for takedown by their users, and other content that should have been easy for the tech companies to identify for themselves. In these cases, failure to act on behalf of the tech companies could leave them open to legal proceedings launched either by a public regulator, and/or by individuals or organisations who have suffered as a result of this content being freely disseminated on a social media platform.”
  • another suggestion that the government consider establishing a “digital Atlantic Charter as a new mechanism to reassure users that their digital rights are guaranteed” — with the committee also raising concerns that the UK risks a privacy loophole opening up after it leave the EU when US-based companies will be able to take UK citizens’ data to the US for processing without the protections afforded by the EU’s GDPR framework (as the UK will then be a third country)
  • a suggestion that a professional “global Code of Ethics” should be developed by tech companies, in collaboration with international governments, academics and other “interested parties” (including the World Summit on Information Society), in order to “set down in writing what is and what is not acceptable by users on social media, with possible liabilities for companies and for individuals working for those companies, including those technical engineers involved in creating the software for the companies”. “New products should be tested to ensure that products are fit-for-purpose and do not constitute dangers to the users, or to society,” it suggests. “The Code of Ethics should be the backbone of tech companies’ work, and should be continually referred to when developing new technologies and algorithms. If companies fail to adhere to their own Code of Ethics, the UK Government should introduce regulation to make such ethical rules compulsory.”
  • the committee also suggests the government avoids using the (charged and confusing) term ‘fake news’ — and instead puts forward an agreed definition of the words ‘misinformation’ and ‘disinformation’. It should also support research into the methods by which misinformation and disinformation are created and spread across the internet, including support for fact-checking. “We recommend that the government initiate a working group of experts to create a credible annotation of standards, so that people can see, at a glance, the level of verification of a site. This would help people to decide on the level of importance that they put on those sites,” it writes
  • a suggestion that tech companies should be subject to security and algorithmic auditing — with the committee writing: “Just as the finances of companies are audited and scrutinised, the same type of auditing and scrutinising should be carried out on the non-financial aspects of technology companies, including their security mechanisms and algorithms, to ensure they are operating responsibly. The Government should provide the appropriate body with the power to audit these companies, including algorithmic auditing, and we reiterate the point that the ICO’s powers should be substantially strengthened in these respects”. The committee also floats the idea that the Competition and Markets Authority considers conducting an audit of the operation of the advertising market on social media (given the risk of fake accounts leading to ad fraud)
  • a requirement for tech companies to make full disclosure of targeting used as part of advert transparency. The committee says tech companies must also address the issue of shell corporations and “other professional attempts to hide identity in advert purchasing.

How the government will respond to the committee’s laundry list of recommendations for cleaning up online political advertising remains to be seen, although the issue of Kremlin-backed disinformation campaigns was at least raised publicly by the prime minister last year. Although Theresa May has been rather quieter on revelations about EU referendum-related data misuse and election law breaches.

While the committee uses the term “tech companies” throughout its report to refer to multiple companies, Facebook specifically comes in for some excoriating criticism, with the committee accusing the company of misleading by omission and actively seeking to impede the progress of the inquiry.

It also reiterates its call — for something like the fifth time at this point — for founder Mark Zuckerberg to give evidence. Facebook has provided several witnesses to the committee, including its CTO, but Zuckerberg has declined its requests he appear, even via video link. (And even though he did find time for a couple of hours in front of the EU parliament back in May.)

The committee writes:

We undertook fifteen exchanges of correspondence with Facebook, and two oral evidence sessions, in an attempt to elicit some of the information that they held, including information regarding users’ data, foreign interference and details of the so-called ‘dark ads’ that had reached Facebook users. Facebook consistently responded to questions by giving the minimal amount of information possible, and routinely failed to offer information relevant to the inquiry, unless it had been expressly asked for. It provided witnesses who have been unwilling or unable to give full answers to the Committee’s questions. This is the reason why the Committee has continued to press for Mark Zuckerberg to appear as a witness as, by his own admission, he is the person who decides what happens at Facebook.

Tech companies are not passive platforms on which users input content; they reward what is most engaging, because engagement is part of their business model and their growth strategy. They have profited greatly by using this model. This manipulation of the sites by tech companies must be made more transparent. Facebook has all of the information. Those outside of the company have none of it, unless Facebook chooses to release it. Facebook was reluctant to share information with the Committee, which does not bode well for future transparency. We ask, once more, for Mr Zuckerberg to come to the Committee to answer the many outstanding questions to which Facebook has not responded adequately, to date.

The committee suggests that the UK’s Defamation Act 2013 means Facebook and other social media companies have a duty to publish and to follow transparent rules — arguing that the Act has provisions which state that “if a user is defamed on social media, and the offending individual cannot be identified, the liability rests with the platform”.

“We urge the government to examine the effectiveness of these provisions, and to monitor tech companies to ensure they are complying with court orders in the UK and to provide details of the source of disputed content– including advertisements — to ensure that they are operating in accordance with the law, or any future industry Codes of Ethics or Conduct. Tech companies also have a responsibility to ensure full disclosure of the source of any political advertising they carry,” it adds.

The committee is especially damning of Facebook’s actions in Burma (as indeed many others have also been), condemning the company’s failure to prevent its platform from being used to spread hate and fuel violence against the Rohingya ethnic minority — and citing the UN’s similarly damning assessment.

“Facebook has hampered our efforts to get information about their company throughout this inquiry. It is as if it thinks that the problem will go away if it does not share information about the problem, and reacts only when it is pressed. Time and again we heard from Facebook about mistakes being made and then (sometimes) rectified, rather than designing the product ethically from the beginning of the process. Facebook has a ‘Code of Conduct’, which highlights the principles by which Facebook staff carry out their work, and states that employees are expected to “act lawfully, honestly, ethically, and in the best interests of the company while performing duties on behalf of Facebook”. Facebook has fallen well below this standard in Burma,” it argues.

The committee also directly blames Facebook’s actions for undermining the UK’s international aid efforts in the country — writing:

The United Nations has named Facebook as being responsible for inciting hatred against the Rohingya Muslim minority in Burma, through its ‘Free Basics’ service. It provides people free mobile phone access without data charges, but is also responsible for the spread disinformation and propaganda. The CTO of Facebook, Mike Schroepfer described the situation in Burma as “awful”, yet Facebook cannot show us that it has done anything to stop the spread of disinformation against the Rohingya minority.

The hate speech against the Rohingya—built up on Facebook, much of which is disseminated through fake accounts—and subsequent ethnic cleansing, has potentially resulted in the success of DFID’s [the UK Department for International Development] aid programmes being greatly reduced, based on the qualifications they set for success. The activity of Facebook undermines international aid to Burma, including the UK Government’s work. Facebook is releasing a product that is dangerous to consumers and deeply unethical. We urge the Government to demonstrate how seriously it takes Facebook’s apparent collusion in spreading disinformation in Burma, at the earliest opportunity. This is a further example of Facebook failing to take responsibility for the misuse of its platform.

We reached out to Facebook for a response to the committee’s report, and in an email statement — attributed to Richard Allan, VP policy — the company told us:

The Committee has raised some important issues and we were pleased to be able to contribute to their work.

We share their goal of ensuring that political advertising is fair and transparent and agree that electoral rule changes are needed. We have already made all advertising on Facebook more transparent. We provide more information on the Pages behind any ad and you can now see all the ads any Facebook Page is running, even if they are not targeted at you. We are working on ways to authenticate and label political ads in the UK and create an archive of those ads that anyone can search. We will work closely with the UK Government and Electoral Commission as we develop these new transparency tools.

We’re also investing heavily in both people and technology to keep bad content off our services. We took down 2.5 million pieces of hate speech and disabled 583 million fake accounts globally in the first quarter of 2018 — much of it before anyone needed to report this to Facebook. By using technology like machine learning, artificial intelligence and computer vision, we can detect more bad content and take action more quickly.

The statement makes no mention of Burma. Nor indeed of the committee’s suggestion that social media firms should be taxed to pay for defending democracy and civil society against the damaging excesses of their tools.

On Thursday, rolling out its latest ads transparency features, Facebook announced that users could now see the ads a Page is running across Facebook, Instagram, Messenger and its partner network “even if those ads aren’t shown to you”.

To do so, users have to log into Facebook, visit any Page and select “Info and Ads”. “You’ll see ad creative and copy, and you can flag anything suspicious by clicking on ‘Report Ad’,” it added.

It also flagged a ‘more Page information’ feature that users can use to get more details about a Page such as recent name changes and the date it was created.

“The vast majority of ads on Facebook are run by legitimate organizations — whether it’s a small business looking for new customers, an advocacy group raising money for their cause, or a politician running for office. But we’ve seen that bad actors can misuse our products, too,” Facebook wrote, adding that the features being announced “are just the start” of its efforts “to improve” and “root out abuse”.

Brexit drama

The committee’s interim report was pushed out at the weekend ahead of the original embargo as a result of yet more Brexiteer-induced drama — after the campaign director of the UK’s official Brexit supporting ‘Vote Leave’ campaign, Dominic Cummings, deliberately broke the embargo by publishing the report on his blog in order to spin his own response before the report had been widely covered by the media.

Last week the Electoral Commission published its own report following a multi-month investigation into Brexit campaign spending. The oversight body concluded that Vote Leave broke UK electoral law by massively overspending via a joint working arrangement with another Brexit supporting campaign (BeLeave) — an arrangement via which an additional almost half a million pound’s worth of targeted Facebook ads were co-ordinated by Vote Leave in the final days of the campaign when it had already reached its spending limit (Facebook finally released some of the 2016 Brexit campaign ads that had been microtargeted at UK voters via its platform to the committee, which published these ads last week. Many of Vote Leave’s (up to that point ‘dark’) adverts show the official Brexit campaign generating fake news of its own with ads that, for example, claim Turkey is on the cusp of joining the EU and flooding the UK with millions of migrants; or spreading the widely debunked claim that the UK would be able to spend £350M more per week on the NHS if it left the EU.

In general, dog whistle racism appears to have been Vote Leave’s preferred ‘persuasion’ tactic of microtargeted ad choice — and thanks to Facebook’s ad platform, no one other than each ad’s chosen recipients would have been likely to see the messages.

Cummings also comes in for a major roasting in the committee’s report after his failure to appear before it to answer questions, despite multiple summons (including an unprecedented House of Commons motion ordering him to appear — which he nonetheless also ignored).

“Mr Cummings’ contemptuous behaviour is unprecedented in the history of this Committee’s inquiries and underlines concerns about the difficulties of enforcing co-operation with Parliamentary scrutiny in the modern age,” it writes, adding: “We will return to this issue in our Report in the autumn, and believe it to be an urgent matter for consideration by the Privileges Committee and by Parliament as a whole.”

On his blog, Cummings claims the committee offered him dates they knew he couldn’t do; slams its investigation as ‘fake news’; moans copiously that the committee is made up of Remain supporting MPs; and argues that the investigation should be under oath — as his major defense seems to be that key campaign whistleblowers are lying (despite ex-Cambridge Analytica employee Chris Wylie and ex-BeLeave treasurer Shahmir Sanni having provided copious amounts of documentary evidence to back up their claims; evidence which both the Electoral Commission and the UK’s data watchdog, the ICO, have found convincing enough to announce some of the largest fines they can issue — in the latter case, the ICO announced its intention to fine Facebook the maximum penalty possible (under the prior UK data protection regime) for failing to protect users’ information. The data watchdog is continuing to investigate multiple aspects of what is a hugely complex (technically and politically) online ad ops story, and earlier this month commissioner Elizabeth Denham called for an ‘ethical pause’ on the use of online ad platforms for microtargeting voters with political messages, arguing — as the DCMS committee is — that there are very real and very stark risks for democratic processes.

There’s much, much more self-piteous whining on Cummings blog for anyone who wants to make themselves queasy reading. But do also bear in mind the Electoral Commission’s withering criticism of the Vote Leave campaign, specifically — for not so much a failure to co-operate with its investigation but for intentional obstruction. (See: Pages 12-13 of the Commission’s report.)

Why unskippable Stories ads could revive Facebook

Prepare for the invasion of the unskippables. If the Stories social media slideshow format is the future of mobile TV, it’s going to end up with commercials. Users won’t love them. And done wrong they could pester people away from spending so much time watching what friends do day-to-day. But there’s no way Facebook and […]

Prepare for the invasion of the unskippables. If the Stories social media slideshow format is the future of mobile TV, it’s going to end up with commercials. Users won’t love them. And done wrong they could pester people away from spending so much time watching what friends do day-to-day. But there’s no way Facebook and its family of apps will keep letting us fast-forward past Stories ads just a split-second after they appear on our screens.

We’re on the cusp of the shift to Stories. Facebook estimates that across social media apps, sharing to Stories will surpass sharing through feeds some time in 2019. One big reason is they don’t take a ton of thought to create. Hold up your phone, shoot a photo or short video, and you’ve instantly got immersive, eye-catching, full-screen content. And you never had to think.

Facebook CPO Chris Cox at F8 2018 charts the rise of Stories that will see the format surpass feed sharing in 2019

Unlike text, which requires pre-meditated reflection that can be daunting to some, Stories are point and shoot. They don’t even require a caption. Sure, if you’re witty or artistic you can embellish them with all sorts of commentary and creativity. They can be a way to project your inner monologue over the outside world. But the base level of effort necessary to make a Story is arguably less than sharing a status update. That’s helped Stories rocket to over 1.3 billion daily users across Facebook’s apps and Snapchat.

The problem, at least for Facebook, is that monetizing the News Feed with status-style ads was a lot more straightforward. Those ada, which have fueled Facebook’s ascent to earning $13 billion in revenue and $5 billion in profit per quarter, were ostensibly old-school banners. Text, tiny photo, and a link. Advertisers have grown accustomed to them over 20 years of practice. Even small businesses on a tight budget could make these ads. And it at least took users a second to scroll past them — just long enough to make them occasionally effective at implanting a brand or tempting a click.

Stories, and Story ads, are fundamentally different. They require big, tantalizing photos at a minimum, or preferably stylish video that lasts five to fifteen seconds. That’s a huge upward creative leap for advertisers to make, particularly small business who’ll have trouble shooting that polished content themselves. Rather than displaying a splayed out preview of a link, users typically have to swipe up or tap a smaller section of a Story ad to click through.

And Stories are inherently skippable. Users have learned to rapidly tap to progress slide by slide through friends’ Stories, especially when racing through those with too many posts or that come from more distant acquaintances. People are quick with the trigger finger the moment they’re bored, especially if it’s with an ad.

A new type of ad blindness has emerged. Instead of our eyes glazing over as we scroll past, we stare intensely searching for the slightest hint that something isn’t worth our time and should be skipped. A brand name, “Sponsored” label, stilted product shot, or anything that looks asocial leads us to instantly tap past.

This is why Facebook COO Sheryl Sandberg scared the hell out of investors on the brutal earnings call when she admitted about Stories that “The question is, will this monetize at the same rate as News Feed? And we honestly don’t know.” It’s a radically new format advertisers will need time to adopt and perfect. Facebook had spent the past year warning that revenue growth would decelerate as it ran out of News Feed ad inventory, but it’d never stressed the danger as what is was: Stories. That contributed to its record-breaking $120 billion share price drop.

The shift from News Feed ads to Stories ads will be a bigger transition than desktop ads to mobile ads for Facebook. Feed ads looked and worked identically, it was just the screen around them changing. Stories ads are an entirely new beast.

Stories Ads Are A Bigger Shift Than Web To Mobile

There is one familiar format Stories ads are reminiscent of: television commercials. Before the age of TiVo and DVRs, you had to sit through the commercials to get your next hit of content. I believe the same will eventually be true for Stories, to the tune of billions in revenue for Facebook.

Snapchat is cornered by Facebook’s competition and desperate to avoid missing revenue estimates again. So this week, it rolled out unskippable vertical video ads it actually calls “Commercials” to 100 more advertisers, and they’ll soon be self-serve for buyers. Snap first debuted them in May, though the six-second promos are still only inserted into its longer-form multi-minute premium Shows, not user generated Stories. A Snap spokesperson said they couldn’t comment on future plans. But I’d expect its stance will inevitably change. Friends’ Stories are interesting enough to compel people to watch through entire ads, so the platforms could make us.

Snapchat is desperate, and that’s why it’s already working on unskippable ads. If Facebook’s apps like Instagram and WhatsApp were locked in heated battle with Snapchat, I think we’d see more brinkmanship here. Each would hope the other would show unskippable ads first so it could try to steal their pissed off users.

But Facebook has largely vanquished Snapchat, which has seen user growth sink significantly. Snapchat has 191 million daily users, but Facebook Stories has 150 million, Messenger Stories has 70 million, Instagram Stories has 400 million, and WhatsApp Stories (called Status) leads with 450 million. Most people’s friends around the world aren’t posting to Snapchat Stories, so Facebook doesn’t risk pushing users there with overly aggressive ads except perhaps amongst US teens.

Instagram’s three-slide Stories carousel ads

That’s why I expect we’ll quickly see Facebook start to test unskippable Stories ads. They’ll likely be heavily capped at first, to maybe one to three per day per user. Facebook took a similar approach to slowly rolling out auto-play video News Feed ads back in 2014. And Facebook’s apps will probably only show them after a friend’s story before your next pal’s, in between rather than as dreaded pre-rolls. Instagram already offers carousel Stories ads with up to three slides instead of one, so users have to tap three times to blow past them.

An Instagram spokesperson told me they had “no plans to share right now” about unskippable ads, and a Facebook spokesperson said “We don’t have any plans to test unskippable stories ads on Facebook or Instagram.” But plans can change. A Snap spokesperson noted that unlike a full thirty-second TV spot, Snapchat’s Commercials are up to six seconds, which matches an emerging industry trend for mobile video ads. Budweiser recently made some six second online ads that it also ran on TV, showing the format’s reuseability that could speed up adoption. For brand advertisers not seeking an on-the-spot purchase, they need time to leave an impression.

By making some Stories ads unskippable, Facebook’s apps could charge more while making them more impactful for advertisers. It would also reduce the creative pressure on businesses because they won’t be forced to make that first split-second so flashy so people don’t fast-forward.

If Facebook makes the Stories ad format work, it has a bright future that contrasts with the doomsday vibes conjured by its share price plummet. Facebook has over 5X more (duplicated) Stories users across its apps than its nearest competitor Snapchat. The social giant sees libraries full of Stories created each day waiting to be monetized.