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Are Text Messages the New Social Media? One Start-Up Thinks So.



Are Text Messages the New Social Media? One Start-Up Thinks So.

Andrew here. You probably received today’s DealBook newsletter, as you always do, by email. But you probably got a bunch of spam and junk mail in your inbox, too.

That’s why so many of us are moving our most important communications to text messages. And in the process, the “text inbox” has become the new holy space for brands, far more intimate than your social media feed.

At least, that’s the bet that Ashton Kutcher, the actor turned venture capitalist, and Guy Oseary, Bono’s and Madonna’s manager turned investor, made when they co-founded a text message company called Community in 2019. In the beginning, it was marketed to celebrities to communicate with their fans about tour dates and new projects.

But over the last year, the business has quietly grown to power text messages from some of the largest brands, like McDonald’s, HBO, the New York Yankees and Condé Nast. When this month’s Hollywood blockbuster, “The Super Mario Bros. Movie,” launched an advertising campaign, it came with a phone number for viewers to text, powered by Community.

The company plans to announce next week that it has raised another $25 million, bringing its total fund-raising to $110 million, from investors such as Salesforce Ventures, Morgan Stanley Next Level Fund and Verizon Ventures. (It did not disclose its latest valuation.)

It also made Robert Wolf, a former chairman of UBS Group Americas, who served as an informal adviser to President Barack Obama, its new chairman. He started helping to sign up large corporate customers over the past year, bringing the total clients to over 8,000. The company is run by Diankha Linear, a longtime executive who served as an Army logistics and transportation officer.

Community has gained its latest funding as questions have increasingly arisen about social media’s reach and how companies can own the digital relationship with their customers without a middleman like Facebook or Twitter.

“I started out with Twitter and built a fairly large following on Twitter,” said Mr. Kutcher, who has 16.8 million followers. “But Twitter today is very different than what Twitter was when I originally started playing around it,” he added. “The click-through rates are massively degraded — the number of people that actually see the post is massively degraded.”

At Community, in contrast, “we have like 45 percent click-through rates and 98 percent open rates,” Mr. Kutcher said. “You don’t get that in social environments because most people don’t even see the things you’re posting.”

Community competes with a bevy of different types of services vying for space in your text inbox, from Attentive to Twilio to Zendesk. And many of the software platforms that companies use to manage their relationships with customers now have features that facilitate texting.

But what sets Community apart is the dialogue that celebrities and brands have with their customers, who provide troves of information about themselves, which the brand owns and isn’t shared with Community’s other clients.

Oseary was originally drawn to Community because of his role as a music manager, he said.

“I have no way to know who came to the concert tonight. I have no way to speak to them again once they leave the concert. I have no way to know who bought the album,” he said. “With Community, once they text the number, we now have a way to stay in touch directly. And that information is not owned by anyone but the artist, the talent or the person who’s building a business.”

Companies advertise a phone number that users text to sign up for updates. McDonald’s posted its number on a billboard in Times Square just this month. The service also allows brands to segment customers who sign up for texts, so if an artist has an concert coming up in Atlanta, only people in Atlanta get the texts.

Using text messages to connect with customers, for all its promise, poses unique challenges. Brands are required to get their customers to opt in to messages, which is hard to do unless the brand is already well established. And customers may want to hear from fewer brands in their text inbox than they do in their email inbox.

“As opposed to email, when you have to scroll to the bottom of the thing and hit the link that says unsubscribe, if you don’t like the text messages you’re getting, you only have to write one word: Stop,” Mr. Kutcher said. (That’s some news you can use.)

Rupert Murdoch makes another deal. Fox News settled a defamation case with Dominion Voting Systems at the last minute for $788 billion. The deal allowed Murdoch and his company’s executives to avoid having to testify, but it also handed Staple Street, the private equity owner of Dominion, a big payday after it bought the company for $38 million in 2018. His son Lachlan, C.E.O. of Fox Corporation, also settled a separate defamation suit against an Australian publisher this week.

Return to sender. Netflix ended its DVD delivery service after 25 years. The streaming company’s original business model revolved around sending discs by mail, and at its peak, in 2010, about 20 million subscribers used the service. The company announced the changes as it reported first-quarter profits of $1.3 billion, up 4 percent year on year.

Gary Gensler gets a grilling. The chair of the Securities and Exchange Commission, was hammered by Republicans over the agency’s handling of the cryptocurrency industry, in an appearance before the House Financial Services Committee. Gensler defended the regulator, saying he had never seen a sector break so many securities laws with such regularity, after being accused of failing to spot problems at FTX before the cryptocurrency exchange collapsed.

China’s economy bounces back, kind of. In its first full quarter since Beijing lifted punishing Covid restrictions, the world’s second-largest economy beat expectations on the back of surging consumer spending, rising exports and government-led infrastructure spending. But youth unemployment hit 19.6 percent, its second-highest mark on record, suggesting that businesses are not convinced that Beijing is finished dabbling in the private sector and that economic uncertainty is over.

Goldman Sachs quickens its retail banking U-turn. The Wall Street giant reported lackluster first-quarter returns and accelerated its retreat from consumer banking, including putting its GreenSky unit up for sale just a year after buying the lending company for $2.2 billion. One spot of new business: The bank introduced a savings account with Apple that offers a 4.15 percent annual interest rate — more than 10 times the national average.

BMW gets into hot water over ice cream. The German carmaker was forced to apologize after being accused of discriminating against Chinese visitors to the Shanghai auto show this week. Images went viral on Chinese social media of workers at its booth appearing to give free ice cream to a western man after telling ethnic Chinese attendees that they had run out.

Ever since Earth Day was established in 1970, companies have advertised their green initiatives on April 22. But with many Republicans now taking a strong stand against corporate environmentalism and targeting companies that publicize their climate change-related goals, you might see fewer companies touting their green credentials this year. Instead, some businesses are resorting to “greenhushing.” An analysis of 1,200 companies published last fall by South Pole, a Swiss consultancy, found that one in four planned to go green but then “go dark” — that is, keep its green goals under the radar.

Artificial intelligence has had a creative few weeks: A song that used A.I. to mimic the voices of Drake and The Weeknd went viral; a murder-mystery novel penned using A.I. is available to preorder; and an image generated by A.I. won one of the world’s biggest photography prizes. DealBook wrote last week that A.I. was creating thorny copyright issues, but it is also raising questions about the nature of human creativity itself.

Companies have tried to draw lines between human and machine-generated work. Streaming services, including Spotify and Apple Music, pulled the tech-created song from their platforms this week. And Universal Music Group urged the services to block A.I. from scraping its songs for use as training data.

Some artists see creative possibilities rather than threats. Stephen Marche, who wrote the cheekily titled “Death of an Author” novel using three A.I. programs, compared the process to composing hip-hop: “You don’t necessarily know how to drum, but you definitely need to know how beats work, how hooks work, and you need to be able to put them together in a meaningful way,” he told The New York Times. “I am the creator of this work, 100 percent,” Marche said, “but, on the other hand, I didn’t create the words.”

Who is the creator? Boris Eldagsen, the Berlin artist whose A.I.-generated “Pseudomnesia: The Electrician” won the creative open category at the Sony World Photography Awards, told DealBook that making the image had been like directing a film.

“On a movie there is a set director, there is a cameraman, and there is an actress and a story writer, and I tell them which direction to go,” he said. “I am the one, as an artist, who needs to connect all of this to the world, the human condition.”

He entered the competition to kick-start a conversation about separating the art of photography from A.I.-generated art, which he considers co-creation.

But who should take credit for this type of collaboration? Generative A.I. is informed by reference material created by human artists. It becomes more complicated when A.I. is used to imitate a particular performer, or a specific artist’s drawing style. Last month, the Recording Industry Association of America launched a “human artistry campaign,” which argues that the makers of A.I. need to license copyrighted work they use as training data. And Holly Herndon, a musician, started a company to build consent guidelines for the tech. “The creative possibilities there are fascinating and will change art forever,” she told The Times. “We just have to figure out the terms and tech.”

Thanks for reading! We’ll see you Monday.

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Twitch to shut down in SKorea over ‘seriously’ high fees



The platform said it had tried to lower its costs by reducing the maximum video quality but it was still losing money

The platform said it had tried to lower its costs by reducing the maximum video quality but it was still losing money – Copyright AFP Chris DELMAS

US-based streaming platform Twitch said Wednesday it would stop its service in South Korea in February because of “seriously high” network costs, dealing a blow to millions of users in one of the heartlands of e-sports.

The Amazon-owned company said in a statement signed by CEO Dan Clancy that costs were 10 times higher than most other countries, making it impossible to continue operating.

South Korea allows internet service providers to charge data-heavy companies like Twitch extra fees, which has already led to a long dispute with Netflix.

Big telecom firms in Europe have pushed for a similar deal, which they call “fair share”, but an EU consultation concluded in October that the idea was not popular.

Twitch said it had tried to lower its costs by reducing the maximum video quality but it was still losing money and would pull out of the country on February 27.

“The cost of running Twitch in South Korea is currently seriously high,” said the statement.

– ‘Stellar player’ –

Twitch, acquired by Amazon in 2014 for close to $1 billion, gained significant traction among gamers in South Korea.

The firm does not publish user numbers but it was widely reported in 2021 to have six million users in South Korea, more than four percent of its global total.

The country is known for its passionate, competitive, and dedicated gaming community, as well as its megastar Faker — a gamer hailed as the Michael Jordan of e-sports.

“We would like to reiterate that this was a very difficult decision, and one that all of us at Twitch are deeply saddened by,” the company’s Wednesday statement said.

“South Korea has always been a stellar player in the global e-sports community and will continue to do so.”

Shares in South Korean video streaming service Afreeca TV, Twitch’s competitor, soared almost 30 percent in afternoon trading in Seoul.

Some of the country’s Twitch users were devastated by the news.

One streamer, yummy_2 said: “It feels like losing my job right now.”

– Biden vs Trump –

Netflix was the first major international firm to cry foul over South Korea’s rules on network fees, getting entangled in lawsuits with SK Broadband, one of South Korea’s biggest internet service providers.

However, the two firms announced in September they would drop the legal cases and would now instead “collaborate as partners for the future”.

While the usage fees are a boon to telecom companies, they are bitterly opposed by tech platforms around the world.

European lawmakers and digital rights activists also argue such an arrangement could break rules on net neutrality, whereby telecoms firms are barred from selling faster internet speeds to particular companies.

The issue has been at the heart of a years-long dispute in the United States with former President Donald Trump rolling back net neutrality rules and his successor Joe Biden struggling to restore them.

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Baltimore food influencers do it for the ‘gram. Do restaurants benefit?



Baltimore food influencers do it for the ‘gram. Do restaurants benefit?

The Cake Out Maryland bakery in Columbia was a labor of love for sisters Sade and Azia Castro.

Between traveling nurse gigs, Sade Castro would take orders over social media for the sweets otherwise found only in the Philippines, advertising flavors from ube flan to chiffon cake with a milky caramel glaze. But few outside their community knew of the shop.

Castro saw foodies on Instagram in videos that garnered thousands of likes and followers. More people had to be searching for “Asian tastes” in Maryland and Virginia, she thought. Why couldn’t her cakes be the next viral sensation?

So she reached out to a food influencer.

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Over the last few years in Baltimore, the practice of connecting restaurants and burgeoning food businesses with social media personalities has become increasingly common, according to public relations executive Dave Seel, who has built an arm of his Blue Fork marketing firm for the task.

“There can be a dearth of coverage for certain subsections of the city,” he said. “Influencers have taken up that space and used it to build followership.”

Baltimore is a small city, especially in food media. There is no Eater, Infatuation or Michelin Guide. People are thirsting for creative, diverse angles, Seel said.

With the rise of food influencers in Baltimore comes an opportunity to provide platforms to communities, voices and cuisines that have been traditionally alienated. But this wave of restaurant marketing has also raised questions about the authenticity of social media tastemakers and where the quest for that viral video leaves small businesses, many of whom are fighting for survival following the pandemic.

Marketing is an extension of community building, Seel said, and to that end, some restaurants have modified their aesthetics to attract new customers over social media.

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Seel cited BLK Swan in Harbor East as a prime example for its well-advertised community events and “selfie walls.” Customers cannot visit Gunther and Company on Toone Street without taking photos by its “Instagram-worthy living green wall,” he said. At times, he has recommended that restaurants invest in a “particularly ooey, gooey picture-worthy” dish.

It does not always go viral or attract the attention needed to generate business, but it’s an increasingly popular strategy.

“Has it eclipsed all other strategies? I don’t necessarily think so. … But do [influencers] have a seat at the table? Absolutely,” Seels said. “You can’t ignore it.”

‘It’s a marketing job’

Tim “Chyno” Chin, also known as “the Baltimore foodie,” is a well-known food influencer in the area. (Jessica Gallagher/The Baltimore Banner)

Tim “Chyno” Chin always dreamed of hosting his own television show about food.

He grew up an army brat, born in Germany and shuttled between bases before landing in Sandtown-Winchester, a Baltimore food desert. It was not “lavish,” he said; food was utilitarian and purchased with food stamps. There was no one like him on TV: Black, Chinese and gay. But as Chin remembers, he had a “charisma” that allowed him to persevere.

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Chin now considers himself part of a “freshman class” of influencers who rose to foodie fame before the local restaurant industry came to embrace the world of social media marketing. Until about six years ago, eateries looking for publicity were beholden to legacy media platforms. The big players trusted to show Baltimoreans where to eat were radio personalities like Downtown Diane and Dara Cooks, he said.

“We slowly started replacing that,” Chin said. “They didn’t understand [social media] was going to catch on the way it did.”

Chin had worked in kitchens and as a server, so he believed he could relay the importance of a social media presence to the old guard of small businesses. He started by running the social media of the former Joe Squared in Power Plant Live, and then shooting food pictures at the now-shuttered Pinch Dumplings in Mount Vernon Marketplace in exchange for free meals.

“I would post something and then a restaurant would sell out of it,” he said, calling it “the Chyno effect” — a byproduct of his time hosting a YouTube show. He’s now garnered followers as “The Baltimore Foodie” and “The Boy with the Blue Beard,” building a more-than-135,000-person Instagram following and appearing as a host for the “Fresh, Fried and Crispy” show on Netflix.

“I’ve got an Emmy waiting for me somewhere,” he told The Banner.

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To show restaurants he was serious, Chin drew up a rate sheet for his services. “A lot of influencers have it,” he said. The sheet explains an influencer’s cost per post, Instagram reel, links, video and stories. “Everything has a monetized value.” Chyno did not say how much he charges, but as his audience across platforms rises, so does his value.

“People don’t understand this is hard,” he said. “You have to constantly evolve with technology, learn algorithms, follow these trends. … It’s a marketing job.”

TikTok celebrities like MMA fighter turned foodie Keith Lee, who recently made news for a video critiquing the service at an Atlanta restaurant, can change an eatery’s reputation with a single post.

Anybody can call themselves an influencer, Seel said, but “it doesn’t mean they have a core following or an engaged following that really creates the marketing effect that can get restaurateurs that return on investment.”

‘It’s such a difficult thing to decide what you’re worth’

Rachel Lipton smiles for a portrait in her kitchen.
Rachel Lipton is the local creator behind the food Instagram @liketheteaeats. (Kylie Cooper/The Baltimore Banner)

The world of social media marketing is still largely uncharted. The Federal Trade Commission has codified guidelines on sponsorship transparency for influencers, going as far as to issue $50,000 penalties for failures to adequately disclose paid partnerships.

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According to estimates from Insider Intelligence, more than $6.1 billion is expected to be spent nationwide this year on influencer marketing.

Local influencer Rachel Lipton learned about rate sheets herself in 2017 when 7-Eleven offered her $100 to post its iced tea on her “like the tea eats” Instagram page.

“My wife pulled me aside and said, ‘I think you should be charging these large businesses,’” said Lipton, who already had a full-time job. “It’s such a difficult thing to decide what you’re worth.”

Her pricing varies. Video content took far longer to edit, so she charged more. Her rates also went up depending on the size of the company inquiring about a post. She also is particular about who she will work with — or not. She said she will never post about Chick-fil-A due to their alleged culture of homophobia. And since news broke in 2020 of Ouzo Bay allegedly discriminating against a Black woman and her son, along with follow-up complaints against the owners, Atlas Restaurant Group, Lipton has promised not to promote dining at their restaurants.

Kimberly Kong, the creator of a series of food photography pages known as Nomtastic Baltimore and Nomtastic D.C., has amassed more than 100,000 followers, in part, for making a point of dining at Asian-inspired small businesses in Maryland and Virginia.

“I let [businesses] know that you’re only going to get featured if I genuinely like your food. And it’s going to be disclosed that I was invited and food was comped,” Kong said. Yet she cringes at the “influencer” title and the lack of authenticity it evokes. A large number of her posts were not paid for, she said, and were born out of an interest in wanting to try new spots.

Kong also does not charge small businesses for promotion, citing pandemic-era losses as a reason for many of them to be skeptical of investing in the world of social media marketing. Chin and Lipton also said they offered reduced rates to try and boost local spots.

“I understand the restaurants’ point of view with how slim the margins are and how tough it is right now,” Kong said.

‘Every time we posted something, it just got sold’

1701865565 522 Baltimore food influencers do it for the ‘gram Do restaurants
Sade Castro adds toppings to Cake Out’s rocky road option. The ube cakes she makes with her sister and business partner at the Columbia business are also on the counter. (Kirk McKoy/The Baltimore Banner)

Sade Castro never met the Instagram celebrity that sparked an interest in her Maryland shop.

Neither did her sister and business partner, who repeatedly called Castro “crazy” for inviting someone with more than 100,000 followers to sample their cakes. For three years, the two-person bakery had sold the desserts almost exclusively to a group of Filipino moms over Facebook — and even then, they struggled to meet demand.

“I trust that you really believe in your food recs and that you’ve actually tried and loved every food post,” Castro wrote to Kong on Sept. 9. “With that, I would like you to try our Filipino-style cakes.”

Shortly after, Castro was leaving a sampler of nine cakes at Kong’s door.

On Sept. 21, Kong posted footage of her digging into a gooey can of chocolate cake and slowly slicing into the ube flan’s purple center.

“I was at work when my phone started to go off,” Castro said. Within a day, the video had gone viral. The number of people viewing the bakery’s Instagram page rose by over 900% in a matter of hours, and then again by another 2,000% by the end of the week. About 3,000 new people had followed their rarely updated Instagram by the end of September.

“Why would you do this?” Castro remembered her sister asking. “It’s just the two of us, we’re baking from home, and we have full-time jobs.”

The bakery that had provided roughly 120 cakes each year catering to their Filipino neighbors had received hundreds of orders in a matter of days. “We were messaging people saying we don’t have [the cakes],” she said.

Unable to meet demand, they started a lottery. By the end of October, the attention faded some, with viewers of their content down by 42%, according to Castro’s Instagram analytics. Still, the success of the post presented an opportunity for Castro’s self-proclaimed “side hustle.” “Every time we posted something, it just got sold,” she said.

But a restaurant has to be ready. Seel explained that influencers will often receive a tailored experience: sampler cakes, private dining and even custom sandwiches. The business has to be able to execute at the same level for the regular customers, too.

In October, Fells Point eatery Little Donna’s claimed to be “screwed” after a New York Times critic placed the business on the paper’s list of most exciting places to eat. The now-shuttered Local Oyster also faltered in the spotlight after an influencer-promoted sandwich spurred high demand and community backlash, forcing it to be 86ed from the menu.

“All of a sudden, there can be an onslaught of people and it’s hard to keep up,” Seel said.

Castro has no regrets about Kong’s effect on her business. As of November, Cake Out is searching for ways to increase output and serve the Filipino neighbors who had leaned on them for their traditional holiday treats. Plans to move to a larger kitchen are in the works, due to the support from new customers, Castro said.

“For now, we are grateful.”

Matti Gellman is a Food Reporter for The Baltimore Banner. 

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The Age of Virtual Influencers is Coming, Which Will Bring a Range of New Considerations for Brands



The Age of Virtual Influencers is Coming, Which Will Bring a Range of New Considerations for Brands

While the current spate of generative AI tools are interesting, and are already changing discovery behaviors and interactive processes, they’re really only scratching the surface of what’s possible, and are far from actual “intelligence” as the AI name suggests.

Indeed, most of these initial models are data matching tools, able to predict elements of text and images based on the most likely sequencing, by applying probability to huge datasets. And they’re becoming increasingly at doing just that, but they’re not “thinking” as such, these systems are not developing new concepts all on their own, and there’s no intent or reasoning behind those matches, other than mathematical likelihoods.

That’s the next level of AI, which many experts have expressed concern about, in that such systems will one day have the capacity to think independently, and potentially exceed our own mental capacity as a result. Though creating a digital “brain” as it were is still a long way from being a reality.

But even so, through probability alone, we’re also just touching on the expanded possibilities of generative systems, with the latest advances now pointing to a whole new phase of digital creation, which could cut many humans out of the process.

Last week, a Spanish ad agency made headlines after it revealed that it had created an AI character, which is now earning $US10,000 per month from brand contracts.

Aitana requires no payment, has no qualms about what she promotes, and is available 24/7. And she looks real, and no doubt many of her 200,000 Instagram followers were not aware that she doesn’t, in fact, exist.

You can see the appeal of virtual influencers in this respect, and Aitana is not the first to build a huge following, and certainly won’t be the last.

Even before the arrival of Dall-E and Midjourney, virtual models were already gaining traction, including characters like lilmiquela (2.7m IG followers), noonoouri (424k followers), and Shudu (241k).

More advanced creation tools are now making these virtual identities even more life-like, while the next phase of digital animation could take them to another level of realism, in replicating human trends.

This video, shared as part of Alibaba’s “Animate Anyone” project highlights how advanced image recognition and video sequencing can now replicate actual human movement, to an increasingly realistic degree.

It’s still not perfect, but again, we’re really only at the start of this process, and you can see how, as these systems continue to evolve, virtual influencers, in both still and video form, are set to become much bigger elements of online interaction.

Deepfake characters, where celebrity faces are superimposed over real actors, are another aspect, and another vector for security concerns, but fully virtual creations, animated from still images, would be cheaper to use, faster to customize, and easier for any brand to create, based on templated actions, animations, and movements.

And they are coming. Every platform is already rolling out AI labelling requirements to get ahead of this, but realistically, it’s going to become increasingly difficult to know whether you’re looking at a real person, or an AI creation, with the blurred details and distortions rapidly being ironed out by newer processes and systems.

Sure, right now, it’s easy to spot those AI-generated promotional photos showing up within your Facebook feed ads. But refinements are steadily bringing these tools closer to reality, and ironically, taking consumers further from it at the same time.

So what does that mean for your marketing efforts?

Well, if you’re camera shy, and have reservations about making video content, soon, you might not have to, with viable alternative options to create digitally animated content. You’ll have to disclose such, but realistically, it’s the concept that will resonate with viewers, not the composition, and if you can avoid the tell-tale markers of current generative AI imaginings, it could be an avenue for your future development.

Though it could also be bad news for human influencers, who are just now having their moment in the sun, as more brands come to realize their worth in reaching certain audiences.

The “Creator Economy” in this context could be set for a rapid recession, as even short-form videos become increasingly AI-simulated, sparking all new trends in promotions, with brands happily welcoming the cost savings.

I do think that human creativity will remain an essential, and that no matter how realistic your AI creations are, you’ll still need human-centered emotion at the core of any promotion.

And until machines can actually think like us, that will remain the key differentiator, though the actual process of expressing your message looks set to change significantly.

This will be a key trend to keep tabs on in the new year.

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