A dance with data

Yesterday, Google reminded me that I had a half hour left on my shift.

Along with this it showed me a map highlighting my current location, my destination and my route of choice for getting there – complete with up-to-date traffic information so I could see how long the journey might take.

The thing was, I had never told Google any of this information – nor did I ask for a reminder of my clocking-off time.

I’ve never told Google my work hours, I’ve never told it where I work, I’ve never told it where I live and I’ve never told it my route between those two locations.

That is to say that I’ve never actively told it any of this.

What I have done, however, is switch to an Android phone for a few weeks while my iPhone is out of action.

During the set-up process I casually activated the Google Now feature, and thought no more about it until yesterday’s information.

However in doing so, I had given Google permission to monitor pretty much everything I did with the phone and present me with information based on what it “learned”.

With that in mind I can only assume that – via the GPS on my phone – Google had noticed me moving between these two locations every day of the week – generally at the same times – and “learned” that this was where I work and when I tend to finish up.

There’s no other way it could have figured it out, from what I can think – I don’t put my hours into Google Calendar, nor do I have them detailed in Gmail.

This bit of knowledge was almost certainly based on my movements alone.

I should say that this post isn’t necessarily here to bemoan the menacing hand of modern technology – I had to activate Google Now and should have known better than to be surprised by this result.

However, Google’s prompt has made me better appreciate the trail of information we passively leave behind us every day; well in excess of the obvious flash-points of public Facebook data and the Twitter feed.

It also made me better appreciate just how sophisticated computers are becoming at interpreting data and making fairly-accurate assumptions from there.

After my brush with Google Now’s cognitive reasoning I was about to turn the feature off to avoid a repeat performance, but I’ve since decided to leave it on – for now at least.

I currently using Google’s phone OS (until the iPhone is resurrected, at least), its mail and chat client, its search engine, its mapping software and (in work) its web browser.

I’m equal parts intrigued and terrified to learn what else it figures out about me.

Apple’s US manufacturing bet

Apple’s CEO Tim Cook has revealed that one product line in the company’s Mac range will be manufactured in the US next year, a blip in the decades-long trend that has seen such activity move to Asia (and in particular, China).

On the surface it may seem like another fine piece of PR from the Californian company (and that’s because it is), but the reasoning behind the decision is far more nuanced than that.

While likely to remain relatively low-cost for some time, manufacturing in China is beginning to get more expensive. The middle class is growing and workers are beginning to unionise, which will ultimately lead to demand for higher wages there.

Coupled with this is a rise in distribution costs, which means that getting the finished products out of China and to consumers – more often than not in the US – is gobbling up more of Apple’s (very handsome) profit margin.

Apple’s decision to begin manufacturing a small amount of its products in the US is most definitely a toe-in-the-water tactic, but it is also a defensive manoeuvre that will give the company a head-start if (or indeed when) Chinese manufacturing loses its edge.

Doing it before anyone else does is the icing on the PR department’s cake.

Of course those optics of it are not to be sniffed at either – Apple will now be championed for creating jobs in the US and can soon vaguely state that it has “begun” manufacturing in the country. This is despite the fact that it will be one line in a product category that accounted for just 14% of the company’s revenue in Q3 2012.

Perhaps a more important political consequence, for a cold-eyed businessman like Tim Cook at least, will be the opportunity to sell products to the US Government (which requires that they are manufactured in the US-of-A).

Finally, having a manufacturing base in the US plays into the Apple desire for control.

Having a factory down the road means higher up-front costs but it also means product quality can be more easily monitored, which could reduce faults and – by proxy – returns costs.

It also allows the company to keep a closer eye on factory conditions, thus reducing the chance of Foxxcon-like scandals which are damaging to its coveted brand.

China will remain a manufacturing powerhouse for the foreseeable future, of course. However Apple’s decision is sure to make some people sit up and take notice.

Coincidently, when I interviewed PCH International’s Liam Casey (known as ‘Mr China’ for his work in helping companies get products mass produced in the country) at the 2012 Dublin Web Summit, the topic of rising costs in China came up.

He sees the demographics changing but said the country will ultimately remain the place to manufacture because the expertise, speed and scale to do so is there.

Despite today’s revelation it can be assumed that even Tim Cook agrees with this, at least as long as the iPhone, iPad – and the majority of Macs – are getting churned out from Chinese production lines.

Obama’s data machine and the future of political campaigns

A lot has been said about how data was used to predict the result of the 2012 US election.

A lot has also been made of the Obama campaign’s ability to use raw data (and online platforms) to its advantage.

This article, however, is the first time I’ve seen some real detail on exactly what that data machine looked like and what it achieved.

It’s a long piece – and it spends a lot of time looking at the personalities behind the programming – but for some really eye-opening stats skip down to the ‘what they actually built’ section on page 2.

Some choice facts and figures from there -

  • 30,000 Reddit users registered to vote through Obama’s site after he did an AMA there
  • The campaign used data from DVR boxes (akin to a Sky+ box) to target ads at viewers who had watched certain things, for example the TV debates
  • They designed a Twitter tool that could calculate a user’s influence, cross-reference it with other data (like if they were in a battleground state) and target DMs accordingly
  • Facebook fans were told if friends certain hadn’t voted and encouraged to get them to do so
  • The campaign created a ‘quick donate’ function similar to make repeat donations as easy as buying from Amazon or iTunes

Journalism by numbers

The Irish Institute of European Affairs recently held an event on the future of journalism, featuring speeches by RTÉ‘s Director General Noel Curren, The Irish Times‘ Editor Kevin O’Sullivan, The Journal‘s Co-Founder Brian Fallon and Silicon Republic‘s Editor-At-Large Ann O’Dea.

For the most part the speeches were interesting, though unsurprisingly they did not give the audience anything that it did not already know.

One aspect that did stand out for me, however, was Brian Fallon’s number-crunching on potential revenue models for Irish media outlets. I’ve already had a discussion with him on Twitter about the figures but I thought it might help to blog about too, as 140 characters just is not enough space when you are trying to question and make nuanced points.

Fallon’s figures

You can see the details of Fallon’s figures for yourself by skipping ahead to the 8m 25s mark on the video of his speech. Failing that, you can also read through his presentation, which has helpfully been made available online (the revenue figures can be found from page 19 on).

To summarise, however, Fallon suggests:

  • Based on the average online readership of traditional media outlets like The Irish Times, RTÉ and The Irish Independent (all ~700,000 unique readers per month reading 35m pages – excluding mobile readership and, according to Fallon, international readers too) you could reasonably expect to generate revenue of €3.8m per year.
  • Using the subscription price charged – and a similar conversion rate predicted – by The New York Times under its “freemium” model (5% of online readers paying ~€155 per year) these same sites could stand to generate €3.3m in revenue per year.

Fallon says this kind of revenue would be enough for an outlet like The Journal to employ 80 journalists.

To me, however, his numbers do not add up.

The freemium cliff

The “freemium” model used by The New York Times is relatively simple – allow users a limited amount of free access (initially the NYT allowed 20 monthly page views for free, now it’s just 10), after which they the a paywall and must subscribe or go elsewhere.

The theory is this allows a site to continue to draw in casual readers and make money from their page impressions, while also forcing people to pay up if they are heavy users of the site.

There’s no reason why it could not be deployed in an Irish context (bar RTÉ, in my opinion, which would be breaching its public service remit by going behind a paywall of any kind) but the problem is the readership figures currently enjoyed would become irrelevant.

Once you erect a paywall – freemium or otherwise – you will lose readers. The NYT lost 5-15% of its daily readership in the immediate aftermath of its move to freemium – meanwhile its page views declined by 30%.

It makes sense – if people cannot access more than 20 pages without paying then page views will drop. Many users will also decide to go elsewhere for their news altogether – you just have to hope there are more who decide to cough up for a subscription.

In an Irish context, a 30% drop in page views would mean 10.5m fewer pages read a month – a corresponding drop in revenue (based on Fallon’s figures) would bring that €3.8m of ad money down to €2.6m.

The chicken and the egg

The other problem I see in Fallon’s hypothesis is the application of big media outlets’ numbers to a smaller, low-cost outlet.

In saying that The Journal would be able to grow its team of journalists massively if it had revenue from readership figures akin to The Irish Times, The Irish Independent or RTÉ – coupled with subscription numbers relative to those aspired to by The New York Times – to me misses an important point.

Getting those kind of readership figures – and most importantly the kind of readership that will pay for access – costs.

The aforementioned big media outlets have the readership figures that they do for a number of reasons, not least because they have a large, broad staff that create the content that attracts so many readers.

In other words, to me, it’s not a question of “get X readers so you can employ Y journalists”, it’s the other way around.

When it comes to subscriptions I think having a breadth of unique, quality content is even more critical.

The NYT has a well-earned reputation for quality – in the last three years alone work published in the newspaper has received seven Pulitzer Prizes, for example.

It has enough breadth and depth that it can demand a fee from its readers and clearly there are plenty of readers who feel they are getting value for money from that arrangement.

With all due respect to The Journal I don’t think all that many of its readers would be as willing to pay up if it deployed a freemium model tomorrow. (I’d wager that staff and management within The Journal itself would agree with that – otherwise it would probably have done it already).

That’s not to say that having the kind of feature writers, correspondents, analysts, columnists, investigative journalists and multimedia journalists required to change that dynamic is not on The Journal’s roadmap; I can only assume it is.

However as any media outlet moves to build this kind of fully-fledged newsroom – even those with no legacy costs to worry about – it will quickly encounter financial demands beyond the journalist’s pay.

For example, a correspondent might incur expenses as part of their daily routine, which need to be covered. A multimedia journalist needs to be backed-up with good equipment (camera, mic, a computer, editing software etc) and perhaps even another body to film or edit. An investigative journalist needs time and resources to create a single story that might not come close to paying for itself in the short-term.

For that reason alone I don’t think it’s entirely fair to apply the audience stats of a big media organisation to the cost structure of a small operator – it puts too much emphasis on legacy costs and to some degree overlooks the investment required to build a loyal audience.

A note of optimism

That said I do think Irish journalism can be profitable in the online sphere and I also share Fallon’s optimism about the future of journalism, albeit, perhaps, for somewhat different reasons.

It’s clear that a realisation has hit the Irish media, something that The Journal can probably take some credit for. Traditional outlets are beginning to take the internet seriously, because they finally realise its importance to their surivival.

The Irish Times, for example, is starting to do some really interesting things online and seems to be moving away from the “print on your computer” mentality that has hampered the digital strategies of newspapers the world over.

The Journal too has shown what can be achieved in a short space of time with a low cost-base. I’m interested to see how it develops over the next 18 months, as I feel it is at an important juncture which will define the outlet for the foreseeable future if not forever.

I also think that the freemium model has merit and could be successfully applied to an Irish outlet; I’m not convinced that there is any that have hit the right note to pull it off just yet, though.

Cleaning up my act

A fair while ago this site got hacked and, long story short, there was a nice bit of malware injected into the site’s code as a result.

I’ve been trying on and off – with my limited coding abilities – to clean this up since the turn of the new year and I think I’ve finally gotten it all sorted. Most importantly Google seems to think so too.

This attack will at least partially explain why things have been so quiet around here lately. For a start the dodgy code seemed to break wordpress, meaning it was hard if not impossible to post anything even if I wanted. However I was also reluctant to do anything that might encourage readers to come to the site and, as a result, get some kind of virus on their computer.

That’s not the only reason, of course. Thankfully I’ve also been quite busy with “real” work, most significantly in the past month, and so things like this tend to get overlooked in favour of the instant satisfaction that Twitter brings.

I do hope to get back into the habit of posting here, though, even if it is just once or twice a week.

To start with I’ll put up some of the more interesting things that have kept me busy in the last few weeks. Expect that in the next day or so.

Michael O’Doherty in bad journalism shocker

The Evening Herald’s Michael O’Doherty recently bemoaned the “Apple society” of which he had become a member, following his purchase of an iPhone.

This world was full of unlikable hipsters, he said, who do little more than brag about their latest Apple purchases.

As evidence of his claim he pointed to news that Apple was rolling out a ‘Friend Bar’ in its shops; a place where people can go to talk about Apple products as opposed to actually get help, support or repairs.

The ‘Friend Bar’ story, however, came from the Onion News Network, the internet’s finest fake news site:

Friend Bar story from ONN

BlogTalk conference to be held in Galway (IT – 13/08/10)

Leading figures in social media will descend on Galway later this month as part of the seventh annual BlogTalk international conference. The two-day event, which took place last year in South Korea, will be held on the campus of NUI Galway on August 26th and 27th.

Speakers already scheduled include Galway-born entrepreneur Fergus Hurley and Dan Gillmor, the former Silicon Valley journalist who is now director of the Knight Centre for Digital Media Entrepreneurship. Representatives of the industry’s biggest players, including Google and Facebook, are also due to address attendees.

The conference’s general chairman John Breslin accepted that in recent years many other social media conferences had been created and this had pushed them to open the event to anyone interested in attending.

However, despite these other events he felt BlogTalk still had a unique selling point, particularly due to the more forward-looking approach it takes to the industry.

“We have a nice bunch of speakers coming in this year; it has traditionally been more of a technical event but now there’s a split between technical and general interest,” he said. “It also has a mixture of what’s going on now but also has some future talks.

“We have a lot of people coming in talking about what they’re doing next which is always very interesting.”

Despite the conference’s name, this year’s BlogTalk will have little to do with the relatively old-fashioned platform of blogging, instead focusing on the impact of newer social tools such as Twitter. Mr Breslin said this was a sign of how quickly the internet was evolving and creating new communications channels.

“The conference was all about blogging when it started seven years ago but blogs have kind of faded from the limelight and it’s more about social media now,” he said. “This is probably the last year we will use the BlogTalk name, to be honest.”

Two-day tickets for the event are €149 or €99 for students and the unemployed; a one-day ticket costs €99. A full list of speakers and times can be found at 2010.blogtalk.net.

Deal paves way for customer loyalty schemes (IT – 13th August 2010)

Small retailers will be able to establish inexpensive customer loyalty schemes following a deal between AIB Merchant Services and Irish-based Zapa Technology. The exclusive agreement means merchants can use Zapa’s contact-less chip technology in their shops, removing the need for individual loyalty cards and systems.

Zapa uses near-field communications technology to produce a small sticker that can then be stuck to a customer’s phone or wallet. Users can then tap the sticker on a terminal at the point of purchase, registering it on the chip and gaining rewards in return.

One sticker can be used across any number of shops, with each business’s loyalty programme working independently of others.

“This is a merchant-specific scheme but the sticker works in multiple merchants,” said Chris Mason, managing director of AIB Merchant Services. “The points a customer earns across shops does not get consolidated into one place; each retailer can have their own scheme in place.”

However, it is also possible for a single loyalty system to be established across a number of shops, for example, allowing businesses in small towns to offer a centralised reward scheme to those who buy locally.

In addition to saving money by not having to roll out and manage an individual loyalty scheme, the Zapa system will give merchants access to more customer information, Mr Mason said.

“The merchant can go online to see how many points have been redeemed, how many customers have the tags and what they are doing. It offers a lot of information in terms of who’s been in their shops and how regularly they have done so.

“They would also have the chance to communicate with them through an SMS or e-mail campaign.”

In order to participate, retailers will have a special terminal installed, which will cost up to €30 extra per month depending on the number a retailer takes. Merchants will also be given a supply of Zapa stickers that cost less than €1 each, a cost the retailer is able to pass on to the customer if they wish.

Zapa was launched last year by Alphyra founder and former Payzone executive John Nagle. The company’s first venture was a loyalty scheme with the Insomnia coffee chain.

Start-ups to collaborate on plans in Galway (IT – 6/08/10)

A new Irish networking event aims to give start-ups and entrepreneurs a chance to collaborate to develop tailor-made action plans for the year ahead.

Féile Icarus takes place in Letterfrack, Galway, on August 27th and 28th and invites attendees to share their experiences to help one another identify the next step.

According to founder Chris Mortimer, the event aims to get individuals talking about what drives them and from there decide where they need to go next.

“The nature of the event is a room with 50-100 people who crowd-plan their strategy for the next year; they do that through exchanging their plans and answering the question ‘why do I do what I do?’,” he said.

“That’s why we call it a festival, there’s a passion and even a madness where these people will keep going despite it being difficult to do so.”

The intended end result is for each person to leave with a “flight plan” for the months ahead and a partner with whom they can work to see it through. Mr Mortimer hopes that these teams will then return at next year’s event to talk about their successes and failures.

“There are different methods for exchanging information and working out why you do what you do,” he said.

“The idea really came from my own failures. I’ve spent the last 10-12 years working in start-up businesses and I failed at quite a lot of things and you learn so many things from that.”

More information is available at feileicarus.com.

In search of the light fantastic (IT – 6/08/10)

The switch to green lighting has moved from CFL bulbs to LEDs and Irish firms are targeting niche shares in a burgeoning market, writes Adam Maguire.

As LEDs (light-emitting diodes) become an increasingly promising replacement for traditional light sources, numerous Irish companies are seeking – and finding – niches in a burgeoning market.

CFLs (compact fluorescent lamps) have to date been the assumed replacement for inefficient incandescent bulbs as companies, households and governments alike seek to go green. LED equivalents, however, have quietly moved into prominence in recent years, offering even greater efficiency and life-span than CFLs with less environmental risk.

This sudden shift is evidenced by Philips, which two years ago announced it would not spend another penny on research for CFLs, focusing instead on LEDs only. Since then, the company has been engaged in a race with General Electric (GE) as they attempt to create a practical LED for the consumer market.

With billions of dollars up for grabs, it is easy to see why these big players are so keen. What may be less clear is how a number of small Irish companies think they can compete against such massive manufacturers.

“Everybody is focused on getting LED into where a critical mass is, there’s definitely momentum behind the technology,” says Cian O’Flaherty, chief executive of Frontline LED which provides indoor and outdoor lighting for companies such as Tesco and Vodafone Ireland. “However a lot of international companies are focusing on bulbs, spotlights . . . Philips and GE seem preoccupied on supplying street lights and incandescent replacement.”

Rather than try to compete in the same space, Irish LED players are instead targeting niches, the aim being to take market-share before the big players get there.

“Nobody is at the level that we are at or the level we are looking to get at with our down-lights. We believe we can steal a march on the market,” says Seán Carty, chief executive of Lita Lighting which is developing and manufacturing lighting for industrial, commercial and retail with a long-term view towards a consumer offering.

“It really is a great product and what we want to achieve nobody else is even touching at the moment.”

Lita Lighting was originally based in Spain but moved to Ireland after it was acquired by Carty late last year. He says many people told him he was mad for not manufacturing in Asia but to him, the legacy of the multinational manufacturers in Ireland made the move an obvious one.

“There was a biblical exodus of manufacturing companies from this country over the past few years,” he says.

“The good news is that the US multinationals left behind an incredibly educated workforce who know how to make technical goods well.”

He says there are no other real perks of the move – such as easy grants or tax incentives – and it was purely a business decision.

“There are significant cost savings being based in Ireland and having development in Europe, not least the quick access to market,” O’Flaherty says.

“It’s also an English-language economy. LED in the US has been a huge story and being in Ireland gives you an advantage there as it’s a place and location that’s attractive to the US market.”

Frontline currently has its RD (research and development) and manufacturing facilities in Seoul, South Korea, where O’Flaherty is based. He says this helps keep them close to the cutting-edge development taking place there but he feels it will not be long before that knowledge is taken back to Kerry with him.

“South Korea is one of the largest economies in the world and is well known for quality semi-conductors. Being able to work at the coal face with companies that are so familiar with the product and the industry is so advantageous.

“Ireland has suffered from companies coming in and moving on when the economics make sense. We’re taking the opposite tack, we’ve come to harvest the knowledge and then bring it home.”

One of the most successful Irish LED companies to date has been Nua Lighting. This company specialises in the lighting of fridge and freezer displays in a retail setting and has been extremely successful internationally, working with large multiples such as Tesco around the world.

Unfortunately no spokesman for the company was available to talk at the time of going to print, however there was no shortage of praise for Nua Lighting from its peers.

“When you see what Nua has done in such a short space of time, it’s just phenomenal, they really have a great product and a great set-up in what they do,” Carty says.

“Nua have had such market exposure for six years, that exposure is invaluable even if others decided to compete with these guys,” O’Flaherty adds.

However, despite the rapid progress of late, LED still faces the challenge of its high cost – something which has so far thwarted Philips’s and GE’s attempts at a consumer iteration. For businesses this is different, however, as return on investment is given a much longer time-frame. It stretches beyond simple energy savings, too.

“You’re talking about a 50,000-hour life-span so it’s a two- to three-year return on investment,” O’Flaherty says.

“During the lifetime you also don’t have to worry about maintenance, like a crane going up a floodlight to change bulbs every few months, so it makes perfect sense.”