Entrepreneur Seth Goldstein announced today that his company ROOT has received $1 million in funding from the Chicago Board of Trade (CBOT), a futures exchange founded in 1848. Bernard W. Dan, CEO of the Chicago Board of Trade, will join the board of directors at ROOT.
ROOT is a commodities exchange for Internet- generated consumer leads. Today they provide a service that applies quality standards to mortgage service lead sellers wishing to sell their leads to mortgage service providers.
Far more interesting, though, is their experimental service ROOT.net, a virtual vault for managing attention data (browsing, search history and potentially much more - see partial screenshot at the bottom of this post). In the future, ROOT is likely to offer chunks of attention data that consumers have chosen to expose to prospective buyers in a futures market. It’s very experimental, but I think it’s fascinating. Though ROOT.net is in its infancy today, I think it’s the most important part of ROOT. The news that CBOT has invested in the company and its CEO has joined its board is a very important validation of the Attention Data concept.
ROOT.net lets users manage data captured by the Firefox plug-in from the nonprofit AttentionTrust, which ROOT founder Goldstein also helped found. That plug-in allows you to save your attention data as an xml file on your own computer or store it on the servers of any number of third party services, such as ROOT. See the partial screenshot at the end of this post for a look at the ROOT.net dashboard.
The likely future of the company is that ROOT will sell access to the parts of that attention data that we chose to expose and we’ll receive either part of the profits, discounts from the advertisers who buy it or some other form of compensation. In the case of ROOT, it is most likely not going to be sold in real time but in futures markets. You can already capture your attention data with the AttentionTrust plug-in and manage it with a ROOT Vault, but the company isn’t doing anything with it yet. Users can turn off tracking at any time. As you can see from the image below, there are a number of things you can do already with the service - like use a widget (called a worm) to display your favorite sites on a blog or elsewhere. Keeping track of your web use through a tool like this has a lot of potential already, but ROOT is in a good position to leverage the data you share in a market.
Offering our attention data in a futures market would look like this. Companies would pay now for access later to attention data from people who intend to buy a compact car in California, or who are outdoor recreation enthusiasts with a certain income level. What have those people been doing online as they prepare to make a purchase? The idea is that users will selectively expose that data about themselves in exchange for some benefit to themselves: advertising targeting our intentions instead of sent scattershot at us, compensation for our data or discounts.
Clearly there’s a lot of trust that’s going to need to be built in this sector, but to draw an analogy, we don’t stash our cash under the mattresses anymore - we put it in the bank. We already hand our attention data over to any number of other companies, we just don’t have very much control over it currently and can’t leverage it for our own purposes.
Remember when AOL exposed scores of search queries from users without permission and it was a major crisis? That’s just one example of how valuable control over our own data is to us. Some of it we’ll want to keep private, but much of it we will want to provide to trusted companies to leverage for services we find beneficial. How all of this will play out remains to be seen. The future of the Attention Economy could look like the movie Minority Report where I’m followed by marketing machines that know my consumption history in shocking detail; or it could look like services that provide me with just what I need, when I ask for it.
I hope to be able to use services in the future that take my exposed Attention Data and run it through any number of value added services for my reuse. “Computer, bring me the best articles I’ve read on Attention from the five people I’ve communicated most recently with about the subject.” A futures market for commercial use of that data makes perfect sense to me too, though.
It’s a very complicated and experimental situation. If the Attention Economy goes the direction that some of the key players participating want it to go in, today’s announcement of the CBOT investment in ROOT will likely go down in history as a key event in the emergence of users in control of our data and more widespread appreciation of that data’s worth.
I agree that the idea is fascinating, but can’t help ask…
Does this mean that if Root gets hacked the users who are exposed can say they got ‘Rooted’?
“Does this mean that if Root gets hacked the users who are exposed can say they got ‘Rooted’?”
I like the way it is phrased. Good one, Ben.
Wonderful write up.
When you think about it, this is tremendously high level thinking — sort of where next-generation marketing meets wall street.
It kind of blows my mind, to be honest.
Cheers
t @ dji
Here is the list of the management of this company:
* Lewis Ranieri, Executive Chairman
* Seth Goldstein, Founder & CEO
* Jerry Neumann, EVP of Finance and Corporate Development
* Candice Sherman, Chief Operating Officer
* Michael A. Chaladoff, Chief Financial Officer and Treasurer
* Brian Buttigieg, General Counsel
* Viva Chu, Chief Architect
* Dan Kashman, Director of Business Development
* Robert A. Leathern, Head of Product and Business Development
* Andy Levine, Vice President of Corporate Development
* Eric Masella, Director of Corporate Development
* Matthew Prohaska, VP of Sales
* Joshua Reich, Director of Corporate Development
* Greg Yardley, Head of Strategy and Operations
And here is the math:
1M / 14 ~ 70K
And here is my question:
WHO CODES?
Danny: obviously their programming is done through ScriptLance for loose change.
Sounds like a good idea in theory, but it will never work. The Web doesn’t work that way.
Thanks for this. I met Seth at PC Forum this year, and we talked for a little bit, and I didn’t really understand what the company was trying to do. I think it was because he said he wanted to put a root server on every desk, and we were talking about different sorts of ‘root servers.’ This post is the first time I understood what the company was doing.
And you’re right….it’s facsinating.
— Bret
It’s fascinating in the way that English schoolboys were fascinated by unexploded WW2 bombs. Something that sane people wouldn’t go near, and should be taken somewhere safe by the appropriate authorities and detonated without harm to others.
Actually Danny, now that I think about it, last time I heard about the coding side of ROOT, Robert “r0m’” Lefkowitz was the main coder.
That should read Robert “r0ml” Lefkowitz.
a lot going on at root, probably too much. are they are financial services company or the latest try on changing consumer behavior?
Marshall, this is a good and illuminating post. I think the whole attention movement needs to do a better job explaining what “attention data” is, who has control over it, and why we should support the nonprofit Attention Trust.
I spent a few minutes at the Attention Trust site (as did a couple of really bright people I know) and we came away with, “Hmmm, I’m not sure I get it….”
If you want to know what attention data is CW there is a great explanation via this post (shameless self promotion).
http://www.touchstonelive.com/.....n-for.html
Root.net is a forward thinking, long-term bet that in the near to long-term future advertisers will want better qualified leads based on nuanced profiles of potential buyers while ‘consumers’ will opt to expose their attention data to trade less annoying cold calls and scatter gun advertising for direct bids by product/service vendors who know exactly when you’re ready to buy their particular product/service.
In the short term, however, I think Attention Data needs a more practical application to give users immediate value. And that’s what we’re doing at Touchtone.
Tis is really intresting idea . but how far it will go? there are big players on the web who has got large ammount of that attention data but they are not able to use it because of privacy. I thik that data only used for general statistics.
It would be really intresting to have something that will be able to handle this valuable information and give the fair share to all parties involved.
if I I’m in the market to refinance why wouldn’t I go straight to the lenders. Can any more irrelevant companies try to make a buck a on horrible ideas. Go back to school, a thought is not a business model. it’s a dream. MS, G, and Y! are doing this already but they’re not quite as ostentatious about it and probably don’t care to share the monetary benefit of their info with the user. CBOT obviously has some cash to waste because if this thing is worth anything I’ll eat paint chips. CBOT is dumb.
I think we would all agree that the data we generate through the attention we pay online is valuable. The question is to whom and in what contexts. I can go to Fred Wilson’s blog at http://avc.blogs.com and see what he is searching on through a widget; and that is interesting to me as somebody who wants to know what he is thinking about outside of what he might be actually writing. Companies, on the other hand, also might want to know what he is thinking about, especially if his thoughts are based on some underlying commercial intentions (ie refinancing a loan or buying a car…). The problem with leads is that it is very hard to gauge intentionality, and imho clickstream is a decent proxy for that. Connecting the dots in terms of keeping users in control of their data while providing efficiency for buyers and sellers of leads is probably the hardest challenge I have ever faced in business. Conceptually, it makes a lot of sense. Practically, there are a variety of previously disconnected behaviors to align and change. Ps, Paul, I love it when you talk dirty to me. ; )
These are very early days of attention movement. AttentionTrust organization has made good headway. AttentionRecorder and the attention vaults are the infrastructural pieces that needed to be build and they are now in place.
For the next steps, I second Chris Saad, there needs to be more tangible and consumer-oriented applications. There needs to be more evengelism and excitement around the organization. But, to underscore, being a vendor in attention space, I think having .org to drive the awareness and adoption, and even standards is critical.
Alex
http://www.adaptiveblue.com
Offering our attention data in a futures market would look like this. Companies would pay now for access later to attention data from people who intend to buy a compact car in California, or who are outdoor recreation enthusiasts with a certain income level.
This description seems to be over complicating a simple situation for …intending to buy a compact car in California. Why not just create a module/plug-in and label it “My Purchase Intentions” and place time frame columns in like 3-month, 6-months, 1-year. And allow the user to just fill in the data about what they intend to buy, be it a car, outdoor rec. gear, a home or what have you, and make it available?
Why all the over complicatiing and complexity that could lead to mis-interpretation of the click-stream data and frustrate the user and the marketer/seller?
The more I thought about why you wouldn’t make things as simple for the user/consumer as just declaring what they’re in the market for it as I described previously is that the Attention futures market is not conceived with the user/consumer as the primary focus.
It seems to be conceived with marketers/advertisers in mind primarily and in conjunction with financial market-makers as the other benificiary making money by crowding around the inefficiencies of misinterpretation of clickstream data and leaving the end-user to be adverttised at in a manner no more benefical than what currently exists with keyword advertising.
If you really want to create something that will have value for the end user/consumer create something for them that cuts through all this data analysis and potential misinterpration and just let them declare what they intend to consume.
Hi –
Market models continue to compell ‘fill-in-the-blank’ _________ ‘2.0′ (Web, Enterprise, Economy, etc.) Innovation. It is simply a the long overdue use of complexity science to advance commercial and business objectives.
More, a lot more of this conversation happens w/in the open, non-profit Prediction Markets Consortium. See:
http://www.pmclusters.com/
-j
I thout how it would work with the benefit to all parties and came up with this simle example. Peope in Europe buy or exchange their car every five or six years. so the company that monitors their online behavior at the end of that period can make an offer to buy a new car from the company that willing to sell one with certain discount options. This is how i think it would work. At the end all sides will benefit. Is it possible? I dont know.
My head hurts thinking about this model. Why would this be offered in a futures market? I would think that the advertisers would want access to the users’ browsing data now. Why buy the right to see the data in the future? From my limited unserstanding of futures in the farming market, it goes like this: I need capital now to grow my crops. I don’t have the money so I sell the right to buy my crop to someone else. Why would that person want to pay now for something they recieve later? Because they pay less than they think it will be when the crop is produced and sold. No one knows how the farming season will be so it gives the farmer money to grow his crop and feed his family and gives the buyer a discount.
Now in the futures market of users’ browsing data, what are the auto manufacturers hedging? The possibility that the user data won’t be good in the future???
Help! The architecture asses and 10,000 foot thinkers have taken over
This idea has been tried about 10 times before and only people who spend way too much time with other internet junkies and VCs would think that people want to give up their browsing history - or even store it - for someone else to trade on it.
People surf porn. People surf stupid news. Not all surfing has economic value. When people check out car review is it because they are in the Market? who knows? Who surfs for Insurance rates? Who wants to figure out what to save.
This is another idea like Del.ico.us and DIGG that have VERY LIMITED MASS APPEAL. And the benefits do not accrue to the user, so it will probably never be successful.
Besides, key people associated with this project have already bailed out and $1 million is nothing.
This concept brings us closer to the idea of virtual agents going out and doing our bidding, but it is focused primarily on intention inference and not active agent queries. So overall a good step as long as people understand that the optimal architecture involves agents.
@Tom
You are spot on. This had nothing to do with users. In no way will a futures market for this data help add contextual relevance to users in their attempts to fulfill their goals.
A few more reasons I don’t like the idea.
1. Detailed data like root provides is actually too specific to help marketers. Many companies tried doing personalization based on detailed segments during 1.0. It doesn’t scale and its not effective. In order to optimize you need to have the volume levels to achieve confidence. Millions were spent by marketers thinking personalization was the holy grail. None of it exists to today save some of the basic things Amazon developed in house and maybe a few basic things ATG did.
2. Plenty of user behavior data is available to marketers in real time already. Still, outside of PPC most businesses and agencies are not targeting any of their online media based on behavior and even fewer are segmenting their audiences to market their messages more effectively. It will probably be two more years before these practices gain momentum. Which leads me to…
3. Just as Segments need volume to be effective so do markets. I don’t see consumers turning this infomation over to a source with no history in droves.
Maybe Root can stay above water as a lead-gen company long enough to see if this idea will fly but by that time the real-time targeting and optimization technology will be even better than it is already…and it’s pretty darn good now. The attention economy is real-time. Contextual relevance is where the value is to marketers and those contexts are defined by actions and behavior at the time of the message, not in the future.
To Mr. Mendez
Why you think this is different from the business you are in? Clickstream data is a great complement to the other data streams you are building, its early, give it time.
Does anyone know why this would be successful as a futures market as opposed to a realtime transaction?
I think there’s a bit of unnecessary, forced ‘labeling’ that’s making this very difficult to digest. I’m yet to see any data suggesting that users are clamoring for ‘attention management’. Information overload, time crunch, missing out on important or mission critical information and solutions to the same, they get.
Let’s just simply call all of this a better way for publishers (on behalf of advertisers) to provide users with tools to get the right information, with contextual ads that the user might care about, based on behavior or a specific search.
Having said this the technology and theory behind this is very cool. I’m just not sure that you need all of this to really execute on a more targeted, lucrative lead generation strategy that both users and publisher understands, is comfortable with and can use.
We’ll that’s how we are looking at it.
Sameer
http://www.zaptxt.com
Does anyone remember AllAdvantage? Can we call this AllAdvantage 2.0 for the sake of clarity? It did not work then and it won’t work now. The incentives for users to do this are not there. And in the meantime they can’t make it as a lead gen service to 3rd tier publishers as it will never scale or provide enough leads to any buyer to be taken seriously. That loud sucking sound is getting louder. $13m down and $1m more to go…….
I have a related article in Web 2.0 magazine today,
but on a technical aspects of attention:
http://www.web2journal.com/read/272899.htm
Alex
…and then the CEO got fired for spending $13m in 18 months and the whole company looked like a big joke. When you are out for your own self-aggrandizement it is usually not so good for the business.
Alex –
Your article merely underscores how silly this whole idea actually is…if you need to teach people about something like this - and they have to exert effort to manage it - it will likely fail.
People don’t care about their marketing messages enough to try to manipulate the stream through things like this silly vault. Too much work.
AttentionTrust.org is a not-for-profit just like Root.net net is not-for-profit….because they are both stupid ideas that no one is willing to pay for and they make no money. The .org is just a clumsy way to legitimize this attempt to monetize web surfing, and for the limited benefits provided to the consumer it will surely fail. Die Now!
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So we will give . . . that is freely . . . every bit of information about our browsing that phreaks have been stealing for years . . . or doubleclick . . . and we give it to someone for “safekeeping” so that sometime in the “future” we might profit . . . without any idea of where the “vault” is . . . security, coding, no history of the industry to speak of . . . no statement of ethics, privacy . . . nothing.
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By the way, futures market is buying something now in the gamble that it will be worth more that you paid for it at the future date it comes due.
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