Placing ads based on what people say in phone conversations is going to be controversial, but Pudding Media just raised $8 million in an A round led by Opus Capital and BRM Capital to prove the concept. Pudding Media already operates The Pudding, a Website we covered in September. As we reported back then:
ThePudding provides free, PC-based phone calls to anywhere in the US or Canada. The big catch: computers in Fremont, CA will eavesdrop on and analyze every word of your conversation so they can serve up advertisements tailored to the topic at hand.
These ads are like the ads in Gmail, except that the Pudding’s computers do a speech-to-text translation of what you are saying and serve up contextual ads accordingly. The company says it does not store any of the conversations. The company plans on using its new capital to expand its reach to “cover all forms of voice services - mobile carriers, VoIP operators and Web voice applications.”
Privacy hawks could have a field day with this one. Many people, if they stop to think about it, will find this idea chilling, even if it is just a computer that is doing the surveillance. Others will be willing to give up anything for a free call, and that is Pudding Media’s target. Consumers who object to the surveillance aspect of the service don’t need to use it, right? But what about the people on the other end of the line? It doesn’t seem like they ever consent to their phone conversations being monitored (or monetized).
In some states it is illegal to record telephone conversations without telling both parties that the conversation is being recorded. Those laws may or may not apply here, since these phone calls are not recorded, but rather monitored on the fly. A counterargument would be that the content of the calls are stored (i.e. recorded) for some period of time in order to be converted to text, analyzed,and matched to ads—even if it is just a few seconds before being discarded. This could become a legal can of worms.
Even bigger than the legal risks will be just gaining basic consumer acceptance for such services. These are big hurdles. But if Pudding Media can get past those, there are a lot of phone conversations and emerging voice apps out there creating more potential advertising inventory than any single startup can handle. Is Pudding Media pushing its luck, or will it find a big payday where others fear to tread?
Just don’t think it’s worth it. It’s not that expensive to make international phone calls. Those who frequently make international phone calls will find the advertising a burden and a waste of time.
So long you know about it, and you have a way out of it, I don’t see anything wrong with it.
Amazing, no one seems to value privacy anymore.
Wife: “The baby…the baby…it’s coming out!”
Husband: “Don’t worry, I’m coming! Where are you now?”
PuddingMedia: “This call is sponsored by Baby Center. At Baby Center, you can get all your baby’s needs, blah blah blah blah…”
Wife, Husband: “Hello? Hello! SHUT THIS DAMN AD UP!”
this is a tough sell
OK, so if I talk on the phone about buying a book, the system will give me ads about other bookstores offering better deals? And if I talk with my girlfriend, it will give me ads from dating sites for “comparison shopping”?
But the privacy implications are of course staggering. How long until the company will decide there is extra money to be made by giving companies information about which customers mentioned their products or are possibly interesting in a new car?
Can’t work for business (real business)
- I can see this used from west africa - with scammers, calling americans on the cheap and - offering that 1bil from my deceased relative
Putting Media and Google with DoubleClick would be a slam dunk!
what about languages which are not english??
How are they supposed to insert an ad before they have heard the conversation? What makes them think they will stay on to hear it afterwards? The real problem though is the problem free internet access had. It simply isn’t a very valuable ad space and they will have too much difficulty selling it to pay for itself.
The one area it would work though, is information, directions, directory assistance, white and yellow pages, restaurant ratings, etc. No real privacy issues there and the ads could actually be useful to the listener.
Speech. less. Dead. Pool.
I definitely would never use this service. Those VCs in California are awfully stupid, or greedy. Like who would ever want to invest in this. They just blindly give away money to strike it rich on the “next big thing”. This is seriously crossing the line. And lawsuits will fly for sure!
What a waste of $8M
Another example of the old addage: “Just becasue wascan, doesn’t mean we should’
What’s worse than “dead pool”?
typo correction: “Just becasue we can, doesn’t mean we should’
Their business model is as serious as their name. I’m guessing one of the top guys or founders went to b-school with someone on the VC side of this deal.
a friend of mine grew up in india and has a strong accent. his bmw gps navigation system can’t understand him.
so what happens if you grew up outside the u.s. and have an accent? or if you’re from n.y. and you talk really, really fast?
There’s already a working version of this already stuff from a regular phone http://69.57.168.29/asr/ - See coverage here. http://www.centernetworks.com/.....ogle-phone
All these comments are hilarious! I could crack on this forever.
I think they’re smart as hell - it’s one of those ‘why didn’t i think of that’ situations. The market for VOIP has been steadily improving every quarter and more and more weight is being placed on ads served on non-traditional media like 411 services, ads in online video, phone sex lines, etc.
It’s where tech is going so embrace it people - and feel the warmth of social exploitation as it envelopes every aspect of your life.
@Nick (#1): Pudding is only for North American calls, not international. And, actually, I think that’s their main shortcoming at this point, rather than the privacy issue. Long distance in NA is already cheap enough to be below the threshold of caring for most people. I have $25/mo flat rate long distance from my cable co (Rogers).
HOWEVER: International calling is still expensive enough that a lot of people are motivated to find cheaper solution. This is really the basis behind Jajah and many other Voice 2.0 start-ups. I’ll bet Pudding has aggressive plans to expand into international calling.
@Bill (#4): The ads are visual, not audio. They show up on your browser while you make the call.
Back when they launched, I had about some other ideas about where Pudding was headed. See here http://www.shaiberger.com/?p=32.
Ken Elefant (at Opus) is a sharp guy — I met him as part of the funding effort for Streamcheck — and there is more going on here. Think past the *immediate* incarnation of this technology. Think about ads pushed out to the mobile phone… context-driven services…
I have some further thoughts here: http://www.shaiberger.com/?p=50
“It’s where tech is going so embrace it people”
It’s only where tech is going IF people embrace it. If they don’t, there’s a greater chance for the future not to look like this. Are you an investor?
With the Beacon incident still fresh in everyone’s mind, you’d think that business would begin to recognize that even though finding new and inventive ways to advertise is definitely important to any company’s business plan, consumers still HAVE RIGHTS and will ASSERT THEM when they feel that their privacy is being intruded upon.
Advertising has supported much of the entertainment technology and creative content we take for granted today, but instead of finding new ways of treating consumers like LAB RATS to be studied, WE NEED to find ways to work TOGETHER.
Consumers are NOW ACCUSTOMED TO advertising, BUT I doubt WE want to hear ads in the middle of a conversation! With the continuing evolution of user generated content, the next logical step is to involve consumers in the advertising process and turn that into a conversation TOO.
SA Insider beat you guys to the punch on this one. What’s up with that?
I don’t understand how people are supposed to find this “chilling.”
Can someone explain?
A computer analyzing my conversations is kind of creepy. I’m sure their venture capital guys are smart, but no one is infallible.
Good illustration of how out of touch VC’s can be.
VoIP technology is going to be one of the very powerful trends in 2008!