The Benefits And Drawbacks Of Apps And How It Affects Business Empowerment
Apps have become a huge part of our lives. Apps are a great way to do almost anything nowadays; you can use them for business, pleasure, or both. It is especially true for apps that make life easier. More and more businesses have turned to apps to help them engage with their customers.
In this episode, we will discuss the Benefits and Drawbacks of Apps and How It Affects Business Empowerment.
Darabase is the AR Outdoor Media Company, a turnkey platform and solution for brands, advertisers, and retailers wanting to run immersive Augmented Reality Outdoor Media layered on the real world.
They augment existing outdoor media screens and billboards, deliver permission-based AR campaigns in iconic locations and provide scale geographic coverage through our "Run of World" AR inventory network. They help retailers use AR to drive footfall and sales and enable property companies to monetize their estate.
Know more about Darabase: https://darabase.com/
The Benefits And Drawbacks Of Apps And How It Affects Business Empowerment
Regulation is needed and it's a good thing. You gave an interesting example of Google Maps. I've seen companies as a PropTech investor cool use cases where you're trying to navigate through a very complicated building, imagine a very large luxury apartment complex. Some cool cases where they've mapped the indoor environment, so your on-demand delivery driver, for example, can easily get to your door rather than getting lost in a maze of elevators, stairs, different floors, and floor plans. That's an example of how AR can be aiding us.
I appreciate the example you gave of technology needs to enable and power, and not hog attention and take us away from our world. It needs to facilitate it. We've been caught to a point now where technology can be quite intrusive. Not only is it creating addictive behavior where you go to a restaurant and you see couples, families, and children all glued to their phones, but these apps are designed and engineered to get you hooked, notifications after notifications.
It's creating a response in your brain. That's very similar to hardcore drug addicts. It's far enough dopamine and it's getting us addicted. I appreciate the whole idea that what happens when you have a virtual ad overlaid on a building, so talk to us a bit about that. You cited some cool examples about Buckingham Palace. A lot of our users are global. Buckingham Palace is a very royal place. It's an honor to have another fellow Brit describe the cool virtual advertising that's taking place there. Could you give us a few examples globally, too, of what you've seen?
Buckingham Palace is interesting. I'm going to stay on the right side of the law here. Snapchat has a service called Landmarkers. In the same way that you'll see lots of Snapchat filters for your face whereby they make it easy to put a crown on and all you open your mouth and rainbows spew out, and all that stuff, which is fun, but slightly nebulous.
What's interesting is we feel the big of opportunity in every sense is around augmenting places and spaces rather than faces. They've launched Landmarkers and they basically created three-dimensional of certain iconic landmarks around the world. They've made it simpler for you if you have certain skills. You use Lens Studio, which is a creator tool to be able to then map your digital content onto those three-dimensional spaces, such that if you're in that location, it'll come up in your Lens Bar and you can hit that lens, hold it up to the Flatiron Building or the Eiffel Tower, or Buckingham Palace, and the digital content will look like it's in the same space.
For example, some time ago, when The Lion King film came out, they did a Lion King advertisement where you held up your phones at Buckingham Palace and a lion came out onto the roof and roared. There's a massive lion on the roof. It's cool and a good illustration of how you can start to augment places and locations.
However, my understanding is they didn't have the permission of the Royal Family to do that. That's my understanding and I couldn't tell you for sure, but what's interesting is clearly it's an implied endorsement. There's a connection there. It's the king, it's The Lion King, and it's on Buckingham palace. If you go to the Lens Studio now and you go to the Landmarkers section of Snapchat's website, there's a big thing. It says, "Warning. Landmarkers templates are not permitted for commercial use. If you wish to use them for advertising purposes, you need the permission of the property owner."
To explain the use case here, you're a multifamily developer or industrial developer. You've had architecture built a wonderful structure. If you had physical billboards, you would have an advertising agency, an outdoor one, working with you and making sure that you get paid for those ads. What you were saying here is if you own this building or you're the developer, people could take their phone and see ads because there's a virtual overlay, and no one even consulted you for that, and this is what can happen in the world right now.
People are already selling virtual land. Somebody already owns the digital skin of your building in the digital world.
The database exists to augment the digital rights problem. If you're a property owner, the main asset that you have and you may already have asset value linked to the advertising ads that are in your building. You'll know the very large screen and Piccadilly Circus in London. This is called Piccadilly Lights which is owned by Landsec and they owned the building behind it.
No one's ever heard of the building behind it with the number one show in the street. No one has any clue. That is no Piccadilly Lights, which is the massive screen. It costs a lot of money to advertise in Piccadilly Lights. If you look at the asset register for Landsec, it's a multi-global property company. It's the 8th or 9th biggest asset on the asset register. It's worth £400 million, so over $500 million of asset value for the ad screen because the right value is if you want to be on there for a week, it's £ 200,000 to be on the screen.
There's clearly increment and lots of probable companies all over the world already thinking, "There's a valuable audience outside of my building.” I have the opportunity to be able to help somebody to reach that audience and make incremental ancillary revenue. Also, potentially some asset value is associated with that. There are also mineral rights, thus the beginning air rights. The database exists to say, "We have digital rights."
What is the value that can be attributed to your building in terms of how it could be leveraged digitally? There are two sides to that coin. The side we mostly think about right now is the bigger opportunity for property companies. It's clearer in terms of the legal and regulatory standpoint is how can I leverage my rights? How can I codify those and put a value on them on my balance sheet? Also, how can I then let through database enable somebody to be able to use that to serve content on itself so that I can make revenue from augmented reality advertising rather than billboard advertising?
That's additional rights and the physical matter first. The other thing, especially for iconic properties is, "How could I make money from allowing someone to use or personally use my location in the virtual masterclass?" If you go to the Decentraland, Sandbox, Roblox, etc., some of these virtual worlds are purely virtual. It doesn't mimic in any way, shape, or form the real world.
Some of them are more related to the physical world. People are selling virtual land. "It's not about putting ads on your building." People are selling your property as well as virtual land in these virtual worlds. Somebody else owns your building in a virtual wrapper of the physical world and is selling it to other people. They feel that they own the digital skin of your building. We're saying, "No, that's nonsense." If you own the physical asset, you should also own additional rights to be able to control how those work.
For example, you owned Buckingham palace. We happily faced it. Buckingham Palace, with all the palaces, or the Flatiron Building or whoever it may be, should have control in terms of how that building manifests inside of a virtual world. In the same way, if I go and buy the NBA computer game. Madison Square Garden is digitally represented inside of that game. They paid for the license. Even though it's a purely digital manifestation about physical property, there's a deal that's been done to be able to include that. We believe that is the virtual mass advertising matures. There's also a large opportunity for property owners to be able to think about how they leverage their right to that space too.
I'm curious. How has it worked in the past with games like Grand Theft Auto, where you can play in a replica of a city and there are buildings around it? Are there laws defined? I'm sure that analogy holds for the metaverse too. I'm sure someone had to deal with the regulations and licensing issues there or has that been an area where there's been no regulation?
There's a regulation. It's linked to a few different laws. I'm not a lawyer. This is not legal financial advice. For example, there's a thing called the PANORAMA Act, which has been a very old act, which says, "If a building or location is part of a Panorama, then you don't have to pay the individual building owner." Whereas if it's an individual building, you do.
That applies to video games. For example, if you were driving through London and you've created a wearable, Palo Alto, whatever it may be, and you're going down California Avenue, and it's some buildings, and it is a rough representation, you don't have to have done a deal with every single property owned on California Avenue.
The Panorama Act states that if a building or location is part of a Panorama, then you don't have to pay the individual building owner.
The new Apple building or the Tesla Manufacturing Headquarters that were in California before they moved or whatever.
Especially, if you call it Tesla or you said, "No, it's the Raspberry phone factory," or whatever. You're making an implied endorsement. You can't do that. There have been even examples and I've seen some cases before. There was a strip club in Grand Theft Auto. Let's say it was called Spearmint Rhino for the sake of argument. They'd put it in Grand Theft Auto and they call it Peppermint Hippo or whatever, and then they got sued.
If it's recognizable as an individual location, especially if it's central to the game or similar, if you're driving a Ferrari, my understanding is you need to have a license from Ferrari. If the Ferrari that's in the background, not necessarily. It depends on how contextual the experience is and how much will imply endorsement. This is the passing of the law that wasn't pretty ubiquitous.
On this thread, if you're a big game producer and you're making hundreds of millions of dollars in revenue, it's very easy. Ferrari's or Apple's lawyers or whoever knows exactly who to write the legal threat to, and they know there's money to take out. The problem with this metaverse is they're pretty decentralized and it's hard to track down the source of the token or the wallet because that's how the blockchain is designed in some way to provide anonymity, which creates a whole confusion around how do you litigate? How do you enforce property laws and digital rights in a virtual world?
We're not trying to create a police force. We believe that if you look at all media, pretty much. At the beginning of YouTube, they didn't worry about rights. It was completely your responsibility as the creator to ensure that you had the rights and then it got so big, that they had to get rights. What we're going to try and make sure that no one has held rights going to put up there before it gets put up there, but even then, they'll say, "It's the responsibility of the creator first and foremost, to ensure that they've got the rights for what it is, then publish it."
Similarly with advertising outdoor, it was only illegal to put fly posts. I had to pull illegal posters up on a private property in the mid-80s in the UK. That was when the law came through, but before then, hardly anybody did it anyway, apart from small nightclubs. There was this £1 billion business in the UK and if you were Ford, McDonald's, Starbucks, or Apple, you're not fly posting on people. You're going to take these premium permission-based regulated legislators' side.
What we're doing is we're creating a viable alternative. We're doing that in such a way, which is very open, it will be API-based. If you want to run it at metaverse, we're going to get a hike and the CPM is going to have a higher value per advertising because you're going to get the right premium advertisers advertising your metaverse. They want to make sure why that placing that brand, which has a lot of equity, is being done with the permission of the property owner and these iconic locations, etc. Using a database will allow you to be able to facilitate that.
Will there be other people not doing that? Undoubtedly. Do we believe that as this grows and matures, a commission-based way will be the way that is required? Absolutely. Do we think that property owners are going to do deals with hundreds of different metaverses? No. There needs to be some central data service. Your background, as I note as well, is the way that programmatic advertising works.
It's built around the ability to have these centralized supply-side platforms that allow access to inventory into the right levels of data to be able to make real-time decisions. We believe that as that increasingly embraces augmented reality type advertising in the world around us as our habits shift to be flat screen ad lens-based, then the database will be incredibly useful.
It's a nightmare for brands who care a lot about where their brand is perceived and how it's used. You could destroy the value of a brand if you put it in the wrong context. I founded and successfully sold an advertising company in the mobile app space. One issue we had is that we had a lot of games where we'd showcase ads inside of games, but the brands didn't want their ads appearing in some random game where people were chopping each other's heads off.
In the same way that brands were very nervous about YouTube because user-generated content implies poor quality. Do you want a luxury high-end brand advertising in that environment? It made it very difficult and we call that brand safety in the advertising industry. It wasn't just a problem of rights and ownership of who the publisher is. The brands also want control of how they're perceived.
It's interesting that the metaverse brands are minting NFTs, non-fungible tokens, which is a unique digital representation. It could be Nike shoes and Nike has done this. They're very successful. There was a fashion show on online metaverse where they had these unique dresses and you could buy those unique dresses and put them on your avatar. That's the power of NFT is at least allows the brand in some way to verify ownership. Who has this?
Most NFTs are transferable and I don't want to get too technical, but it was a wonderful post by the Founder of Ethereum, and he talked about the concept of soul-bound NFTs. It's a cool concept where rather than allowing the NFT to be freely transferable, it's bound to that user in the same way your passport cannot be bought and sold. Your ID and your vaccination card, shouldn't be either.
Although, there are places where you can do that. The idea was, like a criminal background or your education, you would have soul-bound NFTs, and that's an interesting idea in terms of making sure that the NFT, the digital object, is used and tied to the account. It's a new paradigm shift from what Web 3.0 and the metaverse offer when it comes to enforcing rights.
The other thing is the NFT is non-fractional ownership. NFTs are getting a bit of a bad rep because everyone associates what NFTs are being used for right now. Some of the kinds of valuations around those. It’s crazy because Bored Ape Yacht Club, I don't understand it versus this digital image that associates you with this community of crypto intelligence. However, NFTs have an underlying smart contract that says, "Here's something that's non-fungible and something that is unique and allows me to associate.” It could be associated with a bottle of rare whiskey or film investment, or digital rights.
In some scenarios, the freeholder of the property wants to be able to say, "I'm going to be in charge of how we put advertising on my building," but oftentimes also, they'll go, "I'm going to leave that to a third party. I'm going to either do one deal where they pay me in arts and mining, and they manage it or they manage it, but then they give me to share the check."
What we're trying to do as a company is look at how the world works now because it's taken a while to shake out and then apply those models to this very fast-moving and dynamic space in which we find ourselves where it's necessarily to want to reinvent the world. People will see content in the way that I've been describing. That content is likely to be free because when was the last time any of us bought an app.
Therefore, if it's free, let's be honest with ourselves. There's probably going to be some advertising associated with it. It helps to be able to facilitate the delivery of that service. If the content that I'm seeing is based on the world around me, then there's going to be advertising for the world around me. How do we do that in a way that isn't some dystopian view from a sci-fi movie? Let's look at outdoor media now and how that best works and start to apply digital principles to this opportunity.
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