Jason Sosa is the founder and CEO at Immersive Labs, which has been featured by CNNMoney, The New York Times, The Huffington Post, Fortune, Mashable, and Business Insider. For the last few years, he has been researching digital signage and HCI (human computer interaction) with a focus on bridging the gap between the virtual (online) world and physical world through intelligent content.

Immersive Labs builds the world’s most advanced intelligence software for digital signage. Their backgrounds include advertising, artificial intelligence, media research, digital signage and human computer interaction.

NTT: Can you tell us about the new technology Immersive Labs is working on?

Sosa: Definitely. We use facial recognition in combination with artificial intelligence to make existing signs, signs you might see in malls or airports or shopping centers, making them smarter so they can adapt their content based on the people that walk by, based on the weather, based on the time of day.

NTT: Many who have written about Immersive compare the technology to the advertising Tom Cruise’s character encounters in the film Minority Report. Do you think that film offers a realistic view of the future of advertising?

Sosa: Back when that film was made, I think it was 2002 when that film came out, and during that time period, we still had banner pop-up ads in our browsers. So, I think the rules of marketing have changed considerably over the last, actually almost 10 years since that film has been released. Back then, it was very much a broadcast mentality of how messages were sent to customers. And especially when the novel was written, you know, way back.

So it’s changed a lot. Now it’s more about empowering consumers as cell phones and other technologies have evolved. So what we see is not really building a system where it’s going to be like Minority Report, where it’s bombarding folks with messages, but more so empowering them to help them make better choices and have a better shopping experience.

NTT: How does that actually work in the shopping experience? Can you give an example?

Sosa: Our business is really to bring the online experience to the physical world. Right now you go online and you have ability to find recommendations, to share things with your social graph. We think that those types of features would be really amazing to have in an in-store experience. A majority of commerce, believe it or not, still happens in the physical world. So, if you go into a store, wouldn’t it be just amazing to be able to have the ability to, when I go to the Gap, it knows that I like this shirt, it can recommend other shirts that I might like. Or to see what else my friends might recommend based on my taste. I think there’s some interesting things that can happen in the physical world. And a digital sign is a part of that, but it’s really about making the entire store intelligent.

NTT: Are you talking about bringing kiosks into the store where people can search for particular items that appeal to them, or how exactly does that work?

Sosa: What we’re doing is we’re adapting content to the sign, and maybe even at some point the sign will interact with your mobile device. So it can recognize, when you walk in front of the screen, male or female, we can know your approximate age. We can customize a tailored experience more directly to person in front of the sign.

NTT: Can this technology work with existing digital advertising displays or is it better to integrate it into new displays?

Sosa: We actually built our technology with the current infrastructure in mind. So all the existing signs you see out and about. And we really focused on pedestrian traffic. Really what a digital sign is, it’s just a commercial grade LCD screen, a computer and an Internet connection. We just leverage everything that’s already in place, and with a simple, low-cost sensor, we can make a big difference in the ability of that screen to become more intelligent. It can work with the existing signs that are out there, and certainly anything new that comes up.

NTT: What sort of advertising environments work best for this technology? For instance, can it work with highway billboards where consumers are driving in cars? Or do you have to be walking past the sign with your face visible for this technology to work?

Sosa: Facial recognition is really just one component of it because we’re really pulling multiple sources of information. But it’s best suited for pedestrian traffic where you’re in a shopping experience and you’re likely to be able to look at this medium. So a roadside digital sign, something that you’d see while you’re driving your car, isn’t something that we’re focused on. It’s a different challenge to be able to tailor that, given the amount of traffic that’s going to drive by that sign. We’re really just focused on indoor or outdoor digital displays for pedestrian traffic.

NTT: What is the cost difference to advertise on a traditional printed sign, a digital sign or a digital sign equipped with your technology?

Sosa: There are a lot of analytics and information you can get online. You can see exactly how many clicks you’ve received, how many impressions you’ve received, and even corresponding conversion rates on your sold products as a result of that. And unfortunately, a lot of those granular level details or analytics aren’t really available off the web. You really have a general idea of what the traffic is going by the sign.

With the digital sign, of course, there are some cost savings because you don’t have to pay for the cost of printing and it’s pretty simple to send over new digital files. Our technology can actually help advertisers know who looked, how long they looked, and what the demographics were. We can show how long they stood there vs. how long they looked. And we can help them optimize their advertising spend, so they’re only directing their message to those who want to see it or who they want to see it. They can really take their message and stretch their ad dollars to put it where it really counts.

NTT: Can you give an example of how an existing client has used the technology and what sort of experience they’ve had?

Sosa: We launched the Sony Style store in New York City. In that particular instance, we were able to understand customer segments as they looked at a 3D TV demo in the store. We also launched a few other retailers in the Boulder and Denver area in Colorado. We were able to determine that, when using our optimization, we saw a 60 percent increase in customers’ attention time.

NTT: How does the system determine what kind of ads to display?

To be really specific, it’s not just male ads for men and female ads for women. It’s much more sophisticated than that. It’s going to show ads based on context. So it could make a decision that it’s morning, and we happen to have a coffee ad in the inventory, so it’s much more relevant to show that coffee ad than it is to show a FedEx ad, for instance. So it’s really understanding context so it can make decisions on its own.

Right now, all that sign owners can do, they really have two options: they can either randomly rotate ads on a loop or someone can take the time to create a playlist and tell it these ads run in the morning, these ads run at night. And while that’s a good solution, it’s very time intensive thing to do. We are basically the autopilot that can automatically schedule those ads on the fly. The great thing about our system is it actually learns and improves over time.

NTT: Will Immersive expand the technology’s capabilities to provide additional customization criteria for advertisers?

Sosa: We have some really interesting things in the works. We’re still quite a ways away for announcing anything, but it’s going to be interesting to see how marketers use the information we’re collecting, the data, to create a more rich experience for in-store advertisements and really create more experiences around what kind of messages they tailor. So we’re looking forward to that.

NTT: Have you heard anything from the people that you’re working with about how they feel their advertisements are going to change?

Sosa: There are some really interesting ideas. The really great thing about going through this process is, when you talk to customers, you can really get a good sense of the direction that we need to be thinking in. A lot of it tends to focus around interactive, at creating experiences with folks. I think that the information we’re collecting and the intelligence we’re providing is going to provide a new level of interactive experience. It’s going to be, while not as intrusive as Minority Report, it will certainly be as entertaining and engaging.

NTT: It does seem like a lot of our interaction with brands is moving that direction, instead of a static relationship where they talk, we listen. Mobile is at the core of much of that. What possibilities does Immersive see within the mobile category?

Sosa: Absolutely. That’s really the key point to the web is really a two-way communication. And I think that the time of broadcast is kind of moving to the wayside as analog is replaced with digital. Everyone has these two-way communication devices, or most folks have smartphones or some form of text message, where we can interact with our environment. So I think we can do some really interesting things with the devices that folks have as well.

A lot of the discussion has been around near-field communication. So what’s really interesting is that we could probably use that to allow people to opt in to a system so that they could be identified as a member of a loyalty program when they walk into a store and have a two-way communication with the screens. The customer could actually change the content from their phones. So there are some really interesting things that we can do with that.

And I think as things like Google Wallet, and I’m sure Apple will probably create its own solution for a wallet or payment system, I think that will be an interesting device to incorporate with digital signs. The digital sign is more of a public interface, where you’re cell phone is more of a private interface. You wouldn’t want to enter your credit card on a giant touch screen, but you more than likely would do that on your cell phone. That’s kind of how we see the marriage of the two coming together.

NTT: Your company has been clear that you take privacy concerns seriously by making sure the technology does not store information about customers and only analyzes non-identifying characteristics to tailor ads to passersby. But there is a lot of talk about the possibilities for similar technology to identify more distinguishing characteristics to deliver ads based information like consumer moods. At what point along the spectrum of customized advertising do you think privacy becomes a concern and how do you stay on the right side of that argument?

Sosa: I think it becomes an issue when there’s a forced opt-in, that’s probably the line. I’ll give you a quick overview of where we are with our privacy issues. We don’t save or record any images, there’s no database of any faces or anything like that. Really what’s happening is, what our software’s looking for are characteristics of the face, and we’re identifying a numerical value, so like a one or a two. Think of it like that. All we’re collecting is numerical information. It’s not personally identifying Amy, it just knows you’re a young adult female. So that’s the kind of information we’re collecting.

Where we see the future of the industry going in retail or in any type of digital signage application, it’s going to be an opt-in type of thing. And it has to be because I think consumers will push back if it’s not. I think there are too many concerns about privacy, at least at this point. Advertisers certainly wouldn’t adopt this if there is consumer backlash.

So the most important thing for this type of experience to be possible is going to be by allowing folks to use near-field communication, their cell phones, in some way, to opt in to this service. So when I walk into a store, I could say, “remember me, this is Jason. Remember where I go, serve me information that’s relevant to me, give me recommendations on products that I might like, show me coupons.” I think those are the types of things that we’re going to see. And I think it’s really the only way that the industry is going to advance and create better experiences for customers.

NTT: It sounds like, what it’s doing really, is using technology to help improve the customer service we receive in our favorite stores. Is that the direction you see this going?

Sosa: Absolutely. I can give you a perfect example of that. We have one customer that came to us and that they thought this service would actually help them better staff their stores. How many times have you gone into a store and you have eight employees, and there are two customers? Or you go in and there are two employees and 100 customers. So we think we can actually better optimize the efficiency of stores and their planning. They can understand traffic flow patterns and customer segments and demographics so they can really staff and support the customers at the times when they’re most frequently visiting the stores.

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