The Pudding

Company Will Monitor Phone Calls to Tailor Advertising
Big Brother Is Listening?
September 25th, 2007

Listen To Recorded Audio:
[audio:ACT Smart 0925.mp3]

This has to be one of the wackiest business ideas I’ve heard of in years (and there’s certainly been some doozies). Companies like Google scan their e-mail users’ in-boxes to deliver ads related to those messages. Will people be as willing to let a company listen in on their phone conversations to do the same?

The Company: Pudding Media
Pudding Media, a start-up based in San Jose , California , is introducing an Internet phone service today that will be supported by advertising related to what people are talking about on their calls. The Web-based phone service is similar to Skype’s online service — consumers plug a headset and a microphone into their computers, dial any phone number and chat away. But unlike Internet phone services that charge by the length of the calls, Pudding Media offers calling without any toll charges.

The trade-off is that Pudding Media is eavesdropping on phone calls in order to display ads on the screen that are related to the conversation. Voice recognition software monitors the calls, selects ads based on what it hears and pushes the ads to the subscriber’s computer screen while he or she is still talking.

A conversation about movies, for example, will elicit movie reviews and ads for new films that the caller will see during the conversation. Pudding Media is working on a way to e-mail the ads and other content to the person on the other end of the call, or to show it on that person’s cellphone screen.

What THEY say: “We saw that when people are speaking on the phone, typically they were doing something else,” said Ariel Maislos, chief executive of Pudding Media. “They had a lot of other action, either doodling or surfing or something else like that. So we said, ‘Let’s use that’ and actually present them with things that are relevant to the conversation while it’s happening.”

The company’s model, of course, raises questions about the line between target advertising and violation of privacy. Consumer-brand companies are increasingly trying to use data about people to deliver different ads to them based on their demographics and behavior online.

Why will Pudding Media flop?
Free or nearly free phone calls are already available from dozens of companies, including Skype. The difference between 2 cents a minute and 0 cents a minute (for SkypeOut users) is negligible.

Except for people trying the service to see how relevant the targeted ads are (of which there will be many, especially after the New York Times article), users will be absolutely freaked out by the idea that someone/something is listening to their phone calls.

I think it’s a safe bet that advertisers will be extremely cautious fearing potential consumer backlash
Want to give it a go?

See the full New York Times article:
Company Will Monitor Phone Calls to Tailor Ads

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