Electric Guitar PLC (AIM:ELEG) CEO John Regan talked with Proactive about the group's new joint venture with Exelia, focusing on AI-driven products. He explained that Electric Guitar PLC (AIM:ELEG) aims to capitalize on changes in digital advertising caused by new privacy legislation and shifting attitudes. The company's recent acquisition, 3radical, has technology that adapts website content based on user behaviour to enhance customer engagement and return on investment (ROI).
Proactive: John very good to speak with you, you've announced a new joint venture with Exelia, a technology to build new AI-driven products. Tell us more about this.
John Regan: Well Stephen actually we're really excited about this. Just to give you a bit of context and to recap on Electric Guitar; Electric Guitar it's a business which is focused on capitalising on the disruption that's happening in digital advertising. And that's been caused by changes to privacy legislation, changing attitudes to privacy, and of course, the fact that the big tech companies, the people who provide the data that drives advertising are reacting to privacy by reducing the amount of data which is available to advertisers and marketers.
And if you're an advertiser, the challenge is, that the way that it used to be, which you use that data, which was very cheap and ubiquitous to drive people to your website, it's becoming more difficult. What that means is when you have people coming into your website from an advertising company now, rather than just chucking more mud against the wall, to get more; you want to drive people to the website, you can learn as much about the consumer as you can.
One way to do that is to use the type of technology that 3radical, our recent acquisition has built. And also once people are there, you can use that very, very rich late data to make sure that your website adapts to feed them appropriate information according to what they are doing. So the type of difference may be you're coming just to browse, it might be that the website takes you to more information for a brochure download of products they want to try, but of course, you want to direct people into that kind of place as quickly as possible.
There are many more nuances between those two things. The better you are working out what people are doing on the website, and where they are coming from. The more effectively you can do that, of course, that means greater ROI. And that's where machine learnings and AI comes in. Because what we're able to do with the AI joint venture, is process the data, which we've got and build algorithms, which I understand from the way people are behaving, what it is, is the most likely to be on the website for, and then serve them appropriate information. Now as the business of Electric Guitar continues and develops we ultimately want to access more and more data from the businesses that we acquire. But the exciting thing right now, 3radical has over a billion data points which they've gathered through their technology, which they deployed over the years. And we're in the process of analysing those billions of data points to start to build this first algorithm.
So we've got a real head start there and that process is actually already started. The JV is with a technology company that specialising in machine learning and AI, I have actually worked ten years or last 10 to 15 years myself, it worked very well. And they started working on that now. So we’re really excited that within a very short period of time, 3 to 6 months, it should be able to start talking to our clients and to new prospects about the things that we're finding out from that data, and talking to them about how they can really improve the experience on their website and of course to get that ROI up.
Proactive: So what's the market opportunity you're seeing here John?
John Regan: Well the market opportunity is that this is a main focus for CMOs right now. All of the market researchers are doing is telling us that CMOs are concerned now gathering up first-party data and they are concerned about making sure that visitors to their website, have the best experience where they get the most appropriate information for what they need and the algorithms that we are building will help, will do that by analysing the behaviour of the consumers that visit a website and then automatically make a decision about where they should be directed to next. So it might be that they are directed to a brochure page, or it might be they are directed to a page to purchase depending on where they are or various other nuances around them. So the market opportunity therefore is twofold, one is we aim to be able to deploy the machine learning algorithm through the existing 3radical Voco platform and charge for that of course. But second, we intend to make the algorithm available to other users as well without the Voco platform which means they can apply it straight onto their website.
Proactive: And you've already started developing your first program with Exelia, your first product.
John Regan: Yes, yes. That's right. I mean, and what we're doing, obviously with a billion data points, it's very, very complex data. So the first step is to start to understand that data and even that understanding itself actually is very, very valuable. So what we're hoping is within three months we should be able to present some really interesting bits of understanding from that data. One of the things that's already come out of it, actually in the very early stages, we now know from the 3radical gaming experience. Their most simple engagement experience is one of those spin-the-wheel games, and we know that the dwell time people that game is 3.6 seconds. That doesn't sound very much, does it? But when you compare that to the dwell time on a typical digital banner ad, which is 1.2 seconds, it's more than double. We know that just that one experience is having a significant effect on the way advertising works for our clients.
Proactive: John I hope you'll keep us posted on any progress. Thank you very much for speaking with us today.