A few months ago Pudding Media was in the news for their ad-based phone service plan. Their basic idea is to use computers with voice-recognition software to listen in on their users phone calls in exchange for giving those users free VoIP phone service.

Once the voice-recognition software catches an important keyword, the software loads an appropriate ad to the computer’s screen. Pudding Media (founded by two brothers who previously worked for the Israeli military intelligence) plans to extend this model to mobile phones as well.

Obviously with such a technology, there are serious privacy and legal issues. Under U.S. law, phone calls may not be recorded without the knowledge of both parties. Pudding Media skirts this issue by only buffering the recording for mere seconds before erasing it. However, this may still be considered illegal recording (courts have not yet ruled on the issue.)

Aside from the moral/legal/ethical framework, the fact that such an enterprise exists shows the strength of the 2.0 model extending backwards into more traditional technologies. One of the tenets of the 2.0 model is the dynamic, two-way flow of information. Users of a service also create content for that service. This content is then turned around and offered to other users in a never-ending, turtles-all-the-way-down cycle.

The two people sharing a phone call with this new technology will constitute the “user” while the content is the ad chosen by the software for them to view. The keystone to this 2.0 story is that the company has found that people change their conversations based on the ads they are shown. Thus, the users help generate content which then influences the users as they create a second generation of content and so forth.

Semi-infinite recursion has the ability to strongly influence marketing tactics. Ads are traditionally seen as either a set-piece or a set-story. In the first group, ads simply stand alone. Most magazine ads are of this style. All the information the advertiser wants to communicate to the consumer is contained within this single piece. In a set-story, an advertiser chooses a progression of ads to lead the consumer to a certain conclusion. An example are the dying breed of highway ads where each successive billboard ads another piece of information to the story.

The set-story is less common currently because advertisers have no easy way to make sure that you start at the beginning and proceed forward in a linear manner. Obviously, with the viewer-tracking made possible in current internet models, there may be a renaissance of such advertising.

Pudding Media’s technology may lead to a third marketing method. Depending on how much influence the ads have on the conversation, we could see model where the advertiser develops several distinct storylines that lead to their object. (A story-web may be a more appropriate word than storylines.)

Set-piece ads are like a static picture. Set-story ads are like a novel. What Pudding Media may develop into is the equivalent of the choose-your-own-adventure novel.

Tags: advertising, Marketing/Strategy, Pudding Media, voip