This is an undeniably horrific situation, but it’s also a familiar one. Flash back to the start of the year, and the last glut of headlines about advertisers boycotting YouTube – in that case, over ads showing alongside videos from terrorists. Or back to the last time YouTube was accused of failing its youngest users, earlier this month, when a blog post exposed the creepy and often genuinely inappropriate videos being targeted at kids.

This, it seems, is the background radiation of the modern internet.

Look at the most recent controversy involving Facebook, and the role its platform played in Russian attempts to interfere with last year’s US election, through ads and fake news stories which spread because they fitted Facebook’s remit for shareable content. Jumping back to YouTube, look at the inevitable follow-up to the paedophilia story, as its autofill search was found to be suggesting ‘s*x with your kids’ (the asterisk serving to circumvent YouTube’s content filters).

The algorithm problem
When you look at all these stories together, it seems like the problem is simple. Coming from platforms centred around user-generated content, they’re an inevitable side effect of the enormous scale at which Facebook and Google operate. After all, they can’t be expected to individually vet every ad and piece of content that goes through their respective platforms. 300 hours of video are uploaded to YouTube every minute – by my maths, in order to just watch all the videos going up, you’d need nearly 20,000 people working around the clock.

Our solution to that problem can be summed up in a single word, one that has been given almost magical power in this industry: Algorithms.

But in many of the examples I’ve mentioned above, algorithms are actually contributing to the problem. Many of the creepiest YouTube ‘kids’ videos exposed by James Bridle’s blog post are the result of what he calls ‘keyword salad’, mashing together the top search terms to take advantage of the search and discovery algorithms used by YouTube. And it cuts both ways – it’s been suggested that the aforementioned incestuous autocomplete results may also have been the result of people gaming the search algorithms in a specific effort to embarrass YouTube.

Man vs machine
The temptation here is to separate the problem and solution into two disparate halves. On one side, you have algorithms and machines, which are efficient and precise to a fault. On the other, you have humans – unpredictable and creative, but imbued with a common sense that means they can recognise when something is off. But of course, the divide isn’t that clean.

As human beings, we have a natural affinity for systems. Create a set of rules – which, ultimately, is what any algorithm is – and people will internalise them, and look for a way to bend them so they get the maximum output from the minimum input. That’s how gambling works, it’s how you get ‘whales’ spending terrifying amounts on in-app purchases; it’s ultimately why capitalism as a whole is such a successful system.

And according to none other than Tim Berners-Lee, inventor of the worldwide web, “the system is failing”. Google and YouTube have created algorithms that reward misuse, whether it’s creating potentially disturbing children’s videos or spreading fake news even if you don’t have a political agenda, because they generate clicks.

As Berners-Lee told The Guardian earlier this month: “The way ad revenue works with clickbait is not fulfilling the goal of helping humanity promote truth and democracy. So I am concerned.”

Sins of the developer
So, perhaps humans are a little more like machines than we might like to admit. What about the other way around?

This is where it starts to get really troubling, because algorithms very often carry the biases of the people who created them, or of the data they are processing. And those biases can be very ugly indeed.

Last May, ProPublica found that Compas, a computer program used by a US court, was twice as likely to mistakenly flag up black defendants as potential reoffenders than white. Similarly, HRDAG has shown how PredPol, used to identify crime hotspots, could get stuck in a feedback loop of over-policing neighbourhoods with a majority non-white population.

Moving back into the realm of social media, there was Microsoft’s infamous chatbot, Tay. The bot used machine learning to hold natural-language conversations with Twitter users – and was pulled the day after it launched due to the offensive content of many of its tweets. Or the Seattle Times report which showed that LinkedIn’s search suggestions were correcting many female names, in favour of male ones.

Facing the consequences
These are problems that, at a high level, the tech industry is aware of and is working to address, even when they don’t involve the loss of millions in ad dollars. Google set up its PAIR (People and AI Research) initiative in July, to study the interaction between humans and machines and make sure that the technology “benefits and empowers everyone”.

This is exactly the kind of initiative that’s needed, but it seems to be tackling the tech problem, rather than the human one. It’s probably impossible to deal with the real root of the issue: the inherent thought processes in the people behind the technology. As Silicon Valley actor Kumail Nanjiani‏ tweeted earlier this month, of his conversations with developers: “We are realizing that ZERO consideration seems to be given to the ethical implications of tech.”

What does this mean going forward? Well, taking the absolute narrowest view, it means that this probably isn’t the last time advertisers will pull spend from YouTube, as we discover new problems stemming from the combination of sheer scale of content, unpredictable human behaviour, and algorithms that can enable and even encourage abuse of the system. We can probably expect a lot more controversies like the ones mentioned above.

To some extent, this is just the cost of doing business. If you want the kind of scale that these platforms can offer, and the kind of opportunities for targeting that come with social media, then you have to accept all the problems – not just to your own business interests, but potentially on a broader social level – that come along with it.

This is a bigger issue than just brand safety or transparency, though both are tangled up in it. As a result, its much harder to fix – but this doesnt absolve us of responsibility.  We can keep working on the machine side of the equation, but ultimately the only solution is for humans, whether were developers or users or markerers, to be more considerate of our actions, and the consequences that can snowball when working at the kind of scale that Facebook and YouTube offer.

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Niantic
Niantic Labs, the developer of smash hit game Pokémon Go, has raised $200m (£150m) in a round led by Spark Capital.
Spark, which has previously backed the likes of Twitter and Oculus, was joined by NetEase, Founders Fund, and You & Mr Jones.
The funding pushes Niantic’s valuation above the $1bn ‘unicorn’ mark.
“This round enables new strategic opportunities and enhances our ability to make long-term investments in augmented reality and the Niantic real-world platform,” said Niantic founder and CEO John Hanke.
This funding follows the announcement earlier this month that Niantic is teaming up with Warner Bros and JK Rowling for its next game, Harry Potter: Wizards Unite.

Lyft
Taxi booking app Lyft has raised an additional $500m funding, an extension to the $1bn it announced in October.
As with the previous round, this funding is led by CapitalG, the growth investment fund operated by Google parent company Alphabet.
The deal was first reported by Axios. In a statement, a spokesperson for Lyft said: “Increasing the potential for this round will allow us to further accelerate our commitment to serving passengers and drivers.”
This funding raises Lyft’s valuation to $11.5bn.

PacketZoom
PacketZoom has raised $5m in Series A funding to scale development and adoption of its application performance management and optimisation platform.
The round was led by Baseline Ventures, with participation from First Round Capital, Tandem Capital and Arafura Ventures.
“Poor network quality causes mobile app publishers operational challenges and costs them millions in lost monetispation opportunities,” said Shlomi Gian, CEO of PacketZoom. “PacketZoom’s platform is the only solution that’s been designed from the ground up to address these issues. Our platform provides mobile app developers with real-time insights, control and optimisation capabilities without needing to make any code changes.”
The funding will be used to help the company expand into Southeast Asia, Europe and Latin America, and enable it to fill key positions in its executive team.

Supermetrics

Marketing analytics company Supermetrics has closed a €3.5m (£3.1m) Series A funding round from OpenOcean Capital.
Supermetrics collates marketing data from across various offerings, so that users have a single view for monitoring and analysis. It says the funding will be used to ‘strategically invest in its technology’.
“I’m proud of the rapid growth our exceptional team has pulled off,” says Mikael Thuneberg, CEO of Supermetrics. “What’s more important, however, is what that growth means – the millions of hours of boring manual work we save marketers from every year. This new funding gives us additional resources to accelerate technology and product innovation, and to expand quickly and strategically into new markets.”

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Mobile is now the biggest source of retail traffic, accounting for 46 per cent of online store visits on Thanksgiving, eating into the share of both desktop (44 per cent) and tablet (10 per cent).

Desktop is still on top when it comes to actual spend, however, bringing in 57.2 per cent of revenue compared to mobile’s 30.3 per cent – although again, mobile’s share is growing, up 22.1 per cent year-on-year, at the expense of desktop.

“Unsurprisingly, mobile shopping is becoming the norm for shopping this holiday season,” said Mickey Mericle, vice president of marketing and customer insights at Adobe. “With many consumers on the road, or with family, we’re seeing record traffic numbers to retail sites from the smartphone, as well as revenue.”

All of the previous 22 days in November have seen over $1bn spent online, adding up to a total $30.39b – an increase of 17.9 per cent.

The figures are based on Adobe Experience Cloud, which claims to track 80 per cent of online transactions at the 100 largest web retailers in the US.

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Promoting the new BMW X2 model in North America and Europe, the Lens enables Snapchat users to see a 3D model of the new BMW X2, overlaid onto their camera feed.

They can move around in real space to view the virtual car from every angle, and tap it to change the paint colour. Any snaps taken with this Lens can, as ever, be sent to friends, posted to a Story or saved to Memories to view later.

A Snap ad for BMW will be displayed between friends’ Stories and in the app’s Discover section, inviting the user to swipe up to activate their camera and access the experience. The Lens can also be accessed by scanning a Snapcode.

“Snapchat is young and modern – which suits BMW and the BMW X2 perfectly,” said Jörg Poggenpohl, head of digital marketing at BMW. “We are enriching Snapchat users’ digital experience through content they find appealing, with a high recognition value. We wanted to insert ourselves in an organic way into the Snapchat environment and its users’ world. That is the most meaningful way to address our fans in a style that fits the channel and the target group.”

This isn’t the first partnership between the two companies, or even the first in the X2 campaign. Earlier this month, the car brand ran a Face Lens campaign in Europe that enabled users to virtually paint their face with the same galvanic gold finish as the car. That campaign was viewed over 40m times, with an average engagement time of 24 seconds.

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Digital ad spend is predicted to grow by 9.8 per cent year-on-year, to £11.9bn, driving an overall growth of 4.8 per cent across all media – the UK ad industry’s ninth successive year of growth.

The biggest area of digital is paid search, at a forecast £6.2m, with pureplay display making up the majority of the remaining spend with £4.2m.

Digital is by far the biggest growth area for UK ad spend, as many legacy channels are expected to see a drop, particularly print media – ad spend in national newspapers is expected to shrink by 8.3 per cent. Meanwhile TV, after enduring its first drop this year, is set to stabilise and remain static year-on-year.

“Advertising investment remains stable despite a fragile economy”, said Adam Smith, futures director at GroupM. “The focus of marketers remains relentlessly short-term and arguably underweighted relative to long-term brand building in broadcast media. This favours performance-oriented digital media which continue to be the most robust growth story despite concerns over measurement, transparency, brand safety and other issues”.

GroupM estimates that 75 per cent of the advertisers who ‘paused’ their YouTube spend after brand safety controversies earlier in the year have now returned to normal levels of spend on the platform. The remaining quarter have not entirely given up on YouTube, but are allocation a smaller share of budget, moving this investment into alternatives like VOD and addressable TV that they found effective.

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Based in Montreal, Canada, Vrvanas sole product is the Totem, a headset which combines Virtual and Augmented Reality technology, which was yet to be widely released.

Though there has been no official word from Apple or Vrvana, the acquisition was confirmed to TechCrunch by sources close to the deal.

Its not clear whether Apple will release the Totem headset – though it seems more likely that the plan is to fold Vrvanas technology into its own offering – or what will happen to Vrvanas pre-existing partnerships with the likes of Audi, Tesla and Valve, maker of the HTC Vive.  According to TechCrunch, a number of Vrvana employees have moved to California to work at Apples HQ.

This news seems to back up the ongoing rumours that Apple is working on an AR headshot, to be launched as its next major product in 2020. The company made the first moves in this direction early this year, with iOS 11s ARKit feature, and back in March was reported to have 1,000 engineers in Isreal working on an AR headset. CEO Tim Cook has praised AR, saying the technology“gives the capability for both of us to sit and be very present, talking to each other, but also have other things – visually – for both of us to see.”

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Adform has uncovered ‘HyphBot’, an ad fraud operation generating fake traffic on over 34,000 domains – making it one of the largest bot networks ever seen in digital advertising.

Active through at least 14 different exchanges and SSPs, Hyphbot has been generating up to 1.5bn daily requests. The traffic comes from a network of over 500,000 IP addresses, primarily in the US.

The fake domains tricked advertisers into thinking they were buying inventory from premium publishers like CNN, the Wall Street Journal and Financial Times.

The bot-generated traffic on these domains was mostly focused on video inventory, due to the higher price of video ads over display. Depending on CPMs, Adform estimates that HyphBot could have taken as much as $1.3m (£1m) in a single day.

Adform’s report suggests a number of solutions to help the industry beat HyphBot.

“DSPs and SSPs should check their data warehouses for the patterns highlighted and they should also investigate requests from cookies that visited those patterns,” it reads. “In addition to this, they should contact all networks that are sending traffic from these patterns. If networks are not transparent about their source, we suggest you shut them down. There needs to be a real cost of doing business with fraudulent players.”

It also says that much of the fraudulent traffic could have been avoided using the IAB Ads.txt initiative, which uses lists of authorised domains for analysis and filtering.

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Uber quietly admitted to the breach yesterday, in a blog post from CEO Dara Khosrowshahi.

“I recently learned that in late 2016 we became aware that two individuals outside the company had inappropriately accessed user data stored on a third-party cloud-based service that we use,” Khosrowshahi said. “The incident did not breach our corporate systems or infrastructure.”

Uber says  that there is no sign that financial details, dates of birth or trip location histories were stolen, but hackers did gain access to personal information on 57m Uber users, both drivers and passengers, inlcuding the drivers license numbers of 600,000 drivers in the US.

“At the time of the incident, we took immediate steps to secure the data and shut down further unauthorised access by the individuals,” said Khosrowshahi. “We subsequently identified the individuals and obtained assurances that the downloaded data had been destroyed.”

What he doesnt mention is that – as first reported by Bloomberg – Uber actually paid off these individuals once it had identified them. The two hackers were reportedly given $100,000  in order to delete the data and keep the breach quiet.

Khosrowshahi did, however, address the companys long silence on the breach, and acknowledged its wrongdoing.

“You may be asking why we are just talking about this now, a year later. I had the same question, so I immediately asked for a thorough investigation of what happened and how we handled it. What I learned, particularly around our failure to notify affected individuals or regulators last year, has prompted me to take several actions.”

First and foremost of these actions was the firing of the two Uber employees who handled this response – namely, according to Bloomberg,  chief security officer Joe Sullivan and senior lawyer Craig Clark.

Data breaches are nothing new – and the 57m affected pales in comparison to Yahoos record-setting 3bn – but this is just the latest example of questionable conduct from Uber. In 2017 alone, it has faced an intellectual property lawsuit from Alphabets self-driving car division Waymo; a UK ruling that its drivers are employees and should be treated as such; and allegations of sexual harassment and discrimination. Amidst all of these scandals, former CEO Travis Kalanick – himself the subject of a fraud lawsuit from a major Uber investor – was forced to resign his post.

Referring to the breach – though he could be addressing all the incidents that happened before his appointment, Khosrowshahi said: “None of this should have happened, and I will not make excuses for it. While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes. We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers.”

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Deliveroo
Food ordering app firm Deliveroo has closed a $98m (£74m) Series F funding round, bringing the total raised by the company to date to $482m, and valuing Deliveroo at over $2bn.

The round was led by T Rowe Price Associates and Fidelity Management & Research Company, while existing investors DST Global, General Catalyst, Index Ventures and Accel Partners also made follow-on investments.

The news of this funding comes as Deliveroo moves into its 200th city, Cannes in France. The company says the money will be invested into growing its technology team; expanding into more cities and countries; and developing its ‘Editions’ initiative, which partners with restaurants to build custom kitchens in new areas, specifically for fulfilling Deliveroo orders.

“The next exciting phase of the UK restaurant industry will see more power being handed to the consumer, with restaurants better able to cater for consumers’ needs because they have richer data to work with,” said Deliveroo founder and CEO Will Shu. “This investment will help to accelerate this process, bringing more people more choice, healthier options and new food. As our technology improves deliveries will become faster and our selection on offer will become more varied.”

Zeelo
Zeelo has raised £1.2m in a seed round led by InMotion Ventures, the mobility investment arm of Jaguar Land Rover.

Founded in London earlier this year, Zeelo aims to disrupt the coach travel industry with an offering that utilises big data and machine learning. To date, it has focused on the football market, working with clubs like Man City and Aston Villa to get fans to games.

The investment will be used to move into spaces like city-to-city travel and airport transfers, and new markets in the UK and Europe.

“Zeelo’s whole model is built around the needs of the customer: using data to understand their painful journeys,” said co-founder Barney Williams. “We’ve made a good start with major events, but now it’s about giving more people access to the Zeelo experience and replicating our technology across different markets.”

Poshmark
Social fashion marketplace Poshmark has landed $87.5m funding in a Series D round led by Singapore’s Temasek.

Other participants in the round include Mayfield, Menlo Ventures and Inventus Capital.

Off the back of the funding announcement, Poshmark is launching ‘Stylist Match’, a voice-enabled feature for Alexa that connects shoppers with stylists to help them pick which products to buy.

“Since day one, weve focused on building a highly engaged community, enabling our network of Seller Stylists to deliver a shopping experience thats personal, not just personalised,” said CEO and founder Manish Chandra. “With the introduction of social styling, were revolutionizing the way people shop by combining data, social interactions and people-powered commerce to create the fashion mall for the Instagram generation.”

Bossa Nova
Bossa Nova, a company which creates autonomous service robots for retailers including Walmart, has closed a $17.5m Series B round.

The round was led by Paxion, with other participating investors including Intel Capital, WRV Capital and Lucas Venture Group.

This latest money brings the company’s total funding to $41.7m, and will be used to help grow its engineering and commercial teams.

“Bossa Nova is solving a hard inventory problem that costs retailers billions of dollars every year,” said Michael Marks, general partner at Paxion, who has joined Bossa Nova’s board. “The company has developed a unique set of algorithms and proprietary technologies that give them a strong lead in autonomous robotics and retail data analytics.”

Behavox
Behavox has landed its second round of financing, raising $20m from a group of investors led by Citigroup.

Citi is also a customer, using Behavox’s employee analytics platform to ensure compliance and detect any signs of potential wrongdoing.

“The Behavox platform generates previously undetectable insights about corporate conduct, culture and commercial opportunities,” said Erkin Adylov, CEO of Behavox. “The demand is being driven by a growing recognition that in the real-time economy, companies cannot afford to have any blind-spots about the strengths and weaknesses of their teams and operations.”

Behavox plans to announce expansion into new markets – starting with Asia – in the next few months.

Roxy
Roxy has raised $2.2m in seed funding for its ‘conversational devices’, voice-controlled hardware and software – similar to Amazon’s Echo and Alexa – which are customised to fit the specific needs of businesses, with an initial focus on hotels.

“A lot of these companies don’t want their data in Amazon or Google’s hands,” Roxy co-founder and CEO Cam Urban told TechCrunch.

Investors in this round include Highway1, Alchemist and Betaworks.

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