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The Future Of App Engagement Is In the 'Feed Flow AI' The Netflix documentary The Social Dilemma highlighted the fact that a number of Silicon Valley tech companies are using Feed Flow AIs to monetize attention with many users being unaware

By Peng T Ong

Opinions expressed by Entrepreneur contributors are their own.

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Using algorithms to drive user engagements today is fairly run-of-the-mill for tech companies today. If you look at Facebook, YouTube, Instagram, TikTok, and Bigo Live, you'll see that they share a common feature: a personalized feed. This feed is powered by an AI-driven algorithm that analyzes and predicts the type of content users would like to see and engage with. We internally have been calling this type of algorithm the "Feed Flow AI"— software that controls the content users see on a feed, based on certain optimizing criteria. In Southeast Asia, companies and startups we're seeing are increasingly adopting Feed Flow AIs.

The Netflix documentary The Social Dilemma highlighted the fact that a number of Silicon Valley tech companies are using Feed Flow AIs to monetize attention with many users being unaware. For some companies, it is for the sake of corporate interests. Take a look at the social media platforms from the US, which tend to optimize for engagement to drive ad revenues. Meanwhile, platforms in China tend to drive direct revenues through methods like virtual gifting.

Indeed, the Feed Flow AI is a powerful lever for user engagement but this brings up the question of transparency. Are companies respecting users' attention, privacy, and most of all, their free will?

Several companies have already figured out how to use algorithms successfully to solve complex problems, but it's not used for consumers' good (yet). Society is now beginning to understand how social media impacts their lives, and startups using Feed Flow AIs have the potential to disrupt the market - if they start thinking critically about how to use it for users' benefit.

The need for transparency to consumers in Feed Flow AIs

There is generally concern over the impact of the Feed Flow AI optimizing the user experience for corporate revenues. As users, we may seem fine with that because we get entertainment or informational value from the experience. But would we feel the same way if we were aware of just how effective the Feed Flow AI is at capturing and directing our attention, not to mention our time?

Take TikTok, for example. Digital safety app maker Qustodio found that people spend an average of 52 minutes a day on the app, with younger users spending as much as 80 minutes. If the user was consciously allocating time and attention, would they really allocate 52 minutes a day to watching amateur videos?

I suspect that if users would consciously examine these social media habits, the answer would be no. In the long run, getting people to do what they wouldn't otherwise want to do would not bode well for either the company or the consumer.

Companies need to focus on improving Feed Flow AIs specifically for the user's benefit, and also to implement it with transparency so that users will understand the optimization criteria. As many platforms are doing now, apps can offer users the ability to opt-out of having certain behaviors tracked.

The bottom line is simple. Entrepreneurs using the Feed Flow AI to solve complex problems for consumers' good will reap the rewards. Instead of relying heavily on ads, companies can think of how deeper engagement in the app will translate into better results and customer experiences, and perhaps higher virality.

Content is King. Feed Flow AIs ensure its reign

Today, many companies continue to struggle to drive consistent and deep user engagement. Globally, 25 per cent of apps are used only once after being downloaded, according to Statista. The situation is more dismal in Southeast Asia where app engagement rates are lower compared to the rest of the world, according to a study by marketing and retargeting company Liftoff.

Feed Flow AIs can change this. As app users generate content, the Feed Flow AI shows the content to the people who will potentially care about it and engage with it. By putting personalized content into users' hands, the Feed Flow AI allows apps to increase user engagement and longevity. It can also hide or bury sub-par user-generated content (UGC) that might lead to negative user experiences.

In 2019, WeChat launched a new news feed algorithm to boost recommendations of high-quality UGC. The personalized feed takes into account the media consumption habits of both the user and their friends in the network. This use of the Feed Flow AI enables users to discover and engage with relevant and higher-quality content. Users who worked hard to produce top-notch content also receive more exposure.

The Feed Flow AI also serves to prevent their experience on an app from going sour. Bigo Live, for example, uses AI-driven image recognition, facial recognition, video intelligence, and voice processing capabilities to moderate content on the platform. One could argue that the moderation is not strong enough, but at least they have that capability.

Yes, content is king! But we also should recognize that random content will most likely cause the user to disengage. It is the purpose of the Feed Flow AI to ensure the reign of content by ensuring the most engaging content shows up for the most relevant users.

Focus on people, not algorithms

In using Feed Flow AIs, companies need to strike a balance between AI and people. In the future, people may have personal AIs to serve their needs, not companies'. But for now, companies can start figuring out how to use this tech to help improve customers' lives.

Think of these possible scenarios of positive, "for good," applications of Feed Flow AIs:

Using feed flow AIs for education

An app that teaches English might use the Feed Flow AI to learn about the topics that interest each user, and then offer customized vocabulary lessons based on those interests. It could encourage users to interact with their friends in English by offering topic prompts and content templates. Encouraging competition between groups of students could increase engagement, and thus learning. By tailoring content that would capture the customer's interest, the app can help to ease boredom while at the same time encourage study habits and persistence. Ultimately, Feed Flow AIs can shift learning to a fun and highly engaging process, resulting in much higher learning rates.

Optimizing feed flow AIs for financial inclusion and literacy

What if a finance app's feed showed each user all the financial news and tutorials they need for their particular situation at that moment? It could provide courses contextualized to each user's country's investment scene and to cultural nuances around money.

Digital banks could also consider the user's feed as a channel to educate customers on saving money for an emergency fund, planning how to pay back loans, and preparing to take out a mortgage. As customers engage with these types of content, they become more financially literate, and more prepared to use various banking products and services. While this allows the digital bank to drive revenue, it's an approach that focuses on educating users instead of just advertising financial products they may not fully understand.

Staying fit and healthy with feed flow AIs in fitness apps

Fitness apps' feeds could help users discover people who have the same training method and goals, allowing them to share tips. They could help find advanced users who could potentially provide guidance, as well as exercise buddies to join within their vicinity. In general, the Feed Flow AI will help focus users on getting fit, and staying healthy.

Capturing a bigger slice using feed flow AIs for good

In a transactional world, companies will try to milk the user base as much as possible to generate revenues. When a business starts to look at the user base as a group of people with whom the company can build long term relationships, the focus starts to be how to, long term, benefit the user. Once the company brings value to the users, there will be many opportunities to transact in a win-win manner over the months and years to come.

Over the next decade, businesses will figure out how to make the Feed Flow AI a core component of their user retention and virality strategy, to build those long term relationships. Those who do it sooner, and in a transparent, trust-enabling way, are more likely to have more engaged, loyal customers, and eventually capture a bigger slice of the market.

Peng T Ong

Managing Partner, Monk's Hill Ventures

Peng is an entrepreneur who invests in entrepreneurs. He does so primarily through his role as Managing Partner at Monk's Hill Ventures - a technology venture fund based in Southeast Asia that he co-founded. Peng was the co-founder Electric Classifieds. After Electric Classifieds, he was the founder and CEO of Interwoven, which went public on NASDAQ and grew to a $10B market cap before being acquired. After Interwoven, Peng founded Encentuate, the leader in enterprise identity management. The three businesses he started now generate annual revenues that total more than $1 billion. Most recently, Peng was a Partner at GSR Ventures, a leading VC in China. Peng has also served on many boards, including SingTel. YY.com, and IMDA Singapore. He is currently the Chairman of SolveEducation! and a board member of the International Advisory Board for the University of Texas at Austin. Peng earned a B.S. in Electrical Engineering from the University of Texas and an M.S. in Computer Science from the University of Illinois.
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