Tencent, the giant Chinese internet technology company partly owned by Naspers (Prosus) recently announced their plan to seamlessly embed video ads directly into movies. To get a clearer idea of how this will work, take a look at the video clip contained in the link below:

Technology media companies like Google/Youtube and Facebook/Instagram have long made use of their users’ data to target them with specific ads. What makes Tencent’s technology interesting is that companies will now also be able to target specific viewers with specific ads when they watch movies.

Consider the following scenario:

A movie viewer logs onto Netflix to watch Top Gun. This viewer has a credit card history of drinking Starbucks coffee. While watching the movie, Tencent’s technology registers the viewer’s credit card history and inserts a Starbucks branded coffee cup in a scene of the movie. Great subliminal marketing. Another viewer has a history of drinking Coca-Cola. When he watches the same movie scene, Tencent’s technology will place a Coke in the scene instead of a Starbucks coffee cup.

Before this technology, only one drinks advertiser could have advertised his drink. Now the content owner can provide the same advertising opportunity on the same scene to 100 different drinks advertisers. What’s more, these ads will be specifically tailored to the viewer’s online profile; what he likes/dislikes, places he has visited, political leanings, hobbies etc.  

This is an entirely new annuity revenue stream for content owners. Not surprisingly, the media giants are racing to create new content to capitalise on these new revenue generating opportunities:

The purpose of marketing is to influence behaviour.

Instead of Coca-Cola cans, politically focussed, targeted advertisements in movies could likely follow. Imagine seeing Tom Cruise wear a “Make America Great Again” hat in a Top Gun scene. Movies tend to influence the mood of society at large. Any technology that could potentially influence human behaviour on a targeted scale will be extremely valuable both to governments and corporations. Old movies and documentaries will not be spared.

The Race is On!

The fine line between reality and fiction is becoming ever more blurred.

Fortunately, the historic performance of the Fintax Funds remains intact and it is good that it has. Not only has the performance of the Fintax Funds (net of fund manager fees) managed to keep up with the MSCI ACWI (gross of fees), which is a 100% equity index, they have done so by taking on significantly less risk. On the first page of the fund fact sheets you will note the annualised performance volatility measure. Since inception, the Fintax Funds have delivered similar performance to the MSCI ACWI but at a significantly reduced level of annualised volatility.

As always, we welcome any comments, queries or questions you may have.