Digital Real Estate in AR, with Darabase’s Dominic Collins

Longtime listeners will remember one of Alan’s favorite AR anecdotes; the Burger King ad that digitally vandalizes a competitor’s ad space. But has anyone stopped to think, does that digital space belong to anyone? Or to someone who might not care for digital ads existing there?

Yes, someone has — Dominic Collins from Darabase, who is building an AR digital permissions platform to ensure the AR marketing ecosystem is fair and equitable for everyone.

Alan: Hey, everyone. Alan Smithson here, and today we’re speaking with Dominic Collins, CEO and co-founder of Darabase Ltd., a global platform that is managing and monetizing AR permissions on the physical world. All that and more, on the XR for Business Podcast.

Dominic, welcome to the show.

Dominic: Thank you, Alan. I’m delighted to be here.

Alan: We did an event about six months ago — with our law firm in Toronto, Fasken — and we did this kind of “VR and AR through the legal lens” event with the VR/AR Association in Toronto. And what we realized was there’s this kind of massive problem that if you’re putting augmented reality over top of the physical world, who owns that data? Who’s responsible for it? I think the first case study that we’ve seen of this is Burger King lighting McDonald’s advertisements on fire in AR. This is going to be a really interesting space. And now with Snapchat putting world lenses on buildings. So this is what you do. What do you– walk us through, what it is Darabase does, and how it’s solving this problem?

Dominic: Yeah. So you’re absolutely right. You know, since we started the company about a year ago, there’s so much that has happened to, I suppose, add further grist to our mill, that our service and services like this are required. We kind of see ourselves, I suppose, as the permission layer between the spatial web and the physical world. A lot of– it’s amazing how many big companies now are kind of what I call the immersive lasagna that kind of — whether it be Magic Leap’s Magicverse or the real world index and Facebook — you kind of got these great slides with these, you know, loads of layers with the physical world, or the digital twin, and infrastructure, and all these things that sit on top. But as you say, it doesn’t really feel that the permission of the real-world physical property owner is taken into consideration. Our insight, I suppose — and my background is more conditional and working in marketing — is that where media and platforms have really thrived historically — and when they’ve really kind of accelerated in terms of growth and adoption — has been where all of the axes engaged and rewarded appropriately. And from a digital perspective, there’s never been a time where permission and privacy and consent had more of the spotlight. So Darabase, essentially it is — at its simplest form — an AR database, hence “Darabase”, but we have a global database of permissions where physical property owner — whether that be a big iconic building, whether that be a retailer — is able to register in a kind of technology platform-agnostic way, so this one will work across all the different AR clouds or platforms or whatever you want to call them, that they can register what appears on their property. Now we’re talking commercial content. We’re not saying that we’re trying to govern and be a police force for editorial content. But if someone was to put commercial content or advertising on a building, then we believe that the physical property owner should have a say. That’s a far more scalable and appropriate mechanic, that other companies would have taken a different route. Other companies are creating AR twins of the world and then selling those for a tenth or an eighth or whatever. We think that actually long term, even shorter, it just makes a lot more sense that if I own this iconic building in the middle of New York, that actually I should have a say over what content gets served on it. And if it’s commercial, then I should get a cut, the same way that I can do a deal right now with a company that puts billboards on the side of buildings. I give them the consent, they put it up, they manage it on my behalf, and I get a check at the end of every month. And that’s basically what Darabase does in its simplest form.

Alan: So I think in order for this to be effective, you kind of have a two-prong sales approach. You have to get the property owners on board and permissions that way. But you also need to get the AR platforms. And I would think that Facebook, Snapchat, maybe Apple, those the main ones. But you kind of need to get all of them, really, in order for this to be effective, correct?

Dominic: Yes and no. So we’re certainly starting out with working with a lot of very large property owners, who both see the risk and they also see the opportunity. And for them, this is a — for lack of a better term — but a bit of a no-brainer. You know, they can register their properties for free, and they can allow it to be monetized and even go down to the level of picking the IP categories in terms of what type of content will appear on the building. They can also, if the retailers have their own content, through Darabase they can be certain of their own promotions. So yes, the property owners kind of create the marketplace, if you want to think of it that way. In terms of who’s on the flip side of that marketplace, actually– we’re about to launch our first SDK and that’s– we think of it much more at a Unity level, than necessarily as an Apple or a Google level. Through Darabase’s SDK, you’ll be able to essentially kind of plugin monetization to your world facing our app, which is much more contextual to the location while being uninterruptive. And that will work across all of those platforms. Now, there’s also other conversations that we’re having — and I can’t go into a lot of detail on those, as most of them are under NDA — but certainly there are very large platforms, who are creating toolsets for brands and agencies who are saying “immersive is core to the future of our business, and we’re investing heavily in the space.” And actually world-facing lenses are probably more interesting long term than self-facing, which there’s been some famous ones for brands like Taco Bell and whatever, but actually the ability to serve commercial content for the mixed reality way on the world is kind of more– has more scope, let’s say. But that’s absolutely, they want to ensure that where brands do that, consents and permissions have been given. From the conversations that we’re having, that’s what we’re building is not a solution that those companies are looking to build themselves. The property companies themselves certainly want to be able to have one place to register. And so we’re building this as a setting in a platform-agnostic way, so that you can call against the Darabase platform to work out what permissions there are, where you can serve content based on the device location in real-time. And yes, that will work across all of the major platforms.

Alan: So you’re really going kind of the route of AR, meaning kind of Apple and Google foundation.

Dominic: Oh, yeah. So I mean our foundation’s great, because it kind of straddles both. Right now, this is a mobile play. We know from just in the last few days how the rumor mill can swing wildly between years, let alone months. I fully expect– and I’ve been working in immersive, I ran Jaunt VR outside of the US previously. And so I have been kind of immersed myself in this space for a number of years. And I’m a firm believer that this fourth conclusive wave of immersive will increasingly replace mobile. But for now, and for the years coming up — or several months coming up — mobile is the major play. Facebook had over a billion users now in AR in the last year. So right now, it’s all about supporting the major players, the major platforms through the mobile lens. But as in when we see kind of scale, I suppose consumer-facing consumer-targeting HMDs, then we’ll look to support those too. But that’s a lot of work outside by now. So that’s on the policy for us for the moment.

Alan: It’s going to come, but it’s going to take a few years. So everybody be patient, and the device that’s in your hand is the magic window to the world right now. Before you were working on Darabase, you have some pretty interesting experience in the VR and AR space, and then before that, in telecom. You want to just talk a bit about how you kind of ended up at Darabase?

Dominic: Yeah, sure. So I spent most of my career, I suppose, working in large organizations, helping them be more digital. That’s when digital existed kind of way back when. I worked in magazines — before the Internet was really a thing, and when people still bought magazines — and I used to land in Esquire magazine in the UK and various bits and bobs. I then went into digital, when that first started. I was in a European start-up a little while, and then I ran Digital Sky, as well as then ran a couple of companies for Orange, France Telecom, and then worked in a company called EE, which is the largest telco, helped to launch that brand with the launch of 4G in the space, as well as being chief marketing officer for a big finance company called Legal and General. So basically spent a lot of my career kind of riding the wave of change through various industries, starting with advertising in magazines and kind of finishing off on the front of the beach in tech. And what I kind of realized when I got to working in the finance side — and having done that for a number of years — and applied what I’d learned in one industry and applying it to the next, was that actually whilst I spent most of my time helping big companies be more digital, it might be more fun to help digital companies be more big. I’ve just done a big deal with WPP, did a big agency review and so on, and was lucky enough to be invited to go to on what they call the West Coast Tour, where they take 14-15 CMOs from across the world, and you got on the bus, — you know, get into SFA, you get on a bus, you go see Jack Dorsey — that’s for a couple of hours, and you get on a bus and you go in a driverless car for a bit. And it’s amazing networking opportunity. And because you’ve got a billion+ worth of ad revenue in the room, the people that you get to meet and evaluate are significant senior and give you a lot of their time, which is a real privilege. And the last company that I met was a company called Jaunt. And John had just raised a seed round. So they had $100-million at that point, from the likes of Highland, and Redpoints, and Disney, and Skye, and China Media Capital, and a bunch of others. And they were this relatively small company in Palo Alto, just thinking about renting a studio in LA. And kind of long story short, I then kind of joined them as the first guy outside of California, and helped to grow that business and launched the international business and then also ran the joint venture in China. And kind of had an amazing time, both from a VR perspective, and then — as you probably know — going into AR, we made some changes towards the end of last year. It’s kind of been the focus back down. Mike wants more of an AR business. And as you may have seen, that was recently– the technology and IP was acquired by Verizon. So, yeah, so I spent that kind of the last four or five years in this kind of an immersive bubble. And it was during that time that I really started thinking about putting my kind of traditional marketing media clout back on, about actually if this was really going to be big, and if this was going to be the main way that we will see additional content that– for sure, some of it is just gonna be floating in front of a building and it’s just my inbox, and it has no relevance or persistence in that location. Some of it’s going to be editorial. And I can probably take a picture of Buckingham Palace and draw a love heart, and send it to my folks in Santa Monica and say “Love, from London.” That’s absolutely fine. But in my mind, if you want to put a Lion King from Disney ad on top of Buckingham Palace — which was a recent landmark, this campaign — then my argument would be, you need the permission of the royal palaces. And if they didn’t get that permission, then they should get paid, because you’re making a direct correlation between the IP of a palace and the IP of a king.

Alan: It’s interesting that you say that, but like you’re playing devil’s advocate here. There are no legal precedents around this. Nobody’s really paying attention to it, other than us. So what happens if–? How do you enforce this? How does it become something that the property owners go, “We need to have this?”

Dominic: I think I got two answers. First answer is around “is there a legal precedent?” Now, that depends on how you see legal precedence. If you see legal precedence, as in, has something gone to court specifically about AR — like Candy Labs or Niantic — and has that been tested in court? And how much precedence is that specific to AR content of a commercial nature being served on the physical location? You’re absolutely right, there’s very little. Though, let’s be honest. It’s going to come. We want to be able to create a platform which helps to — I use a term probably a little bit carelessly, but — kind of clean that up, ahead of any regulation coming out or self-regulation coming out. But the other way of looking at it is actually “is there existing precedence?” Is there existing law and regulation that should be, or is easily applied to what we’re doing? And I’ve heard people say before — and look, we’re not trying to be the police force, we’re trying to be a company that empowers this, not polices it. We want to be able to create a service, which means that this grows, not diminishes — but I’ve heard people say before it doesn’t really exist, it’s only on the screen. So let’s say it’s The Lion King, the lion’s not really on Buckingham Palace, it is only on the screen. You wouldn’t otherwise see it. But in my mind, that’s no different to me taking a video of Buckingham Palace, and then photoshopping a lion on it and putting it into a TV ad. That’s only on the screen, too. And yet, you could not do that. You could not use the IP of Buckingham Palace in that way, because that’s an established modus operandi. The other way of looking at is actually, is there already regulation that is kind of applied to another media, which is extremely close? And we’re not picking up the phone to the royal palace, or picking up the phone to Snapchat and say, “Hey, you guys should stop doing this, we’re Darabase.” Quite the opposite. What we’re looking to do is try and create alternative iconic locations in that market, where you can do this and everyone’s super happy, and the brand can do it with confidence and brand safety. Which is then the second part of the answer, which is why should anyone care if there’s no law, then does anyone even need doorways? My answer to that is, well, we’ve got this thing — as you probably heard — called GDPR, which is having gotten impact more globally as well. And there’s a bunch of stuff that GDPR kind of puts into place in law, that actually everyone or certainly all the good actors were doing anyway. You know, people were doing double opt-in email before, because it’s the right thing to do.

Alan: I have to say something and I think I speak for the world. The GDPR thing is great, except for now every single website I go into, I have to accept cookies and I can’t even visit the website if I don’t accept them. This is a stupid law and it’s pissed me off. On every website, I have extra things now. It’s dumb.

Dominic: I agree. And actually what all that happens is there’s an extra click, because no one then goes in and manages their cookies anyway. And actually the next level of it, it’s gonna be even worse because they’re now saying is that actually you need to give people the ability much more proactively, to be able to look at the different types of consents they’ve given and split it out. So, yeah, I’m not saying that I’m here as a proponent of GDPR. I agree on a personal level.

Alan: I had to call it out, because it’s one of those things. I only have one venue for my outlet, it’s this podcast, so I’ve got to call things out sometimes. I don’t want to accept your cookies. Piss off. Let me just see this stuff.

Dominic: …you got it off your chest now? I should never have mentioned GDPR. That should have been in my briefing notes.

Alan: [laughs]

Dominic: Anyway. So the second thing is that, I believe having been a marketer myself for many years, that the vast majority of brands — and I come back to Burger King — for the vast majority of brands, want to make sure that they are not doing anything to erode the significant money that they spent building my brand equity. But that’s seen as doing the right thing. I know– I speak to major agency groups where they say, “Look, it’s actually in our terms of business that we sign with our brand clients, that we will not book anything that is not permission-based. That’s not to say whatever we’re going to be it’s not illegal, but let’s not book something that’s not permission-based.” Yes, there will be a few guerrilla tactics. And personally I think what’s genius, actually, about the Burger King “Burn the ads” campaign — burning McDonald’s ads and so on — what I think it’s absolute genius about is and I think the AR industry genuinely can learn from this, is that– we live in a bit of a bubble, but everyone in our bubble and a lot of people beyond know about this stuff. But actually, it happened to Brazil, as far as I’m aware. Certainly wasn’t in North America and Europe or whatever, it was a relatively small campaign in Brazil. And what was actually the campaign was the YouTube video they created about some quite good looking people doing this thing on their phone. So I’d love to see the data that said, how many people actually did the experience inside of the BK app and actually got a free Whopper.

Alan: A person said they’d given a 5,000 free Whoppers.

Dominic: 50,000. Okay. And versus how many people looked at YouTube.

Alan: Millions.

Dominic: Exactly. This is the learning that actually, the vast majority of that campaign was completely permissioned, because it was just watching a YouTube video. So as I said before, we’re saying that this is really applying to where commercial content is specifically being sort of on a location. And where, if you wanted to– So let’s take The Shard, for example, a big iconic building in London. Well, The Shard has not done anything about thinking about that this is even an issue, or registering it or thinking about the IP or trademark of that building or how it might affect digital media. Well, none of that has happened. People can very happily start putting content on The Shard in AR. And the number of people that are going to see that is going to grow and grow as we hope and trust over time. Now, as soon as The Shard, however, goes, “You know what? We’ve kind of recognized the fact that this is now a thing, and we see that there’s an opportunity. And actually, we do allow AR content to be served on the building, but we want to be able to frequency cap it, and we want to be able to make sure that’s the kind of content we want to get on there. We kind of expect to get paid, because if you wanted to film a TV series or whatever in the building, then you go through our film department, and we get paid and we get permits. Normal, normal stuff. And we’re going to make it super simple. We’re going to use this company called Darabase, but we’d like you to use them. And we’re going to– and by the way, when you do that, you know that you’ve been given that permission. We’re going to get a cut of the campaign revenue or a fee or whatever, to allow you to put your content on our iconic and trademarked location.” Now the vast majority of brands will go, “Okay, cool. I can super simply do it now.” But it takes a very different type of brand to go, “You know what? Stuff that. I’m still going to put my content on your property. I don’t care. You’ve done all of this thing, I’m still going to stick it on your property. Screw you.” The vast majority brands will not do that. And we believe that the vast majority of brands that actually really take this medium seriously and come into scale, they’re going to want to know that it’s permission-based. And that’s the same with the publishers as well. You know, we’re working with a couple of large publishers, kind of building them like a private property network, so that they know that– there’s one — again, it’s under NDA, but — global youth-focused brand and sports-focused brand. They want to be able to meet and reach that audience using what we call GeoAR — world facing AR — in locations where their audience are out, going to a club, or going to sporting events, or whatever. And they’ve got a big campaign with a shoe manufacturer, that they can start to introduce location-based AR as part of that campaign. The only reason that they’re now doing that with us is because they know that the proxy network that we’re putting together for them with these big property owners in these iconic locations is permission-based, and that they can go to their brands and say — just like all the other media — that you’re buying from us. This is high quality, high reach, trackable, and all parties are engaged in the process.

Alan: I think you’re on to something for sure. And the first time you kind of explained to me the business model, it seemed so obvious, only because we had had this kind of legal lens meeting with Fasken and VR/AR Association, it was one of those, we just you start to kind of question these things. Well, who does own the digital space? And Magic Leap’s got their Magicverse that they’re building, you know, multi-layer kind of universe of digital content on top of the real world. And you start to go, “Wow, there’s so much data floating around from IoT sensors, smartphones, to sensors from cars and buses and lights and everything.” Being able to transform that digital layer, people aren’t thinking about it now, because the window to the world is through a small six-inch phone or tablet. But when it goes to glasses, and we’re able to kind of really fully unleash spatial computing on the world, this is going to be something that you guys will be well established on. I love the fact that you’re probably three years ahead of everything right now.

Dominic: Yeah. I mean, that’s one of the conversations we have most often with investors, is one of timing. Are we too early? Are we too late? I think we’re certainly not too late. And actually I don’t think we’re too early.

Alan: No, I think the timing’s actually very perfect. And I’ll tell you why. Over the last five years, tons and tons of money went into VR, $100-million+ went into Jaunt, ODG. There’s been Plepler. There’s been a number of spectacular raises and failures because people are trying to blaze a path. Well, the good thing is Apple and Google and Facebook and Snapchat are all putting billions of dollars behind this. I think 2020 is gonna be this spectacular year where developers start to really dig into what the ARKit and ARCore capabilities truly are. And I think there’s so many things; we are only scratching the surface. We’re talking about this last night. We’re talking about things that are going to come in ten years from now. We can’t even possibly imagine. It’s not fathomable for us. And I think you are right at the precipice of permissions-based on a phone, and then you’ll be well established when it comes time to transfer that to glasses. And my guess is that’s going to be five years from now before we have ubiquitous glasses. So I’m going to kick my prediction of AR glasses out to 2025. But Darabase seems like it’s perfectly positioned to capture the mobile phone market — which is in the billions of devices — and then be perfectly situated for when it moves to glasses.

Dominic: Yeah. Thank you for the vote of confidence. And as you say, even with mobile — depending on whose research you believe — that the AR advertising [market] is somewhere between 9 and 19 billion, or whatever it is. So, you know, this is a significant market. I think you’re right. What excites me, and what gives me a lot of confidence, is just the amount of underlying technology and enablement that is being built into operating systems. Qualcomm chips, devices, camera technology. We have a great relationship with Scape, for example; the Scapes and the 6D.ais, and all of this super-exciting underlying functionality, which is making it ever easier for super smart and creative app developers — and actually WebAR developers, too — to be able to make some amazing experiences. We just want to be there with them so that they can achieve a higher CPM, they can serve commercial content in a really nice and smooth way into those experiences, and the knowledge that they’re doing it in the right way and that everyone’s engaged and they’ve got a good stream of high-quality advertising and the inventory to put it on. And I think one thing that we really focus on — because as you know, there’s so much going on in the space and you can be so many different things — we try hard every day just to be very true to what it is that we’re building and not to kind of get pulled into “oh, we could do this or that or the other.” There are so many companies in this space. We just want to be this kind of glue — the permission glue — the permission layer that works with everybody else in order to make this a fantastic medium for the future.

Alan: I think it’s gonna be spectacular. And I think being able to give brands the confidence, knowing that they’re doing things legally above board, regardless of wherever the law ends up being. If you guys are already anticipating the best-case scenario, brands can confidently know that their advertising in the right way and then also giving property owners the ability to monetize on the likeness of their buildings. It kind of legitimizes it. It’s almost like when cryptocoins were launched, everybody and the brother launched an ICO or whatever, ITO — they did all different names for them — and we saw the kind of rise and crash of that. But it’s only when there’s regulation involved do we really start to see a maturity and real value created of an industry. And I think AR and VR, this industry, is growing slower than people thought. But it’s growing in a practical, more pragmatic way that is responsible. And I love the fact that our industry is thinking about things like ethics, securities, permissions. These types of things are really important, not just, “hey, let’s just make a ton of money.” I think all of us — everybody on this podcast that I’ve had as a guest, anyway — is looking at this in the long term. Like, this is the next 10 years. This is the future of computing and we can’t screw it up. I think you’re on to something really amazing and I want to thank you for sharing that.

Dominic: Not at all. And thank you for all the great work that you do, because you’re one of the few people at the center of the community, and the more of a community we are, the more successful we’ll be.

Alan: Well, since you mentioned community, I’m going to put a plug for XR Ignite. We’re really focused on XR Ignite as a three-pronged approach now. We want to build that community, like you said, and we want to have that community hub where people can help each other and share. So there’s the community hub aspect. Then we want to take companies that are ready to grow and have the accelerator. And then we also want to be able to fund them so that we can help them through sales and marketing and these things, but also capital if they need. So XR Ignite’s starting as a community hub, accelerator, and fund, and you can set up XRignite.com. Thank you for letting me interject that. I think building that community is important and we had UploadVR was kind of the center of VR when it started and it kind of imploded a bit, but we want to pick up that slack and really just make a comfortable, safe place for people to share and that sort of thing. What problem in the world do you want to see solved using XR technologies?

Dominic: So one thing that we think about may be surprising, when we get to a bigger scale, we’d love to have more direct impacts on this. But, it’s homelessness. Because we are specifically linked to property, we’re specifically linked to how property owners can monetize further their asset, and whether you’re in Venice Beach or you’re in the center of London, I think there’s never been a worse time as than it is now for homelessness, and it affects a lot of people. So I think that actually — I hope — that, as we look up from our mobile screens, which can be very blinkering, and we start to look through an AR lens on our face, I hope that we see more than just the digital content in our lives; I hope that we see more broadly, see the world around us in a more informed and more augmented light. And that includes some of the societal issues that we have around us. So I would hope that, directly through Darabase, in the future and more broadly, things like homelessness can through digital inclusion that all of our society can be more on a level.

Alan: So I’m going to throw a challenge. What percentage of your sales are gonna be dedicated to solving this problem?

Dominic: And I’m gonna dodge the challenge, and say I don’t know what number! [laughs] I mean, it would be unfair on myself and my current investors to just pick a number out of the air. Yeah, but we approached this not to make a ton of money — though that may be a byproduct — but genuinely to try and make sure that this space is one that is a positive for the future of our world as it significantly changes in an ever-accelerating way. I’m sure you and many of your listeners will have seen the hyper-reality video and we know the guy that directs it back here in London. None of us want to live in that world, and we hope that Darabase can be–

Alan: For people listening, look up “Hyper-Reality” on YouTube. Oh my god. It’s like, if shit goes wrong, this is what happens.

Dominic: Exactly. So Darabase exists to try to 1) avoid that, as well as 2) to be a force for good. We’re a company that’s a year old. We’ve got a long journey ahead of us. We’re excited about our journey and we will do our best to make this a better place to live.