Tech Trail: Miami Beach firm’s face camera reads age, race, gender to target ads. Is that OK?

·3 min read

Imagine being served a targeted ad on a tablet based on its camera identifying your facial features.

It’s not science fiction. Instead, it’s the business concept of Alfi, a Miami Beach-based company looking to revolutionize the advertising world.

Alfi’s technology is stored in modified portable tablets that it intends to put in places like the back of an Uber or Lyft, or at an airport kiosk. It trains the tablet’s camera on an individual’s face, and uses what it calls sensory cues to detect a person’s age, gender, and ethnicity, as well as mood — without storing any personal data.

If that sounds controversial, Alfi co-founder and CEO Paul Pereira said it’s an improvement upon the current digital ad system, the one that uses tracking “cookies” to also detect personal information based on a user’s online habits.

“The cookie is dead,” Pereira told the Miami Herald. Besides posing a greater threat to a user’s privacy, cookies lead to ads may not always be appropriate to a user’s interests.

“That ad may be falling on deaf ears,” Pereira said.

Alfi, he said, is “not interested in who you are.” Instead, Alfi claims to deliver “the right content, to the right person at the right time in a respectful and ethical manner.”

Some investors think the company is onto something.

This summer, Alfi shares joined the ranks of “meme” stocks that have seen brief, spectacular price increases. After debuting on the NASDAQ exchange at $3.70 in May, Alfi’s shares climbed to as much as $17.10 in June before falling back to $7.61.

That is despite the fact that Alfi lost nearly $8 million in the first half of the year, and with negligible revenues, according to its financial filings.

Pereira said Alfi’s technology is built to the European Union’s strict General Data Protection Regulation privacy standards. That is his response to privacy and ethics concerns raised about his company’s technology — concerns that have already drawn the attention of Senators Amy Klobuchar of Minnesota and Richard Blumenthal of Connecticut. In June, the Democratic lawmakers wrote a letter to the heads of Uber and Lyft, in whose cars Alfi has said it intends to put its tablets, raising “serious concerns about privacy for your passengers.”

But Alfi is charging full-speed ahead, saying it is able to negotiate the placement of its tablets directly with drivers, without the permission of Uber or Lyft. Alfi said last month that it now expects to have over 150,000 tablets deployed by the end of 2022. It also says its advertising inventory by the end of 2021 is expected to be “in excess of $100 million” and by the end of 2022 “in excess of $500 million.”

“By shipping to our driver partners directly and providing them an instructional video for easy set-up, we can quickly scale in our targeted high-volume rideshare communities and achieve our goal of an installed base of 30,000 by year end 2021 and more than 150,000 tablets by the end of 2022,” Pereira said in a release.

As for accuracy and the chance of race or sex bias in its product, Alfi indicates on its website that as a best-in-class technology as defined by the National Institute of Standards and Technology, it is less prone to it — though it acknowledges “there is much improvement to be done in reading darker skin tones.”

“But even recent data factors like determining a viewer’s mood are already showing a lot of success at 80% accuracy,” it adds.

Pereira told the Miami Herald it has more high-profile announcements in the offing. Besides, Pereira said, it has invested significant resources in making sure its technology catches on.

“Building this platform has not been easy,” Pereira said. “But we think we have a secret sauce.”

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