"press: here" is sponsored in part by barracuda network. security and store solutions to simplify i.t. city national bank to help california businesses grow. tech companies have gotten so good at parting you from your money, you'll barely notice when they take more. plus, will ad block break the internet? our reporters sarah lacy this week on "press: here." good morning, everyone. i'm scott mcgrew. when my son was young, young enough to be in a stroller, he

shoplifted. he was about 3 and didn't know you can't just take a banana and let your dad stroller you out of the grocery store. well, you can't now, but soon you'll be able to take all the bananas you want. the grocery store of the future will be able to see your banana or whatever it is you put in the cart and just charge you for it automatically, no checkout, just roll and go. this is already the way uber works. just think back to the very first time you used uber, how odd it felt to just step out of the car and leave, no cash changing hands. recently, the golden gate bridge went to automatic tolls, and pay by phone, the company that allows you to feed the meter with your smartphone is working on new payment technology for parking garages with no gates, no tickets, just drive in, drive out, no stopping.

the ceo of seattle-based pay by phone, the man who wants to make it easier for you to part with your known. join bidill lon sweeney of venture beat and sarah lacy of panda. thanks for being here. this concept that if we can reduce the amount of pain between what i want to do and the payment, i'll do more of that thing. >> that's exactly right. if you look at parking, when people use the pay by phone mobile application, you see transactions that are 40 to 50% higher than people that are using change or their credit cards because it's much easier to top off remotely when you go park. if you're in the starbucks having coffee, you realize you're going the chat for another 30 or 40 minutes, you click a button and continue your parking session. >> does the city hate that you lose them so much money on fines and fees? like you have saved me thousands of dollars here in san francisco. and i always felt like the reason they required quarters and like you to have half your passenger seat with quarters in

san francisco is because they want to charge me huge fines. >> well, it's interesting that you say that. most cities actually do try to do the best they can as far as the good of the constituency. so the fines are not something that they want to perpetuate. some cities see that as a large revenue source and see that as a concern. but fundamentally they say it in terms of saving costs, you don't have to deploy infrastructure, you don't have to spend $50 million, $100 million to deploy devices. >> pick up the quarters. >> et cetera. where there is a lot of stealing, it's called shrinkage where you see 20, 30%. >> people at the arcade. >> so from that perspective, cities save on capital costs and they also increase their revenue base. >> now this is just for parking now, correct? >> currently we do only parking in north america and europe. we do have one tolling service in vancouver, bc where pay by phone is a really cool concept where folks cross the bridge.

and if they don't have a toll tag but they do have a pay by phone account they get an alert do you want to use your pay by phone and your license plate is your identity. if they say yes they can start crossing the toll seamlessly. >> and in the uk you're doing the concept of i just go into a parking garage. and i think this is cool. and it speaks to the whole concept of a grocery store and uber, where i can just go into the parking garage, park, leave, eventually i'm going to get a bill from pay by phone. but i don't have to stop and do the ticket there could be a whole world of this where i just go through my life and it bills me later. >> that's exactly right. in the case of the uk, which is the london underground, you basically drive into the lot. it basically takes a snap of your lenovo plate and as you exit it's the same thing. you don't even have to pull out your phone there. >> is a lot of potential for sticker shock here. there are all these stories when it came out of people who got in uber kind of drunk, not paying attention, got their bill or realized how much at the end of

the month they're spending on uber or lyft in my case. it terrifies me thinking about teenagers who are running on my account going through a grocery store just throwing stuff in a basket and not really thinking about what the bill you're racking up. >> downloading apps to their phones. >> i remember i signed up for all these girl scout cookies once. just because you sign your form. >> do you remember also, there was a point in which you got a paycheck. you literally somebody mailed you or handed you a paycheck and then you went to the bank and -- >> kissed it first. >> kissed it first. now it's all direct deposit and you use a cash card. i rarely carry cash at all. already i'm somewhat divorced from the idea of cash. >> you still pay attention. >> there are studies that show that the more that abstracted you are from cash. >> yes. >> the more willing you are to pay for things, instead of

tokens or gold coins. >> we all pay more for transportation. >> the tolling services, the parking services, many of the thesish mobility, like wyche lent, people can use it for parking as well as biking and even bussing. >> it's so funny the more we go down the road, you get really used to it. if you go to new york and take a cab, you just try to get out of the car and they're wait a minute. i'll leave my house there are so many places if you live in a neighborhood where they have your card on file and you don't have to carry. i feel like half of the time, i need an id more than i need a credit card when i leave the house. >> that's right. in fact, your identity in the case of pay by phone can be your license plate number or it can be your phone number. really, that's what your account. you take that and abstract that to the grocery store or any number of things, that's how you end up paying. >> how does the privacy of the license plate work out? you know it's in great britain. but is that you know -- how did

you get permission to do that? >> so when people sign up for their account, you know, to park, we have to know what their license plate is for enforcement. >> sure. >> i tell you. >> the consumer tells me. >> all right. you're not going through -- >> no we're not doing any kind of data mining or anything like that. >> it's similar to a fastrak card. >> that's correct. >> it will read it, but if they can't, they have the picture by license. >> fastrak allows me to do the same thing at the airport you're describing. in san francisco, isn't fastrak better positioned to do this than you guys? >> a lot of it comes down to the mobile technology and the ability to engage with the consumer. in many of these cases, if you look at traditional parking operates, even tolling operators, et cetera, and you say what is your relationship with the consumer, their answer is we wave goodbye to them after they pay their money. they have no way to engage with the consumer where as we have a platform. we have a way to say hey, there is a 49ers game this weekend and the parking rates are going to change. and therefore that's much more valuable to the consumer from that perspective.

>> kush, how long can we can actually buy bananas with pay by phone? >> good question. >> he is a pro. >> i think if you look at the movement of the industry, initially it's going to be unattended retail. so think about vending machines or those little corner shops that you have inside the hilton hotel or your sbg type hotels. and ultimately that will migrate to the grocery store which is a little bit more complex because you have more skus. but fully the next five years. >> kush parikh is ceo of pay by phone. thank you for being with us. >> thank you very much. making a payment in your car payments and something that might break the internet. when "press: here" returns.

welcome back to "press: here." there is a relatively new phrase to break the internet, a phrase that refers to something that is so popular or so lurid it gets lots of views. and i am not above showing you an example. a photo spread of kim kardashian was said to have broken the internet with its popularity, though it did not break the internet. but there is something that could very well break the internet, or at least damage the financial model so many sites rely on it. ad blocking.

and it's one of the most recent updates to the apple operating system. it began allowing ad blocking software on its devices. ad blocking does what it says it does. it blocks ads. lars albright is one of the brightest people in the world when it comes to mobile advertising. from working at quattro wireless which apple bought to being an executive at apple itself. and now ceo and founder of session m, a consumer loyalty company. thanks for being with us. could it break the internet, this adblocking? >> it's unlikely to. and we're seeing -- adblock has been around for a long time. and it's been particularly prevalent in europe, more wired, web based servicing, they've been using adblocking for some time and there has been some impact. here there is a lot of uproar about what happened when ios 9 came out. is this going to cause publishers to lose money. the answer has been no, it hasn't had a huge effect. >> why not? >> how is that possible? >> a couple of reasons so far.

one, it's really just focused on predominantly the web-based environment. so the mobile web and not applications. and the vast majority of time, over 85% of time is spent in mobile applications. >> even reading news, though? >> i think from what we see in terms of the amount of ad dollars and ads spend. >> the adblockers can't get into nyt now app. >> there is rumors of apps being launched and trying to do it and even within the am store and google. but what we're seeing is that's not happening very much. so i think the reality is that it could have a big impact down the line. not in the short to midterm. also, publishers aren't standing still either. they're saying look, if you have an adblocker on, we're going to minimize content availability. we're not going to make it as good an experience for you as a consumer. one thing i like as a bigger discussion around this is it does bring in to focus is advertising really done in the right way, and what are ways the

companies need to think about building more direct connection was their consumers as opposed to relying on standard ad placements that are largely ignored. >> the answer to your first question is easy. advertising on the internet is totally out of control, i think. it's not done the right way. and that's why people are so eager to plo adblockers. that supports their free reading habits. it's that the ads are tracking. they take up content, your bandwidths. >> is it better to have a world where it's all sponsor content and native ads? that's the solution to a lot of this. you talk to a company like refinery 29, everything is going to be in stream and native. >> for a women lifestyle brand, maybe not such a big deal. for someone like the economist or the "new york times," is it more of a big deal? >> it does depend on the content and the site. i think the challenge, though, that native can also become much like the prior format of just having an out of control

experience with lots of banners. sometimes native is deceptive. sometimes you're not sure where it is. it's a way publishers can adapt and try to get around the more traditional placements. but i think the big challenge back to your point is the traditional placements are largely ignored. and that's an issue that really people don't like to talk about is probably only half a percent of people typically click and engage in these traditional ad formats. and i think that's where the best companies out there, companies that are thinking about how do i not rely on the third party, but how do i actually speak to my customers directly and build that relationship where i'm able to build them value and learn into a way that they're opting into. it doesn't feel like someone is watching all my data. the big thing about adblocking is really the revenue is one thing. but the data transfer is a huge thing. people talk about ads and not being able to serve ads. be you don't know what people are doing your honor web property. so you can't optimize the content, make it better. >> to "the wall street journal," to "the new york times," to the economist, i'm trying to think

of anything else i pay for. they give me such insight and -- >> my goodness. >> i pay for that as well. they give me enough good content that i'm willing to pay for it. is there a way of building loyalty that isn't necessarily you give me great content, i give you money? what other models would work? >> i think it goes back to this nurture and value there is value. loyalty, we're seeing this whole new age of loyalty being really important to a companies in telco, sephora or starbucks that are really using loyalty in an incredibly important way to build that connection, that value there is successful tactic there's. there is also a lot of value around relevancy and timeliness. so if you are being given information in a relevant and timely way to you based on your preferences, you'll see that as value and hopefully that drives your customer loyalty. >> i wonder if we're having a change where people are more willing to pay than they weren't. i think it's being driven by

netflix, spotify, seamless transactions and a mobile universe. i think it's a very slow, gradual thing, and i think it's more of a younger demographic that is willing to do it. but we turned on a subscriber model on june. and it's been less than six months and it already pays for half of our operating costs of the business. >> and i think people are not only willing to pay, but they're willing to share more about themselves if they're getting value in return. that's a big -- when you're just getting blasted with ads and banners and different things, you don't feel as good about that exchange if there is real value there. we're also seeing a big shift from just pure acquisition spending and into retention marketing and more around the recognition that it can be more expensive to acquire a user than to retain a loyal one and build that loyalty over time. we're in the early phases of it, but you'll see more focus on retention marketing, loyalty, how do you provide value. and some of that can be for a paid model. some of that can be what you're talking about to get somebody

willing to pay. >> i wonder if there is any hope at all for advertising supported media? can you see a future where, you know, publishers and the advertisers that advertise on their sites show enough restraint in the ads that they're running that people are like yeah, that's an acceptable trade-off. i don't need an ad blocker. >> i think that's probably the positive part of this discussion is that people were talking about it. other people are talking about it. i think there is a recognition that the current approach is broken. it doesn't work. and consumers that -- they're not going to sign up for it forever. i do think that we can get back to a more natural equilibrium. and i think there can be different ways, there can be different ways that we see the models go. >> and the ones that are all doing it well are buzzfeed by refinery 29. these companies that are doing heavy custom. lots of custom. lots of native. >> we're seeing new creativities as well. there are times when you watch a youtube preroll and you find yourself i'm watching that whole thing. >> you really do that? >> yeah. >> that's never happened to me.

>> what's the best customer retention you've seen? not statistically. method. >> i think it goes back to -- it goes back to i would point out loyalty like starbucks. they're very data centric. they're able to build a profile of a customer in realtime and understand that those customers actions so they can message them and give them value. i think companies that are doing that more than going out and just blasting acquisition marketing are the ones that are the most successful. >> lars albright and ceo of sessionm. we appreciate you being with us this morning. car insurance per mile, not per month. a huge disruption, particularly use informal san francisco. we'll talk about it when "press: here" continues.

welcome back. would you pay $5 to watch this tv show? or $5 to patch the 49ers play the bears on fox? $5 just to watch a football game on television might seem steep, but when you consider the average cable bill is now $120 a month, according to npd group, if you don't watch a lot of tv, paying per show instead of per month might make sense. but would you do it? recently car insurance companies have started offering pay per mile insurance. you don't pay a monthly bill. you're tracked per mile driven,

around 6 cents a mile. for those who don't drive much, it is a huge cost savings. dan preston is ceo of metro mile. i did not invite dan on to sell us insurance. sarah doesn't even own a car. but i would talk more about this idea, paying per event. let's call it a la carte, as opposed to all you can eat. people can see significant cost savings in places like san francisco where they're not necessarily driving much. what kind of people see cost savings? >> it's anybody who drives less than the average. so typically the average driver is driving 10,000 to 12,000 miles a year. anybody driving less than that for decades now has been subsidizing the high miles drivers. so largely it's been unfair for the low mile drivers to pay one flat rate for their insurance. >> wait. if you take that subsidy out, though, doesn't that affect the rates that everyone else is paying? >> well, so your high mileage drivers would end up pay mortgage in tend. >> but to your point, the high

mileage are not going to use your service. therefore where is the money come from? >> that's right. we would really only be suitable for low mileage drivers. the low mileage drivers are about 60% of drivers and they're typically in cities. because you have a multiple of transport options whether it's the train, biking, uber, whatever it might be. these are all different ways people get around. >> 60% nationally? >> nationally. >> drive less than? >> than the average. that's because there is a long tale of people who drive 30,000, 40,000 miles. 60% drive below the average which is about 12,000 miles a year. >> wow. i remember when i lived in memphis, tennessee, typical sprawly, decent-sized american city, i had a leased car and i had to pay huge penalties because there was no way in hell. that's crazy to think 60% of people, just that many people live in urban cities now? >> that's true. there is a trend generally of people driving less. >> more option. >> if you look at the millennials demo right now, in

general you see people moving more and more into cities. it's a general trend. a very large portion of the u.s. live in cities. but you're right. in more suburban or rural environments, you'll drive a lot more. but cities the average is less. >> is that good for you. it seems you can really focus on the places there are certain places where you're going to have a big bang for your marketing buck whereas having to roll this out to 50 american city, we don't do tv yet. we practice on putting billboards on buses and trains. these are places where people are commuting. they're not taking their car to work, but they need the car on the weekend to do errands and other things. we focus on areas where we know people are driving less. >> in fact, it's not in my viewing area, but you're just about to announce that you are expanding into? >> new jersey. >> new jersey. >> why new jersey? because of the urban density? >> it's the most densely populated state in the u.s. i believe. and not only people who take the train into new york or whatever it might be. so we're really excited about it. it's going to be a great state

for us. we've been moving more and more towards the east coast. this is obviously a great step in that direction. >> in terms of the overall mind-set of what scott was describing, i mean, i don't know if it's just that i'm old and i'm busy, but the idea of having to think about how many shows i'm going watch and is this $5 more. there is something about or for me that would create more friction. i would feel -- >> more stress. >> am i going to take my car to napa with friends or am i going to try to get my friends to do it? even if it's not that much and i'm losing money overall, there is a sense that every time you do something, you're paying. >> yeah. i think you have to make it very seamless and frictionless. the way we did this was we made so it that it was retroactive to the end of the month. you do have to take a picture of the odometer or anything. we've done some things to help out. for instance, road trips. you can cap that at certain miles you don't need to pay. i think to build a flock is successful that moves from a flat rate to something more pay as you use, you need to make it very easy, frictionless so you don't have to make those kind of

trade-offs. >> it sounds like it only works too in markets where the same kind of thing applies that applies in the car insurance industry where you have low usage people who are effectively subsidizing the higher usage. which maybe that applies to cable. or car ownership. >> what else would this apply to? what else could you see? we're currently paying per month. but would make a heck of a lot more sense if we paid per trip. can you think of anything? >> for cars there are a few different things. if you look at, for instance, the way you lease a car, 12,000 miles a year, but it's still priced per mile. ultimately gas is a thing that basically. you can see a world in which everything you do with a car is user based and you only pay for what you use of that car. >> that's like zipcar, essentially. >> it's interesting to watch the technological inventions. surf air says instead of paying for every flight, pay us a flat

fee and you can knock yourself out and do what you want? and at the same time we're seeing metromile which is the opposite, don't pay a flat fee, to do it individually. >> netflix is the opposite of the example. >> sure. >> the fact that i pay an amount. i pay for 10, 15 years. and i used to do it to get dvds. and now i get all of these amazing channels. that's part of why netflix is one of the best subscription services we've ever seen. >> it's on demand but for a giant flat fee. to sarah's point, you did find when she said i drive less. yale did a study using your data and find people drive less. >> 6% on average when people switch to metromile. we find 6% less driving overall. i think this is ultimately if you have the choice to bike to work versus taking your car, it makes it a little easier. you get a benefit for choosing the other option which turns out better anyway. >> a little social engineering there. >> as has been the danger lately is low oil prices. people are buying bigger cars,

driving more cars there is no pain point in trying to save or take an uber oare train or anything else. >> you don't see the benefit of driving less today with insurance. but with this you end up getting that benefit. >> dan preston with metromile. appreciate it. >> "press: here" will be right back.

that's our show for this week. my thanks to my guests kush parikh, the man who wants to make it easier to part with your money is the ceo of pay by phone. lars albright, ceo and founder of sessionm and dan preston from metrole mile. i'm scott mcgrew. thank you for making us part of your sunday morning. an ttardes and welcome

to "comunidad del valle." i'm damian trujillo, and today, the spanish voice of the san francisco giants is here in our studio. plus, el grupo folklórico de san jose state on your "comunidad del valle." male announcer: nbc bay area presents "comunidad del valle" with damian trujillo. damian: we begin today with that spanish voice of your san francisco giants. erwin higueros joins me here on this show. an old compatriot, [speaking in foreign language] in telemundo a long, long time ago. erwin higueros: man, that was many moons ago. but we look the same, though. that's always good. damian: no, see, that's why i keep the hair short. it keeps the canas away. tell us what that experience has been like. i mean, for the past 3 years, or i mean, 3 times in 6 years or 5 year, what was that like, that whole run through? [speaking in foreign language] i don't think anybody expected that the giants had a powerhouse, and that you would be announcing