Publishers: Please implement Ads.txt

Ads.txt  is IAB’s newest fraud-fighting initiative. It stands for “Authorized Digital Sellers,” and the aim of the initiative is to increase transparency in the way that programmatic advertising is sold to protect buyers from spoofers.

It works by giving verified publishers and distributors an easy way to declare, publicly, the companies that they allow to sell their digital inventory. They do this by preparing and publishing the “/ads.txt” file, creating a public record of Authorized Digital Sellers and helping buyers to quickly identify which sellers are allowed to handle ad inventory for which publishers.

This makes it much harder for scammers to profit from selling fake inventory and gives buyers peace of mind that the ad space they buy is authentic.

By the time you read this post, over 100,000 ads.txt files will have been published. 750 of the comScore 2,000 will have ads.txt files and over 50% of inventory seen by DoubleClick Bid Manager will have come from domains with ads.txt files. Beginning in November, DoubleClick Bid Manager and AdWords stopped buying ads from ad networks / exchanges not declared on Ads.txt.

Google also says that “DoubleClick Ad Exchange and AdSense publishers that use ads.txt are protected against unauthorized inventory being sold in Google auctions.” To do this, Google “crawls daily over 30m domains for ads.txt files.”

The rapid adoption of Ads.txt shows how much of the market is controlled by Google. But this doesn’t make the initiative less valuable. Domain spoofing has been a huge problem on both the supply and demand sides, and we are happy to see this initiative and help our publishers adopt it.

If you’re a publisher, you need to implement the ads.txt text file on your root domain, listing the exchanges that are authorized to sell your inventory and including your seller account ID for each exchange.

Your seller account ID, sometimes called your publisher ID or seller network ID, is the ID that’s linked to your account on an exchange or supply-side platform (SSP). This is important because this part can’t be “spoofed.”

When you take part in programmatic real-time bidding, this ID should be transmitted through the OpenRTB protocol as the publisher ID, along with the Publisher.Domain in the Publisher object. If you’re using a different RTB protocol, it might be called “seller_network_id,” member or seat ID. 

Ads.txt is also important for buyers, who are the ones paying the bills and the ones demanding more transparency. They have been almost literally throwing out money on online exchanges, and finding their brands in places that are destructive or irrelevant. No wonder they’re finally done with all this, and have demanded changes. Especially this year the ANA and the MRC have become loud players in demanding reform, and Mark Prichard of Procter and Gamble, the country’s largest advertisers, has been on a one-man tirade.

As a private platform, we’re individually secure, and as an ad server we have our protections in place.

We are getting there, folks. Digital advertising is too large an industry to be so rife with corruption. We need to clean up, and we will.

 

 

Market Maturity Means New Media Buying Standards

Contrary to popular opinion, digital display advertising does work, only not the way we think it does. In fact, consistent display ads create brand lift in the same way TV advertising does. And display used for brand lift is a “good buy,” allowing for many impressions at relatively low cost and contributing to availability bias– formerly known as top of mind awareness.

When we use digital display for performance advertising today, we’re using it incorrectly. We should be using it for branding instead. However, we have become used to digital display as only good for performance. By making poor media buying choices like the misuse of display ads, we continuously overlook efficient ways to spend our digital budgets.

Marketing has changed more in the past five years than in the past fifty, and some of the things we thought we knew, even earlier in the digital advertising era, simply are no longer true.

That is why all marketers are making the wrong decisions, despite data to the contrary. Or so says Adam Heimlich of Horizon after running a three year study on digital media budgets. 

Not only is almost no one executing effective digital media buys, the vast majority of big digital advertisers are on the opposite track, chugging like locomotives in the wrong direction. Many have arrived at zero lift.

Digital display is one of many areas of human endeavor where data is exposing conventions that yield suboptimal results. As in finance and baseball, data alone isn’t enough to convince most decision-makers to move away from orthodoxy in marketing.

Digital video, too, is often interpreted incorrectly. In video, it is not always smart to keep spending to create cross channel campaigns aimed at producing specified numbers of sales.

Here’s why: there’s a number in marketing called cost of customer acquisition. If you are looking at a sales number, and you keep spending until you get there, your cost of customer acquisition may very well drive you into bankruptcy. Especially if you are a retailer, bucking a global market trend toward online buying. Sure, you may eventually reach your sales targets if you advertise to enough people, but your ad spend will be unbelievably inefficient.

So we have to make better use of the data we already have, and develop algorithms that truly learn. Then we leverage those algorithms to make better media buys with less waste.

Heimlich advocates buying against the standards of the MRC and the ANA, and avoiding vendors who are not transparent:

By forgoing transparency, viewability and/or fraud protection, bad actors get away with appearing to deliver more value per dollar. How much this practice is fueling the growth of Google and Facebook isn’t exactly a mystery.

Advertisers’ finance and procurement departments should implement a compliance regime based on industry standards, with regular audits to keep marketers honest. This was very difficult before the ANA and MRC caught up to the marketplace. Now, it’s mature, and there should be no excuses.

Think about that the next time you are tempted to spend all your budget on Facebook.

Dependence on Facebook is Bad for Publishers and Advertisiers

Without giving it enough attention, both publishers and marketers have become too dependent on traffic from Facebook. Not that Facebook is going away any time soon, but an entire industry has given up control to a single platform. Single sources of supply are always dangerous, and Facebook has become very nearly a single source of audience supply.

At a recent conference at Harvard Business School on the future of advertising and publishing, the very first panel (Social Distribution, Advertising and the Free Press) questioned whether this industry, long part of democracy, can continue to exist since we have come to know about fake news. In fact, the opening comment from Emily Bell of the Tow Center for Journalism at Columbia was a question about whether we even knew what an ad was anymore. Everything  is an “ad”  in an era where content distributed to targeted groups of people can change minds and even influence elections.

We are in danger of having legitimate advertising conflated with political propaganda.  And our industry groups are not focused on this at all, they’re busy trying to lambaste Apple and Google for taking away cookies. Cookies are the least of online advertising’s problems.

What we in the industry know as ads are unimportant, given the use by Russia in the last election of actual content in Twitter and Facebook newsfeeds. It’s the audience that’s important, and the use of artificial intelligence to target that audience in a more and more accurate way with content that is not recognized as advertising.

These targeted ads on Facebook became problematic in the 2016 election: With such small and specific audiences, Carroll said, it was impossible for citizens and reporters outside the targeted population to even see what information or disinformation was being promoted during the election, and who was seeing it. This led to the feeling of a fragmented society that many experienced when they saw friends and family sharing falsehoods on social media that seemed to come out of nowhere. As Carroll put it in his opening presentation, Facebook had “put military grade PSYOP [psychological operations] weapons in the hands of anyone.”

Facebook has already begun to respond by instituting more transparency for not only political ads, but for all ads.

Even more important, it has begun a test to segregate posts from publishers into a separate feed, the “Explore Feed” and make them pay.

In six markets, Facebook has removed posts from Pages in the original News Feed and relegated them to another feed, Filip Struhárik, editor and social media manager at Denník Nwrote. That means Facebook’s main feed is no longer a free playing field for publishers. Instead, it’s a battlefield of “pay to play,” where publishers have to pony up the dough to get back into the News Feed.

Publishers in markets where this is being tested have already begun to see changes in their traffic, and it is being decried as a hindrance to the distribution of news.

Moreover, Facebook is going to Washington, DC to testify about what it knew about Russian ad buyers attempting to use “dark posts” to influence the American election.

With Facebook grabbing 77% of all growth the advertising spend from marketers, brands are getting themselves into potential hot water. Congress will probably do something to regulate all five big tech companies, and that could well produce chaos.

Publishers and advertisers should plan for big changes to come, and not be so dependent on Facebook either for advertising or for distribution. We did just fine without it in the past, and we can lower our dependence on it for the future.

 

 

A Moment of Thanks to All

Every year at Thanksgiving, I become reflective about the year that is coming to a close. It has been a tumultuous one for our industry, and for the world as a whole, but as the year draws to a close there is still much to be thankful for at ZEDO.

First, ZEDO’s incredible product development team.  Not only do our products  stay abreast of and even ahead of the industry, but they perform so well that when a customer gives us a chance to test against a competitor, we always outperform. This while taking the high road in an industry still fraught with malware, fraud, and misrepresentation.

Second, our sales teams, who never sell vaporware, but get us in front of the right customers so we can help people achieve their financial objectives on both the publisher and the advertiser side.

Third, our highly regarded support and implementation teams, for which we always receive compliments. We have always been known for our support, and this will never change because our customer relationships are not transactional — they’re personal.

Next, our customers, whom we prefer to think of as our partners. Indeed, some of our customers have been on a very long journey with us from ad serving at the turn of the century to serving advertisers with high impact formats on a secure platform today.

Fourth, our thirty party partners, the technologies that externally verify our ads to make certain we keep our promises.

And next, the industry associations we support, like IAB and the Online Trust Association, who keep on working to bring our industry greater professionalism, better research, and higher standards.

Last, but certainly not least, everyone on the ZEDO team who keeps the lights on and makes us who we are. When my friends ask me why I went into the ad tech business, I answer that it’s because of the great people I’m able to work with all the time — bright minds in a fast-moving business.

I hope you all out there in the audience remember to feel grateful for your families, your teams, your health, and your continued presence on this great planet whether it is Thanksgiving in your country or not.

 

 

Agencies Merging in the Face of GDPR

One of the ways agencies grow is by buying smaller agencies. In theory, that gives them access to more clients, a fresh creative staff, and a way to create scale to ward off competitors. However, mergers and acquisitions are only as good as their integrations into the mother ship.  According to an article in AdExchanger,

There were 398 acquisitions in 2016 with a total investment of $14 billion.  The Big Six – WPP, Dentsu, Havas, Publicis, IPG and Omnicom – were responsible for 89 acquisitions, at a value of more than $3.3 billion.

Figures through September showed 291 acquisitions this year. And in this game of agency supermarket sweep, many of the targets come from the data, digital and programmatic aisle.

This could prove tragic in the long run. The good news is that at long last agencies seem to understand that digital, data and programmatic are capabilities they need to have. But they are one step behind in the race to the future. As a result of coming new data privacy regulations, such as the European GDPR (Global Data Privacy Regulations), many marketers have data at the forefront of their minds, but for the wrong reasons. They know they are going have difficulty using it the way they did in the past, because now the consumer will be in control of her data.

What the big agencies really should be doing is studying up on those regulations and coming to grips with the limits that will be placed on the use of data in the future. Agencies are usually headed by people who may know the creative side of the house but don’t keep very good tabs on data. There will be an amazing culture clash when the data-driven geeks arrive in the house. There will be equally big problems because programmatic itself is coming under scrutiny for brand safety issues and ad fraud. So far, the geeks and the creatives have been kept separate, in separate companies. If they come together under one roof, that holding company will have to tighten its controls to make sure that the data flowing through its acquisitions is in compliance with the new regulations, or the fines will be significant.

So what the agencies will need now is a new cadre of management familiar with aspects of the business that have been lumped into a separate bucket called “martech.” And they will probably have to beef up their compliance departments as well.

In the rush to integrate acquisitions and learn more about how to manage data, guess what will get short shrift again? True creative, the kind that makes advertising users want to see.

Another Attempt to “Fix” Digital Advertising

Everyone is trying to “fix” digital advertising.  And now the “geeks” who “disrupt” things have entered the picture,  which always reminds me of how the geeks  realize healthcare, too, is broken and needs fixing. But the geeks don’t know much about healthcare and have a tough time building products that really offer value to that industry, and the same thing will happen in advertising.

A few months ago, we learned about the launch of the Brave Browser, a browser that blocks ads and pays content providers with something called a Basic Attention Token (BAT), which is a form of digital currency. As a visitor to sites,  you buy BATs and they are paid out to content providers in micro payments when you use the browser.  Although we’re following this, we’ve seen too many attempts to replace advertising to believe any of them will work. People want their free digital content.

Now we’re seeing another attempt to use the blockchain to fix the digital advertising ecosystem. This one is called Papyrus, and it doesn’t attempt to replace advertising, but merely to make it safer and more transparent. It hasn’t raised its money yet, but here is an excerpt from its whitepaper:

The Papyrus project aims to provide just such a next generation ecosystem for a fair exchange of value between users, publishers and advertisers. We aim to deliver a postIndustrial marketplace where users control which ads they want to see, who has access to their personal information and market determined compensation for their data, attention and actions. In the decentralized Papyrus digital advertising market ecosystem, all parties will be incentivized to find equilibrium between their interests and resources to obtain maximum value for themselves or the organizations they serve.

That sounds fair. It takes into account the publisher’s need to have revenue, and the user’s need to control of her data, in addition to the advertiser’s need to reach its markets.

Its objectives are laudable:

Preserve sensitive data that users want to keep private while still enabling precise audience targeting using appropriate data processing; Compensate users directly for voluntarily sharing their personal data; Build a sophisticated value-based reputation system that significantly decreases the level of non-human traffic and other types of fraud between participants; Minimize the risks for advertising businesses from excessive government regulation, criminal attacks and security breaches; Increase the agility of all business processes by enforcing everything in real-time via blockchain smart contracts and state channels 3 to eliminate transactional bureaucracy, corresponding offline paper work and the need for traditional bookkeeping; Create an economy that incentivizes the developer community to produce more and more efficient applications that solve practical tasks in advertising; Dynamically balance the interests of users, publishers, advertisers and developers for smooth, accelerated and economically viable progress towards new and more efficient advertising products.

However, scanning the team we think that the company is probably located outside the US, which means the tech stack may be first rate, but the marketing will be slow.  Adoption of the blockchain won’t happen tomorrow, but it will probably eventually happen. While this is nothing to think about today, but at ZEDO we constantly think of both today and tomorrow. It’s how we keep our product development teams ahead of the game.

Instream, Outstream We All Like Video Stream

A little more than four years ago, ZEDO had a global product development meeting to come up with ideas for mobile video. At the time, things were just shifting to mobile, and the ad dollars weren’t quite there yet. The customers, however, were spending more and more time on mobile devices, and the future could be clearly predicted by publishers, who were seeing more and more or their traffic come from smart phones and tablets. Our partner, The Economist, had asked us for a way to run video ads on text pages.

The conversation in the room at that meeting quickly moved around to the differences between phones and tablets, and what consumers would “tolerate” on a device they wore on their person all day. Somehow, the phone seemed a radical departure from any other online device because of this intimate connection with its user.

Our product team showed some of us in marketing an ad unit they were calling “In Article video” because it was a large video ad format that could be shown on a text-based site, and it was a complete departure from the only available video ad format at the time, which was pre-roll. There was a shortage of available pre-roll, and marketers were searching for other places to use their existing TV creative.We thought the format was very effective, and would drive user engagement, because at the time users were just beginning their love affair with video on the phone.Mobile video was still something of a novelty.

We decided at that meeting to call our offering “In Article Video,” because it ran in the article, appearing only when the user scrolled down to see it. When we tested it, the viewability of the unit was over 70%.  We knew we had found the answer to filling advertisers’ need for something beyond pre-roll.

In the first year, we sold this format as In Article, but then the industry began to call it outstream, and soon we had at least one copycat who popularized the name “Outstream.” While this made no sense to us as a name, we had no choice but to adopt it.

One of the claims we have always made about Instream/Outstream video formats is that they are a form of “native,” meaning they don’t take the viewer away from the mobile stream of news or articles she is already reading. However, the industry decided to make it difficult for us with that definition as well: native can now also mean branded or sponsored content. Native has come to mean advertorial, and nothing to do with format or feed.

I’ll take a minute to argue here that every time the industry chooses a confusing term for an ad format, it makes that format more difficult to gain adoption. We have had to deal with the confusion around Outstream and then the confusion around the meaning of native, and we believe that has held back the adoption of both ideas.

The good news is that 77% of marketers have not hear of either Outstream or Instream video, so we’ve got a large addressable market to go after next year with our publisher partners.

 

 

Facebook’s Problems Illuminate Dangers of Scale

As if all the new blockchain companies trying to fix digital ad transactions weren’t enough, we will certainly face more scrutiny in the buying and selling of ads since it was revealed that a Russian troll bank connected to the Kremlin propaganda machine bought $100,000 worth of ads on Facebook during the last election. This was admitted by Facebook, which probably means it’s the tip of the iceberg. Underneath is an iceberg that could harm Facebook if the election revelations are looked at as part of  a pattern that includes Facebook’s recent gaffe with data reporting.

That gaffe, reported by CNBC,  was discovered by a Pivotal analyst,

Facebook’s Ads Manager claims a potential reach of 41 million 18- to 24-year olds and 60 million 25- to 34-year olds in the United States, whereas U.S. census data shows that last year there were a total of 31 million people between the ages of 18 and 24, and 45 million in the 25-34 age group, the analyst said.

“While Facebook’s measurement issues won’t necessarily deter advertisers from spending money with Facebook, they will help traditional TV sellers justify existing budget shares and could restrain Facebook’s growth in video ad sales on the margins,” said research analyst Brian Wieser, who maintains a “sell” rating on the stock with a price target of $140 for year-end 2017.

While the incorrect reporting of data is something Facebook itself has to fix, the propaganda problem is more difficult to address.

There is a lot of hand-wringing going on in our government and in our newspapers wondering how the Russian ad buy could have happened. But we in the industry know exactly how it could happen: Facebook Ads Manager. Anyone with a credit card  and a Facebook account can use Ads Manager, and several people making relatively unnoticeable buys of about $10,000 each could easily have the benefit of Facebook’s super-targeting abilities to hit very specific people with very appropriate messages that would resonate enough to cause them to change their behavior patterns or — we wonder — their votes.

Thus, the same specificity that brands love can be perverted by political organizations to manipulate minds.

How should we think about this?

In Europe, the GDPR addresses some, but not all of this by giving consumers more control over their data. However, we haven’t yet seen any expert analysis of how this would apply to Facebook, which is not a conventional publisher. In fact, Facebook has been reluctant to think of itself as a media company at all. In the face of these recent discoveries, that’s one thing we think will have to change. We may see the return of the ugly word “platisher” as we in the industry try to address these concerns.

 

Equifax, Malware, and the UntrustworthySupply Chain

As if Equifax hasn’t lost enough trust from the first hack, last week it had to disclose that it suffered a second breach, which was called by most reporters a second hack. But apparently last week wasn’t a second hack at all, but a different problem. . Ars Technica wrote:

 A key part of Equifax’s website has been redirecting users to malware for an unknown period of time, a security researcher discovered this week. A video posted by independent security analyst Randy Abrams  showed an Equifax webpage redirecting to a fake Adobe Flash download prompt that installs adware. The infected Equifax page, which the company took offline after discovering the problem, is used to access and update one’s credit report, meaning that many people have likely visited it in the weeks since Equifax disclosed a data breach affecting more than 145 million Americans.

But the new incident was not a second hack – Equifax told MC that the malicious redirect came from a vendor’s faulty code. “The issue involves a third-party vendor that Equifax uses to collect website performance data, and that vendor’s code running on an Equifax website was serving malicious content,” a spokeswoman said. “Since we learned of the issue, the vendor’s code was removed from the webpage and we have taken the webpage offline to conduct further analysis.” Equifax appears to use a disreputable third-party ad provider, Iron Source, which is known for facilitating “malvertising,” the process of implanting malware on victims’ machines through the ads they visit.

So a third party vendor did it? Iron Source, which has a reputation for allowing malvertising. Not according to a person from Malwarebytes, a service used to detect malware. This person said it’s incorrect to call this a hack or attribute it to ads. In fact, the third party script was a web analytics component, and not ad code. But the third-party script itself was leveraged to load a domain serving as “ad rotator.”

Apparently, that’s is an issue with 3rd party scripts and any site that was using that particular one was at risk.  The ad rotator delivered very low quality redirects, suggesting that these were not even targeted ads.

While malvertising remains quite common, compromised analytics tags are less so. What could the takeaways be from this incident?

Our biggest takeaway is that you have to know every single step in your supply chain, and every partners must be certified and trusted. There are far too many unknown intermediaries in digital transactions for us to feel comfortable about our visitors’ data, and we have to limit the number of those for safety’s sake.

That’s why we have a private platform where this cannot happen. We have weeded out low quality sites, we have only quality inventory, only high quality partners, and no one else enters the supply chain once we set up a buy. This must be the way the entire industry operates in the future. If we don’t let the bad apples in, they can’t corrupt our supply chain or compromise the data of any of our partners.

 

2018: The Year of Data Security

It doesn’t take much to predict that 2018 will be the year of enhanced online security. We were headed toward more emphasis on consumer privacy anyway, but the massive Equifax data breach forced every consumer to face what geeks have known for ages: that left to their own devices, the companies that collect, handle and sell our data do not care about keeping us safe. We have to be in charge of our own data security. This event will change the thinking of just about every American on the internet, and since the Europeans already relish their privacy and have begun to take steps to enhance it, we can look forward to a real difference in how marketers, developers, and publishers operate online.

Here’s what we think will happen in 2018:

  1. Apple, which has made security a differentiator in its products for a long time, will block cookies automatically in Safari 11.  All the major marketing trade groups are fighting this, saying they are “deeply concerned” with Apple’s plan to override and replace user cookie preferences with a set of Apple’s own standards. This is called “Intelligent Tracking Prevention,” will provide consumers the gift of a 24-hour limit on ad retargeting. So that pair of shoes can only follow you around on the internet for 24 hours.
  2. A new browser, Brave, developed by the inventor of Javascript and the former CEO of Mozilla, loads news sits two to eight times faster than Chrome or Firefox by blocking ads and trackers by default. Through Brave’s use of blockchain technology, it pays content creators viewed through its browser in micro payments.  The block chain is coming to advertising in other use cases as well, mostly to make the digital media supply chain more transparent. We predict Brave will catch on with the geeks who favor ad blocking and security, although the general public probably won’t know it exists.
  3. The big Kahuna of changes is the launch of the Global Data Privacy Regulation in May 2018.  The GDPR, as it is lovingly referred to, affects how marketers can interact with European consumers: they can only market to a consumer who gives permission. Because this regulation was passed by the European Commission, it carries the force of law and if you violate its terms you can be liable for a hefty fine.

Although the UK is in the process of Brexiting the EU, because its companies handle so much data from EU members it will follow the conventions of the GDPR.  America will be dragged along kicking and screaming, because most online businesses do not have a convenient window into where every data point comes from, it will be easiest simply to comply.

4. There will be a major business opportunity here as small businesses who haven’t paid much attention to these issues in the past re-examine how they handle customer data or who they partner with.

5. And then there’s the obvious windfall for companies that sell data security solutions, which will not be far more appealing.

There may also be a change in advertising from an emphasis on performance ads based on data to brand ads, which do not involve having to violate privacy by tracking consumers around the web.