Brexit Won’t Change Treatment of Data

The Brexit caught many people unaware and forced them to think through some digital media issues in rather a hurry. The UK has just released new privacy and security guidelines– based on the UK’s understanding of the General Data Protection Regulation (GDPR)– that will take effect in 2018, the year the Brexit is actually supposed to occur. The UK and EU have already diverged from the US by requiring all sites that use cookies to announce the policy on first visit.

British data security experts have told us privately that most visitors just click right through and accept the use of cookies, however. The practice of announcing that a site uses cookies is becoming more widespread in the US as well, and does not seem to be the reason the US is seeing the spread of ad blocking.

So cookies are not the major issue: then what are the important components? For the US, the most important issue seems to be on the security side, as US and state regulators try to prevent hacking and release of potentially personal information.  One of the problems with the US is that security is handled by the states. And the US first amendment freedoms create issues with the EU’s laws.

The EU comes at privacy and security by emphasizing the privacy side — the right of individuals to control their own data, and a prohibition against collecting data without a “legitimate purpose.” It also provides no threshold for the right to be forgotten, which is in direct conflict with the freedom of speech guarantees in the US.

If you then throw in the Brexit, the UK, which is the center of digital publishing and advertising in the EU, would have much to do complying on the one hand with US regulations and on the other with EU laws, especially when dealing with so many other potentially difficult issues.

Thus, the UK is expected to ignore the Brexit for purposes of data privacy and security, and throw its lot in permanently with the EU. It makes little sense to do otherwise, as for the next two years the UK will have to go along with everything the EU is doing to get ready for the new regulation anyway.

Moreover, companies that offer cloud-based services, no matter where they are based, will have to comply with the most stringent regulations or face fines.

What do these new regulations mean for publishers and marketers? Well, for starters the new regulations are predicted to create 28,000 new Chief Privacy Officer jobs over the next two years. Both publishers and marketers will have this window of opportunity to figure out how to serve their own ends and still operate within the EU’s GDPR.

 

 

Publishers: Don’t Abandon London Just Yet

In Europe, unlike in America, most of the scary talk isn’t about Facebook eating into the revenues of publishers, but rather of the Brexit and what it means for London as an advertising and media capital in the future.  Common wisdom and many publications have it that media companies will seek to leave London so that they can do business with the rest of the European Union after England leaves. However that involves seeing into the future in a way none of us can. Even if England does leave the EU, things won’t change over night.

We would like to suggest here that the biggest barrier to moving media companies and ad agencies is inertia. It just simply isn’t that easy for a company to change its European base,  especially with European employment laws. Nor is creative talent willing to pick up their families and move. Moreover.  people seem to have forgotten that the Brexit will not take place immediately and may simply not take place at all. It does, after all, take a vote of Parliament. No one here thinks that will happen very soon.

Politically it is very complicated in London right now, with power in both parties changing hands. To an outsider, it seems as if no one want to take the consequences of the referendum.

It will take a while for the new leadership to figure out what to do about what was voted on, and the prevailing opinion is that the politicians will drag their feet as no one wants to trigger the clock on leaving the EU just yet.

Thus our best advice both to publishers and to  agencies is not to do anything too quickly, but to see how all this settles out before causing more disruption than there already is in the industry. There is enough to think about with Facebook constantly tuning the algorithm for its newsfeed, this time in a direction away from publisher revenues, and with Snapchat emerging as a competitor for the attention of Millennials. We in the media industry should stick to our knitting until the politics sorts out.

Anti-Adblock Software Violates Privacy, Advocates Say

While the advertisers and their agencies were partying on the yachts rented by ad tech companies at Cannes, publishers were wondering how they were going to survive the latest changes in the chameleon-like digital media industry. If  you are a publisher and you want to know where your next blow to the chin will come from, it is probably from privacy advocates.

The response to the challenge before this,  the 100+ million users who have downloaded ad blockers, has been all over the map so far. The largest ad blocking extension, Ad Block Plus, an open source project, itself claims a billion downloads and 100 million users. What’s a poor publisher to do?

Some publications, like Forbes, offer visitors who use ad blockers an “ad-lite” experience if the whitelist the site. Others, like Wired, ask the reader to be a good guy and remember that publishers need ad revenue to stay in business. Still others are simply refusing to serve content to visitors who have installed ad blockers, and are running scripts on their pages to detect such visitors and repel them.

As a response to the anti-ad blocking movement, privacy advocates have begun to counter that scanning to see if a user has an ad blocker installed violates privacy. One of those advocates, Alexander Hanff, has been telling just this to European regulators.

In May he sent a cease and desist letter to technology media company IDG UK, one of the many publishers he claims violates his right to privacy (and European laws) by scanning his machine for adblockers without his permission. He plans to expand his cease and desist campaign in the coming months to publishers in almost a dozen countries, including France, Estonia, The Netherlands, Poland, Germany, and Sweden.

Hanff, CEO of the security firm Think Privacy,

says he’s sympathetic to publishers struggles’ with adblocking, but argues that it’s their reliance on third-party advertisers and the ad ecosystem that’s the real issue. “The problem is ad blocking is being seen as a disease, when in reality it’s the symptom of one: the advertising on their pages.”

Hanff’s campaign is based on his interpretation of article 5.3 of the European Union’s 2009 ePrivacy Directive, known as the “Cookie Law,” which says that readers must give consent before publishers can store or access information stored on their devices. Scanning a user’s system to see if they’re using an adblocker, in Hanff’s view, violates that provision.

IAB Europe has decided to release its own set of guidelines for ad block detection that do not violate privacy guidelines. It  believes not all ad block detection violates privacy.

The ad block wars have just escalated another step and most publishers are just taking it one day at a time.

 

DMA Calls Ad Blockers Bad Choice for Consumers

The Direct Marketing Association has called ad blockers a bad consumer choice, based on the learnings it gleaned from the beginning of email marketing. DMA has now begun to offer advice to the media industry based on those experiences. In the early days of direct marketing, mistakes were made, leading to the passage of the CAN-SPAM act of 2003, the first set of regulations for the use of commercial email. This law establishes the rules for commercial email and commercial messages, gives recipients the right to have a business stop emailing them, and outlines the penalties incurred for those who violate the law.

Consumers now feel about digital advertising the way they felt about unwanted email (CAN-SPAM stands for Controlling the Assault of Non-Solicited Pornography And Marketing), and have begun letting marketers know in such large numbers that the government might feel it has to step in.

But that doesn’t make blocking ads the best answer.Comparing ad blocking in 2016 to the email industry before 2003, Neil O’Keefe, SVP of CRM and Customer Engagement for the DMA told Bloomberg TV viewers that adblocking was a significant problem, because the only entity that really benefited from it was the maker of the ad blocking software. He went on to say that it disconnects brands from consumers, and creates problems for the entire marketplace.Marketers need two-way communication with customers in order to inform product development. And customers need their end of the conversation in order to have choice about which brands they want to hear from. With ad blocking they no longer hear about the best new products and about optimum pricing.

O’Keefe believes that ad blocking is a call to arms to deliver better ads. Like the DMA, which tightened its own self-regulation and education programs and actually created an environment where consumers today often prefer email to display ads, he says we have to fight ad blocking with quality ads that are relevant to customers. That is the best consumer choice.

Two other industry leaders came out over the past two weeks with very insightful comments regarding the state of online marketing:

GroupM announced it wouldn’t pay for ads that are re-inserted, declaring “It’s addressing the symptom, not the cause. Let’s fix the user experience first.”
And Sir Martin Sorrell of WPP points out that we haven’t adapted to the smaller screen, but still cautions that there is a price for the consumer to pay for ad blocking: the higher cost of content.

As with every move forward in our industry, the technological changes continue to come with much discussion before settling out into industry best practices.

Ad Blockers Also Block Useful Consumer Information

Here’s a new twist on the issue of ad blockers: they not only break the internet, but they break web sites as well. A study conducted by ad tech firm Oriel on how twenty-four common ad blockers, including UBlock, AdBlock, and AdBlockPlus found that the tools not only blocked popup ads, but were also accidentally corrupting useful parts of a website, such as retail order tracking pages or airline check-in screens. Many users install the ad blockers, and then forget they’ve done it, only to find out that information they really want to receive is missing from their screens.

Oriel tested 100 popular sites in the UK, including British Airways and Vodafone, Ryan Air, Land Rover and P&G.  A visitor to those sites who was running an ad blocker would not know what was wrong; she would only see an error message. This study will create greater consternation in the world of not only publishers, but also e-commerce sites.

It’s more complicated even than what we’ve just discussed, because Oriel tested only downloaded ad blockers. But they’re not the only way users can block ads. They can also use a browser like Opera or Brave, which have native ad blocking capabilities, or if they are really anxious to block ads. According to Oriel,

Mobile operator Three is even looking at blocking adverts at a network level, that is even before they reach mobile devices. It might seem convenient, but below the surface is a very shady, and serious issue – it is interfering, changing and potentially censoring web content and like a “man in the middle attack” the true nature of what the publisher intended to deliver to their website audience is therefore compromised.

British culture secretary John Whittingale likens this to a modern-day protection racket, in which the publishers who can afford it pay to have their sites whitelisted. In a speech at the Oxford Media Conference, Whittingale offered support to both publishers and people in the music industry.

Stopping short of announcing an outright ban on adblocking, he said he “shared the concern” of the newspaper industry about the impact of the technology and would “consider what role there is for government” after hearing all sides of the argument.

No, we haven’t forgotten the fact that Oriel has a dog in this hunt, since it markets a service that allows you to communicate with sites that block ads and assure that the advertiser’s message gets through. In a sense, it’s a blocker of ad blockers. But we think this is a good discussion to raise, and the fact that people like BA and P&G are involved, and that what’s affected are not just ads will cause the ad block sector to re-think how it is doing business and give the publishers and content providers stronger legs to stand on in battling ad blocking.

 

 

Agencies Forced by Trends to Seek New Models

June was not  the most fortuitous month for advertising agencies. Not only did the Association of National Advertisers’ report on business transparency issues in our media buying ecosystem come out, tagging most of the big players with  borderline unethical if not illegal practices like kickbacks, but Kevin Kelly’s new book “The Inevitable,”  published on June 9, talks about getting rid of advertising agencies altogether and having marketers just pay influencers to promote their products, cutting out both agencies and publishers.

You will need to know the reasoning behind that position.

First, who is Kevin Kelly? Kelly is a very well-known and respected tech thinker, one of the founders of Wired magazine.  In this latest book he talks about a dozen trends  that we should embrace rather then resist, because they are going to be very important in the next couple of decades. Of course there are the usual suspects like artificial intelligence and robots, But Kelly also talks about changes in intellectual property rights since the dawn of the Internet. He characterizes the Internet as a gigantic copying machine capable  and laughs at our thinking we could impose digital rights management on intellectual property  online.

He also talks about the incredible proliferation of content spawned by the Internet, and the fact that the most valuable commodity today isn’t content  — it’s attention from consumers who are confronted by an almost overwhelming variety of it. So why should we have to pay for it ?

Kelly suggests that in a future of limitless content the advertising model may well be flipped on its head, and consumers would be paid directly to watch ads and try products without agencies as intermediaries. Or, in another variation, publishers would choose the ads on their pages and could even craft a publication just by stringing together really cool ads:

The simple idea is that you can craft a publication, or a reading/viewing experience, primarily by choosing and sequencing ads. Selecting the right cool ads — not merely cool content — is the attraction. Not just tiny adsense text ad boxes, but full page ads, or even commercials inside widgets. When I was part of the team making Wired magazine a decade ago, half the battle at launch was landing the right cool ads. We had to convince the advertisers to join (and pay) us. But what if we could just choose the cool ads we wanted, without having to ask permission? What if we could simply harvest the the best ads (measured by any metric we choose) and were paid for the ones we ran according to the traffic we brought to them?

In either of these new models, advertisers would not control where their ads appeared and thus the role of the traditional agency would be over.

Facebook’s FAN Will Serve Ads to Non-Users

Once again, Facebook has signaled its power in the ad tech business. After sunsetting Live Rail and its ad exchange, the social network-cum-media company has now gone all in on the Facebook Audience Network, designed to reach people who do not have Facebook accounts but look like similar audiences that do.

On the face of it, this is a good idea. But we wonder if it’s really as good as Facebook expects. There is actually a question on Quora, the well-regarded question and answer site, that gives us insight into what kinds of people don’t have Facebook accounts.

The foremost reason, which has had almost 2 million views, is that Facebook is a time suck. The second reason, not unexpected, is a concern for privacy and having one’s information out all over the internet. And the third reason is reject a Facebook account is lack of regular internet access.

Given these three reasons, we wonder whether this kind of targeting, as described by Adam Bosworth, Facebook’s VP of ads and business platforms, “the company hopes to use its interest-based data to target ads to lookalike audiences who don’t have Facebook accounts. It also hopes to use its “like” button to serve ads based on the content that engages people. ”

Bosworth admits that he doesn’t yet know how well this expansion of the total addressable market will work for Facebook, so the company is going to roll it out slowly. He feels he has the right tools to evaluate  whether he is adding value for publishers. But how will he test the impact on non-users of ads they didn’t expect? And how will he prevent fraud, once the ads get out into a broader market?

When companies are as large and powerful as Facebook is, they tend to think they have the engineering resources to deal with these questions. Our take on it is that Facebook is trying to get younger users, who seem to favor Snapchat, involved in Facebook’s ad network. This, however, is somewhat dangerous, because people under 13 do participate in Snapchat, while Facebook does not allow them to open accounts.

We are already beginning to recognize that Facebook is much more than a social network. Recently, because of the flap about liberal v. conservative views, we began to see Facebook as a media company. And now, if the FAN network succeeds, we may also have to think of it as an ad server.

What does Google think?

 

 

Mobile Video Ads Play Without Sound

At first, publishers were excited about auto-play video, and video ads also played with the volume turned up.  But we quickly found out the audiences did not want volume on in their offices, so we developed our inArticle (a.k.a. outstream) format to run without sound. As usual, everyone is now following our lead. A new study has revealed that 85% of video content runs without sound, especially if it is on Facebook. Even the ads. Facebook hosts up to 8 billion video views daily, and most of them are without sound. It’s as if we were returning to the era of silent, captiond movies.

We’re curious about the future of mobile video ads in this environment. At present, they command high CPMs from advertisers, but the ROI hasn’t bee determined yet. According to an eMarketer study, the pace of mobile video advertising will double by 2019. However, publishers and platforms are making what eMarketer calls “egregious errors” that turn off watchers.

Advertisers are guilty of the most obvious video errors, but publishers and platform providers sometimes share the blame. Among the more egregious offenses are serving the same video pre-roll multiple times during a content series, forcing long-form ads ahead of short-form videos, reusing video spots without regard to screen aspect ratios, and autoplaying—with audio!—without the user’s permission.

Almost any advertiser worth their salt knows that these lackluster experiences won’t deliver the desired results. And yet bad user experience is, if not the rule, certainly more than mere exception.

This is exceptionally true with Facebook, which now shares with Google as much as 80% of mobile ad spend.

Tailoring content to the whims of the Facebook news feed has helped publishers scale on the platform. It’s also turned news feeds stale as publishers put up countless videos that have the same look and feel. Take, for instance, this NowThis video about a Tylenol ingredient that makes people less empathetic and this Tech Insider video about a futuristic bike. While they focus on completely different topics, the key ingredients are the same: a striking visual or message up front followed by a text-heavy explanation of the content.

One thing that does work well on Facebook is branded content, even if it is silent. So at the moment, brands are flocking to that way to get their messages out. Another word for branded content, although often abused, is “native” advertising. And our Innovative Formats work well for that. We  just hope advertisers stick to a high quality standard for their branded content, so that it, too, doesn’t alientate customers.

New Consumer-Driven Ad Standards Proposed

Will changes to the advertising industry come from within, or from outside? Doc Searls, one of the authors of the Cluetrain Manifesto (markets are conversations) and the founder of the VRM (vendor relations management) movement) and a well-known privacy and security expert, Mary Hodder, are about to release what they call a “term,” which amounts to a set of choices consumers can make about what ads they want to see.

They have convened a group of high quality publishers and ad tech companies, including the ad blocker software developers, and are rolling out a set of choices consumers will be able to make about what ads they see. Once the consumer says “I want only ads that don’t track me,” or “I want only brand ads,” the publisher will serve ads according to the individual consumers’ choice.

This puts the responsibility on the publisher to comply, and on the ad blocking software maker to implement correctly. It’s for people who have already said they want to block certain ads, in an effort to make sure they don’t block ALL ads and force the escalation of the ad blocking/anti-ad blocking war that threatens to cause more turbulence in the industry.

As for advertisers, who want more and more data, and are the ones who encourage tracking (and the ones who pay the bills), they will be asked to accept these limitations on how far they can stalk consumers who have already chosen to download ad blockers.

This same “term” will also be presented at the United Nations this week, in an effort to bring it in line with what the EU and other global entities have already enacted with regard to data privacy.

The TL;DR here is that programmatic and RTB will not vanish, but retargeting will cease, for everyone, just as popups did ten years ago. And most advertising will be brand advertising, for which ultra-tracking is not necessary.

In a way, this is just “back to the future,” for advertisers, who got carried away with metrics and forgot they were dealing with human beings.

Time to Think Context, Not Reach

The digital advertising business is in a state of chaos and turmoil. Twenty years ago, the first display ads produced high click through rates (CTRs) and plenty of subsequent conversions–enough for them to be called performance ads. But over the decades, consumers have developed “banner blindness,” and publishers have seen a race of revenues to the bottom.

Advertisers, who pay the bills, have seen a lower ROI on campaigns, which has forced them to buy more ads, and has forced publishers to load their sites with boxes, banners and takeovers. Page load times slowed, and a dash of fraud and malware completed a disturbing picture.

And then came mobile.  With mobile, consumers had the opportunity to turn off ads in large numbers, because the ad blocking software early adopters had already downloaded was automatically included  for the average Joe in Apple’s latest mobile operating system.

Angry consumers who had been targeted and re-targeted turned off ads altogether.

The industry badly needs a savior. That savior will have to offer narrower targeting and more context for consumers, so they only see ads they want. It will change the way media planners buy media. They should no longer buy for “reach,” but for relevance.

The stakeholders in the current ecosystem are the agencies, retailers, and brands on the demand side (the advertisers), publishers, social networks, and apps where those consumers are already spending time, and the coveted object, the purchaser.  With mobile, locating consumers is easy: there are a small number of apps that consumers use for search, including Amazon, Facebook, Google, Yelp and they’ve largely aggregated the buyers.  Companies like RetailMeNot and PocketMath, which deliver mobile coupons, need to find those consumers only while they are shopping. Context is everything.

It would be helpful if every product in every store in the community were geotagged, and if you wanted to buy a Diet Coke you’d only see an ad for the places near you offering Diet Coke. You wouldn’t get ads for stores not in your geography, nor for products that were not Diet Coke. This would enable Real Time Bidding (RTB) platforms to deliver a truly contextual experience. This has been what’s been wrong with RTB platforms  up to now; they’re delivering without context.

Most research says people don’t consider ads for products they’re actually shopping for bad. Rather, they are perceived as information or content. How many times have YOU typed “gas station near me” or “Chinese food near me” into your phone? The ads and listings that come up are perceived as information. All too often, advertisers impatient for reach have made media buys too broad in their targeting. The advertisers need better data. And so do the publishers.

Mobile advertising is a rapidly growing data thirsty industry, and consumers are dissatisfied because the targeting is too broad and without context. In mobile, reaching a large number of people is less important than reaching the single right person at the right time — which is when they’re actually looking for something.