Coalition for Better Ads Launches

The biggest news coming out of Dmexco was the formation of a new effort to mute the influence of ad blockers, which are now used in 25% of browsers, according to recent statistics. A coalition consisting of industry leaders like Google, Facebook, Unilever, Procter and Gamble, Group M, the World Federation of Advertisers and the IAB, calling itself The Coalition for Better Ads, launched at the conference.

IAB had already launched its own initiative, L.E.A.N. (Light, Encrypted, Ad Choice Supported, Non-interruptive) last year, and began to develop standards. At the same time, AdBLock Plus, the largest downloadable ad blocker distributor, launched its idea of “Acceptable Ads.” AdBlock Plus spent the year trying to acquire partners for its efforts, but with little success. Finally, in its own Dmexco announcement, the company launched its own SSP to sell what it considers acceptable ads. This may or may not be successful.

The industry effort, however, probably will be, because ad blocking is the one issue that unites publishers, advertisers, and ad tech companies, all of whose business models are threatened by the unwillingness of consumers to tolerate ads after a decade of taking abuse in the form of popups, interstitials, auto-playing video ads, and even malware. The most offensive sites are so loaded with ads that the content on them cannot be read without interruptions. To make matters worse, the shift to mobile has revealed the slowness of page loads and the cost of additional data borne by now-angry consumers.

The group will focus on the following initiatives:

  • Create consumer-based, data-driven standards that companies in the online advertising industry can use to improve the consumer ad experience
  • In conjunction with the IAB Tech Lab, develop and deploy technology to implement these standards
  • Encourage awareness of the standards among consumers and businesses in order to ensure wide uptake and elicit feedback

Here’s an alphabetical list of the founding members. Notice that the Washington Post is the only traditional publisher to belong outside of an industry group: The American Association of Advertising Agencies (4A’s), Association of National Advertisers (AA), BVDW Germany, Digital Content Next, DMA, European Publishers Council, Facebook, Google, GroupM, IAB, IAB Europe, IAB Tech Lab, as well as additional national and regional IABs, Network Advertising Initiative (NAI), News Media Alliance, Procter & Gamble, Unilever, The Washington Post, and World Federation of Advertisers (WFA). Companies and trade associations that wish to join the Coalition can learn more at www.betterads.org.

Consumer research will be used to develop the standards.

“The foundation for any premium publisher is consumer and advertiser trust. Consumers are clearly frustrated with the current dynamic of digital advertising across the wider web. No industry has ever survived by ignoring consumer needs,” said Jason Kint, CEO, Digital Content Next.

As we always do, we hope to lead in this initiative with our “polite” formats within the ZINC Innovation Suite. However, we also think it will take much consumer education about what industry is trying to accomplish and why –the need to keep digital content free for consumers–before the industry will once again be trusted  to comply with consumer sentiment and people will turn off their ad blockers.

 

 

IAB: Independent Publishers Can Compete Against Facebook

Randall Rothenberg, CEO of IAB, is getting more and more outspoken in his comments about the state of digital advertising, especially since the ANA’s second report and guidelines were issued. Rothenberg blames most of the industry’s problems on brand marketers who value price over performance.  He says marketers still don’t have the in-house expertise to understand the new landscape, and urges them to get tech savvy right away. His theory is that marketers who are out of step with the new advertising environment have bought or subscribed  to ad tech software that has denigrated the user experience to the point where visitors are using available tools to deal with unwelcome intrusions. The marketing is no longer correctly targeted, and the buys are made for price rather than for true relevance to the consumer.

He also thinks that non-savvy marketers need to quit subscribing to the meme that Facebook and Google have most of the audience and that they are the only “safe” buy.

“One of the reasons you’re seeing a reliance on a handful of players is they’re seeking safe havens. Back in the old days nobody got fired for buying IBM. Now nobody got fired for buying Google and Facebook.”

He also says that marketers are also to blame for ad fraud and lack of ROI because for years they have looked the other way.

“It’s either a willful shirking of their responsibility to understand the work of their vendors and their vendors’ vendors, or it’s a wink-wink, nudge-nudge to offload responsibility in their quest for ever-lower prices.”

Rothenberg feels that individual publishers can compete effectively against Google and Facebook by gaining absolute knowledge of their audiences from the standpoint of both data and content development. While Google and Facebook have large audiences, they have less information about niche audiences, and that’s where independent publishers have an edge. He likens this period in the advertising industry to the time when three networks had all the dollars, just before the cable industry came to power.

We have always insisted that the power of publishers with niche audiences will continue to grow, if they market their sites correctly, using Facebook only as a tool.  The growth of new sites like Thrillist or Mic, run by savvy internet marketers, who have either used Facebook to drive traffic to their own sites, or who have built communities around their audiences, is instructive. And so are the biker sites, pet sites, travel sites where communities of users make great audiences for the right brands.

 

 

 

Reach is More than Just a Number

Once again we find ourselves ahead of the curve. Last year, we realized that the programmatic race to the bottom had indeed hit bottom, and we sensed a flight to quality. Fortunately for ZEDO, we had already developed a private buying platform for media buyers to use when they wanted to reach more than just “eyeballs.” Our private platform starts with our high performance ZINC formats — inView and inArticle –and allows brands to use those units on our premium publisher network.

Last year we also “cleaned house” with our publishers, eliminating anyone whose traffic might be non-human or fraudulent. We now have a completely clean supply chain and privacy policies strong enough to make us members of the Online Trust Association’s Honor Roll for the fourth consecutive year.

Now we are beginning to see marketers come to the realization that they want better targeting, even if it means compromising that old metric “reach.”

Advertisers are starting to understand that context and quality of ad units matter now more than ever. They are also starting to think of the audience as the currency rather than simply counting impressions. The head of digital for a major wireless carrier recently stated, “There are only 5 million people in this country who I can get to switch mobile carriers, so why am I marketing to 275 million?”

The rising popularity of private marketplaces represents a step forward for advertisers who are now able to transact directly with publishers to secure higher-quality inventory, particularly in mobile and video.

Indeed. Why pay to reach people who will never buy your product or service and perhaps run the risk that your haphazard targeting will be the last straw that forces them to block ads?

Premium publishers who use private platforms will also have the edge over social sites like Facebook and Snapchat, who are less transparent about their users than traditional publisher sites. Facebook and Snapchat (the walled gardens) have hundreds of millions of users, but are only slowly opening themselves up to scrutiny by media planners. Up until now, they’ve operated as if what they say about their audiences cannot be challenged, because they have highly desirable audiences in very large numbers. But as brands realize they have more hope of moving merchandise by going deep with the right audiences rather than broad with global audience networks, they will turn away from Facebook and seek their niche audiences.

 

New Opportunities for Digital Publishers

If you sit around listening to some industry insiders whine, you’d think there’s no hope for the digital media business. However, people continue to be attracted to it as a business and as a calling, and if you look at the numbers, many publications aren’t doing badly. Even Gawker, forced into bankruptcy and out of business by Peter Thiel’s lawsuits, says its business was up 7 or 8% this year. Business, said beleaguered Nick Denton, is good. Gawker.com may be gone, but its 6 sister sites are doing fine under Univision. Other niche publications, like Thrillist, are also doing well.

According to Thrillist founder and VC Ben Lerer, who appeared on the Digiday podcast, there are many short term threats facing digital content companies. The keyword here is short term, which is how Lerer looks at ad blocking, the decline of effective display advertising, and the hegemony of Facebook. He swipes those common industry concerns away with a flick of the wrist, preferring to focus on what he calls “the massive change in distribution” that has happened because of online media, which he thinks is already making some people rich even as others suffer.

It’s like the 1980s when cable TV first started, he says. Cable TV allowed finer audience targeting than network TV, and provided gigantic opportunities for content creators who understood the needs of their niche audiences.

“The pipes are different,” he said. “It’s not as clean and easy a story, but it’s similar to where there was a large handful of companies that figured out how to make content for those pipes, there’s now an opportunity to make content for these new distributed pipes. The traditional TV companies, who you’d think would be are fundamentally not built to be the guys who win today because of the sheer infrastructure they’ve built to do something that’s not what they need to do in the future. It’s created an opportunity for a new breed of media company. There’s no question there’s a decline coming to television. Those companies are not built for shrinking.”

Lerer thinks the greatest changes in digital media aren’t coming on the publisher side, but on the agency side, where traditional agencies have built a cost structure based on shooting expensive 30-second spots for TV that will now be replaced by native ads on mobile. Those ads will be made by the publishers themselves, perhaps using their existing editorial staffs or through in-house agencies operating with a Chinese wall.

Lerer is not the only publisher who thinks good content will win the new distribution game, whether on Facebook, Snapchat or a publishers’ own site. Brian Lam, founder of tech review site “The Wirecutter” and former writer for Wired says that media companies without a mission will crash and burn.

Of his proposed expansion into the fashion vertical, Lam says “we’re not going to do it because it’s a business opportunity. We’re going to do it because we think we can be helpful, and there’s also a business opportunity. The business serves what we’re trying to build.”

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.