Can Ads Work Without Targeting?

We’ve grown fond of thinking that we need data, data, and more data to have ads that work. That data bias has driven the creativity right out of the industry, and with it the consumer’s tolerance for advertising in general. And yet, many ads used to succeed and even still do, without targeting customers through data mining. These are the ads consumers didn’t mind, and they’re the ones that will survive GDPR, Facebook, and all the other horror stories about digital advertising.

“Old school” ads worked by simply raising awareness. Many pharmaceutical ads still work this way. They are usually bought in mass media, which pretty much targets everyone. And the message is something like “if you suffer from X, ask your doctor about Y.” Some of them, like one prize-winning ad for Vytorin, a cholesterol-lowering drug, gave even more detailed information to tell viewers that high cholesterol was due partly to genetics and partly to what you eat. But it was still information.

Some travel ads also simply give information. “Vacation on the beach for only $599 a week.” An ad like this makes almost anyone aware that this advertiser is offering a sale or a good value on a beach vacation. Airlines and hotels often advertise this way during slow seasons.

Yet other ads try to persuade. Occasionally, the persuasion is pretty overt. But ads can also signal things about products and services without being overtly persuasive. For example, SuperBowl ads very seldom try to persuade game-watchers of anything. However, they signal that the company that buys an ad is financially able to afford it, and thus is more trustworthy than some upstart brand. Or, if the brand is buying an ad for the first time, the signal is that there’s a new disruptive company in town, taking over from the incumbents.

Another way ads can work without targeting is by making promises. “If you buy this product, you will look like/feel like/live like the person seen in the ad.” Some of the promises are explicit, like automobile ads that promise a 100,000 warranty, and some are implicit, like the promises made by anti-aging products or skin creams.

A good brand knows that when it makes a promise, it has to keep that promise, or the brand will lose its good reputation. When an airline says its flights are 99% on time, it had better be able to support that promise, or we will soon see the end of the brand’s primacy in the consumer’s mind.

The last way ads can work without data-driven targeting is through context: in other words, by being placed around content that aligns with the brand’s philosophy, the consumer’s interest, or the type of publication. The best example of this is New Yorker ads, which contain a preponderance of luxury items and items that appeal to intelligent, educated people. These are audience-based ads, and they are not designed for a specific customer, but rather for a specific audience.

We have long attempted to persuade the industry that all this data can cloud, rather than clarify, the goals of an advertising campaign, and we are happy to see the industry coming around to this. We can have a very healthy advertising industry without over-using consumer data and violating consumer privacy rights.

 

Header Bidding Wins

Just as publishers were beginning to see increased revenues from the 2016 hack called “header bidding,” Google decided to get into the game. For a while, header bidding was a way around Google’s almost total control of real time bidding auctions. But now Google has released its own solution called Exchange Bidding to all publishers who use Doubleclick for Publishers. AdExchanger writes,

Exchange Bidding relies on server-to-server connections, which are faster than the page tags some header bidding solutions rely on, and lower latency improves ad viewability, and thus yield.

It’s also faster to install, with Exchange Bidding essentially a plug-and-play product compared to heavy development and collaboration required of publishers in header-bidding integrations. 

Meredith, an Exchange Bidding beta partner, said it joined because its pages loaded faster and because it consolidated exchange reporting within Google, which reduced measurement discrepancies with advertisers, Chip Schenck, the media conglomerate’s VP of programmatic sales and strategy, told AdExchanger last year.

 

Exchange Bidding, however, can’t be used by buyers who have preferred or guaranteed rates. The new product is only available right now for display ads, although it is useful for mobile web and in-app ads. If you are a publisher who relies on video inventory, this is not for you.

We were one of the first to offer header bidding, and that was about two years ago. Before that, Google  had a near monopoly on the auction market. According to an article in last summer’s Ad Age,  header bidding really shook Google up, and it began offering its own product as a test.  But it immediately ran into resistance, because it was trying to charge a 5% cut for the service. That’s been reconsidered, but in the meantime both Amazon and Facebook have begun to offer their own form of header bidding, forcing Google to play fair.

We think this is good for the industry as a whole, because Google’s monopoly turned out to be costly for publishers. What’s also good for the industry is the convergence among all the once high-flying ad tech companies, who charged publishers for services that did not add value.

This call comes just in time, because eMarketer predicts that 83% of digital spend will transact programmatically by 2019, and by 2020 digital spend will exceed all other forms of advertising spend combined.

The next thing we have to do on behalf of publishers is step up the filtering of non-human traffic and traffic to fake sites, and that is increasingly becoming a priority, especially through the widespread industry adoption of ads.txt.

We’re getting increasingly skillful at weeding out the negatives in our industry and focusing on providing a clean marketplace for digital publishers and demand side players to interact.

 

 

 

 

 

Publishers with Strong Brands Increase Revenue

People will watch advertising in your app if you promise them something worthwhile. If the promise is important enough, they will “endure” ads to keep you in business, which is how it worked in the good old days of print and TV. However, if you break your promise, and lose trust, you have lost something from which it is nearly impossible to recover. That is how publishers should look at their sites — as brands that deliver on a specific promise strong enough that users will be willing to look at a few ads in exchange for what you deliver.

How do we know this? It’s been proven, at least on a small sample. This morning I was listening to a podcast celebrating the 20th anniversary of Kottke.org, a blogging site hosted and curated by Jason Kottke. It’s just a bunch of short written pieces, but one of them struck a chord with me. It’s about how  positioning changes the user experience.

There are three major mapping apps. Apple Maps, Google Maps, and Waze.  Of the three,  Waze promises fastest route times, although it often under delivers. Ironically, Apple Maps is most accurate in predicting its route times, and Google Maps actually gets you places the quickest. This was tested by a man named Artur Grabowski  in 120 trips over the course of 2017.

At the other extreme, Waze (Alphabet) makes money through ads when you use their app. What better way to get people to use your navigation app than by over-promising short trip times when no one takes the time to record data and realize that you under-deliver? If an unsuspecting user opens Apple Maps and sees a 34-minute route and compares that to 30-minutes in Waze, the deed is done. Now Waze has a life-long customer who doesn’t realize they’ve been hoodwinked and Waze can throw at them stupidly annoying ads.

Now I maintain that you can only position a product that under delivers for so long before users get the picture. I also maintain that you can only bargain with users to accept a few ads, not a page full of them.

It took us a long time, but the pendulum is swinging back to a focus on what the reader/viewer/visitor needs rather than what the advertiser needs. Advertisers will have to cooperate and stop demanding interstitials, popups, and other garbage that turns away visitors. They will also have to stop demanding data that they can use for retargeting. We are in different times now; we’ve tried a bunch of digital advertising techniques, and we know which ones fail.

As a publisher, your brand and your visitors are paramount. If your value proposition is strong enough to have lifelong relationships with customers, like the New Yorker, or Vogue, or the New York Times, you will eventually sort the financial issues out. But you can never do that if you sacrifice your brand to the needs of advertisers.

Whose Digital Identity Consortium will Win?

Companies in programmatic rely on their own cookies or device advertising IDs to anonymously identify audiences. Thus a consumer can receive many identifiers, resulting in data loss through fragmentation. This is how we got to the problem of a flood of data, yet decreased understanding of consumers, less effective targeting, frequency management, optimization, attribution, and a poor consumer experience.
As the digital advertising industry has matured and the criticisms have increased the ad tech portion of the ecosystem has been looking for a single identity solution. However, with the coming of GDPR and all the movement toward transparency and brand safety, this year ups the ante.
Digitrust was the first effort of the industry at a unified identity for consumers. In November, Rubicon wrote:

Cookies have ruled the ad industry since the early days of online browsing and shopping — helping media companies understand who their audiences were and what they were interested in, while making sure advertisers could deliver the most relevant messages. But the growth of programmatic and the mobile explosion have changed the industry dramatically, leading to a growing sense that cookies are no longer enough.

Across the industry, technology companies, advertisers, and publishers are all seeking an alternative to cookies — and there are a variety of solutions vying to be the go-to way we identify users and analyze their behavior moving forward. DigiTrust, the non-profit, independent ID consortium supported by companies like Rubicon Project, Dataxu and OpenX is one such option…

At the time, Rubicon decided to back Digitrust, but in the interim two other options have emerged.

The Trade Desk Cookie Sync

The Trade Desk has opened their cookie sync database to other organizations. The database is stored in their proprietary domain, and is in line with our existing implementation. However, this solution is only helpful to ZEDO if it is adopted by other players, and as yet there is no information on that.

Advertising Id Consortium
The third of these options is the Advertising ID Consortium, which takes a collaborative approach to solving these issues by providing: 
  • An open and standardized pool for cookie and device IDs.
  • The availability of people-based identifiers.
  • An omnichannel identity framework that adheres to privacy, security, and compliance requirements, industry standards, and best practices.

This is a solution similar to The Trade Desk’s, although headed by Liveramp and Appnexus. The problem with it is that everyone is trying to build Cross Domain Targeting Technology, and if this consortium takes off, Liveramp seizes the competitive advantage.

Competition among the major players may prevent any single solution from gaining enough traction to “win.” That would be painful for those of us who would then have to implement three different solutions.

 

Does Advertising Really Need so Much Tracking?

Our old friend Doc Searls is taking another step toward putting readers in charge of their data and taking on the use of too much consumer tracking. In a prototype edition of the reborn Linux Journal, he is going ask readers to indicate what they want in their advertising:

We believe the only cure is code that gives publishers ways to do exactly what readers want, which is not to bare their necks to adtech’s fangs every time they visit a website.

We’re doing that by reversing the way terms of use work. Instead of readers always agreeing to publishers’ terms, publishers will agree to readers’ terms. The first of these will say something like this:

That appeared on a whiteboard one day when we were talking about terms readers proffer to publishers. Let’s call it #DoNotByte. Like others of its kind, #DoNotByte will live at Customer Commons, which will do for personal terms what Creative Commons does for personal copyright.

Publishers and advertisers can both accept that term, because it’s exactly what advertising has always been in the offline world, as well as in the too-few parts of the online world where advertising sponsors publishers without getting too personal with readers.

Notice he is not anti-advertising as a business model. He is for restoring advertising to what it used to be — brand advertising. He refers to data-driven advertising as “junk mail.”

He theorizes that we’ve (publishers) lost a lot here by putting data collection in the driver’s seat:

By now you’re probably wondering how adtech has come to displace real advertising online. As I put it in “Separating Advertising’s Wheat and Chaff”, “Madison Avenue fell asleep, direct response marketing ate its brain, and it woke up as an alien replica of itself.” That happened because Madison Avenue, like the rest of big business, developed a big appetite for “big data”, starting in the late 2000s. (I unpack this history in my EOF column in the November 2015 issue of Linux Journal.)

Madison Avenue also forgot what brands are and how they actually work. After a decade-long trial by a jury that included approximately everybody on Earth with an internet connection, the verdict is in: after a $trillion or more has been spent on adtech, no new brand has been created by adtech; nor has the reputation of an existing brand been enhanced by adtech. Instead adtech does damage to a brand every time it places that brand’s ad next to fake news or on a crappy publisher’s website.

Yes, Doc is a friend of ZEDO.  But he is also a terrific writer, and you owe it to yourself as a publisher or a member of our ecosystem to read what he has to say in Linux Journal.

Building a Brand: For Publishers

All publishers will not survive the latest onslaught of Facebook changes and GDPR compliance. At least not with an advertising model. But should they? The combination of an almost limitless content  supply of sometimes questionable quality, the “Amazon effect” on brands, and the intolerance of consumers for slow-loading pages and interruptive ads will cause a Darwinian contraction among publishers.

The internet saw the rise of almost countless niche publications, each one fighting for ad dollars. That led to a proliferation of targeted ads, which in turn led to the need to collect personally identifiable information. The fact that 65% of companies weren’t ready to comply with GDPR shows how complicated the ecosystem has become.

That number includes brands and publishers. The brands have already taken steps. P&G cut its ad spend last year by $200 million, and said its reach was 10% greater. It will take more steps this year. In related news, WPP lost 15% since last year.

What will happen? Only the fittest will survive.

We think a combination of things will move the ecosystem forward, including the decline of publications who bet the farm on Facebook to get traffic, as Little Things did, the introduction of more transparency in the media buying system, and a diversified revenue stream will keep the best publications in business.

Mixed revenue streams have already begun to keep the largest publications, such as the New York Times and the Washington Post afloat. Some sites (The Information and Stratechery) do well by subscription alone, although the subscription model won’t scale across the entire industry because there are a limited number of sites to which any one human can subscribe.

That’s why after all is said and done, advertising will remain the best way for keeping content free, and those sites who design for the new ad formats recommended by the Coalition for Better Ads and IAB will see less competition for ad dollars and probably higher CPMS. The new site designs will be cleaner, pages will be faster loading, and desired content will be easier to read — all of which should have already happened.

The internet presented a temptation to put too many ads on too many sites, resulting in the digital equivalent of a swap meet and what we are seeing is a natural fallback of the market from excess to normalization. A market with too much merchandise is just as difficult to shop in as one with too little.

This is not very different from what happened to the cryptocurrency space lately as Bitcoin’s price fell from $19,000 to $11,000.

Bitcoin is a good analogy here, both because the regulators are coming both for digital media and for cryptocurrency, and because its price did not fall to nothing, just like advertising won’t go away. What we are seeing in advertising, as in blockchain, is the adoption of new technology inducing a hype cycle, and the market coming off the hype cycle into something more normal.

The quality publishers will still succeed, most supported by advertising. Publishers, just try to keep the flight to quality in mind. We’re here to help.

Lost Trust is Hard to Rebuild

It was the mother of all ad frauds. A group of Russians working with the Kremlin and desperate to have anyone elected but Hillary Clinton set up a pseudo- ad agency with a budget of $1.25 million a month and bought ads on social media platforms like Facebook and Instagram, measuring viewability, comments, and engagement. The ads were paid for with fake Paypal accounts. In addition to their advertising campaigns, the group ran a cross-channel marketing campaign for Trump, staging rallies and counter-rallies and paying people to participate.

And although Deputy Attorney General Rod Rosenstein made a point of saying the results of the election weren’t swayed by all the bots and ads and phony grass roots efforts, how can we be sure?

Indeed, there are more ways to sway an election than just stuffing a ballot box. Thinking the election wasn’t influenced ignores the power of advertising to create brands. These Russians could sway the election by organizing massive rallies and making Trump appear more popular than he really was. That would create a bandwagon effect — something ad campaigns try to achieve all time.

As a result of this highly successful campaign, over a hundred “unwitting” Americans  participated in the Russian government’s effort to interfere in our elections, and our major social platforms were besmirched as they were ringing up the ad revenues. Until recently, Mark Zuckerberg did not grok the extend of Facebook’s complicity.

There are lessons for the online advertising industry in all this. We have all been busy reaching for scale. But we haven’t put sufficient controls on the messages we are sending, and we haven’t devoted enough time or effort to combatting ad fraud. News outlets desperate for ad revenues in a changing market were willing to run ads that annoyed consumers. Brands bought ads in places they should never have appeared.

What will be the result of all this, beyond indicting 13 Russians who will probably never be extradited? We suspect it will be a massive loss of trust in digital platforms on the part of consumers. And with it, an equally massive pullback from social media advertising on the part of brands.

We were long overdue for this correction. It’s another consequence of mishandling customer trust, as the use of ad blockers is. Our industry could use a giant dose of quality.

In the consumer advertising business, just as in the public opinion business, lost trust is difficult to regain. We’d have been better off sacrificing scale to quality and using better targeting techniques, just as the social platforms would have been better off scrutinizing their advertisers more carefully..

P&G Acts on its Promise to Clean Up Supply Chain

Well, P&G has done it — exactly as Chief Brand Officer Mark Pritchard promised a year ago it would.  The consumer giant cut the number of agencies it works with from 6000 to 2500 and next year will cut that number in half again. According to Chairman and Chief Executive David Taylor, the company has found and eliminated as much as 20% media waste and still increased its reach 10%. Somebody woke up the hibernating bear and it was hungry for change.

For years some of us in the industry have been simultaneously laughing and crying about waste and fraud in digital advertising. No one seemed to care. But all of a sudden the KPIs for everyone from media buyers to middlemen seem to have changed, and everyone’s serious about cleaning up the waste.

P&G is just one example of changes in the media industry that will come about in the coming years. The hammer has now come down on fraud, wielded by the only people who ever could swing it with enough power, the brands that pay the bills.

Now what’s going to happen next? Taylor already told a Consumer Industry Analyst Group that P&G is taking more of its media buying inside, and it will do that “through private marketplace deals with media companies, and precision media buying fueled by data and digital technology.” So much for waste.

What does this mean for the online publishing ecosystem?

For the ad agencies and trading desks it probably means a round of layoffs and belt tightening as many of them lose a big piece of business. For brands, it means some broad shoulders to stand on as they demand greater transparency and more attention to brand safety.  In other related news, Unilever’s CMO, Keith Weed, threatened at the IAB Annual Leadership Summit that it would pull its advertising from Facebook and Google if the platforms don’t curb hate speech and controversy.

For ZEDO it means increased focus on our core mission, which has always been to help our publisher partners to monetize their inventory more completely and at hight rates. For the past three or four years, we have been operating as a private platform that joins publishers who have premium content with big brands in a secure buying environment. We have made certain that any transaction within our control is transparent, viewable, and brand safe.

It seems like the industry is coming our way.

 

 

It Will Soon Be Illegal to Sell Smart Home Info to Advertisers

Gizmodo has a marvelous article on the smart home and its continuous information stream entitled “The House that Spied on Me, ” written by a woman who connected all the smart devices (including her bed) in her home to the internet and then had a colleague “spy” on her by reading the data.

There were a number of pretty astonishing revelations, including the fact that the house gave up data even when no one was home. And that the data, which was almost completely what we refer to comfortably as “metadata,” (meaning it isn’t really describable in total detail), could piece together a pretty accurate portrait of the home’s occupants. The writer, who after all writes for a gadget magazine and can’t be that much of a privacy freak still lands here :

Overall, my takeaway is that the smart home is going to create a new stream of information about our daily lives that will be used to further profile and target us. The number of devices alone that are detected chattering away will be used to determine our socioeconomic status. Our homes could become like internet browsers, with unique digital fingerprints, that will be mined for profit just like our daily Web surfing is. If you have a smart home, it’s open house on your data.

I wouldn’t call that a positive result for her experiment.

Because I own more than one connected device myself (in my home the robots talk to each other), I’m more interested in how this new datastream will be affected by the new General Data Protection Regulation soon to go into effect in Europe (and by extension in the US) in May. It seems there are two especially relevant portions of the regulation:

Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.​

And this paragraph, called The Right to be Forgotten

Also known as Data Erasure, the right to be forgotten entitles the data subject to have the data controller erase his/her personal data, cease further dissemination of the data, and potentially have third parties halt processing of the data. The conditions for erasure, as outlined in article 17, include the data no longer being relevant to original purposes for processing, or a data subjects withdrawing consent. It should also be noted that this right requires controllers to compare the subjects’ rights to “the public interest in the availability of the data” when considering such requests.

So this could potentially stop the data in your smart home from being used by publishers or advertisers for targeting and profiling. It also may mean that the value of many connected devices goes away.  Although most of them don’t keep data more than two days, they sometimes have built into their business models the right to process and sell the data. If that goes away, along with it may go many smart devices.

We’re in the advertising/publisher support business, so we don’t handle or keep data. We don’t have a dog in this hunt. And we have long been active in data privacy and anti-fraud initiatives. But many people around us in the industry depend on data for either their success or their business models, and we see some changes ahead.

Our Formats Meet Better Ads Standards

There’s a reason we’ve been around since 1999 and are still here for our publisher partners, our brands, and their agencies. It’s because we actually care about what we do and take pride in our work. We try to adhere to all the better ads standards coming into the industry before everyone else. As a technology leader, we always try to innovate around all the rapid changes in the industry without violating either the letter or the spirit of those changes. After all, our employees and executives are also consumers, and we have to experience what we produce!

This involves having an engaged product team that keeps abreast of the changes, tests all our major product offerings against them, and makes sure that we continue to take the high road in professionalizing online advertising, rather than just profiting from it. Although this has involved a great deal of work and some sacrifice on our parts, we are proud of ourselves for threading our way through the morass of conflicting standards and arriving at products the marketplace likes and consumers do not block.

The head of our product department has just completed an extensive review of the “Better Ads Standard” and informed the company that our key innovations will pass that standard. This is good news both to us and our customers, because it means we can maintain customer trust. Buying our formats will not violate any industry standard, not even the one advocated by AdBlock Plus.

One of our innovations, now called Smartphone Brand Recall SBR continues to receive great response in the market. It is an in app video format for mobile that’s interactive, and allows consumers to progress to the next level in a game they are playing by engaging in an ad rather than by paying money. Tests have demonstrated that the brand recall from this ad format is very high.

We have released a new publisher dashboard, which works much better than our old one and is liked by everyone who uses it.

In upcoming developments, the Chrome mobile browser has been blocking autoplay of video even in a muted state. But the upcoming release of Chrome for Mobile will allow muted autoplay irrespective of other settings — including “datasaver.”