IAB Rolls Out Blockchain Pilots

We’ve been around since before the dot com bust, which gives us the authority to predict the future (just kidding). But one thing we know, because it has been more a reality than a prediction in the past, is that the IAB under Randall Rothenberg is a powerful industry group that can drive change in our industry in the direction it chooses.

The last two big changes involved visibility metrics, and verification metrics. Now IAB Tech Lab is moving the industry in the direction of the block chain.

The blockchain, a technology that really isn’t new but became prominent when Bitcoin, a cryptocurrency built on its technology, briefly became a “store of value” last year. When we say store of value, we mean people began to invest in Bitcoin  the way they invest in gold or the stock market.

Although Bitcoin crashed, blockchain remains as an interesting option for the advertising industry because it is an “immutable, distributed ledger or record of transactions between a network of participants. The entries in the ledger are governed by pre-defined rules and validated by the network. The network can be public like bitcoin or private with only select participants.” IAB says there are benefits to the blockchain for advertising:

What are the benefits of blockchain in the media and advertising space?

  • Given the complex nature of the digital advertising supply chain, blockchain technology can offer greater efficiency, reliable and high-quality data.

  • Blockchains can create a more efficient medium by which two or more completely anonymous or semi-anonymous parties can complete various types of transactions potentially at a low cost.

  • Since blockchains are decentralized peer-to-peer networks, there is no single point of failure and no single access point for malicious hackers. Thus, it enhances safety and security for data.

  • This ability to keep a fully verifiable and immutable ledger or database that is available to all members of the blockchain provides a layer of trust and transparency that isn’t always available within media and advertising processes.

  • While blockchain will not cure all of ad tech’s problems, it can be beneficial in situations where there is censorship and both sides of the supply chain (i.e. publisher and advertiser) are disadvantaged by not having access to that information.

Here’s what is being tried, according to CMO Australia:

Members actively involved in the IAB program include FusionSeven, Kochava Labs, Lucidity and MetaX, with each piloting emerging blockchain-based offerings with supply chain partners including advertisers, agencies, DSPs, exchanges, publishers and technology vendors.

 

As an example, IAB said Lucidity’s ‘Layer 2’ infrastructure protocol is being used in a pilot to verify ad impressions and improve programmatic supply chain transparency through a decentralised, shared and unbreakable shared ledger. This will be followed by other pilots looking into fee transparency, digital publisher signatures and audience verification.

Another company not involved in the IAB Tech Lab’s group is Brave, creators of the browser that pays publications through its own cryptocurrency, the Brave Attention Token (BAT).

There’s almost no way that the blockchain will turn out to be completely useless to advertising, since  the entire purpose of Ethereum’s technology was to create smart contracts. However, unless it can scale in speed, you won’t see it in ad tech any time soon to do things like serve up ad calls.

What Are Acceptable Ads?

Of all the industry initiatives around making the online ad industry more friendly to users, only Eyeo, the German company behind Ad Block Plus, has spent the last few years doing research on people who download ad blockers, especially their own. The rest of the industry organizations are basically guessing what users will tolerate based on what they’d like to promote. What Ad Block Plus found through a Google survey  conducted in January is that 18% of Americans use an ad blocker on the desktop, and so do 20% of Europeans. But 83% of those running an ad blocker would be happy to see ads that don’t interfere with their user experience.

It’s impossible to write about this too often, since it doesn’t ever seem to sink in, but the root of the ad blocking problem isn’t ads. It’s user experience, and most of the deterioration of UX is due to data collection and tracking. It’s mind boggling how many trackers are on most publisher sites, for everything from analytics to data collection. This tracking is what users hate. It steals their privacy, hijacks their user experience, and shows them only disrespect.

On the other hand, users also hate paying for content, especially young people who have grown up in a world where web content has largely been free. Although sites like the New York Times have grown their subscriber bases admirably, they jury is still out on whether sites like Bloomberg and Wired will garner enough subscribers to make their pay walls “pay.”

And the people who download ad blockers are generally young, well-educated, employed with higher than average incomes, and comfortable with completing their purchases online. In short, they’re a demographic many advertisers would want to reach.

AdBlock Plus has figured out a way to reach them: by respecting their preferences.

Face facts: compelling sites with quality content are not free to run. Advertising used to cover the cost of these sites until publishers lost the battle to protect their visitors’ experience to programmatic advertising. No one knew in advance this would happen.

But Ad Block Plus has now come up with suggested ad formats that do not destroy the user experience, and ad-blocking users have willingly consented to see them. 92% of their users have said they’ll participate in a program through an exchange that can make ad-blocking visitors available to premium brands under special circumstances.

Will this work? Well, for publishers it is tempting because it allows them to monetize their ad-blocking users. And agencies will probably salivate because the exchange gives them access to more than 150,000,000 new users in the most desirable demographic. EMarketer said that 41% of millennials used ad blockers in 2017. Being able to reach them with ads they’ve agreed to let through is quite desirable.

The key is going to be to keep to the rigid rules of Acceptable Ads, which emphasize position, transparency, and size. It’s a cop out to say that time will tell, but Ad Block Plus is only just out of its closed beta with the Acceptable Ads Exchange, so we can’t say much else yet.

 

 

 

 

 

 

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.

Publishers Speak Out at Advertising Week

It seems as if the biggest takeaway from Advertising Week is that the Financial Times announced it has been ripped off by ad fraud, even though it doesn’t sell its own video ads programmatically. And it was a big loss.  The fraud happened entirely outside the magazine’s control,  which only served to underline the lack of trust in the supply chain surfacing again this year. Although a couple of new organizations have formed to solve the problem of fraud in the media supply chain, not much appears to have changed.

Here’s what happened:

The Financial Times found display ads against inventory masquerading as FT.com on 10 separate ad exchanges and video ads on 15 exchanges — the publisher doesn’t even sell video ads programmatically — with 300 accounts selling inventory purporting to be the FT’s. The equivalent of a month’s supply of bona fide FT.com video inventory was fraudulently appearing in a single day. The FT estimates the value of the fraudulent inventory to be $1.3 million (£1 million) a month.

This is called domain spoofing, and it’s the main problem of using open exchanges. The Financial Times had to write to the exchanges involved and ask them to remove the fraudulent inventory. Then it had to write to agencies and their clients telling them not to source inventory from anywhere but Google AdX or TrustX, through which FT sells its display.

“The scale of the fraud we found is jaw-dropping,” said Anthony Hitchings, the FT’s digital advertising operations director. “The industry continues to waste marketing budgets on what is essentially organized crime.”

This is why we developed a totally secure private exchange a couple of years ago.  When we handle transactions end to end, we know where every ad is at any given time, and we can also track its response. We have never understood why the industry tolerates wasting marketing budgets as it has in the past, although we hope this is (slowly) changing.

How can we tell it is changing? Agencies holding companies are reporting poor financial results. That’s because brands are now far more careful about entrusting their budgets to trading desks that engage in arbitrage. Who knew that one of the biggest ways agencies made money was by buying media in bulk and not passing on the savings to their clients? We thought that only happened in the world of late night TV and informercial companies.

The other important media announcement out of Advertising Week was the re-branding of Advertising Age Magazine as AdAge, and the promise to guide this industry through a disruption the publisher admits is under way. We’re a bit suspicious of the publisher’s new recognition that

Everything is a brand. Everything is an ad for itself. So our coverage needs to reflect the broader culture beyond the weeds of our industry. We’ll still get into those weeds, but we’ll also explore the flowers. And we’ll do it with a tone that’s inviting, accessible, wry, witty and sharp.

This leads us to believe that Ad Age is going to be less an industry publication than a cultural publication, and we wonder how its core audience, advertising and brand professionals, will respond to that.

 

If You Care About Security, Come to ZEDO

We have taken security very seriously lately on the ZEDO ad server. In fact, we have three major concerns for our customers and partners:

  1. resisting all the fraud, malware, and piracy problems that have plagued the industry since it began, and offering our customers a clean supply chain.
  2. Making sure our technologies load quickly and do not slow page load times for publisher partners
  3. Ascertaining the brand safety of the sites where our ZINC ads appear.

Every month we roll out technical updates that contribute to these goals.

This month:  for page load times, we are migrating to Gecko ad tags, to allow our publishers to run two of our innovative formats simultaneously .  Gecko is an ad serving tag that is designed to have seamless capability to serve different formats and innovations.  It can be configured to serve one or more ad formats per page view, such as a standard 300×250, a 728×90 InView panorama and an InArticle video for one tag call.

For brand safety, we have partnered with AmplifyReach.  We have started the process of categorizing Page URLs of various sites from our inventory pool into first level IAB categories. We also store brand safety score for each URL as identified by AmplifyReach.  We are learning every day how to make our inventory safer for advertisers.

We have added the capability to monetize secure sites. We saw that a number of publishers from our inventory pool going secure had increased lately, and if we get a request from a secure site, we send a secure flag in the BID request to all the DSPs. Because non-secure scripts cannot run on secure sites (the browser returns an error) this flag is important. By passing this flag DSPs know that they have to send down secure Ad Code if they bid and win.

We continue fighting the good fight to protect advertisers while increasing revenue for publishers. This has become a very complex endeavor, but advertisers are cutting the number of sites they will appear on and publishers have begun enforcing greater security as well. Vendors who cannot bring adequate security and brand safety to the table will be cut from both premium inventory and ads from quality brands.

For years we have been predicting that things in the digital advertising industry will improve so everybody gets better results, and we think this year it is finally happening. This will be good to everybody. The premium publishers will make more money, and the advertisers will get better results.

 

 

 

 

Outsourced Ad Ops Can Solve Publisher QA Issues

One of the reasons we have always offered ad operations to our publisher partners is because the publishers are so busy with other things. And the rise of programmatic buying and selling has made all of this more complicated and less transparent. As digital ad products get more complicated, they require more and more heavy lifting to make sure ads run as they are supposed to according to your own specs and industry standards. A new report from GeoEdge finds that some publishers’ ad ops teams are spending up to 40% of their time doing QA on creative.

In the old days, QA was only “does this ad really run.” But now, because of all the interest in brand safety,

quality assurance is really about risk management. The QA process entails getting detailed ad specs up front, clearly identifying stakeholders and responsibilities,  and effectively setting expectation for how an ad is supposed to work, whom it is meant to reach and actually meeting those expectations in order to insure a good user experience.

According to this report, part of the problem comes from conflicting priorities between the buyer (the agency) and the publisher. For the buyer, ad performance is the highest priority. But for the publisher, continued existence depends on monetization and optimization. Their goals are clearly misaligned.

Publishers ought to focus on their own needs, nor just follow whatever process the agency follows. And not spend so much time pursuing every new platform, to the detriment of QA. What good is it if you are on Snapchat if your ad doesn’t run the way it’s supposed to? Again, from GeoEdge, “the ad integrations that come with new platforms are more complex than publishers are accustomed to, making QA even more laborious.” Video and native ad executions are far more difficult than banner ads used to be. When a complex ad product changes hands among so many different teams, it’s easy for errors to slip through the cracks.

The highlight of this report for us was the experience of Forbes:

… who made a major advertising faux pas in 2016 when it released its 30 Under 30 list. Like most publishers starved for ad dollars, Forbes requested that those looking to view the list disable their ad blockers. Dutiful readers did just that only to open themselves up to malware ready to steal personal data, drain bank accounts and hold passwords hostage. With 56 million monthly unique visitors, this Forbes oversight was no small slip up.

But on our private platform, we can also do the ad operations, and with them, the QA. There is no danger, if you buy our ad formats and run them on our network, that malware can enter our closed system.

Admittedly GeoEdge is selling its automated verification solutions in this report, but the problems it identifies are real ones, and we’ve all been dealing with them in one way or another since advertising became digital.

 

Trends in Mobile Privacy

Mobile advertising has yet to come into its own, perhaps because advertisers are not yet sure what users will tolerate on a device actually held on the body.  Perhaps it seems more invasive because mobile advertising is capable of collecting information about users’ activities across different apps over time to deliver ads to those users based on those activities. It includes retargeting and tracking conversions,  and it may extend to any collection of information on one property to serve an ad on a different property. The data  collected is not tied to an identifiable individual but is tied to an individual device. And users are aware of being tracked across devices.

Lately, just about everyone is collecting user data for cross- device tracking, and users are not happy. The publisher collects user data from registrations and the use of the publisher’s app or site. Demand  and supply side platforms track users through their SDKs installs on the site, or receive user data from advertisers to calculate retargeting or fees. Advertisers also track user data, as do real time bidding (RTB) platforms, by which a user in a certain inventory is sold to the advertiser making the highest bid.

if this sounds awful to you, imagine how it sounds to the consumer who is being tracked for what is known as interest-based advertising. No wonder consumers opt out, forcing the FTC to make advertisers provide enhanced notice and choice.

In the mobile environment, the Digital Advertising Alliance and IAB Europe have determined to self- regulate. DAA has an opt out app that can be downloaded by consumers. There are also protections in mobile browsers to enable consumer choice. But in the EU  there are special considerations for apps and privacy.

The four key data protection risks in the EU include transparency consent, security,  and limitations on both purpose and amount of data that can be collected from an app. It is up to the consumer to control which data processing functions should be permitted: location data, contacts, credit card and payment data, browsing history.

A  company may use information collected across devices through cross device tracking software for content personalization,  interest based advertising,  fraud prevention and analytics.  In the US, opt outs are device specific but users must be provided with notice and a choice if they browsing activity on one device maybe used to deliver advertising to them on another device. In the EU, regulations are stricter: the privacy directive requires prior consent from the user for “storing for accessing information in the terminal equipment of the user.”

In the US, geolocation data can be collected only after the user is told that the data is being collected, and it may not overwrite consumer preferences. Although general geolocation derived from an IP address is not considered  “information”, it should still be disclosed in a privacy policy.

Snapchat and Path both fell afoul of this policy,  and Snapchat had to settle with the FTC over allegations that its Android app transmitted wifi and cell- based data location information from users mobile devices to its analytics tracking service provider in violation of its own privacy policy.

For that reason, although mobile marketing has many possibilities, it is wiser to leave the user in control of her own device marketing preferences.

 

New Law Threatens Privacy

Another marathon political month ends with the US going in the opposite direction regarding consumer data from the EU.  This could end up being confusing to both consumers and advertisers.

The US Senate has passed a bill saying that ISPs can now monetize consumer data in the same way Google and Facebook do. This bill is headed over to the House for a vote. On the face of it, the bill actually equalizes rights, giving ISPs the same rights as platforms. The FCC Chairman who replaced Tom Wheeler has defined this as  part of net neutrality, although that’s not what net neutrality used to be.

““The federal government shouldn’t favor one set of companies over another — and certainly not when it comes to a marketplace as dynamic as the Internet,” said FCC Chairman Ajit Pai and FTC Chairman Maureen Ohlhausen in a joint statement. The two agencies will work together to achieve “a technology-neutral privacy framework for the online world,” they said. “Such a uniform approach is in the best interests of consumers and has a long track record of success.”

Several privacy advocate groups have, of course, come out against the new legislation, including the Electronic Frontier Foundation.

Americans have enjoyed a legal right to privacy from your communications provider under Section 222 of the Telecommunications Act for more than twenty years. When Congress made that law, it had a straightforward vision in how it wanted the dominate communications network (at that time the telephone company) to treat your data, recognizing that you are forced to share personal information in order to utilize the service and did not have workable alternatives.

Now Congress has begun to reverse course by eliminating your communication privacy protections in order to open the door for the cable and telephone industry to aggressively monetize your personal information.

Of course the EFF is an advocacy organization, but privacy groups have become very powerful. And we care about this because anything that makes consumers feel uncertainty about their personal information has a propensity to interfere with the advertising business model most publishers depend on.

We work closely with the Online Trust Association, which also saw this as a potential blow to consumers, and thus to the ad-supported business model, since privacy advocates are now saying ISP stands for “Information Sales for Profit.” As a platform, we neither hold nor track  consumer data, so we’re not directly involved. But we do have a dog in this hunt because we are strong supporters of free internet content that is ad-supported. We work with our partners to make better ads, so there can be fewer ads. We also work with our partners on brand safety in media buying.

We must take pains to maintain the highest ethical and privacy standards so we don’t entice consumers to download more ad blockers. Before this ruling, we had achieved stasis, and were moving on. Let’s do everything we can to keep going in the right direction for both publishers and advertisers, as well as for consumers.

 

 

 

 

Legacy Media Adopting New Models

Time Magazine is one of the legacy names in the media business. But like all  media, it is struggling to adapt to new business models. In a Wall Street Journal podcast interview, Jen Wong, COO of Time, discussed her opportunity to grow the Time subscription business as well as some of its forays into new business models. The most interesting area of the podcast for our offerings is Wong’s assertion that her offerings can now compete against Facebook and Google in the ability to provide brands and agencies cross-device attribution.

Even in an age of difficulty for traditional publications, Time still has 30,000,000 subscribers — about the same number as Netflix. It has also built up the infrastructure to sell magazines from its own database of current and former subscribers. The company expects to grow its business using that consumer marketing infrastructure. And Time also owns The Foundry, its content marketing arm. Content marketing, one of the hottest topics in media, is an area many newer publications, like Buzzfeed, are also getting into, because there is an almost insatiable demand on the part of brands for appropriate content.Wong predicted that the branded content market would double to $9 billion by 2018, and that her company would have a substantial segment of it. Foundry both creates  content and operates websites on behalf of brands, and even now it’s the fastest growing segment of Time’s business, growing about 2x year over year.

However, Time is in the same position as most legacy media: while it is branching out in new directions, three quarters of its revenue still comes from print advertising, which is an endangered source. That’s the conundrum for the established media companies: how much to invest in new platforms that have not demonstrated the capacity to monetize as well as their former businesses.

Still, Time considers native, which is now 20% of revenue, a needle-moving bet for digital, along with people-based targeting and video.

People-based targeting is a euphemism for the ability to target a user with device attribution — finding the same user on mobile and desktop. This is Facebook’s strong suit because of the size of its dataset, but Time has now acquired Viant and Adelphic to compete in this arena. With these acquisitions, specific targets can be found on the web, and then can be attributed across channels in a manner similar to what Facebook offers. In Wong’s view, agencies are looking for alternatives to Facebook and Google, and unlike most publishers, Time does have people-based data which would seem to be a major advantage, especially if the metrics Time provides to agencies prove more accurate than Facebook’s.

In video, Time has a pre-roll business that is growing, and has launched an OTT services as well. In addition to the Time subscriber base,  Viant brought 1.2 billion profiles, and 700,000,000 device IDs in the US, and into that database Time contributed its own 100 million expired and 30 million active subscribers. To make it simpler for agencies to transact against that data in an era of programmatic advertising,  the company even developed its own DSP — although Wong said she would not advise other publishers to try to do this if they didn’t have as much data.

Data is the area in which publishers now must compete against Facebook and Google.

 

 

 

 

 

 

 

 

 

 

 

 

Trustworthy Accountability Group

The Trustworthy Accountability Group (TAG) has accomplished an incredible amount during its first year, including rolling out a TAG Registry, an Anti-Piracy Initiative, Certified Against Fraud, Certified Against Malware,  and updated Inventory Quality Guidelines. Now the work begins: to round up more participants. The early adopters are already on board: 127 companies are already TAG-Registered. To be registered, companies must complete a self-assessment and attest to having certain processes and procedures in place and a plan to keep them in place for the coming year. TAG Registered companies have been verified as legitimate participants in the digital advertising industry through a proprietary background check and review process powered by Dun & Bradstreet and approved by TAG. Once registered, companies are awarded a TAG-ID, a unique global identifier that they can share with partners and add  to their ads or the ad inventory they sell.

130 people, myself included, have completed Compliance Officer Training, and have been designated Compliance Officers for their companies.

I first became involved with the Trustworthy Accountability Group last January, when it held a meeting at the IAB Annual Leadership Conference. Because I’ve represented ZEDO for five years on several industry initiatives that fit our “high-road” approach to partnership with both advertisers and sellers, I attended the meeting and listened to the plans. I had no idea how fast they would move.

By the end of the year, TAG had released a suite of anti-Malware tools, including “Best Practices for Scanning Creative for Malware,” a glossary of terms that establishes a reference of malvertising types, and a Malware Threat Sharing Hub, where certified companies can join a trustworthy collaborative network that qualifies and tracks malicious ads.

The Certified Against Fraud program, which was the last to roll out,  is open to participation by buyers, direct sellers and intermediaries across the digital advertising ecosystem.  Requirements to achieve the TAG “Certified Against Fraud” Seal differ according to a company’s role in the supply chain.  These requirements are outlined in details in the Certified Against Fraud Guidelines.

Companies that are shown to abide by the Certified Against Fraud Guidelines receive the “Certified Against Fraud” Seal and can use the seal to publicly communicate their commitment to combatting fraudulent non-human traffic in the digital advertising supply chain.

When the group sent out its press release earlier this year on the first hundred companies to get registered, it reiterated its pledge to create industry transformation at scale. It was formed in response to multiple accusations by news sources and participants of lack of transparency. With TAG, the industry hopes to prove that it can regulate itself.