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.
Just in time for all the changes in the global market that GDPR will bring next year comes the welcome news that Trustworthy Accountability Group (TAG) certified companies experienced 83% less fraud this year than the market as a whole. TAG, as you may remember, was an initiative we worked with two years ago when it was getting under way. This year, the group introduced Certified Against Fraud, a self-attested certification for companies that were willing to have compliance officer who will inspect the company’s policies and priorities and tell internal people how to comply.
This year, 170 companies joined the program to combat ad fraud. Certain large advertisers have already said they will not do business with companies that have not been certified. IAB has also made the program mandatory for all its members in 2018.
A study conducted by The 614 Group assessed the rate of invalid traffic in 6.5 billion digital ad impressions executed by three large media companies — GroupM, IPG, and Horizon Media on behalf of their clients between July and October. Every impression was delivered through a TAG certified channel. So how did 614 Group know what the rate of invalid digital traffic is overall? They benchmarked it at 8.83% for display and 12.03% when video was included. On TAG channels the rate fell to 1.48%.
We’re thinking the one thing wrong with this TAG certification process is that it is only available to large industry players. Currently, it costs $15,000 annually to join TAG and another $10,000 to get certified. If IAB is going to require this next year, they need to add a program for smaller players and startups, which I bet is where some of the remainder of their invalid traffic comes from.
And for smaller players and startups that are legitimate, the cost is prohibitive. Yet many startups have promising new ideas and technologies that marketers need to be able to try to get new ideas. On behalf of all those small but important and innovative players, who will help move digital advertising forward in the coming years, we intend to say something at the IAB Leadership summit in Palm Springs in February.
One of the ways agencies grow is by buying smaller agencies. In theory, that gives them access to more clients, a fresh creative staff, and a way to create scale to ward off competitors. However, mergers and acquisitions are only as good as their integrations into the mother ship. According to an article in AdExchanger,
There were 398 acquisitions in 2016 with a total investment of $14 billion. The Big Six – WPP, Dentsu, Havas, Publicis, IPG and Omnicom – were responsible for 89 acquisitions, at a value of more than $3.3 billion.
Figures through September showed 291 acquisitions this year. And in this game of agency supermarket sweep, many of the targets come from the data, digital and programmatic aisle.
This could prove tragic in the long run. The good news is that at long last agencies seem to understand that digital, data and programmatic are capabilities they need to have. But they are one step behind in the race to the future. As a result of coming new data privacy regulations, such as the European GDPR (Global Data Privacy Regulations), many marketers have data at the forefront of their minds, but for the wrong reasons. They know they are going have difficulty using it the way they did in the past, because now the consumer will be in control of her data.
What the big agencies really should be doing is studying up on those regulations and coming to grips with the limits that will be placed on the use of data in the future. Agencies are usually headed by people who may know the creative side of the house but don’t keep very good tabs on data. There will be an amazing culture clash when the data-driven geeks arrive in the house. There will be equally big problems because programmatic itself is coming under scrutiny for brand safety issues and ad fraud. So far, the geeks and the creatives have been kept separate, in separate companies. If they come together under one roof, that holding company will have to tighten its controls to make sure that the data flowing through its acquisitions is in compliance with the new regulations, or the fines will be significant.
So what the agencies will need now is a new cadre of management familiar with aspects of the business that have been lumped into a separate bucket called “martech.” And they will probably have to beef up their compliance departments as well.
In the rush to integrate acquisitions and learn more about how to manage data, guess what will get short shrift again? True creative, the kind that makes advertising users want to see.
A little more than four years ago, ZEDO had a global product development meeting to come up with ideas for mobile video. At the time, things were just shifting to mobile, and the ad dollars weren’t quite there yet. The customers, however, were spending more and more time on mobile devices, and the future could be clearly predicted by publishers, who were seeing more and more or their traffic come from smart phones and tablets. Our partner, The Economist, had asked us for a way to run video ads on text pages.
The conversation in the room at that meeting quickly moved around to the differences between phones and tablets, and what consumers would “tolerate” on a device they wore on their person all day. Somehow, the phone seemed a radical departure from any other online device because of this intimate connection with its user.
Our product team showed some of us in marketing an ad unit they were calling “In Article video” because it was a large video ad format that could be shown on a text-based site, and it was a complete departure from the only available video ad format at the time, which was pre-roll. There was a shortage of available pre-roll, and marketers were searching for other places to use their existing TV creative.We thought the format was very effective, and would drive user engagement, because at the time users were just beginning their love affair with video on the phone.Mobile video was still something of a novelty.
We decided at that meeting to call our offering “In Article Video,” because it ran in the article, appearing only when the user scrolled down to see it. When we tested it, the viewability of the unit was over 70%. We knew we had found the answer to filling advertisers’ need for something beyond pre-roll.
In the first year, we sold this format as In Article, but then the industry began to call it outstream, and soon we had at least one copycat who popularized the name “Outstream.” While this made no sense to us as a name, we had no choice but to adopt it.
One of the claims we have always made about Instream/Outstream video formats is that they are a form of “native,” meaning they don’t take the viewer away from the mobile stream of news or articles she is already reading. However, the industry decided to make it difficult for us with that definition as well: native can now also mean branded or sponsored content. Native has come to mean advertorial, and nothing to do with format or feed.
I’ll take a minute to argue here that every time the industry chooses a confusing term for an ad format, it makes that format more difficult to gain adoption. We have had to deal with the confusion around Outstream and then the confusion around the meaning of native, and we believe that has held back the adoption of both ideas.
The good news is that 77% of marketers have not hear of either Outstream or Instream video, so we’ve got a large addressable market to go after next year with our publisher partners.
As if all the new blockchain companies trying to fix digital ad transactions weren’t enough, we will certainly face more scrutiny in the buying and selling of ads since it was revealed that a Russian troll bank connected to the Kremlin propaganda machine bought $100,000 worth of ads on Facebook during the last election. This was admitted by Facebook, which probably means it’s the tip of the iceberg. Underneath is an iceberg that could harm Facebook if the election revelations are looked at as part of a pattern that includes Facebook’s recent gaffe with data reporting.
That gaffe, reported by CNBC, was discovered by a Pivotal analyst,
Facebook’s Ads Manager claims a potential reach of 41 million 18- to 24-year olds and 60 million 25- to 34-year olds in the United States, whereas U.S. census data shows that last year there were a total of 31 million people between the ages of 18 and 24, and 45 million in the 25-34 age group, the analyst said.
“While Facebook’s measurement issues won’t necessarily deter advertisers from spending money with Facebook, they will help traditional TV sellers justify existing budget shares and could restrain Facebook’s growth in video ad sales on the margins,” said research analyst Brian Wieser, who maintains a “sell” rating on the stock with a price target of $140 for year-end 2017.
While the incorrect reporting of data is something Facebook itself has to fix, the propaganda problem is more difficult to address.
There is a lot of hand-wringing going on in our government and in our newspapers wondering how the Russian ad buy could have happened. But we in the industry know exactly how it could happen: Facebook Ads Manager. Anyone with a credit card and a Facebook account can use Ads Manager, and several people making relatively unnoticeable buys of about $10,000 each could easily have the benefit of Facebook’s super-targeting abilities to hit very specific people with very appropriate messages that would resonate enough to cause them to change their behavior patterns or — we wonder — their votes.
Thus, the same specificity that brands love can be perverted by political organizations to manipulate minds.
How should we think about this?
In Europe, the GDPR addresses some, but not all of this by giving consumers more control over their data. However, we haven’t yet seen any expert analysis of how this would apply to Facebook, which is not a conventional publisher. In fact, Facebook has been reluctant to think of itself as a media company at all. In the face of these recent discoveries, that’s one thing we think will have to change. We may see the return of the ugly word “platisher” as we in the industry try to address these concerns.
Last week Apple announced IOS11 and with it the new version of its Safari browser. Now Safari is not at all the most popular browser, because most of the world uses Android, but it is a browser used by almost half of all web traffic in North America and a quarter of all the traffic in Europe. And that traffic is highly desirable to advertisers.
Apple, however, does not care about advertisers. Advertising isn’t its business model, because it sells hardware and software. And to illuminate the cause of its unconcern: Apple’s differentiator is security and privacy.
Remember when the F.B. I. asked the company to break into the iPhone of Syed Rizwan Farook, who perpetrated the mass shooting in San Bernardino, Calif a year ago and the company refused?
Bureau officials [said] that encrypted data in Mr. Farook’s phone and its GPS system may hold vital clues about where he and his wife, Tashfeen Malik, traveled in the 18 minutes after the shootings, and about whom they might have contacted beforehand.
Apple went to court and fought the government rather than write new software to compromise the iPhone’s security.
It only stands to reason that Apple would try to protect its users further by incorporating anti-tracking software into Safari; that’s right in line with its brand strategy.
Safari 11… intelligent tracking-prevention technology makes it harder for ads to follow you around from one site to another and for advertisers to keep track of your browsing habits over the longer term. One part of the approach is deleting even first-party cookies if it’s been more than 30 days since you interacted with the website that set the cookie.
This drove the advertising industry wild, with a coalition of industry groups publishing a letter last week telling Apple that Safari’s new settings would endanger internet economics.
Apple’s Safari move breaks [cookie-setting] standards and replaces them with an amorphous set of shifting rules that will hurt the user experience and sabotage the economic model for the internet.”
But the ad industry shouldn’t worry. We remember when pop-up ads were blocked, and the industry squirmed. We also remember when third party cookies began to be blocked in browsers, and the industry wrung its hands again. Now the blocking of first party cookies will be used as an incentive to innovate, because consumers have already sent the message that they hate retargeting and don’t want to be followed around the web by a pair of shoes they just bought.
And besides, not all first party cookies are blocked, and that’s because some of them are actually desirable for users. Those are the ones that make it possible for you to log into a site without re-registering each time. Safari uses a machine learning model, so if a user visits a site and logs in with Facebook or Twitter, a cookie will still be set to allow that user to log in again.
We are gradually moving toward an era of brand advertising, in which users will be shown content and incentivized to interact with ads for a reward. This gives users a choice, and does not put all the power in the hands of advertisers and their ad tech to force an ad in front of an unwilling user, where it has rested for the past two decades.
I was talking to a woman on our sales team in the midwest last week, and she said “you know, in the midwest many agencies haven’t even heard of ZEDO and ZINC.” In some ways, that’s not a surprise. We’ve been around since 1999, when we were founded as an ad server for publishers, and our headquarters then was in San Francisco. We later expanded to deliver out-sourced ad operations services, yield optimization services, and pretty much anything a publisher would need to increase revenue. But we’re a solutions development company, not a marketing company.
About three years ago, we started a division called ZINC and brought to market innovative high impact ad formats as the industry changed. We were, if I remember correctly, first to market with an ad called the “Inview Slider,” an ad that only appeared when a visitor was there to see it. we followed that with an equally innovative video format designed to be displayed by publishers with sites that didn’t publish video. The “InArticle” Video was quickly picked up by the industry and re-named “outstream.”
We went on to focus on mobile, developing an entire suite of ad formats that do not anger mobile users and get better results than any of our competitors. Along the way, we moved the company to New York to signal our entry into the advertising side of the digital media ecosystem.
Once in New York, we realized we had access to a new customer: brands and agencies.
Along the way we participated in a range of industry-wide initiatives, and realized that ad fraud and brand safety were becoming paramount in the minds of industry thought leaders, so we jumped ahead once again, developing a completely private, secure, end-to-end solution — a platform on which our customers can buy innovative formats that are served directly to our premium publisher network without the danger of supply chain corruption.
At the same time, we eliminated several former partners with whom we worked until we realized they weren’t playing the game on the up and up and their networks were fraught with bots and malware. We also severed connections with some non-quality publishers. And last, we partnered with a company that checks all the URLs to which we serve to make sure we serve ads in a brand safe environment.
All the while, we were heads down continuing to develop new technologies, and ignoring the elaborate marketing plans other companies user to generate transactional sales. We much prefer relationship sales. We’ve just developed our first slide deck in years. We’re coming out to build additional relationships.
You will see more of us now in the media world, because we have begun reaching out in the midwest, New York, and the west coast, doing somewhat more aggressive storytelling about what we have to offer.
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.”
For that reason, although mobile marketing has many possibilities, it is wiser to leave the user in control of her own device marketing preferences.
It all started when the London Times published an investigative piece a couple of weeks ago about ads from prominent brands appearing on terrorist sites and alongside other types of objectionable content. Of course this has been going on for years, at least since the beginning of programmatic buying, but all of a sudden brand safety leapt to the front of advertisers’ consciousness and they began pulling out of Google sites like YouTube and the Google display network. And these are not minor brands; they’re WalMart, Pepsi, Starbucks, Coke and other powerhouses.
Quite often, these little volcanoes erupt in the digital advertising world and brands make noise about something they don’t like. But then the furor dies down and things go back to “normal.” The Wall Street Journal, however, says this is the beginning of something new for the Google ad business, because marketers have been here too many times before, and they really can’t fall back on the excuse that they don’t know what they’re buying. Behind every marketer who may not understand, there’s an agency that does, and the agencies should know better.
Despite Google’s apologies and promise of new tools, ads were still on hate sites, fake sites created by bots, and pornography last week, which prompted the Journal to put a couple of veteran reporters on this lingering story. CEOs and CMOs of big companies are now involved, and perhaps because of potential implications of being linked to terrorist sites, Google is going to have to make some changes.
And not just Google alone. When you are going for scale, it is almost impossible to perfectly police what is being bought. Or so it is said. But the research done by the Journal reporters seemed to point to willful blindness. It does seem incredible that big companies, either the advertisers or Google itself, can’t type in some search terms and find out whether their brand ads are still running on hate sites.
This led reporter Suzanne Vranica to say that no one in the industry is really incentivized to fix problems like these when they occur, because everybody gets paid. The publishers get paid, the holding companies try to push as much inventory through these platforms as possible so they’ll get paid, and the advertisers have the advantage of cheap ads. So throughout programmatic’s history, people on all sides of the supply chain have simply looked the other way at ad fraud.
Encouraging terrorism, however, is a horse of a different color, especially after being seen on fake news sites during the election got them worried. Just after fake news subsided as a concern, the fear of seeing your brand in the headlines for funding terrorism arose for these companies, many of whom are public.
Admittedly, in the back of every advertiser’s mind is the reality that they’re getting what they pay for when they buy cheap ads, but that doesn’t mean they won’t turn on Google and Facebook to save their own reputations. They are coming to realize that they helped build these platforms and they are really the people who pay the bills. The walled gardens are not giving them the data they need, and at the end of the day, that’s the main issue. The advertisers ceded their power, and now they are demanding it back.