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.

IAB’s TAG Program Works, but Too Expensive

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.

 

 

 

 

Publishers: Please implement Ads.txt

Ads.txt  is IAB’s newest fraud-fighting initiative. It stands for “Authorized Digital Sellers,” and the aim of the initiative is to increase transparency in the way that programmatic advertising is sold to protect buyers from spoofers.

It works by giving verified publishers and distributors an easy way to declare, publicly, the companies that they allow to sell their digital inventory. They do this by preparing and publishing the “/ads.txt” file, creating a public record of Authorized Digital Sellers and helping buyers to quickly identify which sellers are allowed to handle ad inventory for which publishers.

This makes it much harder for scammers to profit from selling fake inventory and gives buyers peace of mind that the ad space they buy is authentic.

By the time you read this post, over 100,000 ads.txt files will have been published. 750 of the comScore 2,000 will have ads.txt files and over 50% of inventory seen by DoubleClick Bid Manager will have come from domains with ads.txt files. Beginning in November, DoubleClick Bid Manager and AdWords stopped buying ads from ad networks / exchanges not declared on Ads.txt.

Google also says that “DoubleClick Ad Exchange and AdSense publishers that use ads.txt are protected against unauthorized inventory being sold in Google auctions.” To do this, Google “crawls daily over 30m domains for ads.txt files.”

The rapid adoption of Ads.txt shows how much of the market is controlled by Google. But this doesn’t make the initiative less valuable. Domain spoofing has been a huge problem on both the supply and demand sides, and we are happy to see this initiative and help our publishers adopt it.

If you’re a publisher, you need to implement the ads.txt text file on your root domain, listing the exchanges that are authorized to sell your inventory and including your seller account ID for each exchange.

Your seller account ID, sometimes called your publisher ID or seller network ID, is the ID that’s linked to your account on an exchange or supply-side platform (SSP). This is important because this part can’t be “spoofed.”

When you take part in programmatic real-time bidding, this ID should be transmitted through the OpenRTB protocol as the publisher ID, along with the Publisher.Domain in the Publisher object. If you’re using a different RTB protocol, it might be called “seller_network_id,” member or seat ID. 

Ads.txt is also important for buyers, who are the ones paying the bills and the ones demanding more transparency. They have been almost literally throwing out money on online exchanges, and finding their brands in places that are destructive or irrelevant. No wonder they’re finally done with all this, and have demanded changes. Especially this year the ANA and the MRC have become loud players in demanding reform, and Mark Prichard of Procter and Gamble, the country’s largest advertisers, has been on a one-man tirade.

As a private platform, we’re individually secure, and as an ad server we have our protections in place.

We are getting there, folks. Digital advertising is too large an industry to be so rife with corruption. We need to clean up, and we will.

 

 

Market Maturity Means New Media Buying Standards

Contrary to popular opinion, digital display advertising does work, only not the way we think it does. In fact, consistent display ads create brand lift in the same way TV advertising does. And display used for brand lift is a “good buy,” allowing for many impressions at relatively low cost and contributing to availability bias– formerly known as top of mind awareness.

When we use digital display for performance advertising today, we’re using it incorrectly. We should be using it for branding instead. However, we have become used to digital display as only good for performance. By making poor media buying choices like the misuse of display ads, we continuously overlook efficient ways to spend our digital budgets.

Marketing has changed more in the past five years than in the past fifty, and some of the things we thought we knew, even earlier in the digital advertising era, simply are no longer true.

That is why all marketers are making the wrong decisions, despite data to the contrary. Or so says Adam Heimlich of Horizon after running a three year study on digital media budgets. 

Not only is almost no one executing effective digital media buys, the vast majority of big digital advertisers are on the opposite track, chugging like locomotives in the wrong direction. Many have arrived at zero lift.

Digital display is one of many areas of human endeavor where data is exposing conventions that yield suboptimal results. As in finance and baseball, data alone isn’t enough to convince most decision-makers to move away from orthodoxy in marketing.

Digital video, too, is often interpreted incorrectly. In video, it is not always smart to keep spending to create cross channel campaigns aimed at producing specified numbers of sales.

Here’s why: there’s a number in marketing called cost of customer acquisition. If you are looking at a sales number, and you keep spending until you get there, your cost of customer acquisition may very well drive you into bankruptcy. Especially if you are a retailer, bucking a global market trend toward online buying. Sure, you may eventually reach your sales targets if you advertise to enough people, but your ad spend will be unbelievably inefficient.

So we have to make better use of the data we already have, and develop algorithms that truly learn. Then we leverage those algorithms to make better media buys with less waste.

Heimlich advocates buying against the standards of the MRC and the ANA, and avoiding vendors who are not transparent:

By forgoing transparency, viewability and/or fraud protection, bad actors get away with appearing to deliver more value per dollar. How much this practice is fueling the growth of Google and Facebook isn’t exactly a mystery.

Advertisers’ finance and procurement departments should implement a compliance regime based on industry standards, with regular audits to keep marketers honest. This was very difficult before the ANA and MRC caught up to the marketplace. Now, it’s mature, and there should be no excuses.

Think about that the next time you are tempted to spend all your budget on Facebook.

Agencies Merging in the Face of GDPR

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.