Legacy Publishers Grapple with New Competition at CES

CES (formerly known as the Consumer Electronics Show) is a wonderland of new gadgets, technologies, and possibilities. For the past few years, its focus has been on concept cars with huge screens that can drive themselves while the passengers watch video, and connected home devices that use microprocessors and networks such as wireless, Bluetooth, and NFC (near field communications) to make themselves smart. The connectedness of all inanimate objects around you is called the Internet of Things. The ubiquitous robots seen at CES are also part of the IOT.

In the same way your automobile can inform you that it’s running low on fuel, the most advanced refrigerators can both alert you that you’re running low on milk. But unlike the car, appliances can now connect to your home digital assistant (Apple Home, Google Assistant, or Amazon’s Echo) to help you order more.  This year’s most unusual Internet of Things products included a smart breast pump for nursing mothers and a smart toothbrush with a video camera that takes pictures of the inside of your mouth that you can share with your dentist — or your mom if you’re a kid. Yes, many of these gadgets are silly, and that’s part of the fun of CES. See also “Hair Coach,” a smart hairbrush.

But others are going to evolve into platforms through which brands will be able to talk to consumers. The most obvious platform so far has been the connected car, because now that all cars have display screens built into their dashboards there’s an opportunity to think of the car as “publishing” content to its passengers, whether it be diagnostics or entertainment. And where there is publishing, there is also a marketing opportunity. To that end, Ford has partnered with Amazon to use the Alexa voice technology in its cars next year. Other automakers have chosen to partner with Apple for its Siri technology, or Android for Google Assistant.

The car as a platform is forced to use voice technology because of safety concerns. However, household appliances are not limited that way, and in the next few years they will also become publishers of a sort, delivering information about themselves to consumers and collecting consumer data in return.

In 2017, there will be many other new platforms we can consider as publishers, and those publishers will hope to monetize through advertising — but not in the old way. It’s been twenty years since publishing began to become digital, and it is almost shameful that we’re still for the most part serving up digital versions of the same formats we used in print and TV: 15 and 30 second spots, and display ads on pages. We’ve begun to evolve with native advertising, but that’s just in its most rudimentary phase.

A better example of what is to come in the future is Weiden+Kennedy’s effort to build a virtual cellular network for Verizon within a Minecraft game. The network allows players to make phone calls.  Call that a native ad, call it a sponsorship, call it a product placement, or whatever you wish; that’s how the market is headed and we need to spend time creating new formats to take advantage of the exciting new platforms. At last week’s CES, many brands and agencies were there simply to learn about new mixed reality techniques that can be used to talk to consumers.

At ZEDO, we’ve designated 2017 as a year of innovation for ourselves, as we begin to develop tools for our publisher and agency partners to reach consumers in new ways.

The Smart Hairbrush, one of the new IOT gadgets at this year's CES

The Smart Hairbrush, one of the new IOT gadgets at this year’s CES

 

2017: A Different Year

Because we’ve been watching the industry since before the turn of the century — yes, we were founded in 1999 –we find it amusing to see people try to predict what’s going to happen in ad tech, despite the fast moves that upend the predictions year after year. 2017 will be no different, but we’re going to throw our ideas out there anyway.

  1. Facebook will find itself in greater trouble than ever after a year of disillusioning metrics for publishers and de-prioritization of their content. Analysts have said that the rise of “fake news” sites on Facebook corresponded with when the company tweaked its newsfeed algorithms to favor user-generated content over that from professional publishers. User-generated content turned out to be hundreds of sites generated by Macedonian teens who now are empowered to think they may have influenced the American election.
  2. Advertisers will thus re-think the percentage of ad spend they allot to Facebook, and spend more dollars on sites they know are premium and are still destinations for their targeted buyers.
  3. A confluence of changing ideas and necessity brought about by the percentage of people using ad blockers will re-define reach and scale, making the definitions more about reaching the “right” customer, and not just about reaching someone who will find the ads offensive or irrelevant and turn her ad blocker on again.
  4. Digital video CPMs will continue to rise, because video is the only way to reach viewers on mobile, especially on non-video sites. Outstream video will continue to outperform the market, and ZINC’s innovation suite will continue to outperform its competitors.
  5. More venture funded ad tech companies will run out of money without having found a business model that adds value to either the advertiser or the publisher, and they will be forced to either shut down or be acquired as revenue becomes the major source of expansion funding.
  6. The ad industry in Europe will be quietly preparing to leave London as new data privacy guidelines and the Brexit create business challenges that make staying in the UK more difficult and expensive.
  7. The nascent mobile advertising industry in Africa will grow faster than almost any other reason except perhaps southeast Asia, because of the rapid deployment of inexpensive smartphones.
  8. Snapchat’s IPO will cause a flurry of interest on the part of advertisers until they realize it has pivoted to be a camera company. Brands will experiment with it and not be able to prove ROI for a long time, if ever.
  9. Digital video advertising will finally get its due as a great way to do targeted branding campaigns.

 

DigiTrust Universal Identity for Consumers is Here

All morning we’ve been listening to a webinar on  TAG, Ad-IDD, Time-based Metrics, and DigiTrust presented by IAB. By far the most interesting new development in the industry to us, is DigiTrust  a new 501c6 that is trying to fix identity and tracking problems for digital ads.

Many publishers have been concerned about the number of third party requests to their sites. They know those requests make the consumer experience poor.

So DigiTrust has come along to standardize the identifiers for consumers. Digitrust is a cloud service that  will offer a DigiTrust ID, and a DigiTrust consent stored in a 1st party cookie accessible by third parties. As a standardized ID for all, with DigiTrust, everybody uses the same ID for the consumer.  It’s just a common language they use with their partners, giving every party proof of consent, which is already necessary in Canada and Europe and may become essential in the US soon.

It eliminates the need for pixel syncs, makes pages load faster, levels the playing field between open web and walled gardens. Publishers need to start with putting a script that sets the identifier, establishes ID and consent, and can be passed through to all their suppliers. This standardized ID makes it possible to eliminate all the other Javascript calls and provides a level of control for the publisher. If you close down Javascript access, you benefit the entire ecosystem.

How it works: the consumer views a site with DigiTrust Javascript on any browser, JS then checks if a token and consent exist, and if not a consent notice is shown to the consumer via a window shade. Any subsequent page navigation is then directed through Digitrust ID. Digitrust stores no data, and empowers NO party with incremental data. It’s just a way to identify consumers once.

DigiTrust is aiming for for 100% consumer notice and consent and all Digitrust platforms and publishers must be part of a self-regulatory program (like TAG).

Publishers pay nothing. Platforms pay. Membership fees are one-time non recurring, with monthly API subscription fees for a decryption key. The more people involved, the more cost is spread among members.

So far, 60+ ad tech platforms have indicated interest,  with 20 already paying the fees. There are also 50+ premium publishers involved. But because of the holidays, deployments are not expected to happen until Q1. For information, contact Jordan @digitru.st Digitrust

A Moment of Gratitude

Every year at Thanksgiving, I become reflective about the year that is coming to a close. It has been a tumultuous one for our industry, and for the world as a whole, but as the year draws to a close there is still much to be thankful for at ZEDO.

First, ZEDO’s incredible product development team.  Not only do our products  stay abreast of and even ahead of the industry, but they perform so well that when a customer gives us a chance to test against a competitor, we always outperform. This while taking the high road in an industry still fraught with malware, fraud, and misrepresentation.

Second, our sales teams, who never sell vaporware, but get us in front of the right customers so we can help people achieve their financial objectives on both the publisher and the advertiser side.

Third, our highly regarded support and implementation teams, for which we always receive compliments. We have always been known for our support, and this will never change because our customer relationships are not transactional — they’re personal.

Next, our customers, whom we prefer to think of as our partners. Indeed, some of our customers have been on a very long journey with us from ad serving at the turn of the century to serving advertisers with high impact formats on a secure platform today.

Fourth, our thirty party partners, the technologies that externally verify our ads to make certain we keep our promises.

And next, the industry associations we support, like IAB and the Online Trust Association, who keep on working to bring our industry greater professionalism, better research, and higher standards.

Last, but certainly not least, everyone on the ZEDO team who keeps the lights on and makes us who we are. When my friends ask me why I went into the ad tech business, I answer that it’s because of the great people I’m able to work with all the time — bright minds in a fast-moving business.

I hope you all out there in the audience remember to feel grateful for your families, your teams, your health, and your continued presence on this great planet whether it is Thanksgiving in your country or not.

 

 

TAG Releases Names of First Hundred Participants

It’s a very exciting time in the digital media business. The Trustworthy Accountability Group’s effort to clean up the supply chain has been gathering momentum all year. We’ve (ZEDO) been working on the Business Transparency Committee, and on the IQG (Internet Quality Guidelines) working group. During this first year, over 100 companies, most of them familiar names in the advertising industry, have gone through the process of registration as trustworthy partners, and have either self-attested or been audited on their business practices. All the major advertising holding companies have already been through the process, which has become more common for anyone who buys or sells advertising. In the future, the process will extent to intermediaries.

There is now an accepted transfer protocol for the transmission of registration IDs and payment IDs, and these have begun being passed back and forth during automated transactions.

“The TAG Registry is the foundation for the full range of TAG’s programs to fight fraud, reduce ad-supported piracy, block malware, and increase transparency in the digital advertising ecosystem,” said Mike Zaneis, CEO of TAG. “Through the TAG Registry and use of TAG-IDs, companies can tell which of their industry partners have taken the necessary steps to verify their business as a legitimate digital ad industry participant. When the TAG Registry is combined with the Payment ID system, a floodlight of transparency will illuminate the digital advertising ecosystem, and criminals will have no place left to hide.”

The TAG Registry is one of two parts of the interlocking “Verified by TAG” Program designed to fight digital ad-related crime and increase transparency across the digital ad ecosystem. The other core element of the program, TAG’s Payment ID Protocol, helps ensure that payments made in the digital ad ecosystem are made only to legitimate companies. The Payment ID Protocol enables intermediaries to add a unique identifier for each participant in the supply chain, allowing companies to monitor their ad campaigns and “follow the money” to see who is receiving money for each advertising impression.

Following the money will be the best way for media planners and publishers, as well as ad exchanges and ad servers, to be sure they are dealing with quality partners. The Trustworthy Accountability Group was created to spur transformational improvement at scale across the digital advertising ecosystem, focusing on four core areas: eliminating fraudulent traffic, combating malware, fighting ad-supported Internet piracy to promote brand integrity, and promoting brand safety through greater transparency.

 

Coalition for Better Ads Launches

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

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

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

The group will focus on the following initiatives:

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

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

Consumer research will be used to develop the standards.

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

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

 

 

Brexit Won’t Change Treatment of Data

The Brexit caught many people unaware and forced them to think through some digital media issues in rather a hurry. The UK has just released new privacy and security guidelines– based on the UK’s understanding of the General Data Protection Regulation (GDPR)– that will take effect in 2018, the year the Brexit is actually supposed to occur. The UK and EU have already diverged from the US by requiring all sites that use cookies to announce the policy on first visit.

British data security experts have told us privately that most visitors just click right through and accept the use of cookies, however. The practice of announcing that a site uses cookies is becoming more widespread in the US as well, and does not seem to be the reason the US is seeing the spread of ad blocking.

So cookies are not the major issue: then what are the important components? For the US, the most important issue seems to be on the security side, as US and state regulators try to prevent hacking and release of potentially personal information.  One of the problems with the US is that security is handled by the states. And the US first amendment freedoms create issues with the EU’s laws.

The EU comes at privacy and security by emphasizing the privacy side — the right of individuals to control their own data, and a prohibition against collecting data without a “legitimate purpose.” It also provides no threshold for the right to be forgotten, which is in direct conflict with the freedom of speech guarantees in the US.

If you then throw in the Brexit, the UK, which is the center of digital publishing and advertising in the EU, would have much to do complying on the one hand with US regulations and on the other with EU laws, especially when dealing with so many other potentially difficult issues.

Thus, the UK is expected to ignore the Brexit for purposes of data privacy and security, and throw its lot in permanently with the EU. It makes little sense to do otherwise, as for the next two years the UK will have to go along with everything the EU is doing to get ready for the new regulation anyway.

Moreover, companies that offer cloud-based services, no matter where they are based, will have to comply with the most stringent regulations or face fines.

What do these new regulations mean for publishers and marketers? Well, for starters the new regulations are predicted to create 28,000 new Chief Privacy Officer jobs over the next two years. Both publishers and marketers will have this window of opportunity to figure out how to serve their own ends and still operate within the EU’s GDPR.

 

 

Publishers: Don’t Abandon London Just Yet

In Europe, unlike in America, most of the scary talk isn’t about Facebook eating into the revenues of publishers, but rather of the Brexit and what it means for London as an advertising and media capital in the future.  Common wisdom and many publications have it that media companies will seek to leave London so that they can do business with the rest of the European Union after England leaves. However that involves seeing into the future in a way none of us can. Even if England does leave the EU, things won’t change over night.

We would like to suggest here that the biggest barrier to moving media companies and ad agencies is inertia. It just simply isn’t that easy for a company to change its European base,  especially with European employment laws. Nor is creative talent willing to pick up their families and move. Moreover.  people seem to have forgotten that the Brexit will not take place immediately and may simply not take place at all. It does, after all, take a vote of Parliament. No one here thinks that will happen very soon.

Politically it is very complicated in London right now, with power in both parties changing hands. To an outsider, it seems as if no one want to take the consequences of the referendum.

It will take a while for the new leadership to figure out what to do about what was voted on, and the prevailing opinion is that the politicians will drag their feet as no one wants to trigger the clock on leaving the EU just yet.

Thus our best advice both to publishers and to  agencies is not to do anything too quickly, but to see how all this settles out before causing more disruption than there already is in the industry. There is enough to think about with Facebook constantly tuning the algorithm for its newsfeed, this time in a direction away from publisher revenues, and with Snapchat emerging as a competitor for the attention of Millennials. We in the media industry should stick to our knitting until the politics sorts out.

Anti-Adblock Software Violates Privacy, Advocates Say

While the advertisers and their agencies were partying on the yachts rented by ad tech companies at Cannes, publishers were wondering how they were going to survive the latest changes in the chameleon-like digital media industry. If  you are a publisher and you want to know where your next blow to the chin will come from, it is probably from privacy advocates.

The response to the challenge before this,  the 100+ million users who have downloaded ad blockers, has been all over the map so far. The largest ad blocking extension, Ad Block Plus, an open source project, itself claims a billion downloads and 100 million users. What’s a poor publisher to do?

Some publications, like Forbes, offer visitors who use ad blockers an “ad-lite” experience if the whitelist the site. Others, like Wired, ask the reader to be a good guy and remember that publishers need ad revenue to stay in business. Still others are simply refusing to serve content to visitors who have installed ad blockers, and are running scripts on their pages to detect such visitors and repel them.

As a response to the anti-ad blocking movement, privacy advocates have begun to counter that scanning to see if a user has an ad blocker installed violates privacy. One of those advocates, Alexander Hanff, has been telling just this to European regulators.

In May he sent a cease and desist letter to technology media company IDG UK, one of the many publishers he claims violates his right to privacy (and European laws) by scanning his machine for adblockers without his permission. He plans to expand his cease and desist campaign in the coming months to publishers in almost a dozen countries, including France, Estonia, The Netherlands, Poland, Germany, and Sweden.

Hanff, CEO of the security firm Think Privacy,

says he’s sympathetic to publishers struggles’ with adblocking, but argues that it’s their reliance on third-party advertisers and the ad ecosystem that’s the real issue. “The problem is ad blocking is being seen as a disease, when in reality it’s the symptom of one: the advertising on their pages.”

Hanff’s campaign is based on his interpretation of article 5.3 of the European Union’s 2009 ePrivacy Directive, known as the “Cookie Law,” which says that readers must give consent before publishers can store or access information stored on their devices. Scanning a user’s system to see if they’re using an adblocker, in Hanff’s view, violates that provision.

IAB Europe has decided to release its own set of guidelines for ad block detection that do not violate privacy guidelines. It  believes not all ad block detection violates privacy.

The ad block wars have just escalated another step and most publishers are just taking it one day at a time.

 

Agencies Forced by Trends to Seek New Models

June was not  the most fortuitous month for advertising agencies. Not only did the Association of National Advertisers’ report on business transparency issues in our media buying ecosystem come out, tagging most of the big players with  borderline unethical if not illegal practices like kickbacks, but Kevin Kelly’s new book “The Inevitable,”  published on June 9, talks about getting rid of advertising agencies altogether and having marketers just pay influencers to promote their products, cutting out both agencies and publishers.

You will need to know the reasoning behind that position.

First, who is Kevin Kelly? Kelly is a very well-known and respected tech thinker, one of the founders of Wired magazine.  In this latest book he talks about a dozen trends  that we should embrace rather then resist, because they are going to be very important in the next couple of decades. Of course there are the usual suspects like artificial intelligence and robots, But Kelly also talks about changes in intellectual property rights since the dawn of the Internet. He characterizes the Internet as a gigantic copying machine capable  and laughs at our thinking we could impose digital rights management on intellectual property  online.

He also talks about the incredible proliferation of content spawned by the Internet, and the fact that the most valuable commodity today isn’t content  — it’s attention from consumers who are confronted by an almost overwhelming variety of it. So why should we have to pay for it ?

Kelly suggests that in a future of limitless content the advertising model may well be flipped on its head, and consumers would be paid directly to watch ads and try products without agencies as intermediaries. Or, in another variation, publishers would choose the ads on their pages and could even craft a publication just by stringing together really cool ads:

The simple idea is that you can craft a publication, or a reading/viewing experience, primarily by choosing and sequencing ads. Selecting the right cool ads — not merely cool content — is the attraction. Not just tiny adsense text ad boxes, but full page ads, or even commercials inside widgets. When I was part of the team making Wired magazine a decade ago, half the battle at launch was landing the right cool ads. We had to convince the advertisers to join (and pay) us. But what if we could just choose the cool ads we wanted, without having to ask permission? What if we could simply harvest the the best ads (measured by any metric we choose) and were paid for the ones we ran according to the traffic we brought to them?

In either of these new models, advertisers would not control where their ads appeared and thus the role of the traditional agency would be over.