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.

ZINC Formats and Services Still Available

A ZINC customer called us this morning and expressed surprise and concern that our outstream offerings might no longer be available. We hurried to reassure him that we were just changing the brand name and that the same formats he wanted to buy would be available from the ZEDO site under the ZEDO name.

We are making some updates to the ZEDO site to reflect this new positioning, and we will be shutting down the ZINC Twitter and Facebook accounts after we make the announcement.

The reason for this should be obvious: five years ago when we launched ZINC it was because we didn’t want our publisher partners to think we were abandoning them. We thought they’d be confused. There were so many acronyms: were we an SSP, or a DSP? Well, we were and are both.

Five years later, things have changed in the industry, and it is no longer unusual to serve both sides of the digital advertising ecosystem. Also, in that intervening time we became a secure platform.

Rest assured, nothing has changed except the way we go to market, which I hope will become less confusing as we develop the single brand.

For more information, get in touch with adsales@zedo. com.

ZINCx Merges with ZEDO: Will Operate as ZEDO

We are pleased to say that we are merging our ZINCbyZEDO brand back into ZEDO. As of August 1, 2018 both divisions will operate as ZEDO.com and the ZINC site will shut down.

We launched the ZINCbyZEDO brand five years ago to sell high impact formats to agencies and brands. In our first blog posts on the ZINCx.com site, we told everyone that 2014 was going to be the year mobile video ad spend would grow. We knew mobile would be different, and that it would require some special ad formats.

At the time, it was difficult to message the direction in which we were headed: to create and market the kinds of ads our publisher partners would need as consumers shifted to mobile. So we decided, rightly or wrongly, that the simplest thing to do would be to create another brand on the advertising side of the business to avoid confusion with our publisher partners, who knew us as an ad server.

Back then, serving both side of the ecosystem was not being done, and that’s why we had trouble positioning our capabilities. Your company was either a DSP or a SSP. The industry was just a gobbledygook of acronyms categorized by the now legendary LumaScape.

What a difference five years makes! Our company, in response to industry trends, evolved into a private, proprietary platform on which either buyers or sellers could transact. We shifted our focus to avoiding ad fraud and malware by creating a sort of closed loop between our publisher partners and our agency contacts.

But the truth is that ZINCbyZEDO was a middleman in the transaction between brand and publisher. Now that greater transparency is possible, we are eliminating ourselves as a middleman so a greater percentage of the advertising dollar actually goes to the publisher.

We are also taking steps to make sure that we’re not holding any brand customer data, or sharing it in potential violation of GDPR. Some larger companies have spent millions of dollars to make sure they comply. That’s out of our price range. It’s simpler and more authentic simply to retire the ZINC brand and continue our original mission to be a revenue-enhancing partner for publishers.

We’re not letting people go, we’re just shifting them around within the company. We are, however, slowly making some updates to the ZEDO site to reflect this new positioning, and we will be shutting down the ZINC Twitter and Facebook accounts after we make this announcement.

The digital media industry is a wild ride, as are most businesses as technology continues to advance and consumers continue to make choices. After nineteen years, we know that the way to ride this horse is not to fight it, but to work with it, and that’s what this new move means to us.

 

 

Advertising in the Post-Advertising Era

As usual, we’ve been thinking about advertising, and about its future.  To help us grapple with the days ahead, we’ve read two very interesting pieces this week. One  is from a book called Frenemies by longtime media journalist Ken Auletta who has written “Annals of Communication” for the New Yorker since 1992.  Auletta’s book is about the disruption of the ad business by all the new technologies that have affected it during the past two decades. His thesis is that advertising won’t go away, because it is necessary for consumers to get information about products and services, and subscriptions can’t reach all of the people who need to know. Auletta reminds us that both Clinton and Obama agree that consumers are strapped, having not gotten wage increases in over a decade.

Thus advertising, he contends, is still necessary to feed the free or nearly free content that we all want to see.

 In a non-state-dominated economy, advertising is the bridge between seller and buyer. It would seem an obvious statement, but I’ve found it bears repeating. And that bridge is teetering, jolted by consumers annoyed by intrusive ads yet dependent on them for “free” or subsidized media. In this sense, consumers are frenemies.

Because he begins from this premise, Auletta can spend most of his book talking about what’s happening to the agency business. He calls frenemies the brands who are taking their work in house, the consulting firms like Deloitte that now run their own digital agencies, tech firms that buy and sell media, and the usual competitors who now have to deal with each other because few brands have a single “agency of record” anymore. He can also focus on some of the colorful characters in today’s agency world like Martin Sorrell and Gary Vaynerchuk.

On the other hand, media marketing guy Andre Redelinghuys takes a far more pessimistic view of the future of advertising, because he believes the need for advertising is dependent on a need for distribution that can be met in ways not possible previously.

Terms like ‘Disneyflix’ and ‘Apple Prime’ essentially describe how the most powerful global brand owners are coming to terms with the new rules of engagement. This is not just another story of new versus old, it’s a fundamental shift in the natural order of consumerism. Brands have traditionally been prized, while distribution has been more commoditized. The ‘must have’ things held the power. But if the pipes into people’s lives have become more powerful than the products that go through them, then we’re in the beginning of a new era. and the change is just beginning.

In his view, “pipes” into the home, car or phone now have all the power, and consumers no longer value brands — they value convenience. Ordering household goods from Alexa is one of his big examples. as is using a Nespresso machine and ordering whatever pods fit the machine rather than choosing a coffee brand.

Brands have always fought for a place in consumers’ hearts, and then relied on their loyalty for repeat business. Pipes are structural relationships that don’t rely on such fickle factors. They are built on more vertically integrated distribution channels and behave more like utilities — a way into people’s homes and lives attached to an account.

Amazon is the ultimate pipe. Their entire value is that they bring things to you — the things can change as necessary: movies, pickles, sneakers. They own the interface, the invisible moving parts, and the household. They understand your preferences intimately and have become arbiters of choice in many homes.

I’d argue here that Amazon is also a brand, in the same way Facebook is a pipe, and that the “convenience” of pipes is constantly being weighed against the sacrifice of privacy we make for the convenience. Thus, Facebook lost some brand equity through Cambridge Analytica, and who knows what inevitable mishap can befall Amazon, whose personal assistant already send private conversations to one family’s contacts.

I’d also argue that while things have changed, we are still feeling our way around the post-advertising world.

Cannes Lions: Are They Even Relevant This Year?

This is the week of the Cannes Lions Awards, the Oscars for the ad industry. Early reports say it is a smaller, more serious awards festival this year, perhaps because it had become too overrun with tech companies to feel creative anymore, and perhaps because the advertising industry is too  engaged in navel gazing for clues about its own continued existence to spend $20,000 an executive to send the large delegations of previous years.

Sir Martin Sorrell will be there talking to author Ken Auletta as previously planned, although Sorrell has, we think, had a #metoo moment this year and has stepped down from GroupM.  Preliminary reports say there are also fewer branded  yachts, and especially fewer ad tech yachts.

Behind the scenes, outside Cannes the industry soldiers, on trying to solve its problems, which are multiple. Viewability was a problem we were supposed to have solved five years ago. Only at the same time we tried to attack that problem we were also worried about ad fraud, malware, and scale.  Nobody wants to believe that to prevent everything else we have to let go of scale. But we probably do. Remember three years ago at the IAB Leadership Summit when attendees were literally running between town halls on each of these multiple subjects?

None of these worries have gone away, and advertisers are losing patience with ad tech. Perhaps one of the reasons brands have pulled back on their participation in Cannes is that the combination of angry consumers, unviewed ads and the spectre of regulation has made advertising more of an infrastructure business than a creative business. Who cares what brand or agency made the best ad last year when that ad probably wasn’t viewed? There’s more important knitting to be minded.

Because advertisers have wised up about the cost to their bottom lines of unviewed ads, exchanges have had to change their business models to eat the cost of those ads. Their solution to this problem is to run campaigns on private exchanges guaranteeing viewability. But then what happens to scale?

These concerns appear to us to be the canaries in the coal mine. Far more important is the larger movement away from brands entirely. For example, the online merchant Brandless offers everything from dishes to popcorn at prices listed proudly as $3.00. The Brandless site talks about the “brand tax” consumers pay for name brand merchandise.

Brandless is only one of the seismic shifts happening to advertisers. Generic brands have steadily gained power. Another, larger threat is Amazon. At first, Amazon cooperated with brands, offering them Dash buttons and other methods that made it easier to re-order your favorite laundry soap. However, Dash buttons have given way to Amazon Basics, a competitor to Brandless that can be ordered from Alexa.

It’s too early to tell whether millennials, as they gain spending power, will develop any brand loyalty at all to consumer products. A study last year pointed out that 51% of them had no brand loyalty. When they do like brands, they tend to favor Apple and Nike, not Tide.

 

 

 

Forget GDPR: Mobile Ad Spend Will Continue to Grow

As usual, the digital advertising world is about to change. Several factors have caused this next round, and only a minor one is GDPR, which proves to be something we can all get over by checking another bunch of boxes to say we accept cookies.

But companies have invested quite a big in getting ready for GDPR, and they’re not going to let that go to waste, so here are the ways advertising will change again:

1)Some publications are going to re-ignite direct sales, in the name of transparency and brand safety. Although programmatic will continue to grow, we’re already seeing the return of the I/O, which was a staple of the industry. To guard against misplaced advertising, I/Os specify context. This may seem very old school, but there’s benefit in having ads placed next to relevant content. Facebook and Google already know this.

2)Some players are experimenting with the block chain. There are at least three solutions that experiment with the blockchain. The first is the Brave browser and the Basic Attention Token (BAT) a way of paying content providers micropayments for traffic. No one is under the illusion that this will replace advertising, but it may co-exist nicely with fewer ads. There is also a startup called KindAds, a blockchain platform that wants to decentralize online advertising process by connecting advertisers directly to publishers to remove the intermediary service of ad networks.

And  there’s AdEx, which is attempting to boil the ocean.

AdEx is a blockchain-based ad exchange that seeks to minimize advertising fraud by providing a platform for advertisers to connect with publishers. AdEx also wants to solve the problems around lack of consumer consent, privacy concerns, and data misuse. For one, users get a dashboard where they can choose the kinds of ads they want to see, the firm uses blockchain technology to anonymize user data, it creates a data trail to verify clicks/views in ad campaigns

3)Industry groups are promoting transparency. IAB, the industry’s self-regulating body, has released a framework for acceptable ads, as has the Acceptable Ads Exchange initiative of Ad Block Plus, and several other trade associations. The goal of these efforts is to show consumers the industry can and will self-regulate.

In the meantime, we can be sure digital advertising growth will continue, because Mary Meeker has identified a $7B delta between the growth of time spent by consumers on mobile devices, up 29% since last year and growth of mobile ad spend, which is only up 26%.

 

Digiday Video Summit Reflects Industry Changes

The Digiday Video Summit took place the same week the standards of data privacy totally changed, and as a result it was a meeting of video publishing executives wondering what their next strategies would be and sponsors from the world of “monetization,” “advertising,” and “mobile targeting” who knew even less about the future trying to help them. It was truly a conference of the blind leading the blind, because there were precious few of the people who pay the bills — brands and agencies–in attendance. Those people are focused on the larger question of how they can use their customer data.

As a result, we heard several publishers say they are not going to launch in Europe until after GDPR shakes itself out. Others without a big business on the continent have decided to withdraw completely. In Europe, the Digiday Video Summit will be even more fraught, because it takes place there on June 5.

Whenever there’s change, there’s opportunity. We think the future lies in several different directions, some of which are being discussed at the Summit, others not so much:

Original content

There’s still a market for original video content, if it is good. Netflix and Hulu are testimony to that. And although they subsist on subscriptions rather than on advertising, Hulu at least is going to try allowing subscribers who don’t pay the ad-free premium to download their programs along with ads.

It’s interesting that no one has yet tried what Leo laPorte and Twit.tv have been doing for a decade now, which is  live TV content downloadable as podcasts, supported by advertising. Leo long ago decided that he was going to trade quality programming for scale, and like many podcasts he mostly does his own ad reads. Most podcasts are content to be audio only, and they go for a different audience than the video podcasts. We predict more niche video programming, which will find its own audience without much targeting, because the audience is already interested in the content. It seems so simple to run brand ads against specific video content, but we think the agencies and brands haven’t washed their hands of data dependence yet. It will happen. It will have to.

Branded Content

Branded content is a tricky one. If it’s really good, like Red Bull, it can foster deep engagement. But it’s important to have the right brand and a totally immersive experience. Many agencies have focused too much on data and metrics the past decade, at the expense of great creative.

Content Based on Videogames

Some of the speakers at the summit did talk about how video content could be generated from videogames and attract viewers who have been playing those games.

LCI

This is a new one, and so big that it already has its own acronym. It stands for Limited Commercial Interruptions, and it means fewer ads but higher ad prices. TruTV has been doing this since its rebrand in 2016, with great success. Its viewers spend more “tune time” and their revenues have gone up. Their audience is Millennials with incomes averaging $70,000 — a very desirable demographic.

Like every digital media conference we’ve ever attended, this one made ample use of the words “wild ride,” “rollercoaster,” and a one I had never heard before, “calamitous.” Nevertheless, the conference was pricey and the room was full. Things can’t be that bad.

 

Time to Re-Examine Google’s Ad Server?

After more than two years of saying very little about its preparations for GDPR, Google has now made several changes that reveal how things will change for the rest of the ecosystem. During a call with the IAB Europe GDPR Transparency and Consent Steering Committee, Google disclosed that it has a new tool in beta with some DFP and AdSense customers called Funding Choices.  Funding Choices limits the partners a publisher can share consent with to a dozen.

This is a similar consent tool to other Consent Management Platforms like Admiral and Sourcepoint. A full list of IAB-registered CMPs is here.

The Google consent interface greets site visitors with a request to use data to tailor advertising, with equally prominent “no” and “yes” buttons. If a reader declines to be tracked, he or she sees a notice saying the ads will be less relevant and asking to “agree” or go back to the previous page. According to a source, one research study on this type of opt-out mechanism led to opt-out rates of more than 70%.

Google’s and other consent-gathering solutions are basically a series of pop-up notifications that provide a mechanism for publishers to provide clear disclosure and consent in accordance with data regulations.

As a company that began its life as an ad server, we have been struggling to find out whether we play at all in this full-employment scheme for lawyers, since we do not hold data or sell it. The situation is made more fluid because publishers do not have to accept the Google solution, and large publishers like Axel Springer have developed their own CMP technology.

Another announcement made by Google last week seems to have made  multi-touch attribution attribution much more difficult, because as of May 25 google will no longer provide DoubleClick IDs for data from its had server and DSP, or Cookie IDs and IP addresses from its exchange.

According to Martin Kihn, Research Vice President for Gartner,

Without these IDs, exported DCM log files can’t be used to determine true reach and frequency or to build MTA models, which are by definition user-level. MTA is not the only way to measure the true impact of ads but is theoretically the most accurate and provides by far the most detailed results.

Of course marketers are scrambling. But didn’t everyone in the industry expect this? This, after all, is the objective of GDPR, to preserve the consumer’s privacy.  The consumer does not care about the accuracy of Multi Touch Attribution customer campaigns, and for Google especially there is no other alternative. Google doesn’t really have to care about its ad-serving business (DFP), which it acquired over a decade ago and which is responsible for a very small part of Google’s revenue.

And it’s not as though a company the size of Google can slip under the radar of the GDPR, because it has already been fined and I’m guessing that other than Facebook, Google’s going to be under the greatest scrutiny by GDPR enforcers.

Remember, not everybody has to use Google as an ad server.

 

 

Lost Trust is Hard to Rebuild

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

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

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

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

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

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

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

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

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.