- Digiday | Upping dispute over political ads rules, The Financial Times pulls Facebook ads from the UK (3 min read)
- The Washington Post | Apple’s Tim Cook blasts Silicon Valley over privacy issues (4 min read)
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Adweek | What a Decentralized Web Means for Digital Advertising (4 min read)
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The Financial Times | How smartphone apps track users and share data (8 min read)
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The Atlantic | How Facebook’s Chaotic Push Into Video Cost Hundreds of Journalists Their Jobs (9 min read)
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The Guardian | ‘He’s my guy’: Donald Trump praises Gianforte for assault on Guardian reporter (4 min read)
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The Hollywood Reporter | Apple CEO Tim Cook to Back Strong Privacy Laws in EU, U.S. (2 min read)
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Axios | Digital transition triggers ad industry trust crisis (3 min read)
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The Drum | Siri: What will advertising on voice look/sound like? (5 min read)
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The Guardian | Facebook and Google are run by today’s robber barons. Break them up (5 min read)
Category results for "Perspectives"
DCN’s must reads: week of October 25, 2018
5 big takeaways from the NewFronts West
The Upfronts in New York were always about making big advertising deals before the TV season kicked off. Then came the NewFronts, which focused on digital offerings and innovative formats. Now comes the NewFronts West, an extension of the NewFronts that took place in Los Angeles this month, and which have evolved even further from the original Upfronts. Gone was the talk of making big ad deals. In its place was discussion of new platforms, new formats, and new ways to reach younger audiences with influencers, podcasts and, of course, online video.
In short, the personality and networking surrounding this event fits in perfectly with the ethos of Silicon Valley and Hollywood, the major West Coast hubs that have insinuated themselves into the ad market like never before.
Here are five big takeaways from the inaugural edition of the NewFronts West:
1. Big Ad Deals Take a Back Seat to Relationships and Emerging Models
Closing major ad sales was hardly the focus at this event. One reason is was that it took place outside of the traditional media buying season. Also, because there was a mix of digital-only and legacy media publishers, it offered a chance for all parties to stand out with new types of offerings.
In fact, it was the kind of space where people new to the game could come in and introduce themselves. And it was a chance to think less about traditional models of advertising and more about emerging prototypes that are just beginning to gain traction, like branded content, custom sponsorships and opportunities for publishers within Instagram’s IGTV. These avenues are especially interesting to advertising execs as ad-free platforms take hold and audiences become more and more fragmented.
Even the New York Times, one of the more well-known heavy hitters at the event, saw the NewFronts West less as a space to close deals and more as a brand marketing opportunity to talk to people about how the Times works with advertisers. In this way, the event was much more future-focused. The hope, it seemed, was that building relationships now would reap benefits down the line.
2. Podcasts Are Not Slowing Down
Podcasts have exploded over the past few years, with nearly every publisher producing some or at least considering them. But after BuzzFeed and Slate’s Panoply cut back on offerings, it was easy to think that perhaps the hype had gone too far. Judging by the NewFronts West, those cutbacks might only be a hiccup.
The Los Angeles Times, Gallery Media Group and Ellen Digital all announced new podcasts. The L.A Times announced new podcasts about a drag racer, “Big Willie,” and a reporter’s search for a hospital patient called “Room 20,” following in the footsteps of its popular “Dirty John” podcast co-produced with Wondery.
Podcasts have always been favored for the intimacy that voice offers, but a compelling host is also arguably the best brand influencer for an audience. With 92% of consumers leaning toward product recommendations, according to a FameBit presentation, podcasts are a more personal way for hosts to promote products.
3. Vice Media’s Brand Safety Splash
While there have been a lot of efforts around promoting brand safety for advertisers, Vice Media made a big splash at the NewFronts West by countering widespread use of keyword blocking by pushing a more contextual approach from Oracle Data Cloud.
Vice executives released the findings of an 18-month long study abut keyword blacklists, which are meant to flag potentially objectionable content for advertisers. Turns out they place LGBTQIA-related keywords high on the list, including “gay,” “transgender” and “bisexual.” The study also found that the keywords “Asian,” “Muslim,” and “interracial” also appear at the top of these blacklists.
For a media brand that prides itself on diverse and inclusive programming (as its executives said), Vice’s announcement made a big statement. Vice then said it would be testing Oracle Data Cloud’s contextual brand safety solution, which offers deeper analysis and scores content based on its storytelling context. They also called for other publishers to follow suit. Now we’ll have to see if Oracle Data Cloud stands up to its reputation.
4. Advertisers Will Have to Work Harder to Reach Audiences
Part of why the West Coast’s approach to the NewFronts is so attractive is that advertisers have realized they have to work much harder to secure the attention of their audiences. Thus, they’re more willing to try new platforms and experiment with techniques that are still nascent like Alexa skills, brand-sponsored podcasts or e-commerce enabled videos. Platforms like Netflix and HBO have made commercial-free viewing experiences de rigeur, and readers on the internet can also easily block ads they don’t want to see.
What to do? Create advertising that consumers can’t not pay attention to is the answer. Advertising executives are anticipating that the traditional model of advertising will evaporate sooner rather than later. So, they’re trying to stay ahead of the curve for their own survival and efficiency. That’s a no-brainer. Having influencers on IGTV or other social platforms pitching products for them has become one way to do that.
5. Snapchat Pushes More Scripted Shows
As Facebook has struggled with battles against misinformation (and lost data), Snapchat continues to move forward with its own programming. At NewFronts West, the L.A.-based social app announced a host of new serialized, scripted shows for the launch of what it’s calling Snapchat Originals. It feels a little bit like Netflix’s foray into originals, except the projects will be shot in a vertical format and feature six-second unstoppable ads. It’s definitely a big endeavor, and one to watch – even if it means that other tech giants may want to, ahem, copy this strategy as well (looking at you, IGTV).
The bottom line coming out of this year’s NewFronts West is that it’s much more important to be strategic about new advertising models and partnerships than it is to partner with name-brand entities and existing prototypes. While tried-and-true advertising formats may sound good in theory and work for the time being, they may not be viable in the future. This event gave publishers a chance to zero in on those emerging ideas. If an event like the NewFronts West can continue to present itself as the more future-forward alternative to the East Coast’s spring NewFronts — and reiterate the fact that not all agencies and ad shops are in New York — it has the chance to develop an even larger following for future shows.
DCN’s recommended reading: week of October 18, 2018
Our picks of the must-read stories from around the web:
- The Wall Street Journal | Advertisers Allege Facebook Failed to Disclose Key Metric Error for More Than a Year (4 min read)
- CBS News | “Far from an honest mistake”: Facebook accused of inflating ad data (4 min read)
- NiemanLab | Did Facebook’s faulty data push news publishers to make terrible decisions on video? (11 min read)
- The New York Times | New York Attorney General Expands Inquiry Into Net Neutrality Comments (5 min read)
- Axios | The next big wave of publisher traffic (2 min read)
- Digiday | Why the FBI is investigating media buying practices (4 min read)
- The New York Times | In Virginia House Race, Anonymous Attack Ads Pop Up on Facebook (4 min read)
- The Drum | Neuroscience and ‘baked in’ brand safety: how BBC Global News pitches its content arm (4 min read)
- The Financial Times | Tame tech and drive innovation towards a fair inclusive society (3 min read)
- The Hollywood Reporter | “There’s a Shakeout Coming”: Streaming TV’s Arms Race May Make Cable Look Like a Deal (5 min read)
- AdExchanger | Bloomberg’s Bullish Plan To Make Digital Media Work (5 min read)
In-house agencies on the rise with marketing companies
More marketing companies than ever before have in-house agencies to build brand strategies and brand creatives (traditional and digital). In fact, according to a new ANA report, The Continued Rise of the In-House Agency, 78% of client-side marketers report having an in-house agency, a sharp increase compared to 58% in 2013 and 42% in 2008. Growth of in-house agencies is recent with 44% of respondents reporting their in-house agency was established within the past five years. Eight in 10 marketers (79%) are highly satisfied with their in-house agencies. A full 20% are completely satisfied.
In-house agencies provide many benefits, with “cost efficiencies” and “having better knowledge of brands” ranking top. “Institutional knowledge” and “dedicated staff” rank second highest as benefits.
In-house agencies provide a range of services, including content marketing, creative strategy, data/marketing analytics, media strategy, programmatic and social media (both creative and media). It’s not surprising that 90% of respondents report their workload in-house agency is increasing compared to a year ago. At least two-thirds cite that their workload is increasing “a lot.”
Key trends include:
- 36% of companies say they are bringing media strategy and planning functions in-house, compared to 22% in 2013.
- 30% of respondents have in-house programmatic capabilities.
- 79% of respondents have in-house video production capabilities.
The biggest challenge for in-house agencies is managing growth, managing workflow and scaling and managing resources. Importantly, in-house agencies must remember to step outside the box and include an outside perspective of the brand.
While in-house agencies were once the exception, they are now the norm. The survey identifies the benefits of in-house agencies in four key areas:
- Strategy: confidentiality, better knowledge of brands and institutional knowledge.
- Creative/tradition media: creative expertise, less talent turnover and dedicated staff.
- Creative/digital media: speed, nimbleness, integration is easier and creative expertise.
- Media Planning/buying: cost savings/efficiencies, full ownership of marketing data and greater control.
Despite the growth of in-house agencies, marketers still work with external agencies. In fact, nine in 10 respondents report working with an outside agency. Nevertheless, marketers continue to invest and develop their expertise because in-house agencies allow them to build infrastructures that help weed out inefficiencies.
Instagram vs. YouTube: Who will win the digital ad war?
YouTube is currently the most popular platform for video content. So, it’s no surprise that when Instagram released IGTV, its stand-alone app for long-form vertical video, everyone’s first reaction was to compare the two. And YouTube pretty much always came out on top.
However, in the past year, YouTube has been under fire for brand safety issues. In fact, there was a point when 250 brands stopped advertising on YouTube at the same time in order to protect their assets and brand image. To date, many advertisers still believe that YouTube has done a poor job of preventing its advertisers’ brand safety issues, even though they have gotten better at the response.
This led us to host a panel discussion on October 4th to ponder a key question: With YouTube in its most vulnerable state, and given its ongoing brand safety concerns, is it IGTV’s time to steal advertisers away?
The discussion, entitled “Instagram TV vs. YouTube: Who Will Win the War?”, was moderated by Kerry Flynn of Digiday. The panel consisted of five advertising experts: Kaydee Bridges, VP of Digital & SM Strategy at Goldman Sachs, Elijah Harris, VP, and Head of SM, US at Reprise Digital, Noah Mallin, Managing Partner at Wavemaker North America, Brittany Richter, VP and Head of SM, US at iProspect, and myself.
The discussion offered three key takeaways:
1. YouTube still wins the popular vote.
The majority of panelists agreed that brands interested in video content should be on YouTube rather than Instagram’s IGTV. They pointed out YouTube’s benefits: It’s cheaper, long-form content performs better on YouTube, and it’s better for sharing. Elizabeth Richter, iProspect’s Head of U.S. Social Media, offered a different point of view, arguing that Instagram may work for some brands: “If a brand is struggling with their messaging, or just getting started, Instagram’s IGTV is best because they can experiment with different brand messages and see how consumers respond,” she commented.
2. Instagram’s IGTV is transforming and expanding in promising ways.
For Elijah Harris of Reprise Digital, the early IGTV experience was underwhelming. Its focus was to share long-form content from those he followed on Instagram – something he didn’t enjoy. However, Harris added that the platform currently offers more opportunities worth exploring, raising his confidence in its potential for the future.
3. Instagram’s IGTV isn’t quite ready to compete with the big boys.
Elijah Harris suggested that, if it wants to compete with YouTube, IGTV needs meta tags and better discoverability. To go up against Snapchat, he added, it needs curated content and multi-channel network (MCN) participation.
Noah Mallin of Wavemaker believes that, to compete with Snapchat, IGTV needs “breakout content,” even suggesting that it might fill the void left by the demise of Vine. (“I’m still mourning it,” he confessed). Mallin added that YouTube is “stuck in desktop mode” and must quickly adapt for mobile users.
The consensus was clear. IGTV wants to be the most popular platform for video content. However, it still has a lot of growing up to do. Perhaps Instagram will take note of our panel discussion, and we’ll see a more mature IGTV before we know it.
DCN’s must reads: week of October 11, 2018
Here are some of the best media stories our team has read so far this week:
- The New York Times | Soldiers in Facebook’s War on Fake News Are Feeling Overrun (7 min read)
- Reuters | EU privacy chief expects first round of fines under new law by year-end (4 min read)
- Wired | Google’s Privacy Whiplash Shows Big Tech’s Inherent Contradictions (5 min read)
- Digiday | Conde Nast International’s Wolfgang Blau: ‘Europe seems to play defense’ (4 min read)
- AdAge | What Google’s data snafu means for the for $88B digital ad industry (3 min read)
- CNBC | Expect continued media consolidation, because scale matters, 21st Century Fox vice chair says (3 min read)
- Forbes | The Wall Street Journal Tops A New Index Of Most Trustworthy Media Brands (3 min read)
- Recode | A few words about Cindy Lobel (4 min read)
- AdExchanger | Fraudsters Are Masquerading As Real DSPs (5 min read)
- Variety | Listen: Turner’s Jesse Redniss on How AT&T Changes the Data Game (30 min listen)
If attention is the currency for advertising, what does it take to get more?
In today’s crowded digital advertising landscape, consumer attention is a much sought-after currency. The question is: Do consumers respond better to quantity or quality of advertising? I’d make the argument for the latter and many of my industry peers agree. Compelling, informative and relevant ad content – the non-interruptive kind — is what matters the most in gaining consumer attention.
Granted, the six-second video ad (blink and you’ll miss it) came into vogue at the beginning of 2017 when YouTube/Google showcased their best quickie video ads at Sundance, encouraging more brands and agencies to adopt this “snackable” format. The rationale was that consumers’ attention is so fragmented that advertisers need to pick up the pace to keep them engaged.
However, there’s a better case to be made for longer-form advertising that is well-targeted and brings value to the viewer or reader.
I had the privilege to speak on a panel on October 2 during New York’s Advertising Week called If Attention is the Currency for Advertising—What does it take to get More? My co-panelists were engaging executives from digital advertising company Acuity, creative agency BBDO and Prudential Financial.
Among us the feeling was mutual—quality matters more than quantity and giving more control to the user is paramount in gaining their attention.
Compelling, Long-Form Creative Works
There were some great examples of compelling long-form campaigns offered by my fellow panelists. I’ll choose one here: Anna Papadopoulos, VP of Advertising at Prudential described the financial company’s latest TV campaign, “The State of Us,” which included 30, 60, and 90 second commercials centered around its retirement planning services in which real people —not actors — were featured talking about their financial futures. She pointed out that “the magic about the campaign is that it wasn’t about Prudential. It was about people’s stories.”
I shared with the group one of my favorite examples of long-form sponsored content — The New York Times Magazine’s audio podcast that launched in September (to accompany its annual “Voyages” photo essay issue). The audio content was described as a “soundscape ecology project” allowing listeners to hear real sounds of moving lava in Hawaii or bats in Mozambique, for example. GE sponsored this engaging content. This qualifies as an advertising coup in my opinion because as a consumer, I enjoyed the audio so much I actually remembered who the advertiser was!
Consumers Appreciate Native Advertising
Our panel discussion also revolved around native advertising, another long form approach. I know from experience that consumers look at native ads 53% more than display ads and native ads create an 18% increase in purchase intent. It just stands to reason. If the sponsored content that is surfaced is based on reader interests and preferences, it is way more likely to capture their attention.
What’s noteworthy is that non-social native works best. eMarketer recently found that consumers trust information from advertisers on publishers’ sites 24.4% more than on social media platforms, and 69% trust publisher site ads while only 54% trust social platform ads.
Let’s not forget that context always matters. If someone is reading a news article, they are probably more disposed to reading another article that is recommended to them (even if it’s sponsored). A more natural content experience that seamlessly integrates into the media that users are already consuming has to be more attention-grabbing.
Want Attention? Give Users Control
The panelists agreed that we need to give consumers a greater sense of control. Are your videos fully opt-in? (This means no sound and no motion unless the reader proactively opens it.) If the video automatically starts playing, most people tend to “click to skip.”
However, if the advertiser allows the user to choose to open the video, it could be 6 seconds, 30 seconds, or 60 seconds. It becomes less about short attention spans and more about earning the right attention with the right people that will actually drive good content experiences, and hopefully, conversions.
Overall, advertising should be less about the brand, the agency, or the technology company, and more about what will resonate with the consumers viewing the ad. After all, in the words of digital analyst Brian Solis, “attention is a precious commodity.”
The FBI, subpoenas, and digital advertising: Rebates and transparency under investigation
It’s difficult for any piece of news to rise above the cacophony of our current political discourse. So give yourself a pass if you missed this recent advertising industry coverage that involved the FBI and subpoenas. According to the Wall Street Journal, the FBI has issued subpoenas Havas for issues related to rebates and transparency.
Industry publications rushed to provide their take on the news:
- “Feds Probe Agencies Over Media Transparency” (MediaPost)
- “Federal prosecutors investigating shady media-buying practices in the ad industry have reportedly begun issuing subpoenas” (Business Insider)
- “Feds media-buying probe is ‘cloud that will hang over the industry’” (AdAge)
- “Advertising stocks move further down on probe news” (Seeking Alpha)
Even for a relatively high profile industry category like advertising — which is second only to Hollywood for its number of awards shows and overall narcissism — this kind of news serves as high drama. And the stakes are high, particularly given whispers of sex worker allegations and the Cambridge Analytica mess.
Contrary To The Adage, All PR Is Not Good PR
The current attacks on U.S. intelligence agencies notwithstanding, FBI investigations are generally regarded as credible. (Why else would they allocate scarce resources to them?). And when asked by Congress to report in on its activities, the FBI unsurprisingly points to successful investigations as proof of their worth, using words like “takedown,” “scheme,” and “rampant.”
Needless to say, these kind of investigations create buzz that’s bad for business. This kind of FBI attention from is catnip for industry watchers and general business press alike. This only increases the likelihood of the significant collateral damage, regardless of the investigation’s outcome.
Agencies Scramble To Find New Ways To Make Money
The rebate and transparency issue was outed years ago, and there’s been sort of a slow burn since to address these problems. Along the way, agency executives have slogged through difficult conversations with their peers (and clients) at brands to address questions and explain remedies.
The larger issue is that, even buried in the financials, rebates serve(d) as a profit stream for agencies — an industry that generates income at approximately an average rate of 13%. For comparative purposes, Omnicom generated $2 billion in net income up against $15 billion in sales (13%), while Bristol-Myers Squibb reported $5B in profits on $20B in sales (25%), and Goldman Sachs yielded $11B in earnings on $32B in revenues (34%). By this measure, the agency business is not a particularly attractive category.
That’s not to suggest that potential fraud in advertising is unworthy of examination. Far from it. The U.S. advertising industry topped $200B last year, so just a small percentage of that equates to huge dollars. However, it is nowhere near as profitable as sectors such as financial services or software, where profit margins are 3X compared to advertising.
Systematic and Lingering Implications
The challenges associated with rebates and transparency are grouped, fairly or not, with viewability and fraud (almost exclusively related to digital). These topics have received a good bit of attention in the advertising industry as a whole in recent years, though they’ve not dominated conversations. Of course, there are plenty of other things driving change in the business, from social media and video to influencer marketing and virtual reality, which have been far more interesting for everyone involved.
That’s all about to change, unless the FBI investigation reveals no wrongdoing and the effort is quietly shut down. Not many industry veterans think this is likely, however. In fact, many are preparing for the worst case scenario. An official FBI report, which would most certainly include indictments for most or all of the big agencies, could put the entire industry on its heels for years. And that makes this topic worthy of close attention by industry executives in advertising, publishing, and adtech.
About The Author
Tim Bourgeois (@ECoastCatalyst) is a principal at East Coast Catalyst, a Boston-based digital marketing audit company.
DCN’s must reads: week of October 4, 2018
Here are some of the best media stories our team has read so far this week:
- The Washington Post | Mainstream advertising is still showing up on polarizing and misleading sites — despite efforts to stop it (11 min read)
- The Wall Street Journal | Federal Prosecutors Probe Ad Industry’s Media-Buying Practices (3 min read)
- Techcrunch | Europe is drawing fresh battle lines around the ethics of big data (16 min read)
- The New York Times | Russian Meddling Is a Symptom, Not the Disease (5 min read)
- Bloomberg | Trump Administration Sues California Over Net Neutrality Law (2 min read)
- Digiday | ‘We’re giving them a harder time’: Axel Springer tries to turn up heat on Facebook (4 min read)
- CNBC | Apple’s Tim Cook: ‘Don’t believe’ tech companies that say they need your data (3 min read)
- Medium | The Rumors of Podcasting’s Death Have Been Greatly Exaggerated (11 min read)
- The Washington Post | Big tech is still violating your privacy (5 min read)
In search of a Goldilocks solution to online privacy
For years, large tech companies have spent millions on lobbying in Washington to make sure that they escape tough regulation. And until recently, they have been successful.
But today is a new day—one where tech companies are actually asking for regulation. How did we get here? Trust in tech giants is at an all-time low. And practices that include collecting untold amounts of data, even when consumers think they have privacy (see: Google Data Collection research); selling data to nefarious players (see: Facebook and Cambridge Analytica); and losing their data to hackers (see: Facebook’s newest data breach of data from 50 million users) has focused the attention of lawmakers in the EU and United States.
While past Senate hearings have at times felt like introductory classes to social media, with tech representatives slowly explaining how their platforms work, last week’s hearings on consumer privacy took on a different tone. “The question is no longer do we need a law for consumer privacy; the question is what shape these laws will take,” Committee Chairman Senator John Thune (R-SD) said in his opening remarks.
Now, the tech industry has come to realize it can’t escape regulation, and Facebook’s data breach has only heightened the stakes. But the question is how you make everyone happy with new regulation, with tech companies chafing at California’s strict new privacy laws and the European Union’s GDPR. How do we get to the “Goldilocks” policy? One that’s not too loose for consumers and not too strict for advertising and commerce. And how much will publishers need to change their ways to comply?
The Limits of Self-Regulation
In the past, as critics have expressed more and more concern over privacy — and investigations have revealed the ways in which nefarious players have mined user data for insidious targeting — tech giants have slowly policed themselves. Facebook, for example, announced in August that it would remove 5,000 options on its site that ask for “sensitive personal attributes” that enabled advertisers to hyper-target and limit their audiences.
Facebook says the move was more pro-active on its part and not in response to anything in particular, though the timing is suspicious after a lawsuit leveled by fair housing groups charging that advertising on Facebook could prevent minority communities from seeing housing ads. The routine is now becoming familiar: Scandal on a tech platform related to data. Platform tries to solve problem with new rules and its own regulation. Remember Cambridge Analytica? If not, look no further than what Facebook is currently facing with its latest data scandal.
But last week’s hearings revealed that representatives from major tech companies like Amazon, AT&T, Google and Twitter— along with the IAB, which had previously favored self-regulation — are warming up to the idea of some kind of federal legislation that, in theory, would mandate actions that might prevent future scandals. They said they’re in “widespread agreement” about that, which Google also acknowledged in a proposal for privacy regulation it published just a few days before the hearing.
Meanwhile, publishers have had to take action to comply with GDPR from Europe. And while they realize it’s a hassle, and privacy-policy pop-ups are annoying for users, there can be upsides. At a recent panel discussion at Marfeel in Spain, publishers noted that they now could take responsibility for first-party data they collect, and make sure it’s secure so that users are comfortable handing it over.
“So, I think if there’s any silver lining, it’s that publishers in general and the media companies in general are now actually taking responsibility to collect that first-party data instead of simply hoping that Google and Facebook would play nice and share some of that,” said Rithesh Menon, vice president of monetization and account management at Good Media Group.
Operating in the Shadow of Europe and California
While this may seem like a drastic change of stance among tech companies, remember they’ve already had to pivot to new privacy laws in Europe and California. In fact, the reasoning behind their embrace of federal privacy laws is that they’re trying to avoid legislation that’s as strict as Europe’s GDPR or California’s Consumer Privacy Act. That was obvious during the Senate hearing, where tech representatives called out both laws in urging Congress to “strike the right balance,” as Leonard Cali, AT&T’s senior vice president of global public policy, put it.
Representatives from Google, Apple, and Twitter, for instance, discouraged Congress from following in the footsteps of the GDPR by noting that small and medium-sized businesses might not have the financial backing to take on the compliance costs that would come with GDPR-like legislation. Amazon’s representative pointedly critiqued California’s privacy bill, arguing it doesn’t promote the best privacy practices.
Theoretically, if federal law is not as strict as state law, tech companies could bypass California’s strict regulations that might very well serve as a model for other states, because federal law would trump state regulations. But Congress also noted that strategy is not what it has in mind.
“Your holy grail is ‘preemption.’” Senator Brian Schatz (D-HI) said. “And we’re not going to replace a strong California law with a weaker federal one.”
Having a Seat at the Table
Having a seat at the table when it comes to drafting federal regulation is in the best interest of tech companies at this point. But the reality is that their huffs and puffs about how strict other legislative models are might not do them any good. With yet another Facebook data breach, consumers and lawmakers alike are fed up.
California’s new law requires that people can see what data companies have on them — which makes perfect sense from a consumer perspective. And the EU is still pushing social media platforms to adjust to a new way of operating under GDPR. European Commissioner Vera Jourova warned Facebook to change some of its terms and conditions by December, so the company can finally tell users how it utilizes their data for commercial purposes. It’s a wake-up call for tech companies that the EU is not going to budge — and that gives American lawmakers the chance to pile on with more conviction.
Now that the tech giants have asked for regulation (though of course of the weaker variety), it is up to Congress to take action. But first, they also have to listen to consumer groups — because a table of decision-makers that only includes one side would not look good. Senator John Thune said Congress is not in any rush toward a decision. But let’s hope one emerges before another data breach occurs.
How to build a malware-blocking defensive line-up
Popular malware blocking or filtering technologies can go a long way in preventing bad ads from impacting your business’ bottom line. But they’re not a one-stop solution. Much like a quarterback relies on the assistance of his teammates, blockers also function optimally when paired with other smart technologies and tighter security policies. The Media Trust Digital Security & Operations (DSO) team recently uncovered just how weak malware blockers can be when relied upon as a single malware solution. It’s vital that businesses recognize the danger of relying solely on malware blockers to thwart attacks. They must also take the time to build a better game plan to tackle incoming threats.
Obfuscation: The Quarterback Sneak
A big problem with treating malware blockers as a security solution is that they’re rife with issues. Take malicious domains, for example. Recently, a notable domain, known as “dq6375rwn2aoi.cloudfront.net” made its way onto many suppliers’ watch lists. Yet it still managed to sneak beyond malware blockers. The domain in question was disguised with additional code that made it unrecognizable and, therefore, unreadable by the blocker. This technique is known as obfuscation and it’s posing a massive problem in the malvertising space.
According to the DSO team’s analysis, when the right conditions are met, the malware presents users with a fake “you’ve won” pop-up that prompts readers to claim a reward. When users click OK, they are taken to a website that requests for sensitive, personal information like name, email and telephone. The DSO team quickly identified the malware and worked with the publisher to terminate the ads at the source, protecting its’ 900,000 weekly audience members. In just one day, the team uncovered similar obfuscated malware executing in 16 other client websites. All of them had one thing in common: They used the same malware blocking solution.
Blockers: A Narrow Lineup
There are several reasons why blockers provide only a partial solution to preventing bad ads. For starters, at least 90% of malware used in malicious mobile redirections are obfuscated. And that already-high number is growing. There’s also the conundrum of code that can identify and work around specific tools; if the malware detects the presence of a known provider’s tool, it will change tack and behave differently.
Finally, blockers often use third-party malware data which quickly goes stale, thanks to new malware being introduced quicker than the data can track. This issue is so rampant that the DSO team finds a new attack every 30 seconds and classifies at least 5,000 new active malicious domains each month. According to The Media Trust’s analysis, third-party malware data sources take an average of three to five days to identify and record malware. As a result, by the time a third-party filter is updated, 8,600+ attacks could have occurred over a three-day period. That’s at least 14,400 attacks over just five days. For context, a single attack can affect millions of devices.
It’s also important to note that some blockers shut down good ads or block legitimate digital partners like DSPs because of false positives in the data they use. This overzealous approach to rooting out bad ads and bad actors will reduce a publisher’s revenues and can undermine their reputation with a good digital partner. Additionally, when good ads are suppressed, the user experience becomes needlessly compromised. The fact is, while blockers can help, they cannot eliminate malvertising.
The Game Plan: How to Score Against Malvertisers with Blockers
Until machines can match the craftiness of human programmers, companies should supplement their preferred blocking solution with other measures to reduce risk. As regulations like the GDPR and the California Consumer Privacy Act evolve and spread, a single breach can have a huge impact on a company’s finances, performance and reputation. Businesses can mitigate falling victim to these consequences by staying one step ahead of the curve. A good place to start is by devising a game plan that analyzes the opponent’s behaviors and timing. Here are some tips on how companies can take — and keep — the lead.
1. Choose the Best Blocker
As mentioned, a new malware attack hits the ecosystem every 30 seconds. Many blocking solution vendors use compiled synthetic and data sources that are updated every three to five days. Companies should choose a blocker that offers more frequent updates, preferably around the time when new malware is discovered.
2. Understand Malware’s Many Moving Parts
Ad experiences consist of a creative, a tag and a landing page, each of which can be infected. Ten percent of malware that the DSO team detects infect only landing pages. This is likely because most blocking tools ignore these pages, along with site-level malware. Publishers should find out whether the blocker sees these different components, and whether or not they block them when they’re infected, and how.
3. Watch for URLs That Change Their Behavior
Blockers do a good job of rejecting ads with malicious URLs until the latter are obfuscated to avoid detection. Blockers should identify malicious URLs, along with malicious domains and bad hosts. This way, no matter what form the URL takes, the blocker can identify the malware via its host and domain.
4. Remember That Most Malware is Obfuscated
As we’ve seen, this is a huge and growing problem. Legitimate developers obfuscate code to protect intellectual property, while malware developers do it to escape detection. Obfuscation should be reason enough on its own to make companies want to tighten their security policies around malware.
Reviewing Game Day
Malware blockers can be useful tools, but not when they function as the only security tool. Keeping bad ads at bay absolutely requires that companies implement a multi-layered, proactive approach by incorporating other tools and policies into the mix. Regular monitoring of the website from a customer’s view will also allow companies to understand who and what is executing on the website to be able to take action to block code when required and stay compliant.
About the Author:
Chris Olson co-founded The Media Trust with a goal to transform the internet experience by creating better digital ecosystems to govern assets, connect partners and enable Digital Risk Management. Chris has more than 15 years of experience leading high tech and ad technology start-ups and managing international software development, product and sales teams. Prior to The Media Trust, Chris created an Internet-based transaction system to research, buy and sell media for TV, radio, cable, and online channels. He started his career managing equity and fixed income electronic trading desks for Salomon Brothers, Citibank and Commerzbank AG.
Demand for media quality is a challenge and an opportunity
It’s hard to deny that the landscape for digital publishers is a challenging one. Pools of advertising revenue are shrinking, competition is at an all-time high. A variety of strategic pivots — from video to subscription models revenue models — have yet to fully mature. Furthermore, traditional advertising models are strained by a buy-side that increasingly demands that publishers hit ever more stringent media quality targets. In short, it’s an environment where every penny counts, and where it’s essential that premium publishers maximize the value of their inventory. For many, that means employing tools that can curb factors like ad fraud and low viewability, which can erode the value of premium content.
Fraud
Ad fraud is often positioned as a buy-side problem. Fraudsters use a variety of techniques, from bot networks that generate artificial traffic, to domain spoofing tactics that allow them to impersonate premium publishers. For buyers, it means stolen ad dollars that never impact consumers, and for publishers, it means an obvious loss of revenue. However, ad fraud has a more insidious impact on digital publishers. Not only does it erode the revenue bottom line, but it also erodes trust. The loss of trust damages long-term relationships and reshapes the way major advertisers apportion their budgets over time.
Recently, a digital publisher serving the technology, healthcare, and financial sector experienced an unexpected spike in bot activity. The spike prompted advertisers to question the validity of the publisher’s inventory and could have led to a breakdown in trust and, ultimately, a loss of significant revenue. To combat this, the publisher in question employed a fraud optimization solution to isolate and sequester invalid traffic at the ad server level, reducing fraud across their inventory by over 78%.
Viewability
Like fraud, non-viewable inventory has an unparalleled ability to erode value for publishers. Pressure from major brand advertisers — including highly publicized ultimatums from Unilever CMO Keith Weed, P&G’s Marc Pritchard, and media buying giant Group M — have moved viewable inventory from a nice-to-have in digital advertising inventory, to table stakes for many of the worlds top advertisers. Publishers who find themselves unable to deliver highly viewable inventory may find themselves missing out on significant revenue.
However, demand for highly viewable inventory also presents an opportunity. Publishers who can meet higher viewability standards stand to earn a premium on that inventory given high demand. Recognizing this potential for untapped revenue, a pop culture publisher recently sought to increase viewability across its inventory. Using a publisher optimization solution, the publisher was able to substantially raise viewability from a baseline of 53% to 77.3%, easily hitting a 70% viewability threshold on all of its inventory, opening the door to premium advertiser dollars.
Moving forward
As publishers are increasingly challenged to adapt their business model to a changing ecosystem, it’s easy to feel that rising media quality standards are just one more pressure point. In reality, with the right tools in hand, growing advertiser demand for improved media quality presents an untapped opportunity. Publishers who are able to meet demand can grow trust and more importantly, tap unrealized revenue on high-quality inventory to support their premium content.
