Login
close
Login is restricted to DCN Publisher Members. If you are a DCN Member and don't have an account, register here.
Search

Digital Content Next logo

Menu

Tags containing: "ad tech"

Innovation | Perspectives

22×20 Kicks-off media literacy week with #sschat

This week marks the beginning of the third annual media literacy week. With fake and misleading news continuing to dominate the headlines, media literacy week’s mission — to highlight the power of media literacy and its essential role in education today — has never seemed so timely.

This is particularly true for those in the ad tech and media space. It is imperative for industry players, such as my employer, (whose firm policy against fake news and a history of commitment to consumer trust and long-term publisher sustainability is detailed here), to come together to combat the problem of misleading news via process, people, and policy. I also believe that industry has a moral responsibility to educate and engage the larger public on the issue as well.

Consumers need to understand how the complex ad-tech space affects them as they spend ever more time online. They also need to have better context for the content they are consuming, so they continue to ask the right questions, and stay critical of the information they see online.

This is one reason why I’m so excited to be working with the LAMP (The Learning About Multimedia Project) as Disruption Hub lead of its 22×20 campaign. 22×20 is a nonpartisan, nationwide media literacy and civics campaign to help every teen — 22 million in the US who will be of voting age by the next election — cast informed votes in the 2020 election and beyond.

The 22×20 campaign directly addresses a perceived crisis in the U.S. around youth media literacy and civic participation. According to analysis done by CIRCLE, only 50% of 18-29 year olds voted in the 2016 election. Meanwhile, a 2016 Stanford study showed that more than 80% of high school students do not question the source of news claims made on social media, and 82% of middle school students have difficulty distinguishing between online advertising and news. This data not only speaks to a need to equip youth today with the skills to discern fact from fiction, but also a need to empower them to engage with our civic process.

To quote Estefania Alba, one of the bright and engaged 16-year-old’s working with 22×20 (who recently wrote about her experience with The LAMP and 22×20 for Teen Vogue), “Just like voting gives you a voice, media literacy hands you the microphone and empowers you to have an opinion.”

As a contributor to 22×20’s three-year mission, I’ve been working together with educators, journalists, funders, student leaders, and other tech leaders, to develop an actionable framework for ramping up the media literacy skills necessary for civic engagement across the nation’s youth.

22×20 first kicked off in September, at a summit at the David and Helen Gurley Brown Institute for Media Innovation at Columbia University in New York City. Together, more than 60 of us from across the United States gathered together to strategize against some of our key milestones. Our collective ideas encompassed curriculum, distribution of curriculum, policy and advocacy, communications, professional development, and other out-of-the-box thinking. Now, a few months later, we continue to map out our actionable three-year plan via smaller working groups, conference calls, and late-night Slack chats.

While our efforts for 22×20 are still in its early stages, we’re hopeful that the movement will spark real change around youth media literacy and civic engagement. The ability to discern and more importantly, challenge, misinformation is key to participating in the democratic process. We need to equip young people with the skills to parse fact from fiction so they can decide for themselves what they believe is ultimately right. And we also need to make sure they know that their vote has the power to make a difference.

This week, 22×20 is excited to kick off one of our very first initiatives, in honor of Media Literacy Week. In collaboration with #sschat, an open group of dedicated network of educators and enthusiasts who aim to improve their collective teaching of social studies, we’re engaging educators across the country on the topic of youth, media, and the election on Twitter. We invite all who are interested to participate in the conversation.

Jennifer Bassett (@Jabers) is Outbrain’s Managing Editor. She has 10+ years of experience in the content strategy and editorial space. She began her career as a book editor and has consulted for top agencies, nonprofits, and media companies including Memorial Sloan Kettering, Havas Worldwide New York, and Interbrand. In her personal time, she co-founded the acclaimed newsletter Red for the Blue and when she’s not talking content, she’s playing music with her band The Missing Footage. You can read more of her writing on Outbrain.com and jennifer-bassett.com.

Advertising | Innovation

How thinking like a tech company has transformed innovation at The Washington Post

When you think of The Washington Post, you probably think newspapers, not software company. But the reality is that the company operates a lot more like the latter. Under the influence of owner Jeff Bezos, The Post has been trying innovative approaches to everything it does and is experimenting with new ways of doing business.

That includes running an ad tech startup inside the company, one whose job is to use The Post as a sandbox of sorts to come up with new ways to deliver ads and then market the technology they produce to other publications. It’s not the kind of project you expect to find inside a publication like The Post, but it’s one of the qualities that attracted VP of commercial product and innovation, Jarrod Dicker several years ago.

Dicker says he originally reached out to The Post in 2015 about a job because he was seeing the continuous trend of media companies’ reliance on third-party companies for things core to the business, such as ad technology.

Seeing RED

After he came on board, Dicker helped form the RED team, which stands for research, experimentation and development. The group, which consists of software developers and product managers, began to look at the ways the company did ad tech.

As with any attempt to change the way you do business, Dicker ran into the “that’s just the way the industry works” attitude. His idea was to look at it fresh. What if you didn’t have any preconceived notions about how ad tech was supposed to work, how would you build it from scratch?

What he knew for sure was that users didn’t like the way ads were being delivered to them. So the first thing he decided to do was focus on improving the user experience. When consumers ignored ads—or worse, blocked them—Dicker recognized that the approach the industry had been taking needed to change if publishing was going to survive and thrive moving forward.

Thinking Like a Startup

“My pitch to The Post early on was—and it was me coming in as an individual contributor at the time—how do we take a startup mentality and really think about our focus as a media company and figure out how to differentiate ourselves,” he said. The problem as he saw it was that most media companies were focusing so much on building the content side of the business, they were forgetting about innovating on the revenue side.

So, he said they took the approach: “What if we actually applied an effort to build products that we think would be perfect for user experience, knowing how our consumers engage on The Washington Post and apply those to what we know brands and marketers want.” And that may just have been the key that unlocked the strategy. Dicker and the team he helped form wanted to create products that worked for marketers and brands as well as users who were fed up with online ads.

Getting talent to come in and work on ad tech proved to be a challenge at first precisely because it had such a bad reputation. “People didn’t want to work on ad problems because of the association with fraud, blocking and bad user experience. And the people who could apply [for these positions] and make the change didn’t want to be a part of it. They assumed that things couldn’t change or be better,” he said.

Those were precisely the people Dicker wanted however. Solving these issues requires people who could look at ad tech problems with fresh eyes. One of the problems they found was related to ad load time, so speed became a priority. The result was a product called Zeus that has the fastest ad load times in the industry, faster even than Google, according to Dicker.

Revenue Revisited

The RED team developed Zeus and other ad tech products at the Post including PostPulse, FlexPlay, Re–Engage, Fuse, InContext, and Post Cards, and then began licensing them to other media companies, such as the Los Angeles Times, Toronto Globe and Mail, and Chicago Tribune. He found that providing a way to potentially improve ad technology across the industry, while producing another revenue source, was a happy side effect.

Dicker isn’t under any illusions that the tools his team has created are going to supplant the content/ad/subscription revenue model. However, he does see it as a viable additional form of revenue for the company, and he finds it exciting that his team is helping the core business grow and thrive.

“We now also have a Software as a Service model where the Washington Post is no longer solely reliant on advertising or subscriptions. We are actually becoming the technology vendor for other publications.” And that not only helps them diversify revenue, but has created an internal culture of innovation, which should help drive long-term success.

Advertising | Innovation | Perspectives

Inside the dystopian vision of the IAB’s new AR and VR advertising formats

You’re half-way through a gaming session and the world is breaking apart around you as you run from attacking aliens. Firing as you go, you turn a corner and suddenly your view is filled with the sight of a brand new sedan. You see a cute dog at your local coffee shop. When you lean down to pet the dog an ad pops up next to your hand inviting you to buy puppy food. Sounds dystopian? No, it’s just the latest in advertising technology guidance from the Interactive Advertising Bureau.

Augmented Reality (AR) and Virtual Reality (VR) are exciting technologies, but they are far from mature. Early adopters have paid a lot of money for expensive devices but the future of both the hardware and software for AR and VR is still uncertain.

New Advertising Opportunities

This murky future hasn’t stopped the IAB from pushing out guidance in its latest “#IABNewAdPortfolio” on advertising formats for both platforms. The enthusiasm for new advertising opportunities is understandable. However, these new ad formats could easily kill off these infant platforms.

Worse, it is unlikely that early AR and VR advertisers will strictly adhere to the IAB’s guidelines. The reality is most ads have a tendency to step over the already permissive restrictions laid out in IAB documents. It seems likely that will also be the case with AR and VR.

The IAB has specified ad formats that could turn their hosting technologies into a wasteland. Advertisers could display any ad format onto a virtual wall or billboard. Considering the current state of display ads, that alone is a troubling concept. The IAB offers almost no restrictions on interactive objects, only recommending that a branded can of soda shouldn’t take up the whole view. One innovator in VR advertising provided their own horrifying example of a virtual landscape infested by Despicable Me’s Minions.

This image was proudly supplied to MIT’s Technology Review by MediaSpike as an example of just how great VR ads can be.
MediaSpike’s website provides the view from inside the Minion blimp, complete with three Minion ad placements and one Pepsi can.
Disruptive,  And Not in a Good Way

According to Crunchbase, this mission to create a world where every flat surface and vehicle stares at you through the dead goggled eyes of a Minion garnered over 5 million dollars in funding, surely a sign of the future to come.

The IAB guidance specifies an opportunity for interstitials as well:

360-degree video placed as an interstitial ad between different VR scenes. 360-degree video MUST completely fill the VR scene with video ad.

It is hard to imagine a more disruptive experience than being in one world and turning around into a 360 ad embodying an entirely different one. Such an ad format would be easy for less ethical content providers to exploit, with every virtual head turn or gaze providing a chance to fall into an ad.

I’m Looking at You, AR

Then comes the horror that is the IAB’s ad guidance on Augmented Reality experiences: AI that watches everything you glance at and triggers ads accordingly. Here’s the guidance on what happens when Orwell meets Ad Executive:

For example, a brand may choose to associate a product or service with dogs. When the AI system on a device “sees” a dog using the device lens, the AI system can associate the familiar concept with the previously known concept of a “dog.” The unknown visual of a dog that the AI system scans may be either an image of a dog or the three-dimensional animal. Once recognized, the system can trigger the display of brand content.

This is a terrible concept. First, eager marketers would likely train AI to trigger on even vaguely associated objects. Second, the guidance allows for display ads to be either attached to physical objects or stuck to your viewport until… I don’t know, you go crazy? The concept is so obviously terrible that it was satirized 17 years before the IAB even came up with it.

 

Tracking the Trackers

This doesn’t even touch on consumers increasing opposition to the tracking currently deployed in display and video ads on the web. Ads run by AIs that track every gaze would only compound that invasion of privacy.

Considering the low-quality technical performance of ad tech and the heavy battery use of AR devices, the platforms themselves would probably not be capable of supporting the ad space effectively. Endless popups assaulting an Augmented Reality user’s view is sure to destroy any chance the technology has to make it into the general consumer market. While current ad tech may have damaged the viability of publishers on the web, this may be the first time ad tech destroys a whole technology category with its urgency to monetize.

Slow Down and Get it Right

If AR and VR are to bring advertising dollars, it isn’t by replaying the mistakes of the last decade on new formats. The first step will be severely limiting the possible locations where—and amount of time when—advertising can appear. The next, in any guideline or best practice we must recommend against the invasive tracking of ‘Advertising Intelligences’. This is not the world we want to build and we cannot open the door for this type of tracking tied to these platforms.

This does not mean that there aren’t opportunities. Product placement is, without a doubt, a clear trade-off that most consumers have already accepted. Another option is that sponsors of VR and AR experiences could provide opening areas before users encounter the content, a more appropriate type of pre-roll.  If the technology is given the opportunity to mature, many other opportunities will certainly emerge.

Whatever the future brings, if we wish for it to include AR and VR in our everyday lives—and in the lives of the consumers whose trust is essential to our success—we can’t allow these types of proposals to go unchallenged. If we need ads to fund these platforms, we will have to find more creative options, ones appropriate to the technology and user experience. No matter what business model supports AR and VR, we don’t want to create an untenable experience before these emerging formats have had a chance to develop and capture audiences.

Aram Zucker-Scharff is the Director for Ad Engineering in The Washington Post’s Research, Experimentation and Development group. He is also the lead developer for the open-source tool PressForward and a consultant on content strategy and newsroom workflows. He was one of Folio Magazine’s 15 under 30 in the magazine media industry. He previously worked as Salon.com’s full stack developer. His work has been covered multiple times in journalism.co.uk and he has appeared in The Atlantic, Digiday, Poynter, and Columbia Journalism Review. He has also worked as a journalist, a community manager and a journalism educator.

Advertising | Perspectives

Advertising’s flight to trusted partners

Fun fact: 96% of TSA Precheck passengers wait less than five minutes in line. This innovation is no less than a modern marvel created to save valuable time during an unprecedented increase in security. Meanwhile travelers “unknown” to TSA are relegated to the slow lane removing their shoes, pulling out liquids and laptops, and assuming the position to be body-scanned.

Now imagine for a moment that precheck has been eliminated. Every. Single. Passenger has to be hand-frisked, one at a time in a Single. File. Line. It would rip out the remaining thread of joy in air travel. You would scream. I would scream. There would be a collective cry of despair from travelers across America.

That’s what we see happening in our digital advertising industry today.

“Brand safety” is the latest float in the parade of ad tech problems. I know we’ve seen it before but it’s back with a vengeance. Unfortunately, we’re also seeing a rerun of ad tech firms trotting out “brand safety” filters. Some have even suggested that their tech can work like an ad blocker to prevent the advertisement from loading in an “unsafe environment.” Oh dear. This baggage needs to be hand-searched for restricted materials. Please step out of the line and join the security officer for a reality check.

The security firm White Ops stated in its 2015 Bot Benchmark Study, which analyzed fraud, that the real answers to advertising problems lie in the economics rather than the technology. We thought this was a fairly astute perspective, particularly from technology people.

Advertisers don’t need another layer of technology. Instead, they need transparency so that they know where their ads and money are going. This same approach can apply to solving for nearly every issue in digital advertising. Spend your advertising investments with publishers you know, and you’ll eliminate most of your issues.

Just a few weeks ago, JP Morgan Chase shone a sparkle of sunlight across our beleaguered industry by doing something so simple that there is no way anyone in the Silicon Valley would propose it. They had humans (remember them?) evaluate publishers for their campaign. These people whittled down the targeted sites on which their ads appeared from 400,000 to less than 5,000. The campaign had the same results. I repeat: same results.

Rather than treat every single ad impression as if it’s a random collection of pixels on an unfamiliar page of an unknown website, marketers who seek out trusted publishers already have the advantage of knowing their ads are likely to be viewed by an engaged audience in clean, well-lit environments. By this so-called “whitelisting” of sites, they’re undertaking the equivalent of the “Known Traveler” program: I know your site because it has been carefully evaluated. We can accelerate the process and I won’t need to slow you down with a pat down. In fact, we can speed you right through with a smile on your face.

I sense a movement from marketers (and audiences) towards trusted publishers. In this brighter future, viewability vendors, IVT vendors, and brand safety vendors are all unnecessary when working with quality publishers like the members of DCN. Instead, advertisers can confidently say “I know them and I don’t need to waste my time and money with layers of security measures that will hinder the experience.”

Keep your laptop in the bag. No need to remove your belt, jacket, or shoes. Let’s make this trip fast and fabulous.

Advertising | Perspectives

The ad tech forest is falling. Here’s why

Over the past few years, marketers and publishers have become increasingly concerned that they can’t see through the forest of ad tech. Predictions of carnage in the “ad tech complex” are not new. Terry Kawaja, founder of LUMA Partners, has long foretold hard times. While Terry is in a privileged position as a mergers and acquisitions expert, his February statement that a whopping 90% of the current ad tech companies will disappear (without successful exits) took many by surprise.

As you likely know, I’m a firm believer in the open and competitive internet. One of its great advantages is an environment in which innovation and disruption can spawn seedlings of new ideas and opportunities without great barriers. In addition, I’ve long been on record that programmatic ad technologies will unlock new efficiencies in the market. Automation is the future and we should embrace it.

But there is no doubt that the trees have started to fall and the forest has begun to thin. I’ve personally been eager to take an axe to a few of them that are rotten to their core. But how they fall will be important. There are five strong forces about to hit the ad tech landscape that are likely to cause damage to those who are unprepared. Publishers should use this as notice to their operations teams to ensure their businesses are ready.

The Forces at Work

  1. Brand Safety

    The press had a field day lately covering Google and YouTube’s “brand safety” crisis as more than 300 advertisers publicly boycotted Google. It was the number one topic on both sides of the Atlantic as I witnessed at ExchangeWire NYC last Wednesday in NYC and the next day at European Advertising Week in London. All eyes are currently on Google. But the reality is this issue has affected our industry for many years.

    Brands are damaged when advertisers and their “agents” (quotes used intentionally) rely too much on technology to guide the flow and placement of their advertising. This is a familiar issue to the other half of the Duopoly, Facebook, too. Audience targeting without consideration for environment works fine for direct marketers who are simply trying to fulfill demand through clicks and moving product off shelves. But when brand stewards look to digital to create desire and demand—and shape minds—the context and environment for their advertising is vital. Clearly, the pendulum swung too far. As with many other road bumps for Facebook and Google, they’ll use their scale and dominance to lure advertisers back into the fold. However, many small and mid-sized ad tech companies won’t be able to adapt as advertisers seek assurances on their ad placements.

  1. Margin Pressure

    Advertisers have taken note of the amount of value leakage with these same intermediaries in the ad tech ecosystem. It’s clear that almost no one sitting in the supply chain has been truly accountable to the two principals, the marketer and the publisher. Remember, these are the only two stakeholders that are recognized brands and rely on the trust of the consumer. Marketers have now set a goal of 70% of their investments going to working media while the first lawsuit is being filed by a premium publisher.

    The investment community’s interest in ad tech has been built on outsized margins and models. If you’re in the middle of a supply chain, this can only be achieved by maximizing self-interests as principals. This has led to unsustainable growth through black boxes, volume rebates and incentives, inventory arbitrage and reselling of data and services. Advertisers have clearly put the industry on notice to end it. (See Rubicon’s most recent 10K disclosure.)

  1. VC Funds Dwindle

    Over the past year, the Sand Hill interest in ad tech has been drying up. There is a brutal combination of a maturing landscape and an absence of predictable exit strategies. While the public market has been unfriendly to ad tech for the past couple of years (see FUEL, RUBI, PUB, TRMR, MM), Google, Facebook, Oracle and Aol have also stopped buying. Yes, Chinese dollars are still out there but no one should be excited about this option. If trust and transparency need to be built in the ad tech ecosystem, it’s not wise to invite investment from China.

  1. Policy changes

    Google and Facebook are under a lot of pressure here in the U.S. Very quietly last week, ad tech was hoodwinked into supporting the Senate’s vote to abolish the FCC’s rules which will open the doors for all ISPs to now resell consumers’ browsing history and location data. This will relieve any concerns at Google and Facebook that rules may creep into their businesses as the bar has now been lowered even further.

    The regulatory concerns that forced Google to allow header bidding are gone in the new Washington. More importantly to ad tech, every ISP now has the ability to compete and replace the ad tech services business. Verizon is in the pole position to own this space having cobbled together and transformed an array of ad tech assets into an ability to deliver the full supply chain with unique access to the sensitive data of nearly every American coupled with the inventory of MSN, Yahoo, Aol and the wider web.

  1. G-D-P-R

    These are four letters that most small to mid-sized ad tech companies have wrongly delegated to their legal counsel. However, they need to know the European Commission’s General Data Protection Regulation (GDPR) is coming at them like a freight train that will impact their entire business. In a little over 12 months, the already finalized GDPR will be the law of the land across Europe.

    Importantly, it will create risk and obligations globally as it will serve as the de facto gold standard on data protection for much of the world. Well, except for the United States. Although the jury is still out, it likely will serve as an opportunity for any publishers who have a strong and trusted relationship with their consumers. However, it’s universally understood GDPR will take a chainsaw to much of ad tech as none of these companies have relationships with consumers to solicit or justify consent in order to continue their data collection.

The Aftermath

What is the broader impact on the ecosystem if Terry is right and much of the ad tech forest truly falls? It’s hard to tell. With careful planning, the companies who deliver consumer products will avoid impact. There is a fairly good argument it will benefit most DCN members—premium publishers.

Interestingly, the advertising relying on the ad tech ecosystem is a very small fraction of the internet economy. An expert at Harvard Business School, working with the IAB, put out their third version of a research study attempting to size the US internet advertising market. I took issue with this research, along with others, as it counted every bit of internet-based commerce–from Uber to Citibank to Amazon purchases–under the category of “advertising.”

That said, the study does allow us to better analyze the contributions of the ad tech ecosystem. The IAB/HBS study approximates the US internet advertising market at $1.21 Trillion (6% of GDP). Using the IAB’s own estimates of the revenue in ad tech, not counting the Google and Facebook duopoly, only a measly 1.5% ($28 billion) of the internet advertising market is at risk.

I guess the question is, will the felling of the ad tech forest even make a sound? And an important question for the industry: What happens if there are only two trees left standing?

Advertising | Perspectives | Revenue

Ad blocking: No, we haven’t won.

About a year ago, Josh Benton of Harvard’s Nieman Journalism Lab asked me how concerned I was about ad blocking on a scale of 1-10. I answered “eight or nine.” And one year later, the situation has not improved: As of today it’s still a nine.

In the spirit of transparency, I thought the time was right to look at where we are in terms of ad blocking, if for no other reason than I don’t want my silence on the topic to suggest that the issue is less dire than it was during the flurry of discussion around it in 2015. Since then, DCN has conducted research on the ad blocking ecosystem – some of which has been released only to our member companies. We have also posed many questions about Google, the ad tech ecosystem and the actual flow of the monies.

The state of ad blocking today

Unfortunately, the ecosystem remains every bit as murky. The ambitions and fate of those profiting and suffering from ad blocking (including Google) have not yet been fully revealed. But one thing is crystal clear: The companies that create original content are being hurt the most by ad blocking because it prevents them from monetizing the audiences they attract. And the two companies, now known as the “duopoly” are likely hurt the least.

As predicted, the adoption of ad blockers continues to grow linearly according to PageFair’s latest Ad Block Report. While the sky is not falling, the U.S. desktop penetration did grow from 15% to 18% last year and this number matters … a lot. Despite this growth, the IAB oddly recently claimed victory over ad blockers “rendering them toothless” and suggesting the risk of “network-level ad-blocking has virtually disappeared.” This kind of thinking is where things get dangerous.

We have won neither the battle nor the war. In fact, PageFair’s report—which we have every reason to believe—clearly points to the contrary. Frankly, it’s for this reason that I’m writing now in parallel to our continued participation and support with other organizations on the new Coalition for Better Ads.

The danger is real

Here are three reasons we need to remain focused on ad blocking in order to maintain our ability to monetize audiences attracted by high-quality content:

  1. The companies in the ad tech ecosystem—where many of the ad blocking issues are forged—have very little incentive to be concerned about ad blocking. Their collective migration to the latest ad tech craze, header bidding, has increased their inventory and revenue access by an order of magnitude. It’s also widely recognized to have increased latency, data leakage and other vulnerabilities. So potentially good for revenues, arguably bad for consumers. The additional inventory dwarfs any modest increase in ad blocking so the ad tech companies’ incentives are in many ways at odds with consumers and content creators.
  2. Consumers are shifting to mobile, where ad blocking penetration is estimated at an immaterial 1% in the U.S. However, the value proposition of a mobile ad blocker is significantly higher (heightened concerns for security, user experience, data charges, privacy). So it’s risky to expect penetration to stay at 1% given that it’s currently 60% in parts of Asia, where ad blocking is built into the browser. The same functionality is already available in the States (through the Brave and Opera browsers). And not incidentally: In China, mobile users know how to change the proxy servers on their phones, so I’d expect Generation Z may soon be doing the same, in droves. And this is just one of the numerous ways in which ad blocking may rapidly impact mobile apps.
  3. Network-level ad blocking concerns will likely grow. The number one goal of the new administration’s FCC is to throw out the net neutrality rules. Yes, there is a rational argument against the current regulation. However, nearly 100% of the public wants something in place that protects the neutrality of the Internet against blocking, throttling and other nefarious practices. I’m pretty sure it is not a good idea to fight the Internet. To the point of ad blocking, if the FCC rules are thrown out and not properly replaced by Congress, there is nothing to prevent a carrier (why hello there T-Mobile!) from launching its own ad blocking plan. Meanwhile, the most powerful trade bodies in our industry have yet to take a stand in support of net neutrality (other than DCN, which is not conflicted on the issue).
Burning questions

So now that we’ve established that victory has not yet been achieved against ad blockers, here are some of the questions keeping me up at night:

  1. The financial impact of ad blocking trails its penetration mostly because advertising supply greatly outweighs demand. As long as there is considerably more desktop inventory than demand, then the financial impact is mitigated. But what happens when it doesn’t?
  2. The largest advertising company in the world, Google, is virtually untouched by ad blocking. Google has avoided most of the impact by paying to be whitelisted – as they’ve publicly disclosed – giving them a privileged position that, as far as I know, none of the nearly 80 companies inside of DCN have. Let that sink in. When a monopoly gets to set the rules…
  3. Privacy continues to be the third rail in the industry. The CMO of the largest advertiser in the world, Procter& Gamble, clearly expressed this concern a few weeks ago. The Chairman of the largest media buyer in the world, GroupM, has also called out this same concern. Meanwhile, the industry is aggressively pushing to keep the bar as low as possible, while cloaking the rapidly increasing level of tracking in darkness. This is happening through policy, as much of industry pushes to remove the FCC privacy rules on ISPs. It’s also happening through technology, as tracking has moved into digital fingerprinting and server to server sharing of browsing history. I know many people want to ignore it, but what if data leakage in the ad tech ecosystem is actually the common thread across the performance, security, transparency and consumer privacy issues that have resulted in a loss of consumer trust and rising ad block usage? There are both industry advocates and executives who make this argument.
  4. Facebook has opted to engage in a tech arms race against the very same engineers who are paid by the ad block whitelisting program. Facebook continues to fight a desktop war against ad blockers by circumventing the technology. Almost all of Facebook’s ad revenue growth on desktop came as a result of this tech hacking, according to their CFO during their earnings call. In mobile, Facebook is aggressively shifting content experiences away from the open web, reportedly even ignoring their browser experience, so that they can keep consumers in their app and fight back against ad blockers. Who is monitoring this?
  5. Who owns the number two blocker, Ad Block? At the very least, it’s dubious that a company with undisclosed ownership can block this much advertising. At the worst, it’s a clear-cut antitrust or national security issue to have that much control in the hands of an unknown actor. Can no one solve this riddle?

In the face of this uncertainty and looming unanswered questions, industry leaders need to refocus on meeting the underlying consumer needs. Yes, many articles have been written and many committees created. However, I challenge the industry to work with us, to dig deeper into the dynamics of ad blocking. As much as you might want to believe ad blocking to be a 2015 meme that’s now under control, that is entirely incorrect. Sitting idle while one company, whether it be Ad Block Plus or Google, controls much of the current future ecosystem could be the most dangerous failure of the Internet yet.

Advertising | Perspectives

What’s Verizon’s master plan after nabbing Yahoo?

The rumors were true, and Yahoo, one of the pioneers of the web, is now part of Verizon, the largest wireless carrier in the U.S., after an all-cash deal of $4.83 billion.

It’s a small sum for one of the most popular websites, which was worth more than $125 billion at its zenith in 2000. Many are dissecting Yahoo’s downfall, which likely stemmed from an ongoing struggle with its focus: Amazon owns shopping, Google owns search, Apple owns mobile hardware and Facebook owns photos and the social graph, as the New York Times’ Mike Isaac outlined. Yahoo insisted on branding itself as a media company when it could have focused on building out its technology, and tried to do too many things at once. The result is that it never became known for anything in particular, and did a mediocre job at everything.

But there’s still plenty of potential upside in the acquisition for Verizon. All eyes are now on the company to see what kind of strategy it will take, and whether it can turn Yahoo’s downfall into a climb to the top for itself.

Consumer Behavior and Ad Tech
Anyone who’s been paying attention knows that what Verizon was really after when purchasing Yahoo was not the brand itself. What Verizon did want was Yahoo’s 22 years’ worth of data on consumer behavior and ad technology. Verizon previously acquired AOL, another once boehmouth and now faltering web property, marking Verizon’s push into content and ad tech. Now, with the scale from the Yahoo purchase, as well as Yahoo’s “mobile applications and advertising technology for video and handheld devices,” as Bloomberg’s Brian Womack wrote, Verizon might be able to lift itself into a higher echelon on the web.

And why would it want to do this? Perhaps investing in the advanced technology of ailing web companies is a good way for Verizon to stay relevant, according to Wired’s Brian Barrett. Because Verizon is one of the largest carriers, it already saturates the market, and so growth in its traditional business is limited. Moving up in the evolving digital advertising business, though, is a way for Verizon to diversify and grow. So now Verizon — with AOL and Yahoo, both of which have sophisticated ad tech — can aim higher.

As the New York Times’ Vindu Goel and Michael de la Merced reported, “The idea is to use Yahoo’s vast array of content and its advertising technology to offer more robust services to Verizon customers and advertisers.” Verizon has the benefit of location data, although that is probably limited to Verizon users, and other Internet companies have similar data.

Taking on Facebook and Google
And let’s be clear: The duopoly currently at the top of digital advertising are Google and Facebook, both of which posses a staggering amount of data from users. They’re certified Internet behemoths. The two companies together took in 55% of the digital ad market last year, according to eMarketer. A combined Verizon and Yahoo, meanwhile, would take in six percent of the digital ad market. Verizon may have climbed a few steps on the ladder with the acquisition, but Google and Facebook are already in the clouds as Verizon finds its footing.

Does that mean Verizon should back down in digital advertising, and succumb to the fact it’ll probably never reach Google-Facebook levels? Yes and no. Trying is the only way it will continue to make a dent in the industry, especially as people spend more time on their phones. So investing in ad tech and mobile video, like Verizon’s video service go90, is a smart decision. Because “ultimately, AOL’s ad-sales technology could encourage brands to spend more money across a range of Yahoo websites and apps,” as the AP’s Tali Arbel wrote.

But Verizon will have to keep its expectations realistic. That goes not just for competing with Facebook and Google, but also for ensuring its targeting doesn’t amount to a privacy breach. It already got in trouble with the FCC in March for enabling a “supercookie.” Now, as the AP’s Arbel reported, “the FCC wants broadband providers like Verizon to seek a customer’s permission in most cases before sharing data with advertisers.” That’s not something that tech titans Google and Facebook will have to deal with because their Internet access plans are still nascent.

Bottom line: Verizon is now a serious player in ad tech and online content, with even more consumer data—but it has a long way to catch the leaders.

Perspectives | Policy

Ad Tech: Is opting-out the only way to change things?

Joanna O’Connell had an interesting reaction to news that a few young publishers have decided to spurn ad tech. Without a doubt, the ad tech space is full of promise – new capabilities, greater efficiencies and deeper audience insights. But, I think Joanna is missing the underlying concerns that publishers have with ad tech and why it feels like we’re reaching a breaking point.

Premium publishers are trying to create a premium experience for consumers: one that is clean, well-lit and where they will visit often and engage for the long-term. Part of creating this premium experience is ensuring that consumers feel safe and that they can trust the environment. One factor that impacts consumer trust is understanding when and why data about them and their online behavior is collected – a fairly significant challenge for publishers to fully understand themselves.

It may seem as if understanding how all of their third party partners are collecting and using data about audiences that visit their sites should be easy, especially when data collection and use restrictions can be baked into contracts. But, contracts only go so far. Some third parties have take-it-or-leave-it terms of use, others are simple start-ups that don’t operate on contracts at all, and some third parties reject any limitations out of hand. There’s also the huge challenge of trying to enforce the terms of a contract down the daisy chain of all of the third parties… and their third parties. It begins to feel like a never ending game of whack-a-mole!

Here at DCN, we’ve written a lot about trust in the last 12 months: Trust between advertisers and publishers. Trust between advertisers and consumers. Trust between publishers and audiences. There is increasing and overwhelming evidence that these relationships are under great strain. Advertisers are understandably outraged that large percentages of their ad campaigns are being “seen” by non-human traffic. Consumers continue to turn on DNT signals, increasingly turning to blunt tools like ad blocking software.  And this problem is only on the rise. Just this week,  it was reported that Ad blocking grew by 41% globally in the last 12 months meaning that there a whopping 198 million active adblock users around the world.

We couldn’t agree more with Joanna’s point that, at their best, “ad technologies are tools that can make buying and selling smarter, faster and better.” So yes, we agree with Joanna that programmatic is a fast-moving rocket that digital companies are and should be jumping on. But her qualifier – “if used effectively” – is the crucial point. What does “using effectively” entail? We can’t afford to be blind to the impact of “ineffective use” by third parties. We need to keep our focus on the health of larger digital marketing landscape.

The technologies that underpin the digital delivery of content—from publishers or marketers—must behave transparently and ethically and strive to enhance the customer experience or we will lose the audiences we value most. For the internet to function at its full potential, all of these parties need a foundation of trust built on transparency, choice and fair exchange of value.

©2024 Digital Content Next. All Rights Reserved.