Month: July 2019

The ICO wants to bust any misunderstandings around how and where cookies can be used in advertising and other online services. But it has only vetoed cookies that are “non-essential.” That means any cookie necessary for the delivery of the service a person has requested to use doesn’t need user consent.

“Cookie compliance will be an increasing regulatory priority for the ICO in the future,” wrote Ali Shah, head of technology policy for the ICO in the update. He added that all future action will be proportionate, but that businesses should run cookie audits.

The ad tech industry has already been on red alert since the ICO warned that current ad-targeting practices weren’t legal under GDPR, last month. Others believe this latest guidance takes that up another notch.

“The new guidance on use of cookies will have a significant impact on publishers, advertisers and ad tech vendors alike,” said Ryan Gracey, solicitor and technology law expert at law firm Gordons. “It’s a significant update which brings the use of cookies in line with the GDPR standard of consent and will ultimately change the way in which companies track people online.”

Here is a look at what the ICO has vetoed:

Farewell implied consent
Thanks to GDPR, (this was legal under PECR previously) implied consent can no longer be relied on for cookies or for processing personal data. That means users must give explicit consent to cookies which are deemed non-essential to their website visit or intentions for using an online service (like a purchase.) Pre-ticked boxes (of which there are many still) or any tactic that means users are opted in by default are not allowed for non-essential cookies. Users must be given absolute control over what non-essential cookies are dropped on them and these kinds of cookies also can’t be set on landing pages before that user has given consent. Naturally, some businesses would argue that all their cookies are essential for performing their business or service to a user. That would be a risky assumption.

Analytics cookies need consent
It looks like the trusty analytics cookies are out of luck. The ICO has deemed these should require user consent, because otherwise users aren’t aware this type of cookie is being dropped on their computer when they use an online service. For that reason the ICO has said they are aren’t necessary for the user to be able to access a service, therefore they must have user consent.

“Time will tell how many people give consent for non-essential cookies, but it will undoubtedly restrict the reach of advertisers,” added Gracey.

Cookie walls: dead on arrival
An idea bandied around at one point ahead of GDPR was the notion of a “tracking wall” or what the ICO refers to as a cookie wall. The concept is that any visitor to a publisher’s site that has a tracking wall installed, won’t be able to continue on the site, read or watch the content until they give consent to their data being used and stored by that publisher for advertising purposes. It also applies to a lot of assumed consent strategies. Many sites have added a message to the effect that using the site means giving consent to cookies. However, the ICO has stated this is not valid consent under GDPR.

Legitimate interest
As the ICO recently stated in its latest GDPR update, relying on legitimate interest for sending targeted advertising is a hard no. Same goes for PECR. In fact, the ICO claimed this had always been the case under PECR.

“PECR always requires consent for non-essential cookies, such as those used for the purposes of marketing and advertising. Legitimate interests cannot be relied upon for these cookies,” wrote Shah.

The post UK regulator ICO is set to play cookie cop for the digital ad industry appeared first on Digiday.

“That’s the balancing act we’re looking to master,” said Ryan Storrar, svp and head of media activation for EMEA at Essence. “We’re looking to the future, and context is becoming a more important currency. The assumption is that contextual targeting will become increasingly important in a world where user-level data has been reduced.”

Contextual targeting is centered on the environment in which an ad appears, rather than individuals’ inferred intent to purchase an item, or click on an ad or content based on their former, online behavioral patterns. Naturally, media agency expectations for how contextual targeting performs today, are far higher than they were at its origin. Today, media agencies want to pick up signals that delve beyond the individual site and page information or categories of sites, into the tone in which an article is written in, the words themselves and images on a page, or perhaps even a specific paragraph.

“The breadth of opportunity now is far higher for contextual targeting [tracking] opportunities,” said Matt McIntyre, head of programmatic for Essence. “But there isn’t a very structured way to know what type of information we will get in order to reach a decision based on what the context is.”

In order to achieve that, Essence has experimented with machine learning to crawl pages for more acute contextual targeting signals which pick up individual words, tone and images on pages.

For other agencies, the onus is on publishers and contextual-targeting vendors to develop their contextual targeting features in a way that can help media buyers achieve the scale needed for campaigns if they’re to invest further.

“In light of GDPR and cookie deletion, there has been more of a spend increase toward contextual targeting,” said Samir Shah, managing partner, data, technology and programmatic, at Zenith. “But unfortunately some of this contextual-targeting tech hasn’t had enough investment given to it, as so much focus has been on audience-based approaches.”

Contextual targeting has always had a place on media plans. But many believe it was neglected until the concern around GDPR enforcement last year, prompted agencies to re-prioritize it. Publishers have enjoyed the upswing in interest around contextual targeting, particularly because they can pitch it as a bullet-proof brand safe environment for risk-averse advertisers, agencies hope for more. But, they too, could do more to evolve their offerings, according to agencies.

“Everyone stopped talking about contextual technology for a while, it only works if implemented on-page and on-site,” added Shah. “So it was kind of forgotten about as a solution by publishers, and the growth of where the technology was implemented had stagnated. That creates a scalability issue.”

Speed, or lack thereof, is another challenge. The speed at which pages can be classified by any type of contextual data provider varies wildly. Some vendors allow agencies to contextually target by keyword — a useful feature for agencies need to avoid brand-safety issues. But if there is a breaking-news article that an agency needs to deliver against contextually, it may not be identified quickly enough by contextual providers, according to other agency sources.

One of contextual targeting’s biggest drawbacks, however, is that it is relevant to a specific moment in time: the moment a person spends with a piece of content or on a page. That can create headaches for media agencies accustomed to analyzing consumer behavioral patterns across the web.

That’s partly why GroupM has focused more on increasing investment in scaling campaigns that aren’t powered by third-party cookies, rather than contextual targeting per se. “It is a single moment of content consumption for a single moment in time,” said Richard Lloyd, chief data officer at GroupM UK. “You may infer something about them that if you looked at a broader context, would show you have jumped to conclusions.”

There are ways that the media-buying arm can accurately identify the right kind of data that relies on first-party or login publisher data. “The recent changes announced by the browsers make things a lot more complicated,” said Lloyd. That said, in future Lloyd admitted that contextual targeting could become a far more important form of ad targeting in the future.

“We’re in somewhat of a tricky position as an industry,” he said. “We’re participating in a game of cat and mouse where we work with the capabilities available today and will continue to until they are removed by browsers or by regulators and ICO [GDPR] enforcement.” But that short-term mindset may create challenges later on when certain go-to audience targeting tactics are eroded, should the ICO decide to clamp down on its GDPR enforcement, he said.

He added that the ICO’s warning shot to ad tech on June 20 has put the entire industry on notice: “This forces us to acknowledge the fact that the way we approached GDPR as an industry, which resulted in a major change in how we operated, wasn’t a safe, sustainable approach.”

The post ‘It’s a balancing act’: Media buyers want contextual targeting features to evolve further appeared first on Digiday.

Yet advertisers are still looking for ways to prove their ads work in this environment.

According to research carried out by Global, 78% of over 200 respondents from U.K. media agencies and advertisers said that they would increase spending on audio streaming over the next 12 months, while 75% will increase spend in podcasts.

Digital audio, and with it smart speakers and podcasts, make up a small amount of the U.K.’s digital advertising. With still no official figure from U.K. trade outfit, the Interactive Advertising Bureau, Global estimates it will break the £100 million ($126 million) mark by the end of next year.

To keep ad budgets flowing into digital audio, Global is aiming to solve common problems in measurement and attribution in a number of ways: developing tagging tools and ramping up its post-campaign analysis studies.

“The role of audio is emerging much clearer,” said Oliver Deane, director of commercial digital at Global, adding that from the report two roles for audio stood out, reaching audiences on the go and at culturally relevant points.

“Advertisers are landing on the belief that audio is good to reach people with contextually relevant messaging. The challenge is there’s still work to do in how best to measure audio,” he said.

Global has made progress in proving the effectiveness of its digital audio campaigns in the last year, according to Deane. In that time it has delivered more granular input and delivery data into the econometric models of seven advertiser clients who requested it. These models calculate the effectiveness of marketing and communications channels. Deane was unable to share client details, but a retailer said that digital audio was the highest achieving channel in its own econometric model.

“This leads us to believe that [Global’s digital audio platform] Dax is now playing a bigger role in client’s econometrics studies,” he said. The previous year only one advertiser requested this data.

Global’s research of over 200 media agency executives and brand marketers shows an appetite for audio continues to grow. On average, more than 40% of advertising campaigns in the past 12 months had included digital audio, up from 33% the previous year. Also, 86% of U.K. media agencies see digital audio as an important part of most media strategies.

The media company is seeing this play out through the number of campaigns it runs on Dax. Around 50 campaigns a month use its tracking tool, Listener Insight ID, which uses tags to track what audiences do after an audio ad is served. For online estate agent Purplebricks, Dax targeted audiences who had searched online for properties with Purplebricks ads. The number of people visiting the Purplebricks site increased sevenfold after the ad was served, compared to the average, claimed Global.

Audio, and podcasts notably, attracted a lot of advertisers looking to drive direct response, like Purplebricks. As audio matures, more advertisers are looking to improve metrics like brand consideration and purchase intent, which Dax measures through post-campaign studies. According to Deane, Global’s research budget has doubled due to the number of post-campaign brand analysis studies it now runs.

In one instance, Global client Virgin Atlantic wanted to increase awareness of its new economy classes during the Easter period. Dax geo-fenced a 1-kilometer perimeter around Virgin Atlantic’s poster sites. During the campaign period, Virgin Atlantic saw a 20% increase in bookings and a 7% increase in brand preference.

Agencies agree that Dax offers more granularity and flexibility in overlaying data for targeting compared to other U.K. platforms.

“The capability in Dax is more,” said Lawrence Dodd, communications planning director at agency UM London. “I can target parents with kids between 0 and 3 years old, rather than just parents.”

Audio streaming on devices benefits from browser or app targeting but ad targeting on smart speakers is typically limited for now to contextual targeting by content verticals, like current affairs or news. Like with most new formats, getting advertisers to invest in the creative where the effectiveness is less proven means there are fewer players. Brands like HSBC and Mastercard have both been vocal about their audio identity.

Podcasts, however, have other tracking limitations.

“The most common barrier still faced by podcasting is that the majority of listening is done offline,” said Charlie Yeates, commercial trading, partner, at MediaCom. “Until more is done online and you have the ability to track that live stream, it’s hard to understand who is accessing when and how.”

Advertisers have been linking audio with out-of-home advertising. For Global, which acquired three of out-of-home ad companies in the last 12 months, it’s in a good position to make this more sophisticated than putting both channels on the media plans. How to best integrate these two channels is the next priority for Deane.

The post How radio giant Global is expanding into digital audio appeared first on Digiday.

Mars Petcare created the “Companion Fund” last March with a dedicated $100 million investment pot, part of which it has since spent on 20 startups. Some of those investments skew toward science startups to fuel the nutrition side of the business, but there’s a growing focus on DTC businesses too.

DTC brands are the envy of CPG businesses like Mars. They move fast, have leaner structures and generate reams of data from selling directly to people. The closer Mars Petcare can get to DTC startups, the better it can understand the constantly contorting DTC model, which is a priority in a CPG category where the largest players want to nudge businesses models primed to profit from bulk shipments to stores, to ones that also profit from delivering smaller-quantity shipments to individuals.

“There’s a lot we can learn from those [DTC] businesses when it comes to the proximity they have to people,” said Leonid Sudakov, president of connected solutions at Mars Petcare.

Unlike other corporate-venture arms, Mars is what’s called the “limited partner” to the Companion Fund, which means the CPG business has limited influence over what the execs running the venture-capital fund do with the money as they bet on which DTC startup can next achieve unicorn status. Investments can pay off in two ways: Mars profits from its own stake in a startup that eventually floats on the stock exchange, or the CPG business could acquire a startup it has helped grow, to branch out into new services as it did when it bought “Fitbit for dogs” Whistle in 2016.

Bets made by the venture-capital fund range from $2 million to $5 million for startups going through early phases of growth, in exchange for minority stakes. Marketing support is also offered to chosen startups as is product development expertise, manufacturing resources, distribution plans and science. So far, the team at Mars Petcare have tried to back as many startups as they can including fintech firm Scratchpay, rather than try and pick winners outright. To date, the fund has seen 1,800 young pet industry startups, and has only invested in 1.1% of them.

“When we started the fund, it was clear that the startup ecosystem in petcare was underdeveloped. There was not enough venture money,” said Sudakov.

Finding those businesses isn’t easy. Between 2004 and 2013, 10,000 U.S. businesses that received venture-capitalist funding failed completely, according to venture capital outfit Correlation Ventures. Mars turned to the startup world to make sure it could function as a real venture-capital fund. Ben Jacobs, an investor and co-founder in the Whistle pet tech startup Mars acquired, leads the fund, alongside Sudakov and two other partners Jeannine Taaffe and Kay O’Donnell who previously worked at the Banfield Pet Hospital and Pet Nutrition parts of Mars Petcare.

The group of partners is also backed by a larger spread of data experts that Mars has been on a tear to find over the last 18 months. “It’s been a challenge because we’ve had to bring in a lot of outside expertise from companies like Twitter and the agency sector in order to really understand the value of data to our business,” said Sudakov. In the last nine months, Mars Petcare has hired a data and analytics lead as well as a data engagement lead, while other senior roles within its global solutions team have been poached from data specialist firms like Merkle. The partners behind the “Companion Fund” are also aided by Digitalis, a separate venture-capital firm for startups focused on human and animal health, that will manage the fund day-to-day. Potential investment opportunities are also sourced through Kinship Partners, an accelerator scheme launched by Mars Petcare earlier this year.

“There is logic to generating growth by starting new things — but the most established businesses in our experience find this incredibly hard, given the odds,” said Blackett Ditchburn, strategy director at innovation consultancy Fearlessly Frank. “Whatever the outcome, a well-run VC fund should beat — or at least equal — the returns made from a conventional stock market investment — so Mars should get their money back in due course — over the next 10 to 20 years.”

Brands acting like venture capitalists isn’t a new trend, but there are few success stories. Capital invested in large, successful brands is there for a dependable, low-risk return. Investors will not be pleased if they look around and find their capital exposed to venture capital-type gambits, even if that stable business is not showing stellar growth.

The post To get closer to DTC brands, Mars Petcare is becoming a venture capitalist appeared first on Digiday.