Month: March 2021

For years, privacy advocates argued that data collection and sharing among countless hidden ad tech intermediaries, via third-party cookies, was a privacy invasion. Thanks in part to their advocacy, government and consumer pressure for more privacy protections has finally pushed Google and others to disable third-party cookies. Now the digital ad industry is gravitating toward replacements that some in the privacy community consider even more invasive.

“Indeed, that irony is not lost on me,” said technologist Ashkan Soltani, who helped craft the California Consumer Privacy Act and served in the Division of Privacy and Identity Protection at the Federal Trade Commission.

Advertisers, ad tech firms and digital publishers for two decades have relied on third-party cookies and the data currency they hold to facilitate the quid pro quo of the open web: content, services and more relevant advertising in exchange for personal information. Some forms of cross-site tracking enabled by third-party cookies have been “abusive,” said Pam Dixon, founder and director of the nonprofit World Privacy Forum, another longtime advocate for a privacy-safe digital ecosystem.

But today, more personal information than ever is being harvested for a new crop of identifiers that can be passed like cookies throughout the ad tech supply chain. Some require email addresses or phone numbers — first-party data — to work. 

Tech firms such as LiveRamp and the Trade Desk and industry bodies like Partnership for Responsible Addressable Media say they protect privacy better than third-party cookies because they transform emails into encrypted strings of numbers and letters, creating pseudonymous IDs. And they argue these IDs are created with people’s consent, because emails and other personal data is gathered when people interact directly with a brand or publisher.

Veteran digital privacy crusader Jeff Chester, executive director of the nonprofit Center for Digital Democracy, isn’t buying it. “We cannot allow the industry’s claim that first-party data is accompanied by permission to stand,” he said. “That is a canard.” So far, there is little guidance and few requirements for what notice to people for consent should look like.

“The proposed first-party identifiers essentially are more privacy-invasive than even cookies, and provide users with less transparency and control,” said Soltani. While people can delete or block third-party cookies, he said, identifiers incorporating hashed or encrypted data “are more problematic” because they create persistent, identifiable connections to people across activity on multiple devices. Soltani said in some ways these technologies produce “even more robust of an identifier than your actual name or other [personally-identifiable information].”

Born with a data addiction

In another blow to the quest to minimize data collection, the race to gather first-party customer data like emails has quickened, as advertisers prepare for the loss of third-party data connections that help them customize messaging and connect ad exposure to sales. 

But strategic efforts to gather first-party data are just a continuation of the industry’s perpetual push toward hyper-personalized communication between advertisers and consumers, said Chester. “It’s really the trajectory of the one-to-one marketing model at the heart of digital advertising since its inception in the 1990s,” he said. “They’ve been growing their first-party data sets and porting them over to Facebook and Google,” he added. “This is not a new trend.”

It was the way in which cookies were designed (back in October of 1994, the same year the first banner ad appeared), that jumpstarted an industry reliant on data tracking at an individual level, said Bennett Cyphers, a staff technologist at the nonprofit Electronic Frontier Foundation, which has fought for protections against digital ad-related privacy infringements for over a decade.  Because cookies were designed with full default third-party access, they “made it really easy to do this tracking and profiling on the web,” said Cyphers. “It’s a shame that the tracking industry has gotten so used to all these practices that are so anti-consumer in a lot of ways, and also seem so dependent on them.”

Presumed consent?

Yet, there are obstacles to the proliferation and adoption of alternate identifiers. Namely, Google’s announcement on March 3 that it will no longer support any cookie replacement identifiers such as those built using email addresses in advertising inventory it sells outside its own properties has compounded uncertainties about these technologies

Another potential hurdle: the law. Few identity tech firms require any explicit or just-in-time notice or informed consent mechanisms for people in the U.S. when their emails are used to build pseudonymous identifiers to track them across the web. For now, many companies employing them presume people have given consent because their privacy policies state in general terms that they may use personal information for marketing and advertising purposes.

But that standard approach may not be appropriate for an industry proclaiming a commitment to consumer privacy and transparency, and it may not hold water with regulators. California’s privacy law, for instance, states that mere acceptance of general terms of use describing personal information processing does not constitute consent for the sale of personal information. And some argue the use of email-based IDs will be considered a data sale under the updated version of that law, which covers personal data collected by a business as of January 2022.

“The regulators will not stand for it,” said Soltani. “[A publisher’s] transfer of my identifier including a hashed identifier [is a sale].”

Meanwhile, Jeff Chester expects a coalition of privacy groups to coalesce to convince lawmakers that email collection does not equal consent for identity tech. In fact, he contends there’s an even greater irony afoot as consumer advocates push increasingly receptive lawmakers for more meaningful privacy safeguards.

“The irony is that now the industry’s attempt to jettison cookies may in fact trigger the political backlash we’ve all been waiting for for two decades,” he said.

Our reliance on travel as a business was a struggle [during coronavirus]. MGM, Hawaiian Airlines, Royal Caribbean, Jet Blue and Wyndham. That was 25 percent of my business, and what an ass-kicking we got. But somehow, we were able to work out of that, add in other brands to our portfolio, but also recognize that we need a portfolio balance. Let’s be a bit more selective, a little smarter about what kinds of clients we have, how they pay for things, then take a real good, hard look at our P&L and figure out how to manage it well.

The gap between media and creative

The relationship between the industries is stressed. I’ll go between a creative meeting and a media meeting and it’s like I’m in two different industries. That’s been the case for the last five-plus years, where one side’s talking data and tech, almost too narrowly. And the other side isn’t even acknowledging it, almost, except in maybe some stunty stuff. They’re like, “Here’s our creative, and then we threw in an Amazon Alexa idea.” That’s not what we’re trying to do here. And on the media side, you talk to programmatic people, and it’s almost like messaging doesn’t exist. I feel like that coming together needs to happen, and I think it’s going to have to be led by the data/tech people, but with some people that understand comms and creative. Right now, that just doesn’t exist yet and I think that’s a gap in the industry.

Navigating the maze of adtech for clients, and getting paid for it

We have an interesting situation, where we slot in people [with our clients] who really understand not only how Facebook, Google, or even Amazon Advertising work, but also how a lot of adtech and martech infrastructure works, and how you should design it. We end up in a situation where we do a lot more consulting-type work … but how we get paid is through the placement of media. The good news is we have people moving up the chain, who are valuable to the client because they’re helping them determine their marketing and adtech infrastructure and their philosophy and strategy for that. But we actually don’t get paid enough money to do that, which is a real frustration.

On fewer opportunities to reach people through advertising

We’ve had to come to terms with the fact that the advertising-paid world … how different it is. The amount of gaming people are doing, the amount of Twitch that’s being watched, along with Netflix, Amazon, Hulu and Disney and HBO. Most isn’t ad-supported, right? So, how are we dealing with the fact that these people are invisible to us? We call it infrequency, the idea of when you’re not available to me, because you just watched Netflix for the afternoon or you’re going to play on your PS5 all day. How do I advertise to that person? Where’s my opportunity, and what’s the tool and the metric and the shared knowledge around this idea that people are weaving in and out of ad-supported inventory? We don’t have a way of addressing that yet. Advertising in general’s really hard right now.

On diversity efforts

A couple of young women, people of color in their early 20s, came up with something called a Once in a Lifetime, because they wanted to tell their stories, and we wanted to hear [them]. They hold an agency-wide Zoom [every few weeks], it’s over an hour long, and it’s just young people of color telling their stories. The stories coming out of there have been amazing. You’re like, “Shit, I didn’t know you had to go through that,” you know? So we’re going to try and actually be the company we’ve told you we want to be. I’ve said to them all along: You can judge me today all you want, but truly judge us in a year, because it’s going to take us a year to do all this.

Color by numbers

With the recent rise of Clubhouse and the continuing popularity of Spotify, Pandora and podcasting in general, audio-related stats have seen a surge over the last year. Some standout numbers from Edison Research and Triton Digital’s The Infinite Dial 2021 report, released earlier in March.

• 28 percent of the U.S. 12-and-older population, some 80 million, have become weekly podcast listeners, a 17 percent hike over 2020. They’re also diverse, with the racial breakdown of monthly listeners being 57 percent white; 16 percent latino; 13 percent African American; 4 percent Asian, and the balance undefined.
• 88 percent own a smartphone, up from 85 percent last year, while tablet ownership and smartwatch ownership have plateaued, at 51 percent and 18 percent, respectively.
• As expected, in social media, TikTok usage soared to 44 percent among the 12 to 34-year-old set, up from 25 percent in 2020. Meanwhile, Facebook saw a drop in respondents saying they use it most often among social platforms — 47 percent say so this year, down from 54 percent in 2020 and 62 percent in 2016.

Takeoff & landing

• There’s upheaval at Publicis Media, with SparkFoundry CEO Chris Boothe taking over Starcom U.S. CEO duties, replacing Kathy Ring, who is leaving the company along with Kathy Kline, the global chief strategy officer.  

• Colin Kinsella, the former CEO of Havas Media North America, has joined the board of Fenestra, a London-based independent programmatic optimization platform that works with brands, media agencies and media platforms.

• Katrina Cukaj, most recently the head of sales for CNN, is moving over to sibling company WarnerMedia (both are owned by AT&T) as new head of ad sales. She replaces Joe Hogan, a 30-year veteran who’s leaving the company.

• Canvas Worldwide promoted Madhavi Tadikonda to evp, chief investment officer, following the departure of Amy Ginsberg, who took the chief investment officer post at Havas Media.

• Omnicom Media Group promoted Sara Porritt to head its diversity, equity and inclusion efforts for the U.S., moving her up from a similar role with OMD, although she also was senior director of integrated media planning for clients Pepsico and Clorox. Porritt succeeds Justin Reyes, who recently left the company to take a role with Major League Baseball.

Direct quote

“We continued to grow our top line and bottom line at industry leading rates, despite covid-19 and exhibited agility in developing new content revenue streams quickly, such as robotic production, animation and online events and driving data and digital marketing net revenues, particularly in the fourth quarter and into this year.”

— CEO Sir Martin Sorrell, in announcing S4 Capital’s 2020 financial results on March 25. S4 posted a 19.4 percent rise in gross profit on 15 percent growth in revenue.

Speed reading

• Digiday’s marketing editor Kristina Monllos looks at the latest flurry of content being created by major marketers, including Pepsi, Anheuser-Busch and Mattel, given the fragmented media landscape and the increasing avoidance of straight-up advertising.

• It was a busy week for the heads of the major social platforms as they testified in Congress, agreeing in principle to support limited requirements that force them to be more transparent in patrolling content. Digiday’s platforms, data and privacy reporter Kate Kaye rounds up where they stood on Section 230.  

• The Wall Street Journal broke the news on GroupM’s latest attempt to bring order to its data operation, this time investing $200 million to build a new technology system and consulting group.

• Think NBC is a TV company? Think again. The Hollywood Reporter covered the company’s One21 event last week, in which it positioned itself as something of a flywheel, with parent Comcast’s broadband powering streaming, Peacock powering content and in-house tech delivering that content and creating ad experiences.

Cookie-based targeting 

First-party cookies are created and stored by the site you visit. This makes surfing the internet more enjoyable because the site recognizes you and automatically applies your desired settings and log-in data from the cookie.

Third-party cookies are placed on a site by a third-party — like an advertiser — as a way to track what you do online. Advertisers use this information to serve personalized ads to you. The problem, however, is you have little control over who is collecting this information or where it is going.

Cookieless targeting

Deterministic identifiers are a privacy-friendly alternative to third-party cookies in that they use deterministic data, typically a hashed email or another form of personally identifiable information, like a phone number, to track you online.

Probabilistic identifiers use a mix of signals — across several channels — to create a profile of you based on matching anonymous data points with data from known users who show similar preferences. It’s effectively impossible to link those data points back to you, but the advertiser knows they have a profile that shares similar behavior to a known user and they can use that information to reach certain conclusions about the person behind the probabilistic identifier.

Google’s Privacy Sandbox

Google’s Privacy Sandbox is a batch of new technologies Google is developing in partnership with the industry to allow advertising to continue without the privacy snafus associated with third-party cookies.

FLoC (Federated Learning of Cohorts) is part of the sandbox that has the most momentum behind it. It is used to sort users into groups, or cohorts, based on common interests in place of user-level identifiers.

Trust API is Google’s alternative to CAPTCHA within the Privacy Sandbox. You complete a CAPTCHA-like program while in Chrome which then generates anonymous “trust tokens” to prove you are real.

Privacy Budget limits the amount of user data a site can collect on you. A budget will be given to the site for collecting data from the APIs in the sandbox. This way, only the most necessary data is passed to the site.

Conversion Measurement API lets an advertiser know if a user saw its ad and then eventually bought the product or landed on the promoted page.

Aggregated Reporting API ensures that performance-focused information, from impressions to reach, is folded into a single report and only reported back if it’s sufficiently aggregated enough. Doing so means measurement isn’t reliant on cross-site identifiers. 

Apple’s App Tracking Transparency

IDFA (Identifier for Advertisers) is the mobile identifier companies use to track  Apple device users (without revealing personal information). Companies will have less access to the IDFA once apps are required to ask people for permission to collect and share them.

SKADNetwork is an aggregate way for measuring attribution of mobile ad campaigns for iOS apps. It launched in 2018, but advertisers were never really incentivized to use it. If they had, then it’s likely many would have had to have scrapped other more established attribution models. Now, they don’t have a chance but to use the SKADNetwork should they want to continue to reach Apple device owners. 

Fingerprinting is what happens when certain attributes of a device — like its IP address or the version of the browser it uses — are used to identify it as a device being used by an individual user. Companies are using it as a workaround to Apple’s crackdown on user tracking. 

SDK spoofing is a type of mobile ad fraud that tricks attribution firms into believing events like in-app purchases or registrations have taken place when they haven’t.

Regulatory headwinds

The General Data Protection Regulation in the European Union is trying to give people more control over their personal data by requiring that businesses gain explicit consent to collect and use that data.

The California Consumer Privacy Act draws people’s attention to the personal information that companies collect from them and how that information can make its way into other companies’ hands. Unlike the GDPR, the CCPA doesn’t require companies to get people’s permission to collect their information in the first place.

Why did you leave? 

It wasn’t so much that I wanted to go but I [realized that] I didn’t want to do what I was doing. Every agency has operations and new business. With new business you have new problems to solve. With operations, there tends to be the same problem over and over. For instance, there’s always going to be turnover with your employees, even if you do the right things. You can try to minimize it. But I knew no matter what I did that after people would come back from holiday break people would probably quit.

They’d have conversations with their parents about what they’re doing with their lives. They’d be feeling some gnarly burnout from the push of Black Friday and Cyber Monday through the end of the year. I don’t blame people, they have to do what’s best for them, but I knew I’d then have to go and have conversations with all of their clients about them leaving and restaff. I knew I’d have to do that over and over and over again. It would never end. Going through things like that [I realized] it wasn’t for me [anymore]. I didn’t enjoy it. 

Why not just go to a new agency or start a new agency? 

[I realized that] all agencies have the same problems. You’ll typically be on a hamster wheel of solving those problems. If you don’t like solving those problems, it’s probably not the right thing to be doing. Over time, [solving those problems] became something I’d done before and I was kind of over it. [I also found that] my personal values don’t really align with what you do at an agency day-to-day. I feel like I stumbled into it because I was good at the craft, I liked it, it was exciting and fun. But when you get past that early hump or stage of growth to [what you have to do to] do it well — I always wanted to do it well — [realized working at an agency] doesn’t match my personal values. 

How so? 

I value fairness and justice. I don’t like being slighted — I don’t think many people do. If you agree to do work, agree to get paid a certain amount and then they change what that is or there’s a misunderstanding where their expectations are not met — which happens all the time — that doesn’t fit with those personal values. 

Did working from home and being removed from the culture of working for agencies accelerate this realization that it wasn’t for you anymore? 

The employer-employee relationship can become more transactional with the absence of agency life and agency [office] perks of the job. I think that’s true and I know that to be true of my experience. I liked being in the office. I miss my employees. I never got to say goodbye, that’s unfortunate. Would I have stayed around longer if work had still been in-person? Maybe. Training remotely sucks — and that’s a big part of agencies. Client services was easier, you humanize the person you’re going to yell at through an email. I probably would’ve had a more difficult time leaving if it’d still been in-person. 

Do you think other people are going through the same thing where the pandemic and work from home has them realizing agency life isn’t for them? 

I think we’ve already seen some of that. Part of the reason I left and other people are leaving is that they realize the barriers to starting a new thing or going somewhere else are at an all-time low and they’re getting lower. Having worked for so many businesses that started from nothing and got to turn into something big, having an active hand in that was super fun — helping all these companies do this made me realize it was doable. 

What would you say to agency execs who might be worried their employees are disillusioned with agency life after a year of working from home?

They should pay them well. Pay your people more. They are less likely to leave, guaranteed. But people should like what they do. It’s healthy to reevaluate where you are in your life personally and professionally. 

“Facebook and Instagram Shops are good platforms to represent your brand, almost like a calling card or a mood board,” said Carlos Jorge, director of e-commerce at Fivestory, which retails luxury brands such as Missoni and Oliver Peoples. “But as a conversion platform, not so much.”

Less than 10% of Fivestory sales are generated by Facebook Shops, but up to 20% of monthly site visits come from Facebook, Jorge said.

Marketing services firm Eyeful has several fast-growing fashion clients with Facebook Shops integrated with Shopify. While each of the brands claims triple-digit, year-over-year sales growth on their own sites, one credits only a maximum 1.4% of traffic to their sites from Facebook.

While none of them have seen sales from Facebook yet this year, Eyeful’s clients still see value in keeping their Shops open. “The integration doesn’t cost anything to set up or take down,” said Ryne Higgins, senior director of digital strategy at Eyeful Media. “It’s easy to leave that line in the water, just in case.”

Completing a purchase in a social media app is still fairly new for consumers. According to a June 2020 eMarketer survey conducted by Bizrate Insights, 18.3% of US adults had bought something through Facebook in the past year, compared with 11.1% for Instagram. But 70.4% of respondents said they had not made a purchase through any social media platform that month.

That hasn’t stopped platforms from rushing to add more shopping features they hope will drive the behavior. Like other social platforms, Facebook has been adding products meant to drive commerce on its site, from Marketplace to livestream shopping to product tags in Instagram Reels. 

In a Clubhouse discussion on March 18, Mark Zuckerberg said there are over 1 million active Facebook Shops, and more than 250 million people actively interacting with Shops every month.

But even with on-platform commerce still nascent, integrating with Facebook is just another way of being where their customers are. And that is still an alluring proposition.

“We have a celebrity client who is interested in social selling through Facebook and Instagram,” said Chris Erwin, founder of RockWater, a media consultancy. The celebrity has a large licensing business, with active social channels. Social selling will put them closer to potential customers (and their data).

Higgins says that brands set up on Facebook because of the low barrier to entry. “Most brands think it can at least bring in low-hanging fruit, easy sales. And if it doesn’t work, they move on to other things.”

As one of Hearst’s oldest properties, GH was founded in 1885 and has had a subscription model in place for decades. Its total circulation, which is a combination of both subscriptions and newsstand sales, was 3.3 million as of Dec. 31, according to the Alliance for Audited Media.

At $20 per year, GH+ is slightly more expensive than Good Housekeeping’s traditional print subscription ($12 per year). In addition to the print magazine, it also gives members access to all digital content, free challenges and bonus guides (such as a 21-day sugar detox challenge that traditionally is sold in the GH Shop for $9.99), deals and discounts to retail stores and even the chance to be a product tester for brands that are hoping to capitalize on GH’s authority in product reviewing.

Seave said that GH is finding that the limit of what fans were once willing to pay, originally thought to be $12 per year, is actually $20. And since most of the items GH is offering to readers at that higher price tag are digital assets, the costs for GH end up being pretty nominal.

Notably, not all of the new members have simply upgraded their existing subscriptions. Though Matthews wouldn’t say how many members were existing subscribers, she said a large portion of conversion from readers to members took place through the main GH newsletter or in the GH Shop when users were browsing one of the brand’s challenges to purchase. When the Sugar Detox Challenge launched at the beginning of the year, GH+ saw a 161% increase in new members between December 2020 and January 2021.

Readers who came to the site via search also tended to have a high conversion rate, Matthews said. “If you’re searching for something, you obviously get a variety of different publications on page one, and so there is an element of choice. If someone clicks on the site that they think is the most trusted source, [they] see the authority and expertise of the brand. Then they say, ‘Hey, I want more of this,’” she explained.

There are also additional indicators that this membership program can also lend itself to GH’s other businesses.

Matthews said that there is a correlation between members tending to spend more on GH’s e-commerce operations as well as top spenders tending to become members, but as of now, the goal is not to capitalize on that trend and turn the membership into an e-commerce funnel. “It’s a great bonus,” she said.

GH editor-in-chief Jane Francisco added that the membership is not a pure revenue play for the brand. “We’re more interested in people who want to engage with the brand and are willing to invest in that access and invest in that relationship.”

What’s more, the revenue itself coming from GH+ will at best be around $200,000 if their goal of 10,000 paid subscribers is met come June 2021. That said, GH+ is still young and can very well serve as a test case for Hearst as it continues creating more digital subscriptions and membership offerings after it spent the past year rolling out its cross-portfolio paywalls.

“It doesn’t look significant from where you sit but it could eventually be significant. If they learn a bunch of stuff, they can [translate] it to all the other magazines they have,” said Seave.