Month: February 2022

With the contest, which aims to get creators to post short videos on TikTok and Instagram’s Reels, the brand is looking to show up where consumers are spending more of their time and do so in a way that’s organic to the platform, explained Brittanie Weaver, Bush’s director of marketing.

“TikTok is where we see UGC work really hard for us,” said Weaver, when asked about the brand’s approach to UGC now with the contest. “It’s a community where people are engaging with each other. People are more human, [the interactions are] more one-to-one and it feels like we’re using that UGC in the right way [on the platform].” 

Since its kickoff last week, the film festival hashtag has been viewed more than 7.6 million times on TikTok. To get the word out about the festival, the company is working with TikTok creators including Ben Treat, Miranda Morey, Ashley Xu, Julian Bass and Tommy Guta. 

It’s unclear how much Bush’s is spending on the effort or what its current media mix is as Weaver declined to share those figures. Per Kantar, Bush’s spent $19.7 million on advertising in 2020 and $14.8 million on advertising during the first nine months of 2021. Those figures exclude spending on social channels, however, as Kantar does not track social spending. 

Bush’s isn’t alone in leaning into user-generated content. With younger consumers spending more time on social platforms like TikTok, watching creators and aversion to advertising, brands have had to change how they reach those younger consumers. Many have turned to user-generated content as well as working with creators on those platforms. 

“In a world where getting product discovery in places like Instagram has gotten very expensive, a lot of brands are experimenting with either going to smaller but faster-growing platforms with higher ROI or exploring driving discovery with high-quality UGC content,” said Katya Constantine, CEO of performance marketing shop DigiShop Girl. “As long as you can measure your ROI, it’s a great marketing option and I would expect to see more brands try it.”

That being said, some caution creators from investing too much in contests like these, as they don’t compensate creators for their efforts.

“Creators deserve to be compensated (and compensated fairly) for the work that they do on behalf of brands,” said Danielle Wiley, founder and CEO of influencer marketing shop Sway Group, adding that without the brand vetting the UGC prior to posting possible issues may arise. “Creators can post whatever they like and tag the brand, and there is no recourse if messaging is off or inappropriate.”

These numbers refer to TSM’s combined social media following: the organization’s branded accounts, plus the social accounts of its team members and influencers across Twitch, Twitter, YouTube, Facebook, Instagram and TikTok. This combined figure is what most esports teams use to pitch themselves to prospective brand partners and sponsors.

“The way teams sell themselves in the space is through their influence,” said Chris Mann, svp of gaming and esports agency REV/XP and former vp of partnerships at esports organizations Dignitas and NRG Esports. “Influence is scale, right? So most teams count their social following across their team accounts and all of their players’ accounts, and their creators, as well.”

“As far as pitch decks, we do reference what our following is, in terms of how we communicate our reach and how we communicate what that total audience is,” said Matthew Boyd, head of research and insights at TSM. “Generally, the way things have existed with the partnership equation, up to this point, is that when we’re talking about social handles and building those into those agreements, we’ve pretty much been focused on those owned-and-operated channels, as well as the competitive roster, specifically. So creators and streamers have been less of a central focus when we’ve been going out to the marketplace and talking about what’s possible from an activation standpoint.” 

TSM’s official branded accounts have a total of 9.84 million followers across platforms, according to GEEIQ. Followership of these official accounts has decreased by one percent since September 2021, though Boyd said that followership across TSM’s social accounts increased by four percent during the 2021 calendar year. Some of this drop might be the result of social platforms’ recent purges of bot accounts, which are particularly prevalent in the esports scene.

But the primary reason for TSM’s follower decrease was almost assuredly the exit of some of TSM’s more prominent influencers in recent months, most notably Ali “Myth” Kabbani, who boasts 21 million followers across platforms and declined to re-sign with the team when his contract ended in December 2021. “Obviously, Myth leaving, that’s kind of a big thing. I don’t think we’re shying away from the fact that we have had some high-profile departures,” Boyd said. “Our perspective is, at the end of the day, we’re a competitive organization. We acknowledge that with any kind of organization, whether it’s esports or traditional sports, talent comes and goes. I think that kind of comes with the territory.”

During Kabbani’s tenure at the organization, his fans dutifully became fans of TSM — but their loyalty ultimately lied with the influencer, not the team. This phenomenon is common in both traditional and electronic sports. “It’s the same within traditional sports,” said George Mead, partnerships director at Fnatic. “When Ronaldo switches from one team to the other, there’s a huge spike in the level of followers of the team that he goes to.”

Though Kabbani’s exit was the cause of the largest drop, TSM’s social media following was already on the decline when he left the team. The organization faced a PR crisis in November, when former team member Yiliang “Doublelift” Peng shared vehement criticisms of the team and its CEO, Andy “Reginald” Dinh. In January, reports surfaced that Riot Games was investigating Dinh for verbally abusing his colleagues and creating a toxic work environment at TSM. “It looks like their Instagram, their Facebook, their Twitch and their TSM in India Instagram are all consistently losing followers — even their YouTube is going down,” said GEEIQ CEO Charles Hambro. “So I don’t think this is just isolated to content creators leaving.”

Ultimately, the loss of influencers such as Kabbani could just be another downstream effect of TSM’s PR crises. In a video about his choice to leave the organization, Kabbani blamed the team’s lack of a “family feel” for his decision. 

“Late last year, serious allegations were made in a highly-public forum against TSM founder and CEO Andy Dinh. The well-being of our players and staff is paramount, and something we take seriously. This is not how TSM as an organization operates, and it is absolutely not who we aspire to be as a company,” said a TSM spokesperson in a statement. “Immediately upon learning of these allegations, TSM and its Board of Directors, with Andy’s full support, created an independent subcommittee, enlisted the services of outside legal counsel and hired an independent investigator to conduct a robust investigation. In addition, Andy recused himself from any oversight of the scope, nature and conclusions of the investigation.”

Controversies notwithstanding, the timing of this decline in followers is not the best for TSM, which entered an eye-popping $210 million, 10-year partnership with cryptocurrency exchange FTX in June 2021. It’s likely that FTX signed this deal with TSM’s combined social media following — then pushing 80 million — in mind. 

“The story they’re trying to tell is one of dominance within the cultural landscape — that’s the entire value proposition for sponsors. They’re certainly not doing it on just present numbers alone,” said Jason Chung, an assistant professor of sport management and executive director of esports at the University of New Haven. “To a certain extent, this is a learning experience for brands — that they have to not just latch onto esports orgs because they’re trendy, or they have fans. They also have to look at the management, they have to look at the way it’s trending, they have to look for scandals, they have to do their due diligence on leadership.”

Despite these troubles, TSM is still one of the most storied esports organizations in the business — and despite its decline in followers, it remains one of the most-followed teams in North American esports, coming behind only FaZe Clan (which has 33 million followers across its branded accounts and 207 million in total). But the organization’s competitors continue to build their follower counts, while TSM’s have stagnated in recent months. If TSM continues down this path, its decreased following could put the organization’s future brand partnerships at risk.

“It’s quite easy for a team to grow multiple percent,” said GEEIQ CPO James Burden. “But to actually lose followers, someone is actively going to your account and unfollowing because they don’t like the content. So that is worrying, to say the least.”

This isn’t the first time Microsoft has purchased an in-game advertising company. In 2006, Microsoft acquired the early in-game advertising firm Massive Incorporated for hundreds of millions of dollars, only for the company to fold in 2010. 

“The short of it was that it was too early,” said Guy Ben-dov, the co-founder of Double Fusion, one of Massive’s contemporaries in the early in-game ad space.

With the in-game advertising industry back in force, there are some lingering questions about what happened to Massive — and how the landscape of today’s in-game ad industry might be different had Massive and other early players managed to stick it out. 

So what happened?

The concept behind Massive — connecting brands with game developers to create in-game ads — was and is a good idea. The proliferation of in-game ad companies in the present day is evidence enough of that. Massive’s failure to reach sufficient scale following its acquisition was more a matter of unfortunate timing than the result of any unforced errors on the part of either Massive or Microsoft. “Two major things have happened through the decade-and-some since then,” Ben-dov said. “Online advertising became much more automated to support the scale, and both mobile games and mobile advertising just multiplied. The idea of having brands inside games, whether it’s interstitial ads or in-game, is a much more acceptable form of monetization for game developers and publishers.”

Indeed, both cultural and technological roadblocks stood in the way of Massive’s growth between 2006 and 2010. In those days, misconceptions about gamers’ relationships with brands abounded, and even brands that shamelessly advertise to gamers today were wary of diving into the space as a result. “There has been a huge shift, and now, gaming is considered to be a social thing, a hobby that helps to socialize,” said Natalia Vasilyeva, vp of marketing at the in-game ad company Anzu. “It helped advertisers to realize that they should be part of gaming, as it’s on the way to becoming the new social media.”

From a technology standpoint, the tools and standardization to bring in-game advertisements to scale simply did not exist during the Massive days. “At the time, they were on the supply side, the side of the game developers. There was not much standardization in game engines; right now, you have Unity, you have Unreal, so it’s enabled us to build two integrations and basically support 80 percent of the market,” said Samuel Huber, CEO of the in-game ad company Admix. “Back in the day, the game publishers were building their own engines, and you had to build custom integrations every time you wanted to integrate with a different game or different publisher.”

Massive was also hamstrung by the lack of programmatic ad buying in 2006. 

“They had to go and find brands and literally put them into the game. There was no delivery mechanism, no ability to target based on users, or even countries or anything like that,” Huber said. “Basically, the lack of maturity of the market, both on the demand side and the supply side, prevented them from running a tech company — they had to be an agency, whereas with us, we relied on Unity and Unreal, and are relying on programmatic being fairly developed on mobile.”

The Microsoft deal may also have contributed to Massive’s supply-side issues. Following the acquisition, Massive worked almost exclusively with Xbox titles, while PlayStation had an exclusive deal with competing in-game ad firm Double Fusion. “We divided, exclusively, a market that just wasn’t big enough,” Ben-dov said. “Because an advertiser doesn’t really care who’s the publisher and the platform — they want to be inside games, or inside the genre. The division here was probably something that truly paused the market.” 

Despite Massive’s closure in 2010, some experts were quick to point out that the company was more of a success than a failure, particularly from its shareholders’ perspective. “For the founding team, it was an unbelievable success for them,” said James Draper, CEO of the in-game advertising firm Bidstack, which formerly employed Massive co-founder Katherine Hays as an strategic advisor. “They were only doing like $1.8 million of actual revenue before the exit — so for them to sell it for $187 million dollars was an unbelievable return.”

Given the cultural and technological circumstances in play at the time, it’s unlikely that any in-game advertising company could’ve taken off in the mid-aughts. But what if they had? What would the in-game advertising landscape look like if Massive had managed to survive and thrive during those early years?

 A siloed space

If Microsoft’s acquisition of Massive had worked out, it may have inspired other big game developers to add in-game ad firms to their holdings as well. Since Double Fusion had an exclusive partnership with PlayStation, this consolidation could have resulted in each major developer or console having its own in-house in-game ad infrastructure. “Hypothetically, it’s plausible; the consoles have their own paths that they’ve carved out, and their own ways of doing stuff,” said Fran Petruzzelli, CTO at Bidstack. “If you use the mobile market as an example, that hasn’t happened.”

The agencies would have more agency

A successful Massive Incorporated would have convinced advertising agencies to investigate in-game advertising earlier and with more fervor. “Back in 2017-18 and early 2019, there was not a single person in any of the major agency holding groups that was tasked with planning campaigns around gaming,” Draper said. “So if they’d continued, you probably would have seen that there would be big gaming divisions at companies — the industry itself would have evolved, I’ve no doubt about that.”

This future did eventually come to pass, regardless, and the modern agency landscape is filled with gaming-specific concerns, both independent and under the umbrellas of the big-five holding companies. Draper gives partial credit to the COVID-19 pandemic for this evolution — “now you’ve got a captive audience” — but it was only a matter of time before the agency space caught up to the reality of gaming’s popularity. Still, if Massive had been successful in the mid-to-late aughts, this evolution may have happened years earlier.

Bringing in the big dogs

In addition to bringing more agencies into the space, the success of Massive may have convinced other major hardware companies to invest in in-game advertising as well. Microsoft wasn’t the only tech giant to dabble in in-game ads in the past; Sony started its own internal in-game advertising department in 2007, but Darlene Kindler, the executive tapped to lead the effort, left the company only a year later. 

With in-game advertising experiencing a resurgence — and Microsoft getting back into the game — it’s likely that Sony will also re-enter the space to take advantage of the gaming IP it gained in its own recent acquisition of game developer Bungie. But if Massive had succeeded in 2006, major hardware manufacturers like Sony might have gotten more directly involved in in-game advertising years earlier. “Double Fusion continued for a good five to six years after [Massive closed], just by working with PlayStation,” Ben-dov said. “I wasn’t part of the company then, but at one point, their CEO was in Japan, just to keep that relationship going.”

A massive evolution

If Massive had made it to the present day, perhaps the most likely outcome is that it would have survived as an agency, not a dedicated in-game advertising firm. After all, during its heyday, the company already acted more as an agency than a true tech company, making its name by acting as the glue between brands and developers. 

If Massive had continued down this path, it could have provided a model for other gaming-specific agencies to follow in the future — and left the door open for its more technologically-minded modern-era successors, such as Admix, Bidstack and Anzu, to establish themselves in the space in the years to come. “The bigger they would have grown, the more difficult it would have been to suddenly say, ‘hey, let’s drop the agency,’” Huber said. “If Massive was successful, I don’t see them suddenly becoming a tech company five years down the line.”

Despite Massive’s struggles in the mid-aughts, the emergence of a vibrant and lucrative in-game advertising industry was, in retrospect, more of an inevitability than a question. Even if Massive had succeeded in becoming Microsoft’s in-house in-game advertising arm, it’s likely that today’s in-game ad platforms would still be around in some form — and that there would be more dedicated gaming agencies to help generate demand for those companies’ services.

“The role of gaming has shifted,” Vasilyeva said. “The pandemic brought us even more incentives to play, and it’s come together in one beautiful puzzle.”

Measuring up

The key hits:

• The third-party cookie’s demise will impair publishers’ abilities to measure the impact of ads running on their sites.
• Efforts to address the post-cookie measurement impact are beginning to get underway.
• The ultimate opportunity is to create a true cross-screen measurement landscape that could help media companies compete with tech platforms.

While the TV networks work to overhaul their measurement systems, web publishers are confronting their own measurement shakeup. 

When the third-party cookie eventually goes away, it stands to break many of the measurement systems that publishers use to track the performance of the ads running on their sites, such as brand effectiveness and attribution metrics.

“The biggest challenge here will be that it affects the advertiser, and then as a result, the publishers are going to feel the impact,” said Angelina Eng, vp of measurement and attribution at the Interactive Advertising Bureau’s Programmatic+Data Center.

If advertisers are not able to measure campaigns’ performance to the extent they are now — Google’s Privacy Sandbox will limit the data made available for measurement and attribution — then that could put publishers at a disadvantage against companies, like the big tech platforms, that are also competing for advertisers’ budgets. And publishers are becoming increasingly aware of the situation.

“Where we’re starting to focus is on the measurement side of the cookie going away. It seems like there’s a little less energy going towards what are the measurement solutions going to look like for brand effectiveness and attribution and things like that,” said one publishing executive. 

Multiple other publishers agreed that post-cookie measurement is a more urgent concern for them in 2022 but that too few conversations are being had about it.

“We need to rethink how we’re talking about measurement, how we’re doing it,” said a second publishing executive. “Those conversations are starting to happen, but it’s slow.”

To be fair, measurement-related movements are typically slow. TV ad buyers and sellers have been talking about weaning themselves off Nielsen’s measurement system for years, but faced with evidence of Nielsen’s numerical fallibility, that industry has quickly picked up the pace to update its measurement landscape. Speaking of which, if TV networks are in the midst of a measurement makeover, can’t web publishers get in on the action? Isn’t this the opportunity to finally establish the cross-screen measurement ecosystem that so many media companies, advertisers and everyone in between have been calling for?

The answer, in short: You would think so, yes. But in reality, publishing executives said they have not been involved in TV’s measurement conversations, though they would like to be. “There definitely needs to be more consistency across platforms than there has been in the past. And so I’m hopeful that will start to take shape,” said the first publishing executive.

One reason that TV’s measurement update efforts have not expanded to encompass web measurement is an apprehension among TV network owners about extending the playing field to include major web platforms like Google and Facebook, said one TV network executive.

That being said, even TV network owners are beginning to appreciate the opportunity to come together, and open up the circle to publishers, in order to develop new measurement standards that can ensure media companies are not at a disadvantage against the platforms. “Because [TV network owners], just like the web, are going to be left out. That’s where Google and Facebook come in,” said a second TV network executive. “No matter what we do, we’re not as strong as Google and Facebook because we’ve never actually done that, to co-develop and co-invent [new standards].”

For its part, the IAB plans to kick off a cross-channel measurement council “in the next few weeks,” and the group’s aim will be to “identify what are the standard KPIs and standard measurement metrics that we need for cross-channel measurement,” Eng said. 

There is an ultimate incentive for TV network owners and web publishers to work together on building the new measurement landscape: Advertisers want it. They’ve been wanting cross-screen measurement for a while, and now they see the opportunity to make it a reality.

Yes, the currency conversation among TV ad buyers and sellers heading into this year’s upfront negotiations is very much oriented around linear TV and streaming, but “that currency has to work for everybody, including other media partners. We want to get to a place where we can capture YouTube and TikTok,” said one agency executive. 

As much as that sounds like a point in favor of the tech platforms, from agency executives’ perspective, it’s a step toward tearing down walled gardens. And from publishers’ perspective, it’s a means of getting their feet in the door. “That can have some trickle-down effects. And even if it’s not perfect for digital, there’s at least enough of a foundation there that we can use to build on,” said the first publishing executive.

“The landscape has changed, and we haven’t changed measurement since the dawn of time,” said a second agency executive. Whatever the measurement landscape looks like in the wake of TV’s measurement overhaul and the third-party cookie’s demise, “it needs to work cross-screen.” — Tim Peterson

What we’ve heard

“The publishing industry has been lulled into thinking, ‘The GDPR is not big, and I don’t have to worry about it because I’m not going to get fined.’ We’re definitely seeing smaller fines than expected. But enforcement is really just ramping up.”

— Publishing executive

The Rundown: Individual subscribers is the New York Times’ new metric of choice

The New York Times has achieved its mission of reaching 10 million subscriptions by 2025 about three years earlier than planned, the publisher announced in its quarterly earnings call on Wednesday. 

But acquiring a subscription-first media company and its 1.2 million built-in subscriber-base is bound to make achieving that goal significantly easier. So when the Times closed its $550 million acquisition of The Athletic on Tuesday and officially rang in that 10 million total, the news publisher had to figure out another growth goal for the newly combined business. 

That new number is 15 million subscribers — not subscriptions — by 2027, making “unique subscribers” the new metric for success for the company’s subscription business. The company defines that metric as an individual who subscribes to one or more of the Times verticals, brands or bundles. It’s an effort to de-duplicate subscribers across products.

The Q4 numbers:

• The Times generated $594.2 million in revenue in Q4, up 17% year over year.
• Subscriptions accounted for 69% of the company’s Q4 revenue, and advertising represented 35%.
• The Times added 375,000 new digital subscriptions in the fourth quarter of 2021.
• 171,000 of those new digital subscriptions were for the publishers’ news product, with the remaining being subscriptions for other products like Cooking, Games and The Wirecutter.

Excepting The Athletic’s additions, the Times on its own added 1.3 million new subscriptions in 2021, bringing its total to 8.8 million digital and print subscriptions. However, the company’s leaders were clear to note on the call that the number of subscriptions does not equal the number of subscribers in the Times’ ecosystem. In reality, the company reported there are about 6.8 million unique digital subscribers that are paying, on average, for 1.2 subscriptions each to the Times and one of its vertical products: Gaming or Cooking.

“It was our second-best year ever for net subscription additions, despite changes in the news cycle following 2020’s historic period,” said Meredith Kopit Levien, CEO and president of the Times. Notably, it was also the first time since 2012 that the Times surpassed $2 billion in total annual revenue, a 16% increase over 2020’s total revenue. 

To increase that number to 15 million, the Times is going to prioritize cross-brand bundles that include access to the Times’ properties and The Athletic. This will translate to approximately 18 million total subscriptions (you read that right: “subscriptions,” not “subscribers”), according to evp and CFO Roland Caputo. 

However, the Times will not necessarily be pushing bundled subscriptions to existing subscribers. Subscribers currently paying for more than one subscription will not be offered any upgrades that would give them access to more verticals at a lower bundle price. “We don’t expect to offer the bundle to anyone today who’s got a multi-product subscription. We wouldn’t offer this bundle for less than they’re already paying,” Caputo said during the call. – Kayleigh Barber

Numbers to know

$9 million: The amount of philanthropic backing that non-profit newsite Capital B received ahead of its launch on Jan. 31. The Black-led site is focused on reporting news for and telling stories of Black communities in the U.S.

⅔: The share of the Financial Times’ 40 U.S.-based journalists who voted in support of unionizing the U.K.-based publisher’s U.S.-operation.

300,000: The number of paid digital-only subscriptions Hearst had by the end of 2021, an increase of about 100,000 or 50% over 2020.

13.2 million: The number of people in the U.K. who used the Apple News app in December, making it the top used news app in Great Britain that month. BBC followed shortly behind with 12.5 million users.

What we’ve covered

How crypto publisher Blockworks plans to hit $20 million in revenue this year by doubling down on blockchain experimentation:

• Blockworks generated more than $13 million in revenue in 2021, with 90% of that money coming from advertising.
• To increase its revenue this year, the business-to-business publisher will expand its consumer-facing revenue streams.

Read more about Blockworks here.

Key challenges Google must face in what is arguably the most pivotal year in its history:

• Google-parent Alphabet recorded $75.3 billion in revenue in the fourth quarter of 2021.
• However, privacy headwinds may portend a more challenging year ahead for the tech giant.

Read more about Google here.

Vice Media Group’s Cory Haik aims for commerce, consumers to represent two-thirds of digital division’s revenue by 2024:

• VMG’s digital division is profitable and currently makes the majority of its revenue from advertising.
• VMG plans to roll out affiliate content on more of its properties and add a reader donation option for its news content.

Listen to the latest Digiday Podcast episode here.

How podcast publishers and platforms are working to grow non-English language audiences:

• Companies like Vice Media Group, iHeartMedia and Tinkercast are ramping up podcast production in languages other than English.
• Beyond translating existing English language podcasts, they are producing original shows in Spanish, Japanese and other languages.

Read more about non-English language podcasts here.

Why publishers are using hoteling software to manage their hybrid workforces:

• Publishers like BuzzFeed and Quartz are using workplace software for reserving desks, gathering office usage data and tracking employees’ vaccination statuses.
• The software can also be used by employees to decide whether or not they want to go into the office on a given day.

Read more about hybrid workforce management here.

What we’re reading

After its less than stellar public debut, BuzzFeed is limiting hiring:
The company’s CEO Jonah Peretti told his staffers that hiring will be limited to only critical positions, and any new jobs will not be added unless there’s a business-case justification, according to a report by Axios. Additionally, without its profit margins increasing, as was the plan of going public via SPAC, the company won’t be able to afford potential acquisitions as easily, which again, was the goal of pursuing a SPAC in the first place.

The Root is the latest of G/O Media’s brands to experience a mass staff turnover:
After former editor-in-chief Danielle Belton left The Root for HuffPost in April, a steady stream of the site’s staffers have since resigned, totaling 15 employees in under a year, according to Gawker. This is a nearly 100% turnover of the 16 full-time staffers that worked for the brand at that time. While Gawker wrote that this was likely not due to the new EIC Vanessa De Luca’s leadership style or vision for the brand, many employees were upset that then managing editor Genetta Adams was not tapped to succeed Belton.

A new bill is aiming to break Google’s grip on the murky ad tech market:
A bipartisan effort being led by Utah Republican Sen. Mike Lee is aimed at regulating the “shadowy world of online ads,” The Information reported, with an emphasis on preventing conflicts of interest in that space. Effectively, if passed, Google would be forced to sell or spin off significant parts of its advertising technology operations.

Passion is a key requirement for journalism jobs, according to job posts:
Of the 293 new jobs posted on JournalismJobs.com from the past two weeks, 155 of them include the word “passion,” “passions,” or “passionate” somewhere in the copy, wrote Joshua Benton for Nieman Lab. In light of the burnout and stress that have plagued the media industry over the past two years, passion might be a tall order. But Benton questions why something that is hardly essential to completing a task is being heralded as a top requirement by hiring managers.

Trump’s war on the media is being played out in lawsuits today:
More than a year after Trump’s presidential term ended, three lawsuits against media companies that were sparked during the time he was coining the phrase “fake news” are starting to see their day in court, according to The Washington Post. One of the most prolific cases is former Vice Presidential candidate Sarah Palin’s defamation case against The New York Times, which could have serious ramifications for the media industry if the Times is found guilty.

Simply put, the popups asking people for consent whenever they land on a site are illegal.  

That means all data collected via those popups from more than 1,000 companies including Google and Amazon must be deleted as a result. Nixing it all presents massive logistical and technical challenges, like how to verify the data and whether the data is actually deleted.

Needless to say, advertisers, publishers and everything in between will need to assess their reliance on the framework immediately. Being as many of those businesses paid IAB Europe for this utility, it could put the trade group in an awkward position.

So it will be interesting to see if — and to what extent — they try to indemnify the trade body for costs involved and damages incurred, said Ruben Schreurs, group chief product officer at Ebiquity.

Which is to say the ramifications of this ruling are monumental.

Take retargeting, for example. Large swathes of it could be illegal if ads run on sites where TCF is employed. The level of precise engineering and quality assurance needed to fix issues like this would be unprecedented. Not least because data gained from TCF is ubiquitous to the point where it’s woven into the very fabric of the online ad market. Any revamp of TCF means industry-wide overhauls to the way advertising works across the European Union corner of the web.

The truth is no one really knows what this means right now. It’s not even clear if the regulators will be able to enforce their own ruling. One thing is certain though: the big tech platforms will be ok with whatever happens given their outlined terms to users. When someone logs into those platforms they’re also consenting to data being shared unless otherwise specified. Publishers don’t have that luxury. The way to get consent to use someone’s data for advertising was via the TCF more often than not.

“This is an atomic bomb for so many things related to online advertising,” said Rob Webster, chief strategy officer at media consultancy Canton.

There’s a lot here to unravel, but essentially it comes down to this: the TCF is a coded character string that contains all relevant information on a person’s decision on whether or not they want to be tracked, and by who. It does not allow someone to block their data from being shared.

The consent string is sent alongside all the other user data that’s normally shared by a publisher to an ad tech vendor ahead of an ad running. It essentially functions as a signal of sorts for other companies to know whether or not they can use the data. It can’t actually block anything happening to the data, regardless of if a person has given their permission for it to be shared.

In other words, TCF relied heavily on good actors and the industry’s desire to be compliant. Not everyone was. Otherwise, consent string fraud, where ad tech vendors alter parts of the consent string to appear as though they have user consent more than they do, would not be rife.

It’s a long-running issue with TCF, but neither its architect (IAB Europe) or the companies (consent management platform) tasked with gathering that consent were on the hook for it. The ruling changes that. It concludes that IAB Europe is a data controller, which makes it responsible for consent fraud and user data transmission — even though the trade body does not collect and process any data itself.

And there lies one of the more contentious parts of the ruling for the IAB Europe. It doesn’t believe it’s a data controller in the eyes of the GDPR. So much so, in fact, that it’s weighing up whether to mount a legal challenge to prove it isn’t.

“I wonder a bit if that means that large international standardization organizations (like the W3C) will in the future also be held responsible for personal data that is structured and defined in their protocols,” said Jochen Schlosser, chief technology officer at ad tech vendor Adform. “Downstream, I believe there are some discussions to be had now, there are some mitigations which will be made (obviously). I am confident that the experts in IAB, from a protocol as well as from the privacy side will find the right actions to evolve TCF towards what the regulator is asking for.”

The IAB Europe has two months to find those actions before they’re submitted to the ruling’s leading regulator — the Belgian Data Protection Authority. If it’s approved, then the trade body has a further six months to make it happen, after which a fine of €5,000 ($5,651) per day will be dished out if it hasn’t fixed the problem.

Looking ahead, the trade body is adamant the TCF can be saved. Time will tell whether that’s true. 

An IAB Europe statement reads, “Notwithstanding our grave reservations on the substance of the decision, we look forward to working with the APD on an action plan to be executed within the prescribed six months that will ensure the TCF’s continuing utility in the market.  As previously communicated, it has always been our intention to submit the Framework for approval as a GDPR transnational Code of Conduct. Today’s decision would appear to clear the way for work on that to begin.”

Some ad execs remain cautiously optimistic a resolution can be reached given what’s at stake.

“When the dust settles I’m sure everyone will see this as a very positive day for the programmatic industry,” said Dan Larden, head of U.K. at digital media consultancy TPA. “The TCF and Open RTB framework has been run over with a fine-tooth comb by European lawmakers and there is finally some clear and precise answers on what is needed to ensure that the way data is collected and shared on individuals is compliant with today’s modern privacy standards.”

The timing of the ruling surprised some within the trade bodies helping to steward the industry through the torrent of legal challenges that have hectored the digital media industry since GDPR came into effect in 2018.

IAB Europe notified its membership of the APD’s ruling, and its subsequent consultation process with sister-DPAs across the EU, in November. Speaking at the time, a source with knowledge of the legal challenges TCF faces told Digiday they expected a degree of debate among the various DPAs, so much so that a final ruling would not materialize until mid-2022.

However, rulings, like patents, are only as valuable as the ability to enforce and defend it. And some fear there are too many nooks and crannies for bad actors to take cover in the complex ecosystem that is ad tech.

Some doubt that governments have the resources to police the digital media ecosystem’s middle-layer of ad tech while others point to the working groups charged with devising privacy-compliant industry frameworks as a key source of the problem.

“Tech, in general, has historically been a cat and mouse game, this is not new, and right now [with the latest TCF ruling] it’s just playing out in higher courts,” said Keith Petri, CEO of Lockr.

“When you look at the working groups there’s a lot more participation from ad tech platforms compared to the main stakeholders [advertisers and publishers], and nobody’s even thought about the consumers.”

“Consumers say they’ll shop where they see the brand’s doing good for the world. But when they’re not sitting in front of the survey and are deciding where to shop, are they really going to follow through with that?” said Jesse Wolfersberger, Vrity’s CEO and co-founder, who said he believes this is the first time a researcher has connected direct action to consumer sentiment in this area. “If you can align your values with the consumer, you’re looking at a 60-100 percent lift in how often that person visits your store. We’re talking major lift, and I was surprised it was that big.” 

“People said they did something based on a specific value, and we were able to actually prove that through the signals we collect from them,” said George Stella, co-founder and president of BIGtoken, which has consumers’ opt in to share banking info, shopping info and other personal data, rewards them with cash, gift cards or digital currency — and lets them control how their information is used. BIGtoken was able to tap 3,500 people in its user base to confirm the premise of Vrity’s research in December 2021.

Vrity tracks values across 20 categories, including equality and environmentalism, but also more of-the-moment ones like employee empowerment, which addresses how companies treat their employees. “Turns out it does have high lift, and a big effect on how many people visit the stores,” said Wolfersberger. “That was surprising but also an encouraging indicator on how consumers are approaching the economy. Without being able to show that these things have a lift, [ad] budgets [featuring these types of messages] get squashed.” 

Some of Vrity’s insights: 

• People who think a retailer values diversity and equality visited that retailer 84.0% more often than those they did think do not. People who think the brand is honest and authentic shopped with in 75.7% more often. People who think the brand treats their employees well shop 65.3% more often, and people who think the brand is good for the environment are patrons 64.1% more often.
• These lifts persist across age, gender and income levels. Age does have an effect on the size of the lift, with people under 35 significantly more likely to shop based on their values.
• Costco, which is known for paying employees a $17 minimum wage, saw a significant lift for Vrity’s value category of “Employee Empowerment.” Consumers who recognized Costco as treating their employees well were 287.7% more likely to visit.
• Kroger, which has made a commitment to sustainability, saw a significant lift in Vrity’s “Environmentalism” category. Consumers who recognized that trait were 147.8% more likely to visit.

Neither Costco nor Kroger responded to emails seeking comment. 

Seth Hargrave, CEO of Media Two Interactive, said values-based messaging has been a factor in many of his clients’ media efforts, including the Charlottesville, Va., Convention & Visitors Bureau (which the media agency just successfully defended this week), which is promoting its sustainability bona-fides such as farm-to-table dining. 

“Anytime you’re looking at research from our perspective it’s a matter of how does that translate to return on ad spend? Something like this [Vrity’s research], that’s more specifically saying, ’Our expectation is you’re going to see X amount of lift or X amount of return on ad spend as a result,’ is absolutely valuable,” said Hargrave. “That gives us media buyers a point that we can begin to forecast results off of, and get buy-in from the client side as well.”

For Hargrave, what’s missing is the effect on lifetime value of this research, given it indicates that people under 35 were more likely influenced by these values, “Are you then using a customer data platform to then prove what that lifetime value is? All of that ties into your media buy as well in terms of how you’re tracking that.” 

Vrity’s research stands in stark contrast to a recent poll conducted by conservative-leaning The Heartland Institute and Rasmussen Reports, which found that American voters believe businesses should focus on traditional business metrics and that a majority of voters who have heard of the Great Reset movement (which incorporates many of the values the Vrity tests for) reject it. The survey of 1,016 likely voters, completed in early January, found that 45% of voters believe the highest priority for businesses should be “providing individual consumers with high quality products and services at the lowest prices,” compared to just 1% who said “using business resources to pursue social justice causes.”