Month: March 2022

Move over kickbacks, rebates and undisclosed fees — accuracy and legitimacy of data are taking center stage

In fairness, data provenance has been an issue ever since a refresh of privacy laws on both sides of the Atlantic. That said, the gargantuan effort needed to sort the “good” data from the “bad” has really hit home with marketers in recent months. It’s become clearer than ever that the industry is hurtling toward a time where marketers will have to rely on several different approaches to do the job third-party cookies did on their own. Being able to interrogate the provenance of data across those approaches is table stakes for many marketers, especially those who plan on continuing to use third-party data — data doesn’t become defunct just because third-party cookies kick the bucket. If anything, this data becomes even more valuable. It’s why agencies are seeing more advertisers take point on brokering third-party data deals. As Mike Bregman, chief data officer of Havas Media Group, explained: “We have a number of clients who are reaching out to large, very expensive third-party vendors to negotiate deals anywhere between half a million and two million dollars.”

Ad tech is marshaling a shift from programmatic volume to inventory quality

Quality over quantity is an oft-used mantra in ad tech. But that’s about the sum of it. Which is to say the mantra has never amounted to much more than private marketplaces. This latest round of chatter, however, feels more substantive. The private marketplaces are still there. But so are data clean room solutions, supply-path optimization plans, control-seeking publishers and instances of disintermediation right the way through the supply chain. In other words, the stakes are higher this time thanks to the depreciation of third-party addressability. When third-party cookies go away completely there won’t be a single solution to replace it. Whenever that happens, advertisers won’t be able to reach as many people. Understandably, they’ll turn to those companies with the best data and inventory needed to help plug the vacuum left by third-party cookies. No wonder there’s a scramble across ad tech to influence or control those assets — just look at the opposite ends of the ad tech supply chain: demand-side platforms are building publisher-direct integrations that bypass exchanges. On the flipside, exchanges are building value-add targeting and ad delivery capabilities that marginalize the role of DSPs.

Data clean rooms everywhere

Used by the largest advertisers. Owned by some of the most influential media owners. Pivotal to the ambitions of the largest online platforms: data clean rooms are becoming a staple across an industry wrestling with stricter rules over what can and can’t be done with data. Yes, they’ve been around for a while but the need for a secure, isolated platform that links anonymized marketing and advertising data from multiple sources. Indeed, Disney, NBCU, Channel 4, HSBC and Boots are among a raft of media owners and retailers to step into the data clean room trend over the last year. Not to mention the evolving clean room solutions from the tech companies. Making sense of it all isn’t easy. For starters, not all data clean rooms are created equal. Some are interoperable, whereas others aren’t. Not to mention the level of security differs from solution to solution as does depth of control over what and how the data there gets analyzed. Naturally, marketers are turning to experts for help. 

“The use of data clean rooms requires not only knowledge about ad tech and platforms but often advanced analytical and technical skills,” said Jenifer Jones, senior data insights director at digital agency JellyFish. “Resources with these skill sets can be difficult to find and without these skills marketers could end up with data that is non-actionable or misleading.”

Publishers: dreams or delusions of grandeur?

Talk to any commercial exec at a premium publisher now and you’ll most likely get a version of this statement: “advertisers are trying to figure out a way to track and profile people without third-party cookies and the most scalable alternative they can test are the audiences we own.” To say many of these execs have been waiting a long time for this moment is an understatement. But they also have a lot of work to do to be able to capitalize on this moment. It explains why so many publishers are trying to figure out ways to gather and then capitalize on proprietary data — from switching ad servers to launching data clean rooms. It’s easier said than done when so many other partners-turned-rivals are trying to exert more influence over the same thing. It creates tension, for better or worse. On the one hand, those partnerships could secure more ad dollars. On the other hand, those partnerships could end with publishers on the sidelines as the rest of the industry profits from their biggest assets. It comes down to how well publishers are able to shift their technology partners’ incentives — moving them away from selling as many impressions as possible to arranging data in the safest, most profitable way possible.

“Publishers shifted some control over the paths to their inventory to buyers through header bidding. It’s not the reason publishers adopted header bidding, but it was an externality,” said Kyle Dozeman, chief revenue officer of PubMatic’s Americas division. “As you would expect, buyers actively optimized those paths towards their objectives. Publishers need to shift their technology partners’ incentives. The timing is right for this, as systems and processes adapt to accommodate new forms of audience targeting.”

In a cookieless world, marketers fragment identity

Yes, there’s still much uncertainty over life without cookies, but one thing is clear: there’s no one approach to identity. Indeed, marketers are testing multiple alternatives to mitigate the loss of third-party cookies. Call it a portfolio-based approach to identity: first, there are the authenticated IDs, which use single sign-on solutions across platforms and publishers: next, are probabilistic IDs, which have developed from cross-graphing solutions and try to build relationships between first-party IDs to support cross-domain targeting and measurement: third, are those solutions that use content and other device signals such as time and location and leveraging machine learning to cluster and group similar devices together according to interests: finally, there’s the use of data partnerships, or first-party IDs applied within the publisher’s owned and operated environment. 

“As the world of identity changes, there’s going to be a period of fragmentation of multiple identity providers that are all vying for the top slot as the provider for the open internet,” said Anudit Vikram, chief product officer at ad tech vendor MediaMath. “It won’t, however, be a market where a winner takes all. This period of fragmentation will continue on like this for a while before a few winners evolve as the alternative to third-party cookies.”

Retail media for the win

The depreciation of third-party addressability could be a boon for retailers-cum-media owners. They own a deluge of first-party data, from across the sales cycle. This puts them in the crosshairs of marketers, many of whom see it as a core part of plans to replace third-party cookies. 

Gap’s chief growth transformation officer Sally Gilligan pointed to shift at the IAB ALM event earlier this year: “What matters is what we understand about our customers,” she continued. “We have deep long-standing relationships with our customers which means we’ve accumulated extensive first-party data. We understand when there’s a new addition to a family, we know when and where someone is going on vacation based on how they dress. We know what experiences they enjoy and the activities they want to do. We also know what lifestyle they aspire to and also what they’re living currently.”

All of that information is commingled with how people shop and how they spend their time — even when they’re shopping with intent. Few media owners can offer that depth of understanding sans cookies. Even fewer can do it scale. Take Walmart for example. Around 230 million customers visit its sites weekly, either in-store or online. That number underpins an ads business worth $2.1 billion — proof that there’s a lot of room in the retail media market for multiple players sitting on good customer data. Amazon’s ads business is reliant on smaller businesses, for example. Walmart, conversely, is more predisposed toward larger advertisers from CPG and FMCG categories.

Magna’s executive vp of global market intelligence Vincent Létang pins the slight downturn on that global crisis, with a secondary contributor being continued problems with supply chains in several industries. “The Ukraine crisis has already hit consumer and business confidence. It will slow down economic growth in 2022 and fuel the inflationary trend,” said Létang in prepared comments when the revised estimate was released on Monday. “It is too early to assess the depth and length of economic repercussions, but Magna believes the U.S. economy is strong enough to weather this new challenge.”

Létang pointed to a robust political ad season as a main driver of the American economy that will prevent further downturn. Citing Federal Election Commission data as the basis for Magna’s projections, he said he expects media to bring in $6.2 billion in this election cycle, a 41 percent jump over the comparable 2018 cycle. The primary beneficiary of this political largesse is expected to be local media, which Magna predicts will secure $4.2 billion, a 26 percent jump over 2018. 

Also helping keep the expected growth to remain significant are ad categories that continue to spend heavily in 2022, including technology, telecoms, entertainment, travel and betting, all of which Magna expects to grow faster than average. Automotive, meanwhile, continues to struggle with supply chain issues. 

Magna expects cinema advertising to be the fastest growing medium by percentage, at 168 percent to $450 million, but that’s off a very small number and relatively anemic growth in 2021 over 2020 due to the movie theater business being largely shut down during the pandemic. Connected TV/streaming is still forecast to grow 27 percent over its $5.8 billion haul in 2021, while short-form video is forecast to rise 23 percent over its $16 billion in 2021.

Meanwhile, Brian Wieser, global president of business intelligence at WPP’s GroupM — and one of the other two prognosticators of media spend, along with Publicis’ Zenith agency — said he doesn’t plan to change his numbers just yet.

“Overall we continue to see global economic activity progressing in a relatively positive direction, despite all of the very real concerns impacting much of the world… [U]nderlying economic conditions continue to generally be supportive of the levels of advertising growth we most recently forecast at the end of 2021,” he wrote in a recent report. Publicis’ Zenith agency didn’t immediately return a request for comment on whether its estimates would change in light of the invasion.

So yeah, Hahn has a lot on his plate. But he carved out some time to speak with Digiday about how he’s managing that workload, including an effort to amend part of the IAB’s CCPA Compliance Framework for Publishers and Technology Companies to reflect amendments being made to the law that will bring marketers into the fold.

The interview has been edited for length and clarity.

You seem to have as busy of a job as ever. The digital ad industry is still sorting out alternatives to the third-party cookie as well as similarly unstable means of identity tracking like the IP address. And then the Transparency and Consent Framework has been found to be unlawful, and California has updated its privacy law and now has an agency tasked with enforcing that law. Europe seems on the verge of passing the Digital Markets Act. How do you rank the work you’re having to prioritize at the moment?

Last year, the biggest project we worked on was the Cross-Jurisdiction Privacy Project. That involved us pulling together 150 lawyers from 11 countries around the globe to accomplish two things. One is we created a compendium of how privacy laws in those 11 jurisdictions apply to digital advertising. And the second part of our project was to say, “Can we create essentially legal specifications that could become inputs to the IAB Tech Lab’s technical specifications that are being built into the Global Privacy Platform for there to be a concatenated string that can cover all of these countries?”

And then phase three is, Is there a policy that could sit on top of the technical specifications? Think of IAB’s CCPA Compliance Framework or IAB Europe’s TCF. Because the technical specs communicate how industry participants essentially transmit the consumer privacy preferences in a manner that’s compliant with applicable local law. Those are like the pipes. But it doesn’t say what you need to do, what are the circumstances in which you need to send a signal and what do you need to do when you receive the signal. That’s local policy.

There’s a technical spec, but engineers don’t know how to encode for the privacy law in South Korea and Japan and Israel and Nigeria. So we partnered together as in-house counsel and with local counsel across the globe and essentially created the legal spec. 

Those legal specs, in light of what’s happened with the Transparency and Consent Framework and the Belgian DPA saying it’s in violation, that has led to companies — publishers and ad tech companies — saying to what extent are they then liable or what changes do they have to make. Basically, to what extent can they trust the TCF. I imagine that perspective could be applied to the legal specs. So what are you having to do to confirm that the legal specs will pass muster with regulators?

The issue that’s happening in Europe, really only the use of TCF, which sits on the specifications themselves. So, bearing in mind that this is all still subject to appeal in the market courts, the question is does the [Belgian DPA’s] decision, in some way, implicate the legal and technical spec for South Korea or Nigeria or anywhere else? And the answer is no. They have their own sets of laws. What we’re talking about is the plumbing that a policy sits on top of. Granted, the plumbing is complicated stuff. But the Data Protection Authority in Europe didn’t question the plumbing. They questioned how the plumbing was used in the TCF that sits on top of it.

They effectively questioned the interpretation of the GDPR as applied to the plumbing of the TCF.

They talked about OpenRTB and the use of programmatic advertising. But at the end of the day, they said IAB Tech Lab’s OpenRTB specification, that they were not a joint controller in this. So they were clear about that. But would IAB Europe, if it were indeed a joint controller, would new information need to get communicated through a specification? Sure. And I think the specification could certainly accommodate that. But I don’t think that in any way impacts what might be done in South Korea. What we’re doing is providing a compliance opportunity in the jurisdiction. We’re saying, “Hey, if everyone builds to this technical specification, you can actually communicate what that consumer’s privacy preference is.” 

Where I’m coming at with this is: California with the IAB’s Limited Service Providers Agreement, I remember in late 2019 having conversations with publishers and ad tech companies; some thought, “Great, this is going to help us maintain compliance,” and others were wary of whether it was actually going to pass muster with regulators. And so now TCF didn’t pass muster with regulators. And last year Google with Privacy Sandbox seemingly said, “OK we can’t necessarily trust that our interpretations are going to pass muster with regulators, so we’re going to bring in the CMA and ICO in the U.K. and have them take an oversight role.” So with all the work you’re going at the IAB, are you bringing the regulators in a similar fashion to what Google’s doing with the ICO and CMA?

We anticipate that we’re going to [engage] with the regulator, and that’s going to happen at some point in the future. But if there are no guarantees in life of anything, one thing I do know is that if we do nothing, we definitely have a compliance problem. So we have to be focused on trying to build solutions. We have to begin to come up with a framework now because waiting till the end of the year is not enough time. We don’t have regulations yet, so we’re going to have to build what we can now and see how they pair with the regulations and figure out what do we need to change or what do we need to adjust once the regulations come in. So there [are] a lot of pieces that need to fall into place before you have that kind of dialogue. And of course, this also needs to be done in a consensus-driven manner that serves the various parts of the ecosystem from publishers and ad tech to agencies to brands.

Let’s talk about CCPA. Now there’s the California Privacy Rights Act that amends the CCPA. What changes, if any, have been made or need to be made to the CCPA Compliance Framework in light of CPRA?

The existing framework is designed to be signed by principally publishers and ad tech companies. Because of the changes to CPRA, we’re going to need marketers to sign on for their first time. That’s going to be an important change. If we want to be able to do things like measurement and frequency capping, we’re going to need marketers and publishers to be able to jointly designate service providers to act on their behalf. That’s critical to just do the basic functioning aspects in digital advertising.

What’s the timeline for getting marketers on board?

This is a consensus-driven process. So I like to think about it as a maybe more productive version of [the] congressional legislative process. We’re engaged right now through this State Privacy Law Summit series in educating brands and trying to drive consensus. We’re talking about going through data flows together. We have a dozen data flows; we’re going through step by step and talking about how does CPRA apply to each step in these data flows. Is it a sale [of information]? Is it a share [under] CCPA? That education has to be done as part of the process. And we’re going to begin also educating on the structure of the amended Limited Service Provider Agreement. The work has already begun. In fact, we’re deep into it.

Is the amended Limited Service Provider Agreement already out?

There’s a first amended Limited Service Provider Agreement that exists. This would be the second amended Limited Service Provider Agreement that would account for CPRA.

Is there a deadline for that? In a way, CPRA has already taken effect, though it doesn’t become “operative” until January 1, 2023. 

We are trying to target an implementation date for January 1. The question is how do we get there in a consensus-driven manner. We’re making a lot of progress. We pulled together the measurement companies. We’re spending a month engaged in a three-part series with brands and agencies. We’re going through data flows. We’re talking about what the amended LSPA is going to look like. We’re gaining input. I don’t want it to be Q4 that an LSPA comes out. I want it to be as early in the year as possible. I can’t tell you if that’s going to be May or that’s going to be August. My goal is, obviously, to make sure that it’s earlier rather than later so everyone has a clear set of understandings and expectations and can talk with their outside counsel about this and mull it over.

On that consensus-driven approach, California now has the enforcement agency headed up by Ashkan Soltani. Do you expect to be or are you already working to have Ashkan Soltani and his agency somehow involved in this consensus-level approach to the second amended version of the LSPA?

When I use the term consensus-driven, we’ve got to get consensus among the brands, agencies, ad tech companies, publishers. Engaging the regulator, you need to have a plan in place. We also need to know what the rules are. So all of [these] pieces are not in place at present to have that engagement. But we expect to have that engagement. But it’s almost impossible for us to do it at this particular point in time where there are these variables that still exist.

In his 40 years of experience in TV production — spanning shows including Fox’s “Hell’s Kitchen,” NBC’s “American Ninja Warrior” and Netflix’s “Floor is Lava” Arthur Smith has seen plenty of changes. Nothing like the past two years, though.

“There was a point between March and July [2020] where we were stuck in neutral. We couldn’t produce anything,” the chairman of A. Smith & Co. Productions said in the latest episode of the Digiday Podcast. 

Effectively overnight, six of Smith’s shows that had been slated to go into production that spring were put on ice. “The day that the NBA canceled their season was the day that we were supposed to start shooting [the new season of “American Ninja Warrior”] in Los Angeles. We were all set up, all ready to go — and we canceled it as well,” he said. 

As quickly as the entire production industry came to a halt, though, projects soon began to return to production in the summer of 2020, albeit with significant adjustments. Two years later, there remain differences compared to pre-pandemic productions, but they are fewer.

“We’re making shows again, and we’re making shows at the level that we were making them in 2019. We just show two seasons of ‘Hell’s Kitchen,’” said Smith, whose company produced more than 200 hours of programming in the past year. He added, “the amount of production and the types of production [going on today], it is essentially back to normal.”

Here are a few highlights from the conversation, which have been edited for length and clarity.

Producing in a bubble

I was very proud that all six of those shows got back into production as early as July [2020] with “Ninja” being the first of any major network event show to go into production. And we did it differently. We shot in one place. We shot in a dome stadium in St. Louis because all the dome stadiums were available at the time; nothing was happening [with major sports leagues postponing or pausing their seasons]. And we got the show done. We created our own bubble, and it was all very safe.

The return of the in-person audience

The only thing that is different and has evolved is the [live, in-person] audience, having an audience or not having an audience. But now we have them again. “Ninja” this year is back to having an audience, and “Ninja” in July did not have an audience. But we found other ways. We did our massive screens and had the audiences watching at home to give that energy. But that’s the thing that has evolved: getting audiences back.

The continuing role of remote editing

That’s something that’s here to stay, remote editing and the ability to edit in the way that we can now. It has made for opportunities for things to be turned around quicker or things to be done differently. And it’s great for the editors because a lot of them are happy to work from home. It’s probably going to be a hybrid. There are certain situations where the producer really wants to sit in the [editing] bay with the editor and work it through.

The current pitch process

At certain places, you pitch the organization [for companies] who have a streaming service and a network and a bunch of cable networks. It’s a competition show, and it can go on any of those [properties], and you pitch that person, and they cover all of them. And the way certain media companies are set up, you have to pitch different people [inside the company] the same show.

“There are so many signals trending around voice,” said Rosa Cubas, social strategy director at Gut. “Naturally, this causes brands to evolve how they use sound to drive significant and memorable associations. Often, we see ‘organic’ music or jingles, like Doja Cat for Taco Bell, as an output of this strategy — and it works!” 

Cubas continued: “I like to think of sound-on or music-forward content achieving three things: Recognition (audio branding), relevance (opportunity for inclusion), and a welcome reflection of the consumer (via desires and value). That said, it wouldn’t surprise me if several brands refresh their actual jingles with culturally-relevant voices in upcoming campaigns soon.”

The opportunity for audio branding via songs or jingles has also increased with social media platforms, especially TikTok, which has songs new and old to the top of the charts (Patsy Cline’s “Crazy” is currently trending on the platform) so often that publications now write round ups of trending songs on the platform. “Today there are more opportunities, not just for TVC spots but for richer stories to unfold across multiple media outlets and online platforms,” said Christopher McLallen, head of integrated production at Via. “The ability to tell a transmedia story is enticing and exciting for everyone involved.”

While jingles have never gone out of fashion — Liberty Mutual and Empire are two catchy jingles that still air today though there had been initial disdain for them from some in the marketing community. Given the meta marketing landscape of today, where making fun of marketing tactics can often be a marketing tactic in and of itself (see: Jaja Tequila) some marketers and agency execs believe that disdain has dwindled.

“There was a time when advertising creatives cringed when asked to consider a jingle,” said Steve Diamond, chief creative officer at Rain the Growth Agency. “It was second only to ‘make the logo bigger’ as the most derided request a client could make. Audio branding gets talked about a lot now. I don’t think the power of it ever waned. Instead, we’ve just lost our aversion to it.”

Even if that aversion persists the catchy audio of a jingle can stick in someone’s mind regardless of how they feel about said jingle, which makes it more appealing for some marketers. “Jingles just work,” said Danny Gonzalez, executive creative director at Goodby Silverstein and Partners in New York, who created the Liberty Mutual jingle with his partner David Suarez.

Gonzalez continued: “There’s no reason why I should still remember that I can have ‘pizza in the morning, pizza in the evening, pizza at supper time.’ And as a responsible parent, I disagree with the claim that ‘when pizza’s on a bagel, you can eat pizza anytime.’ But I still remember it, and sing it, and am thinking about buying some Bagel Bites right now. So, say what you will about jingles. I will continue to applaud them with hands covered in the grease of delicious bagel pizzas I just had for breakfast.”

3 Questions With Sparks & Honey CMO Kristin Molinari-Cohen

Sparks & Honey is a cultural intelligence consultancy. Tell us how you guys are thinking about culture at the moment, given things move so quickly?

In the last two years, people now are truly understanding what accelerated change in the market looks like. It’s been dramatic, the shifts that I’ve seen. We’re looking at cultural shifts in the market, trends, if you will. We’ve seen crazy acceleration of some of those trends that we have been tracking over a long course of time, and then deceleration of plenty of them. So many new types of clients are coming to us and asking for help in a lot of different ways. They’re realizing that culture, because it’s moving 24/7, is something that they need to be considering on an ongoing basis. 

How do you define culture and how is it used in today’s marketing landscape?

We talk about it as a kind of a network of ideas and beliefs and behaviors of any kind of — essentially — [a] manifestation of human achievement. It’s everything. And we are challenged with that a lot, because there’s pop culture, [and] there’s multicultural references. It’s really about everything around human behavior that we use as the basis for culture. And for us, it’s adding bias into our system as opposed to taking it out. We take that pretty seriously because you can’t understand culture if you aren’t thinking about things from a diverse perspective.

Culture is incredibly finicky and today’s generation is quick to call out anything that doesn’t nail it. How do you talk to your clients about approaching that?

This is often a place that we start with clients, which is they need an outside in perspective. Often, it’s very easy over time to start to become very insular and just look at what’s happening internally in our organizations, or making decisions based on things like sales data, which we know obviously shouldn’t be a sole indicator of where obviously things are going. And it’s really about understanding more broadly, where they sit within culture, what are the conversations that are happening around them, and what are the potential disruptors to their business? — Kimeko McCoy

By the numbers

In today’s talent market, companies have spent the last year beefing up employee perks, from flexible work environments to better paid family leave. Still, those efforts are deemed inadequate, “failing to make any real impact on gender equality in the workplace,” according to previous Digiday reporting. Looking at it by the numbers, new research from UK-based fertility specialist company, Family Fertility, shows that 3 in 5 UK employees are unsatisfied with their company’s parental leave policy. More key findings from the report below:

• 1 in 6 parents felt their career opportunities reduced after simply requesting parental leave.
• 23% of employees who responded to the survey said that the stress of work affected their ability to have children.
• 45% of respondents want more flexible working hours for an improved parental leave policy. — Kimeko McCoy

Quote of the week

“We continue to see the market respond to big speeches from marketing leaders, but the reality is the industry is dividing into two: enterprise and mid-to-long-tail [advertisers].”

— Wayne Blodwell, CEO of consultancy service TPA Digital, on true transparency in programmatic advertising and why it’s a ways off.

What we’ve covered

• Advertisers are dealing with less granular data for programmatic advertising but they still want it to go a long way to help deliver the results they desire.
• Inside Jaja Tequila’s reactive approach to advertising.
• Here’s why some esports organizations are focused on TikTok growth.