Author: Scott R Turner

After a strong holiday shopping season, retailers are bracing for a flood of returns—and not just at the customer service counter.
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By Gabriel Weintraub (associate professor at Stanford GSB and chief economist at AppNexus)

The information technology revolution has created a tremendous amount of change in how markets function today. Online marketplaces are complex platforms that can be “designed” and “engineered” through the different levers that a platform controls. In this process, there are at least three features that these marketplaces need to execute effectively in order to become successful, as discussed in Alvin Roth’s book “Who Gets What – and Why” and Peter Coles HBS case “Market Design in Online Businesses.” These three features are at an inflection point in real-time display advertising marketplaces, and I believe we have a unique opportunity to get them right for the industry. Let us go over them one by one:

1. Creating “thickness” and enabling transactions

This means the ability to bring many buyers and sellers on board and then facilitate matches and transactions among them. For example, e-commerce platforms provide “global” reach for otherwise local sellers, while sophisticated search algorithms help buyers find what they are looking for from a multitude of offerings.

The real-time display inflection

We would like to have a thick marketplace and header bid auctions are a case in point. Header bidding enhances the openness of the market, which increases thickness by bringing additional demand sources to participate in transactions that would otherwise be closed to them. To deliver on this promise, however, we need to carefully think about auction logic. First, SSPs and exchanges should avoid using straight second-price auctions for header bidding. Sending second highest bids to the ad server typically results in heavily discounted bids that cannot compete head-to-head with competing highest bids from SSPs and ad exchanges (such as AdX), and fails to increase thickness. Additionally, sending the highest bids without shading them could massively increase clearing prices, which would harm buyers. For these reasons, it is important to come up with creative auction designs that compete fairly with other SSPs and exchanges, effectively increase thickness, while at the same time ensuring good outcomes for buyers and enhancing publishers’ monetization.

2. Managing trust and alleviating asymmetric information

A few decades ago, there were serious concerns due to trust issues on whether e-commerce sites could be successful: who would conduct a transaction in a single occasion with a stranger? Today, we not only transact confidently on these sites but we also use platforms that allow sharing cars and apartments. We trust these platforms because of sophisticated reputation and review systems, payment security, and other mechanisms in place that alleviate asymmetric information.

The real-time display inflection

Historically, this is a dimension in which display advertising has been lagging. In fact, some platforms and sellers have traditionally exploited asymmetric information and buyers’ naivety via non-transparent fees and non-transparent auction logic. However, as the market has matured, buyers and the ecosystem as a whole are increasingly demanding transparency. Buyers, rightly so, would like to know the quality of the inventory they are buying, what fees they are paying throughout the supply chain, and the auction logic of the exchange. Platforms and sellers should provide all of this information in a clear way. Failing to do so will result in a significant competitive disadvantage moving forward.

3. Effective monetization

On one hand, the platform and sellers need to make enough revenue from transactions. On the other hand, buyers need to extract enough surplus from them so that they have the desire to participate. Note that our two points raised above are critical drivers of monetization. With a thick market, sellers enhance their ability to monetize because of increased competition, and buyers have more options to choose from. In addition, both sides of the market can improve their decision-making with better information, for example, regarding the quality of agents at the other side of the market. On top of this, agents can optimize to enhance monetization even further.

The real-time display inflection

Similarly, if the two points raised above are well-executed, both buyers and sellers should benefit. On one hand, with the additional thickness and competition created by header bid auctions, sellers should obtain better prices for their inventory. This will be especially true if sellers are smart when defining auction logic, specifically with respect to pricing rules and hard floors. On the other hand, with better information, buyers can and should become more sophisticated and make better decisions. In particular, given transparent fees and auction logic, bidders can optimize both their path to supply, that is to allocate their spend in the most cost-effective way, as well as their bids.

Overall, I believe we are well positioned to create a better marketplace. If we successfully implement header bidding, increase transparency, and enable supply path optimization, we can increase the size of the pie in the real-time display advertising industry. All sides in the ecosystem—buyers, sellers, and platforms—can benefit.

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This year, Facebook faced a backlash over enabling fake news and racist ads, got hauled in front of Congress for spreading Russian propaganda and found itself under the attack from European regulators. And that’s not to say anything of advertisers and publishers standing up to the tech giant over its measurement screw-ups and dominance of their content distribution. Here are five things we learned from Facebook’s annus horribilis:

Tech has too much faith in tech
A deeply seated belief running through Silicon Valley is the idea that tech will make the world a better place. Facebook may help people stay in touch with loved ones, spread democratic movements and help the marginalized find community, but the now-unavoidable truth is, humans can use tech for ill just as much as they can for good, as Facebook’s past year made abundantly clear. This belief caught Facebook flat-footed when it realized how much its platform was being abused.

Facebook’s strength is also a liability
Facebook’s stated goal has been to connect the world. But the scale that made Facebook an advertising powerhouse also works against it. Russian propagandists, racists and fake-news peddlers wouldn’t use it if it weren’t reaching nearly 1.4 billion daily active users to begin with. With that kind of scale, policing all the garbage that runs through the platform is unwieldy (or at least runs counter to profits). Facebook’s decision to reward sharing on the platform inadvertently fed the spread of fake news as well. Its size also makes it a bigger target for criticism. Live by the sword, die by the sword.

Fake news underscores Facebook’s role as a news source
The fake-news problem made us aware that more people are getting their news from Facebook and other social media platforms. Sixty-seven percent of Americans get at least some of their news from social media, up from 62 percent a year earlier, according to Pew Research Center. Facebook is the biggest pathway to news, with 45 percent saying they get news there, followed by 18 percent saying they get news on YouTube and 11 percent on Twitter. And people’s confidence about their ability to spot fake news is misplaced. The more they use Facebook, the more they’re likely to get fooled by fake news on the social network, according to BuzzFeed.

Facebook’s PR efforts haven’t been matched by the results
Facebook has been on a PR offensive this year, allowing users to flag fake news and hiring fact-checkers from organizations including ABC News and The Associated Press to verify suspected false stories. But whatever goodwill that won it with journalists was short-lived. A year in, some of those fact-checkers complain that Facebook exploits them for its own PR and that a lack of transparency on Facebook’s part hinders their work, the Guardian found. Meanwhile, fake news is still being shared on the platform.

Fake news isn’t just political propaganda
A lot of the attention on Facebook was understandably focused on Russian-sourced ads that attempted to influence the U.S. election and cause havoc all around the globe, but there were plenty of other efforts to exploit Facebook’s size to spread falsehoods. As The New York Times reported, anti-abortion site LifeNews.com, with 1 million followers on Facebook, has been one of the more prolific spreaders of fake news and misinformation. Facebook’s definition of fake news and its approach of going after the profit motive don’t necessarily work in the case of sites like this that don’t conform to other fake-news sites and are not motivated by profits but ideology, the Times reported.

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Hindus have vented their fury against Walmart, which has now withdrawn the sale of Ganesh Plush Doll.

Lord Ganesha in Hindu religion is regarded as God of obstacles and worshiped by everyone and Walmart’s product description that “now he’s also the god of cuddliness” offended everyone.

 Rajan Zed, president of Universal Society of Hinduism thanked Walmart for understanding the concerns of Hindu community which thought that marketing Lord Ganesh as a plush doll was trivializing and insensitive.

Zed further suggested that Walmart and other companies should send their senior executives for training in religious and cultural sensitivity so that they had an understanding of the feelings of customers and communities when introducing new products or launching advertising campaigns.

Earlier, Meat & Livestock Australia was urged to withdraw ad featuring Ganesh amid Hindu protest

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Blood-testing firm Theranos has secured a $100 million loan from Fortress Investment Group, averting a possible bankruptcy for now.
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The predictions are now a stark reality. With its Q3 earnings release in early November, Criteo confirmed what until then had been only speculation: Apple’s new Intelligent Tracking Prevention feature, rolled out with the latest version of its Safari browser in September, is taking a heavy toll on retargeters and industry players that rely on third-party cookies to track and place advertisements.

Criteo said during its earnings call that the feature negatively affected its third-quarter r
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Elon Musk teased details for a pickup truck that would challenge Ford Motor Co. and others in one of their most lucrative segments—though, true to form, the Tesla Inc. chief was vague about his intentions.
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Defined loosely as the generation born approximately between 1996-2011, Generation Z is 25% of the world’s population and is poised to surpass other generations in terms of buying power in the near future. Awesomeness, a multi-platform media company, has analyzed the habits of millennials’ younger siblings, Generation Z, in a partnership with research firm Trendera. 

According to Awesomeness, who is creating content slates and branded content for these young people, the generation can be explained using words such as stressed, global, guarded, fluid identity, rule breakers, niche and tech-natives, among others. 

All of that makes sense, as Gen Z is the world’s first generation of truly digital natives. They were born and have grown up with high-speed internet, smartphones, social media and access to news.

According to the study, teens think that social media, technology and cyberbullying will have the biggest impact on their generation. 

As far as engaging in the digital realm, 62% of Gen Z are more comfortable expressing themselves digitally than in person. 

The top five social platforms that Gen Z is using are: YouTube (79%), Facebook (78%), Instagram (69%), Snapchat (68%) and Twitter (49%).

Strikingly, 71% of teens’ typical entertainment consumption is streaming, and one-third is viewed from a mobile device.

“Creating mobile-optimized content that’s platform specific, direct, and entertaining is essential for brands to reach Gen Z,” said Harley Block, senior vice president of brand partnerships, Awesomeness. “They watch 68 videos in a day — meaning this audience has the ability to sort through content faster than ever before.”

52% of Gen Z are more likely to watch a video all the way through if it makes them laugh. 

“Awesomeness is constantly researching and engaging Gen Z to ensure that the content we create is both captivating and inspiring to our audience, and sharing those insights with marketers who are looking to engage with this hard to reach demographic,” Block said.

As far as their beliefs, according to the study, nearly one-third of of Gen Zs say people their age are more likely to think that everyone is equal. Additionally, teens today are largely in favor of Black Lives Matter (80%), transgender rights (74%), and feminism (63%), with the majority saying these movements should be acceptable in society today.

But with that acceptance and a broader sense of identity, one in five teens admit to having a Finstagram — an alternate private Instagram account where they can post without worrying about likes, comments, ratios, etc.

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Uber is selling its U.S. subprime auto-leasing business to startup-car marketplace Fair.com, ending a bid to attract drivers who lack regular access to vehicles.
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Elon Musk teased details for a pickup truck that would challenge Ford Motor Co. and others in one of their most lucrative segments—though, true to form, the Tesla Inc. chief was vague about his intentions.
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