Data-Labor-Technology

WTF is a shadow blocklist?

The first thing to know is that shadow blocklists aren’t a literal list. They are a catch-all term to describe those instances where a buyer — in a bid to avoid funding rogue publishers — uses algorithms to do so without letting the publisher know the reason. A publisher either knows that a buyer has stopped bidding on their inventory but doesn’t know why or they don’t know it’s happening because the ad tech vendors they sell through aren’t flagging the issue. Either way, publishers lose money. 

Tech site XDA Developers recently saw revenue drop 30% overnight when Google’s demand-side platform DV360 stopped buying ads on its site, said Boris Shterev, head of marketing at PubGalaxy, the ad management firm the publisher hired to fix the problem. The investigation started in October and it took five months of trial and error before Google’s DSP started bidding again in February. Even then, the investigators couldn’t say for sure what they did to get off the shadow blocklist, said Shterev.

Why are shadow blocklists a tough nut to crack for publishers?

Many publishers aren’t close enough to demand-side platforms to ask why they’ve stopped bidding on inventory. Getting those answers isn’t straightforward, as XDA Developers’ execs discovered. “Google may own both sides of the marketplace, but they’re separate entities so a publisher can’t just go to the side they sell ads through and ask why the demand side isn’t working,” said Shterev. 

And even if publishers were able to talk to both sides of Google’s marketplace, there’s a chance that they still wouldn’t be able to. “Google doesn’t want to give out the algorithm for how their systems work because people would find ways to cheat it,” said Shterev. 

Shadow blocklists aren’t just a Google problem, however. It’s just easier for publishers to spot when Google does stop bidding on their ads because it accounts for a large slice of their online ad revenues.

“It’s why whenever we’re analyzing drops in performance for publishers we’re looking at all the different factors that could impact it because sometimes the impact [of shadow blocklists] isn’t visible,” said Mirela Kolarova, manager of yield and account management teams at PubGalaxy.

What should I do if I find my ads are being inexplicably blocked?

The first thing to do is to check that the site isn’t doing anything visibly wrong or nefarious to win ad revenue. Its a long and arduous process that saw PubGalaxy testing a medley of theories, from analyzing bot traffic coming to the XDA Developers site, to getting agencies to bid on traffic in order to see how the pages were being labeled by Google’s DSP.

Eventually, the investigators found what they think caused the problem. The two companies that managed the affiliate and comment aspects of the site were also serving ads on it as part of the deal. That meant that whenever Google — or another ad tech vendor — decided not to bid on ads sold by those businesses because the page contained objectionable content they were sent a notice. Usually, those notices are passed on to the publisher. But neither the affiliate or comment companies usually help sell publisher inventory and so hadn’t thought to pass those notices on to XDA Developers, said Kolarova. They could have been receiving those notifications “for years” and not know it, she said.

“Once the publisher was aware of the page violations they resolved everything,” she said. “We had a day of no page violations and then after that, we got our demand back. 

Start with who is selling

It’s a problem that could be stunting revenue for many unsuspecting publishers. In fact, there are two other publishers working with PubGalaxy on similar investigations, said Kolarova. Other ad tech execs say the XDA Developers investigation spotlights concerns on the publisher’s side. The term is new, said one exec, but the problem is a “real thing.”

“Ultimately, the story of XDA was over monetization and a lack of governance and controls on who is selling,” said John Donahue, CEO at media consultancy WLxJS. “If a publisher is concerned over who is buying them, they should start with who is selling them and place governance on that.”

Should advertisers care?

It depends on how much an advertiser cares about the impressions they’ve won and lost. Most just aren’t close enough to those impressions for shadow blocklists to be a concern now. As Shterev explained: “I don’t think many advertisers really know how to evaluate the sites they’re buying from. They rely on platforms to do it for them.”

The change may be an attempt by YouTube to remove the incentive for publishers and creators to pad their videos with extra content that only serves the purpose of ensuring a video qualifies to carry mid-roll ads. That can compromise the quality of videos and annoy viewers who sit through the interstitial ads only to be rewarded with filler content. Since the timeline in YouTube’s video player displays when a mid-roll ad will play, viewers may see a mid-roll ad is slotted near the end of the video, expect that the content after the ad will be filler and opt to stop watching before the ad plays, preempting the revenue that would have resulted for the video maker and for YouTube.

“You can tell when a video is stretched to be eligible,” said the publisher. Lowering the length requirement “will inherently enhance the quality of videos leveraging mid-rolls because you’re not stretching out for that duration.”

Short as two minutes may seem, meeting the 10-minute minimum can push publishers to produce an additional segment in a video, which can necessitate hiring more talent. “It should lower our cost per video slightly because we don’t have to put quite as much into it,” said a second publisher. In an economic downturn, any chance to cut costs can be a boon. Then there’s the potential for publishers to make more money from these shorter videos because of the additional ads they will be able to carry.

Publishers and individual video creators have prolonged their YouTube videos’ lengths over the past few years, in part, to prop up their revenue. As YouTube cracked down on brand safety following an advertiser outcry in 2017 after ads were found running against extremist videos, video makers saw increased instances of videos going unmonetized, and inserting multiple mid-roll ads in a video provided a means of offsetting the lost revenue. 

The addition of mid-roll ads typically increases a video’s revenue by about 50%, said a third publisher. The figure can vary, though, depending on how many mid-roll ads a video contains and how many viewers sit through those interstitials.

However, to meet the 10-minute threshold, some publishers and creators would fill their videos with bloat, like extending clips or replaying clips at the end of a video. “If you go to any channel with a lot of 10-minute videos, you’ll find a lot of comments where the audience even knows people are filling out the content to try to get it to 10 minutes,” said the third publisher.

By lowering the video length minimum, YouTube may reduce the incentive for publishers and creators to lengthen their videos purely for financial reasons. Or maybe not. YouTube allows channel owners to manually slot mid-roll ad placements in their videos and does not have clear limits on how many ads can be inserted. For the most part, though, publishers and creators are responsible and try not to insert mid-roll ads too frequently.

One creator told Digiday earlier this year that a best practice is to include a mid-roll ad every two-and-a-half minutes at most. Publishers and creators will need to see how many mid-roll ads viewers are willing to tolerate in an eight-minute video.

YouTube’s change could also spur a passive revenue boost for publishers because it will apply to the videos they have already uploaded to the platform. After seeing YouTube’s announcement of the shorter minimum, the first publisher analyzed its YouTube channels’ video libraries and found that one channel had roughly 500 videos that were between 8 minutes and 10 minutes in length. 

Considering YouTube’s reputation for long-tail viewership, the revenue from mid-roll ads being inserted into those videos could be notable, and even if not, it would be found money. “If you’re still doing pretty good viewership on your library, it’s like you’re getting a nice little raise,” said the first publisher.

Some of those placements have been added to make up for the drops in downloads many shows experienced in the spring. After a rocky stretch in March and April, when downloads slid by more than 10% as listeners tried to figure out new daily routines, podcasts finished the first half of the year on a high note, with downloads back up above their pre-coronavirus levels, according to data from the podcast analytics service Chartable. Others were added as free inventory offered to keep advertisers happy.

A source close to Megaphone, which offers analytics and podcast ad technology to publishers including Vox Media and the Wall Street Journal,  said that in the past month more of its publisher clients had begun asking for advice on how to increase inventory in their shows, particularly mid-roll ads.  

But adding inventory to the shows carries risks. Direct response advertising still accounts for nearly half of the podcast ad market, and the effectiveness of those ads declines as ad load increases, said Stephen Smyk, svp of podcast and influencer marketing at the media agency Veritone. Though the specifics of this dynamic differ show by show, Smyk said that adding a new ad slot to an existing show can degrade the effectiveness of that show’s inventory by up to 20%.

“We believe this is due to both additional messaging that a consumer has to process, along with the location of these additional ad spots within a show,” Smyk wrote in an email. “Consumer response to each ad read and show varies dramatically, but by increasing ad load and extending an episode, or by putting additional ad spots in less preferred places within a show, consumer response can be impacted significantly.”  

And adding more content, in the form of longer episodes, does not make up for it, Smyk added. Over the past few years, podcasts have actually gotten shorter, with the median show length now just over 36 minutes, according to analysis by the branded podcast agency Pacific Content.

Adding ads also raises the possibility that listeners will find them annoying and simply skip them. Conal Byrne, the president of iHeartRadio’s podcasting division, said that podcasting, as an industry, has an ad skipping percentage of around 15%, far lower than most other media. By comparison, Magna Global research released in 2017 found that internet users skipped 65% of YouTube ads.

“Podcasting has what I genuinely think is the single best ad product in media right now,” Byrne said. “And some of that is because it’s just a really light ad load.”

Indeed, the top 400 podcasts in the U.S. according to Apple’s rankings contain an average of three ads per episode, according to Statista.

That leaves publishers hoping to raise the revenue they get per episode with a puzzle. Some publishers, such as Vox Media, have been experimenting with new formats, like sponsored show segments, which it runs in existing ad breaks, or sponsored mini-series distributed in its shows’ feeds, rather than increase ad loads at the expense of the listener experience. Ryan Pauley, Vox Media’s chief revenue officer, said he has no plans to increase ad loads in any of its shows.

While the launch of tools including Supporting Cast in the past year have made it easier for podcasts to generate consumer revenue, pivoting to paid often requires generating more content or forgoing ad revenue.

“When you have 220 million downloads a month,” Byrne said, “your goal is really just to keep the medium premium,” Byrne said.

Remote work and shared work spaces will be normalized

With employees working remotely for the last several months and productivity levels still on par with normal in-person activities, agency executives say that they are changing their minds on having employees work from afar. 

That’s true for David DeMuth, CEO of Detroit-based ad agency Doner. The last four months has led to an “epiphany” of sorts about remote work for him. Prior to the pandemic, DeMuth believed that it was necessary for employees, especially those in senior roles, to work at the agency’s office. The past few months, however, have proven that working with employees wherever they are is a viable option. “Now we might not require someone to move,” said DeMuth. “My mind is open to different possibilities now.” 

Going forward, agency executives believe that a hybrid model of employees working remotely some days and in the office on other days will likely be popular once the coronavirus is controlled. That model will likely lead to workspaces shared by more that one agency. 

“Clients don’t want to pay for everyone’s overhead anymore, so it’s an industry that’s ripe for shared work-space with access to common resources,” said Caveat co-founder and managing director Josh Greenberg, adding that shared work-space can be beneficial because “creative professionals and creative service companies all need many of the same tools and vendor resources.” 

A focus on diverse talent 

Without the need for employees to live close enough to commute to an office each day the geographic restrictions of searching for an employee near said office will be removed, according to agency executives. Employers will then be able to open up the talent pool and potentially hire candidates outside of their area. For some agencies, the ability to do so could help with the diverse makeup of their employee base. 

“They’ll be able to hire outside of major cities or typical places they recruit from,” said Michael Tonge, founder of The Culture LP and freelance creative strategist. “That enables people to go further outside of their immediate networks. At a minimum it will lead to diversity in thought.” 

In recent weeks, agencies have been grappling with the lack of diversity (especially in mid-level and management roles) and looking for ways to address the problem. Simply hiring more diverse candidates isn’t enough as there are systemic issues inside agencies that need to be addressed to “enable true diversity and inclusion at all levels when it comes to talent,” said Tonge. 

That said, agency executives believe going forward a focus on “hiring, training and recognition for diverse teams and inclusive management becomes the norm,” said Mack McKelvey, founder and CEO of SalientMG. 

Benefits packages will change

Employees with home offices prior to the pandemic were ready for the transition to working remotely. Those without such amenities have had to figure out what’s necessary to make working at home bearable. Some employers will likely make changes to their benefits packages — like a stipend for office supplies or cell phone bills — part of their benefits package going forward, according to agency executives who say they have to account for the new ways of working. 

“Companies will need to rethink benefits,” said McKelvey. “We cover employees personal cell phone bills and home wifi (always have); but in the future, companies should find ways to offset costs (childcare, home office stipend, etc.) creatively for this new hybrid of in-office/remote work.” 

More of a focus on work-life balance

With employees working from home, the boundaries between work and life have come down. Agency leaders and execs say that now, months into this shift, there’s an awareness that the separation of work and life will need to be rebuilt or remade to make sure that employees aren’t burnt out because those boundaries are gone. 

“It will be more important than ever to recreate some sort of limit so work doesn’t end up invading too much of our personal lives and ultimately creating resentment (which ultimately leads to burnout),” said PJ Pereira, creative chairman, and co-founder, Pereira O’Dell. 

With the lines between the professional and the personal blurred physically, some believe that the boundaries of work hours will become more flexible to account for that. 

“Work schedules and individual availability will no longer be as commonly and collectively Monday-Friday / 9-5 (or 9-9, in agency life), but instead be more limited or flexible depending on individual circumstances,” said Matt Wurst, U.S. managing director for branded content shop Revelation. “Successful businesses and companies will be the ones that recognize, embrace, celebrate, adapt and build upon on these differences.” 

More flexibility

For years, agency executives and marketers have used “agile” and “nimble” as buzzwords to set themselves up as modern and differentiated. The need for teams to be both “agile” and “nimble” has certainly been proven in recent months. That said, the ability to quickly change course due to unforeseen circumstances will be part of agencies’ process long after this moment. 

“‘Pivot’ feels like the word of the year,” said Katy Wellhousen, senior account director at influencer marketing agency RQ. “While agencies and brands have always needed to think through ways to adapt campaigns to cultural shifts, the last four months have proven that there are some things you simply can not predict,” she said. “The biggest learning point for me has been putting aside ego and pride and letting go of a concept that no longer fits within the cultural climate.” 

The changes will come into effect when iOS 14 is released, which is expected in mid-September. Yet there are still many questions left unanswered about how the IDFA changes will work in practice.

“There are significant grey areas that are open to interpretation and require clarification from Apple,” said Matt Barash, svp of strategy and business development at mobile advertising company AdColony. 

Below are six questions that remain unclear for advertisers. Apple declined to comment on the record.

How is Apple going to police and enforce these rules if developers or ad tech vendors attempt to circumvent them?

It’s not yet entirely clear how Apple will detect and clamp down on companies attempting to create workarounds once iOS 14 comes into play.

Eric Seufert, strategy consultant at Heracles Media, said Apple “floated a test balloon” last year when it announced kids apps should no longer use third-party advertising and analytics software — apart from in some limited cases, so long as personally identifiable information (including the IDFA) wasn’t sent to third-parties. The rules came into force earlier this year.

Apple started “carte blanche” rejection app updates for those developers found in violation, Seufert said.

How far can contextual targeting go?

Some mobile ad tech companies have posited that the IDFA changes could mark a shift from audience targeting based on user data to more contextual targeting.

“This is not like the type of contextual targeting people think about from desktop in 2014,” said Offer Yehudai, president of app monetization platform Fyber. Rather it’s about, “what can we tell in a privacy aware manner about the [app session] in real-time to then pass information for the [demand-side platform] to use.”

Examples include how long the user has been using the app, whether the device has enough battery to download an app and whether the audio is on or off, Yehudai said.

Yet it’s unclear whether any contextual parameters will be allowed in the bid stream — even if they don’t present any immediate details about the specific user.

Contextual information could still be considered as having the potential for device “fingerprinting,” which is unlikely to pass muster with Apple. The company cracked down on browser fingerprinting in Safari in 2018.

Will the SKAdnetwork be expanded over time?

Apple’s proprietary SKAdnetwork is a basic application programming interface that let’s an ad network know whether their ad campaigns lead to an app install or other limited “postback” events after the app was installed. The reports are aggregated and not delivered in real-time.

Paul H. Müller, CTO and co-founder of mobile measurement company Adjust, describes the SKAdnetwork as “complete garbage.”

“It focuses on metrics not worth anything to people — like downloads — and does not offer granularity even remotely to run campaigns,” said Müller. The data  “campaign ID” is also limited to 100 values, which doesn’t account for optimization: A typical campaign tends to run thousands of different creatives, Müller added, tailored for different geolocations and A/B testing, for example.

Some industry experts aren’t convinced there’ll be much of a SKAdnetwork 2.0.

“Put down your ambitions for precise attribution,” said Kevin Joyner, director of planning and insight at digital marketing agency Croud. “It’s time to move on, it’s not going to get any better. We should look in other places.”

What’s an ‘ad network’ anyway?

Ad network has become a much-maligned term in the ad tech industry, so there’s a whiff of irony that access to the SKAdnetwork is limited to ad networks, source apps and advertised apps.

Anyone working in digital advertising knows there’s usually more than three participants: A DSP, advertiser ad server, publisher ad server and supply-side platform are usually added to that list at the very least. Yet there’s only one ID limited to whoever is registered as the “ad network.”

Apple defines ad networks as entities that “that sign ads and receive install notifications when ads result in conversions,” according to its developer documentation.

“The definition oversimplifies the industry in such a way that it has the potential to create winners and losers just by ignoring the way the ecosystem works,” said Alex Cone, senior director of product management at IAB Tech Lab.

Wording on Apple’s developer site says if users opt out of tracking, developers can’t place a third-party software development kit in their app that combines their app’s user data with data from other developers’ apps to “target advertising or measure advertising efficiency, even if you don’t use the SDK for these purposes.”

Is retargeting possible? 

If users decide not to share their IDFA with third-party providers, retargeting becomes an issue — and also techniques like frequency capping and controls around recency. 

Per Apple’s developer site if a user opts out from tracking, developers can’t share a list of emails, advertising IDs, or other IDs with a third-party that uses that information to retarget those users in other developers’ apps.

One possible alternative could be if a user has provided login information, such as their email address, and agreed it can be used for advertising purposes. But it’s not entirely clear whether that’ll come up to scratch with Apple either if the user has opted out from sharing their IDFA and then is clearly being targeted on their phone using some form of personal identifier.

Are the changes compliant with GDPR?

On July 2, 16 advertising and publishing trade associations co-signed a letter to Apple CEO Tim Cook in which they asserted that the IDFA pop-up doesn’t comply with GDPR. The trade groups said the pop-up isn’t (at this stage at least) “widely customizable by the app developer and is not interoperable with digital advertising market standards,” such as the IAB Europe’s Transparency and Consent Framework.

A spokesperson for IAB Europe, on behalf of the signatories, said Apple hasn’t responded or acknowledged their letter.

“The silence can be perceived as a signal and an example of how Apple has unilaterally taken a decision without any respect for their partners and ecosystems,” the spokesperson said. “If we still have no answer, next week we will be looking into escalating it to local and European authorities.”

(Digiday previously reported that one privacy law expert — Wayne Matus, co-founder and general counsel at SafeGuard Privacy — found Apple’s decision to create a uniform consumer experience not to be in violation of the GDPR.)