Data-Labor-Technology

A quick recap: Apple last month announced two important privacy changes that will come into effect when iOS 14 is released, which is expected in September.  Later this year, developers are required to include information about how their apps collect data in their product page. Crucially, those developers will also need to ask for permission from users to track them across third-party websites and other apps.

The moves affect pretty much anybody that makes money from mobile app advertising: publishers, demand-side platforms, supply-side platforms, and, perhaps most acutely, mobile measurement firms. 

A reasonable assumption is that most users will probably click “ask app not to track” when the permission pop-up lands on their phones. Low opt-in rates give everyone less data to play with — from the performance ad networks who want to prove they drove an app download, to publishers who want to charge advertisers a premium for their audience. Apple’s counter to this is its SKAdNetwork, an imperfect application programming interface it launched two years ago, that developers can use to get basic data about their in-app ad campaign performance. 

The effect of these changes is a massive disintermediation of the $70 billion-plus mobile advertising market. So, as has become customary whenever a seismic change lands on the scene that threatens to upend ad tech’s current way of working, some industry players quickly revved up their FUD (fear, uncertainty and doubt) response strategies. 

• “Consumers will opt in if we successfully communicate the value exchange!” Perhaps. But there’s not a lot of room to explain that tracking supports the creation of quality bubble-shooting games in the 1.5 lines of space Apple provides in the permission pop-up.
• “Look how many people opted into sharing their location in iOS13!” Yes, but they were using a map app where location is 100% necessary for the app to operate. Tracking in a news app? Not so much.
• “Look how high GDPR opt-in rates are!” Sure, but have you seen the state of some of the cookie walls out there? (Also, the European data protection authorities are under-resourced and enforcement — particularly of the ad tech industry — has taken longer than a lot of industry observers expected.)

One high-profile example of the fog machine in action: 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.”

You’d have thought Apple would have had the legal resources to check this over beforehand.

“That Apple made the decision to create a uniform user experience on ‘consent’ does not appear to be a violation: The GDPR protects the rights to natural persons, not companies or developers,” said Wayne Matus, co-founder and general counsel at SafeGuard Privacy. “DPAs are looking for major players like Apple, Facebook and Google to enforce compliance across their systems. Accordingly, I cannot see a complaint against Apple for providing a standardized consent pop-up being effective.”

As for the interoperability issue, Matus said the argument was more of a business or technical issue than a legal one. Indeed, it’s the job of a trade association to reassure and seek to protect their members. The letter also argues that: “Apple advertising services such as Apple Search Ads on the App Store will strengthen their competitive advantage” as a result of the changes.

So what’s the ad tech industry to do? I’ve heard a suggestion that developers could potentially offer a better experience to users who opt in to tracking and a lesser experience for those who opt out. That, too, seems incompatible with data-privacy laws and a tactic you’d imagine Apple wouldn’t take kindly to: It’s making these changes to improve the app experience, not erode it. 

Ad tech companies are also busily looking at workarounds (though don’t dare call them a “workaround” aloud.) If you remember the cat and mouse game between Criteo and Apple over Intelligent Tracking Prevention on Safari, this too seems like an option fraught with risk. 

“Any solution that is misaligned with Apple’s ideology will not be a solution,” said Ratko Vidakovic, founder of ad tech consultancy AdProfs. “A durable solution has to align with Apple’s values. Figuring out clever workarounds to continue granular user-level tracking — even if anonymous — seem contrary to Apple’s intentions.”

Workarounds are essentially ad tech 101: solutions for problems created by bigger players. But perhaps they were ad tech 101 for ad tech 1.0. With revenue diversification top of mind for most publishers and a much more enhanced focus on privacy and safety — helped along by new regulation and big platform changes — any advertising solution in this new era can’t afford to relegate the actual user to an afterthought.

“The question is: Do we want to embark yet again on a story of who’s going to get smarter at working around each other’s constraints or set of policies, or do we want to define what is the playing field we want to operate in, in line with users’ needs?,” said Charles-Henri Henault, vp of product for Criteo’s ads platform.

But even if there is an ad tech epiphany, there remains a lingering question: Will Apple even want to listen at all?

“Well, I was thinking A-list,” said Pittman, according to Kassan.

“Humor me, what have you got?” Kassan responded.

“Elton John.”

“I said: ‘Partner’,” Kassan recalls.

Cannes Lions has grown into the advertising industry’s totem event. The weeklong June jaunt to the French riviera is the ultimate boondoggle: a sun soaked cocktail of awards, conference sessions, beach-side meetings and late-night partying.

Founded in the 1950s, Cannes Lions initially focused exclusively on celebrating the creative side of the advertising. Over time, media agencies got wind of the festivities and started attending too. It expanded further when marketers hopped aboard.

Jim Stengel, the former CMO of Procter & Gamble, first took a contingent from the consumer goods giant in 2003.

“It changed the festival forever,” Stengel said. “I did it at the suggestion of a creative director at Saatchi, to elevate our standards for creativity, and to address our systemic issues that crushed creativity.”

Soon after, tech companies like Microsoft, Google and Facebook began planting their flags on the event — hiring huge sections of the beach to host panel sessions, meetings and parties. Later, flush with venture capital money, ad tech companies flooded the harbor with a flotilla of branded yachts. 

As the event ballooned, so did the associated costs. Combine the price of a business class flight from JFK, a 5-star hotel stay, delegate badge, a generous expense allowance to wine and dine clients and a delegate badge and a Cannes Lions trip can easily cross the $20,000 mark for a single New York agency executive to attend. That’s not to mention the fees to enter awards.

Coronavirus puts the rosé on ice

This year there were no yachts, the rosé was put on ice and rubbing shoulders with anyone — let alone A-listers in the south of France — was strictly prohibited. In light of the coronavirus crisis, Cannes Lions organizers Asciental canceled the 2020 in-person event. In its place was “Lions Live,” a slickly-produced virtual event featuring content from the likes of multi-award-winning director Ridley Scott, Pernod Ricard North America CEO Ann Mukherjee and Lego CMO Julia Goldin. The awards ceremony — the part of the event most advertising creatives deem its raison d’être — was also postponed until next year.

Schmooze — seen as integral to dealmaking and recruitment in the media and marketing industries and core to tentpole events like Cannes Lions — is largely on hold this year. There are unanswered questions around whether it will return in the same way — and if it really was necessary to do business after all.

Industry veterans said the key qualities of events like Cannes are their efficiency and serendipity — there’s a good chance you might bump into everyone you need to meet for the entire fiscal year while strolling along the Croisette. At Cannes 2019, FCB chief executive Carter Murray said he had around 45 meetings in the diary — many of which were held on the yacht the ad agency hires each year for the festival — plus 10-15 “informal” meetings with clients, journalists and employees.

While professionals around the world have learned to replace in-person meetings with Zoom calls, drumming up new business is trickier without the in-person element.

“It’s probably harder to create new projects, new relationships and new deals — whereas if you know people, it doesn’t matter. You’ve already met, broken bread, had a drink, socialized,” said Terence Kawaja, CEO of investment bank Luma Partners. Plus, at Cannes, prospects are in a more relaxed mood. “It’s in the south of France, [they’re] wearing shorts or linen, or holding rosé on a yacht … context does matter when it comes to dealmaking.”

Most of the veterans interviewed for this piece are hopeful that Cannes will eventually return as normal– vaccine and safety permitting. But many of those executives also said this year’s break could offer a chance for a much-needed reset. The coronavirus crisis has heaped financial pressure on many agencies and media owners, forcing CFOs to drastically scrutinize ancilatory expenditures without a demonstrable return on investment. Advertising holding companies had already heaped pressure on Cannes Lions in 2017 to make the event shorter and to reduce the cost to attend and enter awards. Ascential responded with a streamlined “reset” of the festival the following year — and organizers may feel there’s little fat left to cut.

Time to hit reset?

More recently, the huge worldwide conversation about racial injustice following the killing of George Floyd has sparked a great deal of soul-searching in the advertising and media industries about racism, diversity and inclusion within their own ranks. To some in the ad industry, Cannes seems like a relic of a bygone era.

“From the outside looking in, if the cast of ‘Mad Men’ had a summit you would hold it in the south France, with a bottle of liquor … a few boats with your people, pull in some Hollywood people you might have seen at the Vanity Fair Oscars party … to sit on a panel,” said Bennett D. Bennett, principal at Aerialist and founder of 600 & Rising, a new non-profit that is working to advocate for Black agency employees. 

Bennett pressed on the need for Cannes Lions to pledge to no tolerance for any form of racism or microaggressions at future events and to diversify its judging panels, potentially including activists — especially as some of next year’s work is likely to focus on social justice issues.

Amy Kean, brand and innovation director, partner at &us and a former ad agency staffer, hasn’t attended Cannes but is staunchly against what it represents.

“My biggest thing is the classism in our industry and this really archaic view that a decadent lifestyle should represent the advertising industry … Cannes for me doesn’t represent in any way a fair and equal industry that listens and has humility,” Kean said. “The more everyone talks about having brands with a purpose, saving the world, saving the environment … the more it feels inappropriate.”

Marla Kaplowitz, CEO of ad agency trade association the 4A’s, is hopeful next year there will be less emphasis on the “yacht culture” and “more on the learning, creativity and really doubling down on the diversity and inclusion aspect.” She added, “You can’t just keep looking at senior people, it’s going to be more inclusive in terms of the people that get to experience it,” Kaplowitz said.

Next year’s event will likely offer a blend of physical and digital content, according to Simon Thomas, managing director of Cannes Lions. “I think that democratizes the experience and potentially allows us to extend it,” he said. 

This year’s forced switch to virtual events has leveled the playing field for events organizers around the world. In-demand VIP speakers are suddenly available when they don’t have to take a transatlantic flight, which pits huge festivals like Cannes Lions in direct competition with company webinars. 

“A lot of companies think about the ‘what’ — a festival of creativity — and ‘how’ we executive. People need to spend more time right now on the ‘why’ … the purpose, the value proposition,” said Shelley Zallis, CEO of The Female Quotient, the official Lions Live Equality Partner.

Both Cannes Lions’ Thomas and FCB’s Murray noted that following the last financial downturn, 2009’s Cannes was much more focused on creativity aspect versus the boondoggle. They predict the same thing will happen again when the event returns in its physical form. 

But don’t write off the art of the schmooze just yet. Experts predict there will be pent up demand for the return of major events among a legion of Zoom fatigued advertising and agency staffers, pining for the razzle dazzle of one of the major perks of the job.

“2022 for something like Cannes could be cracking if the market is starting to come back,” said Bruce Daisley, Twitter’s former vp EMEA and now a writer and consultant on better ways of working. “People will be like the last days of Rome: ‘We’re here again! It’s a carnival!”

Since 2016, trade bodies and steering groups have created a more palatable version of the first framework that suits more stakeholders. Due to roll out in March, the IAB extended the deadline to August so companies hamstrung by coronavirus could get organized. Here’s an update on the progress.

The purpose of the framework is to standardize how businesses —  publishers, ad tech vendors and agencies — can continue running programmatic advertising on the open exchange in a way that is compliant with GDPR. The updated version has been improved, particularly around how data processors, like Google and vendors, can use publisher user information.

Google’s involvement, like all publisher and platform partnerships, is both a selling point and causing some consternation.   

As Google controls so much of the ad market, having it join TCF is key to the framework’s success. But publishers are still keen for more details on how exactly this will look while the clock is ticking down.

“The main problem for us is the IAB and Google haven’t actually agreed how they will work and Google joining was the main selling point,” said one publishing executive. “Google’s policies are shifting faster than a gearbox in a Formula 1 car so it is hard to work out how that side of compliance looks.” 

German media company Axel Springer and Nordic group Schibsted are irked by Google seemingly dictating how others should process data, allegedly using its strength to push on what was initially agreed in the framework to suit its own needs.   

“We should not be having our compliance dictated by a vendor, no matter how big,” said the first publishing executive. 

Google, and IAB Europe, maintain the tech giant is working within the confines of the framework. Like any other vendor or publisher, Google can set any contractual terms that it likes,” said Filip Sedefov, legal director at IAB Europe. “[Google] would probably do that with or without TCF,” he said. “It’s a fake idea to think that TCF would reinforce that position in any way.” 

Vendors using the out-of-date framework would be potentially flirting with GDPR non-compliance.

For the second version, consent strings — which represent the permissions the vendor needs to use data — contain more elements and segments about that user than the first iteration. Vendors need updated information on user consent to be processed. 

For publishers who are ready for the deadline, they will have to ask for consent again, but it’s unlikely to lead to a drop in consent and so a drop in revenue from ads that can’t be targeted. 

Currently, 460 vendors are operational on TCF 2.0, about 80% of vendors. Roughly 600 vendors signed up to the first iteration. That’s causing some vexation among publishers.

“Ad tech players aren’t quite ready for it,” said a second publisher. “All publishers are getting ready.” It’s true that publishers and consent management platforms have to do less development than vendors. Vendors have to do more development work than publishers to make sure they can receive and read the right signals.   

“DSPs and SSPs could indeed be a risk towards the deadline,” said a former publisher, “since they have to technically ‘digest’ all the tracking pixels, which are to be passed on from publishers to advertisers, and vice versa.”

Europe’s patchwork of different regulatory boards and data protection officers make standard implementation difficult and local interpretations likely. 

“Not a lot of DPOs seem to have a deeper knowledge of the details TCF will be providing,” said the former publisher. “There’s more work for IAB Europe and the local IABs to do.”

Hong Kong’s South China Morning Post has covered the territory’s role as a unique link between China and the rest of the world since the newspaper’s founding in 1903.

But that link has grown fraught as China continues to crack down on dissent and pro-democracy protests via the national security law it drafted and passed late last month.

Gary Liu, the English-language newspaper’s CEO since 2017, worries that its independence depends on that of the territory. “If the laws of this city and the judiciary that protects those laws change to the point where there is no longer press freedoms in this city, the South China Morning Post will change,” Liu said. “And I think that would be a very, very sad day for this city, it would be a very sad day of course for the Post, and it would be an unfortunate day for the world.”

The coronavirus pandemic presents an additional challenge. Though Hong Kong was hardened by its experience with the SARS outbreak in 2003, the virus has combined with the protests that began last year to shut down the industries, including tourism — Hong Kong has been the world’s most visited city for years, according to Euromonitor — that the SCMP depended on for advertising revenue.

These obstacles follow years of readership growth for the South China Morning Post. Alibaba bought the paper in 2015, and brought its paywall down shortly after.

Liu said this allowed the media property to have “far exceeded” the scale it had set out to meet. The English-language paper went from 4 million monthly active users, when the paywall came down, to more than 50 million in recent months, according to Liu.

Now, said Liu, “it’s about when do we believe we have the right product for us to ask some audiences around the world to start paying for the South China Morning Post again?”

For him, financial success is “the only way long-term to ensure and protect editorial independence.” A third of its readers are in the United States, he added.

The pandemic has accelerated initiatives to grow reader revenue, with SCMP aiming to organize 40 virtual events this year as opposed to the 10 in-person ones they’d been planning on. The Post is also launching SCMP Research, a paid vertical.

“China is unique because it’s so important and yet it is still a closed information ecosystem. And there are not a lot of people who can properly extract and can properly parse and can properly distribute the information within China to the rest of the world. And we happen to be able to do that,” Liu said.

Here are highlights from the conversation, which have been lightly edited for clarity.

For Hong Kong, a double whammy

“For any media industry that relies on advertising, the primary advertising verticals were impacted by both the protests as well as Covid-19. The key advertising verticals are retail — largely tourism-driven retail — F&B [food and beverage], and the actual industry of tourism itself. And those industries effectively have been shut down for, at this point, nearly a year.”

Covering Hong Kong (and China) for the whole English-speaking world

“The Post has always been English. Today we have the largest English-language speaking population that Hong Kong has ever had, but that’s still only a little over 2 million people out of a city population of 7.5 million — never been the majority, but they have been the power brokers. During colonial times this was the paper that reported on and for everything that the British government did. The government ran off of the pages of the South China Morning Post, was held to account by the pages of the South China Morning Post. It was for the elites. And even as the government’s language has somewhat changed, the power brokers of the city have remained primarily English-language, obviously in business, but also in consumption. And now increasingly, we are speaking to the Anglosphere all around the world who are trying to understand this city as well as the country it belongs to.”

The Hong Kong protests are multi-faceted

“The Hong Kong protests were and still are much more complicated than just single-issue. It’s a movement that has had its roots over multiple decades and reached a boiling point because of an extradition bill last year. The protests themselves represented many different opinions and many different hopes for the city of Hong Kong, just as the Black Lives Matter in the United States represents many opinions and many points of view. If we read just global foreign correspondent reporting about the Hong Kong protests, it might boil it down to the most important call and the most important point of these protests, but it does not flesh out everything else that’s in the periphery. And that periphery matters to understanding Hong Kong’s complexity — why people felt it so necessary to step into the streets in the millions and call for change in governance.”

Turning (back) toward reader revenue

“Just like everyone else, we are in the process of reinventing what business looks like for the Post. Of course reader revenue is on our roadmap, and Covid-19 has only accelerated our plans to build a product that’s worth direct value exchange with our readers. [Like] virtual events. Our events business was well established but we were talking about 10 events a year. This year we’re going to do 40 events because it’s so much easier to put on an event virtually and there’s revenue to be made there. We’ve established a new knowledge vertical — effectively taking out subject matter expertise and packaging it together for insiders. It’s almost a B2B product. Not every news organization can do that because not every news organization has that truly unique, deep expertise. But we happen to have it, and it’s one that corporates are willing to pay for. Our goal of taking down the paywall was to grow to a certain scale, and we have far exceeded that scale already. When do we believe we have the right product for us to ask some audiences around the world to start paying for the South China Morning Post again? And that is going to come sooner rather than later, I think. We can go back.”

Join us on Friday, July 17 at 12 p.m. ET on The New Normal, a weekly interactive show focused on how publishers are adapting their businesses. Kerel Cooper and Erik Requidan, hosts of the Minority Report podcast, will talk — and share excerpts — with Digiday about what they’ve learned about diversity in the worlds of ad tech, business and media. Register here.

One example of a brand that adapted its digital strategy due to COVID-19 is

King Arthur Flour, the oldest flour company in the U.S. The pandemic resulted in a surge of at-home baking. Left without the ability to rely on brick-and-mortar sales during a time of quarantine, King Arthur Flour’s digital team drove demand online, publishing a new celebrity baking series and other creative, highly relevant content on their site. As a result, the company’s sales increased 200 percent year-over-year, and website sessions spiked by 260 percent. 

In the past, these efforts would likely have taken years, and while this period of rapid change has been difficult for most organizations, many of the accelerated moves made in the first half of 2020 will have significant market-wide impacts for years to come. Now, other brands can be just as successful at rapid digital transformation — especially if they lean into the three biggest trends driving it. 

Trend One: Customer experience is king, fueled by intelligent use of data

A taxi, an Uber or a Lyft ride can all get passengers from point A to B — at the core, they are virtually the same product. In practice, however, the Uber or Lyft experience almost always stands out as a premium customer experience. These companies’ interactions with customers are personalized in every respect, including their mobile applications, emails, text messages and more.

For years, the promise of a truly personalized customer experience was elusive, only available to certain brands — like Uber or Lyft — that could make large engineering investments. Today, any company can deliver meaningful technology-driven customer experiences, thanks to the democratizing influence of open-source software. But personalization remains difficult, as it still requires that organizations get a handle on their customer data, which isn’t an easy task and isn’t something that open-source tech alone can solve.

Only when brands use data to understand their customers’ preferences and intentions can they deliver truly relevant experiences — and in difficult economic times, truly relevant experiences help businesses stand out and drive much-needed sales. It will take a new kind of marketer to bring technology to bear to secure the customer experiences in this way.

Trend Two: The rise of the technological marketer

Marketers have become increasingly reliant on technology to drive memorable digital engagements. Twenty years ago, a web content management system was a stand-alone application run by the information technology team. Today, content management is deeply integrated in the marketing technology stack and operated by marketing teams. It’s not unusual for an ambitious website to have five or more connections into other systems. These integrations are required to help deliver personalized and optimized customer experiences.  

Marketing technology expert Scott Brinker counted more than 8,000 marketing technology vendors in 2020, a 13.6-percent increase over 2019. And as their roles have evolved into that of technological marketers, today’s teams know how to navigate this landscape to choose the best tools for their organizations. For technological marketers, it’s essential to have the right platform to integrate new tech and data, and the tools to continuously optimize personalized customer experiences. 

The rise of the technological marketer has enabled a new partnership between marketing and IT. Marketing can now control the delivery and optimization of customer experiences, while empowering IT to focus on new business capabilities and innovation. 

Trend Three: Open-tech solutions replace closed systems

More and more, marketers find themselves road-blocked by closed systems. When a marketing automation system can’t “talk” to various database sources, it can be impossible to implement effective personalization. If an email marketing tool only draws upon the data contained within its own system, it misses out on the data that’s being collected by a separate web analytics tool. Examples of these types of silos across the traditional marketing technology stack abound.

Without the ability to integrate digital marketing tools and the data contained within them, customer experiences will continue to be disjointed and impersonal. In fact, research shows that 60 percent of customers are frustrated with brands’ ability to predict their needs, and think they aren’t doing an effective job of using personalization. To address these frustrations, brands need to think of openness and interconnectivity between technologies as a must-have, not a nice-to-have.

Until recently, the idea of “open” technology was a hard sell for marketers. But developers have embraced open data, open APIs, open-source software and connectors between best-of-breed tools for years. Trending toward openness will bring the technological marketer into the next era of personalization and campaign success.

The next era: From resilience to transformation

It’s been impressive to see how resilient companies and professionals have adapted so rapidly. Having the right infrastructure, team culture and access to tools and data has fueled these transformations. This type of adaptation has been essential to business survival. And these changes, made under tremendous pressure, will be the key to succeeding as more of the world becomes permanently digital, enabling the kinds of digital transformations for which organizations have been yearning for years.