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Wednesday, March 11, 2015

Bots, Cookies, Fraud & The Great Identity Crisis




“It is far better to advertise to people than to highly sophisticated robots.”
- Sun Tzu, The Art of Ad Tech

To say that there is a ton of turmoil in Advertising Land right now would be a major understatement. Viewability continues to be both a major trend and issue as does fraud and non-human traffic. And in case you missed last week’s bombshell news courtesy of Mediacom’s former CEO Jon Mandel, this opening paragraph from Adexchanger sums it up quite nicely:

“Agencies are not transparent about their actions. Agencies recommend media that is off-strategy when it works for their gain. Agencies accrue media earned by advertisers’ spending and resell it to other advertisers. Agencies demand pay-for-play from vendors in order to be recommended, and cross the line in partnership relationships.”

Whoa! Being an advertiser right now is a rough deal, huh? You’re buying fraudulent often times non human traffic as well as likely paying for ads that never even had a chance at being seen. And to top it all off, your agency is ripping you off, buying media that is not in alignment with your goals and based on the statement above, potentially even profiting from your ad spend by selling extra impressions to other advertisers. Well there’s just about no way to spin that scenario in a positive light…Sorry but that’s all pretty bad. Sure, the world isn’t ending but a potentially large portion of your budget is being wasted, completely and totally wasted…there’s no question that stings.

The tides have started to turn however. Typically large, savvy brands that spend a ton of money on advertising didn’t get that way because they enjoy wasting their money. The rise of attribution vendors was a start. In an online media landscape where everything is measureable, the premise that brands could start to tie interactions and exposures to advertising back to actual results was simply too important to ignore. And all of a sudden the tech world took notice and within hours of each other, Google & AOL both acquired attribution vendors. Rakuten & Oracle (via its purchase of Datalogix) also got in the game with their own acquisitions and there will be more on the way.

Attribution is important but only represents one piece of the puzzle. One of the great tricks pulled by Ad Tech vendors, particularly re-targeting platforms, was buying super cheap impressions that were likely never seen. But because they could drop a cookie, they were ultimately awarded some credit for a conversion down the line. Enter viewability…which aims solve for the aforementioned issue – if an ad is never seen can it really be responsible for driving a sale? And then there’s fraud, bot traffic etc…but it’s Wednesday night and I really don’t feel like writing until the early hours of the morning. Long story short, buying advertising is a tough job and it takes a lot of good partners to accomplish it.

This hasn’t been bad news for everyone. All of this turmoil has opened the door to a very large group of well funded companies that realize this opportunity and want to provide advertisers an another place spend their money. One of the leaders is Facebook, who has recently coined the slogan “People Based Marketing”. Their concept is simple in philosophy; cookies don’t buy things, people do.



And with the majority of purchases still happening offline, if you don’t know who you are reaching, how can you ever truly evaluate the effectiveness of your media spend? Can’t! Facebook has leveraged its ability to identify actual people to create an entirely new way of targeting; optimizing & reporting on ad spend. A cookie will never, I repeat never, represent an actual person. The 3rd party cookie is a probabilistic identifier that is tied to a browser, not an actual human being. Facebook is certainly not alone in this movement, there’s a slight chance you may recognize some of the below companies, who also just so happen to sell advertising solutions:
  • Walmart
  • Target
  • Amazon
  • Alibaba
  • eBay
  • Best Buy
  • Sears
  • Priceline
  • Expedia
  • Apple

The list goes on…and it’s only going to get larger. As people based marketing starts to permeate our industry, the above brands are sitting on some of the most valuable data in existence, identity & transactions. The understanding that you are an actual human being with a pulse and a credit card! 

But this isn’t good for everyone…at the end of the day there is a finite pool of digital advertising dollars and it should be SUPER obvious that accountability is being ratcheted up across the board. As marketers & agencies are held accountable for their ad spend there has to be a migration of dollars spent to platforms that can correlate ad spend to sales. With identity data being the key driver in terms of making that connection.

There’s no question publishers have also taken quite a beating as ad dollars have moved from print to digital. But unfortunately, there is more pain coming…Publishers have always dreamed of also being both Publisher & Platform. It’s been regurgitated more times than I care to count. Need more proof just look here, Many publishers have a bad case of platform envy, compliments of Digiday:

“These days, publishers have platform envy. Many, from BuzzFeed to Gawker to Vox to Forbes, are trumpeting their tech platforms as equal partners to their content prowess. A modern media company, it stands to reason, is part platform and part publisher, or “platisher,” as recently described by Jonathan Glick, CEO of Sulia, a social networking site.”
The real problem with this dream is that  “true” platforms solve for Identity and publishers as a platform do not. “Most” publishers still rely on anonymous identifiers (aka cookies) to determine who their audience is. Well this is kind of an issue if you subscribe to Facebook’s point of view that cookie’s don’t walk into stores and buy things. Without identity you lose out on the ability to properly attribute the value of your media.  And not being able to value your core assets as a publisher seems like kind of a big deal, in a really bad way. Because of the rise of identity based platforms, there are increasingly new ways to advertise to known people and then close the attribution gap by tying ad exposures back to sales. So in a world of logged in vs. not logged in, logged in will win because logged in can provide the “proof”. Just look at the correlation between total email addresses on file & market cap, that should be all data you need.  Imagine Facebook was just a content creation and distribution platform, no form of identity, would they have any value at all?

The funny thing is, this is exactly counter to way publishers marketed and sold print. Print was so powerful because advertisers were buying not only the trust and equity the publisher had built with the subscriber but a known subscriber base. You have to actually give your name, address and hard earned cash to pay for a print subscription. The same content can be consumed online by an anonymous web browser, only identified as Cookie ID 123456, there’s no value there…who is that? You don’t know their name, address, credit card number etc…they are simply a Cookie ID tied to a browser. The digital equivalent of identifying print subscribers would be to capture an email address. As we all know the email address is akin to a digital social security number, it’s the one piece of information that ties all of our online accounts together. The best part, just like its offline counterparts it’s not proprietary. No single platform owns email, which makes it particularly attractive as an online ID. Why? Because if you have no means to identify your own audience, eventually, if you want to remain competitive, you will need to find a solution that helps provide some form of audience identity. And I’m quite sure there will be platforms such as Facebook, Google and others ready, willing and able to fill in the gaps but like a shotgun wedding in Vegas, you may one day regret the decision to get hitched.

The other thing I’m terrified about if I’m a publishing executive is the power and influence a major retailer can wield. Imagine this…

You’re selling into a major CPG Brand – responding to an RFP that is looking to increase unit sales of a brand new product. As a publisher you create a super compelling package with custom integrations and value adds that are going to really increase brand awareness and product sales.

On the other side of the fence you are now competing with a major retailer, who not only is adept at creating compelling content but can leverage data in ways a publisher will never be able to, in addition to reporting on actual sales metrics…and to top it all off premium shelf space is included as part of the RFP response, across their 2,000 brick and mortar retail stores.

That’s tough…even for the best sales person. Just look at the influence Apple has within the App store to drive massive install rates by simply featuring a specific app. In a crowded and competitive marketplace, prime real estate in the digital or real world that can influence and drive real sales, is an incredibly valuable asset.


There will most certainly always be a need to place advertising around specific content. Content that is quality, aspirational, even inspirational…but the fact remains that the majority of the largest advertisers in the world are mass appeal, mass reach brands. Brands that need to drive sales and lots of them to keep the lights on. Advertising vehicles that can report on actual products sold will be in a far superior position to those that cannot. End of story.

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