GDPR Will Bring Fundamentally Better Advertising

If you live in Europe, you already know about the General Data Protection Regulation (GDPR), a new regulation of consumer data that takes effect in May 2018. Its objective is to return control of data to the individual consumer, and it strikes fear into the hearts of businesses, especially marketers. Even if you are not in the EU, you are likely to be affected, as you cannot always tell when you are targeting a European consumer in a programmatic buy. From Wikipedia:

The implementation of the EU GDPR will require comprehensive changes to business practices for companies that had not implemented a comparable level of privacy before the regulation entered into force (especially non-European companies handling EU personal data).

There is already a lack of privacy experts and knowledge as of today and new requirements might worsen the situation. Therefore education in data protection and privacy will be a critical factor for the success of the GDPR.

The European Commission and DPAs have to provide sufficient resources and power to enforce the implementation and a unique level of data protection has to be agreed upon by all European DPAs since a different interpretation of the regulation might still lead to different levels of privacy.

We’ve written about this before, but now we have a more optimistic take on it for marketers. We think that its implementation, once the kinks are ironed out, will allow not only for greater consumer privacy, but for more effective ad spend. Several companies are already trying to bridge the gap between consumers and advertisers with personal data solutions. In these solutions, the data stays with the consumer, who can then decide to share it with marketers who are relevant to her needs. It will truly lead to what Seth Godin called “permission-based marketing” a decade ago:  

Permission marketing is the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them.

It recognizes the new power of the best consumers to ignore marketing. It realizes that treating people with respect is the best way to earn their attention.

Pay attention is a key phrase here, because permission marketers understand that when someone chooses to pay attention they are actually paying you with something precious. And there’s no way they can get their attention back if they change their mind. Attention becomes an important asset, something to be valued, not wasted.

Real permission is different from presumed or legalistic permission. Just because you somehow get my email address doesn’t mean you have permission. Just because I don’t complain doesn’t mean you have permission. Just because it’s in the fine print of your privacy policy doesn’t mean it’s permission either.

Real permission works like this: if you stop showing up, people complain, they ask where you went.

Our company tagline is “fundamentally better advertising.” We try for this in every product we develop.

We’ll be writing more about personal data control solutions and brand advertising in the coming weeks. This is the most important thing to happen to advertising since the internet.

How Advertising Will Survive

We’ve been writing a bit about the future of advertising lately, because it is changing very fast.  It is not, however going away. It tracks as a percentage of GDP just like it always has. However, that doesn’t mean we can sit back and pretend  things will always be the same. Indeed, they can’t be, because the canvas is being removed from ad creatives in many ways.

We already know that print is gone. We don’t mean the same things by “newspaper” that we used to mean. Our guess is that newspapers, who were our original publisher partners, will fall into disuse as a vocabulary word in the next generation. Young people born today may never read a newspaper. Which does not mean they won’t still consume news. It may, however, have a different business model.

The same thing is happening to television this year. Time spent watching both network and cable TV is falling dramatically. However, video content is still being consumed — only it is being consumed on Netflix, without ads.

And then there are the ad blockers being downloaded by people who do watch ad-supported content, but refuse to look at the ads.

So here’s what advertising has to do: it has to get better. If we’ve said this once, we’ve said it a hundred times since this blog started in 2011: advertisers have to bring more and better creative to digital advertising.  As the founder of ZEDO, I’ve been all over the world giving talks on how  there is no reason digital advertising can’t be as good as TV advertising was at its best.

The only reason we’re in this mess today is that we took the wrong fork in the road: the fork toward direct response and direct marketing instead of taking the one that led us to branding. That led us down the track to emphasizing data and metrics at the expense of the consumer. That is why digital advertising has such a poor reputation: none of it is designed to delight or even educate. It’s designed to hew to some metric that may not even be the right one for the brand.

All that should stop right now, before we do ourselves and free ad-supported content any further damage. If we recognize that brands want top-of-mind awareness is an increasingly noisy world, and if we leave the direct marketing to the Amazons of the world, we can transform our industry yet again and keep that $600 billion in spend as part of the GDP in the US.

And will that work in other countries? It will work even better. It will automatically comply with the GDPR, and when the rest of the world comes on to the internet, it will not have to endure the bad ads and retargeting that we’ve faced for the past twenty years.

I am indebted to Andrew Essex, author of “The End of Advertising: Why it Had to Die and the Creative Resurrection to Come” for some of the ideas in this book. And by the way, he admits that’s a clickbait title and what’s really dying is BAD advertising:-)

 

P&G Should Allocate TV Budgets to Digital Branding

Last quarter, Proctor & Gamble eliminated $100  million in digital media spend without any noticeable change in revenues. This led P&G to decide that perhaps all of its digital spending was useless. And perhaps it was, if what the company was doing was programmatically and randomly buying impressions. The company needs to change the way it creates and buys ads, and the goals for its digital advertising dollars. TV dollars never were devoted to performance, but to brand. And now that TV is slowly going away, digital is the only place left to do branding.

“We got some data that said either it was in a bad place or it was not effective,” Mr. Taylor said of the digital cuts. “And we shut it down and said, ‘We’re not going to follow a formula of how much you spend or share of voice. We want every dollar to add value for the consumer or add value for our stakeholders.”

After cutting back on certain digital ads, “we didn’t see a reduction in the growth rate,” said Mr. Moeller during the call. “What that tells me is that the spending we cut was largely ineffective.”

P&G also said it reduced overhead, agency fee and ad-production costs in the quarter.

These numbers tell us that the performance advertising side of digital advertising wasn’t working for them, and that’s right. Performance advertising in digital is very tricky, as well as being plagued by fraud. But that’s not what P&G should be using its digital spend for.

Instead, it should be using most of its digital dollars, outside of the e-commerce dollars it allots to sites like Amazon, to branding. You see, in the future Amazon, and maybe Wal-Mart, will own all the e-commerce dollars, because that’s where people actually go to buy things. But 99% of the time we are on the web, we are not trying to buy anything! P&G was also smart enough to lower its spend to targeted consumers of Facebook, because Facebook is not a place where people go to buy either.

A company like P&G should realize this, and use its online dollars for building brand, which is ever more important in the age of discounts and bargains. We have to have Tide top of mind at all times, or when we DO go to buy something, we’ll select the least expensive product. We will only buy a brand if we are really engaged with the brand.

And that’s how CPG companies should be using their dollars: they should be taking them away from TV, which they use for branding now, and which they feel used to work very well, and putting them into digital video on sites consumers visit every day, like premium publishers, or in apps consumers use regularly, like casual games.

They also should be spending their creative dollars on interactive formats like our “Watch and Engage,” in which the consumer is rewarded for interacting with a brand, producing both a positive impression and a reason for engaging.

The State of Digital Media 2017

Coming so soon after Mary Meeker’s presentation on Internet Trends, Luma Partners’ report on the State of Digital Media this year was a bit buried by the press. But this report was equally important to advertisers looking to maximize their dollars and and their return on those dollars. Advertisers have only recently awakened to the fact that they pay the bills and should be calling the shots.

Since last year’s Luma report, a new issue has joined the previous list of industry problems: adverse context. We know that issue as brand safety, and it joins viewability and fraud as major negatives for the industry. Other things occupying marketers’ minds are how and what to measure, how to avoid being in the clutches of the “walled gardens,”  and how to insure compliance with upcoming GDPR changes.

Luma believes header bidding, which started as a “hack” back when we began offering it, has emerged into a unique disruptive force, and will change the buying habits of advertisers by slimming the supply chain. Publishers have formed consortia (like our premium network) to provide guaranteed premium inventory, and the result will be higher CPMs and fewer choices.

Another confusing issue is measurement. The major platforms all measure viewability differently,

State of Digital Media

Issues change in importance from year to year.

and some have yet to involve third parties to generate metrics. On the other hand, the marketing side of the house is not even sure viewability is the right thing to measure — perhaps it should be engagement. But if engagement, on a platform like Snap, doesn’t result in an immediate sale, how do we account for it? It’s suspiciously blurry, just like offline advertising always has been, but now we have so much data that we think we should know more.

This movement toward greater interest in tracking the correct metric led to what Mary Meeker called in her presentation the convergence of content, ads, and purchase. The least complicated metric to track is sales, and we may find ourselves moving once again to direct response advertising, although with a more native feel to it. Yet every publisher cannot be or look like an Amazon store.

In the world those of us in advertising are inhabiting right now, it’s a day to day struggle to focus on creating value for customers, but it’s also a very exciting time when no one does the same thing day after day. The opportunity to bring creativity to the industry has never been greater.

A New Idea for Advertisers

Sometimes everything old is new again. And that’s the case with sponsorships in the advertising world. We believe they will have an ever-increasing role in advertising going forward. Let’s take a walk back in time.

In the late 1940s, radio was full of wonderful audio shows like “The Lone Ranger” and “Portia Faces Life.” These were fifteen minutes long, and they were “brought to you by” a brand, sometimes Ivory Soap (which is how they got the name soap operas), Quaker Oats or Crisco. At the beginning of the show, you were told who brought you the show. There was no other interruption, unless the sponsor had an offer, which was something like “send in a boxtop from Quaker Oats with your name and address and $.25 and receive a Lone Ranger glow in the dark plastic ring. Or send in the label from a can of Crisco and receive a recipe.

That’s how customer information was collected and “tracking” was done. If you liked the offer, you participated and gave your address. If not, no one followed you.

By the 1950s when TV became big, the shows were an hour long and quite expensive to produce. So there was Milton Berle, brought to you by Texaco. To see Berle, you had to sit through an opening song by four men in gas station uniforms:

Oh we’re the men of Texico,
We work from Maine to Mexico
There’s nothing like this Texico of ours.
Our show tonight is powerful.
We’ll wow you with an hourful
Of howls from a showerful of stars
We’re the merry Texaco men
Tonight we may be show men
Tomorrow we’ll be showmen
Tomorrow we’ll be servicing your cars.

 

 

The opening jingle, really an ad, was live and ran for 1:29. But it wasn’t even seen as an ad. There was, of course, no tracking.
And yet, 65 years later, I still sing that song to myself and think kindly of Texaco for bringing me Milton Berle, as other big brands like Procter and Gamble (now P&G) and Philip Morris Cigarettes brought us “I Love Lucy.” I still remember the bell boy in his uniform yelling “call for Philip Morris” as if he were paging a guest in the lobby of a hotel.

What’s our point? It’s that brand advertising works, and produces long-lasting brand awareness in a way that modern digital advertising doesn’t. We need that break-out creative person to design something like the opening Texico jingle or simply the “brought to you by brand name and tagline.” Looking back at these old ads, which we remember from our own childhoods, we realize how successful they actually were, and yet they were non-interruptive

We have pre-roll formats that could and should be used by advertisers for brand advertising. We’re all for pre-roll, but only if it’s worth looking at. The creative could look like a sponsorship and instead of being called an ad, these should perhaps indicate that they are sponsorships. Perhaps that would be a way to earn back the trust of consumers who are fed up by the aggressive techniques of modern digital advertising.

Can a Strong Brand Be Like a Religion?

Why has digital advertising taken such pains to ruin something as wonderful as how people feel about the brands they love by assuming that brand ads don’t work online and only interruptive, painful calls to action do?  The direction taken by many in online advertising seems to fly in the face of the last decade of neuromarketing research,  and is about to cause advertisers to shoot themselves in their collective feet. There is no evidence that consumers don’t want to see brand ads, and tons of it to show that they are both tuning out and turning off ads that the industry regards as “performance.”
Our emotional engagement with strong brands shares something with our feelings about religion. This  truth was revealed to me as I was reading “Stealing Fire,” a book about how altered states of consciousness are being used by both business and the military to bring about “flow states,” those states in which people show extraordinary creativity and team work.  Burning Man, the large art festival in the Nevada desert, is an example of how an entire city can be created by self-managed teams in flow states.

However, the fact that engagement with strong brands lit up the same brain centers as religious experiences still took me by surprise, and it illuminated for me many of the things that are wrong with digital advertising, and some that the industry could easily get right.

In 2007 a collection of the world’s biggest brands, including Apple, Sony, and Coco Cola, Nike, Samsung, and Ford, put up $7million to fund a study into the neuroscience of buying behavior. They wanted to study whether there were more effective ways to influence behavior than what they were using, and saw this study as a way to replace old-school focus groups with brain scans.

A marketing consultant named Martin Lindstrom teamed up with a neuroscientist, Gemma Calvert to conduct the study. Lindstrom later wrote Brandwashed. They used functionalMRI  and electroencephalograms to scan the brains of people as they made buying decisions, discovering along the way that product placement in movies and TV shows rarely works, and that shopping and spirituality share the same neuronal activity.

Of course there was a backlash, since no one wants to think of themselves as being manipulated. But that doesn’t mean creative departments and marketers can’t strive for stronger brands and better brand experiences. Bought and executed correctly, ads for strong brands can produce similar feelings of joy, love and serenity to those produced in religious people by religious iconography — an emotional engagement for which marketers strive. And with the right platforms and media buying policies, we can even do this programmatically.

So let’s not ruin it by creating ads that merely ask for the sale, and don’t provide worthy experiences.

 

Could Blockchain Technology End Ad Fraud?

More often than not disruptive changes in an industry come from outside, rather than from within an industry. People inside the industry tend to tinker at the margins, not trying to alienate any of the existing constituencies. In that way, industries are like democracies. But just as innovations in healthcare came from outside the industry, innovations in the digital media ecosystem are beginning to come from outside as well.

One place we predict will change how advertising is bought and sold is the fairly new cryptocurrency space. Over the last five years or so, people have become familiar with Bitcoin, digital currency units that are created out of bits and bytes and fluctuate like the securities market or the currency exchange.

Bitcoin, like other cryptocurrencies, relies on an underlying technology called the blockchain, which is a decentralized network of personal computers. Being part of a blockchain network requires connecting to the blockchain through software, almost like connecting to a social network. People on the network can add new records  (assets) through their computers, and the new records are double-verified and added to a ledger of all other blockchain transactions around that asset.

Unless you’re speculating in Bitcoin, you don’t care about any of this. But there’s a related cryptocurrency, Ethereum, that was developed specifically to transparently facilitate contracts. And that’s where advertising could get disrupted.

Blockchain technology through something like Ethereum contracts could monitor ad placements and conduct real time audits of ad delivery. That would solve the problem of transparency in programmatic media buys. Each digital asset ( ad) could be located in real time.  Blockchain’s advantages could include

 verification of ad delivery; immutable contracts with consumers; handling consumer data in a way that is completely transparent; and verifications about products’ authenticity that track from the point of origin, like sustainable fishing. Shanghai-based Vechain is using blockchain tech to authenticate fashion products, as well as provide background info on the items.

Last year, MediaPost similarly pointed to blockchain opportunities for managing huge numbers of consumer relationships, settling of multiparty payments and user ID verification.

Other observers have suggested global payment systems and, especially, smart contracts that are secure and transparent, available throughout a network even as they get modified.

Blockchain technology could also be used to decentralize transaction data, which would offer clients and agencies security and anonymity benefits.

I’m sure there are more exciting uses of blockchain technology than to monitor ad fraud and track wasted digital media ad expenditures, but since this technology has already graduated well beyond the buying and selling of illegal drugs on the Silk Road web site (see Nick Bilton’s terrific new book American Kingpin) and is now being investigated by the big banks to change the way the entire financial system works, we think there will be a day when someone builds a platform that truly brings the advertising industry into the 21st century.

How to Get Creative in the Feed

We were listening to a podcast about creativity in the feed, and we realized there is something VERY new happening in advertising.  Because most advertising now takes place in the news feed, there are new opportunities and challenges for brands.

There is no such thing any longer as an ad campaign based only on traditional ad “units.” Instead the future will consist more and more of branded emojis, stickers and chatbots communicating with the consumer in entirely new ways that are more contextually relevant. Those “ad units” of the future are in messaging apps, which go well beyond just the feed.

For creatives, the fact that larger ad units have disappeared, creates a narrow but potentially very appealing possibility. But first the advertising industry has to get rid of the “muscle memory” it developed back in the day when two thirds of what people consumed was controllable by the media industry. Now, a switch has been flipped and only a third of what people consume is controllable, because there’s so much consumer preference and so much user-generated content organic.

We used to try to change consumer behavior with communications platforms. Now, instead, we have to change brand behavior. We used to be able to invade consumer spaces with repurposed TV ads, but consumers have told us in no uncertain terms that they don’t want to be invaded, though they may still be willing to get engaged.

Advertising needs to be invited into people’s feeds. Consumers are far more judicious in what they want to see in their feeds, and they only want to see a brand that is accretive to their lives in some way — perhaps learning or educational, a utility, commerce, or entertainment. If it doesn’t fall into those buckets, people are not interested.

The brands that are going to be invited into the feed are going to be minimal if we follow those dicta, so brands will also have to figure out how to “crash” the feed. And here Rob Norman, the host of Tagline, had something very telling to say: if you are going to crash someone’s feed you have to be like the crasher at a party — the guy who wasn’t invited but gets very drunk and is allowed to stay because he’s very funny, rather than the guy who crashes the party and ruins it.

Thus brands and agencies have to think about how to be valuable.  Facebook, Google and the other large platforms feel like the key to this puzzle is relevance, which is determined by artificial intelligence in programmatic buys that take place in trillionths of seconds. In that context, how does a creative agency determine what message will get the most relevant ads surfaced most frequently?

This is where chatbots come in. For example, in a successful recent NFL campaign for Bud Light,  a bot asked two simple questions in a messaging app, “where do you live” and “what’s your team,” and then disappeared until two hours before game time, when an ad in the feed appeared for BudLight along with a link to a beer delivery service. That’s probably the best contextual use of bots and ads we’ve seen in a while.

We’d welcome your ideas for other creative ways to make consumers more comfortable with ads in the feed. Put your comments here, or on the   Twitter.

 

 

Acceptable Ads Committee Ponders Problems

Eyeo, the German company behind AdBlock Plus, has been trying to find a helpful way to play in the digital media industry without selling out its user base and still make money. Last year, it established standards for acceptable ads — ads that would get through AdBlock Plus’s filters. After being accused of extortion, Eyeo showed good faith by establishing a standards setting body call the Acceptable Ads Commission of industry heavyweights on the buy, sell and tech sides and spun it off into a separate non-profit corporation.  Like every other industry initiative, it will probably soon be dominated by Facebook and Google, who are already paying Eyeo to have their ads white-listed.

But we don’t believe that Eyeo is in the extortion business, so we accepted a seat on the AdTech segment of the Acceptable Ads Commission. The first meeting was last week, and the agenda was quite inclusive.

Goal: Establish what constitutes an acceptable ad.

Core Values of AAC:

— Protect user experience

— Approve ads that users do not find obtrusive

— Provide publishers/content creators with monetization opportunities

As the ad tech section of this Commission,  we wanted to discuss the value exchange of the internet, and the right of publishers to support themselves based on free content and services. However, we also want to help find appropriate solutions for intrusiveness, privacy and data collection, load time, native advertising, and ad formats. It does not help anyone if free content goes away, quality publishers can’t sustain themselves, and brands can’t find their customers.

The questions we considered include:

  1. What rules should be considered when exempting an ad from being blocked?
  2. What rules are missing from the Acceptable Ads Rules that should be included?
  3. Which acceptable ads rules are too strict and should be rolled back?
  4. What research is needed into this, and does it already exist?

There are a crazy number of industry initiatives going on right now into which this new group must fit itself. There is the Coalition for Better Ads, there is the Trustworthy Accountability Group, a spinoff from IAB, and now the new Chrome Ad Blocker. We also need to recognize efforts to provide users with transparency and choice, ie DigiTrust and the Online Trust Alliance.

Part of the still-to-be-discussed items are whether a committee that originated with an ad blocking service can ever be truly independent, and whether if people like us participate, we will be seen as having a conflict of interest.

But I believe we’re on track to be part of the solution, rather than part of the problem, which is how we always see ourselves. As a closed system, ZINC and ZEDO are in a unique position to advise buyers on what can and cannot run in our system, and advise publishers on issues like ad density. We have a suite of ad formats that are all part of the acceptable ads framework, and a network of publishers whose content is brand safe depending on the brand, We will also adhere to everyone’s white list.

No one ever got fired for buying ZEDO:-)

 

 

Mobile Acceptable Ads Standards Part Two

Two weeks ago we began discussing the Coalition for Acceptable Ads’ new standards. Although there’s nothing surprising to us in them, because we always put ourselves in the shoes of the consumer before we begin designing a format, and we always test with partners before rolling anything out, there are many marketers to are still demanding ads that we already know will anger viewers. Snapchat especially is still experimenting. It’s Discover and story partners use many of the formats the Coalition’s research found offensive.

We’ve been around long enough (and been burned hard enough) to know how much consumers hate popup ads. Our ad server began serving them in the early years of this century when marketers demanded them, and we took the brunt of consumer ire. It taught us to choose our partners and customers more carefully, and now we carefully guard our own reputation, although it sometimes means we sacrifice profits.

Pop-up ads are a type of interstitial ad that do exactly what they say — pop up and block the main content of the page. They appear after content on the page begins to load and are among the most commonly cited annoyances for visitors to a website. Pop-up ads come in many varieties – they can take up part of the screen, or the entire screen.

Included ad experiences tested: Pop-up Ad with Countdown, Pop-up Ad without Countdown

Prestitial ads are another common annoyance.

Mobile prestitial ads appear on a mobile page before content has loaded, blocking the user from continuing on to the content they have sought out. These pop-ups vary in size from full-screen to part of the screen. They may also appear as a standalone page that prevents users from getting to the main content.

Included ad experiences tested: Prestitial ad with countdown, Prestitial ad without countdown.

In fact, the larger the ad is, the more consumers dislike it. Any ad density over 30% is a no-no.

When ads on a mobile page take up more than 30% of the vertical height of the main content portion of the page, the result is a disruptive ad experience, regardless of whether these ads are text, video, or static images. This includes “sticky” ads and in-line ads. This kind of density makes it very difficult to focus on text content on a mobile device, and can lead to frustrated users.

Included ad experiences tested: 50% single-column ad density, 35% single-column ad density, 30% single-column ad density.

The last consumer annoyance: flashing animated ads.

Ads that animate and “flash” with rapidly changing background and colors are highly aggravating for consumers, and serve to create a severe distraction for them as they attempt to read the content on a given page.

Animations that do not “flash” did not fall beneath the initial Better Ads Standard.

We think these are extremely useful guidelines, and we hope marketers will adopt them, and not kill the only way we have of providing free web content, which consumers have also signaled is important to them.