The downfall of ad tech means the trust economy is here

2020 has brought about much-needed social movements. In June, activists launched the Stop Hate for Profit campaign, a call to hold social media companies like Facebook accountable for the hate happening on their platforms.

The idea was to pull advertising spending to wake these social platforms up. More than 1,200 businesses and nonprofits joined the movement, including brands such as The North Face, Patagonia and Verizon. I led my company, Cheetah Digital, to join alongside some of our clients like Starbucks and VF Corp.

Stop Hate for Profit highlighted social media hitting its tipping point. Twitter and Snapchat chose to stand up against hate speech, banning political ads and taking action to flag misinformation. Facebook, unfortunately, has not yet been as proactive, or at best it’s been sporadic in its response.

While many thought the movement would come and go, the reality is it has only just begun. With America conducting arguably its most divisive election in history, these problems won’t just go away. For marketers, Stop Hate for Profit is more than a social movement — it is pointing to an issue with ad tech as a whole.

I believe we are seeing the downfall of ad tech as we know it with social media boycotts and data privacy leading the charge.

The social media quagmire

In May, Forrester released a report titled “It’s OK to Break Up with Social Media” that contained statistics indicating that consumers are fed up with social media: 70% of respondents said they don’t trust social media platforms with their data. Only 14% of consumers believe the information they read on social media is trustworthy. 37% of online adults in the U.S. believe social media does more harm than good.

Here is the reality we need to get back to: Social media isn’t built for marketers to reach consumers. In the beginning of the social media craze, brands rushed to get on board and join the conversations. What many brands discovered is these channels became a platform for customer complaints not for building positive brand perception. Furthermore, the social platforms marketers flocked to as an avenue to reach customers began charging marketers just to get to the customers.

The algorithms that define what content you see unfortunately make it harder for people to see opposing views, and this more than anything else polarizes society further. If you start looking at QAnon content, very soon that’s all the algorithms feed you. You might spend more time on social platforms fueling their ad dollars, but you have also lost a grip on reality. Marketers must admit things have gone too far on social media and it is okay to move on.

Privacy matters

Imagine you are in need of a minor surgery. Perhaps you take an Uber ride to the specialist for a consultation. Next, you go get the surgery and it is successful. Soon you find yourself at home recovering and all is well. That is, until you start scrolling Facebook. Suddenly advertisements pop up for medical malpractice lawyers, but you haven’t told anyone about the surgery and you certainly didn’t post about it on social media.

Here you are, just wanting to rest and recover at home, but instead you are being bombarded by advertisements. So how did those ads get there? You left a digital footprint, your data was sold and now you’re being hit with intrusive ads. To me, this story crystallizes the abuse ad tech has been fostering in the world around us. There’s an utter invasion of privacy and consumers aren’t blind to it.

Data privacy has been a focus of conversation for marketers for several years now. Just this year, America saw the California Consumer Privacy Act (CCPA) go into effect and become enforceable. This legislation gives back control of data to the consumer. In June, Apple announced updates to make it harder for apps and publishers to track location data and use it for ad targeting. At the beginning of August, Meredith and Kroger announced a partnership to provide first-party sales data for advertising efforts in an attempt to move off of cookies. It is clear data privacy is not a fad going away anytime soon.

Where do marketers go from here?

I believe the future of marketing is the trust economy. The Stop Hate for Profit campaign, the invasion of privacy and shifting attitudes and behaviors of consumers point to the end of an era where marketers relied upon third-party data. Trust is now the most impactful economic power, not data. We conducted research earlier this year with eConsultancy, and our findings revealed that 39% of U.S. consumers don’t like personal ads driven from cookie data. People don’t want to be tracked and targeted as they click around the web. Ad tech’s roof is caving in and marketers must adjust.

The old methods of marketing won’t carry you through into the era of the trust economy. It is time to look to new channels and revisit old channels. We have to shift back to the channels where we own what is being said. Advertising on social platforms should be focused on driving consumers to owned channels where you can capture their permissions and data to connect with them directly. Consider email as a channel to focus on.

Don’t worry — it works. That same eConsultancy report found nearly three out of four consumers made a purchase in the last 12 months from an email sent by a brand or retailer and massively outperformed social ads when it came to driving sales. Similarly nine times as many U.S. consumers want to increase their participation in loyalty programs in 2020 than those that want to reduce their involvement. You have to ensure you are owning your data and loyalty programs are a treasure trove of consumer data you own. Emily Collins from Forrester does a good job of explaining why you can achieve this with a true loyalty strategy, not just a rewards program.

Your goal should be to build direct connections to consumers. Building trust means offering a value exchange for data and engagement, not going and buying it from a third-party. Fatemah Khatibloo, a principal analyst for Forrester wrote, “Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include purchase intentions, personal context, and how the individual wants the brand to recognize her.” This zero-party data is foundational for the trust economy and you should check out her advice on how it helps you navigate privacy and personalization.

Take responsibility

The trust economy is really about asking yourself, as a marketer, what you stand for. How do you view your relationship with consumers? Do you care? What kind of relationship do you want? Privacy has to be part of this. Accountability is crucial. We must be accountable to where we are putting our money. It’s time to stop supporting hate, propping up the worst of society and fueling division. Start taking responsibility, caring about social issues and building meaningful relationships with consumers built on trust.

#advertising-tech, #column, #digital-marketing, #facebook, #marketing, #media, #online-advertising, #opinion, #social

0

Metigy gets $20 million AUD to making online marketing easier for SMEs

David Fairfull, CEO and co-founder of Metigy

David Fairfull, CEO and co-founder of Metigy

Metigy, a marketing platform created to help small businesses automate more of the decision making in their online ad campaigns, has raised a Series B of $20 million AUD (about $14.6 million USD). The new funding, led by returning investor Cygnet Capital, will be used to grow the Sydney, Australia-based startup’s international customer base, especially in the United States and Southeast Asia. Other participants in the round included Regal Funds Management, OC Funds, Five V Venture Capital and Thorney, plus returning

Founded in 2015, Metigy is currently used by about 26,000 businesses and has channel partnerships with Google and Optus. About 44% of its customers are in Australia and New Zealand, while 26% are in Southeast Asia, and 22% are in the United States. The startup has raised AUD $27.1 million (about USD $19.9 million) in total.

Co-founder and chief executive officer David Fairfull told TechCrunch Metigy was created because “half of SMEs fail in the first two years and marketing is one of the top two reasons for this. It’s a global issue and a paradigm that can be changed by harnessing technology.”

Fairfull and other members of Metigy’s founding team previously worked at We Are Social, a global creative agency. While there, they “spotted an opportunity to give small businesses access to the same data and strategic insights” as larger marketing teams.

Marketing platform Metigy's Command Center

Marketing platform Metigy’s Command Center

Metigy’s platform gives more support to small or inexperienced marketing teams by using real-time data from their online advertising channels to create a livestream of recommendations. For example, it will tell marketing teams if they should start posting more content right away, use more hashtags or schedule more posts. The platforms also predicts what posts will result in the most conversions, helping companies decide how to spend their advertising budget.

For example, one of Metigy’s customers, parking app Share with Oscar, used Metigy to analyze what was trending on social media when members of the Royal Family visited Sydney. As a result, Fairfull said they were able to generate 2,700 customer engagements by spending about AUD $10 (about USD $7).

Other social marketing platforms like Hootsuite and Sprout Social are “essentially process solutions that help make the marketer more efficient,” said Fairfull. “However, if you don’t understand marketing, then all this process efficiency won’t help you gain results.”

Metigy is focusing on the United States and Southeast Asia because of the large number of SMEs there. By 2022, there is expected to be 30 million SMEs in the U.S. “On top of this, success in marketing technology is often benchmarked by success in the U.S., so expanding in this region adds credibility,” Fairfull added.

But in terms of volume, Southeast Asia offers a more promising market. “The real growth opportunity for us though is in Southeast Asia, where there is expected to be 150 million SMEs across the 11 markets by 2022,” Fairfull said. But the majority of them don’t have large marketing teams or access to the kind of ad technology that larger companies do. Companies in the region also tend to be more price sensitive, Fairfull added, so artificial intelligence and machine learning-based technology helps lower the cost of software like Metigy to an attractive price.

#advertising-tech, #asia, #australia, #fundings-exits, #marketing, #metigy, #southeast-asia, #startups, #tc

0

Is the internet advertising economy about to implode?

Advertising drives the modern digital economy. Whether it’s reading news sites like this one or perusing your social media feeds, advertising is the single most important industry that came out of the development of the web. Yet, for all the tens of billions of dollars poured into online advertising just in the United States alone, how much does that money actually do its job of changing the minds of consumers?

Tim Hwang has a contrarian stance: it doesn’t. In his new book published as a collaboration between Logic Magazine and the famed publisher Farrar, Straus and Giroux, he argues in “Subprime Attention Crisis” that the entire web is staring into an abyss of its own making. Advertising is overvalued due to the opaqueness of the market, and few actors are willing to point out that the advertising emperor has no clothes. Much like the subprime mortgage crisis, once people come to realize the true value of digital ads, the market could crater. I found the book provocative, and I wanted to chat further with Hwang about his thoughts on the market.

Hwang formerly worked at Google on policy and has developed many, many projects across a whole swath of tech-oriented policy issues. He’s currently a research fellow at Georgetown’s Center for Security and Emerging Technology.

This interview has been condensed and edited for clarity.

TechCrunch: Let’s dive straight into the book. How did you get started on this topic of the “subprime attention economy”?

Tim Hwang: There were two incidents where I was like, something is going on here. I was having conversations with a couple of friends who are product managers at Facebook, and I remember making the argument that that there’s a lot of evidence to suggest that this whole adtech thing is maybe just mostly garbage. The most interesting thing that they said was, “Oh, like, advertising works but we can’t really tell you how.” That’s like talking to someone from the national security establishment and they’re like, “Oh yeah, we can stop terrorists but, like, we can’t tell you exactly how that goes down.”

I think one thing that got me really interested in it was how opaque a lot of these things are. The companies make claims that data-driven programmatic advertising really is as effective as it is but then they’re kind of strangely hesitant to show evidence of that.

Second, I was doing research with a lot of people who I think you’d rightly call sort of tech critics — strong critics of the power that these platforms have. I think one of the most interesting things is that even among the strongest critics of tech, I think a lot of them have just bought this claim that advertising and particularly data-driven advertising is as powerful as industry says it is.

It’s a kind of strange situation. Tech optimists and tech pessimists don’t agree on a whole lot, but they do seem to agree on the idea that this sort of advertising works. That was what I wanted to explore in the book.

Why don’t we talk a bit about the thesis?

The thesis of the book is really quite simple, which is you look around and basically our modern experience of the web is almost entirely shaped by advertising. The way social media is constructed, for example, is largely as a platform for delivering ads. Engagement with content is really good for creating profiles and it’s really good for delivering ads. It really has been the thing that has powered the current generation of companies in the space.

As you sort of look closer though, it really starts to resemble the market bubbles that we know of and have seen in other places. So explicitly, the metaphor of the book is the subprime mortgage crisis. I think the idea though is that you have this market that is highly opaque, there’s a lot of evidence to suggest that the value of ads is misidentified, and you have a lot of people interested in boosting it even in spite of all that.

For the book, I wanted to look at that market and then what the internet could look like after all this. Are there other alternative business models that we want to adopt for the web going forward?

#adtech, #advertising-tech, #book-review, #digital-advertising, #facebook, #finance, #google, #online-advertising, #tim-wu

0

Near acquires Teemo to expand its data business into Europe

Two companies in the data business are teaming up, with Near announcing that it has acquired French startup Teemo.

Near founder and CEO Anil Mathews told me that his company processes data around the online and offline behavior of 1.6 billion consumers each month: “We marry these two worlds and fill in the gap.”

Teemo, meanwhile, is location intelligence company based in Paris. Mathews said that Singapore-headquartered Near has been expanding “east to west,” so by acquiring Teemo, it will have a beachhead to expand throughout Europe — for example by getting direct access to the numerous big brands headquartered in Paris.

And while Mathews described Near as a company that has “from day one put privacy in the front seat,” he also suggested that Teemo has unique advantages in this area, particularly when it comes to Europe’s General Data Protection Regulation.

“Teemo is very pro-privacy,” he said. “They were the first company certified by the French Data Protection Officer as GDPR compliant.” (That certification came after it was one of the first companies to be admonished under GDPR.)

Teemo’s founder and CEO Benoit Grouchko will become Near’s chief privacy officer, and the rest of the Teemo workforce will be joining Near as well, Mathews said. Another big asset: This will give Near access to Teemo’s GDPR-compliant consumer data (which he said will be stored in European data centers and continue to be handled in fully GDPR-compliant ways).

Near could potentially expand into other markets by making similar acquisitions in the future, Mathews added.

The financial terms of the acquisition were not disclosed. Formerly known as Databerries, Teemo has raised a total of $17.9 million in funding from investors such as Index Ventures and Mosaic Ventures.

“We are very excited to join the Near family with whom we share a common DNA of technology and performance,” Grouchko said in a statement. “This will allow us to be stronger and to grow even faster, beyond the French market.”

#advertising-tech, #fundings-exits, #near, #startups, #teemo

0

YouTube targets music fans with new audio ad format

YouTube is announcing new ad products today, designed to help marketers reach YouTube visitors who are doing more listening than watching.

The big addition is audio advertising. As the Google -owned video site puts it in a blog post, these are ads designed for viewers who “squeeze in a living room workout before dinner, catch up on a podcast or listen to a virtual concert on a Friday night.”

In other words, audio ads are designed for videos where audience members may only be glancing at the screen occasionally, or might ignoring the visuals altogether. To be clear, these ads won’t be audio-only, but YouTube says the audio should be doing most of the communication, while the visual side is limited to “a still image or simple animation.”

The company says that in early testing, more than 75% of audio ad campaigns on YouTube resulted in a significant lift in brand awareness. For example, this Shutterfly ad resulted in a 14% lift in ad recall and a 2% increase in favorability in its target audience.

The key, YouTube says, is that the audio has to carry the message: “Think: If I close my eyes, I can still clearly understand what this ad is about.”

In addition to launching audio ads in beta, YouTube is also announcing dynamic music lineups, allowing marketers to target their campaigns at collections of music channels on YouTube. These lineups can be focused on a genre, such as Latin music or K-pop, or on an interest like fitness.

In a separate blog post, YouTube’s Head of Music Lyor Cohen made a broader case to advertisers about why they should see YouTube as an essential music streaming platform.

After all, according to Cohen, more than 2 billion logged-in viewers are watching at least one music video each month. And, he wrote, “music is more front and center than you might think” — 60% of YouTube’s music viewing happens on mobile, where background viewing/listening is disabled.

That might seem like an odd thing to emphasize while launching an ad format better suited to background listening, but Cohen continued, “Regardless of when and how people are tuning in, we have ways to help advertisers connect, even when they’re consuming music in the background. Now you can complement the moments your consumers are watching, by engaging them in moments when they’re listening, with newly announced audio ads.”

#advertising-tech, #alphabet, #google, #youtube

0

Zeotap raises $18.5M for a customer ID platform it says was built with privacy in mind

As the online world slowly moves to a more privacy-focused environment free of cookies, startups building alternative ways to help businesses manage customer identity and build marketing around that are getting attention. Zeotap, a customer identity platform built around a company’s own (first-party) data that combines this with other data sources to create more complete pictures of users and what they do, is today announcing that it has raised a further $18.5 million.

This is an extension of a Series C round for the firm coming from a single investor, SignalFire, from its Breakout Fund, reserved for growth-stage investments. Founded in Berlin with operations now out of New York, Bengaluru in India and the UK, Zeotap has now raised $60.5 million for the round, with other investors including the likes of SingTel (via Innov8), Here (the mapping company), Iris Capital, the European Investment Bank, and a number of others participating.

Zeotap is not disclosing its valuation, but PitchBook notes it was close to $158 million post-money in the first close.

Zeotap started life initially as a platform aimed at mobile usage, specifically helping carriers broker deals with third parties that wanted their customer data. Over the years this has widened and evolved to a bigger opportunity not just to exchange data, but a place to draw it all together to build more useful customer profiles.

Projjol Banerjea, founder and CPO of Zeotap, said in an interview that the opportunity Zeotap is targeting has become especially urgent this year, in the wake of the global health pandemic.

“You have two companies right now,” he said. “Those that are using the current market as an opportunity to reassess marketing and drive efficiencies, and double down on streamlining their business. And those that are more resilient and seeing the current time as an opportunity to scale. Whichever category you fall in, customer data is important.”

The company is currently active in 14 markets, he said, with products aimed at publishers, brands, and data partners. Zeotap’s platform essentially covers a few key areas. First, a customer data platform based around an organization’s first party data about its own customers, which provides a unified customer view for an organization based on what it already has. “This is much harder to do than you’d expect,” Banerjea said. “Managing consent is top of mind here, while making the most of first-party assets.”

Second comes ID resolution. Zeotap claims that it hosts the largest marketing identity graph in the world, with a “network of identifiers that can locate a customer across different channels.” This can include offline phone numbers, email and home addresses, alongside browsing activity. “We can provide a bridge to the digital world for offline names,” he said, adding that Zeotap works with some 112 providers to pool data into a single, unified customer view.

These then come together in Zeotap’s universal ID+ product, which he said is “fully consent based and tokenized, with no data leakage.” This essentially is sold to clients whose marketers can then help their efforts “transit across the ecosystem without any exposure for the customer but also for any of our partners.”

A lot of the regulations that have emerged, and the reasons cookies are being depreciated, are to provide better protection for consumers, to give them better transparency around how and where their data is being used. Approaches like Zeotap’s may not completely eradicate that bigger issue — and some might argue that for the foreseeable future advertising and marketing will remain a cornerstone of how the web works — so much as create a system that makes marketing, and the big data profiling that underpins it, more secure, Banerjea explained.

“ID+ is designed for us to be able to connect the dots without exposure,” he said.

Zeotap essentially has two types of competitors at the moment, he said. Larger marketing clouds that have grown by acquisition, where a number of activities sit in silos but under one bigger umbrella; and those that have grown big businesses around the managing of customer identity, such as Liveramp (the company formerly known as Acxiom) and The Trade Desk.

But in an $87 billion industry, and at a time when having an online strategy is a do-or-die imperative, there is perhaps room for another.

“COVID-19 has catalyzed a transformation in the marketing mix as brands invest in their data and learnings to redirect traditional TV budgets to more effective channels,” said Chris Scoggins, venture partner at SignalFire, in a statement. “Our investment in Zeotap is testament to our belief in the company’s leadership, vision, and its rapidly evolving customer intelligence platform (CIP) with a built-in identity solution for the future of marketing named ID+ .”

#advertising-tech, #customer-identity, #identity, #marketing, #martech, #zeotap

0

UK’s ICO faces legal action after closing adtech complaint with nothing to show for it

The UK’s data watchdog is facing a legal challenge after it took the decision to quietly close a complaint against the adtech industry’s high velocity background trading of personal data.

The legal challenge was reported earlier by Politico.

The original complaint — challenging the adtech industry’s compliance with Europe’s General Data Protection Regulation (GDPR) — was filed to the ICO in September 2018 by Jim Killock, executive director of the Open Rights Group, and Michael Veale, a lecturer in digital rights at the University College London.

A series of RTB complaints have been filed with regulators across Europe over the past two+ years.

The crux of the complaints is that real-time-bidding (RTB) auction systems cannot comply with the GDPR’s requirements to provide adequate security for people’s data.

In a report last year the ICO voices its own “systemic concerns” about the adtech industry’s use of personal data in the RTB component of programmatic advertising.

Last December one of its deputy commissioners, Simon McDougall, further warned the industry of the need to reform, writing: “We have significant concerns about the lawfulness of the processing of special category data which we’ve seen in the industry, and the lack of explicit consent for that processing.”

So it’s not clear why the UK regulator has chosen to close the complaint when it still hasn’t issued a decision on the substance.

The ICO did not respond to specific questions TechCrunch put to it about this — but sent us this statement: “We are aware of this matter, which will be decided by the Tribunal in due course. Consideration of concerns we have received forms part of our work on real time bidding and the Adtech industry.”

Earlier this year the regulator said it would “pause” its ongoing investigation into RTB on account of the coronavirus pandemic. The probe appears to still be on ice — raising further questions as to why the ICO would choose a moment of self-imposed inaction to close the complaint now.

In a series of letters to the complainants’ legal team, which we’ve reviewed, the ICO writes that it believes it has investigated the matter “to the extent appropriate”, and further claims the probe has “assisted and informed the ICO’s broader regulatory approach to RTB since September 2018”.

“Please therefore consider this to be confirmation of the outcome of your client’s complaint in line with s.165(4)(b) of the Data Protection Act 2018,” it adds, reiterating its position that the complaint is now concluded.

Killock and Veale voiced concerns that the move is a tactic by the ICO to close down their ability to challenge any future action it may (or may not) take in the area of RTB.

The follow-on concern is that the regulator does not intend to take robust enforcement action against what RTB complainants have referred to as the biggest data breach of all time — and is instead seeking to clear the road of first-order objectors.

In a letter to the complainants, dated September 23, 2020, the ICO writes that it intends to “recommence our industry wide investigation into RTB in due course” — but gives no detail of when that might happen nor any hint of any ultimate outcome more than two years after the complaint was filed.

“We are taking legal action against the ICO, as we believe that data processing being too complex and illegal is more reason to uphold the law, not less. Individuals can’t currently opt out of online tracking — and the ICO shouldn’t be able to opt out of regulating,” Veale told TechCrunch.

“After the ICO produced a report in response to the complaint of Jim Killlock and myself illustrating just how illegal RTB was, they appear to have concluded the appropriate action was to hold some stakeholder meetings, use none of their powers, and claim that they have discharged their obligations to the complainants to uphold the law. RTB continues to be outrageously illegal.”

“They shut our complaint down without doing anything,” Killlock also told us. “They say they will still take action, yes, but they removed the obligation to do something by closing our complaint.”

“They think the Information Tribunal is a soft touch, and won’t listen to anyone seeking to challenge an ICO decision about a Complaint of this nature,” he added. “The Information Tribunal has in fact stated that it will only look at procedural matters relating to this kind of complaints. They are wrong to do this, and this is something we also address [in the challenge].”

The ICO has already faced months of criticizism from European privacy experts over the lack of regulatory action to enforce regional data protection standards around RTB.

And while the regulator has voiced concerns about the lawfulness of practices underpinning behavioral advertising — and urged industry reform — it’s been a bark that hasn’t been backed up with any bite.

The upshot in the UK is Internet users’ personal data continues to be processed at vast scale by the ad targeting industry with no way for people to know where their information might be ending up nor how exactly it’s being used.

Concerns about the mass surveillance of Internet users to power behavioral advertising have been stepping up for years. Personal data that’s being routinely traded for ad targeting via RTB has been shown to include highly sensitive data such as health information, sexual orientation and political affiliation.

On the flip side, government and public health websites in Europe have also been shown sharing data on users with ad trackers — as have commercial sites that offer help with sensitive issues like mental health.

Earlier this month the European Parliament called for tighter controls on microtargeting — in favor of less intrusive, contextual forms of advertising.

As well as the inherent insecurity of RTB systems broadcasting people’s information over the Internet, another objection in Europe concerns whether or not all the players in the adtech chain are obtaining legally valid consent to process people’s data for ad targeting — as they are supposed to under GDPR.

Last month preliminary findings by the Belgium data protection authority cast doubt on the legality of an industry standard tool for gathering Internet users’ consent to ad targeting — with an investigation finding that the IAB Europe’s Trust and Consent Framework (TCF) fails to comply with GDPR principles of transparency, fairness and accountability, and also the lawfulness of processing.

It also found the TCF does not provide adequate rules for the processing of so-called special category data (e.g. health information, political affiliation, sexual orientation etc) .

Data protection authorities in Ireland, meanwhile, are continue to investigate RTB — opening a probe into how Google’s online ad exchange is processing people’s data in May last year. Though Ireland’s Data Protection Commission is also under fire for regulatory inaction.

The complaint was filed there at the same time as in the UK — meaning it’s also over two years old and still no decision to show for it.

#adtech, #advertising-tech, #data-protection, #europe, #gdpr, #ico, #rtb

0

B2B marketplaces will be the next billion-dollar e-commerce startups

Startups involved in B2B e-commerce such as Faire and Mirakl have burst out of the gates in 2020. Almost overnight, these startups transformed into consequential platforms, earning billion-dollar valuations along the way. The B2B e-commerce industry has broad reach, encompassing everything from commerce infrastructure and payments technology to procurement and supply-chain solutions. But one area of the B2B e-commerce sector holds outsized promise: marketplaces.

These venues for buyers and sellers of business-related products are exploding in popularity, fueled by better infrastructure, payments and security on the back-end and companies’ increased need to conduct business online during the pandemic.

Even before the pandemic, B2B marketplaces were expected to generate $3.6 trillion in sales by 2024, up from an estimated $680 billion in 2018, according to payments research firm iBe TSD. They were already growing more quickly than most B2C marketplaces that predated them, and when COVID shutdowns hit, many companies scrambled to shift all purchasing online. A survey of business buyers conducted by Digital Commerce 360 found that 20% of purchasing managers spent more on marketplaces, and 22% spent significantly more, during the pandemic.

For many entrepreneurs running B2B marketplaces, the pandemic created new demand for their platforms. Yet to convince businesses to make a permanent shift to online purchasing, B2B marketplaces cannot simply remain stagnant, serving as simple transactional platforms. Those that innovate now to introduce adjacent services will emerge as winners in the next few years, with some inevitably becoming billion-dollar companies.

As a venture capital investor in B2B e-commerce companies, I’m carefully watching the industry and have seen several forward-thinking business models emerge for B2B marketplaces. The predominant revenue model of B2C marketplaces, the gross merchandise value (GMV) take rate, or percentage of each transaction, doesn’t always translate well in the B2B world. Instead, B2B marketplaces are discovering creative new ways to monetize their networks, ensuring their approach is tailored to the complex and nuanced world of B2B e-commerce. I’ll delve into each of these models below, providing examples of marketplaces that have successfully begun implementing them.

What makes B2B transactions unique? Before discussing how B2B marketplaces can deploy new business models, it’s important to think about how B2B transactions typically work.

Payment methods: There are four main ways to make a B2B payment: paper check, ACH transfer, electronic fund transfer (wires), and credit/debit cards. Nearly half of B2B payments are still made by paper check, but digital payment solutions are quickly gaining.

Financing: It is customary in B2B transactions to pay “with terms,” such as net 30 or net 60, effectively giving a line of credit to the business buyer that enables them to send payment after delivery of the good or service. Supply-chain financing and dynamic discounting are two mechanisms business buyers use to settle invoices with suppliers on preferred timelines.

Bulk discounts: Business buyers often expect and receive discounts in return for placing high-volume orders. While not a concept unique to B2B, negotiated or custom volume discounts can complicate the checkout process.

Contractual pricing: Businesses often enter into enterprise-level pricing agreements with their suppliers. In some B2B verticals, such as the veterinary supplies market, there is little consistency and transparency regarding the market price of any given item; instead, each buyer pays a bespoke price tied to contractual agreements. This dynamic typically benefits suppliers, which can price discriminate based on buyers’ ability and willingness to pay.

Delivery method and timing: Unlike consumers, businesses may place orders for goods but delay delivery for weeks or months. This is particularly common in the commodities market, where futures contracts specify a commodity to be delivered on a certain date in the future. B2B transactions typically include a negotiation on delivery method and timing.

Insurance: Business buyers frequently purchase insurance as part of their transactions, particularly in high-value verticals such as jewelry. Insurance is designed to protect against damage to the goods in transit or theft.

Compliance: In some verticals, particularly those related to healthcare and chemicals, there is a heavy compliance burden to ensure goods are properly sourced and transported. Is the seller legally registered to sell and transport sensitive goods such as medical equipment or pharmaceuticals?

With all of these considerations, it’s no wonder B2B e-commerce has been slower to digitize than B2C. From product discovery through the checkout process, a consumer buying a bag of licorice looks nothing like a retailer buying 100,000 bags of licorice from a distributor. The good news for B2B marketplace founders is that, based on the parameters above, there are many creative ways to extract value from transactions that go beyond the GMV take rate. Let’s explore some of the creative ways to monetize a B2B marketplace.

#advertising-tech, #apps, #b2b, #column, #crm, #e-commerce, #ecommerce, #finance, #marketing, #online-marketplace, #retail-stores, #software-platform, #startups, #tc

0

TVision raises $16M to measure viewer attention on connected TVs

TVision is building what its team hopes will become the standard for measuring streaming viewership — and to accelerate those efforts, it’s raised $16 million in new funding.

The New York City startup started out by measuring traditional TV viewing, using webcams to determine whether viewers were actually paying attention to the ads. More recently, it’s launched a solution focused on connected TVs, where co-founder and CEO Yan Liu said there’s no standard measurement.

“What I’ve found is that in streaming, there’s no such a thing called a TV rating,” he said. “There’s no good currency, per se, in the industry.”

Partly, that’s because the large players like Netflix and Disney+ are subscription-based, rather than ad-supported, so they have little incentive to work with third-party measurement firms.

Liu also said that the measurement solutions currently in the market are largely limited to tags — an approach that allows advertisers to measure how widely their ads were seen, but doesn’t show them how their performance stacks up against industry benchmarks or competitors.

So instead of relying on tags, TVision has built up a panel of connected TV watchers. In some ways, this is a very old-fashioned approach — it’s the core of how Nielsen measures TV audiences — but Liu said it’s harder than it looks, which is why you don’t see many other ad measurement companies building panels of their own.

He added that TVision (not to be confused with the T-Mobile streaming bundles of the same name) has built new technology that uses data like WiFi signals to determine whether an ad is being played on a streaming service or on linear TV.

And Liu said it’s doing all of this in a regulation-compliant and privacy-friendly way, preventing any personally identifiable information from being uploaded and ensuring that panelists understand what data their sharing.

TVision’s measurement platform is focused on connected TVs, rather than desktop/laptop computers or mobile devices. However, Liu said it can offer cross-platform insights through a partnership with Oracle’s Moat.

The startup is already working with customers like Pepsi, Anheuser-Busch, Hulu, AMC and Dentsu Aegis Network, and it has raised a total of $39 million in funding. The new round was led by SIG Asia Investments, an affiliate of global trading firm Susquehanna International Group. Existing investors Accomplice, Golden Ventures and Jump Capital also participated.

#advertising-tech, #funding, #fundings-exits, #media, #startups, #tvision

0

Email creation startup Stensul raises $16M

Stensul, a startup aiming to streamline the process of building marketing emails, has raised $16 million in Series B funding.

When the company raised its $7 million Series A two years ago, founder and CEO Noah Dinkin told me about how it spun out of his previous startup, FanBridge. And while there are many products focused on email delivery, he said Stensul is focused on the email creation process.

Dinkin made many similar points when we discussed the Series B last week. He said that for many teams, creating a marketing email can take weeks. With Stensul, that process can be reduced to just two hours, with marketers able to create the email on their own, without asking developers for help. Things like brand guidelines are already built in, and it’s easy to get feedback and approval from executives and other teams.

Dinkin also noted that while the big marketing clouds all include “some kind of email builder, it’s not their center of gravity.”

He added, “What we tell folks [is that] literally over half the company is engineers, and they are only working on email creation.”

Stensul

Image Credits: Stensul

The team has recently grown to more than 100 employees, with new customers like Capital One, ASICS Digital, Greenhouse, Samsung, AppDynamics, Kroger and Clover Health. New features include an integration with work management platform Workfront.

Plus, with other marketing channels paused or diminished during the pandemic, Dinkin said that email has only become more important, with the old, time-intensive process becoming more and more of a burden.

“We need more emails — whether that’s more versions or more segments or more languages, the requests are through the roof,” he said. “The teams are the same size … and so that’s where especially the leaders of these organizations have looked inward a lot more. The ways that they have been doing it for years or decades just doesn’t work anymore and prevents them from being competitive in the marketplace.”

The new round was led by USVP, with participation from Capital One Ventures, Peak State Ventures, plus existing investors Javelin Venture Partners, Uncork Capital, First Round Capital and Lowercase Capital. Individual investors include Okta co-founder and COO Frederic Kerrest, Okta CMO Ryan Carlson, former Marketo/Adobe executive Aaron Bird, Avid Larizadeh Duggan, Gary Swart and Talend CMO Lauren Vaccarello.

Dinkin said the money will allow Stensul to expand its marketing, product, engineering and sales teams.

“We originally thought: Everybody who sends email should have an email creation platform,” he said. “And ‘everyone who sends email’ is synonymous ‘every company in the world.’ We’ve just seen that accelerate in that last few years.”

#advertising-tech, #enterprise, #funding, #fundings-exits, #startups, #stensul, #tc, #usvp

0

Illinois is taking a data-driven approach to its mask-wearing ad campaign

Here’s an example of ad targeting that’s actually good for public health: In a campaign encouraging people to wear masks, the Illinois state government has been focusing its digital ad dollars on the counties with highest COVID risk.

To achieve this, the government’s been working with Civis Analytics, the data science company founded by Dan Wagner, who was previously chief analytics officer for Barack Obama’s 2012 reelection campaign. The campaign kicked off in August, but the state is now sharing more details about its work, including a map that shows the week-by-week risk assessment that it used for targeting.

Crystal Son, Civis’ director of healthcare analytics, explained that every week, her team pulls together the latest county-level COVID data for Governor J.B. Pritzker’s team, who then use that data to determine where ad dollars for the It Only Works If You Wear It ad campaign should be spent.

Cameron Mock, chief of staff at the Governor’s Office of Management and Budget, said in a statement that the government is using “a one-of-a-kind formula to concentrate media dollars in the areas with the most risk.”

Mock continued, “The risk-based formula uses trends of cases and mobility on the county level to designate higher, medium and lower risk counties. It then uses a pro rata share to dedicate the most dollars to the highest risk areas.”

All In Illinois

Image Credits: State of Illinois

This formula divides counties into five tiers, with Tier 1 being the highest risk and Tier 5 being the lowest. Tiers 4 and 5 will still receive a baseline level of ad spend, but Tier 3 counties will see more spending and Tiers 1 and 2 receive the maximum amount.

While the mask campaign isn’t limited to online advertising, the formula is only being used on the digital side because it’s more difficult to adjust funding for more traditional ad channels on a week-by-week basis.

“Each county has unique and changing circumstances due to the virus, so we designed this campaign to respond to the on-the-ground situation in all 102 counties in Illinois,” said Alex Hann, deputy press secretary to Governor Pritzker, in a statement. “As an area’s risk increases, so too will its concentration of public health messaging. As the pandemic continues and another wave of coronavirus looms, the state of Illinois will continue to listen to scientists and follow the data to keep our residents safe.”

Son said she’s not aware of any other campaign responding to COVID-19 that uses a similar model to prioritize spending in the highest-risk geographies. Is it working? While this data doesn’t show the effects of a specific campaign, according to Carnegie Mellon University, 89% of Illinois residents wear masks — currently the 15th-highest usage rate in the U.S.

In the future, Son said she’s hopeful that we’ll see other organizations adopt “a much more customized communications approach” for healthcare.

“We still have the habit in healthcare of treating groups of people as if they are homogenous, as if they all act the same think the same,” she said. “There are widespread applications beyond mask-wearing for more tailored approaches.”

#advertising-tech, #civis-analytics, #covid-19, #health, #policy, #startups

0

Daily Crunch: Google had a good quarter

Google releases its latest earnings report, Spotify is getting ready to raise prices and Excel gets friendlier to custom data types. This is your Daily Crunch for October 29, 2020.

The big story: Google had a good quarter

Google’s parent company Alphabet released its third-quarter earnings report this afternoon, coming in well ahead of Wall Street expectations thanks in large part to YouTube, which saw revenue rise to $5.0 billion (compared to $3.8 billion during Q3 2019).

Google Cloud also grew revenue from $2.4 billion last year to $3.44 billion in the most recent quarter. Overall, Alphabet reported revenue of $46.2 billion and earnings per share of $16.40, compared to analyst predictions of $42.88 billion in revenue and EPS of $11.21.

The company’s shares quickly rose 8.5% in after-hours trading.

The tech giants

Spotify CEO says company will ‘further expand price increases’ — Although the company didn’t detail its plans, CEO Daniel Ek said the hikes will take place in markets that are more mature for Spotify.

Microsoft now lets you bring your own data types to Excel — That means you can have a “customer” data type, for example, bringing in rich customer data from a third-party service into Excel.

Why Apple’s Q4 earnings look different this year — With Apple’s latest iPhone launch running a few weeks behind this year, it missed the window to be included on Q4.

Startups, funding and venture capital

Donut launches Watercooler, an easy way to socialize online with co-workers — The startup also announced that it has raised $12 million in total funding, led by Accel.

One-click housing startup Atmos raises another $4M from Khosla, real estate strategics and TikTok star Josh Richards — According to CEO Nick Donahue, users have started designing the “first dozen homes” on the platform.

Commissary Club wants to help formerly incarcerated people find community —  While 70 Million Jobs focuses on helping people with criminal records find jobs, its new network Commissary Club is designed to be a place for folks to find community.

Advice and analysis from Extra Crunch

VCs poured capital into European startups in Q3, but early-stage dealmaking appeared to suffer — The VC trends of later and larger continue to change the landscape of private capital.

In the ‘buy now, pay later’ wars, PayPal is primed for dominance — Button’s Stephen Milbank writes that the greatest limitation to buy-now-pay-later adoption is its availability.

Twitter’s API access changes are chasing away third-party developers — On August 12, Twitter launched a complete rebuild of its 2012 API.

(Reminder: Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Europe to limit how big tech can push its own services and use third-party data — Commission EVP Margrethe Vestager confirmed that a legislative proposal due in a few weeks will aim to ban what she called “unfair self-preferencing.”

Comcast says Peacock has nearly 22M sign-ups — But it’s not clear how many of them are paid versus free.

Tech optimism…in this economy? — The latest episode of Equity looks at big startup opportunities for the coming decade.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

#advertising-tech, #alphabet, #daily-crunch, #earnings, #google, #media

0

Lotame unveils its new cookie-less tech for ad targeting

Data management company Lotame is announcing a new way for publishers and marketers to track identity that it calls Panorama ID .

For years, online advertisers have relied on cookies to track and target audiences, but they need new approaches as the major browsers phase out support for third-party cookies. (This shift isn’t limited to cookies. For example, Apple is forcing developers to allow users to opt out of ad tracking next year.)

To adapt to an internet without cookies, a Lotame spokesperson told me that the Panorama ID is built on top of the company’s Cartographer technology, which helps publishers unify their first-party data.

This approach combines different elements of user identity — such as device identifiers, customer IDs and hashed email addresses — with associated behaviors. The company says that on average, a single pseudonymous ID will include 119 web and 89 mobile attributes.

Lotame says that the Panorama ID will be able to unite user behavior across devices, enabling advertisers to target audiences through header bidding. They’ll also be able to effectively employ strategies like capping the frequency with which a person sees their ad.

“Consumers are changing all the time, even more so in the last 8 months,” said Lotame CEO Andy Monfried in a statement. “Marketer and publisher relationships have to evolve with each other and with customers to reflect these profound shifts. Panorama ID provides that new common language or bridge to make relevant advertising possible and impactful for marketers, publishers, and consumers.”

At the same time, the company says the Panorama ID is privacy friendly and compliant with a variety of regulations including GDPR and CCPA. Users will be able to to opt out of from Panorama ID tracking across their devices.

#ad-targeting, #advertising-tech, #lotame, #tc

0

Google’s display advertising business is under antitrust probe in Italy

Italy’s competition authority has opened an antitrust investigation into Google’s display ad business — adding another allegation of abuse of a dominant position to the tech giant’s regulatory woes.

In a press release announcing the action the AGCM said it “questions the discriminatory use of the huge amount of data collected through its various applications, preventing rivals from competing effectively as well as adversely affecting consumers”.

The probe follows a complaint by local ad lobby group the IAB Italy, per Reuters, which says the investigation must be concluded by November 2021.

Specifically, the AGCM said it suspects Google of what it refers to as “internal/external discriminatory conduct” — by refusing to provide competitors with Google ID decryption keys and excluding third-party tracking pixels.

“At the same time, Google has allegedly used tracking elements enabling its advertising intermediation services to achieve a targeting capability that some equally efficient competitors are unable to replicate,” it adds.

We’ve reached out to Google for comment on the allegations.

The move comes as Google is being sued on home turf by the US Department of Justice (DoJ), which filed an antitrust case earlier this month — following a 16 month investigation — alleging Google is “unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States.”

The Italian case also looks interesting as Google has been seeking to reframe the debate around online ad targeting vs privacy — announcing an initiative called Privacy Sandbox last year.

Its aim is to evolve open web standards towards a middle ground between Internet users’ privacy and content providers’ hunger for information to target visitors with ads (as well as, of course, its own people-profiling monetization model as an adtech giant) — proposing a technique called federated learning of cohorts (FloC) which it bills as a “privacy-preserving” mechanism to enable ad targeting without individual tracking.

But as part of that standards push, this January Google announced it was dialling up a plan to phase out support for third party tracking cookies — saying it now wanted to do so within the next two years. So it’s not so much an ‘evolution’ as Google cranking its market power lever.

While others in the browser space have also been clamping down on trackers, Google’s dominance of the online ad market means there are clear competition risks to it unilaterally shutting the door on third party trackers while maintaining its own lucrative access to Internet users’ data. And that seems to be the crux of the Italian competition authority’s concern.

Google has previously been found to be dominant in search by the European Commission — putting requirements on it to avoid abusing its market power to advance in other verticals.

The AGCM suggests that the conduct it’s investigating could have a significant impact on competition across the digital advertising space, as well as flagging the potential for “wide repercussions on competitors and consumers”.

“The absence of competition in the intermediation of digital advertising, in fact, might reduce the resources allocated to website producers and publishers, thus impoverishing the quality of content directed to end customers,” it writes, also suggesting that a lack of “effective competition based on merits” could discourage the development of innovative new adtech and ad techniques that are less intrusive for consumers. 

So, in other words, Google’s dominance of the digital ad space could be damaging both publishers and Internet users, and holding back the development of genuinely privacy-preserving adtech.

Plenty of such concerns have been raised elsewhere about the market distorting power of the adtech duopoly.

In a final report into the online ad market this summer, the UK’s Competition and Markets Authority (CMA) concluded that the market power of Google and Facebook is now so great that a new regulatory approach — and a dedicated regulator — is needed to address what it described as “wide ranging and self reinforcing” concerns. 

“Weak competition in search and social media leads to reduced innovation and choice and to consumers giving up more data than they would like. Weak competition in digital advertising increases the prices of goods and services across the economy and undermines the ability of newspapers and others to produce valuable content, to the detriment of broader society,” the CMA warned.

“Our concern is that such platforms have an incentive to interpret data protection regulation in a way that entrenches their own competitive advantage, including by denying third parties access to data that is necessary for targeting, attribution, verification and fee or price assessment while preserving their right to use this data within their walled gardens,” it added.

The report concluded that there is a “compelling case for the development of a pro-competition ex ante regulatory regime, to oversee the activities of online platforms funded by digital advertising” — something Google has been lobbying the European Commission not to do as regional lawmakers shape new pan-EU rules for gatekeeper platforms.

Per the AGCM, online advertising in Italy was worth more than €3.3 billion in 2019, representing 22% of the resources of the media sector — with such sales being the second most important source of revenue in the sector. 

#advertising-tech, #antitrust, #competition, #display-advertising, #europe, #google, #italy, #privacy

0

TikTok invests in social commerce via new Shopify partnership

TikTok is further investing in social commerce with today’s announcement of a new global partnership with e-commerce platform Shopify. The deal aims to make it easier for Shopify’s over 1 million merchants to reach TikTok’s younger audience and drive sales. The partnership will eventually expand to include other in-app shopping features, as well, the companies said.

At launch, the agreement allows Shopify merchants to create, run and optimize their TikTok marketing campaigns directly from the Shopify dashboard by installing the new TikTok channel app from the Shopify App Store. Once installed, merchants will have access to the key functions from the TikTok For Business Ads Manager at their disposal.

These ad tools allow merchants to create native, shareable content that turns their products into In-Feed video ads that will resonate with the TikTok community. Merchants will be able to target their audiences across gender, age, user behavior, and video category, and then track the campaign’s performance over time. The campaigns’ costs will vary, based on the merchant’s own business objectives and how much they want to spend.

As a part of this effort, Shopify merchants can also install or connect their “TikTok Pixel” — a tool that helps them to more easily track conversions driven by their TikTok ad campaigns.

Currently, e-commerce merchants can track user actions like a user browsing their page, a registration on a website, adding items to their cart, placing an order, and completing the payment.

Image Credits: Shopify

Shopify tells TechCrunch a small number of merchants previously gained access to these features as part of a beta test. But as of today, Oct. 27, the product is being made available to all merchants across the U.S.

“TikTok is one of the world’s fastest growing entertainment platforms with over 100 million highly engaged users in the U.S. alone,” said Satish Kanwar, Vice President of Product at Shopify, in a statement about the new partnership. “The TikTok channel means Shopify merchants—even those without a strong TikTok following of their own yet—can connect with these new audiences using content that feels authentic and genuine to the TikTok experience,” Kanwar added.

Image Credits: Shopify

To get started with the new features, merchants who want to advertise on TikTok will first install the TikTok channel app, then create and connect their TikTok For Business account and install the one-click pixel. They can then deploy In-Feed shoppable video ads by selecting the product they want to feature using ad templates specifically designed for commerce. Because these templates use existing imagery or videos, the TikTok channel can work for merchants of any size, Shopify notes.

To kick off the partnership, merchants are being offered a $300 ad credit to get started with their first TikTok campaign.

In addition, the two companies have partnered on their first co-branded Hashtag Challenge Plus campaign, #ShopBlack, to celebrate Black-owned businesses. Shopify had earlier featured Black-owned businesses in its own app, Shop. But from Nov. 10 through Nov. 15, the TikTok community will be able to browse videos from over 40 Shopify merchants via the new hashtag and its accompanying branded effect within TikTok, too.

Shopify and TikTok had been working together to test various social commerce initiatives ahead of today’s announcement.

The companies, for example, had been spotted trialing a new shopping button that allowed TikTok creators to link their Shopify storefront from their videos. (Teespring was also testing this with TikTok). TikTok had offered a TikTok Ads Pixel for Shopify merchants before today, as well.  But the partnership makes the pixel integration a 1-click install, so merchants don’t have to manipulate code.

Image Credits: Shopify

“We are delighted to partner with Shopify and provide a channel for their merchants to reach new audiences and drive sales on TikTok,” said Blake Chandlee, Vice President, Global Business Solutions at TikTok, in a statement. “As social commerce proliferates, retailers are recognizing that TikTok’s creative and highly engaged community sets it apart from other platforms. We’re constantly exploring new and innovative ways to connect brands with our users, and Shopify is the perfect partner to help us grow and expand our commerce capabilities globally,” he said.

TikTok and Shopify’s partnership won’t be limited to the new TikTok channel app, however. That’s just the first step.

We understand the deal will soon expand to other shopping features, too.

TikTok says it plans to start testing new in-app features that will make it easier for users to discover Shopify merchants and their products by expanding their reach through video and on their account profiles. These features will also “let users browse merchant’s products and shop directly through the TikTok app,” a spokesperson said. They didn’t offer specific details about the features or how the payments portion would work, saying that more information would be available when the new tools launched.

However, the features will launch to a limited beta group of testers soon, a TikTok spokesperson confirmed.

Image Credits: TikTok

Shopify isn’t the first to recognize TikTok’s potential as a new type of social shopping platform. Its ability to drive merchant traffic and sales was a key reason for Walmart’s participation in the TikTok-Oracle deal — a deal whose current status is still unknown, of course, given the ongoing TikTok lawsuit and the upcoming Presidential election whose outcome could impact the Trump Administration’s TikTok ban.

TikTok itself has been steadily ramping up its tools for merchants and other social shopping features. To date, it has  experimented with allowing users to add e-commerce links to their bios; launched “Shop Now” buttons for brands’ video ads; and introduced shoppable components to hashtags with the e-commerce feature (soon to be used for #ShopBlack), known as the Hashtag Challenge Plus.

Shopify, meanwhile, has been working to deliver more tools that give smaller businesses the ability to compete against Walmart and Amazon, while at the same time partnering with Walmart to give its merchants broader reach.

The TikTok-Shopify partnership could help the video platform better compete against other sources of social commerce, including the growing number of live stream shopping apps as well as efforts from Facebook and its family of apps. The social giant has recently rolled out a bevy of shopping-focused updates across Facebook, Instagram, and — just last week — WhatsApp, with the goal of directing users to shop in its apps, then check out seamlessly with Facebook Pay.

TikTok’s advantage is that it’s a video-based social network, more like YouTube, rather than a platform whose roots were in editorial-quality imagery, like Instagram. On Instagram, video features have been added in over time. Now, a number of Instagram products include video — like  Feed posts, Stories, Instagram Live, IGTV, and, finally, Instagram’s TikTok rival, Reels. But overall, the impact is that Instagram has started to feel overcrowded.

TikTok says the new TikTok channel for Shopify merchants is available today in the U.S. It will roll out to other markets next year, including elsewhere in North America, Europe and Southeast Asia.

#ad-tech, #ads, #advertising-tech, #bytedance, #e-commerce, #ecommerce, #shopify, #social, #social-media, #tc, #tiktok, #video

0

EU parliament backs tighter rules on behavioural ads

The EU parliament has backed a call for tighter regulations on behavioral ads (aka microtargeting) in favor of less intrusive, contextual forms of advertising — urging Commission lawmakers to also assess further regulatory options, including looking at a phase-out leading to a full ban.

MEPs also want Internet users to be able to opt out of algorithmic content curation altogether.

The legislative initiative, introduced by the Legal Affairs committee, sets the parliament on a collision course with the business model of tech giants Facebook and Google.

Parliamentarians also backed a call for the Commission to look at options for setting up a European entity to monitor and impose fines to ensure compliance with rebooted digital rules — voicing support for a single, pan-EU Internet regulator to keep platforms in line.

The votes by the elected representatives of EU citizens are non-binding but send a clear signal to Commission lawmakers who are busy working on an update to existing ecommerce rules, via the forthcoming Digital Service Act (DSA) package — due to be introduced next month.

The DSA is intended to rework the regional rule book for digital services, including tackling controversial issues such as liability for user-generated content and online disinformation. And while only the Commission can propose laws, the DSA will need to gain the backing of the EU parliament (and the Council) if it is to go the legislative distance so the executive needs to take note of MEPs’ views.

Battle over adtech

The mass surveillance of Internet users for ad targeting — a space that’s dominated by Google and Facebook — looks set to be a major battleground as Commission lawmakers draw up the DSA package.

Last month Facebook’s policy VP Nick Clegg, a former MEP himself, urged regional lawmakers to look favorably on a business model he couched as “personalized advertising” — arguing that behavioral ad targeting allows small businesses to level the playing field with better resourced rivals.

However the legality of the model remains under legal attack on multiple fronts in the EU.

Scores of complaints have been lodged with EU data protection agencies over the mass exploitation of Internet users’ data by the adtech industry since the General Data Protection Regulation (GDPR) begun being applied — with complaints raising questions over the lawfulness of the processing and the standard of consent claimed.

Just last week, a preliminary report by Belgium’s data watchdog found that a flagship tool for gathering Internet users’ consent to ad tracking that’s operated by the IAB Europe fails to meet the required GDPR standard.

The use of Internet users’ personal data in the high velocity information exchange at the core of programmatic’s advertising’s real-time-bidding (RTB) process is also being probed by Ireland’s DPC, following a series of complaints. The UK’s ICO has warned for well over a year of systemic problems with RTB too.

Meanwhile some of the oldest unresolved GDPR complaints pertain to so-called ‘forced consent’ by Facebook  — given GDPR’s requirement that for consent to be lawful it must be freely given. Yet Facebook does not offer any opt-out from behavioral targeting; the ‘choice’ it offers is to use its service or not use it.

Google has also faced complaints over this issue. And last year France’s CNIL fined it $57M for not providing sufficiently clear info to Android users over how it was processing their data. But the key question of whether consent is required for ad targeting remains under investigation by Ireland’s DPC almost 2.5 years after the original GDPR complaint was filed — meaning the clock is ticking on a decision.

And still there’s more: Facebook’s processing of EU users’ personal data in the US also faces huge legal uncertainty because of the clash between fundamental EU privacy rights and US surveillance law.

A major ruling (aka Schrems II) by Europe’s top court this summer has made it clear EU data protection agencies have an obligation to step in and suspend transfers of personal data to third countries when there’s a risk the information is not adequately protected. This led to Ireland’s DPC sending Facebook a preliminary order to suspend EU data transfers.

Facebook has used the Irish courts to get a stay on that while it seeks a judiciary review of the regulator’s process — but the overarching legal uncertainty remains. (Not least because the complainant, angry that data continues to flow, has also been granted a judicial review of the DPC’s handling of his original complaint.)

There has also been an uptick in EU class actions targeting privacy rights, as the GDPR provides a framework that litigation funders feel they can profit off of.

All this legal activity focused on EU citizens’ privacy and data rights puts pressure on Commission lawmakers not to be seen to row back standards as they shape the DSA package — with the parliament now firing its own warning shot calling for tighter restrictions on intrusive adtech.

It’s not the first such call from MEPs, either. This summer the parliament urged the Commission to “ban platforms from displaying micro-targeted advertisements and to increase transparency for users”. And while they’ve now stepped away from calling for an immediate outright ban, yesterday’s votes were preceded by more detailed discussion — as parliamentarians sought to debate in earnest with the aim of influencing what ends up in the DSA package.

Ahead of the committee votes, online ad standards body, the IAB Europe, also sought to exert influence — putting out a statement urging EU lawmakers not to increase the regulatory load on online content and services.

“A facile and indiscriminate condemnation of ‘tracking’ ignores the fact that local, generalist press whose investigative reporting holds power to account in a democratic society, cannot be funded with contextual ads alone, since these publishers do not have the resources to invest in lifestyle and other features that lend themselves to  contextual targeting,” it suggested.

“Instead of adding redundant or contradictory provisions to the current rules, IAB Europe urges EU policymakers and regulators to work with the industry and support existing legal compliance standards such as the IAB Europe Transparency & Consent Framework [TCF], that can even help regulators with enforcement. The DSA should rather tackle clear problems meriting attention in the online space,” it added in the statement last month.

However, as we reported last week, the IAB Europe’s TCF has been found not to comply with existing EU standards following an investigation by the Belgium DPA’s inspectorate service — suggesting the tool offers quite the opposite of ‘model’ GDPR compliance. (Although a final decision by the DPA is pending.)

The EU parliament’s Civil Liberties committee also put forward a non-legislative resolution yesterday, focused on fundamental rights — including support for privacy and data protection — that gained MEPs’ backing.

Its resolution asserted that microtargeting based on people’s vulnerabilities is problematic, as well as raising concerns over the tech’s role as a conduit in the spreading of hate speech and disinformation.

The committee got backing for a call for greater transparency on the monetisation policies of online platforms.

‘Know your business customer’

Other measures MEPs supported in the series of votes yesterday included a call to set up a binding ‘notice-and-action’ mechanism so Internet users can notify online intermediaries about potentially illegal online content or activities — with the possibility of redress via a national dispute settlement body.

While MEPs rejected the use of upload filters or any form of ex-ante content control for harmful or illegal content. — saying the final decision on whether content is legal or not should be taken by an independent judiciary, not by private undertakings.

They also backed dealing with harmful content, hate speech and disinformation via enhanced transparency obligations on platforms and by helping citizens acquire media and digital literacy so they’re better able to navigate such content.

A push by the parliament’s Internal Market Committee for a ‘Know Your Business Customer’ principle to be introduced — to combat the sale of illegal and unsafe products online — also gained MEPs’ backing, with parliamentarians supporting measures to make platforms and marketplaces do a better job of detecting and taking down false claims and tackling rogue traders.

Parliamentarians also supported the introduction of specific rules to prevent (not merely remedy) market failures caused by dominant platform players as a means of opening up markets to new entrants — signalling support for the Commission’s plan to introduce ex ante rules for ‘gatekeeper’ platforms.

Liability for ‘high risk’ AI

The parliament also backed a legislative initiative recommending rules for AI — urging Commission lawmakers to present a new legal framework outlining the ethical principles and legal obligations to be followed when developing, deploying and using artificial intelligence, robotics and related technologies in the EU including for software, algorithms and data.

The Commission has made it clear it’s working on such a framework, setting out a white paper this year — with a full proposal expected in 2021.

MEPs backed a requirement that ‘high-risk’ AI technologies, such as those with self-learning capacities, be designed to allow for human oversight at any time — and called for a future-oriented civil liability framework that would make those operating such tech strictly liable for any resulting damage.

The parliament agreed such rules should apply to physical or virtual AI activity that harms or damages life, health, physical integrity, property, or causes significant immaterial harm if it results in “verifiable economic loss”.

#adtech, #advertising-tech, #ai, #artificial-intelligence, #behavioral-advertising, #digital-services-act, #eu-parliament, #europe, #facebook, #gdpr, #microtargeting, #online-regulation, #policy, #privacy, #tc

0

Lawmatics raises $2.5M to help lawyers market themselves

Lawmatics, a San Diego startup that’s building marketing and CRM software for lawyers, is announcing that it has raised $2.5 million in seed funding.

CEO Matt Spiegel used to practice law himself, and he told me that even though tech companies have a wide range of marketing tools to choose from, “lawyers have not been able to adopt them,” because they need a product that’s tailored to their specific needs.

That’s why Spiegel founded Lawmatics with CTO Roey Chasman. He said that a law firm’s relationship with its clients can be divided into three phases — intake (when a client is deciding whether to hire a firm); the active legal case; and after the case has been resolved. Apparently most legal software is designed to handle phase two, while Lawmatics focuses on phases one and three.

The platform includes a CRM system to manage the initial client intake process, as well as tools that can automate a lot of what Spiegel called the “blocking and tackling” of marketing, like sending birthday messages to former clients — which might sound like a minor task, but Spiegel said it’s crucial for law firms to “nurture” those relationships, because most of their business comes from referrals.

Lawmatics’ early adopters, Spiegel added, have consisted of the firms in areas where “if you need a lawyer, you go to Google and start searching ‘personal injury,’ ‘bankruptcy,’ ‘estate planning,’ all these consumer-driven law firms.” And the pandemic led to accelerated the startup’s growth, because “lawyers are at home now, their business is virtual and they need more tools.”

Spiegel’s had success selling technology to lawyers in the past, with his practice management software startup MyCase acquired by AppFolio in 2012 (AppFolio recently sold MyCase to a variety of funds for $193 million). He said that the strategies for growing both companies are “almost identical” — the products are different, but “it’s really the same segment, running the same playbook, only with additional go-to-market strategies.”

The funding was led by Eniac Ventures and Forefront Venture Partners, with participation from Revel Ventures and Bridge Venture Partners.

“In my 10 years investing I have witnessed few teams more passionate, determined, and capable of revolutionizing an industry,” said Eniac’s Tim Young in a statement. “They have not only created the best software product the legal market has seen, they have created a movement.”

 

#advertising-tech, #eniac-ventures, #enterprise, #funding, #fundings-exits, #startups

0

We need universal digital ad transparency now

Dear Mr. Zuckerberg, Mr. Dorsey, Mr. Pichai and Mr. Spiegel: We need universal digital ad transparency now!

The negative social impacts of discriminatory ad targeting and delivery are well-known, as are the social costs of disinformation and exploitative ad content. The prevalence of these harms has been demonstrated repeatedly by our research. At the same time, the vast majority of digital advertisers are responsible actors who are only seeking to connect with their customers and grow their businesses.

Many advertising platforms acknowledge the seriousness of the problems with digital ads, but they have taken different approaches to confronting those problems. While we believe that platforms need to continue to strengthen their vetting procedures for advertisers and ads, it is clear that this is not a problem advertising platforms can solve by themselves, as they themselves acknowledge. The vetting being done by the platforms alone is not working; public transparency of all ads, including ad spend and targeting information, is needed so that advertisers can be held accountable when they mislead or manipulate users.

Our research has shown:

  • Advertising platform system design allows advertisers to discriminate against users based on their gender, race and other sensitive attributes.
  • Platform ad delivery optimization can be discriminatory, regardless of whether advertisers attempt to set inclusive ad audience preferences.
  • Ad delivery algorithms may be causing polarization and make it difficult for political campaigns to reach voters with diverse political views.
  • Sponsors spent more than $1.3 billion dollars on digital political ads, yet disclosure is vastly inadequate. Current voluntary archives do not prevent intentional or accidental deception of users.

While it doesn’t take the place of strong policies and rigorous enforcement, we believe transparency of ad content, targeting and delivery can effectively mitigate many of the potential harms of digital ads. Many of the largest advertising platforms agree; Facebook, Google, Twitter and Snapchat all have some form of an ad archive. The problem is that many of these archives are incomplete, poorly implemented, hard to access by researchers and have very different formats and modes of access. We propose a new standard for universal ad disclosure that should be met by every platform that publishes digital ads. If all platforms commit to the universal ad transparency standard we propose, it will mean a level playing field for platforms and advertisers, data for researchers and a safer internet for everyone.

The public deserves full transparency of all digital advertising. We want to acknowledge that what we propose will be a major undertaking for platforms and advertisers. However, we believe that the social harms currently being borne by users everywhere vastly outweigh the burden universal ad transparency would place on ad platforms and advertisers. Users deserve real transparency about all ads they are bombarded with every day. We have created a detailed description of what data should be made transparent that you can find here.

We researchers stand ready to do our part. The time for universal ad transparency is now.

Signed by:

Jason Chuang, Mozilla
Kate Dommett, University of Sheffield
Laura Edelson, New York University
Erika Franklin Fowler, Wesleyan University
Michael Franz, Bowdoin College
Archon Fung, Harvard University
Sheila Krumholz, Center for Responsive Politics
Ben Lyons, University of Utah
Gregory Martin, Stanford University
Brendan Nyhan, Dartmouth College
Nate Persily, Stanford University
Travis Ridout, Washington State University
Kathleen Searles, Louisiana State University
Rebekah Tromble, George Washington University
Abby Wood, University of Southern California

#advertising-tech, #column, #digital-advertising, #digital-marketing, #facebook, #google, #media, #online-advertising, #opinion, #snapchat, #social, #targeted-advertising, #tc, #twitter

0

IAB Europe’s ad tracking consent framework found to fail GDPR standard

A flagship framework for gathering Internet users’ consent for targeting with behavioral ads — which is designed by ad industry body, the IAB Europe — fails to meet the required legal standards of data protection, according to findings by its EU data supervisor.

The Belgian DPA’s investigation follows complaints against the use of personal data in the real-time bidding (RTB) component of programmatic advertising which contend that a system of high velocity personal data trading is inherently incompatible with data security requirements baked into EU law.

The IAB Europe’s Transparency and Consent Framework (TCF) can be seen popping up all over the regional web, asking users to accept (or reject) ad trackers — with the stated aim of helping publishers comply with the EU’s data protection rules.

It was the ad industry standard’s body’s response to a major update to the bloc’s data protection rules, after the General Data Protection Regulation (GDPR) came into application in May 2018 — tightening standards around consent to process personal data and introducing supersized penalties for non-compliance — thereby cranking up the legal risk for the ad tracking industry.

The IAB Europe introduced the TCF in April 2018, saying at the time that it would “help the digital advertising ecosystem comply with obligations under the GDPR and ePrivacy Directive”.

The framework has been widely adopted, including by adtech giant, Google — which integrated it this August.

Beyond Europe, the IAB has also recently been pushing for a version of the same tool to be used for ‘compliance’ with California’s Consumer Privacy Act.

However the findings by the investigatory division of the Belgian data protection agency cast doubt on all that adoption — suggesting the framework is not fit for purpose.

The inspection service of the Belgium DPA makes a number of findings in a report reviewed by TechCrunch — including that the TCF fails to comply with GDPR principles of transparency, fairness and accountability, and also the lawfulness of processing.

It also finds that the TCF does not provide adequate rules for the processing of special category data (e.g. health information, political affiliation, sexual orientation etc) — yet does process that data.

There are further highly embarrassing findings for the IAB Europe, which the inspectorate found not to have appointed a Data Protection Officer, nor to have a register of its own internal data processing activities.

Its own privacy policy was also found wanting.

We’ve reached out to the IAB Europe for comment on the inspectorate’s findings.

A series of complaints against RTB have been filed across Europe over the past two years, starting in the UK and Ireland.

Dr Johnny Ryan, who filed the original RTB complaints — and is now a senior fellow at the Irish Council for Civil Liberties — told TechCrunch: “The TCF was an attempt by the tracking industry to put a veneer or quasi-legality over the massive data breach at the heart of the behavioral advertising and tracking industry and the Belgian DPA is now peeling that veneer off and exposing the illegality.”

Ryan has previously described the RTB issues as “the greatest data breach ever recorded”.

Last month he published another hair-raising dossier of evidence on how extensively and troublingly RTB leaks personal data — with findings including that a data broker used RTB to profile people with the aim of influencing the 2019 Polish Parliamentary Election by targeting LGBTQ+ people. Another data broker was found to be profiling and targeting Internet users in Ireland under categories including “Substance abuse”, “Diabetes,” “Chronic Pain” and “Sleep Disorders”.

In a statement, Ravi Naik, the solicitor who worked on the original RTB complaints, had this to say on the Belgian inspectorate’s findings: “These findings are damning and overdue. As the standard setters, the IAB is responsible for breaches of the GDPR. Their supervisory authority has rightly found that the IAB ‘neglects’ the risks to data subjects. The IAB’s responsibility now is to stop these breaches.”

Following the filing of RTB complaints, the UK’s data watchdog, the ICO, issued a warning about behavioural advertising in June 2019 — urging the industry to take note of the need to comply with data protection standards.

However the regulator has failed to follow up with any enforcement action — unless you count multiple mildly worded blog posts. Most recently it paused its (still ongoing) investigation into the issue because of the pandemic.

In another development last year, Ireland’s DPC opened an investigation into Google’s online Ad Exchange — looking into the lawful basis for its processing of personal data. But that investigation is one of scores that remain open on its desk. And the Irish regulator continues to face criticism over the length of time it’s taking to issue decisions on major cross-border GDPR cases pertaining to big tech.

Jef Ausloos, a postdoc researcher in data privacy at the University of Amsterdam — and one of the complainants in the Belgian case — told TechCrunch the move by the DPA puts pressure on other EU regulators to act, calling out what he described as “their complete, deer-in-the-headlights inaction“.

“I think we’ll see more of this in the coming months/year, i.e. other DPAs sick and tired, taking matters into their own hands — instead of waiting on the Irish,” he added.

“We are happy to finally see a data protection authority having the resolved to take on the online advertisement industry at its roots. This may be the first important step in taking down surveillance capitalism,” Ausloos also said in a statement.

There are still several steps to go before the Belgian DPA takes (any) action on the substance of its inspectorate’s report — with a number of steps outstanding in the regulatory process. We’ve reached out to the Belgian DPA for comment.

But, per the complainants, the inspectorate’s findings have been forwarded to the Litigation Chamber, and action is expected in early 2021. Which suggests privacy watchers in the EU might finally get to uphold their rights against the ad tracking industry/data industrial complex in the near future.

For publishers the message is a need to change how they monetize their content: Rights-respecting alternatives to creepy ads are possible (e.g. contextual ad targeting which does not use personal data).

Some publishers have already found the switch to contextual ads to be a good news story for their revenues. Subscription business models are also available (even if not all VCs are fans).

#advertising-tech, #behavioral-ads, #data-protection, #europe, #gdpr, #iab-europe, #privacy, #programmatic-advertising, #rtb

0

Small business payments and marketing startup Fivestars raises $52.5M

It’s a difficult time for small businesses — to put it mildly. And Fivestars CEO Victor Ho said that many of the big digital platforms aren’t really helping.

Ho argued that those platforms — whether they offer delivery services, user reviews or marketing tools — all have the same underlying model: “They seek to take over a small business’ customer base and then charge them a tax to start reaching those customers.”

Superficially, a company like Fivestars, which has created software to support small business payments and marketing, might not sound that different.

But Ho said that the startup actually takes the “opposite” approach, because Fivestars isn’t trying to build up a big “walled garden” of its own customers that businesses pay to access. Instead, businesses pay for the software, which they use to build a database of their own customers; they don’t have to pay to reach those customers.

“The incentives are more aligned,” he said.

Fivestars

Image Credits: Fivestars

The Fivestars platform includes its own payment product, integration with other point-of-sale systems, marketing automation that delivers personalized messages to customers and a broader network of 60 million shoppers, allowing for cross-promotion across different Fivestars businesses.

The startup is announcing today that it has raised $52.5 million in new funding, combining a Series D equity round as well as debt and bringing its total funding to $145.5 million. The round was led by Salt Partners, with participation from Lightspeed Venture Partners, DCM Ventures, Menlo Ventures and HarbourVest Partners.

Ho said Fivestars actually closed the round before the COVID-19 pandemic, but the team decided to hold off on the announcement because it seemed like a bad idea to “flaunt” the company’s bank account when so many of its customers were suffering.

The company has seen “record usage” during the pandemic, with 1 million new shoppers joining the network every month. At the same time, Ho acknowledged that the pandemic has caused the company to shift its strategy. Originally, the goal for the funding was “just to keep growing our portfolio of merchants across our existing products,” but Ho said, “What changed pretty dramatically through this period for us was emphasizing the payments piece and the network” and focusing on “what small businesses need more than ever.”

He also noted that during the pandemic, the company has provided customers with more than $1 million worth of credits and also made more of its products free to use.

“It’s very clear that small businesses are incredibly resilient,” Ho added. “Particularly when it comes to the category of experiences — you’re not going to take your wife on a date to Pizza Hut, when you go to Paris, you’re not going to go to a generic chains.”

In the funding announcement, Natasha Teague of Ft Lauderdale health food store Tropibowls described the Fivestars platform as “a huge help.”

“The value of being able to communicate with our customers and share updates in real-time has been immeasurable,” Teague said in a statement. “The power of Fivestars’ expansive network and payment tech has made our reopening process seamless and a lifesaver as we navigate new needs as a result of the pandemic.”

#advertising-tech, #ecommerce, #fivestars, #funding, #fundings-exits, #startups

0

Google Analytics update uses machine learning to surface more critical customer data

If you ever doubted the hunger brands have for more and better information about consumers, you only need to look at Twilio buying customer data startup Segment this week for $3.2 billion. Google sees this the same thing as everyone else, and today it introduced updates to Google Analytics to help companies understand their customers better (especially in conjunction with related Google tools).

Vidhya Srinivasan vice president of measurement, analytics and buying platforms at Google wrote in a company blog post introducing the new features that the company sees this changing customer-brand dynamic due to COVID, and it wants to assist by adding new features that help marketers achieve their goals, whatever those may be.

One way to achieve this is by infusing Analytics with machine learning to help highlight data automatically that’s important to marketers using the platform. “[Google Analytics] has machine learning at its core to automatically surface helpful insights and gives you a complete understanding of your customers across devices and platforms,” Srinivasan wrote in the blog post.

The idea behind the update is to give marketers access to more information they care about most by using that machine learning to surface data like which groups of customers are most likely to buy and which are most likely to churn, the very types of information marketing (and sales) teams need to try make proactive moves to keep customers from leaving or conversely turning those ready to buy into sales.

Google_Analytics_predictive_metric predict churn and most likely to convert to sales.

Image Credits: Google

If it works as described, it can give marketers a way to measure their performance with each customer or group of customers across their entire lifecycle, which is especially important during COVID when customer needs are constantly changing.

Of course, this being a Google product it’s designed to play nicely with Google Ads, YouTube and other tools like GMail and Google Search along with non-Google channels. As Srinivasan wrote:

The new approach also makes it possible to address longtime advertiser requests. Because the new Analytics can measure app and web interactions together, it can include conversions from YouTube engaged views that occur in-app and on the web in reports. Seeing conversions from YouTube video views alongside conversions from Google and non-Google paid channels, and organic channels like Google Search, social, and email, helps you understand the combined impact of all your marketing efforts.

The company is also trying to future proof analytics with an eye toward stricter privacy laws like GDPR in Europe or CCPA in California by using modeling to fill in gaps in information when you can’t use cookies or other tracking software.

All of this is designed to help marketers, caught in trying times with a shifting regulatory landscape to better understand customer needs and deliver them what they want when they want it — when they’re just trying to keep the customers satisfied.

#advertising-tech, #ecommerce

0

With a new focus on marketing software, NewsCred relaunches as Welcome

The company formerly known as NewsCred has a new name and a new product: Welcome.

Co-founder and CEO Shafqat Islam explained that this follows a broader shift in the company’s strategy. While previously known as a content marketing business, Islam said NewsCred has been increasingly focused on building a broader software platform for marketers (a platform that it uses itself).

Eventually, this led the company to sell its content services business to business journalism company Industry Dive and its owner Falfurrias Capital Partners over the summer. Now Welcome is officially unveiling its new brand, which it’s also using for its new marketing orchestration software.

“It’s not often not often that startups like ours get to close one chapter and open another chapter,” Islam said. “We kind of went back to being a Series A, Series B startup, iterating and working very closely with our customers.”

While today is the official launch of Welcome platform, Islam said the company has been moving the software in this direction for the past year, and that this side of the business has already seen significant growth, with daily average users up 300% year-over-year.

Islam also suggested that while this was the right time to come up with a new company name, it’s something that’s been discussed repeatedly in the past.

Welcome Gantt Calendar

Image Credits: Welcome

“Every time we raised money ever in last 10 years, the new investor would say, ‘What about the name? Can we change it?’” he recalled. “We could never do it, because we had this content heritage built up and enough brand equity. Finally, with this deal, and with the launch of the new software … we came up with the name Welcome.”

While there’s no shortage of marketing software out there already, Islam said marketers need an orchestration system to manage their projects and workflows — most of them, he said, are stuck using “horizontal” project management tools that aren’t really built for their needs, such as Asana or Jira.

“Marketers have very specific needs,” Islam said. “It could be a simple thing like … marketers work with campaigns, so what are your specific campaigns, marketing briefs or marketing-specific workflows? Our approach was: How do we create something that’s really specific to marketers versus all horizontal solutions out there?”

He also noted that “close to half the engineering team works on the interoperability problem,” so that Welcome can integrate all the other tools that marketers are using, like HubSpot and Marketo. The goal, Islam said, is to become “something marketers standardize on,” the way that salespeople log into their Salesforce accounts every day.

Islam also argued Welcome will take advantage of the way that the pandemic has accelerated changes in the enterprise sales process.

“I personally believe the way people buy software is changing,” he said. “The days of wining and dining and selling to the CMO, that still exists, but that’s not how everyone wants to buy anymore.”

To adapt to this new world, Islam said the startup is adopting a more “bottoms up” sales approach, with a free version of the platform due for release next month.

#advertising-tech, #enterprise, #newscred, #startups, #welcome

0

Is the Twilio-Segment deal expensive?

The Twilio-Segment acquisition was the biggest story of the weekend, and in our current IPO lull, it is the most-discussed deal of the moment.

So it hasn’t been a surprise to see folks working to figure out if the $3.2 billion price tag Twilio expects to pay for Segment is cheap, reasonable or expensive.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


We had the same question.

The all-stock transaction is another big deal from Twilio, which previously scooped up SendGrid. Some expected Twilio to be picked up by a larger company after it went public, I’ve been told. Instead, Twilio has become the acquiring entity, boosting its size and adding to its total addressable market (TAM) through dealmaking.

But a smart company can still overpay while executing a generally intelligent strategy. So, does the Segment deal look cheap, or expensive? While we don’t have all the data we’d like, a few useful VCs dropped hints about the size of Segment in my DMs.

Our hunt begins with Twilio’s own release on the matter. From there, we’ll bring in some historical data from the deal that Twilio compares the Segment transaction to, compare the resulting multiples to today’s market norms and close with a discussion of the acquiring company’s rising share price. The synthesis of all the elements will give us an answer. And we’ll have some fun at the same time.

The deal

A quick refresher on the deal: Twilio will spend $3.2 billion in shares of itself to purchase Segment. Per the company, the transaction is worth about 6% of the combined entity.

#advertising-tech, #fundings-exits, #ma, #saas, #segment, #sendgrid, #startups, #tc, #the-exchange, #twilio

0

If the ad industry is serious about transparency, let’s open-source our SDKs

Year after year, a lack of transparency in how ad traffic is sourced, sold and measured is cited by advertisers as a source of frustration and a barrier to entry in working with various providers. But despite progress on the protection and privacy of data through laws like GDPR and COPPA, the overall picture regarding ad-marketing transparency has changed very little.

In part, this is due to the staggering complexity of how programmatic and other advertising technologies work. With automated processes managing billions of impressions every day, there is no universal solution to making things more simple and clear. So the struggle for the industry is not necessarily a lack of intent around transparency, but rather how to deliver it.

Frustratingly, evidence shows that the way data is collected and used by some industry players has played a large part in reducing people’s trust in online advertising. This is not a problem that was created overnight. There is a long history and growing sense of consumer frustration with the way their data is being used, analyzed and monetized and a similar frustration by advertisers with the transparency and legitimacy of ad clicks for which they are asked to pay.

There are continuing efforts by organizations like the IAB and TAG to create policies for better transparency such as ads.txt. But without hard and fast laws, the responsibility lies with individual companies.

One relatively simple yet largely spurned practice that would engender transparency and trust for the benefit of all parties (brands, consumers and ad/marketing providers) would be for the industry to come together and have all parties open their SDKs.

Why open-sourcing benefits advertisers, publishers and the ad industry

Open-source software is code that anyone is free to use, analyze, alter and improve.

Auditing the code and adjusting the SDKs functionality based on individual needs is a common practice — and so too are audits by security companies or interested parties who are rightly on the lookout for app fraud. By showing exactly how the code within the SDK has been written, it is the best way to reassure developers and partners that there are no hidden functions or unwanted features.

Everyone using open-source SDKs can learn exactly how it works, and because it is under an open-source license, anyone can suggest modifications and improvements in the code.

Open source brings some risks, but much bigger rewards

The main risk from opening up an SDK code is that third parties will look for ways to exploit it and insert their own malicious code, or else look at potential vulnerabilities to access back-end services and data. However, providers should be on the lookout and be able to fix the potential vulnerabilities as they arise.

As for the rewards, open-sourcing engenders trust and transparency, which should certainly translate into customer loyalty and consumer confidence. After all, we are all operating in a market where advertisers and developers can choose who they want to work with — and on what terms.

Selfishly but practically speaking, opening SDKs can also help companies in our industry protect themselves from others’ baseless claims that are simply intended to promote their products. With open standards, there are no unsubstantiated, false accusations intended for publicity. The proof is out there for everyone to see.

How ad tech is embracing open source

In the ad tech space, companies such as MoPub, Appodeal and AppsFlyer are just a few that have already made some or all of their SDKs available through an open-source license.

All of these companies have decided to use an open-source approach because they recognize the importance of transparency and trust, especially when you are placing the safety and reputation of your brand in the hands of an algorithm. However, the majority of SDKs remain closed.

Relying on forward-thinking companies to set their own transparency levels will only take our industry so far. It’s time for stronger action around trust and data transparency. In the same way that GDPR and COPPA have required companies to address privacy and, ultimately, to have forced a change that was needed, open-sourcing our SDKs will take the ad-marketing space to new heights and drive new levels of trust and deployment with our clients, competitors, legislators and consumers.

The industry-wide challenge of transparency won’t be solved any time soon, but the positive news is that there is movement in the right direction, with steps that some companies are already taking and others can easily take. By implementing measures to ensure brand-safe placements and helping limit ad fraud; improving relationships between brands, agencies, and programmatic partners; and bringing clarity to consumer data use; confidence in the advertising industry will improve and opportunities will subsequently grow.

That’s why we are calling on all ad/marketing companies to take this step forward with us — for the benefit of our consumers, brands, providers and industry at large — to embrace open-source SDKs as the way to engender trust, transparency and industry transformation. In doing so, we will all be rewarded with consumers who are more trusting of brands and brand advertising, and subsequently, brands who trust us and seek opportunities to implement more sophisticated solutions and grow their business.

#advertising-tech, #column, #digital-marketing, #general-data-protection-regulation, #marketing, #online-advertising, #open-source, #open-source-components, #open-source-startups, #opinion, #privacy

0

These 3 factors are holding back podcast monetization

Podcast advertising growth is inhibited by three major factors:

  • Lack of macro distribution, consumption and audience data.
  • Current methods of conversion tracking.
  • Idea of a “playbook” for podcast performance marketing.

Because of these limiting factors, it’s currently more of an art than a science to piece disparate data from multiple sources, firms, agencies and advertisers, into a somewhat conclusive argument to brands as to why they should invest in podcast advertising.

1. Lack of macro distribution, consumption and audience data

There were several resources that released updates based on what they saw in terms of consumption when COVID-19 hit. Hosting platforms, publishers and third-party tracking platforms all put out their best guesses as to what was happening. Advertisers’ own podcast listening habits had been upended due to lockdowns; they wanted to know how broader changes in listening habits were affecting their campaigns. Were downloads going up, down or staying the same? What was happening with sports podcasts, without sports?


Read part 1 of this article, Podcast advertising has a business intelligence gap, on TechCrunch.


At Right Side Up, we receive and analyze all of the available research from major publishers (Stitcher, aCast), to major platforms (Megaphone) and third-party research firms (Podtrac, IAB, Edison Research). However, no single entity encompasses the entire space or provides the kind of interactive, off-the-shelf customizable SaaS product we’d prefer, and that digitally native marketers expect. Plus, there isn’t anything published in real-time; most sources publish once or twice annually.

So what did we do? We reached out to trusted publishers and partners to gather data around shifting consumption due to COVID-19 ourselves, and determined that, though there was a drop in downloads in the short term, it was neither as precipitous nor as enduring as some had feared. This was confirmed by some early reports available, but how were we to evidence our own piecewise sample with another? Moreover, how could you invest 6-7 figures of marketing dollars if you didn’t have the firsthand intelligence we gathered and our subject matter experts on deck to make constant adjustments to your approach?

We were able to piece together trends we’re seeing that point to increased download activity in recent months that surpass February/March heights. We’ve determined that the industry is back on track for growth with a less steep, but still growing, listenership trajectory. But even though more recent reports have been published, a longitudinal, objective resource has not yet emerged to show a majority of the industry’s journey through one of the most disruptive media environments in recent history.

There is a need for a new or existing entity to create cohesive data points; a third party that collects and reports listening across all major hosts and distribution points, or “podcatchers,” as they’re colloquially called. As a small example: Wouldn’t it be nice to objectively track seasonal listening of news/talk programming and schedule media planning and flighting around that? Or to know what the demographics of that audience look like compared to other verticals?

What percentage increase in efficiency and/or volume would you gain from your marketing efforts in the channel? Would that delta be profitable against paying a nominal or ongoing licensing or research fee for most brands?

These challenges aren’t just affecting advertisers. David Cohn, VP of Sales at Megaphone, agrees that “full transparency from the listening platforms would make our jobs easier, along with everyone else’s in the industry. We’d love to know how much of an episode is listened to, whether an ad is skipped, etc. Along the same lines, having a central source for [audience] measurement would be ideal — similar to what Nielsen has been for TV.” This would also enable us to understand cross-show ad frequency, another black box for advertisers and the industry at large.

#ad-technology, #advertising-tech, #audience-measurement, #column, #digital-marketing, #growth-marketing, #marketing, #online-advertising, #podcast-advertising, #podcasts, #tc, #verified-experts

0

Podcast advertising has a business intelligence gap

There are sizable, meaningful gaps in the knowledge collection and publication of podcast listening and engagement statistics. Coupled with still-developing advertising technology because of the distributed nature of the medium, this causes uncertainty in user consumption and ad exposure and impact. There is also a lot of misinformation and misconception about the challenges marketers face in these channels.

All of this compounds to delay ad revenue growth for creators, publishers and networks by inhibiting new and scaling advertising investment, resulting in lost opportunity among all parties invested in the channel. There’s a viable opportunity for a collective of industry professionals to collaborate on a solution for unified, free reporting, or a new business venture that collects and publishes more comprehensive data that ultimately promotes growth for podcast advertising.

Podcasts have always had challenges when it comes to the analytics behind distribution, consumption and conversion. For an industry projected to exceed $1 billion in ad spend in 2021, it’s impressive that it’s built on RSS: A stable, but decades-old technology that literally means really simple syndication. Native to the technology is a one-way data flow, which democratizes the medium from a publishing perspective and makes it easy for creators to share content, but difficult for advertisers trying to measure performance and figure out where to invest ad dollars. This is compounded by a fractured creator, server and distribution/endpoint environment unique to the medium.

Because podcasts lag other media channels in business intelligence, it’s still an underinvested channel relative to its ability to reach consumers and impact purchasing behavior.

For creators, podcasting has begun to normalize distribution analytics through a rising consolidation of hosts like Art19, Megaphone, Simplecast and influence from the IAB. For advertisers, though, consumption and conversion analytics still lag far behind. For the high-growth tech companies we work with, and as performance marketers ourselves, measuring the return on investment of our ad spend is paramount.

Because podcasts lag other media channels in business intelligence, it’s still an underinvested channel relative to its ability to reach consumers and impact purchasing behavior. This was evidenced when COVID-19 hit this year, as advertisers that were highly invested or highly interested in investing in podcast advertising asked a very basic question: “Is COVID-19, and its associated lifestyle shifts, affecting podcast listening? If so, how?”

The challenges of decentralized podcast ad data

We reached out to trusted partners to ask them for insights specific to their shows.

Nick Southwell-Keely, U.S. director of Sales & Brand Partnerships at Acast, said: “We’re seeing our highest listens ever even amid the pandemic. Across our portfolio, which includes more than 10,000 podcasts, our highest listening days in Acast history have occurred in [July].” Most partners provided similar anecdotes, but without centralized data, there was no one, singular firm to go to for an answer, nor one report to read that would cover 100% of the space. Almost more importantly, there is no third-party perspective to validate any of the anecdotal information shared with us.

Publishers, agencies and firms all scrambled to answer the question. Even still, months later, we don’t have a substantial and unifying update on exactly what, if anything, happened, or if it’s still happening, channel-wide. Rather, we’re still checking in across a wide swath of partners to identify and capitalize on microtrends. Contrast this to native digital channels like paid search and paid social, and connected, yet formerly “traditional” media (e.g., TV, CTV/OTT) that provide consolidated reports that marketers use to make decisions about their media investments.

The lasting murkiness surrounding podcast media behavior during COVID-19 is just one recent case study on the challenges of a decentralized (or nonexistent) universal research vendor/firm, and how it can affect advertisers’ bottom lines. A more common illustration of this would be an advertiser pulling out of ads, for fear of underdelivery on a flat rate unit, missing out on incremental growth because they were worried about not being able to get download reporting and getting what they paid for. It’s these kinds of basic shortcomings that the ad industry needs to account for before we can hit and exceed the ad revenue heights projected for podcasting.

Advertisers may pull out of campaigns for fear of under-delivery, missing out on incremental growth because they were worried about not getting what they paid for.

If there’s a silver lining to the uncertainty in podcast advertising metrics and intelligence, it’s that supersavvy growth marketers have embraced the nascent medium and allowed it to do what it does best: personalized endorsements that drive conversions. While increased data will increase demand and corresponding ad premiums, for now, podcast advertising “veterans” are enjoying the relatively low profile of the space.

As Ariana Martin, senior manager, Offline Growth Marketing at Babbel notes, “On the other hand, podcast marketing, through host read ads, has something personal to it, which might change over time and across different podcasts. Because of this personal element, I am not sure if podcast marketing can ever be transformed into a pure data game. Once you get past the understanding that there is limited data in podcasting, it is actually very freeing as long as you’re seeing a certain baseline of good results, [such as] sales attributed to podcast [advertising] via [survey based methodology], for example.”

So how do we grow from the industry feeling like a secret game-changing channel for a select few brands, to widespread adoption across categories and industries?

Below, we’ve laid out the challenges of nonuniversal data within the podcast space, and how that hurts advertisers, publishers, third-party research/tracking organizations, and broadly speaking, the podcast ecosystem. We’ve also outlined the steps we’re taking to make incremental solutions, and our vision for the industry moving forward.

Lingering misconceptions about podcast measurement

1. Download standardization

In search of a rationale to how such a buzzworthy growth channel lags behind more established media types’ advertising revenue, many articles will point to “listener” or “download” numbers not being normalized. As far as we can tell at Right Side Up, where we power most of the scaled programs run by direct advertisers, making us a top three DR buying force in the industry, the majority of publishers have adopted the IAB Podcast Measurement Technical Guidelines Version 2.0.

This widespread adoption solved the “apples to apples” problem as it pertained to different networks/shows valuing a variable, nonstandard “download” as an underlying component to their CPM calculations. Previous to this widespread adoption, it simply wasn’t known whether a “download” from publisher X was equal to a “download” from publisher Y, making it difficult to aim for a particular CPM as a forecasting tool for performance marketing success.

However, the IAB 2.0 guidelines don’t completely solve the unique-user identification problem, as Dave Zohrob, CEO of Chartable points out. “Having some sort of anonymized user identifier to better calculate audience size would be fantastic —  the IAB guidelines offer a good approximation given the data we have but [it] would be great to actually know how many listeners are behind each IP/user-agent combo.”

2. Proof of ad delivery

A second area of business intelligence gaps that many articles point to as a cause of inhibited growth is a lack of “proof of delivery.” Ad impressions are unverifiable, and the channel doesn’t have post logs, so for podcast advertisers the analogous evidence of spots running is access to “airchecks,” or audio clippings of the podcast ads themselves.

Legacy podcast advertisers remember when a full-time team of entry-level staffers would hassle networks via phone or email for airchecks, sometimes not receiving verification that the spot had run until a week or more after the fact. This delay in the ability to accurately report spend hampered fast-moving performance marketers and gave the illusion of podcasts being a slow, stiff, immovable media type.

Systematic aircheck collection has been a huge advent and allowed for an increase in confidence in the space — not only for spend verification, but also for creative compliance and optimization. Interestingly, this feature has come up almost as a byproduct of other development, as the companies who offer these services actually have different core business focuses: Magellan AI, our preferred partner, is primarily a competitive intelligence platform, but pivoted to also offer airchecking services after realizing what a pain point it was for advertisers; Veritone, an AI company that’s tied this service to its ad agency, Veritone One; and Podsights, a pixel-based attribution modeling solution.

3. Competitive intelligence

Last, competitive intelligence and media research continue to be a challenge. Magellan AI and Podsights offer a variety of fee and free tiers and methods of reporting to show a subset of the industry’s activity. You can search a show, advertiser or category, and get a less-than-whole, but still directionally useful, picture of relevant podcast advertising activity. While not perfect, there are sufficient resources to at least see the tip of the industry iceberg as a consideration point to your business decision to enter podcasts or not.

As Sean Creeley, founder of Podsights, aptly points out: “We give all Podsights research data, analysis, posts, etc. away for free because we want to help grow the space. If [a brand], as a DIY advertiser, desired to enter podcasting, it’s a downright daunting task. Research at least lets them understand what similar companies in their space are doing.”

There is also a nontech tool that publishers would find valuable. When we asked Shira Atkins, co-founder of Wonder Media Network, how she approaches research in the space, she had a not-at-all-surprising, but very refreshing response: “To be totally honest, the ‘research’ I do is texting and calling the 3-5 really smart sales people I know and love in the space. The folks who were doing radio sales when I was still in high school, and the podcast people who recognize the messiness of it all, but have been successful at scaling campaigns that work for both the publisher and the advertiser. I wish there was a true tracker of cross-industry inventory — how much is sold versus unsold. The way I track the space writ large is by listening to a sample set of shows from top publishers to get a sense for how they’re selling and what their ads are like.”

Even though podcast advertising is no longer limited by download standardization, spend verification and competitive research, there are still hurdles that the channel has not yet overcome.


The conclusion to this article, These 3 factors are holding back podcast monetization, is available exclusively to Extra Crunch subscribers.

#advertising-tech, #chartable, #column, #digital-marketing, #growth-marketing, #marketing, #media, #online-advertising, #podcasts, #tc, #verified-experts

0

Greycroft, Lerer Hippeau and Audible back audio measurement startup Veritonic

Veritonic is announcing that it has raised $3.2 million in Series A funding led by Greycroft, with participation from Lerer Hippeau and Amazon-owned audiobook service Audible.

CEO Scott Simonelli, who founded the New York startup with COO Andrew Eisner and CTO Kevin Marshall, told me that his goal is to create a new category of “audio intelligence” — namely, measuring and predicting the effectiveness of any pie of audio content or advertising.

The company is focused on marketing initially, with its first product, Creative Measurement, analyzing any audio ad and showing marketers how it scores compared to similar content, as well as identifying which parts of the audio are most effective. And Veritonic is launching a new product, Competitive Intelligence, which helps businesses see how and where their competitors are spending on advertising and provides alerts when those competitors launch a new ad.

Simonelli said that until now, audio measurement has been limited to things like creating audience panels with a few hundred people, which simply doesn’t scale given the enormous growth in the audio market.

Veritonic, on the other hand, has analyzed thousands of audio files, correlating the content with data about how people responded and using that analysis to predict how people will respond to new audio. Simonelli said the company can add more “fuel” by going out gathering more human response data, but even without additional data, it can provide an instant prediction on an ad or campaign’s effectiveness.

Veritonic

Image Credits: Veritonic

Simonelli also noted that Veritonic has spent the past five years developing technology that’s specifically attuned to the challenges of measuring audio effectiveness — like the fact that audio is experienced over time and, even more than other media, needs to be memorable.

“We can look at a sonic profile and predict and evaluate how somebody is going to respond,” he said.

The ultimate goal, he added, is to create the “benchmark for audio advertising,” which means working with a variety of players in the industry. For example, he said that when you look at other audio investments in Greycroft’s portfolio (such as podcast network Wondery or podcast analytics company Podsights): “Veritonic makes every one of those audio investments more valuable.”

Veritonic’s made pretty good progress on that goal already, with partners including Pandora, SiriusXM and NPR, and brand clients like Pepsi, Visa and Subway. It was previously backed by Newark Venture Partners (whose founder Don Katz previously founded Audible).

“We are excited to be a part of Veritonic’s continued growth and success,” said