The TruEffect Blog

The future of privacy is happening now

TruEffect recently joined the Future of Privacy Forum (http://www.futureofprivacy.org), a Washington, DC based think tank that focuses on the use of technology and its impact to our privacy within the online advertising industry. At TruEffect, we are active proponents of keeping the internet free by using advertising dollars to support its development – that’s our business.  But, in the same breath we believe consumers have fundamental rights and expectations that their privacy be assured, and the data they share online be used only for the purpose intended and only by the entities with whom the consumer believes they are interacting.

In a trip to Washington this week, I had the opportunity to participate in a meeting at the Federal Trade Commission to discuss the recent FTC White Paper entitled “Protecting Consumer Privacy in an Era of Rapid Change.” It was a chance to hear first-hand the FTC’s intentions to gather feedback, conduct hearings and propose actions during this calendar year. As Chairman Jon Leibowitz made clear in his opening remarks,  the purpose of drafting these papers is two-fold: a.) encourage business to develop best practices and b.) guide lawmakers. It became clear that the FTC believes the status quo is not acceptable, and that we will see new mechanisms in place soon that provide consumers more clarity, more choice, and more protection. The determination of whether to establish a universal “Do Not Track” capability will not languish for seven years like the “Do Not Call” legislation did.

Although the group meeting with the FTC was small, representatives from some of the largest corporations in the world were present. That said, those most conspicuous by their absence were some of the largest and most recognizable advertisers and advertising agencies on the internet. Change is inevitable, and it will affect the ability of these companies to grow their online relationships with consumers. I would strongly encourage any advertiser or agency that believes interactive media will play a significant part in their business over the next decade (which means every advertiser or agency) to engage now.  Visit http://www.futureofprivacy.org to learn more. And as always, let me know what you think.

– Scott Nelson

Make me care.

It's official.  Gen Y has taken over media (and Typepad).  Claiming to reach more than 115M uniques in the US and more than 345M uniques worldwide, SayMedia, the offspring of SixApart with VideoEgg, wants to meld social ads within social content in order to "make digital ads more useful, more social, and more fun."  And this for the generation who doesn't want to be advertised to? OK.

Why is this significant you say? (or maybe you don't care, and we couldn't make you) Is it really the latest, greatest idea to marry content with advertising in a way that respects and engages the consumer, or just another way to exploit this decade's marketing darling, social media?

"We get consumers to pay attention"  says SayMedia. Their engagement products include AdFrames and Custom Content programs, both of which might be accused of hijacking the already short attention span of users on social media overload, with the sole intention of trying to sell something. Then there is the DOC, a video interstitial that hijacks the entire page.  I'm not saying this isn't an interesting media proposition that can benefit advertisers and provide revenue stream for private content producers (bloggers). But is it really engagement? Will it fit the bill for the "social" user who trusts the opinions of influencers and friends, and will content providers, in fact, have any control over the ads displayed on their blogs?

Only time will tell if SayMedia's intentions are on target, or if the consumer experience is palatable.  Their website is clever, and fun, and I can't argue with their guiding principals: 1)  Attention is scarce (what did you say?), 2) Passion is abundant, 3) Media is fluid, 4) Advertising is content (ok, some might argue with this), 5) Storytelling is vital, 6) Influence is earned, and 7) Engagement is a science.

We would add – the relationship between the consumer and the advertiser is everything, and advertising needs to reflect that, as in don't show acquisition messages to existing customers or chase them around with shoes. In the meantime, I hope they post a rate card on their site soon.  (photo credit = lifted from their downloadable presentation – consider it social media advertising)

– Layne Salter

Ad targeting regulations and media spending

eMarketer released a survey of US marketers reporting that their online spending habits will remain relatively unfazed by restrictive regulations about audience data. In fact, the survey analysis goes on to predict that such regulations could actually boost online ad spending by demystifying privacy concerns. The problem with this survey data, is it doesn't take into account that the landscape of vendors with whom the advertisers might spend this budget, or the services they might offer, could potentially change – a lot.

Being ahead of your time has it's pitfalls. One of our biggest hurdles here at TruEffect in recent years has been educating advertisers and agencies on the concept behind our technology, relationship advertising, and how it works.

US: What if you could dramatically improve the performance of your online display campaigns by using what you already know about your customers, but in a privacy centric manner that doesn't allow your customer data into the hands of third parties?

THEM: My customer data is in the hands of third parties?

Those of us in the online ad technology industry know how click stream, site analytics, shopping cart, and other data makes it's way into third party usage. We know how it is compiled and aggregated to retarget. We're data geeks. We also understand how it can be used on the advertisers' behalf, but also benefits competitors. Besides being chased around by shoes, you might, for instance, visit Sprint, and then be chased around by AT&T banners. A lot of wasted impressions follow us around in the name of retargetting, often inferring information that simply isn't true. I'm inundated with Verizon ads in my Yahoo mail after I go to their site to pay my bill. Wasted impressions.

We frequently give cookie demonstrations to advertisers to show how many cookies are set when a user visits their site. It's second in popularity only to the demo that shows how you can upload and schedule hundreds of creative in seconds – but I digress. The point is, display ad targeting can be smarter – much smarter. It already is.

– Layne Salter

Is Display dead, along with the Web?

“Thank you Chris Anderson and Michael Wolff for the thought-provoking Wired article “The web is dead- Long live the Internet.” It almost feels like they’ve spent some time in TruEffect’s planning sessions!  Web advertising has been long on promise and short on return. The fact that its digital content consumption is over 35%, yet it only garners 14% of ad revenues (as opposed to TV which has 30% of consumption and 40% of ad revenues) should be enough to make industry practitioners and VC’s stop and evaluate their next ventures. It seems we’ve lived with more-of-the-same for the last five years, with the hope we can deploy newer technology or better data manipulation to create value where it’s limited, at best.
 
The belief that the fundamentals of publishing will be reasserted, is interesting. Great content attracts a great audience, which attracts great advertisers. But while Wolff asserts this on the one hand, he also acknowledges a parallel phenomenon that the pool of advertisers having access to the channel is larger, thanks in large part to Google. Local pizzerias are therefore bidding for the same eyeballs as marquee brands. To believe that only marquee brands can elevate the quality of advertising is an interesting position, but one that detracts from the main argument that advertising is about effectiveness – and it’s failing.
 
Wolff’s discussion of click rates is actually more telling than he realizes. We’ve been stupefied over the past decade into assuming a click was anything other than technology’s answer to proving interest or intent. True practitioners moved past that hurdle a long time ago, but the topic is by no means dead and buried, judging by the amount of discussion it still receives. What Wolff identifies is the symptom to the underlying problem – a problem that will continue for Mr Jobs, or whichever new media baron rises. Advertising will never work the way it’s currently being measured – whether it’s in web 2.0 or Internet 1.0, in HTTP or DOM.
 
That’s because we’re still trying to use the same tools and methods that we used when the space was new. It’s an indictment of all the investment of time we’ve spent trying to support untenable measurement standards. It’s pathetic that the last true work on measurement accuracy was the 302 redirect. It’s not an accident that advertisers haven’t migrated $$ into a channel that can’t demonstrate an effective and predictable return – whether they’re a Fortune 500 company, or one that includes fortune cookies with your order.
 
Until now. Only when you stand back and look at all the facets of how advertising works can you really design how it should work. This has been TruEffect’s mission for the last 5 years. Wolff is right about a lot, but he may not be correct about how it all plays out. What we’ve seen in countless online display campaigns is a staggering change in measurement accuracy, a lack of clear understanding of how to make media efficient, and the importance of accountability in terms of response and managing ROI. To say it’s broken implied that it ever worked in the first place.
 
The answer lies in a number of the areas illuminated by Wolff. First, the bond between content and audience has been frayed. Intermediaries have attempted to build networks before they have assembled quality programming. Secondly, technologists believe their census based measurement is robust and empirically sound – but it isn’t!  Finally, we’ve been seduced into thinking we can finesse responses by identifying user attributes – and that this will overcome lack of context.
 
But most importantly, we need to discard what's never worked, and stop measuring performance with tools that aren’t up to the task. Stop trying to target with indiscriminate volumes of irrelevant data based upon a transit mechanism (third party ad serving) that’s poorly designed and wholly inadequate for today’s needs.
 
The answer lies in the relationship between the advertiser and the consumer, enabled by the publisher. Advertisers and consumers have relationships, intermediate service providers do not. Advertisers and their customers enjoy a dialogue (most of the time) about the value and meaning of their products and services. Intermediate service providers seek to ambush consumers on behalf of whichever advertiser is willing to pay the most! Advertisers and publishers nurture relationships through content and discussion. They produce things –you get the idea. But to do this requires a different type of technology which removes the intermediary from the dialogue between consumer and advertiser, and provides accurate measurement for effective analysis. This is what TruEffect does.
 
The hope here is that Steve Jobs will do for Internet advertising what he’s done for retail, and the micro-payments market with iTunes – make it relevant and resonant for the consumer. And shape it in a way they like to buy. To do this, however, requires reshaping the online advertising model to measure and engage properly. As the Lowe group used to say “Good advertising and bad advertising cost the same – the difference is priceless”.

– Martin Smith

What Women Want - Part 2

I’m not sure if it’s last week’s eMarketer  article about how women account for over 60% of all online buying transactions (a whopping 88.5 billion), or last night’s episode of Mad Men – but I’ve got female consumers on the brain.

Where do I start? If you caught last night’s episode of Mad Men, in an out of character feminist moment, Don Draper rejects his consultant’s Pond’s Cold Cream focus group findings, which concluded that women are only interested in snagging husbands. The agency (aka Peggy Olson) wanted to pitch Pond's as an “experience” for women, whereby ritual is created and women look in the mirror and bask in their own beauty - husbands be damned.

Though feminism was probably not on Draper’s mind as much as the fact he would never allow his creative genius to be undone by this female consultant, his position was kind of profound. He believed that the women from the focus group only responded the way they did, because it was the only possibility that had ever been presented to them. They might actually want something else, if they thought it was possible.

In the world of advertising, what we “think” is true about an audience, if not a figment of a bad focus group, could be a narrow interpretation of old school metrics that are due for an over haul. For instance, eMarketer research shows women buy more video games and consoles than men, and just about as much electronics and computers. Does this turn your campaign strategy on its head if you sell these products and target most of your efforts toward men?

What if you could know exactly what your best customers wanted, and where they hung out on the internet? What if you could go beyond clicks and conversions and actually tailor your ads to speak intelligently to your audience, because you know, explicitly, what state of the buying cycle they’re in? All this is possible. But online technology companies are holding the hands of their clients, much more gingerly of course than Don Draper would, to get them past the confines of the past, and open to new ideas of performance metrics and data analysis.

So…. men buy more flowers, greetings, and gifts. Not a big surprise. Also not surprising that women spend 20% more time on retail sites than men. Is it because we like to shop? Or can’t make up our minds? Maybe we just want to make sure we get the best deal. Or, perhaps we abandon those shopping carts to bask in our Pond's Cold Cream ritual? Wouldn't you like to know?

– Layne Salter

Scared straight?

Today, The Wall Street Journal finished its 3-part series on internet privacy. Part 1 last week was greeted with skepticism from the online ad community, and accusations of being "alarmist."  But according to WSJ's instant poll, over 60% of people are "very alarmed."

Part 2 featured an in-depth look at private browsing, specifically focusing on the in-fighting at Microsoft between the InPrivate IE browser team and the Microsoft Advertising Group.  You mean ad interests and consumer privacy are at odds? Nothing new here.

Part 3, written by Emily Steel and Julia Angwin, takes a scary, microscopic look at the data compilation industry and how it intersects the consumer's online experience. The WSJ research study covers data handler [x+1] and how their technology benefits clients like Capital One. They take us step by step through exactly how many bits of data are passed to Capital One in an instant, merging what [x+1] has already gleaned, with back end data modeling enabled by Nielsen. Once the user is sufficiently silo-ed, Capital One knows which credit card offer to serve up.

If consumers and industry folks are "alarmed" that the data that passes between third party data aggregators and their clients is just a few bits short of enough information to go from "anonymous" to knowing your name, they've obviously not paid much attention to internet consumer privacy arguments that have been raging for years.  But [x+1], while acknowledging the possibility of de-anonymization, says its unlikely to happen because it's not worth the effort. "It would be a massive undertaking," says John Nardone, CEO of [x+1], "and it is hard enough to make money." OK. I'm sleeping better already?

We talk a lot about privacy here at TruEffect. Is it crazy to believe in the possibility of productive and engaging internet ad encounters, that don't abuse a consumer's right to privacy. We think not.

– Layne Salter

Go ahead, put all those eggs in one basket

Now that advertisers are opening their pocketbooks more, it’s a great time to take a comprehensive look at how your online advertising dollars are working across all efforts. eMarketer recently reported some statistics from “2010 Lead Generation Optimization Key Trends Analysis” from CSO Insights revealing that most marketers are increasing their budgets for lead generation and new customer acquisition.

It’s interesting to note that the largest increases reported are on web design/content, email marketing, social media, and SEO.  But how many advertisers are working to ensure that all their channels work together?  How are online display advertising dollars impacting both natural and paid search campaigns? And what about those email campaigns?

In another article by Bob Rose, "Do You Have A Marketing Credit Crisis?", he cites various multi-channel attribution models and says, “But really all of them have interesting solutions to creating a matrixed framework of conversion events, assigning values to engagement, and other values to metrics such as time-on-site, pages viewed, tracking through the funnel the percentage of credit that each tactic should get – and aaaaaah my head just exploded.” Sound familiar?

A while back, TruEffect published a paper on The Impact of Display on Search and concluded that a first-party solution helps with the exploding heads by allowing advertisers to control online campaign data from one central point – theirs. What would it be like to see into the various measurement methodologies of your media and technology partners, and understand who, and what, actually attributed to the success of your efforts? First party ad technology can provide a centralized way to look at campaign performance across channels. It gives a whole new meaning to putting all your eggs in one basket. Seriously. More, better, actionable data – less exploding heads. Everyone's happy.

– Layne Salter

What women want

In a recent iMediaConnection article, Emily Girolamo makes some interesting observations about Relationship Advertising and women.  Girolamo states that 53% of women feel they form “relationships with brands online,” and that nearly “90 percent of women studied ‘wish’ they were sent more tailored offers from trusted brands.”  I concur.

Traditional advertising, like television, has long revered the female buying audience. Apparently we control the purse strings which I guess makes total sense because we’re the ones with the actual purses.  So, it’s not surprising that women are anxious to receive more relevant ads. As a female, with a purse, who also works in the online ad biz, I’m always gratified, if not amazed, when I receive an ad that actually hits the mark.  With interactive direct response technology maturing, I guess the question is – why doesn’t this happen more often?

Is it so hard for advertisers to market to me directly on the internet?  Every time I visit a website, Yahoo! mistakenly thinks I’m a good candidate for its products. What they don’t take into consideration is that I’m already a Verizon customer.  And I was looking at those schools for someone else.  And I only Googled Toyota to find the local dealer so I could make an appointment for my recalled gas pedal.  Is this retargeting technology at its finest?

So, while every targeting company out there claims to find the advertiser the “right customer, in the right place, at the right time” – they fail.  Sometimes miserably.  Tell me there’s a technology out there that knows whether I’m already a customer. That knows if I’ve already purchased. That actually knows something about what I want.  Oh, you mean like TruConnect? Shameless plug, I know. But seriously – online ad industry, please stop serving me irrelevant ads. 

– Layne Salter

A newer, sexier version of P3P?

A start-up called Better Advertising kicks off its public campaign this week to become the reference standard technology for online advertising industry self-regulation.  The technology manifests itself as an icon (the “Power I”) located in the upper-right corner of a participating advertiser’s display ad.  When a consumer mouses over the icon, they're presented with the data being used to perform behavioral targeting in the delivery of the ad, and have the option to opt out of future targeting.  The company says they enable advertisers to be more accountable to consumers.  Basically, it’s a way to expose what data is being used by what advertisers to force some restraint through transparency.

Previous attempts to disclose the use of consumer data for targeting haven’t fared too well.  For example, the Platform for Privacy Preferences project was a noble attempt to force advertisers to state in unequivocal terms how they used consumer data.  Those terms were actually embedded in a “compact policy” facility built into web browsers since 2002.  The organization supporting P3P was not a commercial entity like Better Advertising, and it's been dormant for three years. 

Another attempt, the Network Advertising Initiative, has been more successful, but today's regulatory and legislative circles that work on privacy matters suggest it's insufficient. The NAI is the organization behind the cookie-based opt out, long established as the vehicle for consumers to exert preferences over how their data is used.  But unlike the NAI, Better Advertising will actually provide details about how data is used before providing the opt out choice.

Draft legislation from Congressman Rick Boucher (D-VA), has thrown down the gauntlet to the industry, and FTC Chairman Jon Leibowitz has been rattling his sword at the industry for a year now.  If we collectively fail to act, swift and significant restrictions will be placed on advertisers' ability to leverage consumer information to improve media performance and deliver the most relevant advertising available.  Will the "Power I" get the job done?  A lot of media heavyweights support the effort, so it has as good a chance as any.  Transparency will be key, and the belief within legislative and regulatory circles that consumers will be satisfied with the options available to them. 

– Scott Nelson

Dead internet ideas

Doug Weaver, founder and CEO of Upstream, and frequent speaker at iMedia Summit series gives a great, uncensored look at the truths we tell ourselves in the online ad biz in his presentation on “12 Dead Internet Ideas.” We talk a lot about consumer privacy and "relationship advertising" here at TruEffect, and how internet advertising hasn’t really changed much in 10 years. We should know – we were there in late 20th century, developing technology to serve the first ad. But Weaver, in Steve Jobs keynote fashion, puts it ever so much more eloquently than a PowerPoint ever could.

Weaver’s dead internet idea called "The Right to Target" calls into question the industry’s never ending quest to pull out all the stops on targeting technology, while lulling consumers into complacency around their privacy concerns by ensuring them that they are exchanging their data for really cool candy – like better and more relevant ads that keep the internet free. Weaver says "We think because we can, we assume that we may."

But by downplaying the relevance of context, we just provide more of the same –thousands of meaningless impressions that nobody is clicking on. To understand what will actually reach, and impact, the consumer has been the illusive grail of advertising since Madmen wrote the Brylcreem jingle.

But Weaver cautions that "the landscape we're destroying is the one we'll need to live in, and profit from, for years to come."  Even though it looks as if the "cookie opt-in" clause will not make it into the Boucher bill - for us to "celebrate dodging that bullet is like whistling past the graveyard."  He reminds us that if we think that consumers and government don't decide how it goes, one only has to take a look at how the "Do Not Call Legislation" put phone marketing out of business in 48 hours. 

But, it’s just a presentation, right?

– Layne Salter