Doc Searls Weblog · advertising

Without aligning incentives, we can’t kill fake news or save journalism

July 19, 2019 in adtech, advertising, Journalism | 1 comment

It’s time to move past the toxic and destructive business called adtech: surveillance-based advertising.

Adtech is the Agent Smith of digital advertising: a rogue programmatic approach to digital advertising that rationalizes tracking people like marked animals.

Today adtech is the main business model for nearly all of online publishing, including nearly all the news sites reporting endlessly and ironically on how Facebook and Google do the same thing.

This pull-quote, from The New York Times’ In New Jersey, Only a Few Media Watchdogs Are Left, by David Chen, might work as a first step on the path toward understanding what adtech has done to journalism:

Question: Why would the Star-Ledger, one of the country’s great newspapers, incentivize its reporters to maximize page views, rather than than to do real journalism?

Answer: Because adtech is now the business model of choice for most publications, and adtech cares only about content. It doesn’t sponsor any publication for its own worth, the way old-fashioned advertising did. (And, for the small number of publications that remain principled, real advertising still does).

So, since it’s easy to produce content for the simple purpose of earning advertising money, the game attracts bad actors galore, all working to maximize the number of places eyeball-aimed ads can be spread.

The result is a flood of content so large, and so full of crap, that even biblical metaphors fail. Hell, at least Noah’s flood was limited to forty days and nights on the physical world. There is no end to how much content adtech will pay just to pull in eyeballs, wherever they go.

And we are here:

Publishers need to face the simple fact that handing revenue production over to adtech meant trading a business model that supports journalism for one that supports content production—and that the easiest way to align incentives that support both business and journalism is to return to the business model that worked for a century and a half before everything got all digital.

That business model was advertising. Which adtech is not.

Here’s the thing: adtech looks like advertising, and gets called advertising; but it’s actually a form of direct marketing, better known in the old days as direct mail, better known by its victims as junk mail.

Here’s the main difference:

Advertising sends creative and economic signals to populations. It doesn’t want to get personal. It doesn’t want clicks. It is also the only form of advertising capable of sponsoring publications, because it wants to reach the distinctive populations publications bring to them.
Direct marketing sends targeted messages at eyeballs. On the Internet these eyeballs are known to machines through surveillance by tracking beacons (most of which are inserted into browsers without the user’s knowledge). It wants to get personal. It wants clicks.
Advertising creates and sustains brands, and always has. Adtech is incapable of branding, and hasn’t produced a single brand known to the world, even after about a $trillion has been spent on it. It is also not interested in sponsoring publishers, because the number and variety of eyeballs a given pub can gather is too small, no matter how well journalists are paid to bait clicks.

How did advertising turn into adtech, and vice versa? Well, as I said in Separating Advertising’s Wheat and Chaff, Madison Avenue fell asleep, direct response marketing ate its brain, and it woke up as an alien replica of itself.

Thus it became damn near impossible for anyone wanting to make, sell or buy real advertising to get it. Publishing had no choice but to re-base its advertising business on adtech. And, since adtech wants to support content and not journalism, the publishing business has now vastly expanded to include content-producers of every kind, including bad ones in abundance beyond estimation. It has also caused good journals like the Star-Ledger to bias their purpose toward maximized content production rather than journalism.

And what’s the easiest content to produce?

In two words, fake news.

The are examples aplenty. One is this Wired story about Macedonian teenagers who got paid well for click-baiting fake stories such as “Pope endorses Trump.”

See, fake news and clickbait are eyeball candy that is a lot easier to produce than the meat and potatoes of actual journalism. This is why so many online publications also feature piles of additional clickbait from Taboola, Outbrain and Zergnet. Those are Joneses that publishers can’t keep up with.

For journalism to win, we need a new alignment of incentives. In many posts here I’ve suggested that a return to #SafeAds —real advertising that’s not based on tracking people—is one way. The GDPR pretty much requires it in any case. (Even though most pubs now flaut the letter as well as the spirit of the GDPR by posting cookie notices that require—or appear to require—consent to exactly the kind of tracking the GDPR was meant to outlaw.)

Membership is another way. So is subscriptions, with or without putting everything behind a paywall, like many big publishers (and all of pay TV) already do.

There are bound to be others. Let’s think creatively here.

What I am sure won’t work is trying to get the adtech world to fix the mess they made. Their incentives are what’s killing journalism. Simple as that.

[20 October 2017 update…] I’m at @mattervc’s #matterdemoday, and will be looking for incentive alignment here. I have no advance knowledge about who or what will be debuting at the event.

Cool: https://getpurple.io/ (@getprpl), debuting at #matterdemoday, has a membership model. Also digging @meetgretta. More after the mixer (and I drive back to Santa Barbara…)

[24 October 2017 update…] I just re-wrote much of the above to address the concerns behind this tweet by Ben Werdmuller of @mattervc: “If it turns out post-war liberal democracy was finally undone by the internet, we’re all going to feel a little bit foolish.” It’s important to note that democracy and journalism are both victims of adtech.

[19 July 2019 update…] I just copied* this piece over from its old placement in Medium. I can no longer edit it there, and the images in it have disappeared. This is also the case for other stuff I’ve published on Medium, alas.

*I also copied over all the HTML cruft that Medium is full of. It’ll take more time than I have to extract that. Meanwhile, it seems to look okay.

Tags: adtech, advertising, content, direct marketing, Journalism

Wanted: Online Pubs Doing Real (and therefore GDPR-compliant) Advertising

May 30, 2018 in adtech, advertising, VRM | 18 comments

This is what greets me when I go to the Washington Post site from here in Germany:

Washington Post greeting for Europeans

So you can see it too, wherever you are, here’s the URL I’m redirected to on Chrome, on Firefox, on Safari and on Brave. All look the same except for Brave, which shows a blank page.

Note that last item in the Premium EU Subscription column: “No on-site advertising or third-party tracking.”

Ponder for a moment how the Sunday (or any) edition of the Post‘s print edition would look with no on-paper advertising. It would be woefully thin and kind of worthless-looking. Two more value-adds for advertising in the print edition:

It doesn’t track readers, which is the sad and broken norm for newspapers and magazines in the online world—a norm now essentially outlawed by the GDPR, and surely the reason the Post is running this offer.
It sponsors the Post. Tracking-based advertising, known in the trade as adtech, doesn’t sponsor anything. Instead it hunts down eyeballs its spyware already knows about, no matter where they go. In other words, if adtech can shoot a Washington Post reader between the eyes at the Skeevy Lake Tribune, and the Skeevy is cheaper, it might rather hit the reader over there.

So here’s the message I want the Post to hear from me, and from every reader who values what they do:

That’s what I get from the print edition, and that’s what I want from the online edition as well.

So I want two things here.

One is an answer to this question: Are ANY publishers in the online world selling old-fashioned ads that aren’t based on tracking and therefore worth more than the tracking kind? (And are GDPR-compliant as well, since the ads aren’t aimed by collected personal data.)

The other is to subscribe to the Post as soon as they show me they’re willing to do what I ask: give me those real ads again. And stop assuming that all ads need to be the tracking-based kind.

Thanks in advance.

Tags: adtech, advertising, publishing, VRM

How True Advertising Can Save Journalism From Drowning in a Sea of Content

January 26, 2017 in adtech, advertising, Business, Journalism, problems, publishing, Technology | 4 comments

adtech-content-journalism

Journalism is in a world of hurt because it has been marginalized by a new business model that requires maximizing “content” instead. That model is called adtech.

We can see adtech’s effects in The New York Times’ In New Jersey, Only a Few Media Watchdogs Are Left, by David Chen. His prime example is the Newark Star-Ledger, “which almost halved its newsroom eight years ago,” and “has mutated into a digital media company requiring most reporters to reach an ever-increasing quota of page views as part of their compensation.”

That quota is to attract adtech placements.

While adtech is called advertising and looks like advertising, it’s actually a breed of direct marketing, which is a cousin of spam and descended from what we still call junk mail.

Like junk mail, adtech is driven by data, intrusively personal, looking for success in tiny-percentage responses, and oblivious to harms it causes, which include wanton and unwelcome surveillance, annoying the shit out of people and filling the world with crap.

But adtech is far worse, because it also funds hyper-partisan news flows, including vast rivers of fake news, much of it from pop-up publishers that are as fake as the clickbait they maximize. Without adtech, fake news would be marginalized to the digital equivalent of supermarket tabloids.

Here’s one way to tell the difference between real advertising and adtech:

Real advertising wants to be in a publication because it values the publication’s journalism and readership.
Adtech wants to push ads at readers anywhere it can find them.

Here’s one way to tell the difference between journalism and content:

Journalism has ethics.
Content has volume.

Another:

Journalism is supported by advertising and subscriptions.
Content is supported by adtech.

Companies advertising in the old publishing world were flattered to appear in publications like the Star-Ledger. They were also considered sponsors of those publications.

Companies advertising in the new publishing world are drunk on digital and want to maximize the “big data” they acquire. And there are thousands of bartenders to help with that.

As I wrote in Separating Advertising’s Wheat and Chaff, in the new publishing world “Madison Avenue fell asleep, direct response marketing ate its brain, and it woke up as an alien replica of itself.”

That’s also why, to operate in publishing’s new alien-built economy, journalists need to meet that “ever-increasing quota of page views.” Better to “generate content” than to do the best journalism we can, the proposition goes. It’s still a losing one.

See, adtech doesn’t care about journalism, because its economy incentives maximizing the sum of content in the world, so it has as many places as possible to chase followed eyeballs with ads. Case in point, from @WaltMossberg:

About a week after our launch, I was seated at a dinner next to a major advertising executive. He complimented me on our new site’s quality and on that of a predecessor site we had created and run, AllThingsD.com. I asked him if that meant he’d be placing ads on our fledgling site. He said yes, he’d do that for a little while. And then, after the cookies he placed on Recode helped him to track our desirable audience around the web, his agency would begin removing the ads and placing them on cheaper sites our readers also happened to visit. In other words, our quality journalism was, to him, nothing more than a lead generator for target-rich readers, and would ultimately benefit sites that might care less about quality.

If Recode insisted on real ads, rather than coming to depend on surveillance-based adtech, its advertisers would have valued the publication, and not just the eyeballs of its readers, wherever it could find them.

Walt concludes,

It’s no easy task to either make money online as a publisher or to advertise your product in a world where attention is so fleeting and divided. But the current system of ad-supported web content isn’t working for readers and viewers. It needs to be reset.

The ad business is too brain-snatched to do that reset alone. It needs help from readers and brave publishers willing to stop participating in the adtech game.

As I explain in How customers can debug business with one line of code (hashtag: #NoStalking), each of us can come to publishers with a simple term that says “Just show me ads not based on tracking me.” In other words, “Give us real advertising. We can live with that.”

#NoStalking is not only in the works at Customer Commons, but saying yes to it will be an ideal move by companies wishing to obey the General Data Protection Regulation (aka GDPR), which will start punishing stalking severely, starting in 2018.

While the GDPR will blow up adtech as we’ve known it, #NoStalking will save real advertising, and the best of ad-supported publishing along with it, because it will bring economic incentives back into alignment with journalism. We had that in the old ad-and-subscription supported world of offline journalism, and we can get it back in the new world of online journalism. As I explain in Why #NoStalking is a good deal for publishers,

Individuals issuing the offer get guilt-free use of the goods they come to the publisher for, and the publisher gets to stay in business — and improve that business by running advertising that is actually valued by its recipients.

So, if you want to save journalism, the best of publishing and civil discourse that depends on both, bring back real advertising and cure the cancer of adtech.

For more help with that, go back and read Don Marti’s Targeting failure: legit sites lose, intermediaries win. You might also visit the Adblock War Series at my blog.

Two bonus links:

…

The original version of this post was published in Medium on 23 January 2017. This is an experiment in publishing first in Medium and second here. We’ll see how it goes.

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Tags: adtech, advertising, civilization, content, content generation, content producers, content production, Journalism, journals

Nobody else owns our experiences

August 3, 2016 in adtech, advertising, Broadcasting, Business, Internet, News, problems, publishing, Research, Technology, VRM | 15 comments

shackles

Who Owns the Mobile Experience? is a report by Unlockd on mobile advertising in the U.K. To clarify the way toward an answer, the report adds, “mobile operators or advertisers?”

The correct answer is neither. Nobody’s experience is “owned” by somebody else.

True, somebody else may cause a person’s experience to happen. But causing isn’t the same as owning.

We own our selves. That includes our experiences.

This is an essential distinction. For lack of it, both mobile operators and advertisers are delusional about their customers and consumers. (That’s an important distinction too. Operators have customers. Advertisers have consumers. Customers pay, consumers may or may not. That the former also qualifies as the latter does not mean the distinction should not be made. Sellers are far more accountable to customers than advertisers are to consumers.)

It’s interesting that Unlockd’s survey shows almost identically high levels of delusion by advertisers and operators…

85% of advertisers and 82% of operators “think the mobile ad experience is positive for end users”
3% of advertisers and 1% of operators admit “it could be negative”
Of the 85% of advertisers who think the experience is positive, 50% “believe it’s because products advertised are relevant to the end user”
“the reasons for this opinion is driven from the belief that users are served detail around products that are relevant to them.”

… while:

47% of consumers think “the mobile phone ad experience (for them) is positive”
39% of consumers “think ads are irrelevant
36% blame “poor or irritating format”
40% “believe the volume of ads served to them are a main reason for the negative experience”

It’s amazing but not surprising to me that mobile operators apparently consider their business to be advertising more than connectivity. This mindset is also betrayed by AT&T charging a premium for privacy and Comcast wanting to do the same. (Advertising today, especially online, does not come with privacy. Quite the opposite, in fact. A great deal of it is based on tracking people. Shoshana Zuboff calls this surveillance capitalism.)

Years ago, when I consulted BT, JP Rangaswami (@jobsworth), then BT’s Chief Scientist, told me phone companies’ core competency was billing, not communications. Since those operators clearly wish to be in the “content” business now, and to make money the same way print and broadcast did for more than a century, it makes sense that they imagine themselves now to be one-way conduits for ad-fortified content, and not just a way people and things (including the ones called products and companies) can connect to each other.

The FCC and other regulators need to bear this in mind as they look at what operators are doing to the Internet. I mean, it’s good and necessary for regulators to care about neutrality and privacy of Internet services, but a category error is being made if regulators fail to recognize that the operators want to be “content distributors” on the models of commercial broadcasting (funded by advertising) and the post office (funded by junk mail, which is the legacy model of today’s personalized direct response advertising online).

I also have to question how consumers were asked by this survey about their mobile ad experiences. Let me see a show of hands: how many here consider their mobile phone ad experience “positive?” Keep your hands down if you are associated in any way with advertising, phone companies or publishing. When I ask this question, or one like it (e.g. “Who here wants to see ads on their phone?”) in talks I give, the number of raised hands is usually zero. If it’s not, the few parties with raised hands offer qualified responses, such as, “I’d like to see coupons when I’m in a store using a shopping app.”

Another delusion of advertisers and operators is that all ads should be relevant. They don’t need to be. In fact, the most valuable ads are not targeted personally, but across populations, so large populations can become familiar with advertised products and services.

It’s a simple fact that branding wouldn’t exist without massive quantities of ads being shown to people for whom the ads are irrelevant. Few of us would know the brands of Procter & Gamble, Unilever, L’Oreal, Coca-Cola, Nestlé, General Motors, Volkswagen, Mars or McDonald’s (the current top ten brand advertisers worldwide) if not for the massive amounts of money those companies spend advertising to people who will never buy their products but will damn sure known those products’ names. (Don Marti explains this well.)

A hard fact that the advertising industry needs to face is that there is very little appetite for ads on the receiving end. People put up with it on TV and radio, and in print, but for the most part they don’t like it. (The notable exceptions are print ads in fashion magazines and other high-quality publications. And classifieds.)

Appetites for ads, and all forms of content, should be consumers’ own. This means consumers need to be able to specify the kind of advertising they’re looking for, if any.

Even then, the far more valuable signal coming from consumers is (or will be) an actual desire for certain products and services. In marketing lingo, these signals are qualified leads. In VRM lingo, these signals are intentcasts. With intentcasting, the customers do the advertising, and are in full control of the process. And they are no longer mere consumers (which Jerry Michalski calls “gullets with wallets and eyeballs”).

It helps that there are dozens of companies in this business already.

So it would be far more leveraged for operators to work with those companies than with advertising systems so disconnected from reality that they’ve caused hundreds of millions of people to block ads on their mobile devices — and are in such deep denial of the market’s clear messages that they deny the legitimacy of a clear personal choice, misdirecting attention toward the makers of ad blocking tools, and away from what’s actually happening: people asserting power over their own lives and private spaces (e.g. their browsers) online.

If companies actually believe in free markets, they need to believe in free customers. Those are people who, at the very least, are in charge of their own experiences in the networked world.

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Tags: ad blocking, advertising, Business, iab, marketing

Is the online advertising bubble finally starting to pop?

May 9, 2016 in adtech, advertising, Business, marketing, problems, publishing, Technology, VRM | 18 comments

1-e10zgDdxrcJgNcp9Njr4GQ

I started calling online advertising a bubble in 2008.

I made “The Advertising Bubble” a chapter in The Intention Economy in 2012.

I’ve been unpacking what I figure ought to be obvious (but isn’t) in 52 posts and articles (so far) in the Adblock War Series. This will be the 53rd.

And it ain’t happened yet.

But, now comes this, from Kalkis Research:

Some charts:

googlecpc

adblocking

change-in-advertising-vs-sales

costofadspace

And here is their downbeat conclusion:

We are living through the latest stages of the online advertising bubble, as available high-quality ad space is shrinking, leading to a decline ad space quality, and a decline of ad efficiency. Awareness for fraud is growing, and soon, clients will cut their online ad spending, and demand higher accountability. This will destroy the high-margin market of automated reselling worthless ad space, and will force advertisers to focus only on prime publishers, with expensive ad space.

This is a re-run of the online advertising crash of the early 2000s, when the proliferation of banners and pop- ups destroyed any value these ads had (and led people to install pop-up killers, just like with ad blockers today)…

We estimate that the online advertising market has been artificially inflated since the end of 2013, and is much more mature than its pundits are claiming. 90% of Google’s revenues come from advertising. We expect Alphabet’s share price to go down by 75%…

A larger number of companies will be impacted, as a growing number of third-party tech giants are involved in the advertising play (Oracle, Amazon, Salesforce), and we expect the whole tech sector to be hard hit by the unwinding of the bubble…

Currently, January 2018 Alphabet puts with a strike of $400 are trading at around $8, for a 20x return should our scenario materialize.

There are other signs. For example, a falling ping-pong table index:

pingpongtable

GroupM, the “world’s largest media investment group,” also just published Interaction 2016, which is also bearish on adtech:

Advertisers and the entities that place their ads have always sought relevance and engagement; the consumer has chosen to set a higher bar. Advertisers and the buyers of media have a further responsibility.

Until now, we have assumed almost all data are worth having. But however much he gathers, no advertiser commands complete, continuous data. This creates a risk that the advertiser’s left hand may not know what his right hand is doing. A customer who has already made a purchase may be bombarded with redundant repeat ads wherever he roams: what we might call the phenomenon of “repetitive irrelevance.” Even worse, several advertisers may be sharing the same data and using performance-oriented media, multiplying the “repetitive irrelevance.” Tracking and targeting intended to make advertising welcome makes it a nuisance. It is dysfunctional. The advertiser damages his reputation and pays to do so.

This brief analysis suggests that a partial solution to adblocking is a combination of design, technology, common sense and the ability to establish the point, across channels and vendors, at which the application of a particular data point becomes the poison of marketing rather than the antidote to ineffectiveness.

The emphasis is mine. (Hey, I know boldface tends to get read and blockquotes don’t.)

There are other signs. Last May Business Insider said The ad tech sector looks an awful lot like a bubble that just popped. In June, The Wall Street Journal said adtech investment dollars are running dry. “These companies are struggling to even get meetings,” they said. In December Ad Exchanger called 2015 a “reality check” year for adtech.

Clearly the end isn’t near for Facebook or Google. Tony Haile, founding CEO of Chartbeat — and to me the reigning king of adtech moneyball — compares Facebook to the Sun, and everybody else to planets and other debris orbiting around it. One pull-quote: “It is Facebook that curates and distributes. It owns the relationship with the user, and decides what content the user sees and how many see it.” Meanwhile Google, which places a huge percentage of online ads (for itself and countless others), is said by Digiday to be exploring an “acceptable ads” policy obviously modeled on the one launched by Adblock Plus. And while ad fraud has been bad, AdAge reports that it’s down, dramatically: “analytics firm Integral Ad Science found a 20.9% decrease in both overall and programmatic ad fraud last quarter compared to the fourth quarter of 2015.”

Still, I’ve been told by one (big) adtech exec that his business is “a walking zombie” and that he’s looking toward “the next paradigm.” One of the biggest online advertisers told me late last year that they yanked $100 million/year out of adtech and put it into traditional advertising for one simple reason: “It didn’t work.” I have a sense that they are not alone.

Got any more examples? I want us to get as clear a picture as we can of the adtech edifice as it starts crumbling to the ground. Or not. Yet.

(Later…) Okay we have some:

The Theory of Peak Advertising and The Future of the Web, by Tim Hwang and Adi Kamdar, October 9, 2013
KMPG Media Tracker, which has a UK survey that says, “47 per cent of high earners say they’ll be using an ad blocker in the next six months, 59 per cent of 18-24 year olds say the same,” and “The group least likely to use ad blockers were the over 65s, at 36 percent.
Are Peak Advertising Predictions Now Coming True? in Screen Media Daily (Thanks to Lionel Topper, below, all three of these.)
At least one of Israel’s leading VC-backed adtech companies will be at best a shadow of its former self by the end of 2016, by Michael Eisenberg in Aleph.vc, January 13, 2016. (Thanks to Don Marti for that one.)

Tags: adtech, advertising, The Big Short

Will Content Blocking push Apple into advertising’s wheat business?

August 29, 2015 in advertising, marketing, problems, Research, Technology, VRM | 9 comments

wheat+apple

[Update on 3 January 2016: Buzzfeed reports that Apple is killing iAd and getting out of that business, ending the conflict I detail below. And Apple confirms the decision, here. For a look at what I am sure is behind that, scroll down to “Sacrificing its adtech business…”.]

A couple weeks ago, I posted Separating advertising’s wheat and chaff, contrasting privacy-respecting brand advertising (the wheat) with privacy-offending tracking-based advertising (the chaff), better known in the industry as “adtech.”

Apple pushes both, through its own advertising business, called iAd. The company is also taking sides against both — especially adtech — by supporting Content Blocking in a new breed of mobile phone apps we can expect to see in iOS 9, Apple’s next mobile operating system, due next month.

In Apple’s Content Blocking is chemo for the cancer of adtech, which I posted a few days ago, I visited the likely effects of content blocking. Since then a number of readers have pointed to posts about iAd and the opt-out choices Apple provides for advertising on iPhones and iPads.

Both iAd and the opt-outs reveal that Apple is as much in the adtech business as any other company that tracks people around the Net and blasts personalized advertising at them.

Apple is clearly taking sides against adtech with its privacy policy, which has lately become more public and positioned sharply against the big tracking-based advertising companies (notably Google and Facebook). In September of last year, for example, Apple put up a new page — apple.com/privacy — that contained this paragraph:

Our business model is very straightforward: We sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t “monetize” the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple.

What we have here, then, is Apple’s massive B2C business in conflict with one of its B2B businesses. Since there is a lot of history here, let’s review it.

On 8 July 2010, Engadget published iAds uses iTunes history, location information to target advertising. It begins,

We’ve heard about this before, but now that it’s up and running, this is probably worth a revisit. Apple’s iAds system actually uses lots of your information, including your iTunes purchasing history, location data, and any other download or library information it can suss out about you, to determine what ads you see. So say a few marketing firms working with the large companies now buying and selling iAds.

A recent series of ads for soap was able to target “married men who are in their late 30s and have children.” That’s very specific, and when Apple rolls out the full program, it’ll even be able to use things like iBooks purchases and iTunes movie and TV downloads to target you with advertising.

On 15 October 2014, Digiday published Apple revamps mobile ads with retargeting options. It begins,

Apple’s release of its new mobile operating system last month came with an overlooked gift for marketers: the ability to retarget ads based on users’ in-app browsing behaviors.

According to ad agencies, Apple is actively pitching the new capability as a way to effectively solve the mobile cookie problem.

Say, for example, a visitor to a retailer’s iPhone app adds a pair of shoes to his cart but ultimately decide not to buy it. In this scenario, the retailer will now be able to retarget that user with an ad for that exact pair — even in another app on his iPad. When tapped, the ad would direct him back to his abandoned checkout page and automatically add the shoes to his online shopping cart.

That was when iAd was new. Since then it has come to be regarded, at least by the online press, as something of a failure. On 16 Ocbober 2014, Business Insider published Here’s Apple’s Plan To Turn Around iAd, One Of Its Biggest Flops. The gist:

Several sources have confirmed to Business Insider that Apple is currently visiting mobile specialists at the top media agencies in New York City to push the new function. (Cross-device retargeting.)

Cross-device retargeting is of most use to retailers: if a customer spends some time looking at a dress on their iPad app but decides not to buy it, that same retailer can “retarget” them with an ad displaying an image of that dress, options to buy, or directions to the store when they next pick up their iPhone.

On 19 November 2014, AdExchanger published iAd starts selling programmatically, and explains how it works:

iAd has more than 400 targeting options for advertisers. Its audience is also validated, since users must create an iTunes account in order to download apps. With the release of iOS 8, Apple announced that those Apple IDs could be used by iAds advertisers to retarget users across their devices. Those capabilities make it a good fit for advertisers doing audience-based targeting, who often prefer transacting in programmatic channels.

iAd has scale: “Apple iAd’s sell-side SDK is one of the most penetrated SDKs in the industry,” said Michael Oiknine, CEO of Apsalar. “They now have added iTunes radio inventory, so it’s a smart yield maximization strategy for Apple and is akin to Facebook strategy, which maximizes inventory sales via FBX and PMDs.”

On 21 November 2014, Venturebeat published Apple and AdRoll enable iOS ad retargeting — with extra data from iTunes and the App Store. It begins,

In a significant move for the mobile advertising industry, Apple and retargeting leader AdRoll have announced a partnership that will see AdRoll providing its retargeting and programmatic buying capability for iAd. In addition, Apple will enable advertisers to target potential customers via access to its proprietary data sets from iTunes and the app store.

On 21 November 2014, AdWeek published Get Ready for More Mobile Ads on Your iPhones as Apple Launches New iAds. The gist:

Today, Apple is unveiling partnerships with companies like AdRoll, which will flip a switch and start serving iAds through its automated marketing platforms. This turn toward programmatic mobile advertising has been in the works for at least a year. Last year, the company stopped treating iAd like a high-end marketing platform for only the top brands with the most cash.

Apple wanted to build a self-serve mobile advertising system in house, and it bought Quattro Wireless to help. Sources said that effort faltered, and Apple decided to partner with ad tech companies like AdRoll and The Rubicon Project to compete with mobile ad giants like Facebook, Google and Twitter.

AdRoll is a retargeting specialty firm that lets marketers use their own consumer data profiles to deliver ads across such platforms. And Rubicon unexpectedly leaked word earlier this week that it was partnering with Apple.

On 22 January 2015, ExchangeWire asked What will Apple’s Ad Tech Play look like? They say,

Apple’s renewed designs on the advertising business were revealed when it was announced it was to start selling its iAd inventory on a programmatic basis, with several firms including MediaMath, Rubicon Project, among others, over four years after its iAd unit was initially launched, asking advertisers for (the then audacious sum of) $1m per campaign on its iOS devices.

Since launch, Apple’s presence in the advertising business has been largely underwhelming (apart from its own spend). But the revelation it had chosen several supply-side platforms (SSP) to sell programmatic guaranteed opportunities on behalf of the 250,000-plus App Store developers indicated its renewed designs on the sector.

The announcement itself made waves, not least because of the bungled nature of the announcement,which itself raises a number of issues to debated about Apple’s influence in the ad tech sector (more on that later).

The initial announcement read: “Apple’s iAd provides 400-plus targeting options to advertisers, based on hundreds of millions of validated iTunes accounts worldwide. This rich first-party data asset makes it easy for buyers to target the specific mobile audiences of their choice.”

The move represented, for the first time, that Apple is willing to loosen control over its first-party iTunes data with advertisers expected to be willing to pay top dollar for the access.

They add,

Apple has since started to advertise for roles within its iAd business, requesting applications for UK candidates to join its iAd Marketplace Sales Organisation.

Among the skills requested are: “Apple’s customers on the various products iAd has to offer as well as how to leverage iAd’s self service buying platform, iAd Workbench.”

In addition: “Third-party tags familiarity a plus.”

What is clear, from all these pieces and many others like them, is that Apple’s adtech business is little if any different from the rest of them — meaning just as creepy and privacy-abusing — and notable as well for failing to live up to its original ambitions, which were both huge and (via Business Insider) outlined by Saint Steve himself:

At launch, Jobs set out the bold ambition that iAd would capture 50% of the mobile ad market. Apple marketed iAd as a best-in-class solution for advertisers because it owns both the hardware and operating system the ads ride on and gains valuable data when people sign up for Apple ID to register for iTunes accounts. That means it can target ads by age, gender, home address, iTunes purchases and App Store downloads.

However, it’s still somewhat behind that lofty 50% target. iAd made up just 2.5% of the mobile ad revenue booked in the US last year, according to eMarketer, behind Google which takes the lion’s share (37.7%) and Facebook (17.9%). The most recent data from IDC states Apple generated $125 million in mobile ad sales in 2012.

Apple’s total sales in FY 2012 were $125 billion, or 1000x its mobile ad sales that year. Put another way, iAd contributed 0.01% to Apple’s sales.

Meanwhile, does any Apple customer want advertising on their iPhone or iPad?

Apple knows the answer to that question, which is why Apple provides ways for you to “limit ad tracking on your iPhone, iPad, or iPod touch” and “ads based on your interests.”* (Just go to Settings > Privacy > Advertising to “Limit Ad Tracking,” and to Settings > Privacy > Location Services > System Services. to turn off “Location Based iAds.”) And soon we’ll have Content Blocking as well.

Sacrificing its adtech business would position Apple in full alignment with three things:

Tim Cook’s privacy statement. It would take the loopholes out of that thing.
Market demand. People are fed up with losing their privacy online — almost all of it to the tracking-based advertising business. (Sources: Pew, TRUSTe, Customer Commons, Wharton.)
The moral high ground called simple human decency. Most people don’t want to be tracked in the online world any more than they want to be tracked in the physical one. Nor do they want information about them known by first parties to be sold to third parties, or to anybody, with our without their knowledge, no matter how normative that practice has become.

Dropping adtech would also be good for iAd, which could then concentrate on placing non-tracking-based brand ads, which are more valuable anyway: to brands, to publishers and to the marketplace. Also to Apple itself, because they would be selling wheat, rather than chaff.

Until then, the loopholes persist in Tim Cook’s privacy statement, and Apple retains major conflicts between its massive B2C businesses and its struggling B2B adtech business.

It will be interesting to see what the company does once the Content Blocking chemo hits the App Store bloodstream.

* “Based on your interests” (aka “interest based advertising“) is a delusional conceit by both adtech (examples here , here and here) and online retailing (prime example: Amazon). Neither visiting sites nor buying are measures of interests. All they show are actions that could mean anything — or nothing.

The interest-based advertisers say our interests are “inferred” by what we do (and they like to observe, constantly and everywhere). And yet those inferences are weakened by another assumption that is flat-out wrong, nearly all the time: that we are always in a shopping mode. In fact we are not.

We are, in fact, always in an owning mode, which is why I think that’s the real greenfield for e-commerce. If companies shifted a third of what they spend on adtech over to customer service, they would vastly increase both customer loyalty and brand value.

By the way, Apple knows this, possibly better than any other technology company. That’s one more reason why I think their B2C smarts will correct the adtech crowd-following errors of their B2B ways.

[Later…] @JamesDempsey tweets,

@dsearls @adcontrarian @dmarti @businessinsider iOS 9 content blocking is in Safari. iAds appear in apps—not web pages: iAds not blocked.

Good to know. Apple’s iAd site doesn’t make that clear (to me, at least). What this tells me is that iAd is in the chaff business while Content Blocking encourages wheat on Safari. Doesn’t change the point of this post, or the earlier ones.

Tags: ad blocking, adtech, advertising, Apple, content blocking, iad, tracking blocking, VRM

On taking personalized ads personally

March 27, 2015 in marketing, problems | 2 comments

In the pile of comments under the post on Facebook I wrote about here yesterday, Christopher Brock writes a long and thoughtful response that pretty much represents the thinking of the adtech business today. Since it’s hard to respond point-by-point in Facebook’s commenting UI, I’ll do it here:

It is not really fair to say Facebook identifies you as x,y and z.

Yes it is, because Facebook is in the business of delivering personalized ads. True, they also deliver non-personalized ads (ones targeted, say, to a demographic). But since there is no flag on an ad that says it’s one or the other, and because Facebook can get more personal, with more people, than any other advertising platform in the world, it is legit to at least suspect that their ad-placing machine thinks you are x, y or z.

What the ads reflect are the audience demographics approved by businesses willing to purchase impressions against a profile to which you fit in hopes of turning a ROI.

Or because you’re being targeted personally. For example…

Retargeting ads are based on your browsing habits, which can be telling of your historical intent based searches.

Yes, that and a lot of other data, some gleaned by surveillance, some bought from Acxiom and other brokers, all crunched in a thing that IBM calls The Big Datastillery.

See those beakers at the bottom? That’s you and me.

How is it possible for a company as smart as IBM to insult human beings so obviously? The short and simple answer is, because consumers aren’t human. The term “consumer” presumes that’s all we do: consume. (Jerry Michalski calls consumers “gullets with wallets and eyeballs.”) In the same way that “when all you have is a hammer, everything looks like a nail,” “when all you have is plumbing, every consumer looks like a beaker.”

As for all the plumbing above the beakers, does anybody outside the adtech world know the difference between programmatic (including direct and forwards), predictive, real time bidding (RTB), AB and MV testing, supply side platforms, demand side platforms, marketing and interaction optimization, and all the other valves in the piping that blurps placements of ads through Facebook, other commercial websites and mobile apps? I suppose from the plumbing side it doesn’t matter. But it does to the humans being treated like empty vessels on a conveyor belt. We don’t know what the hell is going on, but we do know that it’s big, creepy and trying to be personal in a robotic way.

By contrast, the provenance of ads in the old advertising world was obvious to everybody. (And if they needed reminding, they got it with Mad Men.) Every ad you read in a newspaper or magazine, heard on the radio, saw on TV or a billboard was placed there either directly by the advertiser or through an agency. And here the key thing: it was never personal. It was aimed at a population. Everybody knew that.

Direct marketing, better known as junk mail, was a very different animal. It was addressed to you personally, and wanted a direct response. Adtech is what we got after direct marketing body-snatched advertising. An ad you see on Facebook might be addressed to populations the old fashioned way, or it might be personal. You can’t tell the difference — unless an ad is obviously personal, in which case it risks falling into the uncanny valley where you might creeped out. At the extreme, perfectly personalized advertising (based on knowing everything about you) is perfectly creepy.

Eith a new market we are served non-relevant ad content, however over time more businesses will move to paid digital ad marketing and the ads we see will become more contextually and intentionally relevant.

And creepy.

I know the best adtech people go out of their way to avoid the uncanny valley. There are also special cases, which also happen to be the two biggest: Facebook and Google.

Facebook is in a position to know people to a high degree of detail. The company is careful not to show that fact (and fall into the uncanny valley), but knowing how personal Facebook can get does make a difference. That’s why I said “If I were actually the person Facebook advertised to…”

Google is less privileged in that respect, but the nature of the help it provides (in search results, in guessing at locations we search for in Maps, and so on) makes their search results and ad placements less of a valley when they get uncanny.

But in general the body-snatched nature of digital advertising leaves us in the dark, nearly all the time, about what’s personal and what’s not.

There is a lot of profit potential for marketers who can accurately design marketing funnels for products/services based on demographic profiling and intentional modeling using a demand side platform like Facebook.

Is that what it is? Man, that is so damn confusing to us beakers. I was in the advertising business (the old Mad Men kind) one way or another, for much of my adult life, and for me — as well as for the rest of the world — the demand side of the marketplace is the whole human population. The supply side is the one selling goods and services to that population.

A few weeks ago I spent an afternoon with an RTB company talking about all this stuff, and my spinal cord kinked as my brain spun around, trying to grok how demand in that business is on the side that produces the ads, rather than the side that consumes them. (Which we mostly don’t, by the way. We ignore 99.x% of them. But we’re still consumers to the ad producers.) As Wikipedia currently puts it,

A demand-side platform (DSP) is a system that allows buyers of digital advertising inventory to manage multiple ad exchange and data exchange accounts through one interface. Real-time bidding for displaying online ads takes place within the ad exchanges, and by utilizing a DSP, marketers can manage their bids for the banners and the pricing for the data that they are layering on to target their audiences. Much like Paid Search, using DSPs allows users to optimize based on set Key Performance Indicators such as effective Cost per Click (eCPC), and effective Cost per Action (eCPA).

Whatever. (And saying that I speak for all people not laboring in the adtech bubble.)

Since marketing data science is relatively new as is social, local and mobile tech, not all businesses buy digital ads.

True. In fact the Internet we know today is only about 20 years old. It showed up when commercial activity could operate there (technically, when NSFnet shut down), in 1995. The cookie was invented around that time as well. (But not for tracking. It was meant originally just to help websites recall and assist prior visitors.)

The Net we made then, and still have, is Eden. We arrived naked there, and we still are. The adtech business loves that, but the rest of us don’t. That’s why privacy is a huge issue online (sources: TRUSTe, Pew, Customer Commons) and a non-issue offline.

In the physical world we’ve had clothing, shelter and other privacy technologies for many thousands of years — and manners for how we treat each others’ private spaces. In the online world, rudeness rules. A merchant who would be appalled at the thought of placing a tracking beacon on a visiting customer, just so that customer can later be “delivered” a better “advertising experience,” doesn’t think twice about doing the same online.

This will change. It’s already happening through regulation, and through ad and tracking blocking rates that steadily increase. But those are stone tools. Eventually we’ll get real clothing and shelter. When that happens, the adtech business will be in trouble, unless it changes, which I’m sure it will.

@docsearle maybe you should be a web marketer

No thanks.

you obviously have identified an area of opportunity.

The area I’ve identified is the one where customers will signal their intentions far better than any marketer can guess at the same.

If you want more and better thinking about all this, I highly recommend what Don Marti has been writing. He, Bob Hoffman and I are voices in the wilderness today. But that will change. The wilderness is already burning.

Image from Personalizing with Purpose, by Paul Dunay in imedia connection.

Tags: ad exchange, adtech, advertising, brain, data exchange, demand side platforms, Facebook, programmatic, RTB, spinal cord, supply side platforms CPC

The most important event, ever

March 25, 2015 in Business, Events, Future, Health, Ideas, Identity, Internet, IoT, marketing, VRM | 1 comment

IIW XX, the 20th Internet Identity Workshop, comes at a critical inflection point in the history of VRM: Vendor Relationship Management, the only business movement working toward giving you both

independence from the silos and walled gardens of the world; and
better means for engaging with every business in the world — your way, rather than theirs.

If you’re looking for a point of leverage on the future of customer liberation, independence and empowerment, IIW is it.

Wall Street-sized companies around the world are beginning to grok what Main Street ones have always known: customers aren’t just “targets” to be “acquired,” “managed,” “controlled” and “locked in.” In other words, Cluetrain was right when it said this, in 1999:

if you only have time for one clue this year, this is the one to get…

Now it is finally becoming clear that free customers are more valuable than captive ones: to themselves, to the companies they deal with, and to the marketplace.

But how, exactly? That’s what we’ll be working on at IIW, which runs from April 7 to 9 at the Computer History Museum, in the heart of Silicon Valley: the best venue ever created for a get-stuff-done unconference.

Focusing our work is a VRM maturity framework that gives every company, analyst and journalist a list of VRM competencies, and every VRM developer a context in which to show which of those competencies they provide, and how far along they are along the maturity path. This will start paving the paths along which individuals, tool and service providers and corporate systems (e.g. CRM) can finally begin to fit their pieces together. It will also help legitimize VRM as a category. If you have a VRM or related company, now is the time to jump in and participate in the conversation. Literally. Here are some of the VRM topics and technology categories that we’ll be talking about, and placing in context in the VRM maturity framework:

Personal clouds (aka PIMS, vaults, stores and lockers)
Privacy tech of all kinds (and privacy characteristics, such as secrecy, anonymity and autonomy)
First person technologies, including those providing independence, sovereignty (especially around identity)
Technologies of Us
Personal digital assistants
Intentcasting
Wallets and fintech, including Etherium, DAPP, blockchain and EmanciPay
Decentralization
Clouds for Things (#CFTs) and/or the true Internet of Things (rather than the Compuserve of Things)
Silo-busting
Truly private browsing
Investment
Research
Legal, including terms and privacy policies that individuals proffer
Password management
Co-creation of value and experience co-creation
Surmounting bureaucracy (guidance: David Graeber’s amazing The Utopia of Rules), by both individuals and institutions
Tech, standards and protocols. In no particular order, telehash, XMPP, OAuth, CloudOS/KRL, XDI / RDF and other graph-based protocols
Recsuing advertising that’s not based on surveillance from the kind that is
Verticals, including retail, automotive, health, QS/self-hacking, real estate
Heterarchy
APIs, including personal ones
Trust frameworks, such as OIX’s
Allied organizations, such as PDEC and Customer Commons

Note: Another version of this post appeared first on the ProjectVRM blog. I’m doing a rare cross-posting here because it that important.

Tags: advertising, APIs, Berkman Center, decentralization, iiw, IIWXX, independence, investment, liberation, marketing, PDEC, research, sales, Venture Capital, VRM

Thoughts on tracking-based advertising

February 18, 2015 in Business, Internet, Technology | 9 comments

Yesterday @davidweinberger and I were guests on screen at a @commongroundmcr session in Manchester, hosted by Julian Tait (@Julianlstar) and Ian Forrester (@cubicgarden). We talked for a long time about a lot of stuff (here’s a #cmngrnd search featuring some of it); but what seems to have struck the Chord of Controversy was something I blabbed: “Tracking-based advertising is creepy and wrong… and needs to be wiped out.” Martin Bryant (@MartinSFP) tweeted a video clip and a series of other tweets followed. Here’s a copy/paste, which loses a little between Twitter and WordPress):

Adam Morgan and Martin Bryant favorited a Tweet you were mentioned in Feb 17: @MartinSFP @dsearls People dont realise how much worse our experiences with ads would be if they werent personalised
Adam Morgan favorited a Tweet you were mentioned in

Feb 17: @cyrusradfar @dsearls I prefer personalised advertising, and working for a media startu, it’s better for us. But still, many find it creepy
Cyrus Radfar ‏@cyrusradfar Feb 17 @MartinSFP @dsearls targeted ads allow new players to enter the market. W/o it, it’s cost-prohibitive and incumbents can only play.
Martin Bryant ‏@MartinSFP Feb 17 @firstconversion @dsearls agreed
Martin Bryant favorited a Tweet you were mentioned in

Feb 17: @MartinSFP @dsearls People dont realise how much worse our experiences with ads would be if they werent personalised
Stephen ‏@firstconversion Feb 17 @MartinSFP @dsearls People dont realise how much worse our experiences with ads would be if they werent personalised
Katie Gallagher retweeted some Tweets you were mentioned in

Feb 17: Tracking-based advertising is “creepy and wrong… and needs to be wiped out,” says @dsearls #cmngrnd pic.twitter.com/yzUzDmtK80
adrianslatcher retweeted a Tweet you were mentioned in

Feb 17: Tracking-based advertising is “creepy and wrong… and needs to be wiped out,” says @dsearls #cmngrnd pic.twitter.com/yzUzDmtK80
Martin Bryant ‏@MartinSFP Feb 17 Manchester, England @cyrusradfar @dsearls I prefer personalised advertising, and working for a media startu, it’s better for us. But still, many find it creepy
Cyrus Radfar ‏@cyrusradfar Feb 17 @MartinSFP I’d like to debate @dsearls on this topic. I’ll take the side of the advertiser.
Jemima Gibbons and Martin Spencer favorited a Tweet you were mentioned in Feb 17: Tracking-based advertising is “creepy and wrong… and needs to be wiped out,” says @dsearls #cmngrnd pic.twitter.com/yzUzDmtK80
Manoj Ranaweera and 5 others retweeted a photo you were tagged in
Feb 17: Let’s talk the Cluetrain Manifesto… Here’s @dsearls and @dweinberger. #cmngrnd pic.twitter.com/C86jzvEg6B

Martin Bryant ‏@MartinSFP  Feb 17Manchester, England Tracking-based advertising is “creepy and wrong… and needs to be wiped out,” says @dsearls #cmngrnd

Raman Frey favorited a Tweet you were mentioned in

Feb 17: @MartinSFP I’d like to debate @dsearls on this topic. I’ll take the side of the advertiser.

Cyrus Radfar favorited your Tweet

22h: @cyrusradfar @MartinSFP Wow, that was quick. Thanks! Meanwhile, http://projectvrm.org and http://doc.searls.com will also help. #vrm

Cyrus Radfar ‏@cyrusradfar  23h23 hours ago

@dsearls ha, I’m happy to being proven wrong! That means I’ve learned something. @MartinSFP Will follow up…

Cyrus Radfar ‏@cyrusradfar  23h23 hours ago

@dsearls @MartinSFP will to learn about your perspective before we debate 😉 pic.twitter.com/5SUljsDI3k

Martin Bryant favorited your Tweet

23h: @cyrusradfar @MartinSFP Read my book first and see if you still want to argue. http://bit.ly/intentioneconomy … #VRM

So, while Cyrus awaits his copy of the book, I thought I’d share a few links on the topic, before I hit the sack, jet-lagged, here in London.

First, a search for my name and advertising. Among those the one that might say the most (in the fewest words) is this post at Wharton’s Future of Advertising site.

Second, dig pretty much everything that Don Marti has been writing about business, starting with Targeted Advertising Considered Harmful. My case — the one people who like personalized advertising might want to argue with — is Don’s. He became my thought leader on the subject back when he was helping me with research for The Intention Economy, and he’s been adding value to his own insights steadily in the years since. (BTW, I’m not a stranger to the business, having been a founder and creative director for Hodskins Simone & Searls, one of Silicon Valley’s leading ad agencies back in the last millennium.)

When I get a chance I’ll write more on the topic, but for now I need some sleep.,

Tags: adtech, advertising, personalization, personalized, programmatic, targeted, tracking, tracking-based advertising

Advertising in the pits

March 27, 2010 in Art, Business, Life, Strange stuff | 3 comments

There is an ad running during the NCAA basketball playoffs that’s so creepy and surreal that I decided to take some screen shots of it, as a kind of public service to the company spending money on it.

The scene is a guy’s hairy armpit. (Do they have armpit models? Guess so.) As if this weren’t icky enough, all of a sudden a rectangle of flesh drops down, opening a grave, right there, in his sparse forest of hair. It’s like watching that eyeball get sliced in Un chien andalou. Creepy as shit. And you wonder, where did the missing block of pit go? Is it down by the rib cage somewhere? Packed around his rotator cuff? Or is he hollow? And why no blood?

Then this white triangular thing rises out of the same hole.

You wonder, what the fuck is that? before seeing that Oh, okay, it’s a Matterhorn. But it’s not like the real thing. It’s more like a toy Matterhorn, with a little Swiss Chalet at its base, flanked by a few trees, looking like a snow-globe scene, without the globe and the snow.

By the time it’s over you’ve witnessed two awful things you don’t want happening to your body: Having your armpit turned into a deep hole — and then having it replaced by a piece of broken kitsch. It’s so disturbing that you don’t even notice, much less remember, the name of the advertiser.

Not my cup of meat. Or whatever that dude is made of.

Tags: advertisement, advertising, armpit, basketball, Matterhorn, NCAA

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