It was a busy M&A week for the adtech industry. From LinkedIn to Amazon, everyone snapped up the tech they needed to thrive and compete against the duopoly.
Let’s start with LinkedIn.
LinkedIn and Drawbridge tie-up
LinkedIn has a large B2B audience base and fledgling advertising solutions to woo marketers from Google and Facebook to its own property. In fact, according to the announcement post, LinkedIn Marketing Solutions has grown its revenue by 46% YOY. But as you have guessed, still LinkedIn has a long way to reach the duopoly.
Now, how Drawbridge will help LinkedIn’s ad products?
LinkedIn probably will use Drawbridge identity graph to help its advertisers reach more audience and personalize the ad experience. For instance, LinkedIn Audience Network can expand its reach as the identity solution will shot up the target audience number. Similarly, lookalike audience will further improve with Drawbridge’s graph.
“Drawbridge technology is going to help us better connect mobile and desktop experiences.”
On the other side, Drawbridge can safely function under the LinkedIn banner and avoid grappling with GDPR and privacy laws.
Amazon is acquiring Sizmek ad server and DCO
Amazon has been rumored to be in talks with Sizmek to snap up its only profitable business – ad server. Last week, the company confirmed that it will acquire Sizmek ad server and Sizmek DCO businesses in a blog post.
As per AdAge sources, Amazon is paying $30 million for the assets and both the server and DCO will operate independently for the time being.
Amazon doesn’t have a strong foothold in dynamic creatives. It has only one dynamic product “Dynamic e-commerce Ads” and Sizmek businesses should enable the company to improve its offerings on this end.
Amazon might also integrate Sizmek’s ad server into its platform, which, in turn, will allow Amazon advertisers to use rich data from Amazon to target customers on the open web precisely. Sizmek’s ad server directly competes with Google’s Marketing Platform, so Amazon is set to go head-to-head with Google with its acquisition.
That being said, integrating an ad server isn’t easy. Facebook essentially tried to build a robust ad server when it acquired Atlas from Microsoft but ended up winding down the server business completely (Facebook prioritized its own property rather than focusing on the open web ecosystem). Unlike Facebook, Amazon may decide to focus on the open web with its ad server, we’ve to wait and see.
With the growing threat from GDPR and the duopoly, small players are struggling to keep up and raise fresh funding from investors. Giants see this as an opportunity to bypass the development time and effort and keep acquiring the technologies to fill up the gap they’ve in their existing stack.
German publishers are at it again
Last year, in our weekly roundup, we discussed that 20 Media, e-Commerce, and agency ISP businesses rolled out unified log-in to capture rich user data and get consent – so that they can compete against the duopoly. The idea is to create a log-in system for the open internet (restricted to EU).
Similarly, Germany’s biggest four media houses unite their ad inventories to beat Google, Facebook, and Amazon. Digiday reported that the sales houses are planning to pitch advertisers and agencies to direct their ad dollars from the walled garden to ‘Media Impact’ – a joint sales house which combines Axel Springer and Funke Mediengruppe with joint sales house of fellow publishing juggernauts RTL Group and Gruner+Jahr.
“Growth has been assumed by Google, YouTube, and Facebook. With this framework and cooperation, we want to get back our fair share. Amazon is also relevant in the German market and growing. This is the base of our future growth: to find the right mix of reach, relevance, service and highest ad quality that you can generate for advertisers and agencies.”
– Carsten Schwecke, Chairman of Media Impact’s management board.
Can they win over the platforms?
– Media Impact reaches over 50 million unique users in Germany, which is 10 million higher than that of Facebook.
– The alliance is committed to learn the demands from the marketers and advertisers and then, build the proper technological infrastructure with competitive targeting capabilities.
– The joint sales house aims to offer a brand-safe environment for the advertisers on the open internet and enable contextual targeting capabilities too.
We’ve been watching the alliances for over a year now. This one stands out from the rest (unified log-in, the ozone project, etc.) as it poises to have an upper hand in terms of both – reach and technology. As always, we’ll keep you updated.
Let’s talk about the behavioral advertising study
The Wall Street Journal published a story with the goal of answering a simple question – Do behavioral targeting yields better ad revenue for publishers?
If you’re a publisher, you probably would say ‘of course’, without thinking twice. Because, after all, you’re the one who went from contextual ad networks to header bidding to experience the revenue lift first-hand. Surprisingly, the study concluded that the lift was just 4%.
You read that right.
For the sake of the study, let’s try to discern how they answered the question.
– The study analyzed ad impressions from a publisher with several domains. As per the source document, the publisher seems to be a media company with a handful of sites spanning across news, lifestyle, and entertainment categories. This itself is a problem. One cannot possibly say the effectiveness of cookies/behavioral ads based on a single media company.
– The study analyzed “millions” of impressions for a “week” in May 2016. Millions of impressions are what many vendors process within an hour today and 2016 is a long time back, considering the explosive growth of header bidding. Besides, seasonality is one of the most important factors in our ecosystem and a week of May isn’t arguably a great time to compare behavioral and contextual CPMs.
– The sample included 3,800 advertisers and almost 60% of the bids are from a single DSP. Again, we process bids from tens of thousands of advertisers every day. Especially, as all the walled gardens are taking part in open programmatic, the numbers are getting higher continually. On the other hand, 60 percent of bids from a single DSP shows that publisher’s ad stack don’t have enough demand partners (probably just Google AdX).
– On top of these, the study fails to answer questions like what is the direct deal to open programmatic ratio, what sort of demand partners are being used, how publishers are getting consent (if any mechanism is active), etc.
Here’s a tweetstorm from Paul Bannister of Defy Media with more questions:
First, the dataset itself is massively problematic. It's 3 years old (from May 2016), based on data from a single publisher, is data from a single week, and is referenced as "millions of transactions" repeatedly as if that's a good thing, when in reality that's a tiny dataset.
— Paul Bannister (@pbannist) May 30, 2019
Though the study considered the browsers, users’ consents, and other factors, it still fails to answer some important questions as pointed above. To put it simply, we need a study with a huge or at least considerable data set from the recent past.
Take a year but come back clean
AdExchanger revealed that French data regulators are giving a year for publishers to properly implement consent mechanism. Until then, soft consents are acceptable to serve targeted ads to users.
GDPR requires publishers to get “informed” and “unambiguous” consent from users to drop third-party cookies. But French data protection authority CNIL’s (Commission Nationale de l’informatique et des libertés) 2013 consent recommendations allows publishers to drop cookies as long as a banner is shown to the user explaining the purpose.
Now that the GDPR is live, 2013 recs became obsolete and CNIL plans to revise it and release the updated consent recommendations in 2020. So, French publishers, for the time being, can run personalized ads, just by showing a simple banner to the users.
The way vendors, publishers, and regulators interpret GDPR is still one of the biggest issues. Nation-wide cookie policies and outdated ePrivacy directive confuse the publishers and vendors alike. We expect that regulators across the EU will update their consent and cookie policies to make them in-line with GDPR.
Moments that matter
Google to block ad blockers on its browser for enterprise users – 9to5 Google.
Common video measurement metrics for all – Axios.
Header bidding in 5 charts – eMarketer.
How LiveRamp plans to woo advertisers – AdWeek.