Last Week’s Highlights
- Identity resolution has become the no. 1 challenge in the programmatic landscape as more stringent legislations come into play
- Yahoo’s new ID-less audience solution, Next-Gen Solutions, presents an advanced way of contextual targeting using machine learning and real-time data signals, keeping consumer privacy a priority
- Using dark patterns in website design to manipulate users to consent to their personal data can be punishable under the FTC Act
- Retail sales for the holiday season in 2021 grew by 16.1% year-over-year (YoY) in the US, the fastest growth rate in the last 20 years
- The ad industry is divided into two sides, as Belgian Data Protection Authority rules that IAB Europe’s Transparency and Consent Framework violates GDPR on multiple levels
No. 1 Challenge in the Programmatic Ecosystem
The digital advertising landscape has always been under fire for using consumer data to track their activity on the Internet to serve targeted ads. As users become more and more concerned about their privacy, publishers are facing stringent regulations covering the usage of third-party identifiers. But of late, this issue has evolved into a much more significant challenge than ever before.
Adding to the challenge, the US Congress recently introduced two bills to regulate privacy concerns related to online advertising during the start of 2022. The Terms-of-service Labeling, Design, and Readability (TLDR) Act aims to make website terms of service easier to understand. The act requires websites to provide a ‘summary statement’ that outlines what data will be collected and how it will be used.
The Banning Surveillance Advertising Act, which is yet to be passed by Congress, aims at preventing major ad platforms from targeting ads using any data that is ‘reasonably linkable’ to an individual. Though it is unlikely for the bill to be passed in its current form, it indicates what is to come for the advertising industry.
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“I don’t think the bill will pass, but it’s a signal of the dissatisfaction out there and the danger of relying fully on an ad model that could disappear,”
– Yoram Wurmser, Principal Analyst, Insider Intelligence
Yahoo’s ID-less Audience Solution
Yahoo has announced the launch of its ID-less audience solution, known as Next-Gen Solutions for the web. The solutions present an advanced way of contextual targeting using machine learning and real-time data signals, preserving consumer privacy.
The solution was initially launched for in-app ads in 2021 but is now available online. Next-Gen Solutions for the web works in combination with the Yahoo DSP, and Yahoo ConnectID, and uses machine learning models trained on data signals from direct consumer relationships across Yahoo’s owned and operated platforms. The solution doesn’t rely on ID-based cross-site tracking, or even user profiling, making it easier to comply with existing and upcoming privacy regulations.
Yahoo’s ConnectID and Next-Gen Solutions for the web are currently available for publishers in North America and APAC nations. Yahoo ConnectID is also integrated with Network Advertising Initiative (NAI)’s “Audience Matched Advertising Opt-Out” platform, enabling consumers to opt-out with just their emails.
Ad Industry Divided Over Third-party Addressability
A lot has been said about the third-party addressability issues in the advertising industry over the past few years. Implementing more and more privacy laws also points towards the magnitude of the problem. While everyone in the ecosystem considers IAB the authority to make the right decisions, the Belgian Data Protection Authority thinks otherwise.
On February 2, the Belgian authorities ruled that IAB Europe’s Transparency and Consent Framework (TCF) violates the GDPR on multiple levels. IAB Europe abided by and released a statement to redesign the TCF to comply with the regulations. However, this debate over third-party addressability and identity resolution in the programmatic landscape has divided the ad industry into two sides.
One side believes they should sustain the existing ecosystem (with a few changes) and advocates that there isn’t anything “intrinsically wrong” with TCF and considers it an essential foundation for a standardized protocol.
“The IAB has little to do with the amount of companies a media business puts in that framework. It’s up to everyone else to act responsibly.”
– Stefan Havik, Digital Development Director, DPG Media
On the other hand, many publishers have recognized the discrepancies in the OpenRTB protocols. At IAB’s Annual Leadership Meeting, Vox Media CEO Jim Bankoff stated that they would find a way to generate ad income while putting their audience’s privacy rights first. A view that is shared by a large number of brands, advertisers, and publishers.
“We must be very clear about the real issue here, which is large scale and ungovernable third-party data addressability on the open web,”
– Ruben Schreurs, Group Chief Product Officer, Ebiquity
Related Read: What Is TCF 2.0 and What Do You Need to Do With It?
Publishers Need to Stop Using Dark Patterns
According to a recent study by Princeton, publishers use more than 15 different dark patterns to coerce users into giving their ‘consent’ for data collection. The study examined close to 11,000 shopping websites and 53,000 product pages for misleading and deceptive practices to get users to accept cookies. Out of this data set, close to 1,254 shopping websites were using dark patterns in some form to manipulate users.
Further, Adexchanger stated that such practices have long been in the eyes of the legislators, with multiple privacy laws coming into the picture to fight dark patterns. In 2020, the US federal government introduced the Deceptive Experiences To Online Users Reduction (DETOUR) Act. According to this, using dark patterns is punishable under the FTC Act. And the recent fines faced by Google and Facebook by the French government only add to the problem.
Dark patterns can take different shapes and forms, with one single goal, to persuade users into ‘consenting’ to give their personal information. Even practices that users commonly encounter on the Internet can be categorized as dark patterns, such as using confusing language in the consent pop-up or having multiple steps to make it difficult to decline cookies.
Holiday Retail Spending in 2021
As the world bounces back from the pandemic, retail sales saw a year-on-year (YoY) growth of 16.1% during the holiday season of 2021 in the US, according to eMarketer. This is the fastest growth rate in more than 20 years, amounting to $1.221 Trillion.
The most significant events of the holiday season in 2021 were Cyber Monday, Black Friday, and Thanksgiving. As expected, Cyber Monday was the star of the show with the highest spending and a YoY increase of 1.1%, reaching $10.90 Billion, followed by Black Friday and Thanksgiving, with an increase of $9.03 Billion (0.3%) and $5.17 Billion (2.3%), respectively.
Experts suggest that the 2022 holiday season will witness a rise of 3.3% YoY, reaching $1.262 Trillion, with eCommerce in the lead with a 15.5% YoY surge.
Data Source: eMarketer
The Daily Beast’s Subscription Model
After honing its subscription strategy for several years, The Daily Beast, an American news publication, is now moving beyond its subscription model and generating revenue throughout the reader-to-subscriber funnel. With a whopping 29 million average monthly unique visitors, the subscriptions business for the publisher accounts for 20% of the company’s total revenue, making it the second-highest revenue stream for the brand.
Now the publisher plans on turning passive readers into ‘true loyalists’ who are willing to pay before the point of conversion. Using the first-party data collected from their loyal users, The Daily Beast aims to identify the known products that users are most likely to pay for and then market them to the readers once they’re in the Beast ecosystem.
“The strategy is now to decipher which of those [known] products any given user is most likely to convert on,”
– Mia Libby, CRO, The Daily Beast
The publishers plan to make money from the first-party- data collected from user profiling for known users, which is valuable for advertisers. The publisher further added that the revenue generated from a known user is about 169% more than an unknown user because of the first-party data and the advertising revenue earned from them.
Why Did Future Ditch Google AMP?
Earlier this year, Future plc decided to move away from Google AMP and has benefitted from this decision. The publisher acknowledged the risk of losing traffic, as AMP enables a page to load much faster on mobile devices. However, they are calculated the number of ads they could sell on alternative mobile pages.
“I estimate that between 80% to 90% of our volume is no longer using the AMP framework now that we’ve successfully migrated to our mobile sites,”
– Stuart Forrest, Director of Audience Operations, Future plc
Future’s started gradually shutting down AMP versions for several sites and calculated its adverse impact on traffic and revenue. They noticed that the traffic and revenue had little to no effect after dropping AMP. The traffic for Cinema Blend (Owned by Future plc) went up by 30% YoY for January.
They further added that to make the AMP pages faster, Google left publishers with limited media to sell to advertisers. This affected ad revenue, but many publishers accepted this in exchange for a better user experience. But by removing AMP support, small and mid-sized publishers will struggle to get the same amount of organic search traffic.