Summits Yellow

Mid-term report

Tyrone Stewart

2018 has been a very eventful year so far within the digital advertising and technology spaces – and we’re still only halfway through it. With that in mind, Tyrone Stewart takes a look back at everything that’s happened so far, and where we can expect it to go for the rest of the year and beyond.

This year, we’ve witnessed a whole host of incidents including the Facebook and Cambridge Analytica data scandal; deaths involving self-driving cars; more brand safety issues involving the likes of YouTube, and much more. So, in light of all these problems, how is the industry shaping up?

Data scandal
Perhaps the biggest story within the industry this year has been the data scandal involving Facebook and Cambridge Analytica. News of the scandal was broken by a combination of Channel 4, The New York Times, and The Guardian – with all reporting on how Cambridge Analytica had collected the data of around 87m Facebook users without permission back in 2014.

The revelation put pressure on Facebook over the way it handles personal data and caused users on the platform to partake in a #DeleteFacebook campaign. Pressure is also still being piled on by both lawmakers in the US and the UK over the possibility that Cambridge Analytica used the data to target political voters on both sides of the pond.

“Facebook is an incredibly powerful tool with an extraordinary reach, but with this power comes problems,” says Charlie Smith, UK managing director at Blis. “Politicians and consumers lack clarity around Facebook's role in society and in the tech ecosystem, and this means consumers aren’t fully aware of how their data is being used. And politicians have failed to regulate Facebook like other communications industry giants.

“The solution is clearly some kind of regulatory action. People need to be made aware of what they’re signing up to and what’s happening to their data. Facebook in turn needs to take responsibility for the data they hold.”
With the implementation of the General Data Protection Regulation (GDPR) added to the scandal surrounding Facebook’s handling of data, the social network has begun taking more of this responsibility by putting in place new tools and policies, while providing more of an insight into what it does with people’s data.

“As a result of the Cambridge Analytica scandal, Facebook and a lot of the big advertising agencies will have tightened the strings on their privacy policies, which can only be a good thing,” says Aaron Brooks, co-founder of influencer marketing platform, Vamp.

“Since trust in social media platforms has taken a hit since the Cambridge Analytica scandal, Facebook is being completely explicit about how it will follow the new regulations. Having said that, it won’t change how companies advertise on Facebook because the companies will be responsible for ensuring their own compliance."

Facebook isn’t the only social media company to have been hit by the scandal – with Twitter also admitting that it sold data access to the Cambridge University researcher who passed on Facebook user data to Cambridge Analytica, Aleksandr Kogan.

With that added to the ongoing issues that all the social platforms have with fake news in general, it can be argued that social media giants have an air of “naivety and arrogance” about them, according to Jon Mundy, freelance ad tech & data specialist.

“It could be said that Facebook demonstrated remarkable naivety in its casual disregard of the importance of personal data and willingness to allow third parties to exploit it, but there's also an arrogance,” says Mundy. “The attitude that the data generated by its vast user base is its own property and it had every right to build a business on the back of it. The lack of any single authority to constrain them until the rise of the GDPR only cemented that. Of course, that attitude has been shared by many others, most obviously Google, but also the ad tech industry at large.”

The attitudes presented by the internet giants become more evident when you look at the industry around them, and how it has begun identifying what’s wrong and working on making it better for all.

“While media sellers are fighting to build a more trusted, transparent and inclusive environment, the internet giants continue to threaten the industry reputation as they fall short on getting a handle on data privacy. The tech giants are perceived as accumulating massive amounts of data on individuals, without clarifying how this data is being used,” says Mike Shaw, VP EMEA at DataXu. “With a large proportion of media budget being invested on Facebook and Google, the tech giants urgently need to review their business and monetisation models – not only for their own sake, but for the sake of the entire media industry.”

Brand safety
While Facebook has been at the heart of the biggest data scandal of the year, when it comes to brand safety, all eyes have been focused on YouTube, with the Google-owned platform struggling to keep ads away from racist, paedophilic, and extremist channels, despite having filtering options in place. But while YouTube has been at the forefront of the issue, the problems run much deeper and extend to programmatic advertising as a whole.

“This year, brand safety has been one of the biggest worries on marketers' minds. Fraudulent activity and poor ad placements are hindering the further growth of a premium programmatic marketplace. As a community, we must come together and adopt standards that can ensure ad quality and stop fraud,” says Steve Wing, managing director for the UK, Ireland and Nordics at Rubicon Project.

This idea of competing organisations coming together to ensure that ads appear only in brand-safe environments is starting to happen. Note April’s formation of the Advertiser Protection Bureau (APB), which includes representation from agencies including Dentsu Aegis Network, GroupM, Havas Media, Horizon Media, IPG Mediabrands, MDC Partners, Omnicom Media Group, and Publicis Media.

Despite such initiatives, however, brand safety remains an ongoing challenge, and a highly subjective issue, since what one brand considers to a non-brand safe environment will be considered OK by another.

“There’s no one-size-fits all description of brand safety and that’s why it’s a constant challenge for the industry,” says Stuart Flint VP EMEA at Oath. “What one brand deems safe territory may be different for another. And with the battle against ad fraud, some brands’ objectives are more focused on performance versus the environment they’re engaging consumers in. Brands need to have the right partner in place who puts the needs of the consumer and the customer first. They need to be able to trust that partner to understand the nuances of their brand, create campaigns and deliver the right content to the right audiences that meet their business objectives in a safe environment.”

Transparency, like brand safety, muddies the water a little more and, some feel, is a difficult concept to pin down – how much do companies have to reveal in order to be considered transparent? It’s a question that puzzles Maor Sadra, managing director and chief revenue officer at AppLift.

“Transparency in my humble opinion is still a very vague and unclear term,” says Sadra. “If the expectation for transparency is ‘placements’, I would ask ‘why?’ – what value does anyone get from a report showing 50,000+ placements where their ads was shown? An advertiser utilsiing placement transparency to try and build a very short whitelist is an advertiser who doesn’t understand the value of digital advertising.

“If the expectation for transparency is transparency in the media and cost funnel, this I would very much say is a requirement and a necessity for any advertiser that evolves their understanding that digital advertising is a pure data game.

”Moving forward, all parties within the industry need to work together to improve both brand safety and transparency – whatever definition of the two they eventually decide to agree on. Only by doing so will confidence and trust in digital advertising in general, and programmatic in particular, be restored.

Blis’s Smith believes that where these issues are concerned, the time for passing the buck is over. “We in the tech industry have a responsibility to address negative perceptions – and quickly,” he says. “We can do this by implementing concrete measures to improve trust, tackle persistent publisher quality issues, ad fraud, measurement, and data privacy. A broad range of solutions is key to tackling the issue head on, for example, whitelisting in mobile apps, or the use of pre-bid technology to combat domain-spoofing.

“Moving forward, there will inevitably be more scandals – but this doesn’t mean it’s time to lose hope. Quite the opposite: it should spur us on to take action to protect the reputations of brands, agencies, and tech partners alike. Only this way can we make brand safety trend for the right reasons in 2018.”

Re-evaluating relationships
On a positive note, all of these scandals, around data, brand safety and transparency, are forcing the ad tech industry to take a long, hard look at itself, and to re-evaluate some of the relationships that have been in place for many years. One of these is that between media buyers and ad agencies, where the level of trust has definitely declined. Fixing this, says Paul Wright, CEO of Iotec, lies at the heart of the transparency problem.

“Trust can be restored if media buyers are willing to be transparent about how they buy media and ad agencies are able to communicate openly why they are choosing to work with certain suppliers over others,” says Wright. “If true transparency existed across the board – across price, placement, optimisation and use of data – then media platforms and vendors would be judged solely on the merit and the value they bring back to the advertiser. Which is how it should be.”

Could blockchain help the ad tech industry address its issues. Many believe the tech, created by a faceless person or group known as ‘Satoshi Nakamoto’ when Bitcoin was introduced almost 10 years ago, has the potential to transform many aspects of the world around us.

While its origins lie in cryptocurrency, it has expanded into many other areas, such as advertising, consumer payments, and digital rights management, among others.

Last November saw the launch of Truth, with the pledge that it would be the media agency in the world to use blockchain smart contract technology to provide advertisers with 100 per cent transparency. The company is owned by TMG, which at the time, said it has launched Truth in response to the erosion of trust between advertisers, media agencies and media owners, in an industry “where middlemen and the layers involved in media planning and buying can easily strip 80 per cent of the value between brands and media owners”.

Blis’s Smith believes blockchain will solve the industry’s most debilitating issue of transparency. “Put simply, it offers advertisers the possibility of knowing how their media buying is execute, without any outside interference or alterations,” he says. “Of course, there is a long way to go before blockchain becomes an industry standard. It has limitations – speed, for example – which have prevented its use in media buying. Its strengths lie in data transactions, which are much more effective than traditional methods.”

On the other hand, alongside the growth of blockchain, cryptocurrency itself has had a rather turbulent existence over the last 18 or so months with stocks soaring and tumbling frequently, while a number of companies have used initial coin offerings (ICOs) to raise money for cryptocurrency ventures.

“While the cryptocurrency hype has somewhat deflated in the last couple of months, many are clear about the value of blockchain in disrupting industries. With that said, the deflation in cryptocurrency, and specifically ICOs, has led many to be suspicious about blockchain as well, as the two terms are often spoken in the same context,” says AppLift’s Sadra.

“I now believe that for the blockchain to make its way into the ad tech/martech world, it needs to be disassociated from cryptocurrency. However, once you take away the financial interest, it becomes difficult to impossible to get anyone onboard. For blockchain to disrupt any side of our industry, it needs to solve real-life problems like attribution, fraud, validation, viewability.”

The rise of ICOs over the last few years – with around $9bn ($6.6bn) invested since the beginning of 2016 – has not been widely viewed as a positive for the industry, with people questioning the legitimacy and intentions of those taking the fundraising avenue. One such person questioning ICOs is Randy Apuzzo, founder and chief technology officer at Zesty.io, who believes ICOs are purely “a money grab”.

“The value of blockchain goes beyond digital trading and currency. When new companies attach their business applications of blockchain to a tradeable coin, it diminishes the true function of blockchain and gives blockchain technology a bad name on a global scale,” says Apuzzo. “Going forward, companies will need to leave the tradable currencies behind and use blockchain in core technology if they want the business world to take them seriously.”

In leaving the tradable currencies behind, one use of blockchain could be to offer greater security and flexibility within loyalty programs.

“Looking forward, it is likely that brands will start using blockchain technology to power loyalty programs. But for any who contemplate a universal currency, they should carefully evaluate the implications,” says Howard Schneider, VP of loyalty strategy at Kobie Marketing. “Every good program offers a compelling value proposition for the consumer, but a program that rewards customers in ways that don’t drive repeat visits is only hurting itself. At the very least brands that are contemplating universal loyalty currency should ensure exclusivity in its category or vertical – meaning customers can’t easily redeem blockchain-based points for a similar product or service.”

Artificial Intelligence
Another technological advancement that has been in the spotlight this year is Artificial Intelligence (AI) – with the light shining on everybody from Google and its voice AI booking appointments over the phone to Uber and a self-driving car death.

With the growing use of machines, fears are becoming heightened and the possible exploitation of the technology becomes more of a factor. Starting at the back end of last year, people with apparently little productive to do with their lives have been using AI to map the features of celebrities on to pornographic videos. These ‘videos’ are known as ‘deepfakes’.

Deepfakes are just one example of AI technology being used for mal intent, and reports have warned about the danger of criminals, terrorists, and rogue states taking advantage of the tech to cause harm through automated hacking; the conversion of drones into missiles; and the use of fake videos to manipulate people through propaganda – a more widely problematic use of deepfakery.

The potential negative uses of AI technology even prompted a group of UK lawmakers within the House of Lords to lay out recommendations for the ethical development of AI to ensure the correct use of machines.

Of course, despite all of the negativity surrounding AI, there are also some positives and it is certainly here to stay.

“Over the last twelve months, the AI sector has boomed. Businesses across the spectrum have been racing to adopt a technology which promises to transform not only our industry, but every aspect of our lives,” says Stephen Upstone, founder and CEO at LoopMe.

“The promise of AI is that through the power of data and algorithms, we can improve the human experience. But following the Facebook and Cambridge Analytica scandal, trust in internet companies and data-driven technologies has fallen. We expect the tech industry’s innovators as a whole to push back, placing a stronger emphasis on how data can empower consumers and provide better experiences. Personalisation remains a hot topic, and increased adoption of AI technologies will be the principal driver of improved advertising experiences.”

Upstone makes a valid point. If machine learning can be deployed to crunch data in volumes humans can only dream of, it can help brands deliver more relevant advertising, and also help the likes of Facebook and Google to monitor and vet the gargantuan amounts of content being uploaded to their servers every minute of every day.

At this point in time, however, the jury is very much out on whether the ad tech industry has the collective will to solve the key problems threatening its future prosperity and even survival. And politicians are becoming impatient. The ad tech industry faces a stark choice: get your act together under your own steam, or leave it to the regulators and risk working to rules that are likely to be far more draconian and stricter than anything the industry itself would impose. The clock is ticking.