People will always pay more when being led by the heart and not the head.
By MediaStreet Staff Writers
Brides and the bereaved beware: You, like many shoppers, may have a tendency to reject thriftiness when your purchase is a matter of the heart, according to a new study led by the University of Colorado Boulder.
People are reluctant to seek cost-saving options when buying what they consider sacred – such as engagement rings, cremation urns, or even desserts for a birthday party – for or to commemorate loved ones. The paper, published in Judgment and Decision Making, is the first to examine the implications of this phenomenon.
Even when they identify a less expensive alternative to be equally desirable, people choose the more expensive of two items. They also avoid searching for lower prices and negotiating better prices when the goods they’re buying are symbolic of love.
“People’s buying behaviour changes when they’re making purchases out of love because it feels wrong to engage in cost-saving measures,” said Peter McGraw, associate professor of marketing and psychology at CU. “People abandon cost-saving measures when it comes to sentimental buys because they want to avoid having to decide what is the right amount of money to spend on a loving relationship.”
The findings highlight how wedding, funeral and other industries can exploit consumers, said McGraw.
In one part of the study, which involved nearly 245 participants, the researchers asked attendees at a Boulder wedding show about their preference between two engagement rings. The attendees nearly always chose the more expensive ring when deciding between a more expensive ring with a bigger carat and a less expensive ring with a smaller carat.
“It’s important to be aware of this tendency not to seek cost savings because, over a lifetime, consumers make many purchases that are symbolic of love — whether for weddings, funerals, birthdays, and anniversaries,” said McGraw. “The loss of savings can really add up and put people in compromising financial situations.”
So how can we apply this to a marketing situation? If you are selling goods or services for sentimental events, play up the quality, not the price.
So, which citizens trust their media the most? And the least?
By MediaStreet Staff Writers
Let’s start with the USA. The 2018 Edelman Trust Barometer reveals that trust in the U.S. has suffered the largest-ever-recorded drop in the survey’s history among the general population. Trust among the general population fell nine points to 43, placing it in the lower quarter of the 28-country Trust Index. It is now the lowest of the 28 countries surveyed, below Russia and South Africa.
The collapse of trust in the U.S. is driven by a staggering lack of faith in government, which fell 14 points to 33 percent among the general population, and 30 points to 33 percent among the informed public. The remaining institutions of business, media and NGOs also experienced declines of 10 to 20 points. These decreases have all but eliminated last year’s 21-point trust gap between the general population and informed public in the U.S.
“The United States is enduring an unprecedented crisis of trust,” said Richard Edelman, president and CEO of Edelman. “This is the first time that a massive drop in trust has not been linked to a pressing economic issue or catastrophe like the Fukushima nuclear disaster. In fact, it’s the ultimate irony that it’s happening at a time of prosperity, with the stock market and employment rates in the U.S. at record highs. The root cause of this fall is the lack of objective facts and rational discourse.”
Conversely, China finds itself atop the Trust Index for both the general population (74) and the informed public (83). Institutions within China saw significant increases in trust led by government, which jumped eight points to 84 percent among the general population, and three points to 89 percent within the informed public. Joining China at the top of the Trust Index are India, Indonesia, UAE and Singapore.
For the first time media is the least trusted institution globally. In 22 of the 28 countries surveyed it is now distrusted. The demise of confidence in the Fourth Estate is driven primarily by a significant drop in trust in platforms, notably search engines and social media. Sixty-three percent of respondents say they do not know how to tell good journalism from rumour or falsehoods or if a piece of news was produced by a respected media organisation. The lack of faith in media has also led to an inability to identify the truth (59 percent), trust government leaders (56 percent) and trust business (42 percent).
This year saw a revival of faith in experts and decline in peers. Technical (63 percent) and academic (61 percent) experts distanced themselves as the most credible spokesperson from “a person like yourself,” which dropped six points to an all-time low of 54 percent.
“In a world where facts are under siege, credentialed sources are proving more important than ever,” said Stephen Kehoe, Global chair, Reputation. “There are credibility problems for both platforms and sources. People’s trust in them is collapsing, leaving a vacuum and an opportunity for bona fide experts to fill.”
Business is now expected to be an agent of change. The employer is the new safe house in global governance, with 72 percent of respondents saying that they trust their own company. And 64 percent believe a company can take actions that both increase profits and improve economic and social conditions in the community where it operates.
This past year saw CEO credibility rise sharply by seven points to 44 percent after a number of high-profile business leaders voiced their positions on the issues of the day. Nearly two-thirds of respondents say they want CEOs to take the lead on policy change instead of waiting for government, which now ranks significantly below business in trust in 20 markets. This show of faith comes with new expectations; building trust (69 percent) is now the No. 1 job for CEOs, surpassing producing high-quality products and services (68 percent).
“Silence is a tax on the truth,” said Edelman. “Trust is only going to be regained when the truth moves back to centre stage. Institutions must answer the public’s call for providing factually accurate, timely information and joining the public debate. Media cannot do it alone because of political and financial constraints. Every institution must contribute to the education of the populace.”
Other key findings from the 2018 Edelman Trust Barometer include:
Technology (75 percent) remains the most trusted industry sector followed by Education (70 percent), professional services (68 percent) and transportation (67 percent). Financial services (54 percent) was once again the least trusted sector along with consumer packaged goods (60 percent) and automotive (62 percent).
Companies headquartered in Canada (68 percent), Switzerland (66 percent), Sweden (65 percent) and Australia (63 percent) are most trusted. The least trusted country brands are Mexico (32 percent), India (32 percent), Brazil (34 percent) and China (36 percent). Trust in brand U.S. (50 percent) dropped five points, the biggest decline of the countries surveyed.
Nearly seven in 10 respondents worry about fake news and false information being used as a weapon.
Exactly half of those surveyed indicate that they interact with mainstream media less than once a week, while 25 percent said they read no media at all because it is too upsetting. And the majority of respondents believe that news organizations are overly focused on attracting large audiences (66 percent), breaking news (65 percent) and politics (59 percent).
It’s a brave new world, and we as marketers must realise that placing any marketing cash with distrusted media outlets could mean a very big waste of our advertising spending power.
Amazon Alexa and Google Assistant are battling for supremacy in voice search.
At the CES trade show, which begins in Las Vegas this week, gadget manufacturers will show off their latest products using Alexa and Assistant.
Amazon has aggressively pushed Alexa everywhere, gaining dominance. Now, it’s slowly but slyly turning Alexa into a big driver towards its core retail business.
Google has aggressively chased after Amazon, pushing the Google Assistant into new places. But it’s less clear how Assistant will help Google’s core search advertising business.
At next week’s Consumer Electronics Show, we’re going to see the battle between Amazon Alexa and Google Assistant kick in to high gear.
Last year, Alexa was the clear winner of CES, with companies like Ford, Huawei, and LG agreeing to integrate their products with Amazon’s virtual assistant. Since then, Alexa has only gotten bigger — Amazon says that it sold “tens of millions” of Alexa-enabled products, led by its own Amazon Echo Dot, over the holiday season.
This year, Google is striking back. While the search giant’s Google Home speakers still lag the Amazon Echo in terms of market share, it’s picking up momentum: Google claims that it sold over 6.7 million Home and Home Mini speakers over the holiday shopping season.
Make no mistake, though. All of this, and all of these announcements, are a proxy war between Amazon and Google. The battleground, this time, is the growing market for smart speakers. But what’s at stake is each of these tech titans’ relative positions as we enter a new wave of computing.
Here’s the current scorecard between Amazon and Google — and what to watch for this week as each company makes its moves and counter-moves.
The company has built on the lead with an avalanche of new hardware released in the last year: The tablet-like Echo Show, which has a screen; the Echo Look fashion camera; the Echo Plus home hub; the Echo Spot alarm clock; the redesigned Echo.
Plus, partners like Sonos and Ecobee have released their own products with Alexa built in, so you can talk to (and shop from) Amazon from an ever-increasing number of places. And with 30,000 skills, or apps, now available for Alexa, customers can do a lot more with those devices — giving them fewer reasons to switch.
This is all a part of Amazon’s ongoing playbook to get Alexa everywhere. Now, with its market share established and its position looking to be firmly entrenched, Amazon is entering a new phase in its master plan.
The complete lineup of Amazon Echo gadgetry.Matt Weinberger/Business Insider
Amazon has begun experimenting with ads in Alexa, CNBC recently reported, bolstering its fast-growing online advertising business. As a nice bonus, these ads would use a shopper’s data to suggest products, which could help turn Echo users into Amazon shoppers, too.
Beyond just that, Amazon has started to play around with premium skills. With Alexa games like “Jeopardy,” you can pay $1.99 a month for extra questions, or else get them for free if you’re an Amazon Prime subscriber. If you pay up, Amazon takes a cut, or else it’s just another reason to subscribe to Amazon Prime. Either way, Amazon wins.
So keep an eye out for two things from Amazon: New ways to get you using Alexa, but also new ways for Amazon to slowly but surely turn Alexa into something that makes a material impact on the company’s bottom line.
Google is gaining ground fast, but there’s a problem
Google was relatively late to the smart speaker game, but it’s gaining ground quickly.
The Google Home speaker has been available since 2016. But in the last few months of 2017, Google launched the smaller $49 Google Home Mini and the $399 super-premium Google Home Max. And, like Amazon, Google has been signing deals with vendors like Sonos to get Assistant into their devices.
It’s especially worth noting how aggressive Google has gotten about extending its market share. Over the holiday shopping season, Google lowered the price of the Home Mini speaker to $29. Better yet, if you bought it at Walmart, it came with a $25 credit towards Walmart orders on the Google Shopping Express service.
Otherwise, Google’s playbook looks a lot like Amazon’s. The imperative is for Google to get Assistant on more devices. Google does have one edge, too, in the form of Android, which makes Google Assistant the default voice agent in the most recent version of the OS.
The Google Home Mini is a palm-sized voice computer.Matt Weinberger/Business Insider
The problem for Google is that it still doesn’t have a great answer for how Assistant will play into its core search business.
Google has signed deals with vendors like Walmart and Target to bolster its Shopping Express service, which lets you shop with your voice. Unlike Amazon, though, Google isn’t a shopping company at heart. And a partnership with Disney to promote “Beauty and the Beast” with sponsored content for Google Home ended in a user backlash.
There have been more successful forays into sponsored content on Google Home since, notably interactive Mickey Mouse and “Star Wars” games that you can play with your voice. That answers at least some of the questions around how Google will monetize the Home speaker and the Assistant.
Still, the challenge remains for how Google Home really figures into the search advertising business that’s propelled Google to its current heights. And as Alexa continues its aggressive growth, and a rising threat from Apple and its HomePod on the horizon, this war is all but won.
Imagine how much revenue ad networks, publishers, retailers and search engines would have lost if Google released the information about the chip flaw prior to the 2017 holidays. This week Intel, Google, Microsoft, Apple and others revealed that potentially every type of device with a central processing unit (CPU) — which means personal computers, Macs, laptops, smartphones, tablets and cloud servers — is impacted.
In June 2017, Google Project Zero researcher Jann Horn led the discovery of a serious security flaw in CPUs that would enable malicious users to read a system’s memory that is supposed to be inaccessible. For example, an unauthorized person may read passwords, encryption keys, or sensitive information that is open in applications.
In January 2018 we learned about the flaw and tests that also proved an attack running on one virtual machine was able to access the physical memory of the host machine. These vulnerabilities affect CPUs from AMD, ARM, and Intel, as well as the devices and operating systems running on them.
Is the idea to fix the flaw and then disclose it to the public?
The security issues are known by two names: Meltdown and Spectre. Microsoft, Apple and others have already developed and begun to push out patches to affected systems and software.
It almost seems like another day, another security flaw or hack. That’s until I realized that Google researchers discovered the flaw in June 2017. And then I began to think about the forfeited revenue that would have resulted if Google had revealed the problem prior to the holidays. How many people would have refrained from buying products online?
Research published late Thursday by RBC Capital Markets notes that comScore estimates total U.S. online retail grew 18% to 20% year-on-year (YoY) over the 2017 Holiday Season, compared with more than 17% in 2016 and 13% in 2015. Sales reached between $95 billion and $96 billion, consistent with comScore’s earlier forecast.
Several factors drove the YoY acceleration, such as one extra shopping day vs. 2016; positive macro trends such as low unemployment and the highest consumer sentiment in years; a strong selection of hot products, such as smartphones, smart speakers, IoT devices, and gaming systems; and the ongoing ease of online shopping and fulfillment.
“We’re struck by the fact that U.S. Online Retail Holiday Spend will have now accelerated for the third or fourth year in a row,” according to the RBC report. “We believe rising smartphone adoption has been a key factor here, but so has the real break-through into the mainstream of online retail shopping, with rising brand awareness, rising online shopping confidence, and speedier delivery times all being key factors.”
Facebook and Google are dominating mobile advertising, so what are marketers to do? Columnist Brian Handly discusses the solution to competing with the internet behemoths.
Early this year, I was invited to attend a meeting with a digital sales team for a well-known media company and an agency with which they’ve been doing business for years. Our supporting role was to provide answers to anything related to location-based advertising.
As the conversation progressed, the truth came out. The agency principal looks at the sales team, shrugs and says, “I love working with you, but my clients are pushing me to advertise on Facebook. They’ve got great targeting, and everybody uses it. I’m struggling to send business your way.”
We immediately witnessed the blood draining from the faces of the sales reps, and the look of dejection that overcame them before they quickly rebounded in the positive fashion that salespeople often do.
This conversation happens hundreds, if not thousands, of times each day across the US. Any sales team that competes for ad dollars from local, regional or national advertisers is hitting a brick wall.
While Google has been a dominant force in digital ad spend for decades, Facebook has risen to become an advertising juggernaut. The problem is that the “duopoly” of Google and Facebook significantly impedes the ability for any other publisher to gain a foothold or even a tiny slice of the mobile advertising pie.
The stats that show Google and Facebook now command 99 percent of the growth opportunity in digital ad spend are both astounding and terrifying. They’re beating everyone else because they’ve built powerful targeting capabilities on top of troves of behavioral and demographic data. They make the tools simple enough to operate so that everyone from national brands to the local florist can build a campaign in 30 minutes.
For the publishers and marketers that wish to compete with these internet giants, the solution lies in making use of their own data or alternative data sources.
Facebook’s ability to create custom audiences based on other data sources is a powerful tool that few marketers take advantage of today. The mechanics are simple: Upload a CSV file of your own data, which Facebook then matches to their own users. The end result is a targeted audience of Facebook users who are matched to your own data sets.
The data sources a marketer can use when creating a custom audience include email, phone number, mobile advertiser ID, website traffic, app activity and location-based audiences, plus at least a dozen other criteria. Instagram, Twitter and Snapchat all provide similar functionality.
The benefits of making use of your own unique data sets
There are at least three benefits of using different data sources to build target audiences on social media. First, there is a cost savings. When a marketer brings their own data to a platform instead of using the built-in targeting tools, the cost-per-click fees can be significantly less.
Second, the ads can perform better. Increasing the relevancy of an audience that a campaign reaches increases engagement and performance.
Third, it provides marketers the targeting capabilities that the social media platforms can’t, or won’t, offer themselves. In the case of location-based audiences, the platforms enable real-time targeting of location and have begun testing the ability to target visitors to one’s own locations. They do not offer any competitive location targeting or the ability for a consumer packaged goods company to reach shoppers who visit stores that stock their products.
For the marketers and agencies that can source this data, they now have a significant competitive advantage and a valid reason to earn that ad spend, as opposed to having it be consumed by Facebook directly.
This last point will become even more salient in 2018. A recent article shared results from over 60 agencies which show that working with Facebook is a big challenge. The social media giant frequently attempts to circumvent agency-brand relationships by approaching the brand directly, citing its ability to provide more and better data than the agency can provide.
Ultimately, the smart marketers that wish to compete should begin taking advantage of their own unique data sets and finding new ones to remain competitive. They will not only be more innovative, but they’ll provide better, more efficient and effective ad campaigns for themselves and their clients.
Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.
Brian Handly, CEO of Reveal Mobile, possesses more than 20 years of technical, operational and executive management experience, with 18 years of that in advertising technology. Brian was co-founder and CEO of Accipiter, which was acquired by Atlas in December of 2006 followed by the $6.1 billion acquisition of Atlas by Microsoft in 2007. Before their recent acquisition, Handly served on the Board of Directors for WebAssign, and currently serves as an Operating Partner for Frontier Capital. Brian also has extensive experience as an angel investor and is an active advisor for several North Carolina technology companies.
The number of websites and devices defaulting to HTTPS is climbing.
For several years now, Google has been exerting pressure to increase the usage of HTTPS across the internet. By defaulting to secure connections on both ends, users can be protected from anyone who may intercept or even manipulate data as it flows back and forth — quite useful in a world where you can’t even trust WiFi. For its own products, Google says HTTPS use is up to 89 percent overall, up from just 50 percent at the beginning of 2014. The number of top 100 websites defaulting to HTTPS has nearly doubled since last year (way to catch up), growing from 37 to 71.
Now that Google is flagging websites that request data without securing the connection first, developers have even more reason to make the switch. In its Chrome browser, Google says 73 percent of pages in the US are now delivered with encryption. One thing holding back the numbers are older mobile devices that don’t support encryption due to their hardware, but you can get the full interactive chart breakdowns on Google’s report website.
Many people realize that smartphones track their locations. But what if you actively turn off location services, haven’t used any apps, and haven’t even inserted a carrier SIM card?
Even if you take all of those precautions, phones running Android software gather data about your location and send it back to Google when they’re connected to the internet, a Quartz investigation has revealed.
Since the beginning of 2017, Android phones have been collecting the addresses of nearby cellular towers—even when location services are disabled—and sending that data back to Google. The result is that Google, the unit of Alphabet behind Android, has access to data about individuals’ locations and their movements that go far beyond a reasonable consumer expectation of privacy.
Quartz observed the data collection occur and contacted Google, which confirmed the practice.
The cell tower addresses have been included in information sent to the system Google uses to manage push notifications and messages on Android phones for the past 11 months, according to a Google spokesperson. They were never used or stored, the spokesperson said, and the company is now taking steps to end the practice after being contacted by Quartz. By the end of November, the company said, Android phones will no longer send cell-tower location data to Google, at least as part of this particular service, which consumers cannot disable.
“In January of this year, we began looking into using Cell ID codes as an additional signal to further improve the speed and performance of message delivery,” the Google spokesperson said in an email. “However, we never incorporated Cell ID into our network sync system, so that data was immediately discarded, and we updated it to no longer request Cell ID.”
A cell-tower location sent to Google from an Android device. (Obtained by Quartz)
It is not clear how cell-tower addresses, transmitted as a data string that identifies a specific cell tower, could have been used to improve message delivery. But the privacy implications of the covert location-sharing practice are plain. While information about a single cell tower can only offer an approximation of where a mobile device actually is, multiple towers can be used to triangulate its location to within about a quarter-mile radius, or to a more exact pinpoint in urban areas, where cell towers are closer together.
The practice is troubling for people who’d prefer they weren’t tracked, especially for those such as law-enforcement officials or victims of domestic abuse who turn off location services thinking they’re fully concealing their whereabouts. Although the data sent to Google is encrypted, it could potentially be sent to a third party if the phone had been compromised with spyware or other methods of hacking. Each phone has a unique ID number, with which the location data can be associated.
The revelation comes as Google and other internet companies are under fire from lawmakers and regulators, including for the extent to which they vacuum up data about users. Such personal data, ranging from users’ political views to their purchase histories to their locations, are foundational to the business successes of companies like Facebook and Alphabet, built on targeted advertising and personalization and together valued at over $1.2 trillion by investors.
Cell-tower locations collected and sent to Google from an Android phone with location services turned off and carried in Washington, DC. (Obtained by Quartz)
The location-sharing practice does not appear to be limited to any particular type of Android phone or tablet; Google was apparently collecting cell tower data from all modern Android devices before being contacted by Quartz. A source familiar with the matter said the cell tower addresses were being sent to Google after a change in early 2017 to the Firebase Cloud Messaging service, which is owned by Google and runs on Android phones by default.
Even devices that had been reset to factory default settings and apps, with location services disabled, were observed by Quartz sending nearby cell-tower addresses to Google. Devices with a cellular data or WiFi connection appear to send the data to Google each time they come within range of a new cell tower. When Android devices are connected to a WiFi network, they will send the tower addresses to Google even if they don’t have SIM cards installed.
“It has pretty concerning implications,” said Bill Budington, a software engineer who works for the Electronic Frontier Foundation, a nonprofit organization that advocates for digital privacy. “You can kind of envision any number of circumstances where that could be extremely sensitive information that puts a person at risk.”
The section of Google’s privacy policy that covers location sharing says the company will collect location information from devices that use its services, but does not indicate whether it will collect data from Android devices when location services are disabled:
When you use Google services, we may collect and process information about your actual location. We use various technologies to determine location, including IP address, GPS, and other sensors that may, for example, provide Google with information on nearby devices, Wi-Fi access points and cell towers.
According to the Google spokesperson, the company’s system that controls its push notifications and messages is “distinctly separate from Location Services, which provide a device’s location to apps.” Android devices never offered consumers a way to opt out of the collection of cell tower data.
“It is really a mystery as to why this is not optional,” said Matthew Hickey, a security expert and researcher at Hacker House, a security firm based in London. “It seems quite intrusive for Google to be collecting such information that is only relevant to carrier networks when there are no SIM card or enabled services.”
While Google says it doesn’t use the location data it collects using this service, its does allow advertisers to target consumers using location data, an approach that has obvious commercial value. The company can tell using precise location tracking, for example, whether an individual with an Android phone or running Google apps has set foot in a specific store, and use that to target the advertising a user subsequently sees.
After a slow start out of the gate, adoption of ads.txt is taking off with some help from Google.
Only 13 percent of the 10,000 most popular domains that sell digital ads adopted ads.txt in the 100 days following its release by the Interactive Advertising Bureau Tech Lab in May. But between mid-September and the end of October, that number jumped to 44 percent, according to data from Ad Ops Insider publisher Ben Kneen. The time frame of the uptick in adoption overlaps with Google’s recent announcements that several of its most popular ad products will begin filtering for ads.txt. It also underscores just how much sway Google holds over publishers.
The IAB Tech Lab launched ads.txt as a tool to help ad buyers avoid illegitimate sellers that arbitrage inventory and spoof domains. The way that ads.txt works is that publishers drop a text file on their web servers that lists all the companies authorized to sell their inventory, which allows buyers to check the validity of the inventory they purchase. If a publisher uses ads.txt, then anyone with an internet connection can verify the publisher’s authorized sellers.
Domain spoofing remains a serious threat to the growth of programmatic advertising, so aside from shady resellers, pretty much everyone who works with automated advertising has incentive to back ads.txt. But despite the fanfare that followed ads.txt’s announcement, publishers dragged their feet in adopting ads.txt early on. The text files take just a few hours to create, according to multiple publishing sources, but publishers were slow to adopt because they had finite tech resources overcommitted to other projects, a lack of understanding about how ads.txt could benefit them and a lack of clarity about the impact. (Some publishers also weren’t crazy about exposing all the ways buyers could get onto their site outside of direct sales.)
“Even one or two months ago, it was slow going,” said Dennis Buchheim, svp and gm of the IAB Tech Lab, noting that ads.txt has since become one of the Tech Lab’s fastest-growing initiatives. “People were saying good things, but not necessarily acting on it.”
Google isn’t alone in pushing for ads.txt, so it can be difficult to separate correlation from causation when trying to determine what prompted so many publishers to create ads.txt files recently. Some ad buyers have said they won’t buy from publishers without ads.txt by the end of year, ad industry lobbyists support ads.txt and ad tech firms like AppNexus and MediaMath have created tools around the initiative. A few publisher execs have also clamored for more adoption of ads.txt to protect media brands from fraudsters, and ads.txt has become a buzzword at industry events.
All of these factors likely helped goose adoption rates, but none of these other organizations have Google’s power. Before Google announced it would use ads.txt files to filter unauthorized inventory, just 20 percent of the publishers that work with ad tech firm Advelvet had ads.txt files, said Murat Deligoz, CEO of Advelvet, which helps publishers set price floors in Google’s ad exchange. Now, all the publishers that work directly with Deligoz’s company have ads.txt files.
“Google is definitely the force to get ads.txt up and running,” he said.
In the past six weeks, Google announced that its DoubleClick Ad Exchange, AdSense network and demand-side platform DoubleClick Bid Manager will begin using ads.txt filesto filter unauthorized inventory. For now, publishers without an ads.txt file can still sell their inventory through these channels. But if a publisher does have an ads.txt file, Google will block unauthorized vendors not listed in the file from selling the publisher’s inventory, said Pooja Kapoor, Google’s head of programmatic global strategy.
“I believe that Google should get most of the credit [for the increase in ads.txt adoption] because until the DoubleClick Bid Manager mandate went out a few weeks ago, many publishers, though not all, were just playing a waiting game,” said Michael Stoeckel, vp of global tech strategy at Prohaska Consulting.
Aside from the public announcements, Google has worked in the background to push ads.txt. In mid-October, Google sent emails to publishers using its DoubleClick exchange that said publishers should update their ads.txt files “in order to prevent impact to your earnings.” In the past month, Google’s ad server added an ads.txt management tab to its dashboard that shows publishers which sellers are listing their domains without authorization, according to a publishing source requesting anonymity.
Screenshot of the ads.txt tab in Google’s ad server
Last week, Google launched a tool that scans publishers’ ad calls and spits out ads.txt files for them based on who it thinks is authorized to sell their inventory, Kapoor said. Publishers are encouraged to fact-check and tweak these files. The idea isn’t to set a publisher’s ads.txt file in stone but instead to remove friction to help it start one.
Google’s recent moves regarding ads.txt can be seen as the first steps that ultimately culminate with Google requiring ads.txt files from publishers before they can sell inventory through Google platforms. Google has discussed requiring ads.txt files from publishers, but no timeline exists for making such a move since ad buyers and sellers are just beginning to account for ads.txt in their transactions, Kapoor said.
“There’s no reason why we as an industry should monetize counterfeit inventory,” Kapoor said.
Since Google owns the most popular ad exchange, DSP and ad server in the ad industry, it wants to prevent further erosion in the trust in programmatic. Google’s ad exchange is listed on nearly 14,000 ads.txt files, which is 50 percent more files than the second-most popular exchange AppNexus has, according to ad measurement company Pixalate. Propping up trust through initiatives like ads.txt is one way for the search giant to encourage ad buyers to keep sending dollars through programmatic platforms, which is an area Google dominates.
Although publishers and advertisers alike have wearied of the power that platforms like Google and Facebook possess, the industry is welcoming Google’s push for ads.txt adoption. Liane Nadeau, director of programmatic at ad agency DigitasLBi, called Google’s backing of ads.txt “a great step.”
Slate adopted ads.txt in September a few weeks before Google announced its DSP would start using ads.txt files to filter unauthorized sellers, said Dan Check, vice chairman of The Slate Group. While Google wasn’t the main catalyst to nudge Slate to use ads.txt, Check recognized and supported Google’s use of its influence to push for industrywide ads.txt adoption.
“It can be good to have a stick, waved judiciously, in cases like this,” he said.
Silicon Valley’s online tech giants are under pressure, and not just from Russia investigators. This time it is the people who pay the bills: the advertisers who are asking serious questions about whether their products were sold alongside covert Russian propaganda.
Just as airlines pull their ads during coverage of air crashes, advertisers have long had strict rules about the placement of their brands. But the evolution of the automated digital ad business, including that of Facebook, Twitter and Google, has led to some distasteful situations for advertisers, including the placement of hundreds of their banner ads — including those for politicians — atop jihadi videos on YouTube.
That debacle has led advertisers to be especially sensitive to what they call the issue of “brand safety,” the effort to make sure their commercials appear next to quality content.
The sun rises behind the sign at the entrance to Facebook headquarters in Menlo Park before the company’s IPO launch in 2012. Beck Diefenbach / Reuters file
“The controls are not as strong as one would like,” said Bill Koenigsberg, chief executive of Horizon Media, an ad agency that spends around $8 billion a year for clients from Geico to Burger King. “Facebook and Google have hired people to be brand-safety watchdogs. Marketers are asking a lot more questions, the agencies that represent them are trying to hold Facebook and Google a lot more accountable, and if they don’t clean up the garden you will start to see it affect their pocketbooks.”
He said it isn’t just the Russia investigations that are causing concern but the parade of bad news surrounding the online advertising business. “Every day there is another snippet that comes out, and you piece them together and you’re starting to draw conclusions that the water isn’t as clear as we’d hoped.”
Facebook said it will place 1,000 staff members on a team to review ads and soup up its machine-learning abilities to address the problem. But the revelations are dragging the company and other online firms into a huge and potentially costly embarrassment.
No companies have pulled their ads from Facebook yet, at least not publicly, but executives say the sentiment is turning negative. That could have substantial implications for the company’s bottom line, which is almost entirely dependent on ad revenue.
One high-level business strategist, Michael Kassan, chief executive of Medialink, which advises tech companies and large media conglomerates, said that chief marketing officers at big companies fear that their bosses will ask them what is adjacent to their ads.
“People are on much higher alert,” Kassan said. “I have never seen it so pronounced. It’s every one of them.”
Kassan thinks the Russia investigation is still too new for marketers to figure out how it affects them.
“But you can’t argue they’re not involved,” he said. “If your brand is supporting the inclusion of stuff you don’t think is appropriate and you have proximity to it? One is known by the company one keeps.”
Nonetheless, there is still a clear reluctance in the advertising world to publicly criticize Facebook and Google.
“The entire advertising world is very anxious,” said Mike Paul, an independent expert in crisis public relations, who has worked at big ad agencies, “but few will admit publicly that the negative news is affecting Facebook because it is the 800-pound gorilla globally for ad and media buyers.”
Facebook’s Credibility Problem
The nervousness is not just because of the Russia inquiry. Brian Wieser, an analyst with Pivotal Research, recently found that the company claimed to reach an audience of 41 million people in the U.S. ages 18 to 24, though only 31 million of them exist, according to the Census Bureau.
The Video Advertising Bureau, an organization of broadcasters and cable companies, issued a study on Oct. 2, asserting that there are fewer people ages 18-34 living in every state than the number of people in that age range that Facebook claims it can reach in those states. (NBCUniversal, the parent company of NBC News, is a member of the bureau, as are the other major networks.)
Facebook said the problem may have been caused by kids pretending to be older, and said it does not bill advertisers on the basis of those estimates.
Facebook bought a series of newspaper ads, which ran on Wednesday, to explain its commitment to transparency. “We take the trust of the Facebook community seriously,” the ads said. “We will fight any attempt to interfere with elections or civic engagement on Facebook.”
Last month, ProPublica, the investigative news site, revealed that Facebook advertisers were able to use self-serve tools to target “Jew haters.” The company’s chief operating officer, Sheryl Sandberg, acknowledged the failure.
“We never intended or anticipated this functionality being used this way – and that is on us,” she said in a company statement.
A few days later, Mark Zuckerberg, Facebook’s chief executive, admitted that he was wrong to dismiss fake news on the social network as having had any influence on the election. “Calling that crazy was dismissive and I regret it,” he said in a statement.
Facebook and Google: The “Digital Duopoly”
Facebook is the second-biggest player in the digital ad market after Google. Both companies are set to grow their share of the ad pie. Together they are often known as the “digital duopoly,” with the kind of global scale other media companies can only dream of. Facebook has 2 billion monthly users. YouTube, owned by Google, has 1.5 billion.
And the financials are staggering by any measure.
This year, Google (including YouTube) will garner $35 billion in total digital ad dollars in the U.S., up 18.9 percent from last year, according to eMarketer, a measurement firm. That expansion will push Google’s share of the U.S. digital ad market to 42.2 percent.
The firm forecasts Facebook’s total digital revenues in the U.S. will grow 40.4 percent to $17.37 billion, pushing its share of all U.S. digital ad business to 20.9 percent.
Mark Zuckerberg did a Facebook live to discuss Russian election interference and next steps to protect the integrity of the democratic process. Facebook
Advertisers have to take Facebook and Google’s word that they get what they pay for. “We do not have visibility into whether we got what we bought,” said a senior marketing executive with a Fortune 500 company, who added: “I’m really nervous. We’re in business with Facebook and Google, they are the gateway to the audience, but the relationships are strained.”
Meanwhile, Facebook is on track to have yet another killer quarter. Last week a Deutsche Bank analyst, Lloyd Walmsley, told investors: “Facebook is the new IBM (in a good way). …We think Facebook is growing into a similar position in advertising, with best-in-class ad systems, a large growing audience across numerous products and a well-oiled sale machine.”
YouTube’s Credibility Problem
Still, Alphabet’s Google — is facing its own YouTube drama with advertisers around the globe.
One ad executive, who did not want to be identified because of business relationships with the online companies, said that a recent test run of ads on YouTube found they were placed adjacent to content that didn’t meet the firm’s requirements 30 percent of the time. After the Las Vegas shooting last week, for example, false conspiracy theories wound up high on YouTube’s search results, as reported in the Wall Street Journal. YouTube said it would tweak its search results to show more reliable sources of news.
Some of YouTube’s largest advertisers in 2016 dropped their spending by 95 percent or more, according to Pathmatics, a company that tracks online advertising, and measured desktop ad spending.
The company says AT&T notably reduced spending on YouTube by 76 percent over the year before (January through August). Disney spent less than $200,000 from April to August after spending more than $1 million in January, the data showed. Overall, however, Pathmatics said that spending on desktop YouTube was up 31 percent for the period January through August versus the same period last year.
In August, Google said it would refund advertisers for ads placed on dodgy websites with fraudulent traffic counts, according to a Wall Street Journal report.
Proctor & Gamble, the packaged-goods giant, cut more than $100 million in digital spending beginning in March, the company’s chief brand officer, Marc Pritchard, said in a speech in Orlando, Florida, on Thursday.
“There is no question ads should ever be on an ISIS video,” Pritchard said.
A Wake-Up Call For the Industry
Martin Sorrell, chief executive of the WPP Group, an advertising holding company whose agencies spend billions of ad dollars around the globe, said the pressure on Facebook is going to intensify. He said he has urged Facebook for some time to acknowledge that it is not just a platform.
“They are a media company,” he said. “They seem to have acknowledged the need for human review and that you can’t just rule by algorithm alone.”
Randall Rothenberg, president and chief executive of the Interactive Advertising Bureau, which represents Google, Facebook and other big content companies and advertising firms, said there’s an industry-wide effort to fix a host of issues, from fraud to cybersecurity to fake news.
“What has changed over the past three to four months, thanks in no small part to the Mueller investigation and the dribbling of information from various parties, is a broader understanding from multiple constituents that these things are all connected,” he said, referring to Robert Mueller, the special counsel investigating Russian meddling in last year’s election.
“The common understanding is out there,” Rothenberg added, “and now there is a greater will among more parties to come to the table to solve it.”
People are freaked out by ads that follow them around after a google of the product.
By Mediastreet Staff Writers
Personalised ads now follow us around the web, their content drawn from tracking our online activity. We in the ad industry have suggested that people are okay with it – that people see benefits roughly equal to perceived risks.
A study by University of Illinois advertising professor Chang-Dae Ham says otherwise, suggesting the ad industry may want to reconsider its approach.
“The perception of risk is much stronger than the perception of benefit,” Ham found in surveying 442 college students on how they coped with what is known as online behavioural advertising. “That drives them to perceive more privacy concern, and finally to avoid the advertising,” he said.
Previous studies have looked at various aspects of online behavioural advertising (OBA), but Ham said his is the first to investigate the interaction of various psychological factors – or mediating variables – behind how people respond to it and why they might avoid ads.
“The response to OBA is very complicated,” he said. “The ad avoidance is not explained just by one or two factors; I’m arguing here that five or six factors are influencing together.”
Ham examined not only interactions related to risk, benefit and privacy, but also self-efficacy (sense of control); reactance (reaction against perceived restrictions on freedom); and the perceived personalization of the ads.
He also looked at the effect of greater and lesser knowledge among participants about how online behavioural advertising works. Those with greater perceived knowledge were likely to see greater benefits, but also greater risk, he found. Similar to those with little perceived understanding, they tilted strongly toward privacy concerns and avoiding ads.
Ham’s study of online behavioural advertising follows from his interest in all forms of hidden persuasion, and his previous research has looked at product placement, user-generated YouTube videos and advergames. But OBA is “a very special type,” he said, in that it elicits risk perceptions and privacy concerns different from those in response to those other forms.
The study conclusions could have added significance, Ham said, because research has shown that college-age individuals, like those in his study pool, are generally less concerned about privacy than those in older age groups.
If his findings are an accurate reflection of consumer attitudes, Ham said they could represent “a really huge challenge to the advertising industry” since online behavioural advertising represents a growing segment of advertising revenue.
Ham thinks advertisers, in their own interest, may want to make the process more transparent and controllable. “They need to educate consumers, they need to clearly disclose how they track consumers’ behaviour and how they deliver more-relevant ad messages to them,” he said.
Giving consumers control is important because it might keep them open to some personalised online advertising, rather than installing tools like ad blockers, in use by almost 30 percent of online users in the U.S., he said.
With little understanding of online behavioural advertising, and no easy way to control it, “they feel a higher fear level than required, so they just block everything.”
It’s all the more important because the technology is only getting better and more accurate, Ham said. Tracking systems “can even infer where I’m supposed to visit tomorrow, where I haven’t visited yet.”
