I’ve not been posting much, November last year was the last time I got anything out, but I have been reading a lot. So I figured I’d put up a bunch of links, all of which I think are worth reading. In no particular order…..
Instead I asked myself: “what other ‘vicious circles’ in science and philosophy could one unravel using the same linear-algebra trick that CLEVER and PageRank exploit?” After all, CLEVER and PageRank were both founded on what looked like a hopelessly circular intuition: “a web page is important if other important web pages link to it.” Yet they both managed to use math to defeat the circularity.
Perhaps the most noticeable aspect of my confidence is the way I sustain eye contact. Some people have called it the “predator stare.” Sociopaths are unfazed by uninterrupted eye contact. Our failure to look away politely is also perceived as being aggressive or seductive. It can throw people off balance, but often in an exciting way that imitates the unsettling feeling of infatuation. Do you ever find yourself using charm and confidence to get people to do things for you that they otherwise wouldn’t? Some might call it manipulation, but I like to think I’m using what God gave me.
Another thing to keep an eye out for? Markings that have been blasted away. The FAA keeps strict rules about how paint or marks are removed—they’re absolutely never to be painted over, since the decay of the new mark might wear away to reveal conflicting information. Instead, airports have to sandblast or power wash the old paint away and re-do it.
And yet, the panel seemed perfectly comfortable speculating for over an hour on what features in the Apple Watch would be delivering a great user experience and how users would find the Watch valuable. This really surprised me because the panel of experts was speculating about features that are available to test run today…on Android Wear.
Silva related how the top bankers in the nation were asked to contribute money to save Lehman. He described his disappointment when Goldman executives initially balked. Silva acknowledged that it might have been a hard sell to shareholders, but added that “if Goldman had stepped up with a big number, that would have encouraged the others.”
“It was extraordinarily disappointing to me that they weren’t thinking as Americans,” Silva says in the recording. “Those two things are very powerful experiences that, I will admit, influence my thinking.”
Essentially their model — a lot of seem to be reliant on “eventually we hope AOL or Yahoo will buy us, and then it’s their problem if we don’t make any money.” So they’re doing some really good journalism, but I think there’s a problem there.
When I talk about this false precision, this great hope for reliable, precise formulas, I am reminded of Arthur Laffer, who’s in my political party, and who is one of the all-time horses’ asses when it comes to doing economics. His trouble is his craving for false precision, which is not an adult way of dealing with his subject matter.
By comparison, news-related applications do not requires a lot of phone resources. They collect XML feeds, some low resolution images and render those in pre-defined, non-dynamic templates. They use a tiny fraction of a modern smartphone’s processing power.
Yet the attack involved not merely the towers, but two other actions, in particular a successful attack on the Pentagon. Why is it that only a few people take proper notice of that? If the 9/11 operation had been a conventional military campaign, the Pentagon attack would have received most of the attention. In this attack, al‑Qaida managed to destroy part of the enemy’s central headquarters, killing and wounding senior commanders and analysts. Why is it that public memory gives far more importance to the destruction of two civilian buildings, and the killing of brokers and accountants?
What triggers a mutation? Schumpeter insists that this evolution is disciplined above all by new consumers’ needs combined with the new institutional forms that must be invented to reliably meet those needs.
Venture capitalists may remind founders not to get carried away because they may need to raise money again soon, perhaps in a less-favorable market. Fundraising at a lower valuation is known as a “down round.” It’s a major Silicon Valley no-no in terms of perception, and it can have negative effects, depending on the other stipulations of the agreement.
In Yemen you don’t really talk while eating. This makes the heavily-armed diners staring up at me from their carpets seem even more menacing. The wait staff, on the other hand (at least I assume that’s what they are) run round shouting at the top of their voices. Almost everyone has already purchased a bag of qat, which they’ll start chewing after lunch. The qat is leafy and kind of bulky, and comes in a colored plastic bag. Some men tuck it under their shirt, so it hangs over their belt like a paunch. Others carry it in their hand. The effect is to make everyone look excessively health conscious and obsessed with salad.
The fifth principle asks that managers trust developers and create a pleasant work environment that motivates good work. The eleventh principle advocates for self-organizing teams—giving developers autonomy and freedom to choose the projects and features that most interest them and avoiding a dictatorial style of management.
It can be indexed and searched efficiently, even by hand. It can be translated. It can be produced and consumed at variable speeds. It is asynchronous. It can be compared, diffed, clustered, corrected, summarized and filtered algorithmically. It permits multiparty editing. It permits branching conversations, lurking, annotation, quoting, reviewing, summarizing, structured responses, exegesis, even fan fic. The breadth, scale and depth of ways people use text is unmatched by anything.
I’m sure it happens every day – that a kid in one of these far-flung places can find a new favourite band, send that band a message, and that singer of that band will read it and personally reply to it from his cell phone half a world away. How much better is that? I’ll tell you, it’s infinitely better than having a relationship to a band limited to reading it on the back of the record jacket. If such a thing were possible when I was a teenager I’m certain I would have become a right nuisance to the Ramones.
In order to gain the position of a global financial super-hub, and potentially that of world financial capital, the City of London has been making an effort to attract Chinese and Islamic finance, both in rapid expansion.
We no longer know what neighborhood we’ve wandered into, we don’t know the shape of the building, or the condition of the room. We don’t know what other people are wearing — our first and most profound way of signaling cultural affiliation and social-economic status.
“But as time went on, every time there was a problem in the camp, he was at the centre of it,” Abu Ahmed recalled. “He wanted to be the head of the prison – and when I look back now, he was using a policy of conquer and divide to get what he wanted, which was status. And it worked.” By December 2004, Baghdadi was deemed by his jailers to pose no further risk and his release was authorised.
That’s why, internally, our top-line metric is “TTR,” which stands for total time reading. It’s an imperfect measure of time people spend on story pages. We think this is a better estimate of whether people are actually getting value out of Medium
I, personally, want to put a gold chain on my phone, pop it into a waistcoat pocket, and refer to it as my “digital fob watch” whenever I check the time on it. Just to make the point in as snotty and high-handed a way as possible: This is the decadent end of the current innovation cycle, the part where people stop having new ideas and start adding filigree and extra orifices to the stuff we’ve got and call it the future.
Quinn Norton is a name that hovered on the edge of my consciousness for a chunk of time. She dated Aaron Swartz for 3 years and in the resultant furore after his death her name was a part of that story as it became clear that prosecutors had put pressure on her to offer testimony against him, something she did not do.
At this year’s Chaos Communication Congress she spoke on the topic “No Neutral Ground in a Burning World” with Eleanor Saitta which gave an historical perspective on governmental surveillance and how technology is impacting this need for legibility.
Then finally I found this piece, “A Day of Speaking Truth to Power, Visiting the ODNI”. The ODNI is the Office of the Director of National Intelligence, spook central, a scary place for anyone let alone a journalist with a reputation for speaking ill of the intelligence community (IC). It’s a great read for so many reasons. It paints a picture of the IC that is both confirming and revelatory and it also surfaces a number of interesting ideas, that could have been brought up in a completely different context, but found their way into this conversation instead.
When I read longer form essays I often take one quote, sometimes two, and send them to my email for recycling into a post (credited of course) or to remind myself to dig deeper into a topic, or just to add a highlight to a particular piece, to make it standout against everything else I am reading.
With this essay I sent myself 9 different quotes, I’ve listed 5 of them below. Please read all of it though, it’s fascinating.
It was clear to me part of this mess we’re in arose from the IC feeling that if everyone was giving away their privacy, then what they, the Good Guys, did with it could not be that big of a deal.
I said the end of antibiotics and the rise of diseases like resistant tuberculosis would mean that tech would end at our skin, and we’d be limited in our access to public assembly. It was probably the darkest thing I said all day, and one of my table mates said (not unkindly) “I don’t like your future.”
I realized that one of the problems is that being at the top of the heap, which the security services definitely are, makes the future an abomination and terror. There is no possible great change where the top doesn’t lose, even if it’s just control, rather than position. The future can only be worse than the present, and a future without fear is a future to fear.
They were mostly pleasant and thoughtful people, and they listened as best they could. One told me I made her feel like Cheney, “And I’m not used to feeling like Cheney.”
When we learn to live online we will want to be full humans again. When, as one of the outside experts put it, the Eternal September is over, we will learn once again to mind our own fucking business, and we will expect others to, as well.
That last quote is something we are going to visit again and again over the next 20, 30 or 50 years (it will likely be a hard slog). The truth is that being online is such a young concept and we haven’t a clue yet, what it means in human terms, social terms, societal terms. In the same way that we expect privacy at a coffee table in a public coffee shop, even though it is possible for someone to listen to our conversation, we will find a social code developing that covers the digital in ways we will find reminiscent of the analogue.
This is top of the list and is subtitled too. A Chinese film, Trap Street looks at issues of governmental surveillance and the ‘smaller’ day to day things that can happen under the conditions of a modern surveillance society. Its made in and about China but presumably has resonance for us all considering the context of Snowden’s revelations. This particular clip shows how the surveillance function is pervasive and executed for all sorts of reasons, good and bad, by the government and by the population too. I love the idea of a personal map populated by the spatial and time locked events in a life, both grand and essential, even while I can be horrified at the privacy issues it raises.
I think this is more about showcasing progress in the science and art of film making and VFX but I really hope they make it into a fully realised and full length feature. Its a short trailer but full of dramatic potential.
Errol Morris, the acclaimed director of the Fog of War here turns his documentary making skills onto the controversial figure of Donald Rumsfeld. The film is made with full access to Rumsfeld himself who talks through his version of history (adviser to 4 presidents) via the exploration of memos he had written as world events played out around him.
Right kids. Me and your Mum have decided it’s time to buy a new TV. Exciting eh.
Yes, yes, it’ll be a good one, we’ve decided to get a good one. It might not be the biggest, it still has to fit in the corner, but it will be a good one, lots better than the one we’ve got now.
OK, but you know there are some decisions we have to make, right. We’re going to have to decide which channels we want.
Well, yes it would be nice if we could get them all, but different TV’s show different channels don’t they, you know that.
Why? Well that’s just the way it is.
What? Well yes we could just give them more money, you’d have thought so wouldn’t you, but actually we can’t. They don’t operate like that.
That doesn’t make sense? No, I guess it doesn’t does it.
Aren’t they trying to make money? Well yes they are. That’s why…. that’s why…
Look, you see, the TV people, they have deals with the people who make the programs, and the people who make the programs, well, they only want you to watch their programs on certain types of TV.
That doesn’t make sense either? …….No I guess it doesn’t does it.
Well yes, you would have thought that the people who make the programs want as many people as possible to watch.
Yes, if it was available on all the TV’s then more people could watch it. That’s true.
Look kids, you’re just going to have to trust me on this one. We just can’t get all the channels, it’s not possible, they won’t sell it to us like that. We’re going to have to choose which ones we want.
No, it doesn’t make sense. I agree.
Sorry, what was that, I didn’t hear you?
Please stop mumbling, say that again.
Adults are stupid. Ah…ok
CONTEXT: Please imagine this conversation happening anytime from 1980 up until 2003 (…or so). The link below describes the real situation as it occurs in today’s world (a very good read), and a Youtube clip to identify Joyce Grenfell for those who have never heard of her.
This essay is the follow up, long overdue, to this small observation, posted in February 2013.
The whole issue of disintermediation is one of the key phenomena of the internet age, yet for some reason digital advertising seems to have missed out. In fact, somewhat perversely, digital advertising has instead managed to go in entirely the other direction, filling up with a whole new class of mediators, the adtech companies.
I’m going to argue that this is a situation that cannot last long (years not months, probably at least 5). King Canute’s original command that the tide stop rising was never going to be a great business model.
Although the common telling of the Canute story has him drowning against the onslaught of the waves, there is evidence that he instead adapted to the new knowledge and changed his practices.
..he commanded that his chair should be set on the shore, when the tide began to rise. And then he spoke to the rising sea saying “You are part of my dominion, and the ground that I am seated upon is mine, nor has anyone disobeyed my orders with impunity. Therefore, I order you not to rise onto my land, nor to wet the clothes or body of your Lord”. But the sea carried on rising as usual without any reverence for his person, and soaked his feet and legs. Then he moving away said: “All the inhabitants of the world should know that the power of kings is vain and trivial, and that none is worthy the name of king but He whose command the heaven, earth and sea obey by eternal laws”. Therefore King Cnut never afterwards placed the crown on his head, but above a picture of the Lord nailed to the cross, turning it forever into a means to praise God, the great king.
I will cover the detail in a separate post, but I also believe that this could be the moment when digital advertising and digital marketing is forced to make some short term and slightly painful changes that will eventually open up a whole new vista of opportunity and the chance to truly lead the media landscape.
Before going into the depth of the essay it might be worth taking a quick 2 minute look at this link which explains the core ideas behind how the adtech model works. It’s a clever and accurate explanation and is easy to digest, an informative visualisation of a highly complex system. It will also provide clarity regarding exactly which part of the adtech universe I am talking about.
Mediators and Disintermediators
Digital advertising hasn’t been disintermediated yet because firstly it is in and of itself, a mediator (all advertising is) and like all incumbent mediators, is not keen to be disintermediated. Simply moving advertising from the offline realm to the digital is not enough. It might seem that web platforms force disintermediation all on their own, but they don’t. Other factors need to align as well.
For a start there needs to be a new model that can replace the current one, and that new model also needs to deliver enough consumer/user benefit to overcome the ever present inertias.
Amazon, for example, took the intermediation costs out of the book market but replaced the incumbent model with a different way to sell books. From the consumer perspective the loss of the mediators was painless, almost invisible, they just bought their books in a different shop that happened to be located on the internet instead of the high street, and for significant cost savings too.
That Amazon could offer digital shopping, that their technology existed and was functional, was the substantial factor that enabled the new market dynamics to take hold.
It’s not the same in advertising today.
With regard to advertising, the consumers in question are the advertisers, not the people who buy the advertised products.
Businesses buy their advertising from a large (and getting larger) ecosystem of multi-skilled providers. Very few businesses create their advertising in-house and generally do not own the resources required to do so (copywriters, art directors, studios, media planners, media buyers, systems, relationships….etc). As a result marketing services agencies and advertiser marketing teams are currently deeply co-dependent.
Disintermediation, by definition would seek to weaken that relationship and few people, on either side, can see how that could function. In short the advertisers are not using their market position to force disintermediation in the marketing services ecosystem, and hence their access to customers remains firmly managed.
Part of the reason for this co-dependency is the burgeoning complexity in the use of data.
The second and more problematic reason that we have mediation instead of disintermediation therefore, is related to what’s happening with all this data. Or rather not so much what is happening with the data, but why so much effort is being concentrated on the data. The companies that do things with data are in the marketing services sector, for the reasons stated above and whereas advertisers’ markets grow if they sell their products or services (via marketing or sales initiatives, or whatever) the marketing services sector grows when they sell more services to the advertisers.
The most important, acknowledged, growth opportunity in the marketing services industry today, is in data management and data targeting…. the enabler of such things is adtech.
This is the prime economic incentive driving growth in advertising at large and it has the simultaneous benefit of minimising macro level change too, as the focus remains on trading eyeballs even while the industry appears to be innovating.
On the surface it seems that everyone is a winner. Even the publishers.
The short answer, then, is that digital advertising is currently avoiding disintermediation due to the absence of a plausible replacement and the dynamics/politics of the growth opportunities for marketing services. The advertisers, who could credibly drive the need for such a replacement, via market forces, are currently heavily co-dependent on a vibrant marketing services world, and in thrall to its innovations in data. As a result they are not putting any pressure on their suppliers for anything except more of the same.
But the short answer is deeply unsatisfying. If adtech was the correct way to go, then the adtech market itself would be consolidating not exploding.
As it happens there really is something deeply wrong with the adtech model.
It’s all about eyeballs (and data)
The publishing industry has always been about eyeballs, because eyeballs generate their revenue. Much of the tech sector is going the same way. In the absence of subscription revenue much technology innovation is built on ad supported models.
Google is eyeballs and data. Facebook is eyeballs and data. Everything is eyeballs and data.
But the traditional home of disruptive companies, the kind that have generated the internet’s reputation for disintermediation is the technology start up sector itself isn’t it? So what’s going on?
It’s not that the startup world has incomprehensibly passed on by in the world of digital advertising, it’s that in this particular sector the short term incentives have lined up to foster a glut of mediation instead of disintermediation.
Ironic certainly, but the question that needs to be answered is, at what point does it become a problem?
I think we are already there and the reason why I say that lies in the wider mechanics of today’s digital publishing business model.
It is worth pointing out that I do not intend to set out a vision here for the whole of the publishing industry’s business future. What I want to do instead is to pull on just one loose thread, one that hopefully might reveal a feasible possible future, as the cardigan it belongs to starts to disintegrate.
The loose thread is this.
As a publishing medium the web has no inventory limit that is effectively bounded by physics, cost or performance.
- The cost of adding pages to a printed medium requires capacity at the printing press and the cost of adding relevant content that has commercial worth, to both consumers and advertisers
- The number of worthwhile sites to place outdoor posters is limited and generally fully explored
- TV is bounded by production and distribution costs and the fact that there are 24 hours in a day
- Radio has a finite audience, as does cinema, which is not growing
- Direct marketing messages are bounded by the size of target populations
The internet, on the other hand, offers trivial extension costs, a seemingly infinite audience and some unique content creation opportunities.
But what about worthwhile content, right? That surely establishes some kind of significant commercial boundary. Well, yes and no. Some parts of the publisher universe have to pay for their content, but the ability to originate all your own content is no longer an entry level requirement.
Take for example something like Buzzfeed, or the Huffington Post. Both very legitimate publications. Some of their content is provided free by the writers, some of it is given value by the quality of the data optimisation (multiple headlines, automatic analysis = loads of eyeballs, only one writer’s cheque and it’s a relatively small one, as the writer isn’t the most important part of the equation), and some of it, a small part of it, might be remunerated at traditional levels.
Some sites simply steal content, while generating ad revenues (whiffy publishers), and some sites use a variety of legitimate but infuriating tactics to up the impression count (3000 word articles split over 8 pages, for example), let alone the sites that stuff footers with 1×1 pixels.
These are all troubling practices but more worrisome is the rise of retargeting, via tracking technology and the buying of audience profiles through ad exchanges. Retargeting and profiling are more worrisome because they are totally legitimised by the industry at large, are vulnerable to significant fraud (the biggest problem) and are educating a generation of advertisers (client and agency) to disregard huge swathes of wisdom that we have, as an industry over many years, learned about advertising.
We have forgotten about the value of context and the quality of the ad environment.
This has happened because of the huge volume of useless inventory ‘magically’ masquerading as prime media, distorting the economics of the marketplace. It doesn’t help that misaligned incentives across the whole executional chain (publisher, agency, advertiser) are hampering the efforts to clean up the situation.
I should first explain why this inventory is useless and to be fair some of it isn’t totally useless (although it’s not far off).
Some of it is just low grade, being sold as something better because of the addition of insight from data analysis….this is the retargeting strategy. The idea that because I can track you from a premium environment to a low grade environment there is no need to pay the higher cost of the quality placement. After all you’re the same person aren’t you, why wouldn’t you be just as persuaded consuming an advert on GQ.com compared to say, uselessshite.com?
To be fair the idea of buying an audience, which is what we are seeing here, is not alien to advertising, it is after all similar to the way we buy TV. However, it is not a good like for like comparison, however much we want it to be. This is, again, because one medium has a finite inventory (TV), while the other is not even close to finding its market defined ceiling.
In this case it changes the dynamics of verification.
A TV buyer is aware if the network is dumping its weak spots in one buy, while the digital buyer doesn’t know anything about the contextual quality of their purchase. In both circumstances the buyer will get the audience they purchased but the TV buyer can exercise more control over the environment, and hence the value, that their audience is delivered into.
I dislike retargeting strategies because I think they are theoretically weak. Environment quality is important and should not be disregarded. I don’t like retargeting but it is at least derived from a legitimate concept, they are trying to put the ad in front of the right person. If that seems like a low bar for acceptance, it is.
Sadly it gets a lot worse from here.
The second class of useless inventory, is the inventory that isn’t even human. This is the bigger issue. Bot traffic is running between 30% and 46% of online display impressions, depending on which set of stats you want to use.
You did read that right. Roughly 1 in 3 digital display impressions being bought today aren’t even human.
There is no argument that can possibly turn these into good media tactics. If no humans are seeing these adverts then it follows, without controversy, that they can’t influence a human to purchase a product. Yet the industry at large is making these buys, seemingly with full knowledge every day.
This is not an unreported phenomenon, by the way, I am not breaking news here.
It’s very important to understand that media planners and buyers aren’t idiots. Not by a long margin. There must, therefore, be reasons that can help explain this behaviour.
First as previously mentioned the commercial incentives really don’t help
- clients are charged with hitting cost and reach targets
- agencies need to help them hit those targets, as that is the job they are hired to do, but also their business models are significantly based on trading volume
- publishers need to squeeze every penny they can from the market at the lowest executional cost possible
These conditions might explain why some parts of the industry are making these mistakes, but they aren’t sufficient to explain why the whole industry is making these mistakes. If this was all that was going on the only brands doing this would be those in urgent need of cost control. The successful top quartile, at least, would still be executing against ‘premium’ inventory. But they aren’t, so something even more foundational must be at work.
To understand what that is we need to investigate how this inventory is getting into circulation. The question is a harsh one, how can an industry that has operated for so long suddenly be duped into buying campaigns on such a flawed basis?
This is where the impact of adtech becomes a nightmare.
Adtech has created automated networks that operate, in real time on either side of the publisher. Publishers can buy part of their audience from a network, and then they can sell advertising against that exact same purchased visitor, through another network.
If you can manage the money such that the buy costs less than the sell, even if that is a tiny amount, then over vast volumes of impressions, the riches await. Moreover, if 30-40% of the traffic being sold is created by bots, those costs can be incredibly low, which in turn reduces the price needed on the ad networks. Which means that the advertisers are picking up impressions at a stunning low price too.
And that’s what’s happening, no joke.
There is a veil of respectability in buying these cheap impressions because the kosher media properties, who are looking to establish high cpm’s in exchange for real advertising value (with their premium stock) are using these exchanges to generate incremental revenue on their remnant inventory too. Along with the impressions being sold in old traditional deals between humans this is what makes up the 60% of inventory that is actually put in front of real people.
Because there is too much inventory out there, as explained by the economics of digital real estate as already noted, this massive cost saving can be comfortably excused as simple supply and demand dynamics.
However, as also already noted all this is not a secret. The industry is aware. It’s therefore a very fair question to ask how this situation could possibly be tolerated let alone enthusiastically adopted.
Part of the question is answered by the intense fervour generated around the technology itself. This technology is clever and complex, there is much to be admired in engineering terms. However, this very complexity enables a troubling but comfortable ignorance. It means that the buyers can’t vouch for the veracity of their buys even if they wanted to. As things stand they can’t be held accountable.
If that sounds hyperbolic I must point out that this complex machinery isn’t lamented for the separation of knowledge it creates, at all, quite the opposite in fact.
John Battelle just loves adtech
To make my case I would point you towards the following 3 links. They are all connected to, or written by John Batelle, an important and intelligent champion of the adtech/digital advertising/digital landscape. An industry leader, he is no fool.
First up is the highly instructive visualisation I linked to in the first part of this essay, that shows the technology I have been talking about in action. It’s well constructed and explains better than a wall of text how this all works. If you haven’t already please do look at this link even if you look at none of the others, it shows how the modern digital market operates more clearly than anything else I have seen, Battelle is very proud of it as he should be.
I am keen to highlight this explanation of the adtech model because I don’t want anyone to think that I have misunderstood what is being sold. This explanation is provided not by sceptics like me, but by enthusiastic cheerleaders.
Near the end we are triumphantly told that,
Dozens of sophisticated servers can be involved in a single ad placement, which takes less than a quarter of a second.
I’m really not sure that that is something any media planner should be happy reading, to be honest, knowing as we do that at least 1/3 of impressions aren’t even human.
Secondly we have Battelle’s homage to the deep importance of adtech. He is almost universally positive about it, although I sense a few moments in this ‘love letter’ that suggest a few notes of caution have made themselves known to him. If you think I am being snarky in describing this link as an homage and a ‘love letter’ I would point out in riposte that the title (seemingly without irony) of the post is “Why the banner ad is heroic and adtech is our greatest technology artefact”.
He proudly heralds the LUMAscapes as evidence of success rather than inane profligacy, champions the technology that allows “a pair of shoes to chase you across the web” as heroic, instead of creepy, but pays nothing but dismissive lip service to the deep seated concerns raised by several respected leaders of today’s digital world such as Lawrence Lessig, Jonathan Zittrain and Tim Wu, none of whom are uninformed luddites.
OK. Let’s step back for a second. When you think of this infrastructure, are you concerned? Good. Because it’s imperative that we consider the choices we make as we engage with such a portentous creation…..
What are the architectural constraints of the infrastructure which processes that information? What values do we build into it? Can it be audited? Is it based on principles of openness, or is it driven by business rules and data-structures which favor closed platforms?
These questions have been raised, and continue to be well articulated, by Lessig, Zittrain, Wu, and many others. But we’re entering a new, more urgent era of this conversation. Many of these authors’ works warned of a world where code will eventually augur early lock down in political and social conventions. That time is no longer in the future. It’s now. And I believe as goes adtech, so goes our social code.
My emphasis added. He acknowledges concerns, big concerns, but is alarmingly sanguine about trying to solve them. If adtech is our social code as he suggests, then our future is damningly bleak.
However the 3rd link is the one I struggle with the most.
This is where we learn that Battelle has been appointed as co-chair, by the IAB, of the “traffic of good intent” task force. Good intent in this context means traffic that is actually worth buying. In their words….to,
more effectively address the negative impacts” of bots and other “non-intentional” traffic.
Which quite frankly is a weak mission statement when the actual job required is the eradication of the massive fraud at the heart of digital advertising.
Still what can we expect, the co-chair of this task force is the same man who believes that
Every retail store you visit, every automobile you drive (or are driven by), every single interaction of value in this world can and will become data that interacts with this programmatic infrastructure.
Right. Time to step back and return to my narrative. I need to explain why Battelle cannot idolise this technology and also solve the fraud problem without destroying privacy.
[I must state, at this juncture, that my concerns, the reason I am writing this, are not rooted in a fear of a world with no privacy, although I do not wish to live in that world. In truth my concerns are for the veracity of my trade, I work in advertising, it’s what I do, I would prefer it be intelligent and effective not automated and fraudulent.]
Battelle does a great job of demonstrating and lauding the very complexity that totally obfuscates the ability to examine the veracity of the media buys. It is this complexity that forces a critical compromise on us.
Don Marti lays the compromises bare, as a 3 way play. “Ad tech, privacy, fraud control: pick two?”
He makes a strong case.
Remember ad tech is being gamed by big volumes of fraudulent non-human ad traffic, being passed off as the real thing. As Battelle’s graphic has pointed out the data work that fuels this market is all profile based and anonymous. No-one is following around named individuals, instead they are following a 35yr old, male, that plays golf and was recently browsing for a new pair of shoes. They know a lot about you as it goes, but not your name (apparently).
Under this system there is enough space for 40% of the traffic to be spoofed without getting caught.
The only way to resolve the fraud then, and maintain the adtech structure is to deliver complete visibility of who is who, where and when.
Or to put it another way to answer the question of whether or not that impression, that was just purchased, is a bot, or a human requires that you the human forgoe your desire, your right, to remain an anonymous data point. There is nothing partial about this solution, the only way to really kill the fraud is to always identify the humans. But not in a binary, human/not human way, a simple flag is too easy for a bot to overcome or to spoof. To really kill fraud, and maintain the adtech structure we will have to relinquish our digital privacy in totality.
All of a sudden this line from Battelle becomes more worryingly profound,
Every retail store you visit, every automobile you drive (or are driven by), every single interaction of value in this world can and will become data that interacts with this programmatic infrastructure.
The italic emphasis in that quote is his by the way, not mine.
So, which couplet do you fancy most?
- Ad tech + privacy = lots of fraud
- Ad tech + fraud control = no privacy
- Fraud control + privacy = no ad tech
Option 1 should be totally unacceptable to the whole advertising industry (publishers, agencies and advertisers) but it’s actually where we find ourselves today.
Option 2 is, ultimately, in my opinion outside of the influence of the advertising industry. Even though Facebook has revealed significant comfort with the idea of hugely reduced digital privacy, among great swathes of the population, there are big signs that this trend is not fully supportable long into the future. Natives are aware of the role of online personas and spend as much time spoofing the ‘correct’ image on the mainstream tools, as they do behaving like teenagers on the networks that Mum, Dad, aunty Glad and uncle Bill don’t know about. The Snowden/NSA revelations are not going to help reverse that trend.
Moreover the world at large needs a level of achievable anonymity to function. Cities were the first such artefact, providing the young with an arena within which to grow and find themselves, outside of the gaze of those who ‘know’ them best. There is a reason much innovation is rooted in the city, not the farm.
Option 3, on the other hand, makes sense for a lot of reasons, not just in terms of privacy. For a start it would force digital advertising to re-assess some of the more human aspects of driving useful commercial interactions instead of ceding more and more decision making to misunderstood algorithms. We might even start to understand how best to use the digital medium as a branding channel, something that has been glossed over in the data revolution.
It could also be part of the evolution of digital publishing into a fiscally secure enterprise. Rampant content theft by rogue commercial entities and the eroding of premium rates for quality placements would by definition be somewhat stymied. It would also start to create an economic boundary for the quasi infinite inventory problem by reintroducing meaningful performance limitations.
A good result all round no?
So how do we get there?
If we want to clean up this situation it is painfully obvious what needs to happen, we simply take adtech out of the picture and in its absence return to first principles. The reasons why advertising works, why it sells products, haven’t changed because of the internet, we can still function without adtech.
The trickier part of the equation is getting to this inflection point, getting the industry, at large, to choose to move past adtech. That’s a lot harder and the nature of that journey will be influenced by whose outrage is powerful enough to drive change, consumer outrage, advertiser outrage or a bit of both.
It’s true that the consumer is concerned about privacy today in ways that have been lacking in recent years. This is inspired by Snowden and the NSA, as opposed to creepy adtech. Yet here in the UK there still doesn’t seem to be a huge concern. This strange silence, this peculiar lack of British outrage, is not mirrored across the Atlantic though, and what is finally adopted in the States will soon become the standard here too. Similarly our European neighbours seem to have more concerns in this regard than we do, certainly the EU seems more committed to consumer protections in this area than the British government or population. So, even if the US doesn’t move I suspect the EU will.
The connection between commercial surveillance and state surveillance is robust and real, there can be no reform in the one without the other. So I fully imagine that regulatory responses to the Snowden scandal will impact on commercial data practice.
Finally there is the influence through market forces of consumers seeking privacy friendly solutions to account for, although the scale of such influence is not likely to prove substantial in the shorter term, in my opinion.
These factors, stemming from consumer outrage are actually relatively weak as agents of the kind of change I’m advocating. However they do suggest that the commercial surveillance machinery, adtech, will struggle to deliver the total surveillance advocated by Battelle. And if that is true then the ability to stem the tide of impression fraud is severely compromised.
The real force for change will likely be advertiser outrage and that will come from a different direction.
If total digital transparency doesn’t arrive to solve the fraud issue, then it will not take long for advertisers to start asking the hard questions that they should really be asking today. Eventually they will refuse to pay a 40% surcharge for their media. The pervasive reality of useless inventory is not a secret, it can only become knowledge to a wider audience not a smaller one. Soon enough the advertisers’ CFOs will cotton on.
At that point the advertisers will have to insist on fraud control, and the only option that will be able to deliver it, is turning off the adtech machine. You can imagine a discussion between the CMO and the CFO that goes a little bit like this.
CFO: Why are you buying inventory that you can’t verify?
CMO: Well if we stop using exchanges we won’t be able to hit our reach and cost targets
CFO: But you aren’t hitting them today. 40% of your traffic is robots!
CMO: Well, that’s true but the only way to buy volume that cheaply is via exchanges. We can’t ignore digital advertising, we have to be there, it’s a cost of doing business
CFO: OK, well can you show me data that proves that these buys are effective? That it’s a cost of business worth paying?
CMO: ah, no not really. You’ll have to trust me.
And here we come to one of the genuinely hidden aspects of all this, the effectiveness question. It’s very important and is a big part of the reason why this situation persists. You see, both the CFO and the CMO are talking some sense here, as strange as that sounds.
Measurement and Effectiveness – the Great Big Stinky Elephant in the Room
If you don’t work in advertising or marketing it might seem crazy but it has long been difficult to conclusively prove which sections of an ad campaign were successful. Analysis is conducted mostly at the level of the media channels that were used, chiefly because this is how the money is committed.
So, for example, the CMO wants to know if £10 million is best spent on print or TV or radio or digital. More precisely actually, she wants to know what the optimal mix of those channels should be, the way channels work together is crucial, particularly with respect to digital. It’s not easy to do, and in some cases not possible at all.
Direct marketing, the stuff that asks you to phone up and buy something (or visit a website) was always more measurable. Should the call centre get 1000 calls tonight? What is the target conversion rate, 15%? Did it happen? Both the calls and the sales can be counted so that question can be answered.
That worked well enough for a long while but it wasn’t perfect. Direct marketers would always like to send out their ads while there was a peak in brand awareness (often coinciding with the big TV campaign), even though the cost of that brand campaign was rarely incorporated into their ROI analysis.
Most ad spend wasn’t in direct marketing though, it was in brand marketing. If you only go back even just 20 years the media landscape was more concentrated and more innately understandable and a big chunk of the advertising dollars were intended to push shoppers to retail outlets. As a result proxy metrics like brand awareness were the best we had, technology simply couldn’t follow you from the ad to the purchase. These proxy metrics favoured big spends in the classic mass mediums, with TV considered king of the hill.
Although it is an oversimplification there is some truth to the idea that whether or not you advertised on TV was mostly a factor of the size of your overall budget. If you could afford to do TV accepted wisdom was that you should. TV has a low cost in terms of cost per thousand impressions, but there was a substantial cost of entry, it is both cheap (relative cost per thousand) and expensive (total capital outlay). To shift brand metrics costs millions of pounds. There were lots of exceptions of course, but the general principle stood up to an intuitive examination, and when good econometric studies were done (not often enough) these big spends were usually identified as most likely to shift the metrics. TV still dominates media spends today by the way. This accepted wisdom has not yet been supplanted.
Nonetheless when digital advertising came of age it was thought that we might be entering an era of eminently more measurable advertising. As it turned out nothing could have been further form the truth.
Digital is an innately direct medium. Every interaction can be counted, if your computer sees my ad I am made aware of that by the ad serving tools. If you click on my ad, then similarly this is a solid data point that can be collected.
Even though digital was a direct media it was never really ceded to the direct marketers, instead it became a part of the brand marketers playbook.
The resulting problem wasn’t one of competence, the counting methods at the heart of direct response were only ever a challenge of the ego (spreadsheets, moi?) and easily overcome, the problem was one of competing evaluation methodologies.
To fit digital into econometrics (the method of choice for evaluating brand campaigns) it needed to be assessed against the same cost metrics as the other channels, which is cost per rating point (a coarse profiled audience buying metric) and reach and frequency. This wasn’t possible as the volatile digital landscape debarred effective reach and frequency measurement (a % based metric) while absolute cost metrics (price per point) were replaced with performance metrics (cost per click). The absolute cost metrics existed of course, but they weren’t driving buying decisions.
There is nothing wrong with either body of cost management, but you simply cannot use them interchangeably, and facilitate a meaningful analysis. This is evidenced by the ongoing inability of the industry to effectively quantify the effect of TV aircover on digital acquisition campaigns. It stands to reason that there will be a relationship but quickly measuring and quantifying that effect after the adverts have run and the business results are in….we haven’t got there yet.
The real takeout here? If you manage a reasonably sized advertising media budget, you still can’t accurately and quickly understand which part of your spend works well and which part doesn’t.
That was a long explanation of the vagaries of measurement, and do I apologise, but it is this inability to measure that is the reason why the CFO and the CMO can both be partially right.
It’s a madness to willingly spend 40% of your digital budget serving ads to robots. The CFO is therefore right to ask why.
But it’s also true that an advertiser with a decent budget these days is likely to be best served by a multi-channel strategy and that digital display should almost certainly be a part of that. And while the industry at large is accessing the remnant market (via exchanges) It would be a very brave CMO who decided to take a stand, all on their lonesome.
In truth the CMO probably should stop buying on the network exchanges, but her costs will rise significantly as most advertisers very sensibly take advantage of remnant markets to control costs (in most channels not just digital) and whereas that might well be the right thing to do academically, there are few finance departments that would be comfortable with such an overnight increase in relative cost.
So change will likely only come when the CFO gets wind of the adtech fraud. Money talks and the CFO is the ultimate money man. Until then the CMO is unlikely to highlight the issue, and subsequently will be unable to explain the increase in media costs and the reduction in reach.
The pressures that will lead to a solution are therefore essentially political. Both the politics between CFOs and CMOs and between digital tech evangelists and more widely obligated marketers (client side and agency side), while the regulatory politics that will play out in response to the NSA debacle and consumer privacy concerns will also play their part.
When your ability to understand what is working is impaired you must return to first principles. So, we kill the adtech, and we once again plan ad campaigns according to the hard won knowledge of 100 years of advertising experience.
Back to disintermediation?
You might have noted that I still haven’t explained why there is no disintermediation in digital advertising. What I have done, instead, is show why the sector has been flooded with surplus mediation and proposed a sequence of events that might lead us to a position where digital mediates between advertisers and customers in the same way that offline advertising does.
However, the possibility that the internet can do to advertising what it did to book selling is more than a pipe dream. There is a lot of work being done to deliver what is called vendor relationship management, whereby the innate value of data insight is harnessed to bring efficiency to the commercial marketplace. But that data will be controlled by the consumer, not mediators.
More to follow in another post.