The digital advertising industry continues to show remarkable vibrance amidst so much change and uncertainty. Let’s try to sum up this past week.
The Menlo Park Papers
Facebook knows that Instagram can be psychologically damaging to teen girls. It knows that all sorts of nefarious groups use the platform to do nefarious things, from recruiting to simply amplifying hate and disinformation.
Yet the company often looks the other way or makes exceptions for “special,” i.e., famous, users.
It’s one thing to suspect these sorts of outcomes or to hear these kinds of assessments from researchers, analysts or even ex-Facebook officials. It’s a whole other matter to learn the company has done extensive research on all these issues and has even written down all the highly inflammatory results. That’s perhaps what made the bombshell of bombshells, The Wall Street Journal’s sweeping investigation — The Facebook Files — such a stunner. We can talk at length about what this means for society, governments, etc., but in terms of business, it’s not so clear. Previous revelations have hardly slowed the company, or as Brian Morrissey tweeted, “This looks pretty bad. Stock should be up at least 10% over the next couple days.”
Here’s where it could matter. Facebook is already under regulatory scrutiny, and now Congress is asking lots more questions thanks to The Files. Could this all combine to put pressure on Facebook to open up a lot more and make some public concessions — like easier data opt-outs or even breaking off Instagram? The cynical answer is, Facebook’s history is to apologize and then keep doing whatever it wants. But maybe this is different.
A company that handles millions of people’s credit reports will soon own a company that handles big piles of digital consumer ID data. Is this a stroke of martech brilliance? Or scary for consumers? It’s not easy to tell unless you’re intimately familiar with the businesses of TransUnion and Neustar, which are coming together as part of a $3.1 billion acquisition.
As AdExchanger noted, TransUnion has quietly put together an intriguing collection of ad-related assets: TransUnion bought marketing tech platform TruSignal in May 2019, cross-channel marketing company Signal in August 2020 and OTT measurement and data management provider Tru Optik in October of last year. The theme that ties it all together: identity, of course.
What are they going to do with all this ID information? Neustar has been one of many companies in recent years to develop a digital ID designed to at least partially replace cookies. As Business Insider’s Lara O’Reilly put it, “The thematic narrative of the digital advertising industry at the moment is one that’s shifting away from the individual targeting of users amid the death of cookies and stricter online-privacy regulation. So on the face of it, [this deal] goes against the grain.”
Will regulators take notice? Or are these companies too obscure and too opaque for them to scrutinize?
All System1s Go
While martech is where the really big money is, adtech is hardly wilting. The very under-the-radar System1 is about to go the SPAC IPO route with a $1.4 billion valuation, reported AdExchanger, which referred to the European firm as an “online advertising bounty hunter.”
What does that mean exactly? Well, System1 owns properties, including MapQuest, info.com, HowStuffWorks and Carsgenius, which it uses to compile intent-based traffic through search and social ads. “We believe that customer acquisition will be going heavily in this direction,” System1 CEO and Co-Founder Michael Blend said. “The companies that are able to operate their own network of intent-driven websites have a large advantage with third-party cookies going away.”
Some will see this as bottom-feeding or exploitative (does anybody remember Demand Media?), while others will find it ingenious. Regardless, it speaks to the ripple effects of the depreciation of cookies, which include big challenges and hidden opportunities.
Down with DMPs
Conventional wisdom had declared that data management platforms (DMPs) had become close to irrelevant. Except now, some are back. According to Digiday, while DMPs were threatened by the emergence of customer data platforms like mParticle, many brands are now going through adtech audits as they try to prep for a more privacy-focused era. It seems that first-generation products have generally disappointed since many were built for third-party data (which is clearly not in vogue). However, a new crop of DMPs, including Permutive, may become crucial as brands and publishers rekindle their data-sharing relationships, turning first-party assets into second-party connections. Either way, it seems that dumb pipes or dumb storage just won’t cut it. “Marketers aren’t just interested in data management, but its enrichment,” wrote Digiday.
Enriched data sounds great, as long as it is privacy-safe. If you can figure that balance out, you should have a solid business.
Anyway, that’s enough identity philosophizing for this week. See you next time.