THE CAT AMONGST THE PIGEONS ACCC ADTECH INQUIRY AND ADMA'S RESPONSE
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THE CAT AMONGST THE PIGEONS ACCC ADTECH INQUIRY AND ADMA’S RESPONSE
Right Message, Right Audience THE PERENIAL PROBLEM FOR MARKETERS THE DISINTERESTED AUDIENCE
OLD SCHOOL TARGETING
THE ADVERTISING
SUPPLY CHAIN
Advertising
opportunity and data
Online Content and
Services
ADVERTISER AGENCY ADTECH PUBLISHER Display ad CONSUMER
SUPPLY CHAIN
Payment for ad Online Advertising
opportunity
TWO SIDES TO THE
AD:TECH CHAIN
DEMAND SIDE SUPPLY SIDE
Advertisers and media Publishers and adtech
agencies vendors
TWO SIDES TO THE
AD:TECH CHAIN
DEMAND SIDE SUPPLY SIDE
Advertisers and
media agencies Publishers and adtech
vendors
SUPPLY SIDE
ADTECH SUPPLY CHAIN
AD NETWORKS
PUBLISHER AD FURBALLS
SERVER
SUPPLY SIDE
PLATFORM
(SSP)
DEMAND SIDE
Advertisers and
media agencies
SSPs connect to multiple ad networks Publishers set a floor price and sell Publishers might sell some
so they can maximise the publishers their spare inventory on called a inventory through direct buys
opportunities to sell inventory SUPPLY SIDE PLATFORM (SSP) or private deals
WHAT HAPPENS ….
Publishers ad server requests an ad to from Snowflake goes online to
the Supply Side Platform (SSP) research her furball issue and
she lands on the Yorkshire vets
page
ADTECH SUPPLY CHAIN
Ad Request PUBLISHER AD Ad Request to FURBALLS
ADVERTISER to SSP SERVER Ad server Online
SUPPLY SIDE Content and
PLATFORM Services
(SSP)
Display ad Display ad
Advertisers can Supply Side Platform (SSP) sells the
start bidding on inventory to highest bidder and serves up
that inventory an ad to the publishers ad server
based on what
they are willing to
pay and the
audience they are
looking to target
THE OTHER SIDE OF
THE CHAIN
SUPPLY SIDE
DEMAND SIDE
Publishers and
adtech vendors
Advertisers and media
agencies
DEMAND SIDE : AGENCIES
AND BIDDING
They use DATA MANAGEMENT PLATFORMS (DMPS)
gather, storage, and organise audience data to
optimise targeting ADTECH SUPPLY CHAIN
SSP
DATA MANAGEMENT PLATFROMs
(DMPs)
ADVERTISER DATA SIDE PLATFORM
SSP
SSP
AGENCY TRADING DESK (ATDs)
DATA SIDE PLATFORM
Advertisers
define:
who to target
what they will
SSP
pay. They
engage via an
agency or Agencies & Brands use AGENCY TRADING DESKS Demand Side Platforms (DSP’s) are
directly (ATDs) to manage programmatic media buying. They the systems used to bid, manage,
leverage the data in DMPs to facilitate targeting and serve and track ad inventories from
will manage the bidding process via interaction with multiple ad sources (e.g. SSPs)
multiple DSPsDEMAND SIDE : AGENCIES
AND BIDDING DATA MANAGEMENT PLATFORMS (DMPS)
gather, storage, and organise audience data
SSP
ADTECH SUPPLY CHAIN
DATA MANAGEMENT PLATFROMs
(DMPs) AUDIENCES DATA SIDE PLATFORM
ADVERTISER
SSP
SSP
AGENCY TRADING DESK (ATDs)
DATA SIDE PLATFORM
Advertisers define
who they want to RESEARCH
target and what they SERVICES
are prepared to pay
SSP
to reach them. They
then engage directly
or via an agency in AGENCY TRADING DESKS (ATDs) buy media DSP’s are the system ADVERTISERS
the supply chain programmatically on behalf of brands. They leverage use to purchase and manage ad
the data in DMPs to facilitate targeting and will inventories from multiple ad sources
manage the bidding process via interaction with (e.g. SSPs)
multiple DSPsTWO SIDES TO THE
AD:TECH CHAIN
DEMAND SIDE SUPPLY SIDE
Advertisers and media Publishers and adtech
agencies vendorsAUDIENCE
DATA
FURBALLS
FIRST PARTY DATA Data collected on your site
Snow has an account on Nine entertainment, they know:
she lives in Newtown, is a creative director, she accesses the site
via an iPad, has high speed internet, based on her DOB she is over
18 (she lied) and her content preferences skew heavily towards
animals and period dramas. SO in the case of Snow and Nine/Science
They currently don’t know she is a cat but they assume she must Diet
own one …..
If Science Diet did a second party deal with
Petbarn and chose to advertise on Nine, via
SECOND PARTY DATA Data Someone else has collected on their site a direct buy, they could target Snow directly
Snow shops at Petbarn online and gets all her pet supplies
delivered. Monthly she buys Science diet (sensitive stomach If they choose to target snow
kibble), a range of gourmet (gluten free) pates and a special
programmatically, they would be doing so
imported brand of cat litter.
based on her presumed interest in pets, or,
based on her recent browsing history
THIRD PARTY DATA – Data collected from multiple sources (2 day cookies).
Snow has been added to a number of pools for high end
pet fashionTHE VALUE OF DATA
First party data - is the most valuable because of its quality. You collect it, it’s accurate, it’s your audience. It’s
directly relevant to your business.
$$$
USES: Direct targeting, Predict future patterns, audience behavior, Insights and strategy. Testing messaging
Second Party Data - someone else’s first party data (quality remains high). Extremely useful if you find the
right partner. Opportunities to access to information and insights you don’t have on your audience.
$$
USES: Expand reach, predict future patterns, understand more customer behaviors and build out your
current audience pool
Third Party Data – aggregated anonymous data organized into categories, bought and sold
programmatically. Major benefits are its scale, the downside is that you don’t know the original
$ source or quality and its not exclusive.
USES: Can be useful to expand insights into your first party data, identify prospecting audiences
that hold similar attributes.
WATCH OUTS: Its going to have no value at all in 18 months timeAN EVOLVING LANDSCAPE We are facing one of the biggest periods of transition our industry has seen • ITP (Intelligent Tracking Prevention) on Safari • GDPR – its not in Australia yet but its coming… • The imminent death of 3rd party cookies And this: • In 2018 Josh Frydenberg kicked off the digital Platforms inquiry (paper published in June 2019)
THE DIGITAL ADVERTISING
SERVICES INQUIRY
ACCC Digital Platforms Inquiry recommendations found:
‘complexity and opacity associated with adtech pricing’
Federal Govt commissioned ACCC’s Digital Platforms Branch to
conduct a follow up inquiry with a focus on:
Competitiveness, transparency and effectiveness of markets
for supply of digital adtech services and ad agency services
Inquiry is currently underway
KEY DATES
• Interim report due 31 Dec 2020
• Final Report by 31 August 2021SUBMISSIONS
Industry Association
Agency
Publishers
Global Tech
41 Submissions (as at 25th August 2020)
Data Services
Industry Ombudsmen
Research
Industry Associations Publishers Scholars
• Daily Mail Australia Misc
• Asia Internet Coalition
• Guardian News Media
• ADMA
• News Corp Australia
• AANA
• SBS
• Commercial Radio Australia
• Star News Group
• Computer & Communication Industry Association
• Country Press Australia
• Free TV Australia
• Interactive Advertising Bureau
• Media Federation of Australia (MFA) Digital Advertising Platform/ Global Tech
• Music Rights Australia • Facebook (2)
Scholars
• Google • Allens Hub for Technology
Agency • Microsoft • Dr Balasingham (Macquarie Uni)
• Dentsu Aegis Network Australia • Oracle • Dr Katharine Kemp (UNSW)
• Havas Media • Verizon Media • Dr Nico Neumann ((Melbourne Business School)
• Kinesso
• Omnicom Media Group (OMG) Misc
• WPP AUNZ Industry Ombudsmen
• Sites N Stores • Australian Small Business & Family Enterprise Ombudsmen • Confidential Party 1 & 2
• Telecommunications Industry Ombudsmen • Damien Geradin & Dimitrios Katsifis (for Google)
• Daniel Bitten Stephen Lewis
• Timothy Whitfield & Denise Shrivell
Data Service Provider
Research
• Loyalty Pacific (Flybuys)
• Consumer Policy Research Centre
• International Center for Law and EconomicsIS IT
SUSTAINABLE?
ARE WE
WHO GETS THE BUILDING
MONEY? BRAND TRUST?
FOCUS AREAS OF
ADMA RESPONSE
WHAT
WHERE IS THE DETERMINES
VALUE? SUCCESS ?
STANDARDS
BIDDING
OF
PROCESSES
MEASUREING
AND FLOOR
AND
PRICES
REPORTINGWHERE DOES THE VALUE LIE?
WHERE DOES VALUE LIE IN THE SUPPLY CHAIN? • Media channels remain the largest expense in any marketing budget. Digital spend has eclipsed traditional channels • It is in the best interest of the consumer, the advertiser and the media channel.
THE LANDSCAPE IS GETTING COMPLEX 2011 2020
WHERE DOES THE VALUE LIE? • Marketers don’t generally know • In Australia, spend less in programmatic than other economies (40% vs 60% in US) • Media remuneration models have been slow to adapt • Technology is often inconsistent in measuring value • Many clients are looking at different models e.g. taking media inhouse, media managed, who owns the invoicing
THE
CREATIVE
SUPPLY
CHAIN HAS
BECOME
MORE • Volume of content required has increased (in 10 years from 150 – 200 pieces a year to
COMPLEX almost 3000 pieces of work (Trinity P3) … is this necessary?
• Digital channels all have multiple different creative requirements
• Specialist skills are required to execute
• Niche agencies and suppliers with varying business models have evolved
• Production has commoditized creativity and remuneration models have been slow to
adaptRecommendation 1: ADMA welcomes scrutiny of the extent of value creation and value capture along stages in the marketing and advertising supply chain. Generalisations and quantitative analysis of value points in the advertising services supply chain is inherently difficult, given the diversity of paths of players, technology and data that collectively constitute the marketing and advertising supply chain. ADMA supports efforts to improve transparency in the marketing and advertising supply chain. ADMA can assist in development of case studies that would assist in providing better transparency of some reasonably representative value chains.
WHO GETS THE MONEY?
THERE ARE COSTS AT EVERY STAGE
OF THE SUPPLY CHAIN
Retainer Fees
3rd party data $
2nd party Data $$
Tier 1
Agency
DMP hosting and
DATA transaction fees
Setup fees
MANAGEMENT
Transaction fees
PLATFROM
Agency
Digital
Trading AGENCY
Agency
Desk TRADING DESK Floor Price Ad serving fees
Bid price
Ad Request to Ad Request to
SSP PUBLISHER AD Ad server
Production Supply Side
SERVER
Fees DATA SIDE Platform
PLATFORM (SSP)
Media
Agency Ad is returned
Strategy Transaction fees
Page Snow
about
Furballs
Retainer Fees
Research Fees
So Science Diets Agency, via their trading desk, bids on inventory, ends up buying space on Nine
entertainment which results in an ad being served to snow when she next visits the Yorkshire
vet site.THE
ISSUES
• AUDIENCE QUALITY
• Few standards of measurement
• It can be subjective
• MARTECH AND AUDIENCE BUYS
• What adds value and what doesn’t?
• Are marketers seeing a full market view?
• Is it transparent?
• Are there commissions involved?
• REAL TIME BIDDING
• Are fees and commissions visible
• What is the floor price
• What assumptions are being made? UK ISBA PwC study reviewed fifteen UK
• REMUNERATION advertisers and found 300 distinct supply chains
• Are all stages being captured to reach 12 publishers.
• How is value add being measured Out of a total of 267m of ads placed online, it
• Are rates consistent
was only possible to match the end-to-end
process for 31m.Recommendation 2: ADMA welcomes an assessment of the remuneration models applied by the publisher, agency and adtech process in addressing the value that the relationships provide to the marketer, to the advertising supply chain and to the campaign itself. Contributing factors in a range of different campaign types will need to be considered. ADMA can provide assistance in pulling together case studies of a range of campaign types and on varying platform delivery success identifiers to see if pricing models have been constructed fairly with proper weighting given to the right elements and thereby parties delivering such elements.
IS THE CURRENT MODEL SUSTAINABLE?
WHAT IS REASONABLE? Publishers • Traditional Print publications in Australia where slow to invest in digital adtech • Google and Facebook, together consumed more than half of all online advertising spend in Australia in 2018 • For every $100 spent online: Google ($47) Facebook ($24) Everyone else ($29) • QUESTION: Is advertising a sustainable model for generating news?
THE SUSTAINABILITY OF AGENCIES • Traditional Media Agency models often relied on retainers and commissions and some lack transparency. • Some digital models appear to have leakage and raise questions of double dipping • Multiple tiers of creative agencies are required to deliver specialist digital assets • Clients beginning to question multiple different fee structures.
Recommendation 3: ADMA welcomes an assessment of the efficiency and sustainability of an advertising economy with an expanding range of supply chains co-existing to support the introductory of new innovative ways in which to deliver campaigns and targeted messaging. ADMAs member base includes a range of different suppliers along this supply chain and acknowledges that the analysis of these models will need to be careful to ensure that any increase in transparency does not come at the expense of competitiveness and the ability for new businesses to enter the market.
MEASUREMENT STANDARDS FOR MEASUREMENT AND REPORTING
REPORTING STANDARDS This is a continually evolving space: • Industry growth has been organic and fast • Many systems and variations in standards and reporting • Timing variations and methodologies create conflicts in data • Interpretation is often in the hands of vendors and agencies which may be subject to bias BUT … • Reporting frameworks need to be fair and flexible • Measurement metrics need relate to their source • The future holds many unknowns, Innovation can not be predicted and should not be stifled
Recommendation 4: ADMA recommends a detailed look into the possibility of standardising metrics of measurement in reporting of campaigns so that advertisers can make a qualitative assessment of the campaign in terms of success. This would assist both marketers and platforms in benchmarking the relative contribution of one dataset over another in the advertising supply chain as well being more informed about what to expect from a campaign. Additionally, the governance underpinning the management of any reporting data needs to comply with a minimum standard to ensure both the privacy of marketer's data insights and the personal information and behavioural patterns of consumers that may have contributed to targeting the campaign. ADMA can assist in gathering a comparative dataset across industry to help better understand the extent to which future standardisation may be able to occur.
COMPETITION: WHAT DRIVES SUCCESS AND ADVERTISER CHOICE?
BIG DATA IS NOT
ALWAYS BETTER
• Data is data but how are you capturing it, reporting it,
measuring it?
• Effectiveness is complex and requires planning
• Scale of audiences and the depth of data held does
gives big platforms an advantage, however it is not the
only factor driving advertiser selection.
ADMAs position on factors influencing the success of
brand marketing campaigns:
• Brand equity
• Use of a brands first party data
• Contextual targeting
• Alignment and direct buys with niche publications
There is a role to be played in educating the
• Importance of segmented targeted messaging market and the regulators on these factors
before making sweeping regulationsRecommendation 5 : ADMA welcomes a market-wide audit to assess contributing factors of success to a targeted advertising campaign with the view that an understanding and/or education of such contributing factors to the campaign itself (separate to the supply chain provider) would better inform advertisers on the elements to be considered for future campaigns (including but not limited to) platform capability, brand equity, creative collateral, market targeting capabilities and contextual significance. This will help advertisers evaluate the true value that needs to be attributed to behavioural data and targeting via platforms of scale and improve competitiveness in the market for all sized market participants.
BIDDING PROCESSES AND FLOOR PRICES
TRANSPARENCY
CHALLENGES
• Floor price and the conditions around access are still
determined by those holding the data.
• This creates distortion in comparing value and pricing
between platforms.
• The Industry needs a clearer understanding of the
methodology applied to valuing:
• Data
• Terms of access
• Floor prices and changes to them
• Practices of those bidding for data
• Actual demandRecommendation 6: ADMA sees great benefit in identifying where and how the value is attributed in the auction bidding process and what transparency and accountability measures might be appropriate to identify that an advertisement has been served to the intended audience as well as anything else in this process that needs to be improved to validate the value chain and make all those involved more informed and/or responsible.
BRAND TRUST AND DIGITAL MARKETING PRACTICES
TRANSPARENCY
• Personalisation assumes a level of consumer trust
• Privacy breaches erode consumer trust
• All platforms should offer control of privacy and targeting
• Marketers can build trust through:
• relevance and variety
• transparency,
• respect for the individual
• minimisation of collection and handling of PI
• ADMA members agree to adhere to our codes of practiceRecommendation 7: ADMA believes that an evaluation of effectiveness of both regulation and processes can play a key role in promoting fair and transparent practices in targeted digital marketing as well as protecting individuals from harm. ADMA can assist with providing information on how businesses have evolved to operate in this space and some of the challenges they face as business parameters extend and global data best practices evolve. ADMA agrees that more transparency and a better understanding of value points is good in promoting fair competition in the supply chain.
NEXT STEPS • The ACCC has requested information and case studies to further understand the industry • It is in the interests of the industry to make sure that the regulators are as informed as possible and the industry is seen as responsible. • ADMA has agreed to work with Members and other interested parties to collect anonymized case studies and examples to further inform and educate the ACCC Any participants that are interested should contact: Jenny.williams@ADMA.com.au
BUILDING
A STRONGER INDUSTRY
• ADMA Offers regulatory advice to members
• Bespoke Workshops on regulatory topics
• Toolkits and Webinars
OUR NEXT WEBINAR:
Regulatory Reshaping of the Online Advertising and Marketing Sector and
Privacy: Current Status and What’s Next
• Marketers, advertisers, intermediaries and data: new norms for governance
of data about users
• The ACCC and opacity in the advertising value chain: how codes and
reporting transparency will transform marketing
• Digital platforms vs media publishers: Will advertisers be collateral damage?
• Behavioural marketing: Will reform of privacy regulation reshape what can
be done?
• The ACCC as litigant: Trivago and Google and the future of consumer
protection law
• Presented by Peter Leonard, Principal, Data Synergies and Professor of
Practice, UNSW Business SchoolWhat happens next
IMPLICATIONS
The draft report from the ACCC is due December 2020. Likely
outcomes:
• A forced reshaping of transparency and reporting requirements
in the advertising supply chain between marketers and
publishers.
• Regulation which may effectively force industry to implement a
binding code
• More intrusive regulation is now inevitable. There is the
potential for the ACCC to impose excessive or inappropriate
regulation.
WHAT WE CAN DO ABOUT IT:
• ADMA seeks to represent the interests of marketers and
adtech and martech intermediaries in achieving fair value for
money in digital targeted advertising.
• ADMA will assist the ACCC to understand the advertising value
chain and how transparency as to value-adds could be
improved.QUESTIONS?
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