AdTech Month in Review: July 2019

A curated look at the top AdTech stories from July 2019 — condensed and to the point.

Who's Actually Using Ad Blockers? [ExchangeWire]

A profile of the average ad-blocking user, the motivations driving adoption, and what it means for the industry going forward.

Key takeaways:

• Ad blocker adoption among American users continues to climb and is expected to surpass 27% next year.
• The demographic most consistently associated with ad blocking is tech-savvy young males — a pattern that hasn't shifted much over the years.
• The top motivations are frustration with intrusive, slow-loading ad formats that interrupt the browsing experience or obscure content, along with growing privacy concerns.
• There's no easy fix for the industry. The most viable path forward involves pushing toward non-intrusive ad formats, targeting techniques that minimize reliance on personal data, and ensuring data is only used when users have genuinely consented.

Amazon Opens Fire TV Inventory to Programmatic Buyers [AdExchanger]

Amazon has forged partnerships with The Trade Desk and DataXu — alongside its own DSP — to give media buyers real-time programmatic access to Fire TV impressions through a private marketplace (PMP) built on Amazon Publisher Services (APS).

Key takeaways:

• While some broadcasters have addressable TV capabilities — AT&T's Xandr and Comcast's FreeWheel among them — they do not sell impressions programmatically in real time.
• Major broadcasters remain reluctant to expose inventory to open exchanges, which makes true programmatic integrations in the CTV space rare.
• Amazon's approach is meaningfully closer to real programmatic: ads are served in real time based on deal IDs.
• Publishing an anonymized ID outside DSP walls is a significant step, and one that could position Amazon to reshape how CTV advertising transacts.

Facebook's $5 Billion FTC Settlement, Unpacked [Gizmodo]

Facebook disclosed the details of its agreement with the Federal Trade Commission, resolving the probe stemming from the Cambridge Analytica scandal.

Key takeaways:

• Facebook paid a $5 billion fine — roughly equivalent to a single month of revenue for the company.
• Beyond the fine, the FTC will significantly expand oversight of Facebook's day-to-day operations.
• Facebook's board will be supplemented by an "independent privacy committee," though the members of that committee had not been named at the time of the settlement.
• The settlement struck most observers as insufficient — a light consequence for a level of user trust damage that is difficult to reverse.

DSPs Start Enforcing app-ads.txt [Digiday]

The mobile in-app and OTT equivalent of ads.txt has been slow to gain traction, but it's finally reaching a tipping point: app developers have adopted it widely enough that major demand-side platforms are beginning to enforce it.

Key takeaways:

• Centro and The Trade Desk are among the platforms now implementing app-ads.txt enforcement.
• Current enforcement covers mobile in-app ads. For connected TV, enforcement is still waiting on app store support — from platforms like Roku — or a reliable third-party solution to match CTV app store data against app-ads.txt files.
• Broader adoption is expected to reduce fraud in the mobile in-app programmatic market and give advertisers more confidence buying inventory programmatically.

New York City Considers Banning the Sale of Location Data [The New York Times]

Mobile apps routinely collect detailed geolocation data and sell it to digital marketers, retail advertisers, financial firms, and others — often without users' explicit knowledge. New York City is considering legislation that would make this illegal without clear user consent.

Key takeaways:

• Telecommunications companies and mobile app developers generate billions of dollars annually from selling customer location data, often with little transparency toward the user.
• If passed, New York City would become the first city to explicitly ban the sale of geolocation data to third parties.
• The bill would prohibit sharing location data collected while a device is within the five boroughs, except when directly tied to a service the customer explicitly requested.
• The language targets the vague, catch-all agreements users click through when signing up for apps or cellular services — as well as carving out location collection made in "exchange for products or services."
• In the absence of federal privacy law specifically covering location data, cities and states — including San Francisco and Los Angeles — have been filling the gap.
• Fines under the proposed legislation would range from $1,000 per violation to $10,000 per day per user for repeat offences, with a private right of action for affected users.
• Whether the bill will pass remains uncertain.

Firefox Tests Third-Party Cookie Blocking Without Breaking Its Revenue Model [AdExchanger]

Firefox is moving toward blocking third-party tracking cookies by default. Before doing so at scale, Mozilla has been quietly testing the impact on its own revenue.

Key takeaways:

• Firefox ran the test on fewer than 5% of its user base, measuring how disabling cookies via Enhanced Tracking Protection (ETP) — its equivalent of Safari's Intelligent Tracking Prevention — would affect the browser's primary income stream.
• Mozilla earns a share of ad revenue each time a user performs a search through Firefox's built-in search engine. In 2017, Mozilla generated $542 million from royalties, subscriptions, and advertising revenue.
• The evidence suggests that blocking third-party tracking cookies won't materially harm Firefox's search or advertising revenue.
• The same can't be said for independent AdTech companies. ETP makes cross-site user tracking harder and undermines the third-party data profiles that much of programmatic targeting depends on.
• The practical implication: advertisers and AdTech vendors will increasingly need to rely on targeting approaches that don't require personal data collection — contextual targeting being the most obvious alternative.

Identity Solutions in a Post-ITP World — Index Exchange [ExchangeWire Trader Talk TV]

Index Exchange's VP of Product sits down with ExchangeWire to discuss the identity solutions emerging as the reliance on third-party cookies becomes increasingly untenable.

Key takeaways:

• In a world without third-party cookies, one path for publishers to maintain addressable advertising is the "free wall" model — requiring users to sign in with an email address to access content. Some publishers have already moved in this direction.
• That email address can be hashed and passed to an identity provider like LiveRamp, which uses its Identity Graph to recognize the user on the publisher's site.
• If the same email address is used to log in across multiple sites, advertisers (via DSPs) can identify that user consistently and apply frequency capping and other targeting functions.
• It's worth noting that LiveRamp's Identity Graph is essentially alone in using email-based identification as its core mechanism. Most other widely used ID solutions — including The Trade Desk's — continue to rely on third-party cookies, a foundation that is, at this point, effectively obsolete.