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Sir Martin Sorrell’s Silicon Valley charm offensive

Sir Martin Sorrell is the kind of founder who people in Silicon Valley most prize. He has enjoyed huge success, having built the world’s biggest advertising conglomerate over 32 years, WPP. He’s also out for revenge. Soon after WPP’s board began investing an “allegation of misconduct” in the spring of last year — it later asked him to pay back $200,000 in personal expenses — Sorrell left the company in a huff.

Six weeks later, he’d formed a new company, S4 Capital, using a playbook that he knows works. He and a partner launched London-based WPP by buying a controlling stake in publicly traded company that made wire baskets and teapots, then using it to launch a global shopping spree. Similarly, S4 emerged from a reverse-merger with Derriston Capital, a small shell company that went public on the London Stock Exchange in 2016 and rebranded as S4. Then it started bulking up.

Already S4 — which Sorrell funded himself with £40 million and that has raised tens of millions more from other institutions for acquisitions — has successfully pursued nine companies, though Sorrell stresses these are mergers. “All half cash and half stock.” No long lock-ups, either, says Sorrell, who was bouncing around the U.S. this week before heading to the Web Summit event in Lisbon.

“If you want to sell your company, if you want to make a quick kill and get out, we’re not interested. If you want to sign up to our vision” and help turn S4 is a powerhouse in its own right, that’s a different story, he suggests.

Silicon Valley is seemingly a big piece of the picture. Last month, S4 Capital finalized a $150 million deal to merge with the largest digital agency in the region, nine-year-old Firewood, with S4 paying $112 million up front in shares and cash and the balance coming if Firewood hits its targets for the year.

It also late last year merged with the San Francisco-based digital media and programmatic consultancy MightyHive in a deal valued at $150 million.

If it sticks it to WPP on occasion, that’s probably okay, too. S4 Capital’s first acquisition, for example, of the Dutch digital production agency MediaMonks, came at the expense of WPP, which had also been trying to buy the company. The WSJ reported at the time that S4 agreed to pay roughly $350 million for the agency.

The broad idea, Sorrell says, is to focus S4 entirely on digital advertising and on media and marketing services specifically, where in 2019 for the first time, the world’s advertisers will spend  more than half of their ad budgets. “The digital media industry is up 6 percent [for the year] and it’s down for traditional media, so we’re going where the growth is and pushing on an open door, unencumbered by legacy or analog businesses.”

Asked whether he doesn’t also have an axe to grind when it comes to WWP — which is steeped in both the digital and traditional ad worlds — Sorrell doesn’t hesitate. “I want to see this approach succeed. And if that’s an axe, that’s correct.”

Much of that approach centers on partnering with, rather than trying to compete, with the giants of ad tech, including Facebook and Google, precarious as that arrangement can be.

Other current tech clients include Apple, Salesforce, Microsoft, LinkedIn, Uber, and ServiceNow, which, according to Sorrell, treat S4’s creative and strategic marketing professionals as extensions of their internal marketing teams.

Firewood, for example, will embed teams within companies like Google to “understand the client as well as possible,” Sorrell says. As he explains it, “We don’t compete with [these companies]. We service them; we work with them. If we’re being crude about it, we’re resellers for each one of them. They don’t want to get into the service business.”

They also want to maintain control over what they know of our tastes and interests and other data on which they have an increasing lock, but asked whether he thinks some of these tech clients should be broken up, he insists that he does not, “as long as they’re transparent and they really exercise the power they have responsibly.”

Asked how S4 overcomes the growing number of people who don’t think companies are acting responsibly with their private information and might increasingly opt out of sharing it, Sorrell shrugs off the idea that people are deeply concerned about targeted advertising. “My view is that as long as the consumer knows what they’re letting themselves in for, it’s fine. If I know how my data will be used, in simple language, [I’m not going to opt out.] I do think we’ll have differentiated models, [such as] ‘I want to control my data so [you’re going to pay me for it in some fractional way].’ The problem is caused by people not knowing what’s being done with their data.”

And even that problem is dwarfed by what Sorrell sees as the real reason for so much hand-wringing, which is the size of these companies. “When Apple was the first to become a trillion-dollar company, [former Goldman Sachs CEO Lloyd Blankfein] was asked which would be the first $2 trillion company, and he said there won’t be one because no nation-state would allow a company to get to $2 trillion. You see this in China, too,” he says. “I’ve heard concerns expressed about the size of Alibaba. It’s not just a Western phenomenon.”

And what of political ads leading up to the U.S. presidential election, we ask Sorrell. Twitter has taken a stand; Google is weighing changes to its own ad policy. Should these platforms be running them, no matter their content?

That one, he says is “very difficult. My view has always been that these are media companies that are responsible for the content flowing through their pipes. I think they are acknowledging it; Facebook has thousands of people monitoring content.

“But should we take political advertising or not? Well, in the U.K. You have to be truthful. If the ads aren’t truthful, we’ve got trouble. I think Zuckerberg made the argument that his people know what’s a fact or not, but arbitrating what’s the truth or not is quite difficult,” he concedes.

Before long, our time is up, but before he goes, we discuss with Sorrell traditional ad giants, like the one he himself built across three decades before leaving it abruptly last year. Perhaps it’s unsurprising, given his new endeavor, but he says those companies, with their tangle of properties, most of which are run like independent fiefdoms, should most definitely be dismantled. “I don’t think they have a chance of making it with the legacy assets they have.”

Sorrell recalls one “snotty comment” made by one of the established players, regarding his new venture: “Someone called us a spec in the mirror.” Continues Sorrell, “When you’re in a car crash, that spec in the mirror catches up with you very quickly.”

Sir Martin Sorrell’s Silicon Valley charm offensive

Sir Martin Sorrell is the kind of founder who people in Silicon Valley most prize. He has enjoyed huge success, having built the world’s biggest advertising conglomerate over 32 years, WPP. He’s also out for revenge. Soon after WPP’s board began investing an “allegation of misconduct” in the spring of last year — it later asked him to pay back $200,000 in personal expenses — Sorrell left the company in a huff.

Six weeks later, he’d formed a new company, S4 Capital, using a playbook that he knows works. He and a partner launched London-based WPP by buying a controlling stake in publicly traded company that made wire baskets and teapots, then using it to launch a global shopping spree. Similarly, S4 emerged from a reverse-merger with Derriston Capital, a small shell company that went public on the London Stock Exchange in 2016 and rebranded as S4. Then it started bulking up.

Already S4 — which Sorrell funded himself with £40 million and that has raised tens of millions more from other institutions for acquisitions — has successfully pursued nine companies, though Sorrell stresses these are mergers. “All half cash and half stock.” No long lock-ups, either, says Sorrell, who was bouncing around the U.S. this week before heading to the Web Summit event in Lisbon.

“If you want to sell your company, if you want to make a quick kill and get out, we’re not interested. If you want to sign up to our vision” and help turn S4 is a powerhouse in its own right, that’s a different story, he suggests.

Silicon Valley is seemingly a big piece of the picture. Last month, S4 Capital finalized a $150 million deal to merge with the largest digital agency in the region, nine-year-old Firewood, with S4 paying $112 million up front in shares and cash and the balance coming if Firewood hits its targets for the year.

It also late last year merged with the San Francisco-based digital media and programmatic consultancy MightyHive in a deal valued at $150 million.

If it sticks it to WPP on occasion, that’s probably okay, too. S4 Capital’s first acquisition, for example, of the Dutch digital production agency MediaMonks, came at the expense of WPP, which had also been trying to buy the company. The WSJ reported at the time that S4 agreed to pay roughly $350 million for the agency.

The broad idea, Sorrell says, is to focus S4 entirely on digital advertising and on media and marketing services specifically, where in 2019 for the first time, the world’s advertisers will spend  more than half of their ad budgets. “The digital media industry is up 6 percent [for the year] and it’s down for traditional media, so we’re going where the growth is and pushing on an open door, unencumbered by legacy or analog businesses.”

Asked whether he doesn’t also have an axe to grind when it comes to WWP — which is steeped in both the digital and traditional ad worlds — Sorrell doesn’t hesitate. “I want to see this approach succeed. And if that’s an axe, that’s correct.”

Much of that approach centers on partnering with, rather than trying to compete, with the giants of ad tech, including Facebook and Google, precarious as that arrangement can be.

Other current tech clients include Apple, Salesforce, Microsoft, LinkedIn, Uber, and ServiceNow, which, according to Sorrell, treat S4’s creative and strategic marketing professionals as extensions of their internal marketing teams.

Firewood, for example, will embed teams within companies like Google to “understand the client as well as possible,” Sorrell says. As he explains it, “We don’t compete with [these companies]. We service them; we work with them. If we’re being crude about it, we’re resellers for each one of them. They don’t want to get into the service business.”

They also want to maintain control over what they know of our tastes and interests and other data on which they have an increasing lock, but asked whether he thinks some of these tech clients should be broken up, he insists that he does not, “as long as they’re transparent and they really exercise the power they have responsibly.”

Asked how S4 overcomes the growing number of people who don’t think companies are acting responsibly with their private information and might increasingly opt out of sharing it, Sorrell shrugs off the idea that people are deeply concerned about targeted advertising. “My view is that as long as the consumer knows what they’re letting themselves in for, it’s fine. If I know how my data will be used, in simple language, [I’m not going to opt out.] I do think we’ll have differentiated models, [such as] ‘I want to control my data so [you’re going to pay me for it in some fractional way].’ The problem is caused by people not knowing what’s being done with their data.”

And even that problem is dwarfed by what Sorrell sees as the real reason for so much hand-wringing, which is the size of these companies. “When Apple was the first to become a trillion-dollar company, [former Goldman Sachs CEO Lloyd Blankfein] was asked which would be the first $2 trillion company, and he said there won’t be one because no nation-state would allow a company to get to $2 trillion. You see this in China, too,” he says. “I’ve heard concerns expressed about the size of Alibaba. It’s not just a Western phenomenon.”

And what of political ads leading up to the U.S. presidential election, we ask Sorrell. Twitter has taken a stand; Google is weighing changes to its own ad policy. Should these platforms be running them, no matter their content?

That one, he says is “very difficult. My view has always been that these are media companies that are responsible for the content flowing through their pipes. I think they are acknowledging it; Facebook has thousands of people monitoring content.

“But should we take political advertising or not? Well, in the U.K. You have to be truthful. If the ads aren’t truthful, we’ve got trouble. I think Zuckerberg made the argument that his people know what’s a fact or not, but arbitrating what’s the truth or not is quite difficult,” he concedes.

Before long, our time is up, but before he goes, we discuss with Sorrell traditional ad giants, like the one he himself built across three decades before leaving it abruptly last year. Perhaps it’s unsurprising, given his new endeavor, but he says those companies, with their tangle of properties, most of which are run like independent fiefdoms, should most definitely be dismantled. “I don’t think they have a chance of making it with the legacy assets they have.”

Sorrell recalls one “snotty comment” made by one of the established players, regarding his new venture: “Someone called us a spec in the mirror.” Continues Sorrell, “When you’re in a car crash, that spec in the mirror catches up with you very quickly.”

How to get people to open your emails

Julian Shapiro
Contributor

Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.

We’ve aggregated the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this Growth Report.

This is how you’re going stay up-to-date on growth marketing tactics — with advice you can’t get elsewhere.

Our community consists of 600 startup founders paired with VP’s of growth from later-stage companies. We have 300 YC founders plus senior marketers from companies including Medium, Docker, Invision, Intuit, Pinterest, Discord, Webflow, Lambda School, Perfect Keto, Typeform, Modern Fertility, Segment, Udemy, Puma, Cameo, and Ritual .

You can participate in our community by joining Demand Curve’s marketing webinars, Slack group, or marketing training program. See past growth reports here and here.

Without further ado, onto the advice.


How can you send email campaigns that get opened by 100% of your mailing list?

Based on insights from Nick Selman, Fletcher Richman of Halp, and Wes Wagner.

  • First, a few obvious pieces of advice for avoiding low open rates:
    • Avoid spam filters by avoiding keywords commonly used in spam emails.
    • Consider using email subjects (1) that are clearly descriptive and (2) look like they were written by a friend. Then A/B your top choices.
    • Include the recipient’s name in your email body. This signals to spam filters that you do in fact know the recipient.
  • Now, for the real advice: Let’s say 60% of your audience opens your mailing, how can you get the remaining 40% to open and read it too?
    • First, wait 2 weeks to give everyone a chance to open the initial email.
    • Next, export a list of those who haven’t opened. Mailchimp lets you do this.
    • Important note: The reason many recipients don’t open your email is because it was sent to Spam, it was buried in Promotions, or it was insta-deleted because it looked like spam (but wasn’t). The goal here is to resuscitate these people. You have two options for doing so:
    • (1) Duplicate the initial email then selectively re-send it to non-openers. This time, use a new subject (try a new hook) and downgrade the email to plain text: remove images and link tracking. De-enriching the email in this way can help bypass spam filters and the Promotions tab.
    • (2) Alternatively, export your list of non-openers to a third-party email tool like Mailshake (or Mixmax).
      • First, connect Mailshake to a new Gmail account on your company domain.
      • Next, configure Mailshake to automatically dole out small batches of emails on a daily schedule. Let it churn through non-openers slowly so that Gmail doesn’t flag your account as a spammer.
      • Emails sent through Mailshake are more likely to get opened than emails sent through Mailchimp. Why? Mailshake sends emails through your Gmail account, and Gmail-to-Gmail emails have a greater chance of bypassing Spam and Promotions folders, particularly if the sender doesn’t have a history of its emails being marked as spam.

The case against behavioral advertising is stacking up

No one likes being stalked around the Internet by adverts. It’s the uneasy joke you can’t enjoy laughing at. Yet vast people-profiling ad businesses have made pots of money off of an unregulated Internet by putting surveillance at their core.

But what if creepy ads don’t work as claimed? What if all the filthy lucre that’s currently being sunk into the coffers of ad tech giants — and far less visible but no less privacy-trampling data brokers — is literally being sunk, and could both be more honestly and far better spent?

Case in point: This week Digiday reported that the New York Times managed to grow its ad revenue after it cut off ad exchanges in Europe. The newspaper did this in order to comply with the region’s updated privacy framework, GDPR, which includes a regime of supersized maximum fines.

The newspaper business decided it simply didn’t want to take the risk, so first blocked all open-exchange ad buying on its European pages and then nixed behavioral targeting. The result? A significant uptick in ad revenue, according to Digiday’s report.

“NYT International focused on contextual and geographical targeting for programmatic guaranteed and private marketplace deals and has not seen ad revenues drop as a result, according to Jean-Christophe Demarta, SVP for global advertising at New York Times International,” it writes.

“Currently, all the ads running on European pages are direct-sold. Although the publisher doesn’t break out exact revenues for Europe, Demarta said that digital advertising revenue has increased significantly since last May and that has continued into early 2019.”

It also quotes Demarta summing up the learnings: “The desirability of a brand may be stronger than the targeting capabilities. We have not been impacted from a revenue standpoint, and, on the contrary, our digital advertising business continues to grow nicely.”

So while (of course) not every publisher is the NYT, publishers that have or can build brand cachet, and pull in a community of engaged readers, must and should pause for thought — and ask who is the real winner from the notion that digitally served ads must creep on consumers to work?

The NYT’s experience puts fresh taint on long-running efforts by tech giants like Facebook to press publishers to give up more control and ownership of their audiences by serving and even producing content directly for the third party platforms. (Pivot to video anyone?)

Such efforts benefit platforms because they get to make media businesses dance to their tune. But the self-serving nature of pulling publishers away from their own distribution channels (and content convictions) looks to have an even more bass string to its bow — as a cynical means of weakening the link between publishers and their audiences, thereby risking making them falsely reliant on adtech intermediaries squatting in the middle of the value chain.

There are other signs behavioural advertising might be a gigantically self-serving con too.

Look at non-tracking search engine DuckDuckGo, for instance, which has been making a profit by serving keyword-based ads and not profiling users since 2014, all the while continuing to grow usage — and doing so in a market that’s dominated by search giant Google.

DDG recently took in $10M in VC funding from a pension fund that believes there’s an inflection point in the online privacy story. These investors are also displaying strong conviction in the soundness of the underlying (non-creepy) ad business, again despite the overbearing presence of Google.

Meanwhile, Internet users continue to express widespread fear and loathing of the ad tech industry’s bandwidth- and data-sucking practices by running into the arms of ad blockers. Figures for usage of ad blocking tools step up each year, with between a quarter and a third of U.S. connected device users’ estimated to be blocking ads as of 2018 (rates are higher among younger users).

Ad blocking firm Eyeo, maker of the popular AdBlock Plus product, has achieved such a position of leverage that it gets Google et al to pay it to have their ads whitelisted by default — under its self-styled ‘acceptable ads’ program. (Though no one will say how much they’re paying to circumvent default ad blocks.)

So the creepy ad tech industry is not above paying other third parties for continued — and, at this point, doubly grubby (given the ad blocking context) — access to eyeballs. Does that sound even slightly like a functional market?

In recent years expressions of disgust and displeasure have also been coming from the ad spending side too — triggered by brand-denting scandals attached to the hateful stuff algorithms have been serving shiny marketing messages alongside. You don’t even have to be worried about what this stuff might be doing to democracy to be a concerned advertiser.

Fast moving consumer goods giants Unilever and Procter & Gamble are two big spenders which have expressed concerns. The former threatened to pull ad spend if social network giants didn’t clean up their act and prevent their platforms algorithmically accelerating hateful and divisive content.

While the latter has been actively reevaluating its marketing spending — taking a closer look at what digital actually does for it. And last March Adweek reported it had slashed $200M from its digital ad budget yet had seen a boost in its reach of 10 per cent, reinvesting the money into areas with “‘media reach’ including television, audio and ecommerce”.

The company’s CMO, Marc Pritchard, declined to name which companies it had pulled ads from but in a speech at an industry conference he said it had reduced spending “with several big players” by 20 per cent to 50 per cent, and still its ad business grew.

So chalk up another tale of reduced reliance on targeted ads yielding unexpected business uplift.

At the same time, academics are digging into the opaquely shrouded question of who really benefits from behavioral advertising. And perhaps getting closer to an answer.

Last fall, at an FTC hearing on the economics of big data and personal information, Carnegie Mellon University professor of IT and public policy, Alessandro Acquisti, teased a piece of yet to be published research — working with a large U.S. publisher that provided the researchers with millions of transactions to study.

Acquisti said the research showed that behaviourally targeted advertising had increased the publisher’s revenue but only marginally. At the same time they found that marketers were having to pay orders of magnitude more to buy these targeted ads, despite the minuscule additional revenue they generated for the publisher.

“What we found was that, yes, advertising with cookies — so targeted advertising — did increase revenues — but by a tiny amount. Four per cent. In absolute terms the increase in revenues was $0.000008 per advertisment,” Acquisti told the hearing. “Simultaneously we were running a study, as merchants, buying ads with a different degree of targeting. And we found that for the merchants sometimes buying targeted ads over untargeted ads can be 500% times as expensive.”

“How is it possible that for merchants the cost of targeting ads is so much higher whereas for publishers the return on increased revenues for targeted ads is just 4%,” he wondered, posing a question that publishers should really be asking themselves — given, in this example, they’re the ones doing the dirty work of snooping on (and selling out) their readers.

Acquisti also made the point that a lack of data protection creates economic winners and losers, arguing this is unavoidable — and thus qualifying the oft-parroted tech industry lobby line that privacy regulation is a bad idea because it would benefit an already dominant group of players. The rebuttal is that a lack of privacy rules also does that. And that’s exactly where we are now.

“There is a sort of magical thinking happening when it comes to targeted advertising [that claims] everyone benefits from this,” Acquisti continued. “Now at first glance this seems plausible. The problem is that upon further inspection you find there is very little empirical validation of these claims… What I’m saying is that we actually don’t know very well to which these claims are true and false. And this is a pretty big problem because so many of these claims are accepted uncritically.”

There’s clearly far more research that needs to be done to robustly interrogate the effectiveness of targeted ads against platform claims and vs more vanilla types of advertising (i.e. which don’t demand reams of personal data to function). But the fact that robust research hasn’t been done is itself interesting.

Acquisti noted the difficulty of researching “opaque blackbox” ad exchanges that aren’t at all incentivized to be transparent about what’s going on. Also pointing out that Facebook has sometimes admitted to having made mistakes that significantly inflated its ad engagement metrics.

His wider point is that much current research into the effectiveness of digital ads is problematically narrow and so is exactly missing a broader picture of how consumers might engage with alternative types of less privacy-hostile marketing.

In a nutshell, then, the problem is the lack of transparency from ad platforms; and that lack serving the self same opaque giants.

But there’s more. Critics of the current system point out it relies on mass scale exploitation of personal data to function, and many believe this simply won’t fly under Europe’s tough new GDPR framework.

They are applying legal pressure via a set of GDPR complaints, filed last fall, that challenge the legality of a fundamental piece of the (current) adtech industry’s architecture: Real-time bidding (RTB); arguing the system is fundamentally incompatible with Europe’s privacy rules.

We covered these complaints last November but the basic argument is that bid requests essentially constitute systematic data breaches because personal data is broadcast widely to solicit potential ad buys and thereby poses an unacceptable security risk — rather than, as GDPR demands, people’s data being handled in a way that “ensures appropriate security”.

To spell it out, the contention is the entire behavioral advertising business is illegal because it’s leaking personal data at such vast and systematic scale it cannot possibly comply with EU data protection law.

Regulators are considering the argument, and courts may follow. But it’s clear adtech systems that have operated in opaque darkness for years, without no worry of major compliance fines, no longer have the luxury of being able to take their architecture as a given.

Greater legal risk might be catalyst enough to encourage a market shift towards less intrusive targeting; ads that aren’t targeted based on profiles of people synthesized from heaps of personal data but, much like DuckDuckGo’s contextual ads, are only linked to a real-time interest and a generic location. No creepy personal dossiers necessary.

If Acquisti’s research is to be believed — and here’s the kicker for Facebook et al — there’s little reason to think such ads would be substantially less effective than the vampiric microtargeted variant that Facebook founder Mark Zuckerberg likes to describe as “relevant”.

The ‘relevant ads’ badge is of course a self-serving concept which Facebook uses to justify creeping on users while also pushing the notion that its people-tracking business inherently generates major extra value for advertisers. But does it really do that? Or are advertisers buying into another puffed up fake?

Facebook isn’t providing access to internal data that could be used to quantify whether its targeted ads are really worth all the extra conjoined cost and risk. While the company’s habit of buying masses of additional data on users, via brokers and other third party sources, makes for a rather strange qualification. Suggesting things aren’t quite what you might imagine behind Zuckerberg’s drawn curtain.

Behavioral ad giants are facing growing legal risk on another front. The adtech market has long been referred to as a duopoly, on account of the proportion of digital ad spending that gets sucked up by just two people-profiling giants: Google and Facebook (the pair accounted for 58% of the market in 2018, according to eMarketer data) — and in Europe a number of competition regulators have been probing the duopoly.

Earlier this month the German Federal Cartel Office was reported to be on the brink of partially banning Facebook from harvesting personal data from third party providers (including but not limited to some other social services it owns). Though an official decision has yet to be handed down.

While, in March 2018, the French Competition Authority published a meaty opinion raising multiple concerns about the online advertising sector — and calling for an overhaul and a rebalancing of transparency obligations to address publisher concerns that dominant platforms aren’t providing access to data about their own content.

The EC’s competition commissioner, Margrethe Vestager, is also taking a closer look at whether data hoarding constitutes a monopoly. And has expressed a view that, rather than breaking companies up in order to control platform monopolies, the better way to go about it in the modern ICT era might be by limiting access to data — suggesting another potentially looming legal headwind for personal data-sucking platforms.

At the same time, the political risks of social surveillance architectures have become all too clear.

Whether microtargeted political propaganda works as intended or not is still a question mark. But few would support letting attempts to fiddle elections just go ahead and happen anyway.

Yet Facebook has rushed to normalize what are abnormally hostile uses of its tools; aka the weaponizing of disinformation to further divisive political ends — presenting ‘election security’ as just another day-to-day cost of being in the people farming business. When the ‘cost’ for democracies and societies is anything but normal. 

Whether or not voters can be manipulated en masse via the medium of targeted ads, the act of targeting itself certainly has an impact — by fragmenting the shared public sphere which civilized societies rely on to drive consensus and compromise. Ergo, unregulated social media is inevitably an agent of antisocial change.

The solution to technology threatening democracy is far more transparency; so regulating platforms to understand how, why and where data is flowing, and thus get a proper handle on impacts in order to shape desired outcomes.

Greater transparency also offers a route to begin to address commercial concerns about how the modern adtech market functions.

And if and when ad giants are forced to come clean — about how they profile people; where data and value flows; and what their ads actually deliver — you have to wonder what if anything will be left unblemished.

People who know they’re being watched alter their behavior. Similarly, platforms may find behavioral change enforced upon them, from above and below, when it becomes impossible for everyone else to ignore what they’re doing.

Edo raises $12M to measure TV ad effectiveness

Edo, an ad analytics startup founded by Daniel Nadler and actor Edward Norton, announced today that it has raised $12 million in Series A funding.

Nadler and Norton have both had startup success before — Nadler co-founded and led Kensho, which S&P Global acquired for $550 million. Norton invested in Kensho and co-founded CrowdRise, which was acquired by GoFundMe.

Even so, ad analytics might seem like an arcane industry for an actor/filmmaker to want to tackle. However, Norton said he was actually the one to convince Nadler that it was worth starting the company, and he argued that this is an important topic to both of them as creators. (Nadler’s a poet.)

“Movie studios and publishers, they take risks on talent, on creative people like us,” Norton said. “We want them to do well … The better they do with the dollars they spend, the less risk averse they become.”

Nadler and Norton recruited Kevin Krim, the former head of digital at CNBC, to serve as Edo’s CEO.

Krim explained that while linear TV advertising still accounts for the majority of ad budgets, the effectiveness of those ads is still measured using old-fashioned “survey-based methodologies.” There are other measurement companies looking online; Norton said they’re focused on social media sentiment and other “weak proxies” for consumer behavior.

Edo screenshot

In contrast, Edo pulls data from sources like search engines and content sites where people are doing research before making a purchase. By applying data science, Krim said, “We basically can measure the change in consumer engagement, the behaviors that are indicative of intent. We can measure the change in consumer behavior for every ad.”

In fact, Edo says that since its founding in 2015, it has created a database of 47 million ad airings, so advertisers can see not just their own ad performance, but also that of their competitors. This allows advertisers to adjust their campaigns based on consumer engagement — Krim said that in some cases, advertisers will receive the overnight data and then adjust their ad rotation for that very night.

As for the Series A, it was led by Breyer Capital. (Jim Breyer has backed everything from Facebook to Etsy to Marvel.) Vista Equity co-founders Robert Smith and Brian Sheth participated in the round, as did WGI Group.

“For more than a decade I’ve watched the data science talent arbitrage transform industries from finance to defense, from transportation to commerce,” Breyer said in the funding announcement. “We needed someone to bring these capabilities to bear on the systemic inefficiencies and methodological shortcomings of measurement and analytics in media and advertising.”

On the customer side, Edo is already working with ESPN, Turner, NBCUniversal and Warner Bros. I wondered whether some of the TV networks might have been worried about what Edo would reveal about their ads, but Norton said the opposite was true.

“I don’t sense that they in any way have trepidation that we’re going to pull their pants down — quite the opposite,” he said. “They are absolutely thrilled with our ability to help burnish and validate their assertions about the strength of what they’re offering.”

All charges against ex-Vungle CEO Zain Jaffer, including lewd act on a child, dismissed by judge

All charges against former Vungle CEO Zain Jaffer, including a sexual abuse of a child, have been dropped. According to a statement from Jaffer’s representatives, San Mateo County Judge Stephanie Garratt dismissed the charges today. Jaffer was arrested last October and charged with several serious offenses, including a lewd act on one of his children, child abuse and battery on a police officer.

The dismissal is confirmed by San Mateo County Superior Court’s online records. The case (number 17NF012415A) had been scheduled to go to jury trial in late August.

Jaffer, whose full name is Zainali Jaffer, said in a statement that:

Being wrongfully accused of these crimes has been a terrible experience, which has had a deep and lasting impact on my family and the employees of my business. Those closest to me knew I was innocent and were confident that all of the charges against me would eventually be dismissed. I want to thank the San Mateo County District Attorney’s Office for carefully reviewing and considering all of the information and evidence in this case and dropping all the charges. I am also incredibly grateful for the continued and unwavering support of my wife and family, and look forward to spending some quality time with them.

Vungle, the fast-rising mobile ad startup Jaffer co-founded in 2011, removed him from the company immediately after they learned about the charges in October. TechCrunch has contacted Vungle and the San Mateo County District Attorney’s Office for comment.

Google rebrands its ad lineup, with AdWords becoming Google Ads

Google’s complex lineup of ad products is getting rebranded.

Sridhar Ramaswamy, the senior vice president who leads Google’s ad efforts, explained the rebrand at a press event this morning, where he said the company has been getting “consistent feedback” over the past few years that the plethora of ad products and brands — assembled largely through acquisitions — could make it be confusing for advertisers.

“This is a primarily a name change, but it is indicative of where we have been directing the product” for the past few years, Ramaswamy said. He also said the rebrand points to “where we want the product to go.”

Moving forward, Google’s ad products will be divided up into three major brands. First, what’s now known as AdWords will become Google Ads, which Ramaswamy said will serve as “the front door for advertisers to buy on all Google surfaces,” whether that’s search, display ads, YouTube videos, app ads in Google Play, location listings in Google Maps or elsewhere.

In this case, it’s not just a name change. Google is also launching something it calls Smart Campaigns, which will become the default mode for advertisers. It allows those advertisers to identify the actions (whether it’s phone calls, store visits or purchases) that they’re prioritizing, then Google Ads will use machine learning to optimize the images, text and targeting to drive more of those actions.

The second brand is the Google Marketing Platform, which combines DoubleClick Digital Marketing and Google Analytics 360, the company’s analytics tools for marketers. Under that umbrella, Google is also announcing a new product called Display & Video 360, which combines features from DoubleClick Bid Manager, Campaign Manager, Studio and Audience Center.

Managing Director for Platforms Dan Taylor said the Google Marketing Platform is responding to a growing need for collaboration — for example, he said Adidas used the platform to bring its brand and performance marketing teams together with the measurement team.

Google Marketing Platform

The Marketing Platform includes a new Integrations Center where marketers can view all the ways they can different ways they can connect their Google tools. (And while the focus here is on integration within Google’s platform, Taylor said the company remains committed to interoperability with outside ad exchanges and measurement providers.)

The third brand is Google Ad Manager, a platform that combines Google’s monetization tools for publishers, namely DoubleClick Ad Exchange and DoubleClick for Publishers. In this case, Jonathan Bellack, director of product management for publisher platforms, said there’s already been a “three-year journey” of merging the two products as the programmatic ad-buying becomes used across more types of advertising.

“These categories have just been breaking down for a while — all of our publishers already log into one user interface,” Bellack said. So the only thing that’s really changing is “the logo.”

One result of all this consolidation, and one that Ramaswamy described as “bittersweet,” is that the DoubleClick brand is going away. On the other hand, while they weren’t the focus of today’s announcement, the AdSense and Admob brands will continue.

The rebrand is expected to start rolling out in July. Ramaswamy and Taylor both emphasized that no product migration or training will be required.

“The look and feel is going to change a little bit, but the core functionality is not changing,” Taylor said.

Highlights and audio from Zuckerberg’s emotional Q&A on scandals

“This is going to be a never-ending battle” said Mark Zuckerberg . He just gave the most candid look yet into his thoughts about Cambridge Analytica, data privacy, and Facebook’s sweeping developer platform changes today during a conference call with reporters. Sounding alternately vulnerable about his past negligence and confident about Facebook’s strategy going forward, Zuckerberg took nearly an hour of tough questions.

You can read a transcript here and listen to a recording of the call below:



The CEO started the call by giving his condolences to those affected by the shooting at YouTube yesterday. He then delivered this mea culpa on privacy:

We’re an idealistic and optimistic company . . . but it’s clear now that we didn’t do enough. We didn’t focus enough on preventing abuse and thinking through how people could use these tools to do harm as well . . . We didn’t take a broad enough view of what our responsibility is and that was a huge mistake. That was my mistake.

It’s not enough to just connect people. We have to make sure those connections are positive and that they’re bringing people together.  It’s not enough just to give people a voice, we have to make sure that people are not using that voice to hurt people or spread misinformation. And it’s not enough to give people tools to sign into apps, we have to make sure that all those developers protect people’s information too.

It’s not enough to have rules requiring that they protect the information. It’s not enough to believe them when they’re telling us they’re protecting information. We actually have to ensure that everyone in our ecosystem protects people’s information.”

This is Zuckerberg’s strongest statement yet about his and Facebook’s failure to anticipate worst-case scenarios, which has led to a string of scandals that are now decimating the company’s morale. Spelling out how policy means nothing without enforcement, and pairing that with a massive reduction in how much data app developers can request from users makes it seem like Facebook is ready to turn over a new leaf.

Here are the highlights from the rest of the call:

On Zuckerberg calling fake news’ influence “crazy”: “I clearly made a mistake by just dismissing fake news as crazy — as having an impact . . . it was too flippant. I never should have referred to it as crazy.

On deleting Russian trolls: Not only did Facebook delete 135 Facebook and Instagram accounts belonging to Russian government-connected election interference troll farm the Internet Research Agency, as Facebook announced yesterday. Zuckerberg said Facebook removed “a Russian news organization that we determined was controlled and operated by the IRA”.

On the 87 million number: Regarding today’s disclosure that up to 87 million people had their data improperly access by Cambridge Analytica, “it very well could be less but we wanted to put out the maximum that we felt it could be as soon as we had that analysis.” Zuckerberg also referred to The New York Times’ report, noting that “We never put out the 50 million number, that was other parties.”

On users having their public info scraped: Facebook announced this morning that “we believe most people on Facebook could have had their public profile scraped” via its search by phone number or email address feature and account recovery system. Scammers abused these to punch in one piece of info and then pair it to someone’s name and photo . Zuckerberg said search features are useful in languages where it’s hard to type or a lot of people have the same names. But “the methods of react limiting this weren’t able to prevent malicious actors who cycled through hundreds of thousands of IP addresses and did a relatively small number of queries for each one, so given that and what we know to day it just makes sense to shut that down.”

On when Facebook learned about the scraping and why it didn’t inform the public sooner: This was my question, and Zuckerberg dodged, merely saying “We looked into this and understood it more over the last few days as part of the audit of our overall system”, while declining to specify when Facebook first identified the issue.

On implementing GDPR worldwide: Zuckerberg refuted a Reuters story from yesterday saying that Facebook wouldn’t bring GDPR privacy protections to the U.S. and elsewhere. Instead he says, “we’re going to make all the same controls and settings available everywhere, not just in Europe.”

On if board has discussed him stepping down as chairman: “Not that I’m aware of” Zuckerberg said happily.

On if he still thinks he’s the best person to run Facebook: “Yes. Life is about learning from the mistakes and figuring out what you need to do to move forward . . . I think what people should evaluate us on is learning from our mistakes . . .and if we’re building things people like and that make their lives better . . . there are billions of people who love the products we’re building.”

On the Boz memo and prioritizing business over safety: “The things that makes our product challenging to manage and operate are not the tradeoffs between people and the business. I actually think those are quite easy because over the long-term, the business will be better if you serve people. I think it would be near-sighted to focus on short-term revenue over people, and I don’t think we’re that short-sighted. All the hard decisions we have to make are tradeoffs between people. Different people who use Facebook have different needs. Some people want to share political speech that they think is valid, and other people feel like it’s hate speech . . . we don’t always get them right.”

On whether Facebook can audit all app developers: “We’re not going to be able to go out and necessarily find every bad use of data” Zuckerberg said, but confidently said “I actually do think we’re going to be be able to cover a large amount of that activity.

On whether Facebook will sue Cambridge Analytica: “We have stood down temporarily to let the [UK government] do their investigation and their audit. Once that’s done we’ll resume ours … and ultimately to make sure none of the data persists or is being used improperly. And at that point if it makes sense we will take legal action if we need to do that to get people’s information.”

On how Facebook will measure its impact on fixing privacy: Zuckerberg wants to be able to measure “the prevalence of different categories of bad content like fake news, hate speech, bullying, terrorism. . . That’s going to end up being the way we should be held accountable and measured by the public . . .  My hope is that over time the playbook and scorecard we put out will also be followed by other internet platforms so that way there can be a standard measure across the industry.”

On whether Facebook should try to earn less money by using less data for targeting “People tell us if they’re going to see ads they want the ads to be good . . . that the ads are actually relevant to what they care about . . On the one hand people want relevant experiences, and on the other hand I do think there’s some discomfort with how data is used in systems like ads. But I think the feedback is overwhelmingly on the side of wanting a better experience. Maybe it’s 95-5.”

On whether #DeleteFacebook has had an impact on usage or ad revenue: “I don’t think there’s been any meaningful impact that we’ve observed…but it’s not good.”

On the timeline for fixing data privacy: “This is going to be a never-ending battle. You never fully solve security. It’s an arms race” Zuckerberg said early in the call. Then to close Q&A, he said “I think this is a multi-year effort. My hope is that by the end of this year we’ll have turned the corner on a lot of these issues and that people will see that things are getting a lot better.”

Overall, this was the moment of humility, candor, and contrition Facebook desperately needed. Users, developers, regulators, and the company’s own employees have felt in the dark this last month, but Zuckerberg did his best to lay out a clear path forward for Facebook. His willingness to endure this question was admirable, even if he deserved the grilling.

The company’s problems won’t disappear, and its past transgressions can’t be apologized away. But Facebook and its leader have finally matured past the incredulous dismissals and paralysis that characterized its response to past scandals. It’s ready to get to work.

Facebook plans crackdown on ad targeting by email without consent

Facebook is scrambling to add safeguards against abuse of user data as it reels from backlash over the Cambridge Analytica scandal. Now TechCrunch has learned Facebook will launch a certification tool that demands that marketers guarantee email addresses used for ad targeting were rightfully attained. This new Custom Audiences certification tool was described by Facebook representatives to their marketing clients, according to two sources. Facebook will also prevent the sharing of Custom Audience data across Business accounts.

This snippet of a message sent by a Facebook rep to a client notes that “for any Custom Audiences data imported into Facebook, Advertisers will be required to represent and warrant that proper user content has been obtained.”

Once shown the message, Facebook spokesperson Elisabeth Diana told TechCrunch “I can confirm there is a permissions tool that we’re building.” It will require that advertisers and the agencies representing them pledge that “I certify that I have permission to use this data”, she said.

Diana noted that “We’ve always had terms in place to ensure that advertisers have consent for data they use but we’re going to make that much more prominent and educate advertisers on the way they can use the data.” The change isn’t in response to a specific incident, but Facebook does plan to re-review the way it works with third-party data measurement firms to ensure everything is responsibly used. This is a way to safeguard data” Diana concluded.The company declined to specify whether it’s ever blocked usage of a Custom Audience because it suspected the owner didn’t have user consent. ”

The social network is hoping to prevent further misuse of ill-gotten data after Dr. Aleksandr Kogan’s app that pulled data on 50 million Facebook users was passed to Cambridge Analytica in violation of Facebook policy. That sordid data is suspected to have been used by Cambridge Analytica to support the Trump and Brexit campaigns, which employed Custom Audiences to reach voters.

Facebook launched Custom Audiences back in 2012 to let businesses upload hashed lists of their customers email addresses or phone numbers, allowing advertisers to target specific people instead of broad demographics. Custom Audiences quickly became one of Facebook’s most powerful advertising options because businesses could easily reach existing customers to drive repeat sales. The Custom Audiences terms of service require that businesses have “provided appropriate notice to and secured any necessary consent from the data subjects” to attain and use these people’s contact info.

But just like Facebook’s policy told app developers like Kogan not to sell, share, or misuse data they collected from Facebook users, the company didn’t go further to enforce this rule. It essentially trusted that the fear of legal repercussions or suspension on Facebook would deter violations of both its app data privacy and Custom Audiences consent policies. With clear financial incentives to bend or break those rules and limited effort spent investigating to ensure compliance, Facebook left itself and its users open to exploitation.

Last week Facebook banned the use of third-party data brokers like Experian and Acxiom for ad targeting, closing a marketing featured called Partner Categories. Facebook is believed to have been trying to prevent any ill-gotten data from being laundered through these data brokers and then directly imported to Facebook to target users. But that left open the option for businesses to compile illicit data sets or pull them from data brokers, then upload them to Facebook as Custom Audiences by themselves.

The Custom Audiences certification tool could close that loophole. It’s still being built, so Facebook wouldn’t say exactly how it will work. I asked if Facebook would scan uploaded user lists and try to match them against a database of suspicious data, but for now it sounds more like Facebook will merely require a written promise.

Meanwhile, barring the sharing of Custom Audiences between Business Accounts might prevent those with access to email lists from using them to promote companies unrelated to the one to which users gave their email address. Facebook declined to comment on how the new ban on Custom Audience sharing would work.

Now Facebook must find ways to thwart misuse of its targeting tools and audit anyone it suspects may have already violated its policies. Otherwise it may receive the ire of privacy-conscious users and critics, and strengthen the case for substantial regulation of its ads (though regulation could end up protecting Facebook from competitors who can’t afford compliance). Still the question remains why it took such a massive data privacy scandal for Facebook to take a tougher stance on requiring user consent for ad targeting. And given that written promises didn’t stop Kogan or Cambridge Analytica from misusing data, why would they stop advertisers bent on boosting profits?

For more on Facebook’s recent scandals, check out TechCrunch’s coverage:

 

Crunch Report | Google To Stop Scanning Inboxes

Crunch Report June 23 Today’s Stories  Google now has all the data it needs, will stop scanning Gmail inboxes for ad personalization Samsung’s Galaxy Note8 will reportedly be the company’s most expensive smartphone yet YouTube TV expands to 10 more U.S. markets, adds more YouTube Red series Tesla said to be in talks to create its own streaming music service Credits Written and Hosted by:… Read More

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BrideClick acquires Mode Media

Mode Media The Mode Media story refuses to end — following its abrupt shut down last year, the company’s assets have been acquired by wedding-focused advertising company BrideClick.
Mode previously operated lifestyle sites including Glam and Foodie, plus a larger ad network that it said reached 144 million unique visitors each month.
The financial terms of the deal were not disclosed, but… Read More

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Taboola intros Facebook-style ‘news feed’ to target mobile users with more links

 Taboola, the startup that works with hundreds of publishers to provide a set of links at the bottom of pages directing readers to more content on the site and elsewhere, has long positioned Facebook as the big competitor. Consumers scanning articles on Facebook, especially on mobile, are less likely to ever visit a publisher’s own site, even more so now with the introduction of… Read More

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Quora just launched a self-serve ad platform

 While Quora has been around for almost seven years, it’s been a little slow when it comes to monetization through advertising.
The question-and-answer site first launched ads last year in April 2016, but since then it’s only existed in closed beta to pre-approved advertising partners like Mulesoft and Shopify.
Until now.
The startup just announced that it’s opening its… Read More

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Mobile advertising startup Databerries raises $16M

 Databerries is announcing that it has raised $16 million in Series A funding — money that will help the Paris-headquartered company launch in the United States.
The startup describes its approach as “real life targeting.” It works with brick-and-mortar retailers to direct their ads at consumers who have been to their store or a competitor’s store… Read More

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PebblePost raises $15M to combine online data and old-school mail

Mailbox PebblePost is betting that there’s a big marketing opportunity in printed postcards and catalogs.
The startup is announcing that it has raised $15 million in Series B funding. The round was led by RRE Ventures, with participation from Greycroft Partners and Tribeca Ventures. RRE’s Jim Robinson is joining the PebblePost board of directors.
PebblePost describes its offering as… Read More

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Shine gives up on mobile network ad-block threats, wants to play nice

rainbow-missiles So much for sticking “nuclear weapons” in carriers’ dumb pipes. Shine, last year’s enfant terrible of mobile ad blocking is pivoting (again!) — in both tone of voice and business model. It’s also rebranding to, er, Rainbow. Read More

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Facebook updates its ad policies and tools to protect against discriminatory practices

Facebook CEO Mark Zuckerberg speaks at the company's headquarters in Menlo Park, Calif., Thursday, April 4, 2013. Zuckerberg says the company is not building a phone or an operating system. Rather, Facebook is introducing  a new experience for Android phones. The idea behind the new Home service is to bring content right to you, rather than require people to check apps on the device.   (AP Photo/Marcio Jose Sanchez) In November, Facebook announced it would stop advertisers from targeting users by race for ads that focused on housing, employment, and credit opportunities, in response to a report that found that Facebook’s tools could be used to place discriminatory advertisements. Today, the social network provided a progress update on the matter, disclosing what actions it has taken since… Read More

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Outdoor ad firm buys Swiss dating app Blinq to power beacon push

Blinq The dating game sure is tough to maintain. Zurich-based dating app Blinq has been acquired by a Swiss outdoor advertising firm, APG|SGA, with the latter coveting the team’s experience in rolling out beacon networks for a new division that will be developing interactive ads. Read More

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Salesforce acquires Sequence to build out its UX design services

screen-shot-2017-02-02-at-01-31-39 Salesforce has made another acquisition that underscores how the CRM and cloud software giant is looking to sell more services to its customers that complement the software they are already buying. It has acquired Sequence, a user experience design agency based out of San Francisco and New York that works with brands like Best Buy, Peets, Apple, Google and many more. The news was announced… Read More

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Snapchat’s next Lenses could identify and add to landscapes as well as faces

snapchat-world-lens Snap, Inc. is working on an updated version of its in-app Snapchat lenses that would be able to recognize landscapes as well as faces, according to The Information, and intelligently overlay augmented reality animations and objects overtop of scenes captured through your camera. This is different from its existing smart Lenses, which can add features like snowfall to scenes, because it can… Read More

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Facebook launches a marketing mix modeling portal for comparing Facebook ads to TV, print & more

facebook-video-money Facebook today announced a laundry list of updates regarding its measurement partnership program, including expanded partnerships with Nielsen and comScore, and the addition of a new partner, DoubleVerify. The company also offered details on the status of current integrations, and the launch of a new online portal to help marketers see how their Facebook ads perform, in comparison with… Read More

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Time Inc-owned Viant acquires mobile ad company Adelphic

advertising technology Viant, the ad tech company acquired by Time Inc. last year, just announced an acquisition of its own. The company has reached an agreement to buy Adelphic, an ad startup focused on mobile and cross-device targeting. “Adelphic will bring superior media execution capabilities to Viant’s advertising cloud platform as one of the only DSPs built mobile-first,” said Viant… Read More

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WalkMe acquires Abbi.io to add mobile A/B testing and engagement

walkme After raising $50 million last year on a $400 million valuation, WalkMe — a company that offers on-screen site guidance and engagement analytics — has made an acquisition to beef up its presence in mobile. The startup has acquired Abbi, specialists in mobile A/B testing and app engagement (“Abbi” is both a reference to A/B testing and BI, business intelligence). Terms… Read More

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Article recommendation startup ZergNet adds sponsored links, but promises to remain “content only”

money-arrows ZergNet pitches itself as a higher quality alternative to content recommendation widgets like Taboola and Outbrain. Now co-founder and CEO Reggie Renner is planning to become a bigger source of revenue for ZergNet publishers with the launch of what itthe company calling its Content-Only Monetization Platform. Before this launch, ZergNet’s main selling point to publishers was helping… Read More

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