Advertising online – The entertainment goes digital

Advertising online – going under the radar

From computer to mobile

First we need to acknowledge a new trend: Internet users spend more and more time on their phones when surfing the web at the expense of their computers. That turning point happened in the fall of 2013 in the United States and is expected to happen in 2015 in the United Kingdom according to an article in the Economist issue of September 13th, 2014.

This means a whole different strategy for media content providers. The devices are smaller, and consequently the size of the screen, and the consumers have less patience than when they are browsing over their computer.

Article from the Economist - Sept 13th, 2014 — Article from the Economist – Sept 13th, 2014

Therefore digital strategies need to evolve along these new lines when advertising in order not to antagonize users. Indeed 144 million people worldwide uploaded to their browser an adblock module that hides ads on computers according to the 2014 Adobe report.

There are at least two ways to go under the radar of web users: camouflage and targeting.

Camouflage

The idea for companies is to try and merge their advertising into the rest of the web. Native advertising tries to be less intrusive that classic banners and posters. Baby banners, for instance on the Angry Birds app, tend to take too much space and do not offer a great return considering that it takes a lot of space on mobile screen and that users feel trapped when they accidentally click on the link. The same “trapped” feeling arises when a commercial takes too long before you can click on”skip” on YouTube.

Camouflage on social media

On Facebook for instance,ads appear discretely on the side column or on the main newsfeed as recommendations based on the former clicks of the users. But the strength of social media is to make the users feel that they are the ones deciding what ads they want to look at. On a voluntarily basis users “like” pages of companies or “share” updates and “follow” companies and “retweet” their posts. That is the strength of social media and companies just need to be where the eyeballs of their customers are.

Camouflage through SEO

We could argue that it is no longer camouflage as to a certain extent everybody knows how the referencing system works on a web browser like Google works. The end goal is to arrive first on the result page of as many research keywords’ combinations. There are tricks to get to the top (the way the website is linked to others and the way it is built for instance), and there is also classic ad space that can be purchase to rank first and that are tagged with a yellow “advert”.

A new trend is appearing: inner referencing. People looking for a restaurant in San Francisco might as well type in their search engine “10 best restaurant in San Francisco” and let Google do its magic (after all we are all lazy). The results of such a search provides insights from established travel guides or newspapers… as well as websites dedicated to making rankings, on which companies pay to be ranked. A referencing site within Google’s referencing: the new Russian nesting doll.

Targeting

Geofencing

The location capability of mobile phones is an interesting feature for advertisers as they can keep track of their targeted market segment. For instance Pantene and the Weather Channel send relevant ads to customers depending on the current weather in their postal area or flower shops sending ads to customers within driving distance. This can be a dangerous game for these firms though. If the targeted customers realize how they have been played and how far the technology can go, they can have a negative reaction, feeling that these companies are invading their privacy too much.

Behavioral targeting

The idea in online advertising is not to target to the masses as a billboard in the street would, but to select a certain type of customers and target them thanks to a list of characteristics. Advertisers can thus hit the target more precisely and generate more revenue for their client. This is made possible by the amount of data that is collected thanks to cookies (see other post), web users now leave a trail of information behind them. A classic example would be the follow up email received the day after by customer having searched for certain products on an ebusiness website without yet purchasing it. Depending on people it will be perceived as either intrusive or considerate and convenient.

In a nutshell…

We thought watching the series “Mad men” had given us all the keys to advertising agencies… and yet this era seems to be centuries old. Advertising has taken the path of technology and we are not sure yet what will be the consequences. Finance took that turn decades ago and advertising is following today. Buying advertising space is made through programmatic bidding: computers enter a bidding competition after being programmed to purchase a given space thanks to the characteristics of a targeted group.

Hopefully the system will not derail as the finance did…

Source: the Economist special report “Advertising and technology”, September 13th 2014.

Overcoming privacy issues in a world of connected objects

First let’s lay the foundation with some definitions.

You have probably noticed that your browser proposes you links to click on as soon as you start typing based on your previous search. You probably know that an algorithm on search engines for flight tickets remembers your search and enables the prices to go up if you do the same search again on the same computer. You might have asked your browser to remember your passwords out of convenience. But sometimes it feels that your web browser know maybe a bit too much about you…

This is all enabled by cookies. Cookies are small pieces of data sent from the website and stored in a user’s web browser while the user is browsing a website. The purpose is to facilitate web browsing for users. From the website owner’s perspective it represents a key marketing advantage. The user will be able to find again the items on his/her shopping cart, making his/her whole experience smoother. Moreover, the recommendations provided to the user and the pages displayed are shaped by the data collected on his/her previous activity, for instance on Amazon.com or even on Netflix.com. For more information on cookies: a simple explanation by the UK magazine Wired.co.uk

Data is power. The one who owns it acquires leverage. Web users are used to giving away data either to log into their account on a website or to have access to more promotions for examples. But where does that data go? How is it used? And in what form? The answer is “it depends”. It depends on the website and on the web browser. Sometimes the data is encrypted, sometimes it isn’t. Issues arise when there is an external usage of that data, particularly when it is sold to third parties. Because of the lack of transparency and privacy breaches which occur too sporadically to lead to meaningful change, users do not hold websites accountable. It seems to be too vague an entity to know exactly who to target, although larger companies like Google receive a lot of focus. A “Michelangelo moment” (1) according to the Economist issue of September 13th 2014, would most likely change the current statu quo and result in a drastic backlash… but such a privacy breach has not happened yet.

Recently users have been asked to “opt in” on each new website they visit, that is to say to allow cookies to collect data while browsing on the site. Websites operating in Europe were forced into converting their cookie policy from “opt out” to “opt in” by a European directive so-called the “Cookie Law”.

But where is the “no” button? Who has really read everything after clicking on the “more info” button? Signing out of newsletter is already a tedious process, and “opting out” of cookies is even more so.

Photo source: http://www.srishtis.com/blog/internet-of-things-opportunities-and-challenges/

The impact of connected objects

What is now often called “connected objects“, “smart objects” or “the internet of things” includes all the objects that are connected thanks to the cloud and are thus able to collect data. For instance, a Tesla car equipped with a software to notify the customer when a repair is necessary, a Ralph Lauren polo which records calories burned and heart rate and sends them to your smartphone, or a Philips light bulb controlled via tablet. These type of objects where once regarded as gadgets, though views are evolving and they may soon become the norm.

But at what cost? The fear is that with these connected objects our every move will potentially be recorded. The third party usage of this data becomes a central issue, because some data might be interested if shared, for instance driving conditions for other drivers.

A solution proposed in the November 2014 issue of the Harvard Business Review would be for companies to sell “binding or aggregate data on purchasing patterns, driving habits or energy usage” rather than individual customer data..

In the same issue, Alex Pentland draws the structure of a “New Deal on Data”. The idea is “to give people the ability to see what’s being collected and opt out or in. (…) It’s a rebalancing of the ownership of data in favor of the individual whose data is collected. (…) People are ok about sharing data if they believe they’ll benefit from it and it’s not going to be shared further in ways they don’t understand.” Such works are key to drive awareness and to lobby governments toward these best practices. Transparency will foster trust among Internet users.

In the near future, new legislation will need to be passed by regulators to ensure privacy while using connected objects. The debate is always the same: do we let companies regulate their websites themselves or do regulators need to intervene? Companies have every reason to change their operating model as it is costly to collect all the data they can (all the more because not all data is relevant), and dangerous as their systems could be hacked resulting in massive privacy breaches and countless headaches.

Nonetheless the status quo remains and a bigger push from regulators, consumer groups and citizens is necessary.After all, we should all as citizens and web users feel involved with the issue.

For more information: the interview of MIT professor Alex Pentland.

Story written by Raphaelle Chaygneaud-Dupuy

(1) In 1992, the Michelangelo virus widely infected software and pushed people to invest in anti-virus software.