Google Chrome Privacy Changes & The Impact On AdTech + Attribution

Google’s recent data privacy changes and the potential impact to ad tech was the topic of a recent conference call held with Shyam Patil, Senior Equity Analyst, Susquehanna Securities and C3 Metrics COO, Jeff Greenfield.

These changes actually started on April 16, 2016, when the General Data Protection Regulation (“GDPR”) was born. GDPR is a regulation in EU law on data protection and privacy for all individual citizens of the European Union (EU) and the European Economic Area (EEA). When implemented on May 25, 2018, GDPR required significant changes by both Google and Apple to comply.

Google first made privacy changes by eliminating their unique identifier from all data feeds and removal of all third-party tags from YouTube. This change was not a problem for C3 Metrics, as Google and C3 Metrics have been partners since 2010.  Google created a privacy-safe solution called Ads Data Hub (ADH) and asked C3 Metrics to become the first attribution vendor certified. The C3 Metrics direct integration with ADH began shortly after GDPR was enacted in late 2016 and to this date, C3 Metrics is the only independent attribution vendor certified worldwide. Apple made changes to the Safari desktop browser called “ITP”. The result of this change was to block the use of all third-party cookies, which essentially would stop ad targeting. This change was not a problem for C3 Metrics, as C3 Metrics does not target users for advertising, has never relied upon third-party cookies and migrated towards a proprietary, cookie-less, non-fingerprint solution several years prior.

Unlike Apple, Google was unable eliminate all third-party cookies, as their revenue is 95% dependent on advertising. Google recently announced that Chrome browser users will now have the ability to control privacy settings. Chrome users will have an interface to manage and remove cookies, but only if they want to. Based on industry experience, when a user is given the ability to control cookies, very few actually make changes or opt out.  Google also discussed the removal of the ability to fingerprint. There are a number of companies who were pushing the envelope in the way they extract data from Google and utilize it for targeting. This change was not a problem for C3 Metrics and will not change our ability to perform attribution services.

Overall, this is a very positive change for C3 Metrics and the industry. Google is a valued partner of C3 Metrics and we applaud their efforts towards protecting both consumer privacy and digital advertising.

 

Participants

Shyam Patil, Senior Equity Analyst, Susquehanna Securities
Jeff Greenfield, Co-Founder & COO, C3 Metrics

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Call Audio


 


Call Transcript

 

Shyam Patil
Hello, Good afternoon everyone. I’m Shyam Patil, the Internet Analyst at Susquehanna. Welcome to our conference call with Jeff Greenfield, Founder and COO at C3 Metrics. To talk about Google’s recent data privacy related changes and the potential impact to ad tech. Thanks Jeff for joining us today. We’re going to go through a series of questions for about 45 minutes to an hour. If anyone in the audience has any questions, please feel free to email them over to me during the call and we’ll do our best to address them.

Shyam Patil
Jeff, before we get into the questions, could you provide just a quick intro of C3 Metrics and where you guys fit into the overall advertising ecosystem?

Jeff Greenfield
Yeah, thank you so much. At C3 Metrics we sit kind of in the middle of everything. We’re essentially Switzerland. Because we live in the measurement space and we’re one of the few remaining independent measurement companies. The way that I kind of look at what we do and the way we explain it to folks is that we’re kind of like very sophisticated auditors. We come in almost like the FBI at first and we tap all the communication lines. And so we hook up our technology where we’re capturing data in real time on the digital side. We’re capturing all of the spend that an advertiser will do, and then any type of CRM files that go back and forth. So we’re capturing all of this data, we start collecting it.

Jeff Greenfield
We then go in and purify it in our own data cloud and then we apply machine learning and then we’re able to look backwards and tell an advertiser specifically what they did, where they over-invested and areas where they under-invested. Where they could’ve gotten more bang for their buck. More ROI. But unlike an audit where you can only look backwards, once the technology is hooked up and ready to roll, then a marketer and finance can log into a dashboard environment. Where they can look every single day, every single week, and see how their current marketing campaigns are progressing. Are they on plan, are they where they over-invested, where they under-invested. How did that direct mail campaign work. How did our TV campaign work, we’re running three different TV spots. Which one is having the biggest impact on revenue, and most importantly in finance, what is our velocity to revenue like currently compared to where it was last year and what do we need to change to get more revenue right now, in order to hit our numbers.

Jeff Greenfield
That’s essentially what C3 does and we work across all of the different ecosystems. What’s unique to this world of measurement is that there’s always been holes. There’s always been things that you can’t measure. But because of the changes that have occurred in terms of how consumers look at media, interact with media, with all these digital footprints, you’re able to, even for things you can’t measure, you can see little imprints of it. And then you can use that to accurately determine what the overall impact is to revenue.

Shyam Patil
Excellent, okay. Great. Very helpful. And just, which ecosystems do you measure across. I imagine you guys touch Google, Facebook … I guess who do you touch or is there anyone that you don’t touch or have visibility into?

Jeff Greenfield
No, we have visibility into everyone. And the reason for that is we come at it from unlike a provider that’s just collecting data, where our job is to sell data. We come at it as an extension of the advertiser themselves. Since we come in from the purview of the advertiser, we start with what they call their KPI’s, their key performance indicators. Whether they’re sales online, leads online or sales in stores. We can get that final action which is hidden from many people in the data world and then we can look at those little footprints. Those clicks that come to their website, the impressions that happens in the ads. So in that instance we’re able to look across the entire digital ecosystem and also the entire traditional ecosystem as well too.

Jeff Greenfield
So there’s nothing that’s missed because we fit into that kind of independent perspective and work on their behalf.

Shyam Patil
Excellent, great. That’s very helpful. So I guess we can jump into the questions now. I guess with, we can start with just Google and GDPR. Just from your standpoint, from what you’ve seen, what have been the key changes Google’s made in response to GDPR. And what’s been the impact thus far?

Jeff Greenfield
Well the biggest change that they made and they let everyone know about this, probably about it’s going on a little over a year now. That they were going to be eliminating third party tags from part of their ecosystem. Initially it was going to be YouTube. So what that means is, is that in order for us as an independent provider of measurement to be able to tell when a YouTube video is actually viewed, and someone interacts with it. A number of years ago when YouTube first came out, we provided Google with a tag, essentially a piece of code that would essentially ride piggy backs. Anytime an ad would run on behalf of one of our advertisers, a piece of code would show up from C3 Metrics so we could accurately measure it.

Jeff Greenfield
But what’s happened over a period of years is that the number of people that are consuming YouTube inventory on mobile, has gone up dramatically. And mobile always provides somewhat of a difficulty in terms of keeping that consumer journey intact. The change that Google made was to remove third party tags, so no third party tags, no independent measurement at all on YouTube. And what they did is they created an alternative environment called ads data hub. What that means is that we’re able to get the same data that we had before, the only difference is, is that instead of our tags being out there we now have to query Google after the fact in order to get at that data.

Jeff Greenfield
So it created a scenario where we had to put resources to be able to get the same data that we’ve always been able to get. It was a significant shift that occurred there. That was one change, was getting that data into ads data hub from YouTube. The other change was that Google provides unlike Facebook, where Facebook only has ads on Facebook, the ads that Google has is across pretty much the entire digital ecosystem. Through their Google display network that they have. Also on top of that, a significant, in fact I would say the majority of advertisers are utilizing Google’s ad tech products, specifically their ad server and in some instances their DSP, or their trading desk to actually purchase ads.

Jeff Greenfield
Part of that, and that’s the whole double click environment. So what’s been happening throughout a number of years is that whenever you buy an ad and you’re using one of these double click ad tech products, there’s an identifier that goes out, called the double click ID. And so essentially what you could do is if you’re an advertiser, an agency, you could buy ads, you’d see a double click ID and then when somebody when does a conversion or a KPI on the advertiser’s website, you can have another double click tag there and it would let you know which of those people that got exposed to an ad, actually did that conversion event that you wanted them to do. So if you show, if an ad got exposed to someone with a double click ID of 1-2-3-4. You could then run a double click report, a conversion report that would say, 1-2-3-4, get a conversion on this date and time.

Jeff Greenfield
Well that all of sudden changed come May because what Google realized is that by giving out those double click ID’s, that would somewhat be in violation of GDPR because the advertiser knows how they’re targeting people and then if they know who’s converting that couldn’t be traced back and that would be in violation. What happened is, is that at some point in the middle of May, I think it was around May 21st, when advertisers and agencies and other companies went to pull their double click reports to look at those double click ID’s, instead of double click ID’s they were all zeros. So the other change that Google made in response to GDPR was that double click ID’s would no longer be available for any users of any of their ad technology. They removed it completely because it could put them in jeopardy in terms of GDPR.

Jeff Greenfield
Those are the two key changes that they’ve made in response. From an impact, it’s been very significant. For a lot of advertisers, especially on the YouTube change when they rolled out this ads data hub, and remember you’re going back over a year. It was a year ago that they said to everyone, “Hey, we’re making this change. It’s not going to be any YouTube videos.” Then they came back again last November and said, “We’re serious.” And at first they told us the change was going to happen in March but they didn’t get enough compliance so they pushed it up til May. You see they wanted to make this happen months before GDPR came in. But there wasn’t enough people that were getting on board with it. And so what they made announcement was I think in April, was that any new ads starting May 1st that were going to be submitted to Google for YouTube that had these third party tags in them, if it was a new advertisement, they were not going to accept it. That was the first thing.

Jeff Greenfield
And then the second thing was that May 21st, so remember GDPR went into effect May 25th. May 21st, any ads that were currently running with third party tags would be stopped. And then May 25th is when GDPR happened. And so when that announcement started in the beginning of May, most people in the ad tech community started freaking out, “well what do you mean you’re going to stop taking the tags.” And it’s like, Google’s like, “Hey, we’ve been telling everybody and all our partners about this for a year.” And then they announced that every partner had an opportunity to participate in this ad data hub. It turned out that in May, worldwide, there’s only five partners that participated in ads data hub. I think it’s now up to seven. So were almost a month into this and there’s still only seven partners.

Jeff Greenfield
C3 Metrics was one of the first five, in fact we’re the only independent measurement company that’s involved in ads data hub. And the reason that, you would think that after such a drastic change when you think about the amount of inventory that trades on YouTube, you would think like, “Why all of a sudden isn’t like every ad tech company, every measurement company jumping on board on this?” And the reason for that is because it is a significant shift in terms of how you get your data. It requires a change in work flow and requires significant resources both on our side and then also on the Google side.

Jeff Greenfield
Luckily for us we responded to Google very early on. They provided us with a dedicated team and we’ve been meeting with them every week now for almost a year. And there’s still work that is to be done. Every week to keep this going. It’s a significant amount of work, that’s why people haven’t jumped on board. Right now you have I would say the majority, a significant number of advertisers if they’re not in the Google ecosystem and they were measuring another way with YouTube, they’re completely running blind right now. That’s one big change. The other big change on the double click ID side, is that a significant number of ad agencies were utilizing double click ID’s as a way to report back to their advertisers on the effectiveness of media.

Jeff Greenfield
You see this idea of independent measurement has been around for a long time but agencies represent that they’re doing best practices. And advertisers expect that that’s kind of built into the price that you pay. You’re paying for this media, we expect that you’re going to do what’s best because they have a fiduciary duty to spend the money the best way. A lot of agencies have been utilizing these double click ID’s, they have an internal advance analytics team that are helping them do that. In fact a lot of advertisers have their own analytics team that have been leveraging double click and these double click ID’s to build out incredible reports and all of a sudden in May, they were caught dead in their tracks. So there’s a lot of marketers out there that here we are, we’re about three to four weeks in, it’ll be four weeks in the end of this week, that don’t have reporting.

Jeff Greenfield
That’s pretty significant especially as we approach the end of the month because come the beginning of July, Finance is going to wanna know how did we look in June and a lot of folks are not going to have any answers. And their excuse is going to be, “Well, you know those changes in Google.” So it’s going to be interesting to see the changes that happen as a result of that.

Shyam Patil:
Great. That was very helpful and thorough. I guess I have some follow up questions on ads data hub and the double click ID. On that ads data hub, I know you’re still working to extract all the data efficiently. But is there any less data available or will there be any less data available to measure ROI and effectiveness of ads once everything is set up properly?

Jeff Greenfield:
Well, you know I mean, yes and no. So here’s the thing is that when you start looking at independent measurement overall, there’s kind of and I’m going to give you kind of walk around to get you specifically to your answer. So you go back 15 years ago, the way that measurement was done on the marketing side of things is something known as a marketing mix model. Which today is known as a top down model. That’s where you look at big, broad strokes. You look at in the world of TV, how many impressions or how many GRP’s did we buy in a specific month, week or day. How much did we spend. You look at what the sales results are and then what happened is, is that digital became more and more a component of the marketing mix because you go back 15 years ago, 20 years ago, digital was very, very, very small. It was like less than 5%.

Jeff Greenfield:
And it worked out okay because you look at these broad strokes, you can look at correlation, you can layer in some causation you can even run machine learning on this type of data to see, “Hey, you know direct mail is not as effective as it is.” But the problem is, is that when you layer in the digital data all you’re really looking at was total number of impressions. There is a difference between a TV impression and a digital impression. There’s differences in sides, you can layer in activity, there’s all sorts of things. So what happened is that is digital started to grow up over the last 10 to 15 years. Came the concept of really mapping out the entire customer journey, to where you could look at every single click, every single impression, and then layer that in all the way through an entire journey.

Jeff Greenfield:
Through this data what we’ve been able to learn is really incredible. That we know that the average consumer journey, and this is across all sectors and all industries, is about 32 days. With about 22 individual brand exposures of touchpoints. Now that’s all sectors. But where it gets really, really fascinating and is interesting is when you get into other sectors like auto. Like auto has this journey which has two different journeys. There’s a short journey when a consumer gets in an auto wreck. And it’s about an 8 day journey, meaning you’re driving to work one day, you don’t expect you’re going to a need a new car and all of a sudden you do. You’re car gets totaled, you wait for the insurance to total it and boom you’re going to buy a car. That’s 8 days.

Jeff Greenfield:
But the normal journey for everyone else is about eight months. Think about it, if you’re on a lease you get a lease, they try to buy you out of your lease like 8 months before your lease is expired and that’s a really long journey. So that can have hundreds and hundreds of touchpoints. So that’s what we learned from this kind of, what’s called today multi-touch attribution, this consumer journey mapping. And that’s what you call bottom up, where you get very, very, very granular and you kind of move your way on up. You start at an individual digital tiny little touchpoint, and you move your way all the way up, all the way up, all the way up, and now you’re at this kind of channel level where you can evaluate YouTube on its own and you can evaluate YouTube in relationship to something like a Criteo. Or YouTube in relationship to a trade desk or YouTube in relationship to buying television on NBC.

Jeff Greenfield:
And so there’s that top down and there’s that bottom up. So 10 years ago as digital started to become more and more important part of the ecosystem, there was this big push for just multi-touch attribution and everything has to be incredibly, incredibly granular. But of course, the problem with granular data is that it can point you in an incorrect direction. ‘Cause when you’re analyzing all of this data at a very granular level, if it looked like for example like at that point 95% of your data is impression-based data. And we know because of the problem in the digital ecosystem that half of all digital ads are never seen. So as a result, you could, you didn’t know which ads were seen and which ones were not seen. You could actually, even when you model the data you could be pointed in a wrong direction but with that top down modeling, that marketing mix you’re never pointed in that wrong direction. But the problem with top down is it doesn’t give you the granularity that you want.

Jeff Greenfield:
The future of independent measurement today is what Forrester is calling a unified measurement model. Where we take the best of both worlds. Where we’re able to use this granular data where it’s available and where take that top down approach where it’s available as well because some marketers come to you with a brand new brand and they don’t have any historical data. But where there is historical data you want it ’cause it helps inform the future. So today, most clients today and most marketers today are looking at both, they’re using as much granular data as possible in order to stay on plan and on touch. But they’re using that top down to kind of keep them in alignment as well.

Jeff Greenfield:
So, with that in mind, changes like GDPR are always going to end up in regulatory changes and the changes that we see go on with like the Cambridge Analytica and all of these things. There’s going to be reckoning and even with all the location data that gets leaked out through apps that consumers aren’t even aware of. I think that there’s going to be a reckoning that the digital ecosystem is going to have, and it’s already starting now. But it’s going to happen over the next 24 to 36 months. What the result is going to be is there’s going to be less availability of data, and it’s going to be restricted, but it’s going to be restricted down to a level that it’s not going to impact independent measurement. Because of where we sit, and we sit on the side of the advertiser, we’re living in a world where we have access to the advertiser’s first party data. So even though Google may constrain their data ever so slightly, just like Facebook will, we still have the bird’s eye view of looking at it from that advertiser’s perspective. So even if there are holes and there are gaps, which there’s always going to be. I mean Amazon is a huge hole for a lot of folks, same thing is true with Ebay, but yet we’re still able to see around it, especially if we’re sitting at the perspective of the advertiser.

Jeff Greenfield:
So, that was a roundabout way of saying, that Google did constrict the data ever so slightly, so they could comply with GDPR, but from a measurement perspective, marketers that are utilizing independent measurement, they’re not going to be missing out on anything.

Shyam Patil:
Great. And moving over to the Double Click Id, you talked about the change, what the ID was used for, why Google made the change, what they changed. Can you talk about what the impact has been thus far from this change? So if advertisers and agencies were using the ID, essentially to measure the effectiveness of digital campaigns, and now they’re zeroed out, what are agencies and advertisers doing, how are they reacting to this?

Jeff Greenfield:
I mean, they’re scared out of their minds. I mean they have a duty to produce reports to their clients every single month, to let them know how the campaigns are progressing. You know, are we on plan? What’s our ROI looking like? You know, not what is our total ROI, that’s easy for the advertiser to do. The advertiser simply looks at what sales were this month, and how much we spent. That’s my cost per action, or that’s my return on ad spend, row ads as they call it. In our world, we call it AVSR, which stands for Attributed Value to Spend Ratio. So AVSR is the new way of looking at things, and the reason you have a new perspective on it is because, when you walk into an organization where the return on ad spend for someone like Criteo used to be incredible, and then all of a sudden, under this new lens of management it looks really bad.

Jeff Greenfield:
People freak out when their row ad numbers change significantly. So independent measurement always comes in and says, “Hey, this is a different number with a different acronym.” It’s a way of kind of building consensus over time, but I gotta tell you for those folks that were utilizing Double Click IDs, but were not on a Google stack already, meaning they’re on a Google stack, but they’re not using Google Analytics 360, because remember they … most of these folks are running GA, you know Google Analytics for free. But the agencies didn’t wanna spend the 200 grand for Google Analytics 360. They didn’t want to spend even more money for independent measurement, because they’ve got a team in the house that can do it.

Jeff Greenfield:
And they’ve got all the data, we’re just pulling these Double Click IDs. We’re running them in Excel and reports, and we’re putting in in visualization software. And even the client has overall row ads, I can now give them row ads by tactic, and strategy, and by partner. I can tell them how YouTube did, I can tell them how Criteo did, I can tell them how all this thing did, because we ran everything through DCM, Google’s ad server and I have complete visualization of what happened. Well, I tell you for some of them, I don’t even think they pulled the reports yet because you know how it is, it’s not the end of June yet. And what’s going to happen is, at the end of June, they’re going to pull their reports, and they’re going to have this oh shit moment, they’re going to be like, “What are we going to do?” And that’s what’s going to happen. It’s going to be a bunch of late nights, and they’re going to have to all of a sudden, come up with an answer for their client and it’s going to be a huge, huge reckoning.

Jeff Greenfield:
We’ve already had some very upset calls, not just from advertisers but from marketers themselves, meaning internal teams that have a BI team, where they have built an incredible BI stack, where they are getting these feeds that are coming in automatically. They’re getting pushed into their, what they call their data leg, and they’re running all of this analysis. But unless they’re really up to speed, most of them are probably only running these reports once a month, and they’re not going to know what happened until it all happens, until the end of this month. And there’s going to be, there’s been a big freak out right now, if you read somewhat in the press. There have been a bunch of folks calling, telling Google it’s unfair what they’re doing, it’s not right, and it’s like, “Hey listen. This is Google’s company, they can go what they want, they write the rules on this type of stuff, and their legal teams have determined that giving out these IDs violates GDPR, and they can’t.”

Jeff Greenfield:
You know, there’s already reports of problems that are going on, and we all knew that stuff like that was going to happen, but they don’t want to put themselves further into jeopardy, and I don’t blame them, so there’s solutions that are out there. An advertiser or marketer can sign on the dotted line with Google, be part of the Google stack. Of course the problem with that is, that once you sign up on that Google stack, you are now entrusting that row ads, or what ad call that AVSR, that Attributed Value to Spend Ratio, you are entrusting that Google is going to give you the right number. That they’re going to give you the right breakdown between Google inventory, and Criteo inventory, and PV and all of that stuff.

Jeff Greenfield:
Now here’s the thing that I honestly believe a 100%, that Google’s numbers are completely independent, that they are completely on their own, that there is a … like in research organizations. You know like Gartner’s got the sell side and the research side, the same with Forester, and there’s this wall that’s up between those two. And I’m 100% of the belief that there’s a wall up between Google Analytics measurement, and Google Analytics on the sell side. The company’s huge, of course there’s a separation there. But the problem is, the optics. And this is where you get into difficulty, because when you’re talking about divisions and splitting up budgets between different partners, tactics, strategies, and channels, and you’re talking about measurement, there’s always winners and there’s always losers. And it goes deeper than that, because in many instances, there’s not just one agency.

Jeff Greenfield:
There’s multiple agencies and everybody is fighting for budget, and if there’s a report that comes out that shows that Google search is doing better than a certain tactic or channel, you got to believe that those folks on those tactics and channels are going to point fingers and say, “Of course, Google is saying that Google search is doing better.” Now even though, it’s completely independent, those types of optics cause problems in an organization and prevent that organization from moving forward, because there is no independent voice. It is impossible for Google to come in with an independent voice when they’re selling media themselves.

Jeff Greenfield:
In fact, there’s now being calls made that Nielsen, because of their eXelate purchase that they sell data, they’re selling targeted pieces of data, that it is impossible for them to provide an independent voice. And this is Nielsen, whose been the voice of reason in terms of TV for many years, but some advertisers are saying that they’re not even trusting Nielsen data because they’re not completely independent. And that’s the problem, is that when there’s the appearance of not being independent, that can cause ripples and problems within an organization. And that’s the long term impact here.

Shyam Patil:
This is all great points, and just following up. So, if agencies are going to be smart enough not to trust Google to grade its own homework, what do they do? Do they move spend to another platform? Are you seeing sale cycles from this from larger brands? I guess what, it doesn’t seem like agencies and maps are going to trust Google to provide them the ROI without being able to independently measure it. So what are you seeing right now, what are the agencies doing or contemplating? What do you think ends up happening?

Jeff Greenfield:
Well in January, most large holding companies and agencies were doing the same type of spend that they were doing over the last couple of years which is, we’re creating our own measurement. And their way of creating their own measurement was to leverage those Double Click IDs. That’s what it was. They were building out their own independent measurement using Double Click IDs, which was awesome, until this all went away. So right now, they’re kind of spinning and they’re doing a lot of discussions with folks like us. And there’s not many others that are out there like us.

Jeff Greenfield:
What we’re now hearing, literally in the last three weeks is, that all of a sudden, a lot of the consulting firms are now getting into measurement. They’ve always provided accounting advice. Some recently in the press are now saying that they’re starting their own programmatic desk, and now they’re getting into measurement. And again, that creates its own issue, very similar to the Google issue, which is how can you come in and audit all of our programmatic, and then also tell us you sell programmatic services and also measure. And that’s being a problem right there.

Jeff Greenfield:
So a lot of the agencies right now are trying to figure out, what are we going to do? And here’s the issue. It’s not like clicking a button, and switching over to a new platform, and the reason for that is that, if they’re part of that Google stack which many of them are, switching off of the Google ad server to another. And there are some other great solutions out there. I mean it used to be that it was primarily DCM, which is Google’s ad server, and it used to be Atlas. And then there was a kind of tertiary ad server, called Seismic. And that was pretty much it. And Atlas back in the day was, Microsoft’s kind of ad server measurement solution. Microsoft kind of shut that down and Facebook bought it, like three years ago. It was very exciting.

Jeff Greenfield:
Facebook is going to provide an ad server, advertisers are going to have access to Facebook inventory and insights in there, and it was great. And a lot of really forward thinking marketers jumped ship from Google to go to Facebook, because it’s like, “Hey, we’re spending a significant amount of our spend in Facebook, let’s go over here.” But what they found out very quickly is that, yes it was Atlas by Facebook, but it was still the kluge old style interface and it just didn’t work that well. And there were lots of problems.

Jeff Greenfield:
And right around that time, this was about a year and a half, two years ago, Double Click did a whole rebranding and cleaned up DCM, and it looked great. It looked incredible, so a lot of advertisers are stuck there. They’re in these contracts, and switching over to another ad server is a lot of work. Now in the meantime, Seismic has gone out and has expanded. They’ve acquired Rocket Fuel. And the nice thing about Seismic is, they’ve got a huge massive international footprint. But so I think a lot of the advertisers and a lot of the holding companies are going to sit back and re-evaluate. “Okay, here are, it’s summer. I don’t wanna make a change now, because if I make a change now it’s going to impact Q4.” And Q4 for most brands is a big, big season for them.

Jeff Greenfield:
So really, if they’re smart, they’re going to make plans for the transition that they’re going to make in Q1. But now, besides having Seismic available, Atlas is gone, there’s a lot of other alternatives out there. Because most of them are not just looking at ad serving capabilities, they’re also looking at trading test capabilities, because a lot of them are hooked in with DCM, and then also the Double Click Bid Manager. So, now there’s also the possibility of MediaMath, is a great solution, which also has large international presence. Obviously there’s The Trade Desk, which continues to pick up steam, and continues to be a powerhouse. And then there’s also, so we talked about Seismic, there’s MediaMath, there’s Data Zoo as well. Another Boston company here, as well.

Jeff Greenfield:
And what I’m expecting is, I’m expecting a lot of them will see this as an opportunity to say, “Hey, if we can add a very simple nice layer, that’s a very simple layer for agencies to load up creative and make things easy,” because most of these trading desks are set up to work in conjunction with DCM. I don’t think many of them ever anticipated a future where maybe DCM and Google would be completely gone, and I think that’s where things may be headed. So it opens up a really unique opportunity for a lot of these players.

Jeff Greenfield:
But I think that what most marketers, if they’re smart, they’re going to try to hack something together between now and the end of the year because they have to, but they’re not going to make such a significant shift. What they may do is start testing, like now, and maybe move over a couple of campaigns at a time, and maybe if they can do that. It really depends on the size of the client. Some of these clients are just so large, it’d have to all be done at once, and it’s just a kind of real major effort.

Shyam Patil:
That’s helpful. And you’re talking mostly about, at this point, the larger more sophisticated advertisers, correct? The small to mid-size ones will probably be okay with Google grading their homework because they probably prefer it that way, anyways. Is that a fair tech relation?

Jeff Greenfield:
Yeah, if a brand, if an advertiser is spending, let’s say below three million dollars a year, most of their measurement is probably going to be on Google or Facebook. They’re not large enough yet where they’re branching out into TV, and so the Google solution, and someone in house will be able to take the Google data, hack it together with some of the Facebook data, and you know, put it in an Excel spreadsheet, and do some R square analysis and figure out how to kind of guide the ship.

Jeff Greenfield:
But what happens is, that once you start spending more money than that, you’re now working across different channels, and now you’re missing out, like for example, like the regular Google Analytics, the free solution which most people will use. The minute you go out of Google’s ecosystem, and let’s say you wanna try AdRoll for retargeting, a great retargeting solution. You’re not going to be able to get the impression data into Google Analytics, you’re going to be lost. So you’re not going to be able to, the GDN retargeting that you’re going to do through AdWords, is going to look five to a hundred times better than AdRoll will every single day of the week. And TV’s not going to come into Google Analytics natural on its own, too.

Jeff Greenfield:
So you’re at the point where, that’s going to work well for you, because the problem is that even to move up to that Google Analytics 360 layer, you’re looking at a couple hundred grand a year, and that’s tough for someone who’s spending three million dollars a year, that’s like five percent of their ad spend. That’s tough for someone at that level to justify at this point. Once they start getting higher, they’ll stick with that solution, but what’s going to happen is they’re going to find they’re plateauing. They’re spending more money but conversions and KPIs are not moving, they can’t move the needle. And they can’t figure out why, and it’s because, the Google solution at that point is just going to keep saying the same thing, “Spend more money with Google. Google stuff is working.” And then at that point, that’s where there say, “Hey, we need to really invest in an independent voice to tell us what’s working and what’s not.”

Shyam Patil:
Excellent. And just a quick follow-up, so maybe just honing in on the DSP commentary that you made, you know potentially Trade Desk, MediaMath, Data Zoo, could be beneficiaries. Hypothetical question. So a lot of agencies, for specific advertisers, for specific advertiser campaigns, will run multiple DSPs. So, if DBM is getting the lion’s share of the spend for a particular advertiser, but that agency also has say, The Trade Desk, or MediaMath, or Data Zoo set up as secondary DSPs, is it a challenge to incrementally start shifting some campaigns over to these other DSPs because they’re already set up? Is that something we could start to see now incrementally, and then more of a material shift next year? Would that be kind of what you would expect?

Jeff Greenfield:
They could do it, and they could do it now. The problem is, is that where’s all that creative coming from? So you see, in that scenario, where you talk about DBM, Data Zoo, Mediamath, and Trade Desk, where you’re running on four DSPs, you’re running it all through a single ad server. So what that means is, I can upload one piece of creative into DCM, and then I divvy up code across all of them, and then I’ve got a centralized repository for my creative. So if I wanna update creative, I just go in one place and do it. In fact what I could do is, I could just go and update that creative in DCM right now, and it would update the creative across everyone. That’s the whole purpose behind an ad server.

Jeff Greenfield:
Most people don’t do that. They tend to reissue tags, but to manage each one of them individually, is a real pain. And so historically, what most marketers and the agencies have done, is they use that DCM as that central repository for reporting. So I could shift money over, as a way to tell DBM, and a way to tell Google I’m unhappy, but at this point, if I’m using those Double Click IDs to measure and I don’t have them anymore, I’m scared out of my mind. And so what we find happens when people are in the dark is, there’s very … there tends to be no action at all. They’re scared. They figure I’m just going to keep doing what we’ve been doing because it’s been working, and no one’s been complaining and so, until we have a better sense of what we should-we’re just going to keep it at the same level. I think there’s a huge opportunity for those DSPs to come in and say, “Hey, let’s help you move.” In fact, what I would do is that I would create a whole team and just go at it.

Jeff Greenfield:
This is a great marketing opportunity for them. Listen, at the end of the day, there is an ad tech team at Google that has a number to hit, but the reality is that when you look at the P&L for Google, that the money amount of money that comes in to them through the people buying DCM is minuscule. The big numbers are their inventory.

Jeff Greenfield:
And still, at the end of the day, that Google display network is great inventory. It performs really, really, really well. Whether someone is buying the Google inventory through DBM or DCM or through Trade Desk, Dataxu, or Media Mass, they’re going to buy it no matter what because there’s so much of it and it does perform well.

Shyam Patil:
Excellent. If Google does start to realize share losses from this and you guys just touched on this jut now, would they, do you think, revert back to giving out the ID or do you think in a GDPR world, because this is not a material P&L driver for them that they’re unlikely to revert back and kind of live with the share losses? What is your view there?

Jeff Greenfield:
I don’t think there’s going to be any share losses from Google in terms of monetary if people left DCM in droves. I think if it does happen, it’s going to be a slow change because people … Remember DCM is a portal and is a simple way to buy their inventory, and that’s really what they want. That’s where they make the lion’s share of their dollars.

Jeff Greenfield:
Still, the one piece that we haven’t talked about here is that a lot of the reason people are on DCM is because it ties in perfectly into what’s called DS3, which is double click search. So that’s another piece of the pie that is also being lost.

Jeff Greenfield:
These people that are on this whole double click stack, their using these double click IDs to also measure all of the search impact, as well. So this impacts search dramatically, as well, too. It all ties in together, but I don’t see, based upon my history of seeing Google make changes based upon regulation or litigation since the founding of Google, I have never seen them revert back on any change. I just don’t see it happening at all.

Jeff Greenfield:
The reason for that is that they have created an environment where if you want to get the data, it’s available for you. You just gotta do some work to get there. Not some work, you have to do a lot of work to get there. Which means, the only people who are going to get it are the people that really need it and really want it, and are really doing a good service for their clients.

Jeff Greenfield:
I don’t see any shift back. I think if every client, if every advertiser who is using DCM left tomorrow, if Dataxu announced tomorrow that they have the best ad server in the business, and let’s say it is, and everyone … There was a push button where they could click and export their data overnight, and everyone did it, guess what? People are still going to be buying Google’s inventory.

Jeff Greenfield:
I don’t see any share loss for them, whatsoever. It’s not like everybody, all of a sudden, moving overnight from AWS over to the Google Cloud. This is small numbers for them, at least from our perspective.

Shyam Patil:
Got it. Okay. That’s very helpful. But small numbers for Google could be material for some of these other DSPs that you cited. Correct?

Jeff Greenfield:
It could be incredible numbers for them. Not only that, remember once you have them as a customer, and they’re doing all of their buying through you, then what that means is, they’re your trusted … It’s totally different when you’re Dataxu, and you’re one DSP, when you’re medium app, and you’re one DSP out of five, you’re part of the plan.

Jeff Greenfield:
When the agency comes over and you are now serving everything, and everything is going through you, it’s a completely different relationship. I wouldn’t be surprised, and remember that one piece that we talked about with DS3? There’s two pieces of technology out there that have just been sitting around for the longest time that are search management tools, Kenshoo and Marin Software.

Jeff Greenfield:
These companies have been largely ignored for a number of years. They’ve done a really good job at incorporating Facebook data, making it easy for their clients to go in and purchase Facebook inventory. I would think that there’s an opportunity here, if I was a trading desk, to team up with one of them and make a combined offering that could then be a click of a button away for advertisers to shift over where they would have all the IDs that they need.

Jeff Greenfield:
That could be something really, really interesting. It could be a powerhouse. That could be significant to one of those players. Very, very significant. Remember, like I said, when you’re in that seat, you have a completely different relationship with the agency, you have a completely different relationship with the advertiser, and it creates other opportunities to sell them more services and more products.

Shyam Patil:
That’s a great explanation. I had a question from the audience related to what we’ve been talking about the past couple of questions.

Shyam Patil:
You talked about the double click ID impact to revenue for Google, it would likely be minimal for them, all it could be material for some of the other DSPs. How about the removal of the third-party tags? How impactful will that be to Google?

Jeff Greenfield:
I think it will have zero impact. When you look at Ad Age and Adweek, and Broadcasting & Cable, and you read all these magazines and industry news, all you hear about is how brands have been unhappy with Facebook and Google for the longest time.

Jeff Greenfield:
It’s because you’re living in the world of consumer generated content, which is not brand synced. It’s the nice thing about television. Google talks about how YouTube is a great replacement for TV. Yeah, the only difference is that it’s not produced. Now they’re starting to come out with YouTube Red and these other products, but the majority of inventory on YouTube is all user generated content. You have no idea what’s going to be there, and it’s not brand saved.

Jeff Greenfield:
That’s the biggest complaint of the P&Gs of the world, not to mention all the fraud that’s out there. Mark Pritchard at P&G has been spouting for the last year or so that 75 cents of every dollar they’ve spent in digital has not even been seen by a human, it’s been completely fraudulent. It’s just never ever seen.

Jeff Greenfield:
Brands are always complaining. That’s what you read about. What most people forget is that the majority, the vast majority of the ad purchasers on Google and on Facebook are SMBs. It’s your local florist, your dentist, your chiropractor, your gym. The people that are buying local. Once every florist in a town start buying, what happens? These are all bid environments. The bids keep going up, and going up, and going up. That’s why the CPM’s keep going up every quarter.

Jeff Greenfield:
Google and Facebook, their earnings keep going up, and going up, and going up. I honestly don’t think that, even though Google and Facebook have set up these huge teams to take care of the big advertisers, they’ll set up this massive team, they’ll wine and dine them, they’ll invite them out to the Google Campus. Facebook will do like a Facebook University to educate them. The marketers are all excited. They get to go to the Facebook Campus. I think I saw Zuckerberg across the hall wave to me. It’s all very cool. It’s all very exciting.

Jeff Greenfield:
But at the end of the day, even though that brand they represent $300 million a year that could come in to them, that’s their total spend, let’s say. Maybe they can get 35% of that. They still make more money from the SMBs. I think at the end of the day, that’s who Google is catering to.

Jeff Greenfield:
The SMBs, their not spending enough money. I’m an SMB. To me, I’m spending a lot of money. I’m spending $3,000 a month on Google for advertising. I’m not going to spend $300,000 a year on independent measurement, or a million dollars a year. That’s more than my advertising budget. I think the impact is going to be minimal to them. I think the other side of this is that when you talk about the fraud, and you talk about the brand safety aspect, the other piece to this we haven’t even discussed is, what are brands going to do?

Jeff Greenfield:
What is the potential, if you will, backlash, and we’ve already started to see it, which is, if I’m a brand, the biggest concern I have as a brand is not that I’m not going to have enough sales, but if I’m an international top 50 brand, my biggest number one concern and the concern of my board is ads that show up where they shouldn’t be showing up.

Jeff Greenfield:
Ads that show up and stuff that’s not brand safe. Still, to this day, I cannot trust that Facebook is not going to be brand safe. I cannot trust that YouTube is not brand safe. The things that I know are brand safe are television. I know that print is brand safe, and I know that premium advertisers are brand safe.

Jeff Greenfield:
So things like the Financial Times, things like even the WWE. It may not be brand safe to some brands, but I know what it is because it’s controlled. It’s not user generated content. It’s funny because the world is shifting. You go back to where things were seven, eight years ago, it was the emergence of programmatic.

Jeff Greenfield:
Advertising is taking off. We’re trading. Digital advertising, just like the stock exchange. It’s all this bid. The whole idea was a user goes to the New York Times, and the page loads. As the page is loading, it’s a real time option. How much am I bid for this person? It’s a male. Age is 34 to 55 coming from the Boston area, who just left BMW. How much am I bid, and boom, someone bids on it.

Jeff Greenfield:
It was a great way for premium brands to sell off some of their inventory, but guess what? If I’m a brand, and I buy premium inventory through the ad exchange and it doesn’t perform, I don’t get a make good. I don’t have a throat that I can choke. I don’t have anyone to yell at except for my agency. But guess what? If I go do a direct buy with the New York Times, and they make guarantees … If I go do a direct buy with the Financial Times, or the WWE, not only can they give me great guarantees, but they can do customized content for me. If it doesn’t perform, I’ve got someone to yell and scream at, and I can get a make good.

Jeff Greenfield:
So the other big winner in this are going to be those premium publishers, because you’re going to see a return to the old days. You’re going to see a return to the invoice days where it was actual invoices. That’s what’s coming next and that’s what’s coming back. That’s the new world of media is that if I’m a big brand, it’s obvious to me that these ad tech companies and these social media companies don’t really care about me as much as someone like the WWE does It sounds kind of funny saying that, but it’s absolutely true.

Shyam Patil:
That’s a good point. That’s a good point. I want to hit on a couple of more topics if we can get through these. Google. One of the other things that they’ve done. I’m not sure if this is a permanent change, [Marilee 00:53:03] said something in the near term. They’ve limited their DBM purchases to their own network inventory where they can ensure compliance with their consent program. What kind of impact do you think that has had, or will have, to put us in the ecosystem, whether it’s advertisers or publishers, ad tech companies?

Jeff Greenfield:
I think it just forces folks to go and find alternatives. That’s the biggest impact in terms of that. That’s in terms of the long term. In the short term, just because, unless they’re an in-house agency, so some of the larger brands, they have an in-house team running things. In that instance, they’ve always been running DSPs.

Jeff Greenfield:
So, in the case that DBM is shut off certain providers, they’ll just shift that money over there. That’s fine because DBM, they were getting pennies on that anyway. But for a lot of the agencies who may be, and I hate to call them out, they may be lazy. They’ll just shift that money over to Google. So, I think in the short-term Google may see a little bit of bump, and an increase in buys as a result of that. It may impact. Anybody who is going through an agency where everything’s been going through DBM, because that’s kind of the lazy person’s way of doing things.

Jeff Greenfield:
We’ve always been a big proponent of … Some of our clients are running 15 different partners against each other. The argument has always been, “Oh, you don’t want to do that.” They’re all bidding against each other. It’s like, “Hey, you know what my feeling is if I’m the advertiser, whoever has the best strategy wins.” I don’t feel like I’m wasting my money because I have independent measurement that’s going to tell me who’s actually doing a good job. I think what’s going to happen is, in the short term, Google may be the winner in that race, but give it a couple of months, and I think tat people are going to see that the numbers aren’t as good as they used to be.

Shyam Patil:
Okay. That’s great. Last question. Switching up a little bit to Facebook. What do you think have been their key changes, and what’s been the impact thus far? If we can squeeze that in, in the next few minutes.

Jeff Greenfield:
Well, I think that since Cambridge Analytica, Facebook has really shut down a lot of things. They’ve started shutting down part of their app ecosystem. Listen, they can do whatever they want. We saw this happen … You go back to the history of Google, all the changes that are going on at Facebook, it’s the same changes that Google went through. Albeit, just accelerated. It’s been a compressed time frame. That’s been kind of their first thing.

Jeff Greenfield:
The second thing that’s happened is that they’ve also shut off a lot of third-party measurement. You go back four years ago, they allowed a lot of independent measurement. Then they shut it down, because some independent measurement companies got acquired by some of their competitors. AOL acquired a competitor. AOL acquired one, Google acquired another, so they kind of shut things down. They’ve been kind of playing both sides for a little while trying to figure out what they want to do.

Jeff Greenfield:
But still, at the end of the day, Facebook’s number one focus is on the SMBs. That’s their number one thing. I think they’re really, really focused on those small bit players, and then maybe the medium sized players. The local companies that are spending $100,000 to $200,000 a year, and there’s a lot of those.

Jeff Greenfield:
They want most of that share. That’s what they want. Their big play is on most of those local markets. Those are things that really don’t appeal to the larger brand advertisers. The larger brand advertisers, they want those kind of big picture things. Facebook has been playing in the game of … Remember earlier we talked about those two types of measurements, the old school way, which is that top down marketing mix, and then the bottom school, the newer way, which is that bottom up. The two kind of meet in the middle.

Jeff Greenfield:
Facebook doesn’t want them to meet in the middle. What Facebook has been doing is saying, “Hey, use us for that top down modeling, so you can see the great work we’re doing.” The only data that Facebook has allowed, thus far, is just been data on people that are successful. What we call converting people. Meaning, “Hey, you know, you showed an ad to a million people, 10,000 of them converted. Here’s the data on those 10,000 people.”

Jeff Greenfield:
It’s like, “Well, what about those other 990,000 non-converters. I’d like to get data on those, so I can really go in and tweak the campaign, so I can turn this 10,000 into 50,000.” Google, thus far, has said, “No. We’re not going to give you that data,” which means Google has kind of relegated to that kind of top down approach. Those have been their big changes. I think we’re going to see them stay that way for a while, until this whole Cambridge Analytica cloud kind of moves on. It’s going to take them a while. It seems like every time they take two steps forward and lately, five steps back.

Jeff Greenfield:
It’s yet to be seen how that’s going to shake out for them.

Shyam Patil:
Great. Well, this was extremely helpful, Jeff. Thanks so much for taking the time to walk us through such a complicated topic. Thank you everyone for listening in. With that, I’ll turn it back over to Miles to conclude the call. Thanks everyone.

 

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