🌯 The EU’s Latest Salvo Against Big Tech; Private Relay on Default in iOS16?; Retail Media Rises

AdMonsters Wrapper: The weekly ad tech news wrap up
This Week
May 02, 2022
EU Unleashes Another Salvo of Regulations
Rumor: Private Relay on by Default in iOS16?
Retail Media on the Rise
New EU Legislation Slaps Big Tech on the Hand
Things are heating up in the EU again and, unfortunately, not in a way that will be beneficial for publishers.

Lately, it's been restriction after restriction, and these restrictions have lasting effects on US advertisers and publishers alike.

The latest to come out of the EU is the Digital Services Act, or DSA, which will monitor how companies police content on their platforms. Although the final text is not complete just yet, The European Parliament and The European Commission have revealed some of its many limitations:
  • Certain types of targeted ads will get cut off once DSA goes into effect, including ads based on sexual orientation, ethnicity, and religion. Targeted ads geared towards minors will also get the chop.
  • An official curtain close on "dark patterns," or the confusing and unclear user interfaces that may lead one to buy something they did not intend to or don't need. According to the EU, canceling subscriptions should be just as simple as signing up.
  • Very Large Online Platforms (VLOPs) will have to be way more upfront about their advertising plans by keeping a backlog of all exposed ads, sponsor information, parameters used to target, and total exposure. They will be required to keep this information stockpiled for at least one year after the ad is released.
  • VLOPs like Facebook and Netflix will need to be clear about whatever recommender algorithm changes they plan to make and start recommending stuff that is not "based on profiling."
  • If hosting services and online platforms have to remove something illegal from their platform, they will have to explain why to consumers and give them the option to appeal any takedowns. The DSA, however, does not constitute what may or may not be illegal; that is up to the discretion of whatever particular country that the platform is based in.
  • Online marketplaces will be required to keep a paper trail about traders on their platform if the DSA needs to track down someone selling illegal goods and services.
  • VLOPs will be ordered to present new crisis prevention strategies for when ish hits the fan. (A provision inspired by the recent war in Ukraine)
Why This Matters
The DSA is not to be confused with its sister legislation, the Digital Markets Act or DMA. The DMA's goal is to help carve out an even playing field amongst businesses, while the DSA works to police consumer-facing digital content and ads. This is a step in the right direction regarding looking out for the consumer, but it definitely may present hindrances for publishers.

"Right now, Europe is forging ahead with some of the most sweeping legislation in years to regulate the abuses that are seen in big tech companies," said former President Barack Obama while speaking at the Stanford Cyber Policy Center recently. "And their approach may not be exactly right for the United States, but it points for the need for us to coordinate with other democracies."

I won't be surprised if we hear of similar policies being instated on the Homefront here in the US, and for that reason, we advise marketers and publishers to stay on their toes.

Big tech will for sure take a beating, but we need to be mindful of how this new change may inspire US authorities to jumpstart something similar n the US. Policies like these of course make sense for consumers, but strategizing how the advertising ecosystem will operate with such laws in place will take some serious navigation. For big tech though, we can assume that things are only going to get uglier from here.
With iOS 16 There May Be No Escaping Private Relay
Oh, Private Relay, what is your purpose?

Recent reports tell us that you aren't so private after all and have even been leaking user data on MAC OS! How could you Private Relay, we trusted you?!

Despite the funny business surrounding this alleged secure VPN, Apple may be taking it up a notch and turning on Private Relay by default in iOS 16.

Charles Manning, CEO of mobile analytics measurement company, Kochava, strongly foresees Apple looking to Private Relay as the default digital privacy regulator. His stance is that the implications of policy enforcement and Apple's history of making pubs jump through hoops may mean that Private Relay will be the go-to to help keep up with privacy regulations.
Why This Matters
This is a win for the consumer but a huge L for pubs.

We know that Private Relay will intercept IP addresses from our introduction to Private Relay at the Worldwide Developers Conference (WWDC) in June 2021. It does this by darkening pieces of information from when users browse the internet. It then encrypts user data, separates page requests from IP addresses, and assigns a fake IP address.

As Jessica Muñoz told us back in December, "Because Private relay encrypts an Apple user’s IP addresses, publishers will no longer have insight into traffic coming from specific locations but only state-wide or regional insights. These limited insights mean that publishers now have less granularity when it comes to geo-targeting efforts."

With Private Realy, even Apple supposedly won't know who users are or what sites they're visiting.

"Apple wants to be the referee of privacy, but it's taken them a while to realize how difficult it is to fulfill that role," said Mike Woosley, chief operating officer at ad tech vendor Lotame. "They're going to be fighting a war of attrition moving forward where a lot of the things they do in the name or privacy will have a direct economic impact on their business, which will invite cynicism from the market."

While we know how disastrous Apple's privacy measures have been for the industry overall, we can't help but wonder how all of this will work out for Apple's own advertising network.
This Is How Retail Media Is Changing the Game
Retail Media is on the up and up, and like walled gardens as a whole, retail media companies are doing whatever it takes to protect their data. The approach is different from Google, Meta, and Amazon. Even though retailers establish protective walls around their data, they also rely on programmatic vendors to "pipe data and demand between their walled garden and the open ecosystem."

Latest Retail Media Trends:

Walmart: This OG retailer uses The Trade Desk as its DSP for Walmart's off-site ad sales. Most retailers do not compare as Walmart is a retail giant that has been around for ages. They rely on their third-party programmatic ad structure, Walmart Connect, to make ad ops easier.

The Walton's come second to Amazon regarding how much ad tech stack they own, so they are pretty much a glorified walled garden with The Trade Desk capabilities attached.

If Walmart won the first place gold medal, Target and Kroger are coming in hot with silver and bronze.

Target: Target Reported $1 billion in ad revenue for the year 2021, which is very close to their superior Walmart, which had a total of $2.1 billion. Target puts its data in an SSP, Index Exchange, which acts like an exclusive marketplace that DSP can latch onto. Most importantly, it uses Amazon's DSP...hello, beautiful first-party data!

Last year, Target expanded its platform to
CitrusAds and Criteo retail media networks. They brought DSPs like Skai and Pacvue, which started surfacing ads to Roundel for the first time in 2021.

Kroger: When we think of Kroger, we think of grocery store visits as a kid. Who would have imagined that they'd turn into the retail giant they are today?!

Kroger Precision Media, the grocery store's data-driven ad structure, launched a private marketplace product in October 2021.

If you're an advertiser with a separate DSP, you can now use Kroger's first-party data in your campaigns across the web. Kroger's PMP allows agencies to access good ol' retail industry KPIs and store sales.

While Kroger's PMP is an open programmatic program, Amazon's DSP is prohibited.
Why This Matters
Retail Media giants like Walmart, Target, and Kroger are leading the next growth wave in digital media, and they're leading the way with their first-party data. They're able to provide marketers with rich insights about their customers, and they could become more valuable to advertisers than even the duopoly of Google and Facebook.

Amazon has consistently been on the duopoly's coattails and is leading the way for the upcoming retail media networks. They're showing exactly what brands can do inside their walled gardens to not just move products but actually build a brand.

Retail media's growth is red hot, but buyers are still learning the nuances of the space, especially as each retailer has its own methods for attribution and measurement. So education is a much-needed force in the space's continued rise.
Around the Water Cooler
Here's what else we're talking about...
  • Connecticut is about to become the fifth state with its own data privacy act. (JDSUPRA)
  • Turns out Amazon Alexa is actually eavesdropping to target ads, a study finds. (The Verge)
  • Facebook may not have the ability to limit how it handles users’ data and this could be a violation of GDPR. (Vice)
Sweet Tweet
Buyer/Seller Voltron? Maybe.
Random thought:

Could seller defined behavioral heuristics
????? And

Bring your own algorithm

...come together like Voltron to give both sides of the buying/selling relationship some power?
Worth a Listen
Lisa Howard on Leading Advertising and Marketing at The NYTimes
Lisa Howard leads the advertising and marketing teams at the world's premier news organization, The New York Times. Listen in to this episode of Ad Ops All-Stars to gain Lisa's unique and powerful insights on the online advertising industry, and how she juggles managing one of the largest publishing sites in the world. AdMonsters also talked to Lisa back in 2021 about building a successful advertising business from a subscription-first model.
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