🌯 Cracking Down on the Foreign Consumer Data Trade

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This Week
July 7, 2021
Data Export Crackdown Underway
Supply Chain Validation Gets a Boost
How WFH Shaped Ad Blocking
Big Tech, Hot Seat
Around the Water Cooler
Senator Plans Crackdown on Ad Tech Data Sharing With Foreign Adversaries
The global real-time bidding (RTB) ad marketplace is a hotbed for data leakage both knowingly, and unknowingly.

Sen. Ron Wyden of Oregon is proposing legislation dubbed “Protecting Americans’ Data From Foreign Surveillance Act of 2021.”

The bill would call on federal agencies to categorize data to determine which types of personal data could harm national security by being exploited for intelligence purposes when exported to foreign countries. U.S. advertisers would have to obtain export licenses before providing "unfriendly" countries with ad-targeting data that would reveal an individual's interest graph. And then the Commerce Department would be tasked with creating export regulations.

Back in April, Wyden reached out to ad tech companies, including AT&T, Google, Twitter and Verizon Media, to obtain details about which foreign companies might receive personal consumer data that could pose a national security risk.

Very little information was reported back to Wyden’s office but Turkey, Russia, China, and the United Arab Emirates are partners with many of the companies in question. These little know companies can end up with American consumers' location, browsing, and other identifying information.
Why This Matters
Wars have started for much less, and this serious data leakage issue can pose future national security risks. What's worse, the average person has no idea and no control over the misuse of their private information.

Last month, the Irish Council for Civil Liberties filed a lawsuit against the Interactive Advertising Bureau stating that online advertising causes the world's biggest data breach, and this happens billions of times a day, per documents included in the suit.

The RTB process enables personal data about individuals to be broadcasted between numerous ad brokers and other ad tech vendors during the auction process. Currently, there are no technical measures in place to limit what companies do with this data or who it gets passed to.

Loopholes need to be filled and anyone who goes online needs to have a clearer grasp about where their data is sent, why it’s being sent, and how to potentially limit the frequency and location with which it’s shared.

Maybe it's time the advertising ecosystem does a better job protecting the privacy of the audiences that help to keep the lights on.
IAB Tech Lab Launches Supply Chain Validation Tool
Speaking of transparency, IAB Tech Lab debuted a supply chain transparency service in an effort to increase transparency in the programmatic supply chain.

Publishers want verification they are purchasing from authorized sellers and keeping track of everyone can be a daunting experience.

“The Tech Lab would match information that’s declared in two publicly available files: ads.txt and sellers.json. Automating this process would provide buyers and sellers more accurate information about the different intermediaries — some trusted and some not — involved in an online ad auction,” according to AdWeek.

Small data changes on either side can become challenging to catch, notice and review in a reasonable timeframe.
Why This Matters
It’s a tale as old as time: the want and need for supply chain transparency. The news of a tool to help publishers big and small verify, obtain and maintain a safe level of transparency and data sharing in the RTB marketplace is paramount for the success of publishers and advertisers alike.

The Tech Lab tool will provide weekly updates of ads.txt and app-ads.txt files against sellers.json with a standard set of test cases. In addition, emails will be sent when inconsistencies are found and need extra attention.
How Has Working From Home Shaped Ad Blocking?
Even with Hot Vax Summer in full effect and the gray days of lockdown winter a mercifully distant memory, there’s no denying that the last sixteen months of working (and playing) from home shaped our daily lives in numerous ways.

We’re more online now than ever before, after a year of swapping movie theaters for streaming services, concert venues for live streams, and happy hours for…Zoom happy hours. Even as life returns to cafes and restaurants and house parties, our existence remains highly digital.

But how has all this time spent online altered our feelings towards online ads? And have ad filterers—the 95% of all ad blocking users who have an ad blocker installed but still consent to be served ads—reconsidered their stance on ad blockers?

AAX examined data compiled by the GlobalWebIndex (GWI) keeps about internet behavior, looking into how responses to the query “Why do you use an ad blocker?” shifted since March 2020.

The findings are fascinating; there’s been a marked change. People are now less like to use ad blockers for reasons based in annoyance, such as the perception that ads are too numerous or too intrusive. What we observed is, instead, that people are making the choice to block ads based on guiding principles. The people that have started blocking ads do so because they’ve decided to completely avoid ads—both online and off.

It’s also interesting to observe that people have moved away from blocking ads based on fears that ads eat up data allowance or drain devices batteries. (Although it’s not completely surprising—in a year of being locked down at home, a dependable WiFi connection and an electrical socket were never far away.)

Overall, however, the reasons given for ad blocking didn’t represent a seismic shift in behavior. And we think that’s optimistic news. A return to the office, the gym, and the restaurant doesn’t have to require the same strenuous adjustment as constructing a home office did.
Why This Matters
Ad blocking users tend to have their collective fingers on the pulse. This 200 million-strong demographic is composed of highly educated, affluent digital natives, and their motivations often reflect larger cultural shifts ahead of time. That’s one reason why AAX is fascinated with ad blocking users, and why we penned our last study Why Block Ads? Behind User Reasons and Motivations.
Big Tech in the Hot Seat?
“Hipster antitrust” or looking out for the little guy? No matter how you view it, big tech is navigating big problems.

The Federal Trade Commission lodged an antitrust complaint against Facebook, which was dismissed by a federal judge; the FTC has 30 days to rewrite its lawsuit.

In addition, Amazon wants the new FTC head, Lina Khan, to recuse herself from antitrust investigations of the company.

We haven’t even discussed the half a dozen bills up for vote on the House floor that could break up big tech.
Why This Matters
There’s so much in-fighting, whether it’s between the Democrat and Republican parties — or inside the Republican Party alone — that, coupled with broad legislative wording, doesn’t leave room for optimism that any bills will pass. Big tech will live to see another day, but where does that leave the rest of us?

Google and Microsoft can’t even agree not to sue one another, as the pair have ended their six-year agreement not to litigate against one another. Google is also dealing with investigations into its digital ad market practices by the U.S Justice Department. As well as an EU probe into alleged ad tech abuses.

Couple that with the new FTC head, Lina Khan, determined to limit power to big tech companies and there are headaches and courtroom drama abound for everyone.

We’ll soon know what lies ahead for Google, as the U.S. and states’ Google antitrust probe is near completion. Like you, we're all wondering what the implications will be for the future of ad tech.
Around the Water Cooler
Here's what else we're reading and thinking about...
  • Yieldmo is walking the talk with Multicultural and Inclusion Focused Deals, making it easier for buyers to diversify their media spend with DE&I, Black, Hispanic, Women, and AAPI-owned and/or dedicated publishers.

  • IAS joins the growing list of ad tech companies going public. Demand for ad safety and verification services is growing amid the rise in CTV and contextual targeting and the verification company sees this time as a great opportunity for growth.

  • Given the current ad industry climate, if it's not another IPO or SPAC we're talking about it's another M&A. Magnite is forging deeper relations in the CTV space with the acquisition of Springserve adserver, opening the floodgates to both direct-sold and programmatic deals.

  • For now, Apple has outwitted big tech in China where companies like TikTok and Baidu thought they'd be able to bypass Apple's ATT privacy measures. But here in the states, as users opt-out of iOS app tracking, advertiser spend is shifting across the aisle to Android.
Sweet Tweet
How do you make a small fortune advertising your DTC brand after iOS 14 privacy updates?

Start with a large fortune
Worth a Listen
The Future of the Open Internet
This latest MadTech Podcast Special examines the future of the free and open internet. ExchangeWire CEO Ciaran O’Kane interviews Konrad Feldman, CEO, Quantcast; Sophie Strong, Head of Display and Social, Wavemaker; and Terry Hornby, Group Digital Director, Reach, to get their perspectives on cookieless advertising; the issue of measurement; first-party data; and preserving an open internet model.
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