Is Programmatic Aiding Government Surveillance?

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October 23, 2023
Programmatic Ads Aid Government Surveillance?
Q4 Holiday Shopping Strategy
Ad-Free Social Media
Meet Us at the Water Cooler
How Programmatic Advertising and Third-party Data Sales Aid Government Surveillance
The Wall Street Journal identified a network of data brokers and ad exchanges whose data is purchased by various agencies within the US Defense Department and intelligence community, unbeknownst to consumers and the ad exchanges themselves.

The Wall Street Journal laid out an example of the scheme. The app, Life360, bids on impressions, receiving pretty detailed information about the user, including their ID, geolocation, IP address, and device type. It doesn’t matter if Life360 loses the auction; it still gets the data. As it happens, until recently Life360 had a side business of selling data to brokers like Near Intelligence. Near, in turn, sold it to government agencies.

Ignoring Contracts: Both Life360 and the ad exchanges that sponsored the auctions said they were unaware of Near Intelligence’s relationships with the government and that such sales violate their Terms of Service.

Life360 told the Wall Street Journal that it has stopped selling data to brokers, but how many other apps continue to do so? According to a study by Common Sense Education, between 58% and 72% of the mobile apps industry sells data. Consumers are screwed if, like Life360, those app publishers rely on easily ignored Terms of Service to prevent the sale of user data to the NSA.

Privacy-Schmivacy. One of the more galling revelations is the degree to which Near Intelligence ran roughshod over the rights of EU citizens. In an email to Near’s CEO, Jay Angelo, the company’s Chief Privacy Officer wrote, “We sell geolocation data for which we do not have consent to do so…we sell/share device ID data for which we do not have consent to do so [and] we sell data outside the EU for which we do not have consent to do so.” Angelo also noted that Near sends this illegal data to the US government twice a day.
Why This Matters
Ever since the Edward Snowden leaks, American consumers assumed the government was spying on them. A Pew Research Center survey released last week found that most Americans are concerned about how their data is used and don’t have any meaningful way to secure it. Many in the industry are working hard to build consumer trust in digital advertising, but brokers like Near undermine those efforts.

Unfortunately, consumer skepticism is justified. In June, the Office of the Director of National Intelligence (ODNI) released a partially declassified report on commercially available information, or CAI. A key finding of the report is the large and growing amount of CAI data open to the general public, including foreign governments (and their intelligence communities) and private sector entities, as well as the US intelligence communities. The report concludes that data generated through apps and advertising is used in ways few understand, and even fewer can avoid.

The data sales described in the ODNI report seriously infringe upon civil liberties. The Fourth Amendment protects citizens from unreasonable searches and seizures by the government. The Electronic Communications Act and FISA provide additional protections.

But as an Electronic Privacy Information Center says in a blog post, it’s easy to get around those laws by buying data on American citizens. “As private companies have stockpiled personal data, including sensitive data on Americans, these agencies have increasingly turned to the private sector, purchasing Americans’ data and circumventing traditional legal processes, and without providing any transparency about the government agency procedures (or lack thereof) for protecting Americans’ privacy. This end-run around the Fourth Amendments’ protections has grown more pervasive in recent years.”

Clearly, Terms of Service aren’t sufficient, and data companies need to protect consumer data better.
Get That Festive Feeling With a Q4 Commerce Strategy
With Halloween candy already sharing shelf space with Christmas goodies, it seems like the holiday season arrives earlier every year. Some of this might be because marketers know just how pivotal the Q4 period is for reaching annual revenue goals — but shopper trends have changed, too. According to Criteo's Q3 Shopper Survey, 58% of shoppers start planning their holiday gifts as early as Q3, and over a third have already made those purchases. That's a 6% uptick from last year.

Over the past three years, this shopper survey has reported consecutive shifts in consumer behavior, demonstrating that consumers are searching (and purchasing) earlier each year. They’re also spending more time researching before they make those purchases. For example, 76% of consumers said they spend more time online searching for deals before making a purchase and that, on average, there are 16 days from a consumer's first click to a Black Friday purchase.

Likewise, Criteo also reported that 7 in 10 consumers frequently read articles on the open web before making purchase decisions. The key takeaway? A buyer's shopping journey can start anywhere, including premium publisher sites with content tailored to those shoppers.
Why This Matters
With shoppers making holiday purchases even earlier, advertisers should follow suit to make sure they’re front and center when making those deicisions. This is good news for publishers, who have an opportunity to extend the holiday media buying season by helping advertiser partners better understand the new shopper journey and how their content can influence it throughout Q4.

To do this, publishers should take a data-driven approach highlighting when, where, and how consumers conduct product research, providing insights to media buyers on how to influence consumers and drive commerce outcomes. They can then connect these insights to commerce-forward advertising opportunities which, enable brands to find and engage consumers during those crucial shoppable moments.

For a deeper dive into changing consumer shopping behaviors this holiday season, and practical tips for packaging supply and optimizing your Q4 header setup, be sure to register for Criteo’s next webinar,
Will Ad-Free Social Media Be the New Norm?
Social Media heavy hitters are testing ad-free subscription tiers on their platforms outside the U.S. They're hoping that users will pay for their social media accounts.

Platforms like Meta and TikTok seek to gain an alternative revenue stream. Yet, with this move some publishers and advertisers might end up on the short end of the stick — mainly smaller and more niche businesses.

Earlier this month, Meta announced a plan to charge users a $14 monthly subscription fee to access Instagram unless they opt-in to share their data for targeted advertising. Does this sound like a fair trade to you? In light of the EU’s strict data protection laws, we doubt the federal government is happy about this “opportunity of choice” that Meta intends to offer users.

Traditionally, social media platforms offering targeted advertising set a vast foundation for startups, direct-to-consumer businesses, and other small business advertisers to drive sales and brand awareness. For example, Facebook and Instagram gave smaller brands a way to scale and reach a massive audience. Meta launched initiatives, like Facebook Community Boost in 2017, a 30-city program to boost small businesses’ digital skills to keep ad dollars flowing for small businesses.

Does this sudden shift of heart hint at a revenue issue for the social platforms?
Why This Matters
According to Jen Kohl, Chief Media Officer at ad agency VMLY&R, revenue is the dominating factor: “The biggest reason is if they go subscription model, then that’s guaranteed revenue. They aren’t so reliant on chasing the advertising money, which, as we know, can be variable and volatile.”

Kohl might be correct given the strength of the subscription economy, specifically for CTV streaming. Unlike social media, TV streaming is going through an opposing evolution — the streamers are turning to ad-supported streaming. This is providing advertisers with more opportunities to reach massive audiences. For them, the subscription model is working.

In the social media world, X (formally Twitter) offered users a 50% reduced ad load for a willingness to shell out $8 monthly for a premium subscription. If the exorbitant amount of blue checks on the platform is any indication, it looks like many users are actually paying for a subscription. Is this the new normal? Maybe not in the U.S., but if this model is successful in other markets, the U.S. could become the final testing ground.
Around the Water Cooler
Here's what else we're chatting about...

Will AI Make TV Advertising More Effective? Much of 2023 has been marked by an AI arms race, but now TV advertisers are putting their hat into the race. Waymark, a startup company launched in 2017, helps TV companies do just that — they use AI to help smaller advertisers quickly create lower-cost commercials. (Marketing Brew)

Are DSPs Cutting Off SSPs in the Supply Chain? The ad tech industry is ripe with complaints about the complexities of the supply chain and the need to cut out intermediaries. It seems that for some DSPs that means cutting out SSPs and going straight to publishers. Yahoo’s DSP in particular is taking this approach with the top 10% of publishers. (AdExchanger)
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