What Does Amazon’s Ditched Ad Server Mean For Its Ad Business?

AdMonsters Wrapper: The weekly ad tech news wrap up
This Week
October 9, 2023
Amazon Disbands Ad Server
Addressing the Unaddressable w/ Hashed Email
HUMAN Disrupts Fraud Schemes
Meet Us at the Water Cooler
Amazon Says To Hell With Its Ad Server
Amazon announced the closure of its ad-serving business by Q4 2024. Is this a sign of tough times or the shedding of old skin to allow growth for something new? All signs point to the latter.

"Out with the Old and in with the New": The company's announcement allows brands and agencies ample time to transition to alternative ad servers while supporting affected employees.

Amazon's ad server was the glue when it came to building, distributing creatives, and measuring campaigns across numerous DSPs and publishers, including Amazon sites. However, the company is confident in its advertising business's growth and plans to invest in building a comprehensive advertising-technology infrastructure. This infrastructure aims to empower marketers with deeper insights into campaign effectiveness.

In Q2 2023, Amazon's advertising services business generated an impressive $10.68 billion, reflecting a 22% increase from the previous year. Although the closure of the ad server raises questions about potential reasons, speculations include regulatory privacy policies or a strategic shift toward AI and machine learning. Amazon's updated ad-server privacy policy underscores its commitment to handling personal information.

An Amazon spokesperson said, "At Amazon, we are always evaluating the potential of our products and services to deliver value for customers, and we regularly make adjustments based on those assessments."
Why This Matters
Does closing their ad server negate their predicted takeover of the advertising ecosystem? Maybe this is more of a changed approach. Amazon will continue to bolster other parts of its ads business — Amazon DSP, the Marketing Cloud clean room, and the Amazon Publishers services, among others.

Last year, Amazon spent significant time building its ad business. Some industry experts even predicted that they would take Facebook's number two spot in the Triopoly. Google, of course, remains the top dog of the infamous three-headed monster. It's tough to compete in the ad-serving game, and some industry insiders even speculate that this move further strengthens Google's dominant position.
Addressing the Unaddressable with Hashed Email
Everyone in digital advertising is waiting with bated breath for Chrome’s third-party cookie deprecation in late 2024. But assessing the impact of that change might not have to wait.

Despite Chrome’s full support of third-party cookies, it’s no secret that many users already block tracking by either adjusting privacy settings or using incognito mode. This means that, even today, up to 40% of the Chrome audience is already unaddressable. An analysis by Permutive revealed that the combination of cookie-blocking browsers and opt-out choices on Chrome makes 70% of the internet effectively invisible to the digital advertising supply chain. With most ad spend therefore going to just 30% of consumers on the open web, it’s a challenge everyone is incentivized to solve.

So how can brands address the unaddressable? The answer may not be as complicated or far-flung as marketers may assume. Collaborating closely with publishers may provide a viable path forward.
Why This Matters
As the owners of consent, publishers occupy a unique position in the advertising value chain. For media buyers, publishers are the gateway to rich, consented first-party data, and by leveraging this unique position, publishers can unlock addressability for advertisers, enabling them to reach new audiences and drive commerce goals in a privacy-compliant way.

First-party data comes in many forms, but at Criteo, we’ve decided to stick with something tried and true: email. Like your digital passport, an email is an ever-present 1:1 signal for a user—and it’s a signal which most of us keep for a lifetime. Hashed emails (HEMs) deliver a robust, sustainable, privacy-safe answer to cookieless addressability.

Unlike newer ID solutions, which are growing their footprint from the ground up, Criteo has been laying the foundations for years. We're working with thousands of advertisers to leverage hashed emails for campaign targeting, optimization, and measurement and with publishers to get more yield for their inventory, especially in previously un-addressable environments, like Safari and Firefox—and we only see this snowballing in the years ahead. What's in it for you? By linking your inventory to the rising HEM demand, you can benefit from a higher match rate and CPMs for Safari traffic. One of our clients experienced an 83% boost in match rate and 138% surge in CPMs after doing this.
HUMAN Disrupts Two Sophisticate Fraud Schemes Targeted at Advertisers and Consumers
The News: HUMAN announced in early October that its Satori Threat Intelligence and Research Team discovered and interrupted a sophisticated scheme to defraud advertisers and steal consumer credentials.

The scheme, which HUMAN calls PEACHPIT, involves 39 Android, iOS and CTV-centric apps that have been installed more than 15 million times. Combined, these apps accounted for an average of four billion ad requests a day, and appeared on 121,000 Android devices and 159,000 iOS devices in 227 countries and territories.

Additionally, HUMAN uncovered BADBOX, which infects a range of off-brand devices that are sold to end users via repackaging facilities in China. With this scheme, cybercriminals install Triada malware on Android-based counterfeit mobile and CTV devices. BADBOX-infected devices are able to steal personally identifiable information, establish residential proxy exit peers, steal one-time passwords, create fake messaging and email accounts, and other unique fraud schemes.

Bilking Advertisers: One of the modules lets the fraudsters leverage BADBOX-infected smartphones, tablets, and CTV boxes to create WebViews that the device users never see. “These WebViews are used to request, render, and click on ads, spoofing the ad requests to look like they’re coming from certain apps, referred by certain websites, and rendered on certain models of smartphones, tablets, and CTVs, none of which are true,” HUMAN explains in its report.
Why This Matters
It’s hard not to be awed by the cybercriminal’s technical and business acuity. BADBOX is a set of interconnected fraud schemes that are extremely difficult for users to detect.

“The BADBOX scheme is an incredibly sophisticated operation, and it demonstrates how criminals use distributed supply chains to amplify their schemes on unsuspecting consumers who purchase devices from trusted e-commerce platforms and retailers,” Gavin Reid, CISO of HUMAN said in the press release.
Unfortunately, infected devices are still circulating, and they are being shipped all over the world, including to the US, and there is little that average users can do to remove the malware themselves (assuming they even know that it is installed on their devices). HUMAN purchased devices from online retailers, and found that 80% were infected with BADBOX.

The cybercriminals behind the scheme are committing several types of fraud, including creating fake Gmail and WhatsApp accounts and residential proxy services that transform each device into an endpoint for a global residential proxy network.

One of the key challenges with residential IP proxy networks is that they make it easy for fraudsters to bilk advertisers at scale, as AdMonsters reported earlier this year. Fraudsters can use a residential IP proxy to hide a bot that clicks on ads in any geographic area in the world.
Around the Water Cooler
Here's what else we're chatting about...

Clean Rooms Could Be Moving Beyond Hype While many in ad tech still don't understand all the inner workings of clean rooms, Marketing Brew says advertisers are realizing their potential to boost sales. "While clean rooms were initially pitched as tools geared toward privacy-oriented data sharing, marketers are beginning to see their impact on sales," wrote Ryan Barwick, Senior Reporter, Marketing. On the sell side, we're still seeing slow adoption of the tech, but publishers do see its potential for activating first-party data. To that fact, Canadian publisher La Presse is already realizing revenue growth from adopting data clean rooms. (Marketing Brew)

Experts Say X Is Monetizing Racism Industry reports claim that ads — from the likes of Amazon, Cox Communications, STARZ, Ad Age, Morning Brew and more — are running directly on the verified X profile account of VDARE, a white supremacist outlet. Meanwhile, Facebook and YouTube have banned the outlet from their platforms. What could be worse? The NFL already complained to the social media platform about its ads running on racist platforms. Does this mean that all of X's brand safety talk is hot air? The social media platform is acknowledging it has more work to do to improve their tools, but we think the damage has already been done. Will advertisers stop spending again? Only time will tell. (Reliable Sources)
One X Post
Is Google Fixing Its Search Results? Inquiring Minds Are Asking
Google is controlling the trial w/ its secrecy designations, controlling our searches w/ its greed, and controlling Wired w/ its scare tactics. I wrote an op-ed re Google mucking around w/ organic search to make it more shopping-oriented to gin up ad $. I stand by that. My ?

(Note: Google's SearchLiaison denies these claims.)
Worth a Listen
The Writers Strike Is Over. What's Next for Advertisers?
On this week’s edition of Yeah, That’s Probably an Ad, Adweek’s senior TV reporter Mollie Cahillane joins community editor Luz Corona and Europe brands editor Rebecca Stewart to discuss what’s next—and why the actors' strike continues to rumble on.
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