Don Marti

Wed 04 Feb 2015 06:36:39 AM PST

Data Leakage 2.0

(update 13 Mar 2015: Add link to Tom Foremski piece)

Mitchell Reichgut writes,

Forrester recently found that mobile represents only five percent of brands’ total advertising budget — and the majority are not making significant increases in their mobile investment year-over-year.

And Tom Foremski wrote,

Traditional media companies that were struggling with online ads that produced one-tenth the revenue of print, now have to cross an incredible chasm: $1,000 dollars in print advertising becomes $10 on mobile.

Mobile advertising works fine for search [coffee near me], or impulse app downloads ("I'm bored with this game, what else can I play?"). But mobile ads on average are consistently at the bottom of the standings in terms of revenue per user minute, because they're nearly perfectly targetable and carry no signal. Naturally, adtech players concur on the solution to low mobile ad revenue: throw more technology at the problem. The idea is to use "cross-device tracking" to match the people who saw mobile ads with web users.

Wait a minute—mobile ads are crappy, therefore connect them with less crappy (some web ads are remarkably good by now—see Quartz) web ads? That won't make mobile any better, because of signaling failure, but it's a pure loss for web publishers.

The data leakage problem has leveled up. With cross-device tracking, data doesn't just leak to less valuable sites in the same medium, but to a less valuable medium entirely.

Some background on data leakage from Sophia Cope at the Newspaper Association of America: Data leakage is a serious problem for newspaper websites:

Data leakage harms newspapers by affecting revenue from direct advertising sales. Third parties drop cookies when consumers are on newspaper websites, and then sell ads on other websites targeted to known newspaper readers.

Adtech advocates are trying to get everyone to flip out over ad blocking while ignoring data leakage, and so far it's working.

Ad blocking is survivable, but data leakage isn't. The web kept ad blocking to a tiny niche from 1996, when the first easy ad blockers came out, until 2010, when the Wall Street Journal's "What they Know" series came out. As browsers get better able to act on user intentions, ad blocking can go back to being a niche again.

Data leakage, on the other hand, is a long-term threat to journalism and other original creative work on the web. It forces reputable publishers to compete with infringing, fraudulent and other low-quality sites. Ad blocking is a 9-10% loss for non-technical sites. It's a problem, but not a severe one outside of the gaming niche, where more than 40% of impressions are blocked. Data leakage, though, by putting all sites into a race to the bottom, costs more like 90%, across all site categories.

The problem is that, from the point of view of adtech, data leakage is a win. Adtech is a constant game of how much data leakage various intermediaries can get away with. (Publishers and adtech firms are on opposite sides of the game, which is why publishers and brand advertisers need their own organization separate from the IAB, which works for data-leakage-powered tech companies.)

With various cross-device tracking concepts floating around, the pressure of the leak has grown. Valuable audience data isn't just leaking to bottom-feeder web sites, it can leak all the way down to mobile.

Solution?

A new kind of third-party service: original content sites are going to need another technology thing, as if there wasn't enough to worry about. A tracking protection solution. This will mean using a user trackability detection platform (UTDP), a new tech category, in order to classify user sessions into tracking-protected and tracking-vulnerable. (Once a site has the UTDP results, a tracking-protected user could get many different rewards: access to bonus content, comments promoted, or an early reset on the article count for a paywall.)

Most of the work is already done: the main part of tracking protection is on the client side, something that the users install and run. Tracking protection is a publisher-friendly alternative to an ad blocker, and many easy implementations are available. The server-side work is is to promote, nudge, and reward users for running them.

Finally, the best part: the web site side of a tracking protection program is a sponsorship opportunity, especially for advertisers with a brand personality connected to security or fraud prevention. For example, an area of a site behind a reverse tracking wall can be branded "Exclusive content only for tracking-protected users, brought to you by example.com Insurance." High-profile malvertising is likely to make this a hot sponsorship to sell.

Update June 2015: Aloodo: Tracking protection for sites and brands is an implementation of UTDP, along with some extra features.