marketingtech

No major advertisers rely on Facebook or any other ad platform's reported numbers. The platforms are grading their own homework, and even their abilities to do that are increasingly limited.

Companies spend millions of dollars on these platforms because they know, directionally, that some amount of the advertising is effective. Sales go up when they advertise, sales go down when they stop.

They use the reported metrics from the platforms to see which of their ad campaigns is relatively more effective than the next. No experienced marketers rely on these metrics to be accurate when making budget decisions.

There are different responsibilities for the "controller" and the "processor" under GDPR.

Facebook and Google are recognized as processors in this situation. The websites that send them the data are the controllers and are subject to the vast majority of the regulation, while the processors can assume that the controller has obtained user consent until informed otherwise.

It's legally important to recognize that Facebook and Google are not blindly sucking up data from around the internet. Websites/apps are actively transmitting this data to them and other adtech platforms for their own benefits.

There are a lot of tactics in use today.

For logged in users, it's trivial to match users across sites with an email address or a phone number.

If you're clicking between sites, there may be a unique ID appended to the outbound URL (on Google there's a gclid URL parameter). This ID will be logged on the destination site and can be continuously passed around to identify the same user on multiple sites.

If they don't need perfect matching, they'll use IP addresses, user agents, and other fingerprinting techniques for fuzzy matches.

FB: https://developers.facebook.com/docs/marketing-api/conversio... Google: https://developers.google.com/adwords/api/docs/guides/conver...

This is also why companies like Tealium and Segment are now worth billions of dollars. They provide a single integration point that funnels events to dozens of marketing companies' server-side APIs.

Unfortunately this won't do much anymore, as Facebook and others are transitioning to server-side data transmission. Businesses now log data onto their own servers, then transmit it directly to adtech companies so that your device never directly touches the adtech server.

Apple is winning hearts and minds because these are framed as "privacy changes."

The changes DO improve privacy, but that's more of a nice side effect to the actual change of tightening their grip on the mobile ecosystem and extracting a larger platform tax.

This has been positioned in the media as Apple vs Facebook. It's really Apple vs all iOS developers. Facebook can afford to speak up, and in fact will be one of the least affected companies as they have a massive first-party audience and aren't fully dependent on third-party data.

No, it's not. Eyeballs are down, thus prices and market share are down compared to digital. Different industry sources have different figures, but everyone agrees TV spend was down >5% in 2020 and expected to drop faster in 2021 as digital continues to grow at >30%.

There's now a mad rush to standardize tech for personalized tv advertising, as providers plan to use the email/phone number you used for your cable/streaming service as a personal identifier that can be joined against 3rd party targeting data.

I'm not trying justifying this - just describing where the industry (and money) is going.

In Q4 alone, they made $53/user in US/Canada, and $10/user worldwide. This revenue is not evenly distributed, and the type of user who is willing to pay $50/quarter for FB is worth much more than that to FB advertisers.

source: Slide 4 (ARPU) https://s21.q4cdn.com/399680738/files/doc_financials/2020/q4...

There absolutely are mitigations from a technical standpoint, some with privacy trade-offs and some with UI trade-offs. But the key is to have those mitigations in place before you launch a feature with potential attack vectors.

Moxie's statement in that article claims they have no plans to address it.

Dupe of https://news.ycombinator.com/item?id=25911568

There's an idealogical collision course between safely offering usernames+financial transactions and maintaining an absolutist stance on encryption.

Within minutes, you'll have people going by @ElonMusk and @JeffBezos running scams to millions of non tech-savvy users. Are you going to try to stop that in any way? Can you, while maintaining full encryption?

I can appreciate Moxie sticking to his guns, but he'll need a better plan than "we'll deal with the problem when it comes." if he doesn't want to get deplatformed by Apple/Google or face government scrutiny.

I'm not an expert in antitrust, but I feel like this gives Facebook a stronger defense against governments trying to break up the company.

"Look at all the other messaging options out there with millions of users! If people don't like our decisions, users have shown that they can easily leave us for our competitors."

Facebook and Google do not pay for this data. Flo sends it to them for free, because it improves the performance/ROI of Flo's marketing.

Facebook and Google have no semantic understanding of this data, so it does not have inherent value to them in terms of creating configurable targeting segments. These are arbitrary data points sent by the app, and they might as well be labeled "A", "B", "C", and "D" rather than their sensitive names.

Flo can optimize their ads towards occurrences of event "A" or they can run ads towards "people who have triggered event B in the last week but not event C", but this doesn't offer specific value to other advertisers or FB/G themselves.

That said, when all of this is put into an ML black box, you never know how data points may be correlated. Maybe the system learns that people who trigger event "D" also end up buying baby clothes. That could lead to observable ad patterns, even if no one can explicitly tie event "D" to pregnancy.

This was normalized on the web long before these companies started - they're just the best to do it (though Google did acquire one of the earliest players in DoubleClick).

The term "conversion pixel" is a misnomer these days for a Javascript snippet or API call - the concept predates JS and used to refer to a 1x1 transparent GIF.

Anyways, that generation of tech is being pushed out due to browser privacy enhancements and will be replaced with privacy-protecting browser and server APIs that introduce noise to the data, such that you can still measure the directional/relative impact of advertising without being able to tell exactly who converted.

There are a few competing industry proposals involving differential privacy/cryptography/blockchain/fixed entropy that are being publicly discussed here: https://github.com/w3c/web-advertising

Let me explain it a little differently with a hypothetical scenario.

You set up an ad campaign with an audience of 100k people who are already on your mailing list.

You set up a conversion pixel and run the ads. Let's say that Google's tools say that 10% of people who saw the ad converted. That's incredible! But considering that they were already on your mailing list, maybe they were going to buy anyways - or maybe your TV ad is actually what convinced them to buy.

You test for this by creating a holdout group from that 100k. Let's say 5k people. These are people that could have seen your ad, but we're intentionally not going to show it to them. We'll still use the conversion pixel's measurement functionality on them, and we see that 8% of those 5k people buy your product.

Now, we have a clearer picture - the Google ads drive 2% more conversions for your audience - or people on your mailing list who see an ad on Google are 25% more likely to convert than those who don't.

The issue is, most online ads don't work EXCEPT for G and FB. That's why they're so dominant.

The average third-party ad networks are junk, rife with fraud (ads that are never actually seen or clicked by a human), poor targeting, poor measurement, limited brand safety, and opaque billing.

First-party ad tech provides much better control over these factors and can generally be offered cheaper because they can more effectively allocate their clients' budgets. In what other industries are the superior products cheaper than the junk? (not rhetorical - I'm curious if this exists in other industries)

G and FB are the biggest first-party ad sellers, given that their total addressable audience covers most of the free world, with Amazon rapidly gaining ground. TikTok, Pinterest, and Snapchat are building clones of G/FB's ad tech by poaching a lot of their engineers (karma for G/FB cloning their consumer products...) and are also showing strong growth as first-party sellers.

If you're a website/app that monetizes through a third-party network (including Google Adsense and Facebook Audience Network), you're going to see your revenues plummet in the coming months.

These are pretty easy to measure on Google or FB with their "lift study" tools and a conversion pixel. The lift tools will let you create a holdout group of X% of people who should be targeted by your ad. They won't see the ad, but you can still measure the rate at which they convert on your site. Then, you can compare that conversion rate to the rate of people who actually saw/clicked the ad.

Conversion pixels are never 100% accurate (and are becoming increasingly inaccurate due to browser/OS changes) and shouldn't be used to say "This ad generated exactly X sales that wouldn't have happened otherwise!", but you can examine the relative rates from people who saw or didn't see your campaign.

I've also seen companies who don't trust FB/G to grade their own homework on a known lift study, so they measure the effect by running PSA ads. Their ad campaign will be something like "Donate to charity XYZ!" but will be set to measure purchases on their website. That lets them establish the baseline purchase rate of the customers in their audience.

Even for opted-in users, Apple is reducing the amount of click data that can be transmitted via both in-app browsers and Safari. This new protocol was rejected by multiple W3C committees because it breaks a lot of fraud prevention mechanisms, but Apple is moving forward with it anyways. https://webkit.org/blog/8943/privacy-preserving-ad-click-att...

I would imagine the audience for these full page ads isn't the general public - it's regulators and lobbyists. The ad highlights that Apple has the ability to unilaterally make decisions that can damage revenues for millions of businesses overnight.

Even if the decisions are made in the name of noble causes like privacy, this raises huge antitrust flags.

They use CNAME aliasing to make the requests seem like they're coming from your own domain, so you'd have block a specific URL on a site-by-site basis, and there are also fully server-side APIs so you don't even know when data is being captured or shared.

This is definitely convenient for now, but the shifting browser ecosystem (along with default security changes in Safari and proposed changes in Chrome) is driving the development and adoption of server-side tracking solutions. This is great for the short-term, but I imagine it won't be relevant much longer.

There's a reason why Segment just sold for $3.2 billion... [edited to add: They offer a single integration point and will proxy your data server-side to hundreds of other companies.]

Completely banning political ads puts incumbents at a huge advantage. Emerging challengers don't have nearly as much free organic distribution, so they need to buy ads to build momentum and expand their reach.

Even in the current US presidential election, Biden has 3.2 million Facebook followers while Trump 31.7mm on his personal page and 6.3mm on his presidential page.

Without paying for ads that extend your audience beyond your pre-existing followers, the incumbents will always have more reach for their messages.

Completely agree that we should be able to see the people responsible for running each of these ads though, with personal liability for the content that they're sharing.

Given the App Store antitrust lawsuit and "big bully" PR issue that Apple is facing, they probably realize that now would be a terrible timing for them to flex their muscles and crush a multi-billion dollar ecosystem (even if it's the ethical thing to do).

Facebook's concern isn't oriented around their revenue - it's about the 3rd party advertising ecosystem on mobile in general ($2B of FB's $80B revenue). FB and Google will take a small hit from their 3rd party mobile ad networks going away, but they still have their dominant 1st party businesses to fall back on.

Who this really hurts are the apps that don't directly sell their own ads and rely on a 3rd party network to monetize. Those apps' revenues will be chopped in half overnight, sending a shockwave throughout the entire mobile ecosystem.

FB and Google get poked in one eye, but most ad-supported apps will be blinded.

On paper and for regulatory/tax purposes, a European company does own the European side of Facebook - Facebook Ireland Ltd.

Here are the working proposals for the privacy-safe replacements for 3rd-party cookies on web. This conversation has been happening in public for over a year. Mobile will likely follow similar solutions, but Apple accelerated the timeline of IDFA deprecation and caught the industry off guard. https://github.com/w3c/web-advertising

Generally speaking, any app you haven't heard of yet is now at a disadvantage.

Specifically, this would have crushed rising giants like TikTok and Wish who each have spent over a billion on app install ads before they reached escape velocity.

There are thousands of medium sized apps that try every day to reach to new users, and now it will be more expensive (potentially prohibitively expensive) to do so.

Those are the apps that will run more ads if targeting is crippled. They take a spray-and-pray approach by buying up all the cheap, untargeted inventory. If you see a lot of them, that means you probably aren't being tracked by the ad network.

I'm referring to the ability of paid apps to drive installs. These are ads that drive TO the App Store and generate paid app installs that are being crippled. Sorry if I wasn't clear.

There will be fewer companies able to afford ads to drive installs for their apps.

IDFA trades privacy for market efficiency. It's used by ad networks to allow me to optimize for either the cheapest or most valuable installs, and validate that my marketing spend is actually driving these behaviors with an acceptable ROI.

Without it, ad networks will be much less effective and it will cost developers at least 2x to drive the same number of installs.

IDFA has obvious privacy flaws, but Apple is making a mistake by crippling it without offering a privacy-safe alternative (and several of those have been proposed by the industry).

Not just Facebook, but the entire $80 billion mobile app advertising industry. [edit] To clarify, I'm referring to Apple crippling ads that drive net new app installs, not the ability to monetize your app via ads.

The privacy angle is completely justified, but I think Apple is underestimating the second order effects here. Significantly fewer apps will be installed, harming both the developer ecosystem and Apple's App Store profits.

https://www.forbes.com/sites/johnkoetsier/2020/06/24/apple-j...