NEWSLETTER #123 / JULY 29, 2018
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AD SMACKDOWN: CATS VS DATA
According to research conducted by a professor at MIT, a fellow at the Melbourne Business School, and the Head of Operations and Technology at Group M, data that is informing your programmatic ad buys may not just be unproductive, it may be counterproductive.
Their 3-part study tested the quality and accuracy of data provided by a variety of data houses. Using data to find the most efficient targets is essentially what our adtech industry is paid to do.
The study found that 3rd party data may be useless at the most elementary of targeting tasks -- like intuiting the gender of someone online. In one test 3rd party data achieved... "Gender accuracy...average of 42.3%. Given the benchmark for correct gender classification is about 50%, the natural distribution of gender diversity in the population, using data brokers to assess online browsing profiles for gender appears on average less efficient than using no third-party audience information at all."
In other words, having your cat flip a coin would have been more accurate at predicting gender than all the fabulous "data."
Another study found that using data acquired from 3rd party brokers improved targeting performance by 184%. Sounds damn good right? You've probably seen results like this from your marketing department or your agency and thought, "good job, lads!"
The only problem is this. Acquiring that data... "creates extra costs of about 238% on average in comparison to random placements."
Translation: Having your cat point his paws randomly at websites would have produced a more efficient media buy than the "programmatic" utilization of all this data horseshit.
In summarizing their three studies, the authors say...
"Study One finds that using buying platforms (DSPs) that leverage audiences provided
by data brokers perform poorly in terms of identifying consumers who have a certain set of
demographic characteristics. Study Two finds that when asked to measure the characteris-
tics of consumers arriving at a certain website, data brokers show high inconsistencies and
perform poorly again in correct audience identifications. Study Three finds that the actual
underlying audience information on individual users appears to be flawed, with inconsistent
and poor classification results across 14 leading data brokers. Specifically, we find that on
average 62.5% of user attributes are wrong for our data..."
There is only one sensible attitude for marketers spending money on online advertising -- question everything, believe nothing.
(The study can be found here. It's pretty heavy going for non-statisticians. H/T the great Dr Johnny Ryan.)
The New Yorker Perfectly Captures And Destroys The Stupidity Of Marketing Jargon
Usual Suspects Pile On
To the surprise of absolutely no one, the gaggle of ad industry trade associations (4A's, IAB, AAF, etc) jumped in with both feet this week to support the hideous action of the ANA last week in asking the National Telecommunications & Information Administration to block "over-regulation" of the online ad industry. By "over-regulation" you can read "any regulation."
As usual, these meatballs are way out of step with public sentiment. The Wall Street Journal reports that a study by Ernst & Young... "found nearly 80% of respondents believe companies collect data in order to line their pockets...a backlash is building,"
The dishonest argument the trade groups use to justify their arrogant disregard for the public good is that limiting their ability to track us would kill the online advertising business. This argument is total horseshit. The advertising industry did very well for decades, thank you, without spyware watching our every move.
Even if their argument were true, it has no merit. The privacy rights of individuals happen to be a lot more important than the convenience of marketers.
As a contrast to this, read about a principled stance the UK's ad industry has taken. We should be ashamed of our industry's "leaders."
Social Media Droppings
It's naive to interpret short-term stock price fluctuations as anything other than typical Wall Street hysteria. But with the shares of Facebook and Twitter experiencing one day drops of about 20% this week, something keeps screaming at me.
I can't help believing that the more these businesses are forced to tell the truth, the more we will see how misdirection, misinformation, and outright lying have helped them build their value.
Facebook recently revealed that it had eliminated over 500 million fraudulent accounts in the first quarter of 2018. Twitter revealed that for a two-month period they were eliminating fraudulent accounts at a rate exceeding one million a day. For years they have kept the knowledge of fraud in their numbers quiet and it is only pressure from media exposure that has forced them to attenuate their deceit.
Imagine what would happen if Facebook were forced to reveal their ad "metrics" to the full standards of auditing and transparency that the industry requires of other media? It wouldn't be pretty.
The SEC should have investigated these creeps years ago. The more we know about their unscrupulous practices the uglier they get.
Man Who Created Web: "Devastated"
In the late 1980's, Tim Berners-Lee wrote and released the code for what has become the World Wide Web. Time magazine named him one of the 20th century's most important figures.
Of recent developments Berners-Lee says, “I was devastated...We demonstrated that the Web had failed instead of served humanity..."
A recent article in Vanity Fair says, "Berners-Lee has seen his creation debased by everything from fake news to mass surveillance. But he’s got a plan to fix it."
Berners-Lee is working on a new platform called Solid. Vanity Fair says, "Working with a small team of developers, he spends most of his time now on Solid, a platform designed to give individuals, rather than corporations, control of their own data."
News You Can Lose
- Very flattering review of "BadMen" at The Key Point this week. Where can you buy the darn book, you ask? How about right here.
- Nice mention by Forbes in an article about ad fraud.
- LinkedIn thinks I'm worth interviewing. As the great Estelle Costanza said when told by George's fiancé that she loved him very much, "May I ask why?"
- Speaking of which, radio interview with NPR coming later this week.
