If you told me five years ago that advertising could save the so-called "open web," I wouldn't have listened. But this week, at Collision 2021, I did just that, lining up a virtual chat with Collision keynoter and Quantcast CEO Konrad Feldman.
No use hiding it: I'm nostalgic for the open web. I associate that phrase with a time of passionate, but also literate and civil debates. Those intellectual skirmishes spilled over from one blog post to another. People rethought their positions; communities sprung up.
Back then, you could stand up your own blog site, carve out a niche. If your work was original enough, you'd attract a following of peers - and avid blog commenters. If you're an enterprise blogger, have fun trying to do that now.
I was always hostile to the "walled gardens" that dominate today's Internet. When Facebook was praised as a platform for supposedly spreading democracy in the Middle East, I remained skeptical. I couldn't deny the platform's accessibility. Still, I believed Facebook's viral sound bite culture was effectively dumbing down the Internet (that's saying a lot for someone who grew up on America Online). The herd experience proved difficult to push back against. Groups I cared about glommed onto Facebook, compelling my participation.
As Facebook's Newsfeed algorithm became the kingmaker, the diabolical combination of (snoopy) personalized advertising and viral disinformation took its notorious toll. These days, you'll find plenty of skepticism about the dominant Internet players from across the political spectrum - even as slick mobile apps from those players achieve a near-chokehold on user attention (and online ad spend).
Feldman at Collision 2021 - "advertising funds the open Internet"
What to do? I've never believed advertising was the key to protecting what's left of the open web. But Quantcast does. So, Mr. Feldman, make your case. What was his message to Collision 2021's 38,000 (online) attendees? Feldman told me:
I was talking about a rallying cry for the open Internet. The open Internet has been a phenomenal force for good. It's allowed anyone with a computer and access to the Internet to publish and share their perspective, their point of view, their creativity. Today, five billion people around the world are able to access new information, entertainment, education - for free.
But, Feldman argues, it's never really been free:
What underpins that is often overlooked. It's advertising that funds most of that. Perhaps the Internet's original sin was allowing everyone to believe that the Internet is free. The content that is produced is a labor of love. It takes enormous amounts of effort, creativity, and expense to produce high quality content and distribute it. Mostly, that is paid for by advertising.
Feldman says the online ad market is estimated at $400 billion this year, worldwide. So if online advertising is thriving, what's the issue? Feldman:
The problem is: money is increasingly concentrated into the hands of just a couple of companies. Yes, they've built services we all use, but they don't represent where the majority of those five billion people spend their time. And they certainly don't produce the majority of the original content online.
Bold that last point: the current ad victors aren't content producers. They are aggregators at mass scale, skilled in the art of compulsive UI and algorithmic feeds. The cultural model might be broken; we can debate that. The financial model sure isn't broken - at least not for the digital giants. Feldman adds:
What they have done is create effective systems for marketers to spend their budgets consistently. By comparison, spending money on the open Internet effectively is much harder. And so you see an increasing amount of money flowing into these walled gardens, at the expense of the open Internet. That's a difficult situation. It's getting harder for publishers to monetize. It's getting harder for original voices to find they're able to sustainably find their audience.
Feldman says digital marketers are open to alternatives:
If you speak to the marketers that spend all this money, the money starts with the marketers and flows through the Internet economy. They really want alternatives. But buying the open Internet has just been comparatively too difficult, in comparison to the walled gardens.
The end of third party cookies - a turning point for ads and privacy?
But what about the disruption to the ad industry, via Google Chrome's "third party cookie ban" announcement? Doesn't that position Google as the white hats, forcing unethical advertisers to earn data directly from consumers - before targeting them with ads? Or does Feldman believe, as I do, that much of Google's announcement was self-serving? Feldman:
The third party cookie was never a perfect solution to managing [users] across devices. It was what the ecosystem had available to it. And because of that, it is very widely used, to synchronize across the Internet... The third party cookie is used to create relevant content, to measure the effectiveness of advertising, and so on. Certainly its removal is concentrated in the minds of the industry.
The third party cookie was already in decline; Apple Safari banned third party cookies a long time ago. Time for the ad industry to grapple with this. Feldman:
People have questioned whether [Google's announcement] is also self-serving; I think it's a fair question to ask. But at the same time, as an industry, we need to work towards solutions that enable us to effectively plan to activate and to measure advertising - in a post-cookie world. Many changes have been coming in this space. Obviously, we've seen, with the introduction of privacy regulations, such as GDPR in Europe, and CCPA in California, we're entering a period where we need to be able to inform consumers clearly about the information that's being collected, and how it's going to be used - and provide consumers with choice.
With the introduction of GDPR in 2018, Quantcast launched the widely-used (free) consent management platform, Quantcast Choice. I'm reluctant to label Google as heroes here, but these announcements do make it harder for black hat vampires to pull user data without permission. Do companies that ethically earn consumer data have a level playing field now? If so, that's a positive. Feldman:
I think that's a huge positive. I think it's an opportunity for the industry to confront that original sin. It's an opportunity to explain to people that great content is funded by advertising. And great advertising can be informative and relevant for consumers. Advertising doesn't have to be an irritation; it can be useful and valuable.
Having that conversation is healthy. Everyone who operates in the digital ecosystem will be required to demonstrate they're able to capture consent - and they're able to honor consumer wishes in terms of how data is used. That's 100% a positive.
My take - creative business models versus digital ads
Detractors might say Feldman has a dog in this fight. Since Quantcast provides an ad distribution platform for the "open web," that's clearly true. But you can have a dog in a fight, and it can still be the right dog, and the right fight.
Feldman nearly finished a PhD in machine learning in the 1990s, before getting caught up in tech startups. Today, "AI" is at the core of Quantcast's value prop. So what does a happy Quantcast customer look like? Feldman:
A happy Quantcast customer has an understanding of their audiences and customers; they can understand the types of things they're interested in... [They can use] our AI technology to understand the distinctive characteristics of the audience groups available for them, so that they can find audiences that are going to find their content, their messaging, and their products more relevant.
Cue the "walled gardens alternative" pitch:
We make it cost-effective to be able to plan, activate and measure large-scale advertising campaigns on the open Internet, creating a truly viable alternative to the walled gardens - so that advertisers can put their money into the diverse publishers of the open Internet, just as they want to.
Feldman says Quantcast's AI personalization - which consumers can opt-out of - provides a better ad experience, including: less ads.
We create advertising that is better for consumers, that is more interesting, that is less cluttered. The higher the value of the advertising, the less advertising is required to fund content. So it's possible to use information, to do it in a consented fashion, in a privacy-aware mechanism - and make advertising better for everyone.
To enable this, Quantast's AI model draws on customers' first-party data to build predictive audience models. But Feldman says their "AI" accomplishes another goal: manage the placement of ads at scale. In theory, that frees up marketers for creative and analytical work:
To run just a single campaign on a demand-side platform can take a human operator dozens of hours. And so we re-imagined this process... This frees marketers to do what humans are better at doing than computers: being creative, and coming up with strategies to experiment with marketing strategy.
Needless to say, diginomica has a dog in this fight too. Whether we are part of the open Internet is too presumptuous for me to say. Since our inception, we've pursued a different model than display advertising. Collectively, we can't stand the over-the-top advertising that is apparently necessary to fund the big tech sites, from ubiquitous (and ubiquitously-annoying) auto-play videos to hyperactive, full-page pop-ups - not to mention premature newsletter sign-ups. Ergo, I tend to view the ad model as completely broken. Perhaps Feldman would counter that these sites just need Quantcast.
I have an unrealistic soft spot for online labors-of-love, free content with no business model. Or: creative business models, such as free/quality content to generate client leads. Or: reader-supported content. The so-called Patreon economy is a potential bright spot. I see how it funds citizen journalism where I live.
Feldman also supports reader-funded models, but on this topic, he pushed back. He questions whether subscription models have the global accessibility the open Internet needs:
Look at the rise of ed-tech, and [teaching] solutions that are available online - five billion people around the world have access to that. Most people around the world don't have the luxury of having multiple subscriptions... If we think about the entire global online community, that's not a solution for the totality of that.
I used to be a hardliner on digital ads. But for those who prize online life outside the walled gardens, it's all hands on deck. If advertising is part of how the open Internet will be preserved, I'll keep an open mind as well.