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Viant’s Adelphic acts to solve ad pricing transparency by offering ‘all-you-can-eat’ monthly subscription

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Marketers regularly complain about transparency in digital advertising and, this week, Viant’s Adelphic announced a pricing change that it believes solves the problem for a demand-side platform (DSP).

What’s new. Instead of charging a percentage of media spend as other DSPs do — typically 10 to 15 percent — Adelphic will now charge an all-you-can-eat monthly subscription price of $3,000 per log-in, with a 12-month minimum. And all vendors involved in the process — targeting data providers like data management platforms, inventory providers like ad exchanges, verification services and others — are billed directly to the advertiser.

For those of us who don’t use DSPs on a daily basis, it seems surprising that a subscription model and direct billing is new, but Viant CEO Tim Vanderhook said in an interview that he is unaware of any other DSP that has a similar structure.

SaaS versus media agency pricing model. Adelphic, which Viant purchased two years ago, also previously charged a percentage of media spend and paid vendors itself as part of its fee. Vanderhook said his company spent the time since the purchase getting overall operating costs of Adelphic down to a point where it could offer a subscription.

After all, he said, it doesn’t cost a DSP more to handle a thousand dollars in advertising than to handle ten million dollars’ worth. The trade-off for advertisers, he acknowledged, is that Adelphic requires a 12-month commitment, whereas other DSPs only charge advertisers for their spend.

Typically, he said, DSPs employ a pricing model derived from media-buying agencies, which charge a percentage of media spend as their fee. Many DSPs, he added, don’t have a fixed percentage, but set that fee based on how much business an advertiser does. Instead of using a model based on media-buying agencies, Adelphic is now offering the subscription model of software-as-a-service.

In the traditional pricing model, the advertiser will often pay the DSP an additional monthly amount based on, say, overall CPMs, with the fees for targeting data, inventory, verification services and other vendors buried in the overall charge. Vanderhook added that this monthly amount, separate from the DSP fee, is almost as if the DSP is a publisher itself, charging for its impressions.

The 800-pound gorilla. That leads to advertisers’ suspicions about what the vendors’ charges actually are, he said, and whether there are kickbacks between DSPs and vendors.

“The 800-pound [gorilla] here,” he said, “is that no one trusts each other, and there has to be a model so everyone trusts everyone.”

Ari Paparo, CEO of ad tech firm Beeswax, told me via email that it is “naïve and a bit of a gimmick to offer a one-size-fits-all pricing structure on a product as complex and bespoke as an enterprise DSP.”

But, he added, this move “is a strong indication that the market is demanding more transparent and fairer pricing models that are commensurate with technology usage, rather than arbitrary pricing models that penalize for more media spend and media spend on more expensive inventory.”

Why this matters to marketers. Transparency in ad pricing is central to making the entire industry more trustworthy for brands, and a software-as-a-service subscription model for DSPs, with direct payment by brands to vendors, would seem to directly address that part of the equation.

This story first appeared on MarTech Today. For more on marketing technology, click here.

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10 questions with… Anna Watkins, UK managing director of Verizon Media

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In an attempt to showcase the personalities of the people behind the media and marketing sector, The Drum speaks to individuals who are bringing something a little different to the industry and talks to them about what insights and life experience they can offer the rest of us. This week's 10 Questions are put to Verizon Media's UK managing director Anna Watkins.

What was your first ever job?
It would have been washing my dad's car to earn my £1 pocket money each week. Smart man.

Which industry buzzword annoys you most?
Relatable.

Who do you find most interesting to follow on social media?
@POTUS is truly mind-boggling.

what is the highlight of your career (so far?)
Working with such a creative, inspiring and intelligent bunch of people every step of the way.

What piece of tech can you not live without?
It's baffling that I was born in London yet still seem to use Citymapper every day.

Who or what did you have posters of on your bedroom wall as a teenager?
Adam Ant and Count Dracula (aged 7). I'm not quite sure what that says about me.

In advertising, what needs to change soon?
We need a truly diverse workforce.

If you could change anything about a social media platform you use, which one and what would you choose to do?
It’s more a question of changing myself – I need to flex my creative muscles if I’m ever to make more than one friend on Tumblr…

What is (in your opinion) the greatest film/album/book of your life?
Scarface / Sign of the Times / War and Peace – delusions of grandeur, mine and theirs.

Which industry event can you not afford to miss each year and why?
The big awards bashes – it's like going to a series of weddings where you know half the guests.

The Drum's 10 Questions With… runs each week with previous entries available to view here.

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Mobile carriers end data sharing with location aggregators; should marketers worry?

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The collection and use of real-time mobile-location data has emerged as a critical piece of the larger data-privacy debate. A recent run of negative stories have conveyed the impression that location data usage by marketers is tantamount to spying on consumers.

We’re also starting to see lawsuits, like one recently filed by the Los Angeles City Attorney against the Weather Company, for allegedly misleading consumers about how their location data would be used. More suits will likely follow.

Carriers cut off data sharing. The negative coverage and exposure of some high-profile abuses have motivated major U.S. mobile carriers to cut off location data sharing with third party “location aggregators.” The latest to do so is AT&T, following a story by Motherboard that indicated carrier data was getting into the hands of unauthorized third parties — bounty hunters, in this case — and being used for legally dubious purposes.

As a practical matter, these moves are unlikely to significantly impact use of location data by advertisers on major platforms or in the programmatic ecosystem. AT&T owns AppNexus; Verizon owns Verizon Media Group (the rebranded Oath). Location data will probably still be available to advertisers on these platforms — they’re not “third parties.” (We’ve asked Verizon for clarification on this point and will update the story if they respond.)

Calls for more regulation or legislation. Location data are so valuable and widely available that abuses are inevitable. Some of these increasingly frequent reports are adding momentum to calls for federal data privacy legislation. The carriers’ decision to cut off location aggregators is at least partly an effort to preempt investigations and potentially forestall regulation.

Some location data companies embrace the proposition of clear regulatory or legislative guidelines, however.

For example, PlaceIQ CEO Duncan McCall recently told me in email: “I think that the California Consumer Privacy Act and hopefully a similar federal law (as a state-by-state patchwork of different laws would be good for no one) will not only give consumers protection and confidence, but will finally give the digital data and location data ecosystem a well-thought out set of rules and guidelines to adhere to. This will bring stability and predictability to the industry, and help weed out some of the “wild west” players that have had no interest in investing for the long term good of the ecosystem.”

Most location-data companies also say they adhere to ethical data-collection practices and are scrupulous about being “good actors” in the ecosystem. Some are vocal about the responsible and/or socially beneficial use of location technology. And some organizations (e.g., NAI) are seeking to enforce transparent and ethical data collection standards. Foursquare told me in email that their apps and partners seek opt-in consent for use of location data.

Why you should care. Location data is available from a wide range of sources in the market, including app developers and the programmatic bid stream. The loss of carrier location is not a significant blow to the ecosystem.

However it is reflective of a trend toward the tightening of access to location information more generally. While it remains to be seen whether federal privacy legislation passes in 2019 (multiple bills have been proposed), California’s Consumer Privacy Act will go into effect January 1, 2020. Other states may enact similar or more strict laws, which would lend further impetus to comprehensive federal legislation.

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Catalina adds first attribution tracking service

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Best known as a provider of retail marketing intelligence based around loyalty cards and in-store printed coupons, Catalina this week released its first attribution service.

Called Catalina Multi-touch AttributR, it traces a path from digital advertising — in various channels on various devices — to a purchase made in a store with a loyalty card. The company is able to track purchases down to the UPC bar code level.

At the level of the Diet Coke flavor. Coca-Cola, for instance, can now track how a web site ad shown on a computer affects the purchase of a Diet Coke, as well as whether the flavor chosen is Twisted Mango versus Ginger Lime. Additionally, the attribution service can report if it’s the first time this consumer bought Twisted Mango.

Previously, Catalina measured how its printed in-store coupons affected buyer behavior, but it didn’t track the impact of ads. The new attribution solution is the company’s first effort to link digital ads to buyer behavior, and it plans to add addressable TV ads to the system.

Catalina tags the digital ad with its own attribution pixel, which is called when the ad is shown and provides data on the specific campaign deployments.

But the connection between the ads shown, the various devices used by a single individual, and the in-store purchases are actually made by consumer data firm Experian on Catalina’s behalf, through such persistent identifiers as phone numbers or email addresses.

“Not in the business of knowing who you are.” In the new attribution service, the retailer sends the loyalty card ID to Experian, which matches it with the digital cross-device profile of a given individual and with the ads shown to the user on those devices. Experiam then returns a report to Catalina that uses an anonymized ID.

Catalina CMO Marta Cyhan told me the company deals only with anonymized IDs because “we’re not in the business of knowing who you are,” although Experian does have PII.

The data is updated daily to a self-service dashboard for brands (see below) and, since Experian tracks profiles, the attribution can also include the effect of ads on repeat purchases, new buyers of a product category and other consumer behaviors.

Difference from NCS. Catalina, which filed for bankruptcy protection last month, is also known as a partner in Nielsen Catalina Solutions (NCS), which employs data from the in-store coupons and loyalty cards. But, Cyhan said, Catalina’s new attribution measures individuals across multiple channels deterministically, since the actual people are known through the Experian matching, while NCS is focused on measuring single channels through probabilistic modeled data.

Additionally, she said, Catalina’s new solution is updated daily, includes buyer behavior changes and provides granularity down to the UPC level, while NCS provides post-campaign reports on overall sales lifts.

Why you should care. Catalina’s shopper data is used widely by marketers, and this first attribution service will help brands determine the impact of their paid media spend.

Additionally, Catalina is providing a very fine level of granularity, down to the individual product bar code, with a very high level of certainty. This approach could provide the kind of accurate, return-on-spending results that major consumer brands have clamored for.

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