PageFair statement at European Parliament ALDE shadow rapporteurs session on the proposed ePrivacy Regulation

Dr Johnny Ryan EU, Privacy, Regulation Leave a Comment

Lightly edited transcription of PageFair remarks at European Parliament ALDE session on 4 May 2017. 

Dr Johnny Ryan: Thank you. It’s a pleasure to be with you this afternoon. I’ve been on both sides: the adtech side, and the publisher’s side, of the particular part of this story that I want to talk about. Several years ago I was at The Irish Times as Chief Innovation Officer, and my background before that was academic: I wrote a history of the Internet, which is now a standard text. Now I work at PageFair, a European adtech company, based primarily in Dublin.

I want to make clear that my remarks are limited only to the ePrivacy Regulation as it affects online advertising. There may be issues with other domains. We don’t know about them. Within that strict limit let me say that we think that the direction of travel that the ePrivacy proposal represents – there may be issues with detail – but that the direction of travel that it represents will solve a crisis on both sides of the online media system. 

Let me set out what that crisis looks like, because it affects almost every party.

The crisis of the status quo starts with the problems suffered by brands, who pay for advertising. They are currently furious about online advertising.

They are annoyed because for years they have been sold and seduced by data that have been poor, with poor reporting and poor results.
They are annoyed because they are paying for ads that are being seen, but not by human beings: they are being seen by bots that masquerade as humans. That’s called “adfraud”, and interesting data are from the advertisers themselves, the World Federation of Advertisers: it’s a multi billion dollar problem by their account.
They are even more annoyed because there are ads that they are paying for are not even being seen by non-humans. That’s a so-called “viewability” issue, it’s a huge one.
And they’re probably also annoyed because at least half – if not quite a lot more – of every Euro that they spend on advertising doesn’t go to the publisher. It goes to intermediaries, to adtech companies – of which, by the way, PageFair is one. We’re an adtech company too.
So there’s a problem for advertisers. And although the spend on digital goes up year on year, you’re starting to see that people like the world’s largest advertiser, P&G, are pulling spending out of digital and putting it back in to TV. There’s a problem for advertisers in the digital world.

The second party there’s a problem for are citizens.

By our account, which was published in The New York Times in the last few months, 615 million devices around the world are currently blocking ads. There is an open rebellion for many reasons. One of them is privacy, and that is undeniable.
Less obvious, but I think attributable here, is the problem of “fake news”, and the fact that extremes and extreme opinions are monetizable where mainstream, trust-worthy media are less so. This is only possible in a system where you are rewarded financially for taking an eyeball from one premium publisher and finding that eyeball again and monetizing it on the worst websites on the Web. The premium publisher loses. I would have felt that if I were still at The Irish Times today.
The third problem for citizens – and this is well documented – is the leakage of personal information. The most egregious case I’ve seen recently is Amnesty International’s approach, I think a month ago, where they reported that Donald Trump, if he were so minded, would not need to build a Muslim registry. He could buy one legally – different jurisdiction I know – from a data broker. The data that go in to that data broker’s repository come in part from what industry insiders term the “Lumascape”. Again, we are a part of the Lumascape, so take that as something that is happening.

Third, the publishers.

How would I feel if I were still at The Irish Times? I wouldn’t feel good. Publishers were very happy before the Internet. Almost everything that has happened since the emergence of digital has not been positive for print publishers.
Publishers are now getting less cash per ad. Prices are going down. And there is competition against publishers who actually invest in useful, trust-worthy content: they are being competed with by rubbish. I am not talking here about large publishers versus small. I’m talking about rubbish, clickbait versus useful media – on whatever part of the spectrum it is – that actually keeps society afloat. So there is a big problem.

We have had two decades of experimentation on this very, very young medium. What we have today is the result of well meaning experimentation.

The problems we have today are understandable. But they are not sustainable. This has to change.

It seems to us that the GDPR together with the ePR as proposed, as least in so far as it concerns advertising, starts to address these issues.

Now, there is a real concern, and it is a sensible one: what would happen to publishers and advertisers on the 25th of May 2018 if you took the current draft [ePrivacy Proposal] and ran with it without changing a word? Would the sky fall? I think the answer is, pretty obviously, it would not. Let me elaborate why.

If you are an advertising company you use an advertising agency, which receives – for example – an instruction from you to advertise to MEPs [Members of the European Parliament]. The agency gives then instructs another set of companies that are called DSPs (demand side platforms) who try to target MEPs. Demand side platforms use OBA [online behavioural advertising], but pretty much all of them also use something called “contextual advertising”. Contextual advertising means if I’m reading Euractiv, and I’m reading about a piece of policy, show me an ad aimed at someone who might be an MEP. If I’m reading about golf, show me golf clubs, or life insurance.

Contextual advertising has been tested. It has been live for over a century. It can happen right now. DSPs do it today. So the suggestion that the sky would fall without OBA should be dismissed – unless we in our industry believe that data leakage is an insurmountable problem.

But actually, the question is whether the situation could be improved. Not if life can go on, but if life for all of us can actually be better. And this leads to the question of “Do Not Track”.

There was an opportunity, primarily in the States, for the industry to get behind Do Not Track years ago. I don’t think you can read – in good faith – this [ePrivacy] proposal and not see that the Commission was proposing Do Not Track, with teeth. Do Not Track has been a draft standard since August 2015, and the W3C is planning to refine it and have it ready by the end of the year. This thing works. It has been tested by engineers. It is much better than anything that any stakeholders would come up with.

Just in case there is any suggestion that this wasn’t the Commission’s intention, I asked Commission officials “did you intend that this was Do Not Track with teeth?”.

Now what does Do Not Track Do? Do Not Track does not just make browsers the gatekeeper – this is not another instance of publishers being punished. Do Not Track enables publishers to get their own opt ins, which browsers have to accept. A signal is passed back and forth using a unique cookie, described in point 7 of the W3C’s specification. Here is the fantastic thing: any of us who are in adtech would now have to go through the publisher to get PII [personally identifiable information].

Today, as Joe described [referring to Joe McNamee’s statement], when I visit a publisher – Le Monde, or The Irish Times, everyone in this room, and every third, second, and first cousin they have is part of that transaction, swapping and syncing cookies. But under the new system, assuming kinks are ironed out, me visiting a publisher is like me visiting a doctor. Together, with me in the driving seat, we get to decide who comes in to that room.

And what this does for the first time in the digital history and in the digital economy is put a commercial value on Trust:  Trust will become the asset online if the smart parts of this proposal are carried through.

[interruption]

And let me say, and we can elaborate afterward… there is a third thing here. We are an adtech company, and we have been thinking about this and how to resolve it. We have already come up with a system that can work better than just context, and we are happy to share it with industry. That is just one example of how industry can adapt to this and come up with innovations.

As an adtech company we think the ePrivacy proposal cleans up a big problem.