Carlsbad, CA-- The Interactive Advertising Bureau's annual leadership meeting, EcoSystem 2.0, concluded here yesterday with a call for the industry to develop standards and guidelines for the control and use of data collected during online campaigns.
Walker Jacobs, senior VP for Turner Sports and Entertainment Digital Ad Sales, suggested the exploitation of data by a host of new middlemen entering the industry is rapidly becoming a huge problem primarily because it's destroying the trust between publishers, agencies and marketers.
"Advertisers and publishers hire vendors and partners to help us sort out our business challenges, and as a part of that they are provided very privileged access to our audiences," he added. "What's happening is there are lot of companies that want to use their privileged access...to make business on our backs, and if we're not careful they're going to hollow us out from the inside."
John Montgomery, North American COO for GroupM Interaction, conceded the issue is valid, but warned the cure could be worse than the problem, especially if public policy makers and legislators step in. "The real threat of legislation is not over yet and all the progress made in this industry will wither and die if we allow legislation to control it," he said, noting there's a tremendous amount of brand advertising poised to enter the space provided agencies can show them how to use data to better target. "In order to really grow this business we've got to really take some bold leaps and trust each other."
AudienceScience President/CEO Jeff Hirsch agreed, adding the solution is not more regulation but greater transparency. "There's been a rush of people getting into the data buying and selling game without regard for ownership," he said. "There's a lot more pixel penetration that anyone could imagine on publisher sites and advertiser sties, which leads to a lot of data being collected without compensation."
No one on the panel alleged that data abuses are happening across the board, and several noted many top-tier interactive agencies are voluntarily working with advertisers and publishers to monitor who collects and uses data generated from online campaigns.
But Ramsey McGrory, VP North American marketplaces for Yahoo, said, "What continues to scare me are the startups who are not public and have very little accountability and are selling into buyers who don't necessarily understand what's happening."
He added, "It's not illegal - and I'm not the arbiter of what's ethical - but there are things that are happening in the industry that affect the revenue model of publishers and may effect us at an industry level."
The risk, he said, is that regulators will discover examples of unrestrained data use and conclude that regulation is advisable.
McGrory cited the growth of real-time bidding platforms as one source of data misuse. "When that real-time bid is broadcast, it includes all the attributes... People can then respond with a bid, but if you don't respond or respond with a bid and lose, do you have the right to store and use that data for either bid optimization or charging purposes?"
Other examples, he said, involve third parties gaining access through backend deals with ad partners that neither publisher nor advertiser is aware of.
Because it may take time to develop new data standards and guidelines - and because there's no guarantee they'll be adhered to by all players in the rapidly growing digital ad sector - Jacobs said it's up to publishers and advertisers simply to be careful about who they partner with.
"Part of the problem is there are all these secret algorithms and secret sauces and propriety methodology, and that's all BS," he added. "I'm sick of secret sauces - I'd like clear principles that I'm going to safeguard your intellectual property and you'll do the same for me."
Hirsch concluded it's up to everyone in the process, including the brands themselves, to become more educated, stressing, "If you're not taking the time to understand what's being done with your data, then it probably is not being used in the right way."
David Ward is a veteran freelance journalist based in San Diego, who currently focuses on online marketing, digital entertainment and the growth on new consumer technologies such as 3D in the home.
June 20, 2013
1:00pm ET / 10:00am PT