Firms Compete to Offer Behavioral Ad Icon

daa-iconOnline ad self-regulation is spurring new services – and incremental revenue for the firms that offer them. TRUSTe is the latest to receive certification by the Digital Advertising Alliance – the body overseeing the behavioral advertising self-regulatory program – to enable an icon users can expect to see more of in display ads in the coming months.

Like the other approved firms, TRUSTe will charge a CPM-based fee for implementation of the icon in ads and the backend technology driving it. It will also provide reporting on the number of icon impressions served, how many people clicked them, and how many chose to opt out from being behaviorally-targeted in the future.

TRUSTe, DoubleVerify, and Evidon (formerly Better Advertising) are all approved by the DAA to deploy the icon on behalf of advertisers, agencies, and publishers. And each is vying to prove it can handle serving at scale. That includes serving the icon itself, amending it with dynamic information explaining how the ad was served, and reporting for compliance purposes.

Evidon has been chosen by two of the largest digital ad buying agencies, GroupM and VivaKi, to implement the icon. Evidon also operates the DAA’s monitoring system, which is overseen by the Direct Marketing Association and the Better Business Bureau. That system – which is separate from the platforms enabling the icon in ads – is helping the alliance track whether or not notice was served when data is collected by third parties for ad targeting.

“I think it’s great that more companies are emerging to help companies with compliance issues,” said Linda Woolley, EVP of government affairs for the DMA, which is responsible for enforcement of the program.

Following the Federal Trade Commission’s complaint late last year that self-regulation was moving too slowly, a stream of advertisers and agencies is expected to choose one of these firms in the coming months to ensure compliance with the self-regulatory initiative.

“Some say it’s a cost burden,” said Chris Babel, TRUSTe CEO; however, he argued that advertisers will benefit by engendering trust among users when they include the icon in their ads. “That ROI benefit we’ve found has been positive,” he said.

Advertisers can expect to pay a few cents per thousand impressions to enable the icon. Evidon, the first to be accredited, is really the only firm charging at this stage. While TRUSTe’s service is fully operational, Babel said the company may take a while to begin billing clients; DoubleVerify will not charge its clients to serve icons in their ads until June. The services come in conjunction with Web-based reports accessible any time.

The higher the volume of impressions, “the better the deal they’re going to get,” said Evidon CEO Scott Meyer. When selling to advertisers directly rather than through an agency, he said his firm may sell bundled services, in which case the pricing structure could vary.

Clients not already using DoubleVerify’s ad verification services will be charged “pennies” per CPM. If they use the verification services, “then it’s less pennies,” said Oren Netzer, CEO of DoubleVerify.

So far, DoubleVerify and Evidon each say they are delivering around 5 billion impressions of the ad icon per month, adding hundreds of thousands of dollars to the amount of revenue generated monthly through ads featuring the icon.

“The amount charged is likely in range with what people are paying for ad serving,” Grace Liau, SVP at VivaKi, told ClickZ News. She added, “in terms of revenue – I would quantify it as percentage of the total ad serving market.”

Netzer said, “By mid-year probably the majority of the impressions that we verify are going to be using the [icon].” He said his company serves a total of around 35 billion impressions per month of the ad verification tags that can potentially be altered to enable the ad icon. He called the new icon service “a natural extension of our business.”

TRUSTe will not disclose the number of impressions it has run on behalf of Publisher’s Clearinghouse and Comcast, clients that have been testing the service for months.

Evidon’s icon impressions should get a boost through a just-announced deal with Collective which makes ad icon implementation available to Collective’s 28 publishers and ad network clients. Specific Media recently began adding the icon to ads served in its network and plans for a broader roll out this year.

The fact that the alliance chose to design the self-regulatory program as one that essentially creates a new marketplace for compliance services stems, in part, from the intricacy of online advertising technologies, suggested Meyer. It was necessary to “build a for-profit entity here,” he said, because of “the sheer complexity of rolling this out.”

“I definitely see more and more business growing around privacy,” Netzer said.

VivaKi’s Liau agrees a business sector supporting the “activities” related to the icon is emerging. “I think the real story is beyond enabling the icon. It would be the peripheral services that emerge out of enabling the icon – whether it is consultative, or technical in nature. Also, given the added operational steps that will be required in enabling this, our industry will also have to ‘pay’ for how we get the icon to market [and] ensure compliance.

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