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RE: Frequency Capping

From: Chris Pedigo <CPedigo@online-publishers.org>
Date: Wed, 11 Jul 2012 20:14:12 +0000
To: "Grimmelmann, James" <James.Grimmelmann@nyls.edu>, Chris Mejia <chris.mejia@iab.net>
CC: W3C DNT Working Group Mailing List <public-tracking@w3.org>, Mike Zaneis <mike@iab.net>, Brendan Riordan-Butterworth <Brendan@iab.net>
Message-ID: <CEED5B1AC4405240B53E0330753999D305193C97@mbx023-e1-nj-8.exch023.domain.local>
Just a point of clarification - publishers could continue to frequency cap advertisements on their own site or affiliated sites, correct?  I believe frequency capping could be accomplished either by the first party or, more likely, by a service provider acting on behalf of the first party.  For this conversation about a frequency cap exception, I believe we're talking about allowing frequency capping across multiple, unrelated sites.  

Does anyone have a different understanding?

-----Original Message-----
From: Grimmelmann, James [mailto:James.Grimmelmann@nyls.edu] 
Sent: Wednesday, July 11, 2012 4:07 PM
To: Chris Mejia
Cc: W3C DNT Working Group Mailing List; Mike Zaneis; Brendan Riordan-Butterworth
Subject: Re: Frequency Capping

Chris, I think you are missing the point of my comment. 

Like Jonathan, I would like to see a detailed conversation on whether advertisers' and publishers' interests behind frequency capping could be addressed in ways that are not identical to frequency capping as it is practiced today.  By saying that frequency capping is required by advertiser contracts, you were cutting off that conversation before it could even get started.  Jonathan was brainstorming for ways to limit user exposure to the same ad that require less tracking than pure frequency capping.  I'd like to know what "good enough" frequency capping would look like and whether it would actually be good enough.  Please help in that effort, and don't just say, "It can't be done."


On Jul 11, 2012, at 3:27 PM, Chris Mejia wrote:

> James,
> Since I didn't go into the obvious details before, I will dive a 
> little deeper here, as I realize now that many on this forum are not 
> intimately experienced with the actual business of digital 
> advertising.  I hope you will appreciate that the digital advertising 
> industry carefully balances business concerns with user concerns (thus 
> the "win-win" model we have proven works--consumers and thus consumer 
> protection are key to our success).
> With regards to f-capping on the side of user concerns, as I 
> previously stated, advertisers AND publishers do not want to annoy 
> users with repeated delivery of the same ad creative.  Nor is the 
> repeated delivery of the same ad creative to the same user a good 
> business practice for advertisers and publishers.  There is always a 
> monetary cost associated with the delivery of an ad impression (such 
> as the cost of ad serving and the overhead of campaign management).  
> So the assertion that we just spray the same ads indiscriminately onto 
> those who have turned on DNT:1 will not only be found utterly annoying 
> to those users (at the additional cost of negative consumer brand 
> association for those advertisers), it also costs real money.  
> Remember, every single impression served costs actual money--and 
> aggregated, the cost of serving billions of impressions daily is not 
> trivial (take away here = nothing that happens on the Internet is 
> actually "free" of costs).  When a publisher's cost goes up, those 
> costs are passed to the advertiser (and ultimately to the consumer). 
> So when the publisher serves more ads (in this case, as a result of 
> NOT f-capping a campaign), the publisher charges the advertiser for 
> those additional served impressions.  The idea that this increased 
> cost be paid for by publishers and advertisers, on behalf of those 
> users who are opting out of the publisher:consumer value exchange 
> (when these consumers effectively 'devalue' themselves in the value 
> exchange by turning on DNT:1), goes against the laws of market 
> economics.  If you think advertisers are not going to require f-capping, think again.  Advertisers have plenty of reasonable business reasons to require f-capping in their contracts:  i.e.
> a) not annoy consumers with overdelivery when such annoyance leads to 
> negative advertiser brand association, and b) not needlessly waste ad 
> impressions and money on serving ads over and over again to users who 
> have opted out of the value exchange in the first place.  Again, 
> f-capping represents a win-win practice for industry AND users, even 
> those users who have opted out with DNT:1.
> Since we are on the topic of publishing costs and the value exchange 
> that pays for these costs so that content may be delivered to users, 
> I'm very concerned about the end game of an irresponsible DNT 
> specification (just as a reminder, I am FOR a responsible, balanced 
> and well thought out DNT spec).  In the world of ubiquitous DNT:1 
> signals that many advocates on this forum support, what do you suppose 
> will be the necessary business-motivated recourse for most for-profit 
> publishers?  My educated guess is the rapid proliferation of payment 
> gateways, with subscription services paying for content when 
> advertising alone no longer supports the publishing of "free" content.
> In this case, is the W3C inadvertently, but consequently promoting the 
> idea of a new digital divide?  A divide where those with wealth and 
> credit cards afford access to professionally developed content, while 
> those without sufficient wealth will be blocked from accessing the 
> same?  If you don't think this is a realistic outcome, please explain 
> precisely how professionally developed content will be paid for 
> without sufficient advertising revenue.  Remember, real costs must be 
> paid for with real dollars.
> Is the answer that the reduction in revenue that a ubiquitous DNT:1 
> will undoubtedly bring, mean that publishers should scale back 
> innovation, cut jobs, slow investment in the future?  Should all consumers pay this price?
> In a free market economy, I'm going to bet that innovation will 
> actually not slow; BUT it will be shifted to focus on only those who 
> can afford to pay for it.  Will government pay for the the (less 
> financially fortunate) others?  Will non-profit consumer advocates pay 
> for 'the others' to access this premium content?  Today, the vast 
> majority of that online innovation and premium content is paid for by 
> the publisher:consumer value exchange (advertising pays for innovation, content and access to that content).
> And how about the free press?  Who will pay for the free press?  Over 
> the last 10-years we have experienced a severe reduction in subsidized 
> regional newspaper content as a result of underperforming advertising 
> revenues (economy/recession related?) for local news organizations.
> Consequently, to reduce costs, most regional newspapers who have 
> survived (or are just barely hanging on in some cases) are 
> restructuring their service to less costly Web-only publishing models.  
> But even Web publishing costs money, and ad revenues per impression 
> are far less online than they were in print.  So when these newspapers 
> (the free, advertising supported, press) cannot afford to self-sustain 
> online, who will pay to replace their professional news reporting?  
> Are we all comfortable moving to a government funded press model?  If 
> this sounds ridiculous, have a look at the trend:
> http://online.wsj.com/public/resources/documents/NEWSPAPERS0903.html.  
> In conclusion, I'll step off my soapbox as soon as those who questions 
> such reasonable win-win practices as f-capping step off theirs, and we 
> all start working together on reasonable win-win solutions.
> Chris Mejia | Digital Supply Chain Solutions | Ad Technology Group | 
> Interactive Advertising Bureau - IAB
> On 7/11/12 1:31 PM, "Grimmelmann, James" <James.Grimmelmann@nyls.edu>
> wrote:
>> Advertisers require frequency capping in insertion orders because ad 
>> deliverers are capable of providing it.  If an ad deliverer were to 
>> say that it could not promise pure frequency capping for users who 
>> have requested DNT, but only some best-efforts version such as the 
>> one Jonathan outlines, the deliverer simply wouldn't let advertisers 
>> write that term into their contracts with it.  Of course, this might 
>> come at some cost to the deliverer, and that tradeoff is a fair 
>> subject for discussion.  But let's not mistake the "requirements" of 
>> current advertising contracts for the requirements of the future 
>> advertising contracts that will be written in view of the DNT 
>> standard and various parties' implementations of it.
>> I would add that since the primary motivation of frequency capping is 
>> to reduce user annoyance, users ought to be given the chance to 
>> choose for themselves whether to suffer that annoyance or the 
>> annoyance of being tracked for frequency capping purposes.
>> James
>> --------------------------------------------------
>> James Grimmelmann              Professor of Law
>> New York Law School                 (212) 431-2864
>> 185 West Broadway
>> james.grimmelmann@nyls.edu<mailto:james.grimmelmann@nyls.edu>
>> New York, NY 10013    http://james.grimmelmann.net
>> On Jul 11, 2012, at 12:59 PM, Chris Mejia wrote:
>> Jonathan,
>> Frequency capping (f-capping) is usually a contractual obligation for 
>> the party responsible for delivering the ad (an ad-netork, a 
>> publisher, and exchange, etc.) and is almost always required by the 
>> advertiser in insertion orders (the insertion order or "IO" is the 
>> contract between the parties).  It looks like your assumption below 
>> is that f-capping is
>> (only) a 'tactic' to increase ROI for performance campaigns.  While 
>> this is sometimes true (yet mostly not), it's actually rarely the 
>> real motivation of doing f-capping.  The requirement for f-capping 
>> the delivery of a campaign to users is generally contractually 
>> obligated by the advertiser, for several good reasons, but most 
>> importantly for not annoying the user with multiple servings of the 
>> same ad creative, over and over again in one time frame (i.e. in a 24-hour time period).
>> As f-capping is generally contractually obligated, it's not up to the 
>> deliverer of the ad to CHOOSE which campaigns to f-cap< it's a 
>> REQUIREMENT to f-cap all campaigns where contractually obligated to 
>> do so.  F-capping has happened in television advertising for many 
>> years< imagine how annoying it is when the same tv ad spot plays over 
>> and over again (in fact this happens, and I'm sure we all find it annoying).
>> To sum up, while f-capping can sometimes increase ROI for advertisers 
>> (it's not necessarily always true), it is most often contractually 
>> obligated (per the Insertion Order).  The primary motivation for 
>> f-capping is to not annoy the user with repeated serving of the same 
>> ad creative during a time period.  In my experience, the vast 
>> majority of f-capping is  set at 1:24 or 2:24, etc. (restricting the 
>> showing of a particular ad creative, 1 time in 24-hours, or 2-times in 24-hours).
>> I hope this helps clarify the motivation for f-capping and leads to 
>> mutual appreciation for the need.
>> Kind Regards,
>> Chris
>> Chris Mejia | Digital Supply Chain Solutions | Ad Technology Group | 
>> Interactive Advertising Bureau - IAB
>> From: Jonathan Mayer 
>> <jmayer@stanford.edu<mailto:jmayer@stanford.edu>>
>> Date: Tue, 10 Jul 2012 14:26:12 -0700
>> To: David Wainberg - NAI
>> <david@networkadvertising.org<mailto:david@networkadvertising.org>>
>> Cc: W3C DNT Working Group Mailing List 
>> <public-tracking@w3.org<mailto:public-tracking@w3.org>>
>> Subject: Re: Frequency Capping
>> Resent-From: W3C DNT Working Group Mailing List 
>> <public-tracking@w3.org<mailto:public-tracking@w3.org>>
>> Resent-Date: Tue, 10 Jul 2012 21:26:46 +0000
>> I'd sure like to hear more from advertising industry participants 
>> about how frequency capping integrates into advertisement selection.  
>> The AppNexus approach, if I read correctly, goes roughly as follows:
>> 1) Begin with the set of all campaigns.
>> 2) Filter by targeting criteria.
>> 3) Filter by frequency capping.
>> 4) Assign an expected revenue to each campaign.
>> 5) Select the campaign with greatest expected revenue.
>> The approach includes testing the frequency cap of every campaign 
>> that matches targeting criteria.  What about, instead, only testing 
>> the cap for a subset of those campaigns:
>> 1) Begin with the set of all campaigns.
>> 2) Filter by targeting criteria.
>> 3) Assign an expected revenue to each campaign.
>> 4) Select the n campaigns with greatest expected revenue.
>> 5) Filter by frequency capping.
>> 6) Select the campaign with greatest expected revenue.
>> Some relevant empirical questions include: How often are the highest 
>> revenue campaigns frequency capped?  How well can an ad company 
>> predict which high-revenue campaigns will and won't be frequency capped?
>> Jonathan
>> On Monday, July 9, 2012 at 11:34 AM, David Wainberg wrote:
>> Hi All,
>> In case you haven't seen it already, I recommend Prof. Felten's 
>> excellent blog on "Privacy by Design: Frequency Capping." Please also 
>> read Brian O'Kelley's post in the comment section explaining what he 
>> sees as the technical hurdles for these alternative frequency capping 
>> methods. (I may be wrong, but I think Brian is a former student of 
>> Prof. Felten.) This kind of detailed technical discussion of these 
>> proposals seems very helpful. First, it helps us set reasonable expectations on all sides.
>> Second, and more interesting to me, is that maybe we can have more 
>> discussion and collaboration on bringing these sorts of things to 
>> production.
>> http://techatftc.wordpress.com/2012/07/03/privacy-by-design-frequency
>> -capp
>> ing/
>> -David
Received on Wednesday, 11 July 2012 20:14:43 UTC

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