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Re: Frequency Capping

From: Chris Mejia <chris.mejia@iab.net>
Date: Wed, 11 Jul 2012 20:39:11 +0000
To: Chris Pedigo <CPedigo@online-publishers.org>, "Grimmelmann, James" <James.Grimmelmann@nyls.edu>
CC: W3C DNT Working Group Mailing List <public-tracking@w3.org>, Mike Zaneis <mike@iab.net>, Brendan Riordan-Butterworth <Brendan@iab.net>
Message-ID: <CC235AFF.1FC38%chris.mejia@iab.net>
Hi Chris,

I believe we are talking about limiting 3rd-party f-capping in this thread
(not something I agree with, if I wasn't clear before). As I'm sure you
appreciate, the tens of thousands of small long-tail publishers who
monitize their content, and thus provide their services at all, by
replying on outsourced sales of their ad inventory through 3rd-party ad
networks (and don't use their own ad servers to do so-- the majority)
would be negatively affected under this limitation, even though they
themselves are 1st-party to the user.

Chris Mejia | Digital Supply Chain Solutions | Ad Technology Group |
Interactive Advertising Bureau - IAB



On 7/11/12 1:14 PM, "Chris Pedigo" <CPedigo@online-publishers.org> wrote:

>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."
>
>James
>
>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 20:40:05 UTC

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