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RE: Frequency Capping

From: Chris Pedigo <CPedigo@online-publishers.org>
Date: Wed, 11 Jul 2012 20:51:44 +0000
To: Chris Mejia <chris.mejia@iab.net>, "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: <CEED5B1AC4405240B53E0330753999D305193E01@mbx023-e1-nj-8.exch023.domain.local>
So, in the case of the long-tail publisher (or any publisher for that matter), the 3rd party ad-network could cap the number of times that a certain ad showed on that publisher's site.  But, the ad network would have to abide by the rules for a  "service provider" which means they couldn't correlate data about that user from other, unaffiliated sites.  In essence, an ad network couldn't promise to cap the number of times a DNT:1 user sees a certain ad across multiple sites and over time.  But, publishers could cap the number of times that a DNT:1 user sees a certain ad on their site and affiliated sites.

I'm not arguing one way or the other, I just want to define the scope of we're talking about here.

-----Original Message-----
From: Chris Mejia [mailto:chris.mejia@iab.net] 
Sent: Wednesday, July 11, 2012 4:39 PM
To: Chris Pedigo; Grimmelmann, James
Cc: W3C DNT Working Group Mailing List; Mike Zaneis; Brendan Riordan-Butterworth
Subject: Re: Frequency Capping

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-frequenc
>>> y
>>> -capp
>>> ing/
>>> 
>>> -David
>>> 
>>> 
>>> 
>> 
>
>
>
Received on Wednesday, 11 July 2012 20:52:12 UTC

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