Jon Lund: Cookie Challenge Display

The cookie challenge
and the future of display advertising

• Display advertising will prevail
• Social media = display advertising
• Search is here to stay

Jon Lund // www.jon-lund.com // jon@jon-lund.com // @jonlund
Emediate Nordic Executive Network, May 11, 2010, Stockholm
About Jon Lund: founder and ceo at the Jon Lund consulting company in Copenhagen, Denmark. From 2004-2009 general manager at IAB Denmark. From 2008-2010 member of the board
of IAB Europe. Started out in Internet in 1995 when he established his own creative agency.

a few words on

Privacy

A major concern among internet users

Socialogical
imaginary:
inside the heads of the
users
What do they think? How do they perceive what's going on?

They're overwhelmed by information, intruding their lives

Mobile phones are with us all the time. We use it as alarmclock - and suddenly becomes 24/7 sms-answering centrals

We're using the internet more and more

We're all emailing

Hours/month
40

36

32

28

24

20

16

12

8

4

0
2008 2009 2010

And spending lots of time on the internet

Not only at work, but also by night. We're never off work.

Potentially it's threathening your health

The information that confronts you are often spam. Here's someone wanting to follow you on Twitter. (But really it's porn-spam).

Here at the backend of your blog. Spam.

Jason Calacanis even started a new social search engine, maholo.com, to deal with the problem. "Search-results" are written by real human beings. (actually more like a kind of wikipedia)

Even the content users seek themselves are often crappy. These are the most read articles from five major news-outlets in Denmark. (week ending nov. 22, 2009)

Here's the top five for the 5 sites investigated.

One third sex. A quarter sensationalism.

Half of the stories were completely copy-paste from others.

Yahoo - China 2004

And if all this wasn't enough, the information you give away in this cacaphonical environment could and may be used against you. Here the 1995-Yahoo handling over private emails to the
Chinese government.

28 juli 2006 - searches from 658.000 AOL-user
profiles leaked


Based on the number of local searches, AOL user 1515830 appears to be a resident of Ohio's Mahoning County. On March 1, user 1515830 was trying to find the amount of calories in chai
tea and bananas. But on March 9, the searches took a darker turn.

chai tea calories
calories in bananas

aftermath of incest
how to tell your family you’re a victim of incest
pottery barn
curtains
surgical help for depression
oakland raiders comforter set

can you adopt after a suicide
attempt
who is not allowed to adopt
i hate men
medication to enhance female desire
jobs in denver colorado
teaching positions in denver colorado
how long will the swelling last after my tummy tuck
divorce laws in ohio
free remote keyloggers
baked macaroni and cheese with sour cream
how to deal with anger
teaching jobs with the denver school system
marriage counseling tips
Emediate Nordic Executive Network, May 11, 2010, Stockholmanti psychotic drugs
Based on the number of local searches, AOL user 1515830 appears to be a resident of Ohio's Mahoning County. On March 1, user 1515830 was trying to find the amount of calories in chai
tea and bananas. But on March 9, the searches took a darker turn.

Revenge is a common theme, though of course it's impossible to guess whether an AOL user has criminal intent or is in the middle of writing a true-crime novel. In the case of AOL user
17556639, the jury's still out.

how to kill your wife

pictures of dead people

photo of dead people

car crash photo

Revenge is a common theme, though of course it's impossible to guess whether an AOL user has criminal intent or is in the middle of writing a true-crime novel. In the case of AOL user
17556639, the jury's still out.

Vivianne Reding

Vice-President, Commisoner of Justice, Fundamental Rights and Citizenship
Previous: Information society and media

Vivianne Reding is responsible for privacy-protection. She's the kind of politician, who cares about her voters problems. Roaming prices are one of them. And privacy, the feeling off loss of
control on the internet and the stressfullness perceived are a key priority.

Vivianne Reding
“For years, mobile roaming charges have remained unjustifiably
high. We are therefore tackling one of the last borders within
Europe’s internal market"

Vice-President, Commisoner of Justice, Fundamental Rights and Citizenship
Previous: Information society and media

Vivianne Reding is responsible for privacy-protection. She's the kind of politician, who cares about her voters problems. Roaming prices are one of them. And privacy, the feeling off loss of
control on the internet and the stressfullness perceived are a key priority.

"We cannot expect citizens to trust
Europe if we are not serious in defending
the right to privacy”

This is her quest.

Cookies are like Alibaba: mark the door, to find it again later.

language
selection
remember
password

Shopping basket Target ads
Updated

unique count content
Cookies are like Alibaba: mark the door, to find it again later.

They look innocent. Simple short text-file with a few informations in it. Domain, unique id and dates in ascii.

Phorm
Deep packet inspection
British Telecom, virgin,
talk-talk
Phorm set the debate on fire in the UK. Not cookies, but like it in extreme: following the users through their ISP whereever the go.

Deep packet inspection
British Telecom, virgin,
talk-talk
Phorm set the debate on fire in the UK. Not cookies, but like it in extreme: following the users through their ISP whereever the go.

SIR TIM
BERNERS-LEE
"It’s mine - you can’t have it.
If you want to use it for
something, then you have to

negotiate with me. I have to
agree, I have to understand what I’m
getting in return."
Public outrage. Berners Lee is widely respected as the founder of the world wide web.

19. april 2009: EU opening statement against
the UK: implementation of e-privacy directive
24. november 2010: New e-privacy directive
adopted as part of the Telco package...

Following the Phorm-case, Reding takes the first steps to what could end up being the EU commison dragging the UK government to court under acusations of not having seen to it, that EU
law is respected in the UK.

Member States shall ensure that the storing of information, or the gaining of
access to information already stored, in the terminal equipment of a subscriber or

only allowed on condition
user is

that the subscriber or user
concerned has given his or her
consent, having been provided
with clear and comprehensive
information... This shall not prevent any technical storage or
access for the sole purpose of carrying out the transmission of a communication
over an electronic communications network, or as strictly necessary in order for
the provider of an information society service explicitly requested by the
subscriber or user to provide the service.

The wording of the text of the directive.

What is “consent”?
Do you have actively to say “yes” to each
particular site...
...or is it enough having done so, once and for
all through browser settings?

The word "prior" before consent were removed from the final text. This is enterpreted by IAB as an indication browser settings are enough. But I doubt it's that simple.

1. party
3. party

An important distinction is between first party cookie - where it's the site itself that sets the cookie - and 3. party, where it's a partner of the site (banner network, audience measurement...)
that sets the cookie. In the first case control isn't all gone. In the second, a party unknown to the users (and perhaps also to the site) sets the cookie.

Popup hell?

A ban of 3. party cookies is likely. Or that is: a requirement for all users actively to say yes every time a 3party cookie is set. This would result in a popup hell. Sites probably wouldn't force
this upon their users. Then rather drop 'em.

Popup hell?

Harass the users massively...
...or let go and take the loss?

...or the end of (3rd party) cookies)
A ban of 3. party cookies is likely. Or that is: a requirement for all users actively to say yes every time a 3party cookie is set. This would result in a popup hell. Sites probably wouldn't force
this upon their users. Then rather drop 'em.

Measurement:
No net reach

Execution:
No cross-domain frequency

Targetting:
Only on-site behavioural targetting

Especially since it's not devastating to the sites, although it might be to networks and audience meassurement.

Measurement:
No net reach
--> More wasted impressions
--> Lower prices...
Execution: --> But higher volume
No cross-domain frequency
--> Networks
--> Audience measurement
Targetting:
Only on-site behavioural targetting

Especially since it's not devastating to the sites, although it might be to networks and audience meassurement.

Social
media

Search
Display advertising is squeezed by Social Media and Search

Pagerank + auction = the secret of Google

Search truly takes a huge part of the total advertising pie. It's here to stay. And Google owns it, with it's formula for page-rank indexing and auctioning of ad inventory.

Usage != Money ?

Facebook on the other hand still strugles to find a way to make money. Even though timespend was three times as large on Facebook compared to Google in DK, Facebook only had some
10 percent of Google ad revenue.

Revenue split

5%

50 %
45 %

Google Display Facebook

Social media therefore doesn't pose a threath to display... at least not for now

The Like Button

Facebook might be moving right now though, trying to capitalize. The Like button potentially lets facebook build a quality index of the entire web.

Friend-rank -> Social search

Facebook could therefore build it's own search engine running not only on pagerank algoritms but also on "friend ranks". Creating organic search results superior to Googles.

Friend-rank -> Social search

Google killer?

Facebook could therefore build it's own search engine running not only on pagerank algoritms but also on "friend ranks". Creating organic search results superior to Googles.

Revenue, display advertising, Denmark (indexed)
700

545

390

235

80
2000-1
2000-2
2000-3
2000-4
2001-1
2001-2
2001-3
2001-4
2002-1
2002-2
2002-3
2002-4
2003-1
2003-2
2003-3
2003-4
2004-1
2004-2
2004-3
2004-4
2005-1
2005-2
2005-3
2005-4
2006-1
2006-2
2006-3
2006-4
2007-1
2007-2
2007-3
2007-4
2008-1
2008-2
2008-3
2008-4
2009-1
2009-2
2009-3
2009-4
Anyway display needs not wory. Search is not fighting Display. It gets it money party from other budgets (not marketing, but sales). And even though display revenue might have suffered
from search in the past, the losses hasn't been large enough to stop display from growing hugely as well.

This is so, because Display does something search doesn't. Search is great in certain phases of a buying process. But not when it comes to pushing commercial messages in mass markets.

Create eyeballs

Grow audience

Build reach

This is so, because Display does something search doesn't. Search is great in certain phases of a buying process. But not when it comes to pushing commercial messages in mass markets.

Attention
Display
Interest
Desire Social
Action Search

Actually the good old AIDA still gives you a framework to understand the roles of the three.

iPad promises another answer to the privacy/loss of control. It allows for a contextual web of applications. As Wired Magazine images in it's prototype video: watch it - http://
www.youtube.com/watch?v=wwFbwHaP5tE

E-paper appeal?

Wired and magazine-like apps look like something we've seen before, on another medium. E-papers on web.

Adult monthly users, January 2010
800.000
2008 2009 2010
725.000

700.000 665.000

600.000
575.000
530.000

500.000 470.000
470.000

400.000
Users

375.000

310.000
300.000

200.000
160.000

100.000

0
zmags i-paper e-papers combined

These have been succesfull... (though most are weekly ad circulars)

Page views per visit --- seconds spend per page

Time spend per page and pages read per visit, January 2010
60 60
Pages per visit Seconds spend per page
55,3 seconds/page

50 50

40 40

31,1 pages/visit

30 30

20 20

10 pages/visit
10 10,6 seconds/page
10

0 zmags epapers Average site 0

They display a different readership pattern than does the average website

iPad potential?


150.000 apps in app-store
525.000

450.000

375.000

300.000

225.000

150.000

75.000

0
Jul-08 Jan-09 Jul-09 Jan-10 jul-10 Jan-11

Jon Lund [www.jon-lund.com]
Mobile Copenhagen, 4. februar 2010
The number of apps in the iphone appstore, which can be used for iPads as well, tells a story of a hugely succesfull platform

+3 mia downloads
10.000.000.000

8.000.000.000

6.000.000.000

4.000.000.000

2.000.000.000

0
Jul-08 Jan-09 Jul-09 Jan-10 jul-10 Jan-11

With huge downloads as well (90 percent free, 10 percent paid)

2 mio downloads in Denmark in
December 09

That is some 10 apps per iphone/ipod touch

iPhonen trækker fra i datatrafik

Iphone
HTC
Nokia
Palm
Samsung
Blackberry

Andel af annonce-datatrafik pr. OS i vest-europa blandt smartphones, Kilde: AdMob, december 09

And even though the number of iPhones is very small (15 percent of total smartphones), iPhones accounts for 79 percent of the smartphone trafic on the web. At least in
dec. 2009 iPhone 79 %, HTC 7 %, Nokia 3,1, Palm 0,9, Samsung 0,5, Blackberry 0,4.
Can iPad do the same?

Laptops
Non-touchscreen phones
Flatpanel TVs

Marg. markets
1550 million
Touchscreen

smartphones
Portable media players Sub-markets
300 million
Core markets
Netbooks 150 million

Game consoles

Portable Navigation Devices
(gps)

E-readers

From a market point of view, the iPad potentials are vast. Because it spread over that many product-categories.
Yearly sales figures (units) of relevant markets:
Labtops: 200 (160 regular vs 40 notebooks) mio

iPad advertising uses. IAB UK.

THANK YOU!


Jon Lund: Cookie Challenge Display

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