Policing the Industry for Profit

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police_smallADOTAS – Well, we seem to be about to do what we said we wouldn’t do: add another intermediary cost to the value chain when there is no value being added. I’m talking specifically about paid services to allegedly certify that we’re doing something we’re already doing: looking after our consumers’ privacy rights.

The momentum of our industry’s self regulation initiative seems to be hitting its stride, which is unquestionably a good thing. Believe me when I say, the last thing any of us want is to have Rep. Jackie Speier and the Congressional privacy committee setting the rules and regulations for our industry.

The way I see it is there are two roads we as an industry can take. First, the high road, where our industry leverages a non-profit organization with objective clout that would partner with every audience & data oriented company that has a need for receiving the necessary self-regulation certification for a modest charge to simply cover the regulatory expenses. This seems like the clear option to choose.

Instead, it appears that the governing body of our industry has taken the second path – the low road – and named a select number of companies who have been given the right to profit off of holding media companies that use any data (that would be all of us…) hostage unless they conform and buy into the required service. The more well-known companies holding the guns are DoubleVerify, Evidon and TRUSTe.

I want to reiterate that I am fully in favor of self regulation, but you have to ask yourself: is this regulatory initiative being handled with the industry’s best interests at heart? Or does it seem a little unethical that a handful of select companies be given a license to reap immense non-negotiable profits for something that basically costs zero?

Let me put this into further perspective. Ad serving and ad verification services are an important addition to the media value chain. These CPM rates are generally in the $0.04-$0.10 range depending on the company and corresponding service level. These sponsored, newly formed regulatory companies are asking for CPMs in the range of $0.05-$0.15 for simply adding the “i” icon to the respective creative units when data monitoring, targeting and collection is taking place.

I understand there are other basic bells and whistles included with this inflated, premium rate range but I can guarantee there is a significant profit being made as well with the modeling and impression scale associated with these rates when this service does not warrant to be profited from.

I will leave you with this: if the heads of our industry have little regard for forcing these required regulatory costs upon data companies who have already had their margins reduced over the last few years with justified intermediary costs, then what’s next and where will they stop?

Further, has anyone thought about the marketers as well? Do they really want to pay that much extra for every ad impression? Really?!?

Again, if we want to self-police, we absolutely need to do something. But a much better approach would be to do this within our industry’s leading non-profit group – the IAB. And if we’re paying for the service, it should be priced in a similar structure and scale to the way the IAB currently charges for membership today.

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