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Today — February 25th 2020Your RSS feeds

App Samurai closes a $2.4M Series A funding round led by 212 Ventures

By Mike Butcher

App Samurai, a platform to market mobile apps, has closed an investment of $2.4 million in Series A funding, led by 212 Ventures and co-invested by Collective Spark, 500 Startups and Degerhan Usluel. It’s now raised a total of $4.6 million which will be used to develop the mobile advertising group’s product portfolio and global expansion.
 
Founded in 2016, the App Samurai Group is used by app makers to grow their apps by using a portfolio of products including a user acquisition platform (App Samurai), a real-time mobile ad fraud detection and prevention solution (Interceptd), and an in-app engagement solution (Storyly). 

Commenting on the raise, Emre Fadillioglu, CEO and Co-Founder, App Samurai Inc said in a statement:“This $2.4m investment aligns with our 2020 globalization strategy and will accelerate our talent acquisition and geographical footprint. Our priority now is to bring the brightest minds together, to drive greater transparency, integrity and efficiency for the mobile marketing ecosystem.”
 
Its direct competitors include Traffic Guard, Scalarr, Forensiq, Machine, 21 Metrics, FraudScore and FraudLogix while indirect competitors include Adjust, AppsFlyer, Tune and Kochava.

Before yesterdayYour RSS feeds

How to identify and remove KidsGuard ‘stalkerware’ from your phone

By Zack Whittaker

We reported today on KidsGuard, a powerful mobile spyware. Not only is the app secretly installed on thousands of Android phones without the owners’ consent, it also left a server open and unprotected, exposing the data it siphoned off from victims’ infected devices to the internet.

This consumer-grade spyware also goes by “stalkerware.” It’s often used by parents to monitor their kids, but all too frequently it’s repurposed for spying on a spouse without their knowledge or consent. These spying apps are banned from Apple and Google’s app stores, but those bans have done little to curb the spread of these privacy invading apps, which can read a victim’s messages, listen to their phone calls, track their real-time locations, and steal their contacts, photos, videos, and anything else on their phones.

Stalkerware has become so reviled by privacy experts, security researchers, and lawmakers that antivirus makers have promised to do more to better detect the spyware.

TechCrunch obtained a copy of the KidsGuard app. Using a burner Android phone with the microphones and cameras sealed, we tested the spyware’s capabilities. We also uploaded the app to online malware scanning service VirusTotal, which runs uploaded files against dozens of different antivirus makers. Only eight antivirus engines flagged the sample as malicious — including Kaspersky, a member of the Coalition Against Stalkerware, and F-Secure.

Yoong Jien Chiam, a researcher at F-Secure’s Tactical Defense unit, analyzed the app and found it can obtain “GPS locations, account name, on-screen screenshots, keystrokes, and is also accessing photos, videos, and browser history.”

KidsGuard’s developer, ClevGuard, does not make it easy to uninstall the spyware. But this brief guide will help you to identify if the spyware is on your device and how to remove it.

Before you continue, some versions of Android may have slightly different menu options, and you take these following steps at your own risk. This only removes the spyware, and does not delete any data that was uploaded to the cloud.

How to identify the spyware

If you have an Android device, go to SettingsApps, then scroll down and see if “System Update Service” is listed. This is what ClevGuard calls the app to disguise it from the user. If you see it, it is likely that you are infected with the spyware.

First, remove the spyware as a “device administrator”

Go to Settings > Security, then Device administrators then untick the “System Update Service” box, then hit Deactivate.

Then remove the app’s “usage access”

Now, go back to Settings > Security then scroll to Apps with usage access. Once here, tap on “System Update Service” then switch off the permit usage toggle.

Also remove the spyware’s “notification access”

Once that is done, go back to Settings > Sound & notification then go to Notification access. Now switch off the toggle for “System Update Service.”

Now you can uninstall the spyware from your device

Following those steps, you have effectively disabled the spyware. Now you are able to uninstall it. Go to Settings > Apps and scroll down to “System Update Service.” You should be able to hit Uninstall, but you may need to hit Force Stop first. Tap OK to uninstall the app. This may take a few minutes.

Secure your device again

Now that you’ve ridden your device of the spyware, you’ll need to enable a couple of settings that were switched off when your device was first infected. Firstly, go back to Settings > Security then switch off the toggle for Unknown sources. Secondly, go to the Play Store > Play Protect. If you have the option, select Turn on. Once it’s on, you should check to ensure that it “Looks good.”

Google’s new T&Cs include a Brexit ‘Easter egg’ for UK users

By Natasha Lomas

Google has buried a major change in legal jurisdiction for its UK users as part of a wider update to its terms and conditions that’s been announced today and which it says is intended to make its conditions of use clearer for all users.

It says the update to its T&Cs is the first major revision since 2012 — with Google saying it wanted to ensure the policy reflects its current products and applicable laws.

Google says it undertook a major review of the terms, similar to the revision of its privacy policy in 2018, when the EU’s General Data Protection Regulation started being applied. But while it claims the new T&Cs are easier for users to understand — rewritten using simpler language and a clearer structure — there are no other changes involved, such as to how it handles people’s data.

“We’ve updated our Terms of Service to make them easier for people around the world to read and understand — with clearer language, improved organization, and greater transparency about changes we make to our services and products. We’re not changing the way our products work, or how we collect or process data,” Google spokesperson Shannon Newberry said in a statement.

Users of Google products are being asked to review and accept the new terms before March 31 when they are due to take effect.

Reuters reported on the move late yesterday — citing sources familiar with the update who suggested the change of jurisdiction for UK users will weaken legal protections around their data.

However Google disputes there will be any change in privacy standards for UK users as a result of the shift. it told us there will be no change to how it process UK users’ data; no change to their privacy settings; and no change to the way it treats their information as a result of the move.

We asked the company for further comment on this — including why it chose not to make a UK subsidiary the legal base for UK users — and a spokesperson told us it is making the change as part of its preparations for the UK to leave the European Union (aka Brexit).

Like many companies, we have to prepare for Brexit,” Google said. “Nothing about our services or our approach to privacy will change, including how we collect or process data, and how we respond to law enforcement demands for users’ information. The protections of the UK GDPR will still apply to these users.”

Heather Burns, a tech policy specialist based in Glasgow, Scotland — who runs a website dedicated to tracking UK policy shifts around the Brexit process — also believes Google has essentially been forced to make the move because the UK government has recently signalled its intent to diverge from European Union standards in future, including on data protection.

“What has changed since January 31 has been [UK prime minister] Boris Johnson making a unilateral statement that the UK will go its own way on data protection, in direct contrast to everything the UK’s data protection regulator and government has said since the referendum,” she told us. “These bombastic, off-the-cuff statements play to his anti-EU base but businesses act on them. They have to.”

“Google’s transfer of UK accounts from the EU to the US is an indication that they do not believe the UK will either seek or receive a data protection adequacy agreement at the end of the transition period. They are choosing to deal with that headache now rather than later. We shouldn’t underestimate how strong a statement this is from the tech sector regarding its confidence in the Johnson premiership,” she added.

Asked whether she believes there will be a reduction in protections for UK users in future as a result of the shift Burns suggested that will largely depend on Google.

So — in other words — Brexit means, er, trust Google to look after your data.

“The European data protection framework is based around a set of fundamental user rights and controls over the uses of personal data — the everyday data flows to and from all of our accounts. Those fundamental rights have been transposed into UK domestic law through the Data Protection Act 2018, and they will stay, for now. But with the Johnson premiership clearly ready to jettison the European-derived system of user rights for the US-style anything goes model,” Burns suggested.

“Google saying there is no change to the way we process users’ data, no change to their privacy settings and no change to the way we treat their information can be taken as an indication that they stand willing to continue providing UK users with European-style rights over their data — albeit from a different jurisdiction — regardless of any government intention to erode the domestic legal basis for those rights.”

Reuters’ report also raises concerns about the impact of the Cloud Act agreement between the UK and the US — which is due to come into effect this summer — suggesting it will pose a threat to the safety of UK Google users’ data once it’s moved out of an EU jurisdiction (in this case Ireland) to the US where the Act will apply.

The Cloud Act is intended to make it quicker and easier for law enforcement to obtain data stored in the cloud by companies based in the other legal jurisdiction.

So in future, it might be easier for UK authorities to obtain UK Google users’ data using this legal instrument applied to Google US.

It certainly seems clear that as the UK moves away from EU standards as a result of Brexit it is opening up the possibility of the country replacing long-standing data protection rights for citizens with a regime of supercharged mass surveillance. (The UK government has already legislated to give its intelligence agencies unprecedented powers to snoop on ordinary citizens’ digital comms — so it has a proven appetite for bulk data.)

Again, Google told us the shift of legal base for its UK users will make no difference to how it handles law enforcement requests — a process it talks about here — and further claimed this will be true even when the Cloud Act applies. Which is a weasely way of saying it will do exactly what the law requires.

Google confirmed that GDPR will continue to apply for UK users during the transition period between the old and new terms. After that it said UK data protection law will continue to apply — emphasizing that this is modelled after the GDPR. But of course in the post-Brexit future the UK government might choose to model it after something very different.

Asked to confirm whether it’s committing to maintain current data standards for UK users in perpetuity, the company told us it cannot speculate as to what privacy laws the UK will adopt in the future… 😬

We also asked why it hasn’t chosen to elect a UK subsidiary as the legal base for UK users. To which it gave a nonsensical response — saying this is because the UK is no longer in the EU. Which begs the question when did the UK suddenly become the 51st American State?

Returning to the wider T&Cs revision, Google said it’s making the changes in a response to litigation in the European Union targeted at its terms.

This includes a case in Germany where consumer rights groups successfully sued the tech giant over its use of overly broad terms which the court agreed last year were largely illegal.

In another case a year ago in France a court ordered Google to pay €30,000 for unfair terms — and ordered it to obtain valid consent from users for tracking their location and online activity.

Since at least 2016 the European Commission has also been pressuring tech giants, including Google, to fix consumer rights issues buried in their T&Cs — including unfair terms. A variety of EU laws apply in this area.

In another change being bundled with the new T&Cs Google has added a description about how its business works to the About Google page — where it explains its business model and how it makes money.

Here, among the usual ‘dead cat’ claims about not ‘selling your information’ (tl;dr adtech giants rent attention; they don’t need to sell actual surveillance dossiers), Google writes that it doesn’t use “your emails, documents, photos or confidential information (such as race, religion or sexual orientation) to personalize the ads we show you”.

Though it could be using all that personal stuff to help it build new products it can serve ads alongside.

Even further towards the end of its business model screed it includes the claim that “if you don’t want to see personalized ads of any kind, you can deactivate them at any time”. So, yes, buried somewhere in Google’s labyrinthine setting exists an opt out.

The change in how Google articulates its business model comes in response to growing political and regulatory scrutiny of adtech business models such as Google’s — including on data protection and antitrust grounds.

Retail optimization startup Teikametrics raises $15M as it expands beyond Amazon and beyond ads

By Anthony Ha

Teikametrics, a startup that helps retailers optimize their online ad spending, has raised $15 million in additional funding.

The company launched with the goal of helping Amazon sellers advertise more effectively. More recently, it launched a similar partnership with Walmart.

CEO Alasdair McLean-Foreman said that on both platforms, the startup’s Flywheel platform can improve the ad-buying process using retailer data about things like transactions, inventory and pricing.

McLean-Foreman praised Amazon for creating “an incredible closed loop” where “millions of consumers [are] meeting millions of suppliers across the long tail.” And of the other online platforms, he said Walmart is “the one that’s closest to parity.”

He added that by working with Teikametrics, retailers (whether they’re third-party sellers, or brands promoting products that Amazon and Walmart are selling themselves) can optimize their campaigns across both marketplaces, and eventually on other platforms as well.

McLean-Foreman added that the company will be launching products that go beyond advertising later this year. His vision is for Teikametrics to use that same data to create a retail “operating system” that optimize every aspect of a retailer’s business, including inventory and pricing.

“It’s about creating very simple solution to a very, very complicated problem that is much more dynamic and much more complicated than just the ads,” he said.

The Boston-headquartered startup raised a $10 million Series A in 2018. The new round was led by Jump Capital, with participation from Granite Point Capital, Jerry Hausman (an MIT econometrics professor who also serves as a scientific advisor) and Ed Baker (former head of growth at Facebook and Uber).

Teikametrics says it’s working with more than 3,000 brands, including Clarks, Razer, Power Practical, Zipline Ski and Mark Cuban’s Brands. It also recently hired former Amazon ad executive Srini Guddanti as its chief product officer.

Looking at the broader retail and advertising landscape, McLean-Foreman acknowledged, “AI is almost a buzzword,” but he argued, “We are actually AI-first. The product itself is automation, it is intelligent decision-making.”

He added, “Advertising is a huge lever to pull and a really good problem for AI to solve, but I’m super excited to apply those same AI components or solutions to an even bigger problem at the same time.”

Bloomberg memes push Instagram to require sponsorship disclosure

By Josh Constine

Instagram is changing its advertising rules to require political campaigns’ sponsored posts from influencers to use its Branded Content Ads tool that adds a disclosure label of “Paid Partnership With”. The change comes after the Bloomberg presidential campaign paid meme makers to post screenshots that showed him asking them to make him look cool.

Instagram provided this statement to TechCrunch:

“Branded content is different from advertising, but in either case we believe it’s important people know when they’re seeing paid content on our platforms. That’s why we have an Ad Library where anyone can see who paid for an ad and why we require creators to disclose any paid partnerships through our branded content tools. After hearing from multiple campaigns, we agree that there’s a place for branded content in political discussion on our platforms. We’re allowing US-based political candidates to work with creators to run this content, provided the political candidates are authorized and the creators disclose any paid partnerships through our branded content tools.”

Instagram explains to TechCrunch that branded content is different from advertising because Facebook doesn’t receive any payment and it can’t be targeted. If marketers or political campaigns pay to boost the reach of sponsored content, it’s then subject to Instagram’s ad policies and goes in its Ad Library for seven years.

But previously, Instagram banned political operations from running branded content because the policies that applied to it covered all monetization mediums on Instagram, including ad breaks and subscriptions that political entities are blocked from using. Facebook didn’t want to be seen as giving monetary contributions to campaigns, especially as the company tries to appear politically neutral.

Yet now Instagram is changing the rule and not just allowing but requiring political campaigns to use the Branded Content Ads tool when paying influencers to post sponsored content. That’s because Instagram and Facebook don’t get paid for these sponsorships. It’s now asking all sponsorships, including the Bloomberg memes retroactively, to be disclosed with a label using this tool. That would add a “Paid Partnership with Bloomberg 2020” warning to posts and Stories that the campaign paid meme pages and other influencers to post. This rule change is starting in the US today.

Instagram was moved to make the change after Bloomberg DM memes flooded the site. The New York Times’ Taylor Lorenz reported that the Bloomberg campaign worked with Meme 2020, an organization led by the head of the “FuckJerry” account’s Jerry Media company Mick Purzycki, to recruit and pay the influencers. Their posts made it look like Bloomberg himself had Direct Messaged the creators asking them to post stuff that would make him relevant to a younger audience.

Part of the campaign’s initial success came because users weren’t fully sure if the influencers’ posts were jokes or ads, even if they were disclosed with #ad or “yes this is really sponsored by @MikeBloomberg”. There’s already been a swift souring of public perception on the meme campaign, with some users calling it cringey and posting memes of Bernie Sanders, who’s anti-corporate stance pits him opposite of Bloomberg.

The change comes just two days after the FTC voted to review influencer marketing guidelines and decide if advertisers and platforms might be liable for penalties for failing to mandate disclosure.

At least the Democratic field of candidates is finally waking up to the power of memes to reach a demographic largely removed from cable television and rally speeches. The Trump campaign has used digital media to great effect, exploiting a lack of rules against misinformation in Facebook ads to make inaccurate claims and raise money. With all his baked in media exposure from being President already, the Democratic challengers need all the impressions they can get.

AdQuick raises $6M to conquer an advertising market Google and Facebook won’t

By Lucas Matney

With Google and Facebook yielding massive control over the online ad market leaving only scraps for other ad platforms, perhaps it was only natural that tech startups would take a step back and start to look for opportunities in selling billboards.

AdQuick, a marketplace for out of home (OOH) advertising, tells TechCrunch that it has closed a $6 million Series A led by Initialized Capital with participation from WndrCo, Shrug Capital, The Todd & Rahul Angel Fund and rapper Nas. The startup has now raised $9.4 million to date.

AdQuick isn’t in the business of renting out advertising space they own. Like traditional channels they connect the ad space owner with a buyer and take a commission on the purchase. Unlike some other channels, they’ve tried to inject the ad analytics of the web into the process so that buyers understand what they’re paying for impressions and can point brands to higher ROI locations where they might not have been looking.

“You know while the digital market is just so overbid and essentially controlled by Facebook and Google, the returns on investment from out of home ads keeps going up because people out in public have to see and experience them,” Initialized’s Alexis Ohanian, who led the deal, tells TechCrunch.

In recent months, startups like ZeroDown and Brex have coated San Francisco in outdoor advertising campaigns, while the explosion of direct-to-consumer brands has led startups with massive online ad spends beginning to look at the prices of a billboard on the 101. It’s not just ad real estate in SF or New York or LA that’s seeing increased demand, CEO Matt O’Connor tells TechCrunch that the OOH ad market is seeing big growth across the board.

“It’s the only non-online channel growing, and it’s actually growing faster in the last year than it has in the past decade,” O’Connor says. “A big tailwind is that brands are looking to spend offline earlier than they ever have in their history because it’s gotten so expensive that they’re forced to look for channels with better payback.”

The key opportunity AdQuick is tapping into is the 30-35% of OOH ad space they estimate went unused in the Unites States last year.

Taking on digital ad space sold by Google and Facebook means leveling the playing field and part of determining that real world ad’s ROI can mean relying on the same creepy ad analytics services that connect web habits and location data of de-identified devices for serving online ads, but such are the ills of the advertising world in 2020. These processes allow ad buyers to gain a better idea of what their investment in bench advertising in Cheyenne, Wyoming is actually going to mean in terms of impressions and how much they are paying per pair of eyeballs.

One thing AdQuick isn’t interested in is trying to find an entry point to the the non-OOH digital ad market. “That’s pretty bloody water that’s been picked over by both the duopoly and the thousands of other quote unquote adtech companies,” O’Connor says.

Contextual advertising company GumGum raises $22M

By Anthony Ha

GumGum is announcing that it’s raised $22 million from existing investors, including Morgan Stanley Expansion Capital, NEA spinout NewView Capital and Upfront Ventures — money that CEO Phil Schraeder said he’ll use to pursue a more aggressive acquisition strategy.

This Series D comes nearly five years after GumGum raised a $26 million Series C. Schraeder told me the company’s “core business has been profitable for years,” and that GumGum now has the ability to turn profitability “on or off” depending on how quickly it wants to grow.

“We have historically not done M&A or acquisitions — those are going to be part of what we do going forward,” he said. “We have built an amazing, strong, profitable balance sheet and team and presence in-market that we want to accelerate and grow.”

Schraeder has been at GumGum for nearly a decade, starting out as vice president of finance before becoming COO, CFO, president — and finally CEO, after co-founder Ophir Tanz stepped down last year to run the company’s dental industry-focused spinout Pearl.

Based in Santa Monica, Calif., GumGum was founded in 2008. The team developed computer vision technology that could identify the content of an image, then place an appropriate ad alongside the picture.

This is the core business that Schraeder was referring to, which he said GumGum has used as a “foundation” to expand into new areas like sports sponsorships and in-video advertising (the in-video unit has already been tested with Sprint and other brands, with a broader launch scheduled for the second quarter of this year).

GumGum demo

The company also recently launched Verity for Publishers, which the company says uses both natural language processing and computer vision to analyze the content of a page, ensuring that it’s brand-safe and relevant for advertisers.

Schraeder said that even here, GumGum’s foundation in image analysis remains important, because simple keyword detection won’t cut it — for example, photos can help Verity determine that a “shooting” story is about basketball, rather than a violent tragedy. GumGum plans to launch a similar product for advertisers, called Verity for Brands, later this year.

Schraeder argued that this kind of contextual understanding of online content will become increasingly important to advertisers, particularly as cookies become less and less useful as a way to track and target consumers.

“For the industry, this is what’s going to help us — better user experiences leveraging the context on the page, integrated advertising that brings back the positive view of advertising,” he said.

The company is also announcing that it has appointed Lisa Licht to its board of directors. Licht was formerly the CMO at Live Nation Entertainment, and now runs a consultancy that works with AllBright, Illumination Animation, the Metrograph and Exploding Kitten.

“As I see it, this is the ideal time to get behind GumGum,” Licht said in a statement. “They have outpaced the market in terms of growth year-after-year, maintained profitability and now there’s an obvious inflection point at hand for contextual advertising in digital. That’s an area where GumGum already has a significant edge, so I’m looking forward to helping expand its lead in that area, while also contributing to success across the full breadth of GumGum’s business.”

FTC votes to review influencer marketing rules & penalties

By Josh Constine

Undisclosed influencer marketing posts on social media should trigger financial penalties, according to a statement released today by the Federal Trade Commission’s Rohit Chopra. The FTC has voted 5-0 to approve a Federal Register notice calling for public comments on questions related to whether The Endorsement Guides for advertising need to be updated.

“When companies launder advertising by paying an influencer to pretend that their endorsement or review is untainted by a financial relationship, this is illegal payola,” Chopra writes. “The FTC will need to determine whether to create new requirements for social media platforms and advertisers and whether to activate civil penalty liability.”

Currently the non-binding Endorsement Guides stipulate that “when there is a connection between an endorser and a seller of an advertised product that could affect the weight or credibility of the endorsement, the connection must be clearly and conspicuously disclosed.” In the case of social media, that means creators need to note their post is part of an “ad,” “sponsored” content or “paid partnership.”

But Chopra wants the FTC to consider making those rules official by “Codifying elements of the existing endorsement guides into formal rules so that violators can be liable for civil penalties under Section 5(m)(1)(A) and liable for damages under Section 19.” He cites weak enforcement to date, noting that in the case of department store Lord & Taylor not insisting 50 paid influencers specify their posts were sponsored, “the Commission settled the matter for no customer refunds, no forfeiture of ill-gotten gains, no notice to consumers, no deletion of wrongfully obtained personal data, and no findings or admission of liability.”

Strangely, Chopra fixates on Instagram’s Branded Content Ads that let marketers pay to turn posts by influencers tagging brands into ads. However, these ads include a clear “Sponsored. Paid partnership with [brand]” and seem to meet all necessary disclosure requirements. He also mentions concerns about sponcon on YouTube and TikTok.

Additional targets of the FTC’s review will be use of fake or incentivized reviews. It’s seeking public comment on whether free or discounted products influence reviews and should require disclosure, how to handle affiliate links and whether warnings should be posted by advertisers or review sites about incentivized reviews. It also wants to know about how influencer marketing affects and is understood by children.

Chopra wisely suggests the FTC focus on the platforms and advertisers that are earning tons of money from potentially undisclosed influencer marketing, rather than the smaller influencers themselves who might not be as well versed in the law and are just trying to hustle. “When individual influencers are able to post about their interests to earn extra money on the side, this is not a cause for major concern,” he writes, but “when we do not hold lawbreaking companies accountable, this harms every honest business looking to compete fairly.”

While many of the social media platforms have moved to self-police with rules about revealing paid partnerships, there remain gray areas around incentives like free clothes or discount rates. Codifying what constitutes incentivized endorsement, formally demanding social media platforms to implement policies and features for disclosure and making influencer marketing contracts state that participation must be disclosed would all be sensible updates.

Society has enough trouble with misinformation on the internet, from trolls to election meddlers. They should at least be able to trust that if someone says they love their new jacket, they didn’t secretly get paid for it.

Former Krux and Salesforce execs raise $15M for their marketing data startup Habu

By Anthony Ha

Marketing startup Habu is emerging from stealth today and announcing that it has already raised $15 million in Series A funding.

The company comes out of super{set}, the startup studio created by Krux founders Tom Chavez and Vivek Vaidya. In fact, Chavez is Habu’s chairman, Vaidya serves as CTO and their former Krux colleague Matt Kilmartin (who eventually became chief customer officer for Salesforce’s consumer engagement platform after Salesforce acquired Krux) is the startup’s CEO.

Kilmartin told me that Habu was created to solve a “still elusive” marketing challenge — delivering “omni-channel orchestration for the entire customer journey.” In other words, he’s saying that chief marketing officers are still struggling to deliver personalized messages to potential customers across every channel and at every stage.

Kilmartin argued that’s because they’re challenged by new privacy regulations, plus the fact that many marketing tools struggle to integrate data from the major digital ad platforms. And then there are the limitations of the big marketing clouds (including Kilmartin’s old employer Salesforce), which he said are “stitching together all the stuff they bought — their goal is to have everyone go all-in on one of their stacks.”

So Habu isn’t trying to build yet another marketing platform. Instead, the company describes its core product as a “marketing data operating system” that can be used alongside the aforementioned clouds, bringing a company’s customer data together across platforms, then providing automated insights and recommendations on how to use that data to deliver personalized marketing. And it does this in a way that complies with privacy regulations like GDPR and CCPA.

“We’re trying not to be a platform,” Kilmartin said. “It’s a modular, interoperable suite of services.”

Habu’s software can pull in a marketer’s first-party customer data, as well as data from platforms like Google and Facebook. Kilmartin said that while these platforms remain a “blind spot” for many marketers, “They have APIs and frameworks to be able to do this, it just requires a level of sophistication. And there just aren’t that many extra data scientists that these brands have sitting around.”

In addition to super{set}, Habu’s funding comes from Ridge Ventures. And although Habu is only launching publicly today, it already has customers in the CPG and media industries.

Update: An earlier version of this story incorrectly identified some of Habu’s customers.

4 factors to consider before entering international markets

By Walter Thompson
David Liu Contributor
David Liu is founder and CEO of Deltapath, a communications company whose technology helps businesses collaborate internally and with customers. Deltapath’s solutions have been adopted by brands such as Campbell’s, Volkswagen and Nokia.

As sales increase, most founders tend to double down on what already works to keep growing. But few consider expanding laterally — taking a business model or product that already works and bringing it to a new geographical market. After all, it can seem like a risky move at first, as customers often differ drastically culturally and socioeconomically across borders.

Despite their core differences, people around the world inevitably share many of the same pain points in their daily lives and while doing business. Sure, you might not be able to tap into your domestic relationships, keep your existing go-to-market strategy or even reuse your messaging while entering a new market. But that’s why expanding internationally is hard and something few founders can do well.

When I first started Deltapath, we focused primarily on the U.S. market. But since 2001, we’re now serving customers in 94 countries.

Each time my team expands to a new market, we consider four primary factors before we launch. These considerations will help you avoid costly hurdles and allow you to achieve the best results possible without having to reinvent the wheel with every new launch.

How do culture and market viability differ?

Instagram prototypes letting IGTV creators monetize with ads

By Josh Constine

Instagram may finally let IGTV video makers earn money 18 months after launching the longer-form content hub. Instagram confirms to TechCrunch that it has internally prototyped an Instagram Partner Program that would let creators earn money by showing advertisements along with their videos. By giving creators a sustainable and hands-off way to generate earnings from IGTV, they might be inspired to bring more and higher quality content to the destination.

The program could potentially work similarly to Facebook Watch, where video producers earn a 55% cut of revenue from “Ad Breaks” inserted into the middle of their content. There’s no word on what the revenue split would be for IGTV, but since Facebook tends to run all its ads across all its apps via the same buying interfaces, it might stick with the 55% approach that lets its say creators get the majority of cash earned.

Previously, Instagram only worked with a limited set of celebrities, paying “to offset small production costs” for IGTV content Bloomberg reported, but not offering a way to earn a profit. That left creators to look to sponsored content or product placement to generate cash, or to try to push their followers to platforms like YouTube where they could earn a reliable cut of ads.

A lack of monetization may have contributed to the absence of great content on IGTV. Many of the videos on the Popular page are low-grade rips of YouTube content or TV, or are clickbaity teasers. That in turn has led to mediocre view counts, only 7 million of Instagram’s billion-plus users downloading the standalone IGTV app, and Instagram dropping the homescreen button for opening IGTV. That’s all disappointing considering TIkTok is blowing up on the back of more purposeful, storyboarded mobile video entertainment.

But today, reverse engineering master and perennial TechCrunch tipster Jane Manchun Wong tipped us off to the IGTV monetization prototype she dug out of the code of Instagram’s Android app. She tells TechCrunch she first saw signs of the program a week and ago and was then able to generate screenshots of the unreleased feature. It shows an “Instagram Partner Program” with “Monetization Tools”. This seems to be different from the old “Partner Program” for business tool developers.

Users who are deemed “Eligible” according to criteria we don’t have info about could choose to “Monetize Your IGTV Videos”. The screen explains that “You can earn money by runing short ads on your IGTV videos. When you monetize on IGTV, you agree to follow the Partner Program Monetization Policies.”

It’s not clear IGTV’s monetization policies would be different, but on Facebook, they require that users:

  • Follow all its normal Community Standards about decency
  • Share authentic content without misinformation, false news, clickbait, or sensationalism
  • Share original content they made themselves
  • Avoid restricted content categories including debated social issues, tragedy or conflict, objectionable activity, sexual or suggestive activity, strong language, explicit content, misleading medical information, and politics and government

Instagram confirmed to TechCrunch the authenticity of the prototype it’s been working on and provided the following statement “We continue to explore ways to help creators monetize with IGTV. We don’t have more details to share now, but we will as they develop further.” Given the company is confirming this as a prototype rather than a feature being beta tested, there are no public mentions, and that there’s no Instagram Help Center information published about it, Instagram might not be testing the program externally yet. There’s still a chance Instagram could change directions and never launch the monetization program or alter it entirely before any eventual launch.

Creator monetization has been a slow-going evolution on many of the major social networks. While YouTube was early to the space with ads, it as well as Twitter, Facebook, and Snapchat are now testing an array of ways for influencers to earn money. Those include ads splits, subscriptions to exclusive content, tipping, connections to brands for sponsorship, merchandise sales, and more.

Bloomberg’s Sarah Frier and Nico Grant reported this week that Instagram brought in $20 billion in revenue during 2019. It gets to keep that revenue since it currently doesn’t split any with creators. That contrasts with YouTube, which says it took in $15.1 billion in 2019 revenue this week in the first time it’s revealed the stat, though it has to pay out a substantial portion to creators. With Instagram now running ads in feed, Explore, and Stories, only IGTV and Direct remain as major surfaces lacking ads.

Social apps are wising up that if they want to keep their creators from straying to competitors and bringing fans with them, they need to offer ways for people to turn their passion for creating content into a profession. IGTV spent a year and a half trying to get video makers to volunteer for free, and the result wasn’t entertaining enough. Now Instagram seems ready to share the proceeds if they can bring in viewers together.

Snapchat hits 218M users but big Q4 losses sink share price

By Josh Constine

Snapchat still isn’t profitable nearly two years after its IPO. In Q4 2019, Snap lost $241 million on 560.8 million in revenue that’s up 44% year-over-year and an EPS of $0.03. That comes from adding 8 million daily users to reach a total of 218, up 3.8% this quarter from 210 million and 17% year-over-year.

The big problem was a one-time $100 million legal settlement that pushed it to lose $49 million more in Q4 2019 than Q4 2018. That comes from a shareholders lawsuit claiming Snap didn’t adequately disclose the impact of competition from Facebook on its business. The IPO was soured by weak user growth as people shifted from Snapchat Stories to Instagram Stories.

Snapchat had a mixed quarter compared to estimates, exceeding the EPS predicitions but falling short on revenue. FactSet’s consensus predicted $563 million in revenue and a loss of $0.12 EPS. Estimize’s consensus came in at $568 million in revenue and an EPS gain of $0.02.

Snapchat shares plunged over 9% in after-hours trading following the announcement. Shares had closed up 4.17% at $18.99 today. That’s up from a low of $4.99 in December 2018 when its user count was shrinking under competition from Instagram Stories. It’s now hovering around its $17 IPO price but it’s still under its post-IPO pop to $27.09.

Snap gave stronger than expected revenue guidance for Q1 2020 of $450 million to $470 million, and 224 million to 225 million users. The company’s CFO Derek Anderson says that “Q4 marked our first quarter of Adjusted EBITDA profitability at $42 million for the quarter, an improvement of $93 million over the prior year.” Still, he predicts an Adjusted EBITDA in Q1 of negative $90 million to negative $70 million. That’s manageable for Snap without raising more money, since it now has $2.1 billion in cash and marketable securities, down $148 million quarter-after-quarter.

“Throughout the course of 2019, we added 31 million daily active users, largely driven by investments in our core product and improvements to our Android application “said Snapchat CEO Evan Spiegel . “We’ve recently completed our 2020 strategic planning process and have aligned our teams and resources around our goals of supporting real friendships on Snapchat, expanding our service to a broader global community, investing in our AR and content platforms, and scaling revenue while achieving profitability in order to self-fund our investments in the future.”

Snapchat’s user growth has been on tear thanks to international penetration, especially in India, after it re-engineered its Android app for developing markets. It gained users in all markets. Crucially, it raised its average revenue per user 23% from $2.09 in Q4 2018 to $2.58, though only from $1.24 to $1.35 in the Rest Of World region where it’s growing user count the fastest. Snap will need to figure out how to squeeze more cash out of the international market to offset the costs of streaming tons of video to these users.

Q4 saw Snapchat readying several new products that could help boost engagement and therefore ad views. Cameos, first reported by TechCrunch, lets users graft their face onto an actor in an animated GIF like a lightweight Deepfake. Bitmoji TV, which won’t run ads initially but could drive attention to Snapchat Discover, offers zany four-minute cartoons that star your Bitmoji avatar. We could see a bump to engagement from these starting in Q1 2020.

To retain its augmented reality filter creators, Snapchat has pledged $750,000 in payouts in 2020. It’s also expanded the use of product catalog ads, and now lets advertisers buy longer skippable ads.

Outside of the legal settlement, Snapchat is inching closer to profitability but still has a ways to go. It’s managed to develop a strong synergy between its popular chat feature that’s tougher to monetize, and the Stories and Discover content where it can inject ads. The big question is whether Facebook Messenger, Instagram, and WhatsApp will get more serious about ephemeral messaging that’s at the core of Snapchat. If it can hold onto the market and maintain its place as where teens talk, it could ride out its costs and build revenue until it’s sustainable for the long-term.

UK Council websites are letting citizens be profiled for ads, study shows

By Natasha Lomas

On the same day that a data ethics advisor to the UK government has urged action to regulate online targeting a study conducted by pro-privacy browser Brave has highlighted how Brits are being profiled by the behavioral ad industry when they visit their local Council’s website — perhaps seeking info on local services or guidance about benefits including potentially sensitive information related to addiction services or disabilities.

Brave found that nearly all UK Councils permit at least one company to learn about the behavior of people visiting their sites, finding that a full 409 Councils exposed some visitor data to private companies.

While many large councils (serving 300,000+ people) were found exposing site visitors to what Brave describes as “extensive tracking and data collection by private companies” — with the worst offenders, London’s Enfield and Sheffield City Councils, exposing visitors to 25 data collectors apiece.

Brave argues the findings represent a conservative illustration of how much commercial tracking and profiling of visitors is going on on public sector websites — a floor, rather than a ceiling — given it was only studying landing pages of Council sites without any user interaction, and could only pick up known trackers (nor could the study look at how data is passed between tracking and data brokering companies).

Nor is the first such study to warn that public sector websites are infested with for-profit adtech. A report last year by Cookiebot found users of public sector and government websites in the EU being tracked when they performed health-related searches — including queries related to HIV, mental health, pregnancy, alcoholism and cancer.

Brave’s study — which was carried out using the webxray tool — found that almost all (98%) of the Councils used Google systems, with the report noting that the tech giant owns all five of the top embedded elements loaded by Council websites, which it suggests gives the company a god-like view of how UK citizens are interacting with their local authorities online.

The analysis also found 198 of the Council websites use the real-time bidding (RTB) form of programmatic online advertising. This is notable because RTB is the subject of a number of data protection complaints across the European Union — including in the UK, where the Information Commissioner’s Office (ICO) itself has been warning the adtech industry for more than half a year that its current processes are in breach of data protection laws.

However the UK watchdog has preferred to bark softly in the industry’s general direction over its RTB problem, instead of taking any enforcement action — a response that’s been dubbed “disastrous” by privacy campaigners.

One of the smaller RTB players the report highlights — which calls itself the Council Advertising Network (CAN) — was found sharing people’s data from 34 Council websites with 22 companies, which could then be insecurely broadcasting it on to hundreds or more entities in the bid chain.

Slides from a CAN media pack refer to “budget conscious” direct marketing opportunities via the ability to target visitors to Council websites accessing pages about benefits, child care and free local activities; “disability” marketing opportunities via the ability to target visitors to Council websites accessing pages such as home care, blue badges and community and social services; and “key life stages” marketing  opportunities via the ability to target visitors to Council websites accessing pages related to moving home, having a baby, getting married or losing a loved one.

This is from the Council Advertising Network's media pack. CAN is a small operation. They are just trying to take a small slide of the Google and IAB "real-time bidding" cake. But this gives an insight in to how insidious this RTB stuff is. pic.twitter.com/b1tiZi1p4P

Johnny Ryan (@johnnyryan) February 4, 2020

Brave’s report — while a clearly stated promotion for its own anti-tracking browser (given it’s a commercial player too) — should be seen in the context of the ICO’s ongoing failure to take enforcement action against RTB abuses. It’s therefore an attempt to increase pressure on the regulator to act by further illuminating a complex industry which has used a lack of transparency to shield massive rights abuses and continues to benefit from a lack of enforcement of Europe’s General Data Protection Regulation.

And a low level of public understanding of how all the pieces in the adtech chain fit together and sum to a dysfunctional whole, where public services are turned against the citizens whose taxes fund them to track and target people for exploitative ads, likely contributes to discouraging sharper regulatory action.

But, as the saying goes, sunlight disinfects.

Asked what steps he would like the regulator to take, Brave’s chief policy officer, Dr Johnny Ryan, told TechCrunch: “I want the ICO to use its powers of enforcement to end the UK’s largest data breach. That data breach continues, and two years to the day after I first blew the whistle about RTB, Simon McDougall wrote a blog post accepting Google and the IAB’s empty gestures as acts of substance. It is time for the ICO to move this over to its enforcement team, and stop wasting time.”

We’re reached out to the ICO for a response to the report’s findings.

Online targeting needs tighter controls, UK data ethics body suggests

By Natasha Lomas

A UK government advisory body on AI and data ethics has recommended tighter controls on how platform giants can use ad targeting and content personalization.

Concerns about the largely unregulated eyeball-grabbing targeting tactics of online platforms — be it via serving ‘personalized content’ or ‘microtargeted ads’ to individuals or groups of users — include the risk of generating addictive behaviors; the exploitation and/or discrimination of vulnerable groups; the amplification of misinformation; and election interference, to name a few.

In a report published today the Centre for Data Ethics and Innovation (CDEI) sets out a number of recommendations for platforms that use targeting tools to determine what content or ads are shown to users which it argues will help build public trust in digital services, including those delivered by the public sector.

“Most people do not want targeting stopped. But they do want to know that it is being done safely and ethically. And they want more control,” writes chair Roger Taylor in an executive summary.

“Our analysis of the regulatory environment demonstrates significant gaps in their regulatory oversight,” the report goes on. “Our analysis of public attitudes shows greatest concern and interest about the use of online targeting on large platforms.

“Our research demonstrates that online targeting systems used by social media platforms (like Facebook and Twitter), video sharing platforms (like YouTube, Snapchat, and TikTok), and search engines (like Google and Bing) raise the greatest concerns in these areas.”

The advisory body, which was announced by the Conservative-led government in 2017 to help devise policy for regulating the use of AI and data-driven technologies, is calling for online targeting giants to be held to higher standards of accountability over their use of targeting tools.

Current regulations are inadequate to cover online targeting, per its analysis, while it dubs self-regulation and the status quo “unsustainable”.

Respondents to a survey the CDEI conducted were overwhelmingly in favour (61%) of giving an independent regulator oversight of the use of online targeting systems — vs just 17% preferring self-regulation to continue.

The UK government set out a plan to regulate a number of online harms in a White Paper published last year — which proposes a duty of care be placed on platforms to protect users from a range of harms, such as age inappropriate content or material that encourages damaging behaviors such as self-harm or eating disorders.

The CDEI suggests this proposed framework could help plug some of the regulatory gaps its report is flagging — “if online targeting is recognised within the independent regulator’s remit” (while warning that would still leave a number of gaps in the regulation of political advertising and advertising).

The report also calls for greater transparency in how online targeting systems operate — “so that society can better understand the impacts of these systems and policy responses can be built on robust evidence”.

Another key recommendation is for Internet users to be given greater control over the way they are targeted so that personalization can better fit their preferences.

“Online targeting has helped to put a handful of global online platform businesses in positions of enormous power to predict and influence behaviour. However, current mechanisms to hold them to account are inadequate,” the CDEI writes. “We have reviewed the powers of the existing regulators and conclude that enforcement of existing legislation and self-regulation cannot be relied on to meet public expectations of greater accountability.”

“There is recognition from industry as well as the public that there are limits to self-regulation and the status quo is unsustainable. Now is the time for regulatory action that takes proportionate steps to increase accountability, transparency and user empowerment,” it adds.

The CDEI is not proposing any specific restrictions itself — but rather advocating for a regulatory regime that “promote[s] responsibility and transparency and safeguard[s] human rights by design”.

It also recommends that a code of practice be applied to platforms and services that use online targeting systems requiring that they adopt “standards of risk management, transparency and protection of people who may be vulnerable, so that they can be held to account for the impact of online targeting systems on users”.

The future online harms regulator should have a statutory duty to protect and respect freedom of expression and privacy, it also suggests, writing that: “Regulation of online targeting should be developed to safeguard freedom of expression and privacy online, and to promote human rights-based international norms.”

The regulator will also need information gathering powers in order to assess compliance with the code, per the recommendations — including the power to require that independent experts are given secure access to platforms’ data to enable further compliance testing of their code.

“Online targeting systems may have a negative effect on mental health, for example as a possible factor in ‘internet addiction’. They could contribute to societal issues including radicalisation and the polarisation of political views. These are issues of significant public concern, where the risks of harm are poorly understood, but the potential impact too great to ignore,” the report warns.

“We recommend that the regulator facilitates independent academic research into issues of significant public interest, and that it has the power to require online platforms to give independent researchers secure access to their data. Without this, the regulator and other policymakers will not be able to develop evidence-based policy and identify best practice.”

Another recommendation is that platforms be required to maintain online advertising archives “to provide transparency for types of personalised advertising that pose particular societal risks” — such as for politics ads; employment and other similar opportunities where there may be a risk of unlawful discrimination; and for age-restricted products.

An ad archive is one of the self-regulatory measures which ad platforms including Facebook have developed and implemented in recent years as scrutiny of their systems has dialled up in the wake of the Cambridge Analytica political ad targeting scandal which was carried out using Facebook’s ad tools and user data.

Although such archives still tend to offer only limited visibility to users, while Facebook has been heavily criticized by researchers for failing to provide adequate tools to support academic study of its platform.

On “more meaningful control” for users over how they’re targeted, the Centre suggests support for a new market in third party ‘data intermediaries’ — to enable users’ interests to be represented across multiple services, and new third party safety apps.

It is also calling for formal coordination mechanisms between the future online harms regulator and the UK’s data watchdog (the ICO) and Competition and Markets Authority (CMA) — with the report flagging other related work being carried out by the ICO and CMA, including the ICO’s Age Appropriate Design Code; and the CMA’s market study of online platforms and digital advertising.

The latter raised concerns late last year about the market power of tech giants — with the regulator floating a range of potential interventions in its interim report, including asking for views on breaking up platform giants.  

Aki acquires Eyeview’s ad personalization tech

By Anthony Ha

Video advertising company Eyeview shut down in December, but its technology will live on thanks to an acquisition by Aki Technologies.

Aki CEO Scott Swanson told me that he’s anticipating serious growth in the demand for ad personalization, particularly as consumers see personalization everywhere else online.

Swanson argued that Eyeview’s technology is particularly strong thanks to its focus on video, with “the ability to generate millions of permutations of a video creative and store them in the cloud.” It offers even more opportunities when combined with Aki’s existing technology, which delivers ads targeted for specific “mobile moments,” like whether the viewer is relaxing at home or out running errands.

Plus, the acquisition allows Aki to expand beyond mobile advertising to desktop and connected TV.

The financial terms of the deal were not disclosed, but Swanson said that in addition to acquiring the technology, he’s also working to bring on old Eyeview clients and hire Eyeview team members (he estimated that he’s hired nearly 15 so far and is aiming for around 20). At the same time, he acknowledged that there are challenges in resurrecting a business that had been shut down.

“The technology itself was decommissioned, it was taken down, it was backed up in the cloud,” Swanson said. “As the acquisition proceeds, we’ll literally be taking the code base and relaunching it in the cloud … Hiring the people was super important, and then because it’s not a traditional acquisition where we get customers and stuff, we have to go call up all the customers one-by-one, just as we have to hire people one-by-one.”

Eyeview had raised nearly $80 million in funding before running out of cash and laying off a team of around 100 employees. (Aki, meanwhile, has raised only a seed round of $3.75 million back in 2016; Swanson said the company has grown organically since then.) The news came only a few months after digital media veteran Rob Deichert took over as CEO.

“While it was disappointing to have to shut down the Eyeview business, I’m very happy that the technology assets have found a home with Aki,” Deichert told me via email. “Their business is a logical fit for the technology.”

And despite Eyeview’s misfortunes, Swanson said he’s confident that the company still works as a standalone business: “Look, these guys have been running a business that was full of really happy customers who were seeing good results and seem to have been disappointed when they shut down.”

The bigger issue, he suggested, is the adtech industry as a whole, with advertisers feeling fatigued “with having too many options,” along with a lack of “appetite on the large exit side.”

“The broader trend here is for companies that operate profitably and can support themselves effectively to become a little bit more tech-enabled managed services business,” Swanson said.

Google’s latest user-hostile design change makes ads and search results look identical

By Natasha Lomas

Did you notice a recent change to how Google search results are displayed on the desktop?

I noticed something last week — thinking there must be some kind of weird bug messing up the browser’s page rendering because suddenly everything looked similar: A homogenous sea of blue text links and favicons that, on such a large expanse of screen, come across as one block of background noise.

I found myself clicking on an ad link — rather than the organic search result I was looking for.

Here, for example, are the top two results for a Google search for flight search engine ‘Kayak’ — with just a tiny ‘Ad’ label to distinguish the click that will make Google money from the click that won’t…

Turns out this is Google’s latest dark pattern: The adtech giant has made organic results even more closely resemble the ads it serves against keyword searches, as writer Craig Mod was quick to highlight in a tweet this week.

There's something strange about the recent design change to google search results, favicons and extra header text: they all look like ads, which is perhaps the point? pic.twitter.com/TlIvegRct1

— Craig Mod (@craigmod) January 21, 2020

Last week, in its own breezy tweet, Google sought to spin the shift as quite the opposite — saying the “new look” presents “site domain names and brand icons prominently, along with a bolded ‘Ad’ label for ads”:

Last year, our search results on mobile gained a new look. That’s now rolling out to desktop results this week, presenting site domain names and brand icons prominently, along with a bolded “Ad” label for ads. Here’s a mockup: pic.twitter.com/aM9UAbSKtv

— Google SearchLiaison (@searchliaison) January 13, 2020

But Google’s explainer is almost a dark pattern in itself.

If you read the text quickly you’d likely come away with the impression that it has made organic search results easier to spot since it’s claiming components of these results now appear more “prominently” in results.

Yet, read it again, and Google is essentially admitting that a parallel emphasis is being placed — one which, when you actually look at the thing, has the effect of flattening the visual distinction between organic search results (which consumers are looking for) and ads (which Google monetizes).

Another eagle-eyed user Twitter, going by the name Luca Masters, chipped into the discussion generated by Mod’s tweet — to point out that the tech giant is “finally coming at this from the other direction”.

They're finally coming at this from the other direction:https://t.co/XYkHjVrE8X

— Luca K. B. Masters (@lkbm) January 21, 2020

‘This’ being deceptive changes to ad labelling; and ‘other direction’ being a reference to how now it’s organic search results being visually tweaked to shrink their difference vs ads.

Google previously laid the groundwork for this latest visual trickery by spending earlier years amending the look of ads to bring them closer in line with the steadfast, cleaner appearance of genuine search results.

Except now it’s fiddling with those too. Hence ‘other direction’.

Masters helpfully quote-tweeted this vintage tweet (from 2016), by journalist Ginny Marvin — which presents a visual history of Google ad labelling in search results that’s aptly titled “color fade”; a reference to the gradual demise of the color-shaded box Google used to apply to clearly distinguish ads in search results.

Those days are long gone now, though.

Color fade: A history of Google ad labeling in search results https://t.co/guo3jc4kwz pic.twitter.com/LMYqhmgfyE

— Ginny Marvin (@GinnyMarvin) July 25, 2016

 

Now a user of Google’s search engine has — essentially — only a favicon between them and an unintended ad click. Squint or you’ll click it.

This visual trickery may be fractionally less confusing in a small screen mobile environment — where Google debuted the change last year. But on a desktop screen these favicons are truly minuscule. And where to click to get actual information starts to feel like a total lottery.

A lottery that’s being stacked in Google’s favor because confused users are likely to end up clicking more ad links than they otherwise would, meaning it cashes in at the expense of web users’ time and energy.

Back in May, when Google pushed this change on mobile users, it touted the tweaks as a way for sites to showcase their own branding, instead of looking like every other blue link on a search result page. But it did so while simultaneously erasing a box-out that it had previously displayed around the label ‘Ad’ to make it stand out.

That made it “harder to differentiate ads and search results,” as we wrote then — predicting it will “likely lead to outcry”.

There were certainly complaints then. And there will likely be more now — given the visual flattening of the gap between ad clicks and organic links looks even more confusing for users of Google search on desktop.

We reached out to Google to ask for a response to the latest criticism that the new design for search results makes it almost impossible to distinguish between organic results and ads. But the company ignored repeat requests for comment.

Of course it’s true that plenty of UX design changes face backlash, especially early on. Change in the digital realm is rarely instantly popular. It’s usually more ‘slow burn’ acceptance.

But there’s no consumer-friendly logic to this one. (And the slow burn going on here involves the user being cast in the role of the metaphorical frog.)

Instead, Google is just making it harder for web users to click on the page they’re actually looking for — because, from a revenue-generating perspective, it prefers them to click an ad.

It’s the visual equivalent of a supermarket putting a similarly packaged own-brand right next to some fancy branded shampoo on the shelf — in the hopes a rushed shopper will pluck the wrong one. (Real life dark patterns are indeed a thing.)

It’s also a handy illustration of quite how far away from the user Google’s priorities have shifted, and continue to drift.

“When Google introduced ads, they were clearly marked with a label and a brightly tinted box,” says UX specialist Harry Brignull. “This was in stark contrast to all the other search engines at the time, who were trying to blend paid listings in amongst the organic ones, in an effort to drive clicks and revenue. In those days, Google came across as the most honest search engine on the planet.”

Brignull is well qualified to comment on dark patterns — having been calling out deceptive design since 2010 when he founded darkpatterns.org.

“I first learned about Google in the late 1990s. In those days you learned about the web by reading print magazines, which is charmingly quaint to look back on. I picked up a copy of Wired Magazine and there it was – a sidebar talking about a new search engine called ‘Google’,” he recalled. “Google was amazing. In an era of portals, flash banners and link directories, it went in the opposite direction. It didn’t care about the daft games the other search engines were playing. It didn’t even seem to acknowledge they existed. It didn’t even seem to want to be a business. It was a feat of engineering, and it felt like a public utility.

“The original Google homepage was recognised a guiding light of purism in digital design. Search was provided by an unstyled text field and button. There was nothing else on the homepage. Just the logo. Search results were near-instant and they were just a page of links and summaries – perfection with nothing to add or take away. The back-propagation algorithm they introduced had never been used to index the web before, and it instantly left the competition in the dust. It was proof that engineers could disrupt the rules of the web without needing any suit-wearing executives. Strip out all the crap. Do one thing and do it well.”

“As Google’s ambitions changed, the tinted box started to fade. It’s completely gone now,” Brignull added.

The one thing Google very clearly wants to do well now is serve more ads. It’s chosen to do that deceptively, by steadily — and consistently — degrading the user experience. So a far cry from “public utility”.

And that user-friendly Google of old? Yep, also completely gone.

Where top VCs are investing in adtech and martech

By Arman Tabatabai

Lately, the venture community’s relationship with advertising tech has been a rocky one.

Advertising is no longer the venture oasis it was in the past, with the flow of VC dollars in the space dropping dramatically in recent years. According to data from Crunchbase, adtech deal flow has fallen at a roughly 10% compounded annual growth rate over the last five years.

While subsectors like privacy or automation still manage to pull in funding, with an estimated 90%-plus of digital ad spend growth going to incumbent behemoths like Facebook and Google, the amount of high-growth opportunities in the adtech space seems to grow narrower by the week.

Despite these pains, funding for marketing technology has remained much more stable and healthy; over the last five years, deal flow in marketing tech has only dropped at a 3.5% compounded annual growth rate according to Crunchbase, with annual invested capital in the space hovering just under $2 billion.

Given the movement in the adtech and martech sectors, we wanted to try to gauge where opportunity still exists in the verticals and which startups may have the best chance at attracting venture funding today. We asked four leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in marketing and advertising:

Several of the firms we spoke to (both included and not included in this survey) stated that they are not actively investing in advertising tech at present.

Adblock Plus’s Till Faida on the shifting shape of ad blocking

By Natasha Lomas

Publishers hate ad blockers, but millions of internet users embrace them — and many browsers even bake it in as a feature, including Google’s own Chrome. At the same time, growing numbers of publishers are walling off free content for visitors who hard-block ads, even asking users directly to be whitelisted.

It’s a fight for attention from two very different sides.

Some form of ad blocking is here to stay, so long as advertisements are irritating and the adtech industry remains deaf to genuine privacy reform. Although the nature of the ad-blocking business is generally closer to filtering than blocking, where is it headed?

We chatted with Till Faida, co-founder and CEO of eyeo, maker of Adblock Plus (ABP), to take the temperature of an evolving space that’s never been a stranger to controversy — including fresh calls for his company to face antitrust scrutiny.

AppsFlyer raises $210M for ad attribution and more

By Anthony Ha

AppsFlyer has raised a massive Series D of $210 million led by General Atlantic.

Founded in 2011, the company is best known for mobile ad attribution — allowing advertisers to see which campaigns are driving results. At the same time, AppsFlyer has expanded into other areas like fraud prevention.

And in the funding announcement, General Atlantic Manager Director Alex Crisses suggested that there’s a broader opportunity here.

“Attribution is becoming the core of the marketing tech stack, and AppsFlyer has established itself as a leader in this fast-growing category,” Crisses said. “AppsFlyer’s commitment to being independent, unbiased, and representing the marketer’s interests has garnered the trust of many of the world’s leading brands, and we see significant potential to capture additional opportunity in the market.”

Crisses and General Atlantic’s co-president and global head of technology Anton Levy are both joining AppsFlyer’s board of directors. Previous investors Qumra Capital, Goldman Sachs Growth, DTCP (Deutsche Telekom Capital Partners), Pitango Venture Capital and Magma Venture Partners also participated in the round, which brings the company’s total funding to $294 million.

AppsFlyer said it works with more than 12,000 customers including eBay, HBO, Tencent, NBC Universal, Minecraft, US Bank, Macy’s and Nike. It also says it saw more than $150 million in annual recurring revenue in 2019, up 5x from its Series C in 2017.

Co-founder and CEO Oren Kaniel said that as attribution becomes more important, marketers need a partner they can trust. And with AppsFlyer driving $28 billion in ad spend last year, he argued, “There’s a lot of trust there.”

Kaniel added, “It doesn’t really matter how sophisticated your marketing stack is, or whether you have AI or machine learning — if the data feed is wrong … everything else will be wrong. I think companies realize how sensitive and critical this data platform is for them. I think that in the past couple of years, they’re investing more in selecting the right platform.”

In order to ensure that trust, he said that AppsFlyer has avoided any conflicts of interest in its business model — a position that extends to fundraising, where Kaniel made sure not to raise money from any of the big players in digital advertising.

And moving forward, he said, “We will never go into media business, never go into media services. We want to maintain our independence, we want to maintain our previous unbiased positions.”

Kaniel also argued that while he doesn’t see regulations like Europe GDPR and California’s CCPA hindering ad attribution directly, the regulatory environment has justified AppsFlyer’s investment in privacy and security.

“Even more than just being in compliance, [with AppsFlyer], marketers all of a sudden have full control of their data,” he said. “Let’s say on the web, probably your website is sending data and information to partners who don’t need to have access to this ifnormation. The reason is, there’s no logic, there’s a lot of pixels going everywhere, the publishers don’t have control. If you use our platform, you have full control, you can configure the exact data points that you’d like to share.”

Shadows’ Dylan Flinn and Kombo’s Kevin Gould on the business of ‘virtual influencers’

By Eric Peckham

In films, TV shows and books — and even in video games where characters are designed to respond to user behavior — we don’t perceive characters as beings with whom we can establish two-way relationships. But that’s poised to change, at least in some use cases.

Interactive characters — fictional, virtual personas capable of personalized interactions — are defining new territory in entertainment. In my guide to the concept of “virtual beings,” I outlined two categories of these characters:

  • virtual influencers: fictional characters with real-world social media accounts who build and engage with a mass following of fans.
  • virtual companions: AIs oriented toward one-to-one relationships, much like the tech depicted in the films “Her” and “Ex Machina.” They are personalized enough to engage us in entertaining discussions and respond to our behavior (in the physical world or within games) like a human would.

Part 2 of 3: the business of virtual influencers

Today’s discussion focuses on virtual influencers: fictional characters that build and engage followings of real people over social media. To explore the topic, I spoke with two experienced entrepreneurs:

  • Dylan Flinn is CEO of Shadows, an LA-based animation studio that’s building a roster of interactive characters for social media audiences. Dylan started his career in VC, funding companies such as Robinhood, Patreon and Bustle, and also spent two years as an agent at CAA.
  • Kevin Gould is CEO of Kombo Ventures, a talent management and brand incubation firm that has guided the careers of top influencers like Jake Paul and SSSniperWolf. He is the co-founder of three direct-to-consumer brands — Insert Name Here, Wakeheart and Glamnetic — and is an angel investor in companies like Clutter, Beautycon and DraftKings.
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