Is There Gold at the End of the Rainbow?

Today (24 February) ad blocking company Shine, announced that they are rebranding as 'Rainbow'. Rainbow is described as "a consumer ad experience", and the company states: "We are no longer selling ad blocking to mobile carriers, or ISPs."

In short, Rainbow is an ad verification company, and the verification criteria is not unique – Rainbow uses industry-defined standards.

For advertisers and agencies, the process of Rainbow verification is the same as working with any other verification company: submit ads to Rainbow and they will be verified or rejected. If they are verified they "go on their merry way", to a DSP, Ad Network, AdServer etc. Watch the video below for a 60-second explanation of how Rainbow works.

Rainbow differentiate themselves by positioning the service as consumer opt-in, and claim this opt-in process: "Effectively, gives consumers ‘a bill of rights’, which Rainbow enforces and protects."

The rebrand is supported by a series of videos aimed at consumers, and these videos promise: "No more irrelevant ads that you'll never click, only the ones that really make sense for you" – all you have to do is call your mobile provider or ISP and ask them to turn on Rainbow for you, free of charge.

Given the lengthy waiting times (I waited 45 minutes to talk to someone at a major mobile provider last month) it remains to be seen whether consumers will respond to the ads in the volumes Rainbow hope.

What is difficult to understand is exactly how ads will be more relevant if Rainbow are simply verifying ads against industry standards before they get sent off to be delivered by a separate company.

Relevancy is down to audience targeting – creating niche audience segments and delivering tailored messaging. Verification does not in itself improve relevancy.

This begs the question, are Rainbow going to move into audience targeting? According to the announcement, the answer is no: "Rainbow is not, and will not be, an ad network, or any AdTech solution — we are a consumer experience company."

From a business perspective, it is hard to see how Rainbow will make money. The company says Rainbow verification is free for advertisers, agencies, and publishers; however, there will be fees for 'insights' and 'data services'. Rainbow do not disclose what these two paid-for options consist of.

Furthermore, it is worth noting that no advertiser, media agency, or publisher is going to implement a new verification company without understanding how it impacts the bottom line – in a sense, making these paid-for services essential – thus, creating the revenue stream for Rainbow. But can the revenue from these services underpin the entire operation? With no indication as to how much 'insights' and 'data services' cost, we cannot say for sure.

The announcement also says: "We have been working with the industry, quietly for over six months." Design partners include: mobile carrier group Three; a 'top 3' global advertising agency group; and a global media/content group. Rainbow have also joined the Mobile Marketing Association, and are in the process of joining other trade bodies.

This new foray is funded by new money (said to be "several millions") from current investors.