Positive Social Impact in Advertising: Q&A with Sigma Software

Following ATS Singapore 2022, ExchangeWire speaks to Sigma Software Group's Olha Paramonova (vice president, AdTech) and Katherine Tuluzova (executive vice president, North America) for an overview on how standards can be maintained to ensure advertising has a positive social impact, both in APAC and across the globe.

How is the current state of advertising harming consumers?

The current state of advertising is somewhat weird. Is it helpful to consumers or harmful? The answer is: it depends. Some say it is detrimental to such an extent that it should be outright blocked entirely, while others don’t mind it and even enjoy advertising that is relevant to them.

While the question is about "how" consumers and people are harmed by the monster that modern programmatic advertising has become, the discussion about this is multi-dimensional. Having 15 years of experience in ad tech development, we at Sigma Software Group see it from these perspectives:

• "Who is causing harm?": We need to identify this if a user is targeted by an ill-meaning advertiser, compromised by a man-in-the-browser, or becomes an accidental victim of an ad targeting, delivery, and serving process.
• "What is the harm?" The levels vary from misleading claims or false narratives with fake celebrity endorsements to highly sophisticated, multi-stage payloads designed to deliver malware and compromise the end-user's device. This includes anything designed to cause privacy violations, personal data misuse, account takeovers, or data exfiltration (whether intentional or not).
• "Who is the primary target?" — even when the user is harmed, we should ask if they were the primary target or a mere means to an end in a more convoluted chain of events aimed at defrauding advertisers or other businesses. This includes end-users turned into bots that cause fraudulent or otherwise invalid traffic to harm advertisers by becoming "harmful" themselves. This can be done through malware infections or untrusted code execution.

The answers are never simple, and user privacy, security, and peace of mind are critical. Every participant in the modern advertising ecosystem may inadvertently harm others.

On the other hand, from the publisher's perspective, advertising has mostly been about content monetisation, and solutions like ad blocking and the bots mentioned above are definitely detrimental.

What can be done to correct this?

It is increasingly clear that no "one point" solution can successfully protect the entire ecosystem from various ever-changing threats and behaviours. The keys to a safer future are around standardisation and consolidation of the incredibly disparate ecosystem.

Inevitably, vendors will be able to offer holistic solutions to privacy and data concerns, account takeovers, man-in-the-browser attacks, invalid traffic, and malvertising; rather than businesses having to deal with a myriad of disconnects themselves. A recent example of Human merging with PerimeterX and further acquiring anti-malvertising leader clean.io is a meaningful step in this direction.

Another example is Eyeo, an ad blocker that has recently started ad filtering by acquiring Blockthrough, helping publishers recover ad-blocked revenue. The industry confirms users do not necessarily dislike ads as such but want to limit unwanted experiences, for example, being faced with distracting and annoying ads. This combination with Blockthrough is a wonderful compromise where both sides can win.

Advertisers and marketers need to protect their spending against new kinds of fraud. Platforms need to standardise and define new ways to deliver privacy-preserving, targeted advertising. Additionally, publishers, who currently allow arbitrary third-party code within programmatic ads have a responsibility to protect users from compromise, data leaks, scams, and fake news.

A compromised user will create invalid traffic. A malicious ad will lead to a compromised user. A privacy violation will harm the entire ecosystem and everyone in it, and the industry needs to work together to solve these problems holistically, define better standards and protect what is great about advertising, which is a lot!

How will the transition towards first-party data and privacy-focused advertising bolster publishers?

• First-party data is undoubtedly valuable. It offers a responsible alternative to third-party cookies for cross-site tracking and data sharing.
• Publishers' access to this privacy-compliant resource makes them the perfect partner for advertisers who can use their audience profiles to inform their own campaigns. It's a win-win situation. Publishers' data-rich audiences mean they can better monetise their compelling inventory, while advertisers improve addressability and budget efficiency. No one knows if Google will delay the death of cookies again, but when it does, greater industry collaboration will help brands continue to thrive.
• Publishers can take this message a step further by offering additional site benefits and tailoring the site to users’ interests. They can do this in many ways, for example: through promotions, paywalls for special content, or driving newsletter subscriptions. Not only does this allow publishers to increase user loyalty, but they can also collect more data to reveal increasingly detailed insights into consumers.
• Publishers can better monetise their inventory by making these compelling audiences available to advertisers, with the added benefit of real-time insights so they can adjust campaigns accordingly. As a result, advertisers can tailor campaigns specifically to pre-qualified groups, increasing campaign relevance and ROI.
• First-party data strategies are not without difficulties due to the sensitivity and complexity of data collection. Sometimes records may be disorganised or contain significant gaps, such as missing demographic or geographic data. And there is still no universal solution for analysing or measuring audiences identified through first-party data, so the quality of insights can vary wildly from publisher to publisher.
• One of the ways publishers can make their data-rich inventory available to advertisers is through direct partnerships. Eliminating middlemen provides greater transparency, allows both parties to protect themselves from fraud, and brands to have greater control over their ad delivery. This means they can more easily reach their desired audience and improve ROI.

How has brand safety evolved in the APAC region and globally, following the coronavirus pandemic?

The pandemic has affected consumption in terms of lifestyle by transforming purchasing behaviour from off-site to online, increasing the volume of online shopping accordingly. The need to protect customers online has increased. Users protect themselves together with brands and set up appropriate measures for stores.

As of now, APAC keeps high ratings in terms of safety for brands, also empowered by the government. Tech giants such as IAS and DoubleVerify are sharing the market.

Based on recent research, Europe has many concerns related to viability and brand safety, while buyers are willing to pay for high-quality inventory.

In recent years we have seen a renewed focus on the corporate environment, as well as social and governance (ESG) mandates. How can advertising be used to support these efforts?

We have seen advertising be impactful in creating sustainable change. By delivering meaningful reminders about important matters throughout the day, companies have been able to cause, measure, and prove behavioural changes. Continuously sponsoring these initiatives across the ecosystem is vital, and we are thrilled to see more focus on this. Recently, new vendors have started to deliver innovative ways of advertising online.

How can the industry ensure that standards for ensuring advertising have a positive social impact are upheld in nascent and emerging channels, such as DOOH, gaming, social commerce, and the metaverse?

The number of emerging advertising channels is countless and enforcing existing display and video standards across them is a significant challenge. The only way to ensure consistency is through creating enforcement via demand-side platforms and surfacing transparent reports in omnichannel advertising. Many businesses are involved in such efforts currently, and we expect more to come in the next 3-5 years.

While many markets have been in place for years, the metaverse looks interesting. But it is not yet perfect in terms of standardisation or regulation.

The metaverse proclaims to support a tracking-free and independent journey over the internet. This makes it hard to convert users into an audience. At Sigma Software, we’ve been growing our expertise in the metaverse for several years.

We see that the main limitation of the currently-evolving metaverse is that there is no option for targeting, for example – geo. For advertisers, it is a new challenge to map users in the metaverse as those being unrelated to the usual map.

It is also important to notice that there is no joint advertising network where businesses can place their creatives throughout multiple lands in the metaverse. This greatly limits the reach of the audience. In fact, the advertiser has two options: either purchase, develop, and promote your own land to do advertising inside or negotiate advertising placement with each landowner in the metaverse separately.

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ATS Singapore 2023 will be held on 3rd-4th October 2023. Tickets are available to purchase via the ATS Singapore 2023 event hub.