Bill Michels - What is the True Value of Our Data and Why is No One Talking About It?
“I could see a world where there's an incentive for publishers to have the value exchange with a consumer of why we need identity, why we need to know who you are through email…and how we're going to give you the right controls and transparency on that identity.”- Bill Michels
In the third episode of No Hype, Bill Michels, GM of Product at The Trade Desk (“A media buying platform for the open internet”), joins our hosts to discuss some of the biggest issues impacting the industry in 2021. In addition to being a product leader, Michels is a longtime entrepreneur and marketing location data guru. Together, Michels and our hosts dig deep into identity and privacy, and discuss why we became so dependent on fragile technology like third-party cookies.
Listen up for Michels’ thoughtful views about why and how the messages advertisers and publishers push out about consumer privacy and data collection need to shift from being transactional and punitive to value-driven dialogues. And hear why he believes the future of programmatic advertising is a bright one.
Allyson Dietz: Welcome to No Hype, the podcast about truth, science and the future of marketing, brought to you by hosts Allyson Dietz...
Devon DeBlasio: ...and Devon DeBlasio.
AD: Today's guest is Bill Michels. Bill's a product leader, an entrepreneur and honestly a marketing location data guru. He is the General Manager of products at Trade Desk, but has spent time in leadership roles at Foursquare and Yahoo. In fact, he was COO and a very early employee at Factual, a location data company. Bill, welcome to the podcast.
Bill Michels: Thanks so much, Allyson. Very excited to be here with you and Devon.
AD: 2020 was just such a crazy year for our industry. We started with CCPA launching in January, and then Google's announcement about cookies going away. The pandemic came out of nowhere. And recently, there's been a lot of conversations around Apple and the changes that they're making in relation to the IDFA. I just laid out several different threads. Which of these threads do you think will make the biggest impact to our industry in 2021?
BM: Good question. So of those... I put together just Apple and Google is almost one, which is loss of identity for publishers and for advertisers. We'll have to see which of those has the bigger effect. I think for performance, maybe and I put app install and in games and stuff, the IDFA would have the bigger impact for web publishers, the cookie will have the bigger impact. I know it's a little bit of a dodge of the question but there is a big divide on who it impacts, the lens on who we're saying is the impact on.
DD: ID deprecation across Digital's group together is your answer?
BM: Correct. Correct yeah.
DD: Okay, got it. Just jumping right into one of those, the one we probably know the most about because Google's been more expressive whether it’s through W3C or other means. The third-party cookies specifically powered the entire data-driven ecosystem for many years powering RTB, powering programmatic. So how did we get here as an industry to depend on such a ubiquitous and seemingly so fragile technology. From your opinion how the hell did we get to this point where we're so dependent on this such a fragile piece of seemingly innocuous technology?
BM: Right, I don't think I have anything unique to add here. But my interpretation of it is, it just was a tool to do the job and it worked, wasn't great, but it was the only tool to do the job and it was kind of convenient. Then we kept loading use cases on it. Then several years later, we're like, God, we still use this script, or this little tag for all these use cases and it kinda still just did the job and it like a lot of tools not even technology tools, you wind up loading up use cases on them and they stick around and then all of a sudden you realize it's probably the number of use cases and actually like at this point, the economy and things like that, the economic impact of things that are now tied to it outweigh the actual sort of integrity of it, or the stability of it.
DD: And I guess, because it wasn't owned by any one organization, company, technology hardware. It was a guy creating this thing to do X, Y, and Z. Then people found out it was really a hack.
BM: Yeah. It's pretty wild.
AD: So do you think that the elimination of the third-party cookie is overhyped? Would you say it's overhyped?
BM: I don't think so. I think, it's been sort of piecemealed or, because we have it by browser, which has market share varying by country. But I don't think it is overhyped. I mean, the data we see, and I've seen the same stuff as anybody else, which is, it gives you, if you’re a publisher, you're there's dramatic decrease in CPMs, that you can, you can earn, if with loss of third-party cookies or loss of, I'll just say identity, right? Which has, it has implications for publishers. But I think you take that a step further as, that has implications as consumers and access to the products on the open Internet that we love and use, which also has implications on journalism and other types of products that are built on the open Internet.
DD: But, in terms of privacy regulations today, CCPA CPRA, and, this removal of these identifiers that is, seemingly a problem for buyers and sellers and consumers. Do you find that it's actually leading to some sort of good result?
BM: There's good honest intent there to give consumers better control and privacy. And I think that is generally a good thing. There are better ways to do it, and sometimes regulation takes a while to get there. So certainly a patchwork is not good for anybody. So ideally, we can get to a federal level. So everyone knows exactly what they have to build and implement without having to do the patchwork piece.
DD: I think that's a good point, because the cookie lives in this gray area, right, of who's able to use it, what's able to be piggybacked on this text file. And without, I guess, federal legislation, federal directive, it's still a gray area, right?
AD: Yeah, I'd love for you to talk a little bit about the consumer implication because I think obviously, the service is going away is one challenge. But there are so many benefits to having the cookie for a consumer, and they just I think, to your point. A lot of people in the consumer landscape don't really understand what that really means. So if you if you want to maybe unpack that a little bit, it’ll be interesting to hear your perspective of what is the benefit of the cookie to the consumer?
BM: So there are two types, right, the first and third party. So the first party, one just makes the web that much more convenient and user friendly, right, you don't have to log in again, certain settings and preferences are remembered, things like that. It also helps a publisher sort of do analytics on their site, know how many people came, how many unique people just helps them build their product. So, in the first party version of the cookie, the benefits are pretty great for the consumer, right? We, just makes the web that much more fun to use and easy to use.
The third-party benefits is, that's more for the advertisers, the publishers and sort of Ad tech ecosystem. And that I guess, helps pay for the internet, right? That's how we get to, that's how brands get to engage with a consumer and what we'd call win their hearts and minds, because without identity, they don't, they can't have a consistent dialogue with them. But by doing that we’re able to, publishers are able to get a much higher CPM, and that's what keeps service going. So I guess that would be the third consumer benefit for the third parties that, they have websites and interesting apps and CTV channels and other things like that, that are outside of walled gardens that, you know, provide services and entertain them and games and things like that.
DD: And so when we look at the constituents in terms of, again, breaking it down by publishers, let's say brands are advertisers and consumers. What do you think the new normal will require to appease all three of those constituents?
BM: I think we'll wind up and... let's call it, I don't know what the timeframe here is: 12, 18, 24 months, but I could see a world where there's incentive now for publishers or any Apps, CTV apps, to have the value exchange with a consumer of why we need identity, why we, why we need to know who you are through email, just like a walled garden does. And why we're going to be, treat that with... give you the right controls and transparency on that identity.
We'll start to see a larger request or dialogue between publishers and consumers on the value exchange and why they need identity, and it's not... right now it's been or, I should say, today it has been framed more as a, we want to track you like, what you see in the cookie request is this effectively is, this company wants to track you, right? Which is not the healthiest dialogue, it's like they're starting on their heels a little bit. They should be more of “Let me explain why I would like you to authenticate into my, and share your email with me, and what I'm going to give you in return and why I'm going to treat your email and identity with respect and give you transparency control on it.”
AD: So talking about identity, the universal ID 2.0. It's been coined as a Trade Desk solution. But can you explain what this universal standard’s really meant to be? What's the goal?
BM: Sure. Yeah. So to start, it is definitely not a Trade Desk solution. Devon told me to say that before [laughs].
DD: You guys don't want all the credit? Come on,
BM: All we want is good identity on advertising opportunities with the right consumer transparency and controls. And I think our view is, the best way to get there is to create a fabric, an underlying fabric that all other IDs can tap into that our publishers and advertisers, Ad tech ecosystem players, identity companies, like everybody, all the constituents can leverage and make use of, and then with the right transparency and controls for the consumer.
DD: We talked about having a standard. Do you think that having a standard, looking at our ecosystem looking at, let's say the next three or so years, is it something that you think is a possibility? Or do you think there will be a widely adopted, quote, unquote, standard, but there still will be other solutions in market that will start to take hold? I'm just curious, your opinion on that?
BM: I see. I would say that we wind up in a handful of IDs that, that win in the marketplace. And that's great. You know, I don't know what that is single digit, mid single digit, probably. There's no reason why all of those, though, that that win in the marketplace, that and let’s just call it five, there's no reason all of them should not be interoperable with UID 2, right. So in a way, market will decide that depends on advertiser needs, publisher needs, the services and the unique value each of those IDs bring.
AD: So what do you think identity really means today, both to the marketer and to the consumer? We actually talked about this in our first inaugural episode about the hype around identity. And so, it’d be interesting to hear your perspective, in terms of, what do you think identity really is, and its definition for both marketer and consumer.
BM: Good question. So I guess I would, at its core, identity is what we hang other attributes off of and a it's a common language between constituents. So identity to an advertiser is “okay, if I've interfaced with you, if you've purchased one of my products, say your ecommerce company or retail company QSR it is okay now all the attributes, the identity is what I hang all the attributes I now know about you off of, so how often you bought, how often you bought? Did you return something? Did you actually ask, engage my customer support center?” All of those events and attributes that occur around you is a... I think if identity is the hub of that, that's sort of everything is adorned to that or decorated around that one hub.
AD: How does identity play a role in, the future, the replacement for the cookie and the IDFA. And, in particular, the universal ID solution that you've been working on?
BM: Yeah it is the key role. We have to solve this. It's not only so ads work, it's so that we have an open Internet, right? I think it's a key piece of that. It's a big existential problem or challenge for our industry to make sure that brand dollars can flow into the open Internet, and not just a select few walled gardens. And so the role it plays there, it is sort of the mechanism by which brands can engage with consumers on the open internet and win their hearts and minds, right? And contextual data is great. I mean, that'll always be there. But it's still sort of no match for good identity. Right? So if there was only context for the open web, and the few walled gardens had identity, there'll be some going to the open web, but dollars would flow way towards, way more towards the walled gardens. And that's not a that's not a great world for consumers.
AD: So one of the things that we lean heavily on today are those identifiers to ensure that, not only can marketers know where to invest, but where to reinvest, and what's working and what's not working. And so it provides a feedback loop for marketers to ensure they're making smart decisions. And we need that so that they don't consolidate around whatever is easiest or most convenient.
BM: Right? Yeah, right. So MTA, MMM solutions, products, like they need to work not only for showing last click or anything inside of a walled garden, they need to show what value the open internet is bringing to a brand too to help them win and engage customers.
DD: And so this also, I think calls for a redefinition of identity. Is that something that you are starting to see in terms of a shift in the mindset of your clients and your partners and how they are defining what identity means? Is it just a hashed email?
BM: Yeah, I guess we're probably seeing more educated partners and clients on both sides. So everyone is maybe consolidating, or moving towards a uniform definition of what identity is, they've always had, like a publisher’s had their view of maybe a cookie view, but they're starting, they do now understand the other side's view. “Oh yeah, that's right, they need to bring in first party data into the open internet, because that's how it impacts my CPMs.”
DD: And you talked about first party data. I mean, that's something that people have been talking about forever. I mean, I think we all saw a Renaissance, if you will, of people focusing on the first party data that obviously led to, I just mentioned in terms of this increase in interest in identity resolution, identity management, CDPs they're a hot ticket item, because it's, the handling of first party data. Have you seen this kind of penultimate shift towards a focus in investment in resources and roadmaps around identity?
BM: Yeah. Definitely. Probably similar to what you're seeing. So that could mean more CDP implementations or sort of tighter workflows between CRM systems and ways to activate things like that. And then we're hearing when, of roadmaps, specific to address identity problems. And most of that is, obviously around making sure that all groups have similar access and understanding of first party data. But I wouldn't say that it necessarily comes at the detriment of a third party. I think third party is, third party that's able to solve for the decline or absence of eventual absence of cookies.
DD: Second party data has been also a new resurgence that I've seen. Publishers, I think have an opportunity to monetize their data in a safe and secure way through a second party stream, right. And then there's first-the party data that brands are doing the same thing with on their end. So I think you just bring up a really good point in terms of knocking down the misinformation and misnomers around third party data, because it's not necessarily or really at all tied to any sort of negative, connotation around that type of data source.
BM: Right. Yeah, it sort of falls into two buckets. One would be, “oh, there's something about it, where the consumer hasn't consented, right.” So, as these companies build and make sure there's CCPA, CCRA compliant, and GDPR, and then post IDFA changes, okay, we'll know who is and then with the good quality and good consent and good integrity around how they store and source and have metadata attached to their consent, they'll be here. So that's one thing. And then the other thing people say, oh, but it's never that good. The quality's not there. But that's why we have MTA that's why we know results so it's only a measurement. So you could say it doesn't work, but we're pretty well instrumented system or ecosystem.
DD: Bad data is bad data. I think that's what it comes down to. There's bad first party data, right? We see a lot of it, we have to repair and fix, for our constituents right?
BM: Yeah. Yeah right. Exactly, but...
AD: There's that checks and balances in place, by ensuring that you look at whether or not that's driving conversion or driving outcomes to the brand mean, that's how you determine whether or not that data is actually delivering what is expected to do. What does the future look like for programmatic advertising? And how does all this have impact things like DSPs, in particular.
BM: So, I think the future is bright for programmatic. It is. There is digital's continues to obviously, drive a ton of share, there's ton of linear, these things are all shifting over, right. And more and more different formats are coming into programmatic as well too, right? So there's other nice, catalysts there, whether that's out of home or other categories that are now moving into programmatic as well will be....certainly CTV has been fantastic for programmatic and still very much in the early stages there. And I think, that the amount of linear span that can now still yet to comeover, is just fantastic. And I see data as the center of gravity that will extract that, span out of linear and into programmatic.
AD: Yeah, and I think in the third leg of that stool in terms of, it's better for the consumers because ultimately, they have better consumer experiences, which you've touched on previously and some of our conversation here.
BM: Yeah. I mean, ultimately, as in a lot of things is, as long as there's a good way for innovation, that consumer and competition too, the consumer ultimately benefits. And hopefully, they benefit from yeah great services that they, apps and content and journalism, these things, they also benefit because, more relevant advertising and more personalized experiences, and advertisers can find them to offer them products that are, what they're looking for, but also lighter add loads. Like if we can monetize better you don't have to waste and spend on interruptions, we know are not going to be useful.
DD: So when we look at the look towards the future, we're just curious in terms of predictions, right? We at Neustar feel that privacy will continue to be a strong, momentum, and strong force that will continue to change the way that we engage with advertisers and brands and consumers and the whole ecosystem.
BM: Privacy is important, and it should be and it will continue to play a big role for forever, in the advertising ecosystem, industry, right? And programmatic, walled gardens and any type of interface that will continue to play as it should
DD: I mean, obviously, you are working for an organization that is one of the kind of links across the supply chain, right? Do you think it's gonna be a tighter relationship between let's see, DSP and advertiser and publisher or maybe direct buys through a publisher, due to the fact of identity having to be used in that exchange of media and dollars.
BM: I'd expect a tighter relationship between a publisher and a consumer because that I think we're due for that value exchange, right? That the dialogue cannot be the pop up toast that we see that you're being tracked. Doesn't really, it's not even the right correct message to the consumer. There's no sort of context around that. So hopefully, that that gets a lot sees a lot of improvement between an advertiser and a consumer, we're starting to see with, the past couple years with DTC, like how those brands engage is a lot different than how brands have traditionally engaged with consumers.
They're way more personalized experiences, whether that's through email, and how they market to them, even how they have their customer experience with them. I think those will continue to change, that could be also, because of identity can be a driver there too, and I think even play a role of how they interact with them too. You're seeing like different chat bots. And these different things are ways to like service, you as a consumer and identity can play an important role there as they know who you are, and they know what you've bought in the past, and they can stitch those things together.
AD: Well, Bill, any final comments, before we wrap up?
BM: No this has been great. It actually was great. It was a nice exercise for me to sort of coalesce some of my thoughts around it. So thanks for that. Totally enjoyed it. And this is a great podcast you guys have, and I’m looking forward to checking out more of them in the future.
AD: Yeah, thank you so much for joining us. It's been really a pleasure speaking with you and hearing your perspective. And The Trade Desk and what you guys are up to is fantastic. You really are taking a leadership role in the industry and we appreciate your time today.