Simpli.fi’s Take on Consumer Data Privacy

Transcript David McBee: Hello, and welcome to the Simpli.fi Webinar series. I’m David McBee, director of training. This month, I got the privilege of sitting down with Simpli.fi’s CTO, Paul Harrison. We had a conversation about data privacy, the death of cookies, and some of the changes coming through iOS. I expected Paul to answer my questions with confidence and a solid game plan, and that exactly what I got. Here’s our interview. David McBee: Hi Paul. Thanks for being here. Paul Harrison: Hey, thanks for having me. David McBee: Of course, I’m excited. It’s an honor to have the co-founder and chief technology officer of Simpli.fi on the Simpli.fi Webinar series. So thank you so much. David McBee: Before we get started, why don’t you just real quickly say hello to the viewers, and give them a snapshot of what your day-to-day looks like?. Paul Harrison: So, hi, everyone. As David mentioned, I’m the CTO and co-founder here at Simpli.fi. My day-to-day is overseeing product and engineering efforts, but my primary focus is really drafting product ideas and inspiring others to make those ideas better, so that we can build world-class products. David McBee: And we’ve a lot of that for the last 10 plus years, haven’t we? Paul Harrison: Yes, we have. David McBee: All right, so today we want to cover a couple of very specific topics. I want to hear your take on consumer data privacy, the death of the cookie, and the upcoming iOS 14 changes. But let’s start with cookies. What’s happening in the industry that is creating so much chatter? Paul Harrison: All the chatter’s about the changes happening in Chrome. Which, the third-party cookies are being deprecated out of the system, and third-party cookies have been the primary targeting method used by the advertising industry. This is not new. Apple, in their Safari browser, by default turned off third-party cookies in about 2008, and that created a little bit of habit. So many of us in the industry were already prepared, and had other methods for identifying users for targeting purposes other than the cookie. David McBee: Can I ask you, like what? What other methods did you use? Paul Harrison: There are many different IDs that are used in the marketplace. They’re third party IDs, sometimes they’re first-party publisher IDs that are passed for identifying. And so what we’ve done here at Simpli.fi is, we have created a meta-graph, or a graph of graphs, that incorporates all of those various IDs in the marketplace so that we can identify users, not just in the browser, but also on mobile devices, or on CTV devices. David McBee: Will This loss of cookies or any of these other changes have a negative impact on targeting accurately, or measuring attribution? Paul Harrison: We tracked this very closely, and we’ve already experienced this in the industry. This is sort of back to the future here at the moment on third-party cookies being deprecated. We’ve seen actually an increase in match rates coming across from all of the various exchanges, rather than a decrease. And that’s just because of the proliferation of various IDs. Paul Harrison: No one group can actually see the whole web, we all see different slices of it. So by pulling in all of the various IDs out there, you’re getting a better view of the traffic coming across from the exchanges. So targeting has actually been slightly better for us, the attribution piece has been about the same. Paul Harrison: Now, we’re going to talk a little bit here about the changes that have come in iOS 14 and the IDFA. So IDFA, for foot traffic attribution, has been one of the primary identifiers. But some of these third party companies that are providing identifiers are supplementing the loss of signal on IDFA, which has allowed us to continue to do foot traffic attribution at about the same pace we’ve historically done it. David McBee: In regards to the cookie, how is Simpli.fi future-proofing our processes and solutions? Paul Harrison: From the beginning of this company, we never really used the cookie as the primary identifier. We did use it as a cross-reference, or a cross-check on certain browser targeting combinations. And the reason we did that was, we just set a cookie and stored the same ID that we kept on the server side for the cross-check. Paul Harrison: However, if the cookie was not available, we were still able to target the user. Now, if cookies went completely away and there was no other targeting method, you could still do contextual, you could still do keyword contextual, you could still do geographic targeting. So there are a lot of targeting options. Paul Harrison: However, with the proliferation of all the various IDs and the meta graphs that we built, it gives us the ability to really be in a fantastic position for the post-cookie world. David McBee: What about legislation? Is there any legislation to be aware of, or is this just Google making big changes that are impacting the rest of the industry? Paul Harrison: I think Google’s really taking a position with their whole cohort approach, of trying to leap frog all of the legislation out there. See, what’s happening is, is that states and larger cities are coming up with legislation to protect consumers. And there’s no real consistency on any of this legislation, so it becomes this patchwork across the United States. Paul Harrison: Now, we are constantly monitoring that. We also do internal audits to make sure we’re in compliance. And Google has really focused on saying, you know what, we’re not going to do these individual device targeting. We’re going to just go to the cohort, which is a method of segment that has a time sequence element to it. And that gets them around all the privacy piece. Paul Harrison: For us, we believe in something very similar to what Google’s doing. And that’s that, yes, we do have the device IDs, but we also roll everything up to a household level. And our position on the longterm is that household as a targeting method and an attribution method will be much more defensible long-term, and is much more privacy-compliant than focusing solely on device. David McBee: Why is that? Paul Harrison: Because historically the household has been a primary method for doing any kind of targeting or attribution. If you look at the linear TV space, that has been the main stay from the very beginning. And so translating what they’re doing in the linear TV more into the digital space gives an apples-to-apples approach as we see more linear TV come over into digital through CTV. And it also gives the ability to have apples-to-apples across the balance of all the digital offerings that we have. David McBee: Okay. Do you want to move on to iOS 14? Paul Harrison: Sure. David McBee: All right. Tell us, what are the big changes that have gotten so much media attention lately? Paul Harrison: There’s really a series of changes that have happened in iOS 14, and they’ve evolved over time. You’ve probably read many of the articles. Apple came out with this position of trying to be more privacy friendly. Our industry has used the IDFA, which is the ID for advertising, as the primary method for re-identifying mobile devices. Paul Harrison: And it was originally positioned to be in the operating system level, so the device had a single IDFA. But one of the changes they made in iOS 14 was to move the functionality, to pass that IDFA into the app level. So you can now turn tracking on and off to allow IDFA to be shared or not at the app level. Paul Harrison: The other thing that they were making changes on was location. You can turn your location tracking on and off, again at the app level. But one more feature that got added was precision. So you could change your precision to be very precise, to less precise. And so that combination of changes really caused quite a stir in our industry, to where people were concerned about, are you still going to be able to target? How much loss of signal is there going to be? Are you still going to be able to do attribution? Paul Harrison: Which are all great questions. And hopefully we’re answering most of those questions here today. But I think what we’ve seen is that again, with the proliferation of IDs and the fact that we’re still seeing a significant number of IDFAs even coming from the app level, because most of the time, the apps that are being used are advertisement-supported, and or you need location services turned on for that app in order to have the app function properly. Paul Harrison: We’ve seen an increase of identifiers and user information because, instead of just getting one signal from the device, we are now getting signals from all the various apps. So it created more data that we have to go through in our device graph, which added a level of complication or complexity. But at the end of the day, we’re still seeing plenty of signal. In fact, we’re seeing a slight increase of signal. Paul Harrison: One stat that’s been interesting is that we’ve been tracking how many times, or what percentage of the traffic only has an IDFA? Meaning that we see no other identifier. And it’s about 10% and shrinking. That means that about 10% of the time when we see a bid request come across, that’s a mobile bid request, and it only has an IDFA and that’s it. That’s actually a pretty small number, and that means that we have so many other identifiers for tracking that user. So that bodes very well for the future of both tracking and attribution for mobile. David McBee: All right. Well, tell me just a little bit about the do not track and the limit ad tracking field. How does that work? Paul Harrison: Yeah. Not too long ago, the exchanges started supporting a flag in the bid requests to indicate to the DSPs whether a user wanted to be tracked or not, or wanted to have limited ad tracking. And that’s a field that we respect in our serving of ads. It’s something that, if you want to be compliant with many of the privacy safe Harbor groups out there, that you need to respect the do-not-track and limit ad tracking fields. Paul Harrison: It’s really not set at a high-frequency basis. I mean, it’s a very small percentage of the overall traffic. So it’s been a non-factor in terms of ability to serve ads. David McBee: Okay. So let’s talk about location approximation. I have read predictions that this will interfere with the accuracy of geo-fencing. Is that the case? Paul Harrison: Well, it certainly will have an effect on geo-fencing. Meaning that, if you’re trying to target in an extremely precise way, or you’re trying to have attribution be to a very precise, small location, yes. It’s going to have an effect. Paul Harrison: However, in many ways, the targeting part of things, when you draw a geo-fence, and for our product it’s not just an area, but it’s also got a time element to it. Meaning that somebody was in that geo-fence in the last hour, day, up to 30 days. The way the targeting would work is, is that instead of having a pinpoint location, you have a small circle around the individual, or a fuzzy area. Paul Harrison: Well, if that intersects at all with a targeting fence, targeting geo-fence, we would include them for targeting. At that point, the optimization engine would then determine if that user is a good candidate for serving ads, or to continue to serve ads after they’ve served some ads, depending on how they’re reacting to the ads, or if they are clicking through, or somehow doing an action, whether it’s a purchase or whatnot. Paul Harrison: On the attribution side of things, the primary method used for geo-fencing is for foot traffic attribution. So, for on the foot traffic attribution, again, if it looks like that fuzziness has intersected with a particular geo-fence that we’re trying to drive traffic to, it will be included. But it also, in our lift metrics, we’re going to take all of that into consideration. Paul Harrison: Lastly, the fact is, is that overall we’re going to be trying to roll all of this up to more of a household level. I mentioned earlier that I believe that targeting and attribution will be measured more at the household level. And you’re going to see us introducing products that are going to be related to that here in the near future. David McBee: Generally speaking, what’s your gut tell you about people turning off the precision on their phones? Because I like my blue dot to be exactly in the right spot, right? And I want my children to use Life 360 so I know exactly where they are. I’m not going to allow them to turn that off. If I want to find a Chipotle, I don’t want it to give me the kind of closest one, I want the closest one. So do you think people will opt for this privacy in this fuzzy location? Paul Harrison: Yeah, so that’s really driven at the app level. I think some apps will no longer broadcast the precision, because you don’t necessarily need it. And I think others are going to continue. And I’m of the same mindset. I think people that are going to turn off the precision piece are the same people who opt out of behavioral advertising anyway, turn on the do not track. And as we’ve seen historically, that is a very small percentage of people. Paul Harrison: I personally, knowing what I know about the advertising industry, I leave my precision on for many of the same reasons that you mentioned. In fact, we use many of the same apps you just mentioned. So yes, I think that you may see a slight loss of signal on the precision piece, but I don’t see it being a waterfall of folks turning on the fuzziness to turn off the precision piece in their apps. Paul Harrison: I just, there’s a reason you have the location information turned on, because you need to use it for the app. David McBee: Yeah, I totally agree. Generally speaking, what would you say Simpli.fi is doing to future-proof our processes and solutions in regard to iOS 14? Paul Harrison: It really goes beyond iOS. I think that iOS is a symptom of the fact that people are wanting to have more control over their privacy. I think you’re seeing it in the third party cookie push. It’s not just Chrome, by the way, that just is the one that’s getting a lot of the headline news. But you’re going to see that same type of effort proliferating into Apple’s Safari, into Firefox, into the Brave browser. Paul Harrison: Overall, I think that what we are pushing toward in trying to measure things at the household level, which gives a much better level of anonymity, having many different identifiers coming in and building out a meta graph so that we can draw all this back to a household, and be able to respect the do-not-track, and respect the limit to track, and be on the forefront of helping to influence some of the legislation that’s going out. I happen to be on the board of the NAI, and we’re focused on privacy in our industry. Paul Harrison: So those are the things that Simpli.fi is doing to really be a leader in the space. Being thoughtful in our product development, as we roll things out, and being compliant with all of the safe harbors out there, which should give you, as you are working with Simpli.fi in the marketplace, a lot of confidence. David McBee: Speaking of confidence, Paul, I got to say, it’s one of my favorite things about talking to you, especially about technology. Because you always seem so confident in what Simpli.fi is doing. I’ve definitely gotten that feeling from you today, and I’m sure our listeners have as well. Is there anything else that you’d like to say to the agencies, brands, advertisers or sellers of targeted advertising that might ease their concerns? Paul Harrison: Well, I think that we’ve covered the major topics here today. I do believe that these are great questions. And as you work with other companies in the space, you should be asking these questions. There are going to be winners and losers in our space. Those who have not prepared and were heavily reliant on cookies, or heavily reliant on advertiser identifiers in mobile devices and weren’t thinking about the future, and thinking about legislation. I think they’re going to have a tough time, and you’re going to start seeing a lot of those logos in the famous LUMAscape start dropping out of the LUMAscape. Paul Harrison: So these are great questions, but I believe that we are on the right side of this moving forward, and you’re going to see a lot of really, really exciting things coming out of Simpli.fi this year. David McBee: Awesome. I’m excited to see them. Paul, thank you very much for your time today. Paul Harrison: Yeah, absolutely. Thanks, David. David McBee: Thanks for joining us today. For more information about these topics, or to find out more about Simpli.fi, please visit us online Simpli.fi, or send an email to hi@simpli.fi. Thanks.