MMG Market Trends Blog
Data Privacy Takes Centre Stage for Advertisers
Good Life Networks Offers ad tech solution
The Cambridge Analytica scandal has brought data privacy issues to the forefront for large advertising technology (“ad tech”) companies like Facebook and Google.
In March, it was disclosed that the political firm had used data from 50 million Facebook users in support of Donald Trump’s campaign for U.S. President.
Facebook CEO and founder Mark Zuckerberg found himself testifying before the U.S. Congress to explain how the company uses it members’ Personally Identifiable Information (PII). Facebook has built its ad tech empire, in part, by using members’ PII to sell targeted advertising.
Consumers like the connectivity and freedom of expression that social networks like Facebook offer, but they are becoming increasingly anxious about how much data these companies are collecting on them and how that information is being used.
This dilemma has companies looking for ways to balance advertisers’ demand for the targeted advertising with consumers’ desire for privacy. One Vancouver-based company, Good Life Networks Inc. (TSX.V: GOOD) (“GLN”), has created an ad tech platform that uses machine learning algorithms, rather than PII, to serve ads to consumers.
Consumers are becoming increasingly concerned with a social media world that seems to be spying on them. GLN CEO, Jesse Dylan, comments, “It can feel weird when a topic mentioned in discussion with friends in a bar ends up in your Facebook feed as advertisements about that exact product 15 minutes later.”
GLN’s goal is to leverage machine learning to offer advertisers a similar level of consumer targeting, but without the privacy concerns attached to many of the most prominent companies in the internet ecosystem.
Programmatic Advertising that Doesn’t Use PII
GLN offers advertisers a video-focused advertising platform that allows its clients to effectively and accurately target ads to consumers to ensure engagement and successful conversions.
Dylan notes, “We don’t collect any PII, and we never will. We believe that technology platforms have crossed the line in the pursuit of collecting user information in order to capture more advertising dollars.”
A technology company, GLN builds software that allows advertisers to target engaged users without violating anyone’s privacy. The company estimates that the addressable market for its product was $17 billion in North America in 2017.
GLN has been growing by leaps and bounds. It posted record full-year revenue for 2017 of $9,723,075, a 278 per cent increase over the $2,571,311 it generated in 2016. Gross profit for 2017 increased 800 per cent, from $481,765 to $4,334,670.
GLN has a patent pending on its programmatic video advertising platform. According to Dylan, the technology was designed from the ground up to avoid using PII. “We avoided PII deliberately. Even before the Cambridge Analytica scandal, we anticipated a backlash.”
Led by a CTO with over 20 years’ experience building advertising platforms, the company’s technology allows advertisers to protect their brand while accessing prospective consumers to drive their business.
Speed, Targeting, and Fraud Protection
GLN claims an ad serve rate three times faster than IAB (Interactive Advertising Bureau) industry standard of 30 milliseconds. It’s high-speed exchange, is used by media buyers and sellers, and offers access to millions of websites and mobile devices worldwide.
GLN delivers an ad in 250 milliseconds and makes decisions on users in 10 milliseconds. The product provides its media buyers with brand safety by ensuring that websites are legitimate and that the traffic to a site is valid.
This feature of the product allows advertisers to avoid wasting advertising spend on fraudulent traffic and helps ensure their brand does not get associated with undesirable media outlets. Dylan comments, “We look at traffic based on a patent pending algorithm to determine if the traffic is valid. Our product protects advertisers from invalid traffic or IVT, from the most sinister to the most innocent.”
GLN has its own proprietary tests for IVT that allow it to vet traffic before going out to third-party vendors. This helps with speed of ad service — a critical selling point of any ad tech service.
A Blockchain Answer to the Ad Industry’s AR Problem
In addition to addressing the issue of privacy in online advertising, GLN is also focused on solving one of the ad industry’s biggest problems: timely payment. The company is developing a provisionally patented blockchain solution that would allow publishers to get paid the next day after their transaction.
Last year, spending on digital advertising outpaced spending on TV in the U.S. for the first time, according to the Internet Advertising Bureau (“IAB”). With that trend expected to continue, GLN is trying to find a 21st century solution for an industry stuck in a 20th century accounts receivable system.
“We aim to clean the market up with a financial instrument that takes some of the volatility out of the blockchain community,” says Dylan. “Publishers don’t want to wait 30, 60, or 90 days for payment, and with our blockchain solution, they won’t have to.”
Organic Growth with an Eye to Strategic Acquisitions
With demand for video advertising growing rapidly, GLN’s patent-pending video platform appears perfectly aligned to where the ad tech market is heading.
The company plans to grow organically and by acquisition in the next year. One recent move was to sign a letter of intent to acquire a leading connected television platform. GLN (TSX.V: GOOD) will stay on the lookout for other acquisitions that can be accretive to the company.
The company’s ambition is to be the third largest ad platform outside of Facebook and Google. It believes demand for ad targeting that doesn’t leverage PII will put it in the driver’s seat going forward. “We’re right in the sweet spot,” says Dylan. “This is our moment.”