Epsilon; LiveRamp; Sourcepoint; Perksy; Yutong Yuan/Business Insider
- As regulation and privacy laws start to take shape, marketers are turning to advertising and marketing companies to help them prepare.
- These companies are selling marketers software and other tools that help collect, store, and use first-party data.
- Business Insider asked advertising agencies and investors to identify the leading companies helping marketers navigate the new privacy landscape.
- The 10 we list include startups, established security companies, and data firms belonging to major holding companies.
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Regulators are starting to rattle the advertising industry.
A year after the European Union rolled out the General Data Protection Regulation, or GDPR — the sweeping law that regulates how marketers collect and use people’s data — similar rules are coming to the United States.
The California Consumer Privacy Act, or CCPA, is set to roll out in January, and similar proposed laws in Nevada, New York, and Washington state would clamp down on how marketers use people’s data, particularly third-party data sources.
The proposed laws would require marketers to collect consumers’ consent to use their data for marketing and advertising, and encourage marketers to beef up their first-party data from email, loyalty programs, and transactions.
Digital giants Facebook and Google also are facing increasing regulatory scrutiny and cracking down on advertisers’ ability to use third parties on their platforms. Facebook is rolling out a tool called "off-Facebook activity" that lets consumers wipe data that Facebook collects from other websites for ad targeting.
Google plans to introduce new privacy tools that limit how advertisers use third-party data within its Chrome browser. And Apple is pitching its new "Sign in With Apple" tool as a privacy-friendly tool that would severely limit how advertisers retarget people with ads on its devices.
Startups are capitalizing on marketers’ need to prepare for coming privacy regulations. Scores of advertising and marketing technology firms say they are regulation-proof and pitching marketers on software and services that promise to keep them safe too.
"Marketers are woefully under-prepared — many have taken a laissez-faire attitude towards privacy," said Ben Barokas, CEO of ad-tech firm Sourcepoint, which provides software for digital publishers to collect first-party data.
The catch is that tech firms are hesitant to take on too much legal responsibility, Jason Koye, VP and general counsel of North America and global privacy lead at Omnicom Media Group, added.
"The tools might be compliant, but no responsible vendor is saying, ‘By virtue of using our tool, you will be compliant,’" he said. "What these regulations have done is create legal risk allocation that’s constantly evolving where everyone is trying to push liability onto someone else."
For that reason, he said agencies need to be conservative about the number of vendors they work with.
Business Insider asked a handful of advertising agencies and investors which companies marketers are working with. They named startups like Zeotap, Perksy, and mParticle that help marketers organize and use first-party data for marketing and advertising, along with established firms like TrustArc, which specializes in security technology.
Below are 10 companies, listed alphabetically, that are helping marketers prepare for the new wave of privacy and regulation. We listed companies’ financial information depending on their stage of development. For startups, we indicated how much funding they’ve received to date; for public companies, we tracked their revenue; and for acquired companies, we listed their sale price.
Acxiom says it wants to help marketers develop plans for regulation.
Acquired by Interpublic Group for $2.3 billion in July 2018
As regulators start to clamp down on how marketers use people’s data, big holding companies are making huge bets on data brokers that help marketers manage and store privacy-friendly first-party data.
InterPublic Group acquired Acxiom last year in such a gamble. Arun Kumar, IPG’s chief data and technology officer, recently told Business Insider that Acxiom has an opportunity to help clients build data products and practices that go beyond ad campaigns.
Still, critics — including rival holding companies — have questioned if IPG’s acquisition creates a conflict of interest by limiting clients’ options for data companies.
Acxiom provides hour-long or half-day workshops in CCPA requirements for marketers and helps them plan for regulation. The firm also sells them identity graph software that stitches together digital and offline data and a data-management platform to organize and track data.
Leslie Price, senior product manager at Acxiom, said 40% to 70% of Acxiom’s clients have gone through the assessment process and have a plan in place for CCPA compliance, while another 20% of clients are wrapping up regulation work. She estimated that Acxiom has met with 100 clients about CCPA, in some cases holding multiple meetings.
Some marketers rushed out privacy efforts ahead of GDPR in May 2018, unclear what the law would entail until the last minute. Some marketers are finding themselves in the same situation with the CCPA, but Price said marketers are better off this time around.
"Our interpretation is that more of the law is concrete than what’s going to be fixed in the amendment process," she said.
BritePool says it wants to pool publishers’ privacy-safe data for advertisers.
Total funding to date: N/A
Led by former 24/7 Real Media CEO David J. Moore and former Pizza Hut CMO Bob Perkins, BritePool wants to help publishers transition from relying on third-party data to first-party data for advertising.
BritePool said publishers would increasingly collect consumer consent for advertising purposes as regulation gains importance. In September, it plans to launch free software to help publishers collect IDs based on readers’ browsing habits that advertisers can use as an alternative to Facebook’s and Google’s first-party data. BritePool plans to make money by selling advertisers its aggregate ID audiences.
In exchange for sharing their data with publishers, consumers earn points to redeem items like gift cards and discounts. They can set preferences for which types of ads they would like to see.
"We believe the ad-tech system is fundamentally broken," Moore said. "Our objective is to level the playing field for ad-supported websites to effectively compete for ad revenues with social media and e-commerce sites."
In exchange for the technology, publishers are encouraged to promote BritePool and will receive a cut of the company’s equity. BritePool is allocating 20% of its equity to publishers that sign up the first 80 million users, according to Moore.
CBS, Publishers Clearing House, and ad-tech company PubMatic are among BritePool’s initial clients using the technology. Through ad-tech partners like MediaMath and Sonobi, BritePool claims to have access to 250 million US identities.
Epsilon says it wants to help marketers capture and run ads using first-party data.
Acquired by Publicis Group for $4.4 billion in April 2019
In the holding company’s largest acquisition to date, Publicis Group agreed in April to acquire Alliance Data’s Epsilon for $4.4 billion to help clients prepare for regulation like CCPA.
Epsilon has a database of more than 250 million US consumers. The firm helps marketers collect and manage their own first-party data from email and loyalty programs. It can then layer third-party aggregated data like transaction and behavioral data on top of marketers’ own data to create audiences. Epsilon’s ad-tech arm, Conversant, then runs ads using the data.
For example, the firm created personalized emails for fashion brand Coach by matching customers’ profiles with demographic, behavioral and transactional data. Using machine learning, Coach sent consumers personalized recommendations. Epsilon reported that the efforts increased Coach’s site visits by 9.5% and sales by 3.1%.
Publicis has faced skepticism from industry observers that it can integrate Epsilon successfully into its network of agencies including big players like Leo Burnett, Digitas, and Zenith. Similar to IPG’s acquisition of Acxiom, questions have recently swirled about potential conflicts of interest from agencies owning data brokers and whether Publicis will be able to handle possible security and privacy issues from Epsilon’s past, including a significant data hack in 2011 that affected millions of consumers.
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