Here is the full transcript of Christian Dankl’s talk titled “How Your Attention Is Monetized” at TEDxSalzburg conference.
Co-Founder and Chairman of Precise TV, Christian Dankl’s talk, “How Your Attention Is Monetized,” delves into the evolving landscape of digital advertising and the central role of consumer attention in the monetization process. Dankl highlights the historical progression from the inception of cookies for tracking online behavior to the current challenges and innovations in advertising without infringing on privacy.
He points out the significant shift towards valuing consumer attention as currency in the digital ecosystem, driven by changes in privacy regulations and technological advancements. The talk also examines the impact of these changes on advertisers, publishers, and consumers, proposing solutions like contextual advertising and privacy-focused tracking alternatives. Dankl emphasizes the importance of understanding these dynamics for brands looking to navigate the future of advertising effectively.
He also discusses the potential future where consumer attention could lead to entirely ad-supported services, changing the way we perceive and interact with online content. The presentation is a compelling overview of the digital advertising industry’s direction, focusing on the value of attention in a privacy-conscious world.
Listen to the audio version here:
TRANSCRIPT:
The Discovery of Greenland
A thousand years ago, Erik the Red was exiled from Norway and later from Iceland. He and a few men that he assembled were sailing west. They discovered an island, but this island, or country, was full of snow and the average temperature was minus 18 degrees, so not really a pleasant place to be.
Now, they founded the first European settlement on that little island, and they wanted to attract more people to come with them on that journey. But to talk about snow, ice, and harsh conditions, as you can see here, wouldn’t be attractive for people to come. So, in order to make it more inspiring, and that was a thousand years ago, he had the brilliant idea to market the island, and he gave it the name Greenland.
Now, a thousand years later, in Silicon Valley, there was an engineer, his name was Lou Montulli, and he was working for the very first internet browser, the Netscape Navigator.
The Dawn of the Internet Era
Now think back to those days. It was a very simple internet back then, and he wanted to actually encourage commercial successful enterprises on the internet. So, in order to do so, he wanted to create a solution. Now here was the big problem: the internet was actually completely anonymous, and everyone on the internet was just an anonymous stranger.
Now, think about real-world shops, and if you were a shopkeeper, you could see people walking in the door, you could see with your own eyes if there were tourists, locals, repeat customers, loyal customers, or someone you could pitch a new idea or a new product to. On the internet, it wasn’t possible, so he created a script that could follow you all over the internet, and basically had a new way of tracking people.
Now luckily, when he created that script, he didn’t call it Personal Identifiable Information Tracker, because who would sign up for that one, right? He had the idea to call it, and this is the script here, you can see, he called it Cookie, because we all love cookies. And so it happened that we actually browsed into the 21st century in a cookie-filled journey full of fun.
But the cookies are actually quite useful, and I’ll give you a couple of examples of how they are used today. If you go to your webmail, you don’t have to log in. The webmail knows who you are and knows your password, so you’re automatically logged in. Another use case is, you go to Netflix, it knows who you are, gives you a recommendation algorithm that can actually give you very, very relevant titles to watch.
Or another example would be, you go to Amazon, and you will see the most relevant products that you could shop for today. All of those use cases are called first-party cookies. Now the first-party cookie will stay; it is useful. But there is another use case.
The Intrusiveness of Third-Party Cookies
Now when was the last time you Googled a flight to New York? And then you’re being followed all over the internet with flights to New York, flights to New York, flights to New York. So this is quite annoying. But just to say it’s annoying is not really embarrassing, is it?
Now think about that. How about you being followed by a toilet seat all over the internet, right? So this consumer, this lady, took to Twitter in this amazing tweet about her own experience like being followed all over the internet by a toilet seat. Those use cases are called third-party cookies.
A third-party cookie is effectively a cookie that is not published by the publisher as a first-party, but it’s basically tracking you all over the internet, and it comes up all the time. Now those cookies have been the lifeblood of the digital economy. And for many years, this has been good for you, it was a good deal. For us consumers, because, well, we’ve seen some ads, but we got the free internet for it. Not bad, is it? We got free internet. But there were some bad actors on the way.
The Evolution of Online Advertising
And effectively, it changed quite a bit, because those are some use cases, of course, in the online advertising space, like behavioral targeting or creating user profiles, retargeting. Some are annoying, but some are actually pushing it to the limits. And there have been some quite significant changes in the timeline. So I want to give you a timeline of online advertising from a privacy perspective, from a consumer privacy perspective.
So if you look at 1994, the cookie was created five years later, took five years.
It was deemed safe. Now we then came into Web 2.0, user-generated content, social media, and we started to share more and more of our personal data. And that was in 2004. And it took about 10 to 15 years so that bad actors actually came up. And those bad actors were using that data in a way that no one of us signed up for. And it wasn’t a good deal anymore for us consumers.
And there was a very, I mean, a very interesting moment, which was the tidal shift. It was the peak of that. And you can see on the chart, the privacy intrusion goes from zero up to 100, just in relative terms, from less intrusive to very intrusive. And the peak was Cambridge Analytica. Cambridge Analytica was effectively called by the Wired magazine as the great awakening of the privacy, the great privacy awakening.
And that really changed a lot in terms of like regulations and our future when it comes to digital advertising. Now one of the most important things, Google announced to basically block the third-party cookie. And that will happen in 2024. 2024 in our industry, in the digital ecosystem, is called the death of the cookie.
It’s literally that rip date. But on the way to that, there will be other things that are actually good that you have probably already noticed. Apple, for example, introduced Apple tracking transparency. That means you’re being asked if you want to share data from the internet with an app or not. It’s down to the consumer to opt in or to opt out. The IDFA, which is this unique ID, will no longer be shared automatically with developers. Now those are technical changes. So the browsers effectively control the cookie.
Apple and Android, they control the mobile tracking. But one thing that is very important is there’s another angle, which is an angle from a regulation perspective. And therefore, there was GDPR as a consumer protection law. And in America, a couple of laws, like very early on, we protected our children with the COPPA law. It’s the Children Online Privacy Protection Act. Or the CCPA. The CCPA, effectively in California, was one of the first and most innovative regulations.
Now what happens here is also on this chart, as you can see, the attention has changed and the currency has changed. In the past, the consumer was by effectively getting a value exchange for data. And the paradigm shift that is now coming is literally going into attention. Now if you are a brand, or if you’re an advertiser, you really want to know, how can I run advertising that is successful in the future if there is no cookie? Because as I mentioned before, third-party cookies were fueling, they were the lifeblood of our industry.
Future of Digital Advertising
Now here are four concepts that are solutions that are out there. The first one is basically the Google sandbox. Now the Google sandbox is using cohorts. So instead of tracking an individual or a PII, as we call it, you effectively have cohorts. Those are groups with shared interest. The problem with that is that effectively you might be in a group that is very broad, so it’s not good for advertising, or you don’t identify with that group. You don’t want to be in that cohort. So there are still some things that need to be sorted out, but from a privacy perspective, it’s a pretty good and a solid concept.
The next one is ID solutions, and ID solutions, there are two different ones. One is deterministic, and the other one is probabilistic. A deterministic ID solution is effectively, for me, a technical workaround. You have a hashed ID, which is perhaps your email address. So it’s encrypted and safe in that way, but it’s still tracking you as an individual. The other ID solution would be probabilistic. So that’s based on algorithms that want to effectively predict who you are without knowing who you are. That’s predictive and probabilistic.
Now the next one is the publisher solution. So the publisher solutions are solutions that are owned by large publishers. So think about the New York Times and the CNN agree that their first-party data is being shared amongst them, and they create a single sign-on solution that shares that information for advertising purposes.
Now in principle it’s very good, however, it’s very expensive to roll out, and also there’s a scale issue, because think about it, all of those long-tail publishers that are really the lifeblood of the long-tail, the long-tail publishers, the diversity, all of that, those smaller publishers cannot afford the solution. So they will not be part of that monetisation.
And lastly, an interesting concept that has been around since day one, but has massively changed over time, is contextual advertising. So running advertising in the context, targeting the content rather than the person, protecting the privacy of the individual, but having advertising that actually resonates with the consumer, because it’s relevant, because you like it, if you’re in the mindset of effectively a yoga class and you get advertising for mindfulness or yoga, it makes sense. And those contextual solutions have evolved over time drastically.
So they understand, for example, in videos, the objects in the video, image recognition, video recognition, even like actors and faces and brands can be recognised today, and understood, analysed, and advertising can be placed there. Good.
Now, one thing that’s really important, those are the solutions for you as a brand and as an advertiser, but what platforms will be the winners in the attention economy going forward? And it’s important that you understand how consumers are using the internet and social media platforms. This is a 2022, 18-plus, because it’s also very different under 18, but 18-plus US study.
The winners will be, at the moment, YouTube and TikTok, and that’s partly because of their short-form capabilities of short-form video, and effectively YouTube also has, of course, a large content pool that is mid-form, long-form as well. Which platforms are losing, you can see here. Some of them you recognise, and you probably are using them less yourself, but the winners are clearly YouTube and TikTok from today’s perspective.
The New Attention Economy
This data is from eMarketer 2022. Now with the new attention economy, for you as a consumer, there will be a complete paradigm shift, and it’s important to understand that your time, your attention, is currency in the digital ecosystem, and it matters. And there’s a good example I can give you. Probably you’ve heard Netflix has introduced a lower price tier on their pricing. That is run by ads.
And it’s not crazy to say that there will be a time, maybe, when Netflix is completely free in exchange for the attention and the ads run against it. Now, above all, above all else, remember, your attention does not only matter. Your attention is currency. And this paradigm shift is happening right now, and you are at the centre of this.