App-Based Businesses Juggle Ad Platform Perils; IAB Tech Lab’s Latest Standard

Platform Peril

Seemingly every grocery chain now has a programmatic platform, not to mention Lowe’s, Home Depot, Instacart, GoPuff and buy-now-pay-later companies like Afterpay and Klarna, to be joined soon by Uber, perhaps Shopify and who knows who else. Many of these companies – the BNPLs and all the mobile app-based businesses – got into advertising because they haven’t reached sustainable profitability. Instacart was profitable for one month last year: April. Millions of people suddenly needed online groceries. But as its core business grew, expenses climbed. If you recall, many people’s first taste of grocery delivery was terrible, because in that month Instacart was overburdened and its retail partners were unequipped. And now labor costs are up. Online customer acquisition costs are up. The levers to increase profitability are maxed out. But it’s relatively inexpensive to stand up an ad platform or programmatic data offering if you have valuable first-party data. It’s a delicate balance. An ad business can, and often does, distort decisions to favor white-label brands or advertisers over customers, writes New York Times columnist Shira Ovide. People might love a weepy TV commercial. “What I don’t love are young companies that are becoming addicted to ads – to our detriment and maybe theirs.”

Another.json

The IAB Tech Lab released id-sources.json, a feature that allows publishers, agencies and brands to declare the identity services they work with, similar to ads.txt or sellers.json. The new standard will be open to public comment until November 12 (check it out here). The specs cite some of the major walled garden platform IDs: Roku, Google Android, Amazon Fire, Apple IDFA, Microsoft ID, etc. There’s also the Unified ID 2.0 (The Trade Desk’s baby), the vendor ID5 and LiveRamp’s RampID, formerly IdentityLink. “If businesses use ID sources they should be willing to disclose that choice,” tweeted Alex Cone, the IAB Tech Lab’s VP of privacy and data protection, about the news.

Private Label Dirty Laundry

Amazon’s private-label brand group in India “ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines,” according to internal documents obtained by Reuters. The files consist of emails, strategy papers and business plans that map out the precise nightmare situation envisioned by any brand that does or might face an Amazon-owned competitor. The Indian private brand group snooped on customer returns to undercut better-known brands, rigged search results to appear above the fold and shamelessly cloned rival products. The activity seems local to India – though it’s a huge market – but many sellers will be concerned to see the ambitious goals set for private-label brand groups. The Indian unit had a mandate to be among the top three performers in every product line they competed in, and private label brands were benchmarked to reach 10% penetration of the entire Amazon consumer business by the end of 2023, according to Russell Grandinetti, SVP of Amazon’s International Consumer group, in an email to senior execs in late 2018.

But Wait, There’s More!

InMobi acquires the European ad analytics company Appsumer. [Insider]

MediaMath goes wide with a platform redesign. [release]

Apps are using scummy ads to bypass Google Play and install without consent. [Android Police]