Sweeping regulations like California’s upcoming privacy bill threaten to wipe out the advertising industry. These 10 tech companies are trying to help marketers survive.
- 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.
- Click here for more BI Prime stories.
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.
Jebbit says it wants to help marketers collect mobile first-party data.
Total funding to date: $22.2 million
Startup Jebbit helps retail and consumer-packaged-goods clients like eBay and Express collect first-party data outside their own websites and mobile apps.
Jebbit’s president Jonathan Lacoste said marketers use its software to link to quizzes, videos, and photos. For example, advertisers can attach mobile landing pages to Instagram Stories campaigns to collect first-party data like email addresses. Marketers can then push that data to marketing firms like Salesforce that advertisers use to manage campaigns.
Jebbit in April raised $12 million in Series B funding that was led by K1 Investment Management. Advertising execs and entrepreneurs Eric Roza and Jonah Goodhart also participated in the round.
The concern marketers have with first-party data is that it’s less plentiful than third-party data that targets ads based on consumers’ interests. For this reason, Lacoste said he expects marketers to keep using third-party data to acquire customers.
But over time he expects advertisers to use first-party data to make recommendations that get more personalized, like Netflix’s recommendation algorithm does. For example, a retailer can email people products similar to ones they clicked on in a previous email.
LiveRamp says it wants to power publishers’ consent forms.
2019 fiscal year revenue: $286 million
LiveRamp helps advertisers onboard their own data like store purchase and loyalty card information to run targeted digital advertising.
LiveRamp’s pitch to US brands and publishers is that its consent-management tool will help them avoid the headaches that publishers faced in using their own technology to capture people’s data ahead of GDPR, said Anneka Gupta, LiveRamp’s president and head of products and platforms.
“It’s a lot of work to maintain your own homegrown solutions,” she said. “Now publishers are saying, ‘Hey, we need a real solution for ourselves.'”
Gupta said LiveRamp is in the early stages of developing products with security and other ad-tech firms. For example, LiveRamp could team up with a company that helps marketers with the documentation process of collecting data.
mParticle says it wants to challenge the marketing clouds in handling data.
Total funding to date: $76.3 million
Privacy regulations encourage marketers to build up first-party data by getting consumers’ consent from mobile apps, websites, loyalty cards, and email.
Firms like mParticle sell software that helps marketers aggregate all that data. The firm is one of a growing number of “consumer data platforms,” or CDPs, that help brands including Starbucks, Burger King, and Airbnb use that data for ad targeting, emails, and push notifications.
Marketing clouds such as Adobe and Salesforce provide similar tools for advertisers. Startups such as mParticle pitch themselves as an alternatives for marketers that want to create custom tech stacks.
Agency sources said that while mParticle typically works directly with brands, agencies are increasingly being asked to help clients vet vendors. Andrew Katz, mParticle’s cofounder and CTO, attributed the increase to agencies competing more with consultancies that offer similar services.
“The work with agencies is typically more narrow in scope since there is an exclusive focus on marketing and, more specifically, paid advertising,” he said. “However, we see agencies becoming more involved in personalization efforts as they battle with consultancies.”
Perksy says it wants to gamify market research.
Total funding to date: $4.5 million
Think of Perksy as a mobile equivalent to big traditional market research firms like Kantar and Nielsen.
Consumers download Perksy’s mobile app to answer marketers’ questions. Clients like Pepsi, Target, Smuckers, and Nickelodeon use Perksy’s platform to test ideas and gather sentiment data. For example, a coffee chain could ask about a new drink flavor it’s trying out. In exchange, consumers earn points that can be exchanged for gift cards to brands like Nike, Nordstrom, and Uber.
Nadia Masri, founder and CEO of Perksy, said she founded the company as a way for brands to collect anonymous and compliant data and that she is increasingly seeing brands create their own internal task forces that handle privacy. She wouldn’t specify the size of the company’s panel but said it contains “hundreds of thousands” of users.
“People should have the ability to choose whether or not they want to participate in research, and they should be rewarded for it,” she said.
In February, Perksy raised $4 million in a seed round led by Bain Capital Ventures that included funding from MDC Ventures, the corporate venture-capital arm of agency holding company MDC Partners. The company has worked with MDC agencies including Assembly, Forsman & Bodenfors, and YML.
“With increasing consumer concerns over privacy, brands have a responsibility to disclose the type of customer data they have access to, how it was collected, the permissible uses of that data, and the value it will provide,” Jessica Peltz-Zatulove, a partner at MDC Ventures, said. “Brands must balance trust while still creating a personalized experience; emerging startups like Perksy are capitalizing on this trend.”
Sourcepoint says it wants to help publishers handle regulation.
Total funding to date: $26 million
Sourcepoint helped European publishers navigate GDPR, and now it’s trying to do the same with US publishers.
The company sells consent-management software for publishers. It recently rolled out a tool that allows publishers to store its subscribers or registered users’ privacy preferences. The tool links a publisher’s properties so users can consent once to have their data stored across all those properties.
Sourcepoint’s pitch is that the tool makes it easier for publishers to manage the IDs that they are required to collect under regulation like GDPR and CCPA. SourcePoint said it has two publishers using the tool, which it wouldn’t name.
Ben Barokas, CEO of Sourcepoint, said that as US publishers try to balance privacy compliance with business goals, Sourcepoint can help them create a pool of opted-in users to sell advertising against.
“We’re just starting to see publishers set up [for regulation],” he said. “Publishers have seen it on the horizon but have been more focused on the bottom line than compliance.”
TrustArc says it wants to help marketers manage hundreds of privacy regulations.
Total funding to date: $107 million
Formerly known as Truste, TrustArc is a compliance and security company that has helped companies like AT&T, The Trade Desk, and Nascar comply with privacy-related laws and regulations since the 1990s.
Its technology helps marketers manage consent, ad-targeting preferences and individual laws like Europe’s right to be forgotten. TrustArc’s SVP of marketing, Dave Deasy, said the company’s work with legal departments and marketers alike shows how marketers are leaning on their legal departments to keep up with regulations.
“The average marketer is not investing the time and energy to study the laws and regulations — we find with most companies that [talks] start with the legal department,” he said.
According to a TrustArc survey of 250 US privacy professionals in February, 88% of companies need help complying with CCPA. 71% of respondents said they expect to spend at least $100,000 to become compliant while another 19% said that CCPA will cost them more than $1 million.
In July, TrustArc raised $70 million in Series D funding to build out new technology for companies.
Zeotap says it wants to challenge LiveRamp in Europe.
Total funding to date: $20.5 million
A European equivalent to LiveRamp, Zeotap helps brands use their first-party data for ad targeting. Zeotap then gives anonymized data back to brands for marketing and analytics.
Zeotap works with advertisers and agencies like Omnicom and Havas Group. In one case, Zeotap analyzed a bank’s customer data to understand credit card churn.
The firm matches advertisers’ first-party data with third-party data from 80 sources, including 10 European telecom companies as well as publishers and e-commerce sites. Advertisers can then run ads using vetted, compliant, third-party data to broaden their reach, according to Zeotap.
The firm is seeking to raise Series C funding by the end of the year.
Heer said one of Zeotap’s advantages over LiveRamp is that as a Germany-based company, Zeotap has to operate under stricter regulation than do US-based companies.
“If you’re a large, multi-national brand, you want to have the same service level across markets,” he said. “We’re going to raise money to become the strong No. 2 in the US after LiveRamp and continue to be the No. 1 in Europe.”