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This is interesting, if somewhat expected: "Oath has also achieved lower than expected benefits from the integration of the Yahoo Inc. and AOL Inc. businesses." I think there's more going on than the surface examination I've been seeing... talkingpointsmemo.com/edblog/the-carnage-continuesPermalink On twitter.com
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Yes, one of the problems here is that massive scale is, when the only business goal, fundamentally untenable as a media business practice, but there's a bunch more things as well. First of all it seems likely that the purchase was far far overvalued for a number of reasons...Permalink On twitter.com
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The first is the deal was made on pre-Facebook-massacre traffic and you can bet that all the acquisition projections and pricing were made on the assumption that 3rd party platforms would continue to operate in the style to which Oath is accustomed. Always happens, always dumb...Permalink On twitter.com
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The second is that the rumored Big Win was going to be the joining of user data from Oath with Verizon to achieve that always just-over-the-horizon perfect targeting. Obviously that was never going to happen, but it was likely even worse than that...Permalink On twitter.com
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We know that Verizon was not super into sharing its data, but even when it did, things did not match up the way they had hoped. wsj.com/articles/verizons-internet-boss-in-talks-to-leave-1536321413Permalink On twitter.com
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I'm sure the idea of merging user data sets was especially distasteful with the leaks from Yahoo just sitting right there, basically unaddressed. Then there's the lack of easy matching...Permalink On twitter.com
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It's been reported that even when they were trying to match up data sets it wasn't going very well. That's because these data sets were coming from VERY different methodologies...Permalink On twitter.com
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See Verizon had a ton of new, suddenly allowed to use, precise network-level data on its users it wants to use to Sell You All The Things nbcnews.com/news/us-news/trump-signs-measure-let-isps-sell-your-data-without-consent-n742316 I'm sure it made sense to find more data to match their precise data against that would make users more targetablePermalink On twitter.com
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But having seen AOL ad tech in the wild, there's little there to handle fraud or fakery (like most ad tech). The end result is their data is likely putrid w/fake humans & fraud. They no doubt supplement it with data collection venders who only magnify the problem (like Everquote)Permalink On twitter.com
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This is a good time to tell a little story I was told a while back see EverQuote, my favored enemy in the shitty ads world, markets itself to users as a way to get them the best car insurance. But their model makes no sense for that... Chronotope/1008758427651330048On twitter.com
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It was alleged to me by someone w/good knowledge that EverQuote makes a great deal of money by treating users like Lehman Brothers treated real estate... it allegedly sells off packages of crap user data (collected from bots & the like) w/just enough good user data to fool peoplePermalink On twitter.com
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So if you are an agency, or an ad tech company, you make common practice of trying to make your targeting more precise by buying and tying in data sources from third parties. It's highly likely AOL did this...Permalink On twitter.com
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Only most third parties are (some knowingly, others foolishly blind to it) selling fraud data that layers on top of the bs data the companies already have just creating an expanding pool of complete bullshit users for companies to target with ads they think are going to humansPermalink On twitter.com
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That's how the ad tech industry can burn billions of dollars on fraudulent views in situations like this: mediapost.com/publications/article/322399/mobile-app-ad-fraud-can-cost-brands-up-to-75m.html ...Permalink On twitter.com
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Permalink
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See those ads aren't being just gazed upon by bots casually. Those ads are targeted with the help of thousands of ad tech firms. The bots are being targeted because fraud and misinformation designating them as human is being spread throughout the ecosystem like wildfire.Permalink On twitter.com
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But those fresh new Verizon user data sets they now were just all prepped to use after any sort of control on them had been released with deregulation? Those were well known entities. Verizon had their network traffic, they knew from the data *exactly* who they wanted to target.Permalink On twitter.com
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See, I'm sure a lot of things happened to suddenly turn AOL/HuffPo/whatever into a low value shitshow on Verizon's balance sheet but I bet the biggest one was how they fell short of what Verizon had actually valued from them: user data...Permalink On twitter.com
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I'd bet Verizon took its fine, precise, accurate user data & tried to match it up with the AOL Ad Tech+3rd parties user data and discovered it had basically Nothing. All that added value it was going to get by fleshing out its user profiles and I bet AOL had ~nothing extra to addPermalink On twitter.com
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See the value in the deal was going to be knowing if that Verizon Subscriber who visits WestWorld Fan Sites three times a day also likes to read Bacon Blogs on their T-Mobile phone. Then we can sell them something they'd *really* want. Precisely targeted...Permalink On twitter.com
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Finally the WestWorld-themed Bacon Frying Gadget Maker would have to come to Verizon to make the most of their ad spend. Yes, that was the heady dream Verizon had been promised by AOL's user data...Permalink On twitter.com
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But I'd bet most of AOLs data didn't even match up to Verizon's set of precisely designated Humans. And where it did, it didn't have much to ad to Verizon's already large user dataset. I'd bet they discovered most of that data was just useless to them.Permalink On twitter.com
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See AOL was pulling the large scale version of what EverQuote allegedly made a business out of, it showed Verizon a bunch of cool good user data, not showing the gigs of user data that was fundamentally useless but that seemed to Verizon like it would make them billions...Permalink On twitter.com
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I'm not sympathetic to Verizon as it is a giant company with no ethics or soul that tried to stick its hand in the cookie jar of ad tech and got the hand stuck in there with a big hunk of AOL, but I almost feel bad for the idiots who didn't understand what they were getting in toPermalink On twitter.com
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They didn't realize that AOL's ad tech business is fundamentally bullshit. Like most ad tech businesses are fundamentally bullshit. And that they had no way out of the trap, they *can't* make their ad targeting more precise or accurate...Permalink On twitter.com
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Because if Oath made its ad tech more precise or accurate they'd end up devaluing the enormous scale of likely bullshit users they sell to advertisers, ambiguated through the ad tech ecosystem. It was always going to be lose-lose for Verizon...Permalink On twitter.com
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Because there was no way to create a more accurate AND more profitable Oath ad tech firm AND there was very little likelihood Oath was going to have the accurate user data they wanted to make their deregulated network-level data exponentially more profitable.Permalink On twitter.com
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Yeah, Oath (the media company) definitely got burned by doing shitty scale chasing in its media business... Chronotope/1068252017951498241Permalink On twitter.com
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But the big value drop? That's Verizon watching all its ad tech hopes & dreams get crushed under the weight of the immense fraud, stupidity & malfeasance that plagues the ad tech industry. That's Verizon realizing all that user data they just purchased isn't value. It's a plague.Permalink On twitter.com
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Verizon sez: "Vestberg says the former AOL and Yahoo businesses 'need to survive on their merits.'" Translation: 'It turns out AOL and Yahoo have a negative value and we want them as far away from us as possible' axios.com/verizon-ceo-says-media-business-needs-to-stand-on-its-own-6238925a-481a-4fbc-b2ed-8421ff686ef3.htmlPermalink On twitter.com
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It seems likely to me: the businesses have turned out to be too dependent on fraudulent data to be worth anything to Verizon, something Oath didn't even know itself, b/c in ad tech you're not to ask too many questions. But Verizon didn't realize and started checking the user dataPermalink On twitter.com
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Now it seems likely Verizon looked into it and found the Oath user data was contaminated. Oath was supposed to make them a profit, but now they can't even get rid of it because they'd have to disclose what they discovered. Just a guess here...Permalink On twitter.com
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... But I suspect the story of what happened after Verizon tried to integrate Oath will be Theranos-level bad news.Permalink On twitter.com
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This should be a warning to non-ad-tech companies looking to acquire their way into the field. Ad Tech's ecosystem is a black pool of bad intentions, fraud, and lackluster measurement. Any big ad tech company exposed to the light of honest accounting is going to look pretty ugly.Permalink On twitter.com
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