THE NEW RULES OF BRAND SAFETY

HOW TO BRING ORDER TO A FRAGMENTED SPHERE

THE IMPERATIVE FOR MOBILE CONTEXT

THE NEW RULES OF BRAND SAFETY

PAGE 3 MOBILE TAKES HOLD

PAGE 4 A CONTEXTUAL IMPERATIVE

PAGE 6 THE MEANING OF CONTEXT

PAGE 7 THE MOBILE OPPORTUNITY

PAGE 7 THE MOBILE CHALLENGE: APPS

PAGE 9 TOWARD A STRATEGIC SOLUTION

PAGE 10 A CALL FOR AN UPSTREAM,

PRE-BID AGREEMENT

PAGE 10 WORKING WITH THE PLATFORMS

PAGE 12 TAPPING INTO PASSION

TABLE OF CONTENTS

PAGE 2

THE NEW RULES OF BRAND SAFETY

MOBILE TAKES HOLD

Today’s media consumers read, watch and listen with their mobile devices at the forefront. In the words of a recent comScore report, mobile is no longer the “second screen.”1 Last year total mobile advertising spend for the first time topped desktop, and this year will move decisively into the lead.

For a majority of uses,“mobile” means apps, which account for more than half of digital media consumption time on mobile2 and as much as 90 percent of all time on screen.3

A study by cross-device identity and advertising platform provider Drawbridge found that in just six months, from August to December of 2016, the top 15 ad-supported iOS apps grew 32.5% in monthly unique users to nearly 137 million, while the top 15 ad-supported Android apps grew five percent to 606 million monthly uniques.4

To meet their consumers, publishers and platforms are becoming mobile-first even mobile-only. They are developing a new understanding of how to reach, approach, serve and understand people on their mobile devices.

And that means understanding the context of those devices and screens; the patterns of usage; the networks they’re on; their many special properties. No other type of device offers such versatile capabilities to both the people using them and the media and advertisers trying to reach them.

Source: https://www.statista.com/statistics/326063/mobile-internet-display-ad-spend-usa/

1 http://www.comscore.com/Insights/Presentations-and-Whitepapers/2016/2016-US-Cross-Platform- Future-in-Focus 2 “Cross Platform Future in Focus, U.S.,” comScore, 2016 3 http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing- statistics/ 4 “Drawbridge App Traction Index Q3 and Q4, 2016” PAGE 3

THE NEW RULES OF BRAND SAFETY

“WITH CONTEXT ADDED,

MARKETERS AND

PUBLISHERS HAVE

A POTENT MIX.”

A CONTEXTUAL IMPERATIVE

Smartphones are both more varied and more precise than any media consumption mechanism that has come before. They are communication tools with sight, sound and motion. They provide interaction, creation and location. Their owners cradle them intimately just inches from their eyes and ears,5 touching them more than any other object in their lives.

That mix presents special opportunities and special challenges. Publishers and advertisers must tailor their approaches to both the devices and the ways in which they are used.

“Mobile isn’t just a different channel from desktop. It’s a completely different country,” says Grapeshot CEO John Snyder. “The bar for the mobile user is much higher. People are getting information, entertaining themselves, leaning forward and back. They want something relevant to their context.” In mobile, that context takes many forms, many of them unique. The mobile universe presents an entirely new context from anything that’s come before, a new language with a grammar that can vary by device, region, culture and, yes, context.

NEW CREATIVECreators and technologists are moving beyond treating mobile as an adjunct to what’s come before, simply repackaging TV and display ads and content for the mobile screen.

Mobile for them has become a new creative palette, with special grammar and multi-dimensional capabilities. At the simplest level, they introduce specially sized vertical images and videos. In richer formats, they incorporate swiping in multiple directions, and allow for mobile-centric menus and navigation.

They imbue applications with geolocation and motion detection, inspire users to join in with emojis and specialized filters. They encourage sharing from forward-pointing and self-facing cameras and experiment with AR, VR and 360-degree views.

MOBILE’S INCREASED SHARE

• Mobile accounts for 65percent of time spent indigital media and is gainingshare.

• Audiences for the top 100digital media properties onmobile have far surpasseddesktop in the past year.

• Late last year was the firsttime that more websiteswere accessed onsmartphones and tabletsworldwide than on desktopcomputers. Mobile accountedfor less than 25 percent just3 years earlier.

• Mobile is the place for all newgrowth in digital.

• In the U.S., advertising onmobile in 2016 for the firsttime surpassed desktop,

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5 https://www.apptentive.com/blog/2016/06/30/importance-context-mobile-advertising/

THE NEW RULES OF BRAND SAFETY

MOBILE ISN’T JUST A DIFFERENT CHANNEL FROM DESKTOP. IT’S A

COMPLETELY DIFFERENT COUNTRY.” - JOHN SNYDER, CEO, GRAPESHOT

TIME AND PLACE The way in which someone uses their smartphone — in line, walking, jogging, shopping, in a station or on a train, sitting at work or at home on a sofa, sharing with friends and even slinging to a bigger screen — can be a huge indicator of the types of messages they'll be open to, even delighted to see.

LIVE CONTENT In the mobile sphere, the content being consumed in the moment sends powerful signals as to the context of the person consuming and interacting with it.

Contextual understanding adds a layer beyond what audience data can provide. Knowing what media are being consumed signals a person’s current state of mind, their current preferences, even their level of engagement and degree of attention.

Behavioral and Geo-targeting paint a useful picture of who a user may be and where they are. Context gives what may be the strongest signal of their mindset right now, their real-time interest and engagement, whether they’re in lean-back or participatory mode, transiently snacking or consuming longer form narrative content.

Contextual understanding also adds verification and assurance in a fragmented mobile landscape.

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Source: IAB/PwC Internet Ad Revenue Report, FY 2016

THE NEW RULES OF BRAND SAFETY

THE MEANING OF CONTEXT

Contextual advertising solutions place brand messages where consumers will accept and even invite them. The solutions also protect brands from the tarnish of terrible adjacencies.

Lightning fast scanning in 170 languages, massive processing power, machine-assisted comprehension plus predictive capabilities give publishers and advertisers the tools to understand people’s past interests, their current frame of mind, and even to predict what upcoming trends and topics of interest might be.

Artificial intelligence constantly adapts word weighting to understand what’s “hot” and what’s not, to find new opportunities or block arenas that have become newly unsafe. Custom keyword segments match phrases to hundreds of desired or unwanted attributes.

With context added, marketers and publishers have a potent mix. Beyond viewability and verification, they are starting to demand contextual matching that enhances the message while also protecting their brands.

CONTEXT WORKS

For advertising, context works. For decades, studies have shown that the matching of messages with the environment they’re in positively affects ad recall, ad recognition, brand attitude and purchase intent.

“When visitors to the Guardian’s website view brand ads alongside relevant editorial, they are 10 percent more likely to pick up new information, nearly 20 percent more likely to feel more positive about the advertiser and, crucially, 23 percent more likely to think that the ad is relevant to them,” says, Nick Hewat, Commercial Director at Guardian News & Media.**

PAGE 6

THE NEW RULES OF BRAND SAFETY

USAGE OF THE

LEADING AD-

SUPPORTED IOS

APPS GREW 32.5%

IN THE LAST HALF

OF 2016.

THE MOBILE OPPORTUNITY

With digital accounting for more overall ad revenue than TV6 this year, it will, like TV, be required to let agnostic third parties measure its media offerings — on each and every screen. And as attention moves to mobile, brand marketers and media buyers who use mobile will want the same protections, discovery and intelligence they have on other screens.

They need their brand messages to reach the right people at the right time, in the right way and, above all, in a clean and safe environment.

“I really just want to know it's being placed next to appropriate and relevant content,” says Bonin Bough, host of a CNBC television show and recently Chief Media and eCommerce Officer for Mondelez International, responsible for millions of dollars in brand advertising.

Recent brouhahas have put a spotlight on context, causing temporary boycotts of unverified platforms and spurring new advertising policies. Brand safety has been a major focus of this year’s #NewFronts as publishers try to differentiate themselves from the “walled garden” platforms.7

Meanwhile, those walled gardens are inviting third-party verification solutions and submitting themselves for certification by the Media Ratings Council (MRC) in the hopes they can assuage advertiser concerns.

THE MOBILE CHALLENGE: APPS

As an ecosystem, mobile falls into two main spheres — Web and app. For mobile Web, contextual issues are largely solved, even accounting for newer wrinkles such as Progressive Web, Google AMP and branched versions of the Android operating system.

Contextual scanning can be implemented in ways that adhere to technical requirements while understanding context, and doing it for each and every page’s URL.

The challenge, though, is the wealth of consumption inside apps, an ecosphere many experts interviewed for this paper termed “The Wild Wild West.”

PAGE 7

6 http://adage.com/article/digital/digital-ad-revenue-surpasses-tv-desktop-iab/308808/ 7 http://digiday.com/media/newfronts-publishers-see-opening-recent-youtube-facebook-ad- crises/ and http://digiday.com/media/new-york-times-will-bring-brand-safety-message-newfronts/

THE NEW RULES OF BRAND SAFETY

“One of the biggest challenges is the fact that there is no information in app, there is no contextual information that comes through,” says Peter Gent, Senior Partnerships Manager at The Trade Desk. “When I’m running a campaign in a news environment, I have no idea what articles someone is looking at when I serve an ad.”

A patchwork of workaround solutions is helping understand the context of apps into which messaging can safely appear with great contextual relevance and danger zones that many brands would wish to avoid. They monitor:

• App Store Descriptions. Though only a few dozenwords, descriptions give a basic understanding ofthe orientation of an app.

• Ratings, such as the PEGI system common inEurope, can indicate safe or unsafe zones forcertain demographic groups or brands.

• The Web and Social Media. Grapeshot and othersmonitor social and Web conversations aroundapps, ingesting and analyzing billions of datapoints to learn when discussions are trending inpotentially positive — or negative — directionsaround certain apps.

But the picture is very imperfect and often lacking in specificity and granularity, leading to huge levels of missed opportunity and undesirable risk.

With little or no page-level understanding of the content inside the apps, marketers tend to choose all-or-nothing solutions: place the ads and hope, or pull them completely.

Consider, for example, the classic news app from the most upstanding traditional publishing organization. The app store descriptions will be pristine and accurate, the rating appropriate to the demographic groups being reached, the brand impeccable.

But newly created pages inside the app may be either great opportunities or ones brands would rather avoid. Contextual tools lack the ability to see inside the apps to scan their pages.

“The ideal targeting is at the page level,” Snyder says, “because then you can exercise brand safety and precision targeting.”

WORKING AROUND APPS

Scraping app store descriptions and combining the information with outside data can provide multiple benefits: • Normalizing and condensing

for different names of thesame app.

• Making sure variants of theapp are legitimate and fromthe named publisher.

• Associating the app withconversations on socialmedia and the Web toidentify trends in safetyor relevance.

Yet, there are challenges, such as spoofed apps with purposely obfuscated descriptions.

The descriptions are not comprehensive in saying what content will flow on the pages within the app where advertising may appear.

CONTEXTUAL UNDERSTANDING WILL CREATE NEW OPPORTUNITIES

FOR ADVERTISERS WHILE ALSO ASSURING BRANDS THEY ARE

IN THE RIGHT ENVIRONMENTS.

PAGE 8

THE NEW RULES OF BRAND SAFETY

TOWARD A STRATEGIC SOLUTION

Sweeping all-or-nothing solutions limit the reach brands can achieve and the revenue publishers and platforms can realize.

As media consumption moves to mobile apps, there is every incentive for all players in the landscape to work toward a common solution and allow trusted third parties to see into and verify content at the page level — everywhere an ad could be placed or associated with.

Possible paths are starting to form — though they are right now more blunt-force tools that exclude to protect rather than help all sides:

• Anti-fraud verification vendors like Moat, WhiteOps, DoubleVerify and Integral Ad Science havemoved to certify human traffic and ad viewability in apps. Some have received MRC accreditationfor portions of their in-app tools.8

• The IAB has announced an open source SDK “Tool Repository” to develop mechanisms that willassure viewability for at least a limited set of display ads in mobile.

These solutions are a step but tend to operate in post-bid environments that do not work to create new opportunities for reach or revenue. They simply block an ad from being served after it has been chosen for insertion.

PAGE 9

8 http://mediaratingcouncil.org/Accredited%20Services.htm

THE NEW RULES OF BRAND SAFETY

A CALL FOR AN UPSTREAM, PRE-BID AGREEMENT

The further upstream the solutions can be installed and accepted, the better the technology solutions will work, to the benefit of all. (See diagram: “Schematic for an Industry Standard.”)

They will unearth new, valuable inventory in all types of apps — publisher content, user content and lifestyle apps — while protecting the brands they want to attract and instilling trust for them and the major platforms and app store operating environments.

“It's going to need to be something some governing body comes out and says, 'This is the way that everyone should do it,' ” Gent says. “If there were a single way to look into the app ecosystem that was open and available for anyone to have access, then all of the players within the contextual space could start differentiating with the services they provide.”

WORKING WITH THE PLATFORMS

True contextual solutions need to extract a page’s content before an ad is chosen and offer that contextual understanding to the advertising partners who require it in a pre-bid fashion — that is, before a bid for that ad spot is placed. Multiple frameworks or standards could work, including:

SDKS: Today the system is piecemeal, and app-by-app. Where vendors do have a solution, they must work individually with publishers and their apps, sometimes waiting for the app to update and none of them is a full, pre-bid contextual solution.

FEEDS: Any adept contextual solution will be able to take structured or unstructured content feeds and process them in fractions of a second at scale. Ideally, they would be fed to the contextual partner before the page is rendered in the app (see schematic). For many content- based media apps with mirrored web pages, the solution would be only a minor enhancement of what’s already available.

Each can have significant content and advertising

opportunities.

PAGE 10

UPSTREAM (publisher provided)

USER- PUBLISHER

Users enter much, perhaps most of the content

LIFESTYLE From gaming to health, entertainment, travel

finders and commerce.

CATEGORIES OF APPS

THE NEW RULES OF BRAND SAFETY

SCRAPING: Allowing partners inside apps to scrape every page and discussion would present opportunities but also could face challenges from users or other partners. It’s technologically feasible but may be difficult to accomplish.

TAGGING: A little heralded hack in Facebook’s Instant Articles (IA) allows publishers to tag stories within their IA feed to indicate context for advertising purposes. The solution is somewhat manual, piecemeal and inefficient. It works at the publisher- rather than the platform-level. But the concept may form the basis for wider solution.

The best solution may be one that’s agreed by all major parties and can give marketers the assurance they will have third-party verification of contextual relevance and brand safety.

"Standards usually help proliferation and adoption as long as they’re open and collaborative,” says Brian Ferrario, VP, Marketing, for Drawbridge. “Standardization removes barriers to adoption. It also removes skepticism.”

PAGE 11

THE NEW RULES OF BRAND SAFETY

TAPPING INTO PASSION

The mobile landscape that holds so much promise is also fragmented and difficult. Reporting is uneven, data are unreliable and what were transparent pages on the Web become opaque and vaguely defined in apps.

The situation cannot stay as is. As recent pronouncements from Procter & Gamble have shown9, the world’s largest advertisers will gladly withhold billions of dollars rather than risk wasting their spends or endangering their brands.

And as publishers become less friendly to Facebook’s Instant Articles,10 more may encourage use of, and advertising into, their apps.

The hand-held screen differs from larger in-home or at-work screens in not only form factor and functionality, but also tenor and usage. All sides are learning the special properties of mobile.

Its wares can delight and amuse, while inspiring sharing, emotional expression, intimacy — and risk causing great offense.

The key is to find users when they’re engaged and delighted, communicating and consuming in ways that hold great meaning for them.

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PAGE 12

** Sources: 11, 12

*** Sources: 13, 14, 15, 16, 17

9 “P&G Wants to Cut $1 Billion In Media Spend And Supply Chain Inefficiencies” https:// adexchanger.com/advertiser/pg-wants-cut-1-billion-media-spend-supply-chain-inefficiencies/ 10 http://mobilemarketingmagazine.com/viewpoint-guardian-publisher-unfriends-instant-articles- 11 https://en.wikipedia.org/wiki/Media_context_studies_(Advertising_research)

12 http://www.campaignlive.co.uk/article/context-effect-right-environment-shape-ads-impact/ 1367958#ytG4qKtYQS624gHL.99

13 Op Cit: http://www.comscore.com/Insights/Presentations-and-Whitepapers/2016/2016-US- Cross-Platform-Future-in-Focus

14 https://www.wirelessweek.com/news/2016/03/death-desktop-65-digital-media-consumed- mobile

15 http://www.telegraph.co.uk/technology/2016/11/01/mobile-web-usage-overtakes-desktop-for- first-time/

16 http://marketingland.com/digital-growth-now-coming-mobile-usage-comscore-171505

Dorian Benkoil of Teeming Media was the lead writer on this report,

with input from Grapeshot executives, customers and

partners, as well as original and secondary research. All data are

original and quotes from interviews, unless otherwise noted or cited.

“YOU WANT TO FIND

SOMEONE RIGHT WHERE

THEY’RE PASSIONATE ABOUT

THEIR INTERESTS AND

CONSUMING CONTENT AT

THAT MOMENT,”

SNYDER SAYS. “THAT’S

WHAT MOBILE CAN DO.”