A Swiss regulatory agency that Facebook executive David Marcus said in Congressional testimony would be responsible for overseeing data and privacy protections for the company’s newly launched cryptocurrency, Libra, has not been contacted by Facebook, according to a report.
In a statement provided to CNBC, Hugo Wyler, who’s the head of communication at the FDPIC said:
“We have taken note of the statements made by David Marcus, Chief of Calibra, on our potential role as data protection supervisory authority in the Libra context. Until today we have not been contacted by the promoters of Libra… We expect Facebook or its promoters to provide us with concrete information when the time comes. Only then will we be able to examine the extent to which our legal advisory and supervisory competence is given. In any case, we are following the development of the project in the public debate.”
Facebook’s attempted end-run around national monetary policy already has been criticized by lawmakers in the U.S. and around the world.
“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users… Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congres and regulators have the opportunity to examine these issues and take action,” said Congresswoman Maxine Waters, who heads the House Financial Services Committee, in a statement on the day Facebook announced its cryptocurrency.
Federal Reserve chairman, Jerome Powell, also had harsh words for Facebook and its planned cryptocurrency. “Libra raises many serious concerns regarding privacy, money laundering, consumer protection, and financial stability,” Powell said last week.
Even Treasury Secretary Steven Mnuchin, normally a proponent of laissez faire approaches to private enterprise, voiced concerns about Libra that seemed to echo Powell’s.
“Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs and human trafficking,” Mnuchin said in a press conference yesterday.
David Marcus, the head of Facebook’s blockchain subsidiary Calibra, testified before the Senate Banking Committee today. He said Calibra will be interoperable, so users can send money back and forth with other wallets, and he committed to data portability, so users can switch entirely to a competitor.
At the same time, Marcus said Facebook will embed only its own wallet into its messaging apps Messenger and WhatsApp, which could give the company a sizable advantage.
Multiple sources with knowledge of the deal said that the acquisition price was north of $750 million. As part of the transaction, Vungle has also reached a settlement with founder Zain Jaffer, who filed a wrongful termination lawsuit against the company earlier this year.
Whittaker and another one of the walkout’s organizers, Claire Stapleton, previously said they had faced retaliation from Google after the protest. Other employees also claimed they had experienced fallout as a result of their participation, which Google denied.
Although Substack started out two years ago as a way to turn newsletters into a paid subscription business, it’s since added support for podcasts and discussion threads. As CEO Chris Best put it, the goal is to allow writers and creators to run their own “personal media empire.”
We’re witnessing the beginning of a sweeping upheaval in how companies are allowed to obtain, process, manage, use and sell consumer data, and the implications for the digital ad competitive landscape are massive. (Extra Crunch membership required.)
Kevin Krim is EDO‘s President & CEO. His 21-year career has spanned search, social and TV advertising across start-ups and major companies like Yahoo and NBCUniversal. Sebastian Chiu is EDO‘s Chief Data Scientist. He earned his undergraduate and post-graduate degrees from Harvard, working previously as a data scientist at Dropbox.
One of the most-discussed plot twists in recent advertising has been the pivot of Direct-to-Consumer (DTC) brands to linear TV. These data-driven, digital-first players are expanding well beyond Facebook and Instagram—and becoming serious players on the largest traditional medium in advertising.
A January 2019 Video Advertising Bureau study found that in 2018, 120 DTC brands collectively spent over $2 billion in TV ads—up from $1.1 B in 2016. 70 of those 2018 advertisers ran TV ads for the first time.
But while we know that they’re advertising on TV, what may be less discussed is whether they’re succeeding on television—and what strategies they use to achieve their success.
At EDO, we have a unique and differentiated ability to measure how DTC advertisers perform on TV by tracking incremental online searches above baseline in the minutes immediately following individual TV ad airings as viewers translate their interest in advertised brands and products directly into online engagement with them.
By measuring incremental search activity across 60 million national TV ad airings since 2015, we are able to effectively isolate the effects of TV ad placement and creative decisions that are most likely to cause online engagement.
We ran the numbers on DTCs as well as advertisers in various other categories to better understand how DTCs specifically are succeeding in TV ads—and what DTCs who are considering TV advertising can do to achieve success on TV.
The DTC revolution is a quintessential David and Goliath story. In vertical after vertical, small, digital-native upstarts are changing the game and overtaking major brands. Does that story play out on TV as well—or is TV advertising one area where DTC marketers have finally met their match?
To answer that question, EDO looked at how effectively TV ads elicited viewer activity since September 2018 across eight major industry categories including DTC. Guided by historical ad performance across billions of ads, we rated ad performance based on how closely the DTC ads came to meeting the benchmark volume of brand-related online activity in the minutes following each TV ad airing.
We index each industry accordingly—giving an index value of 100 to an ad that meets benchmark standards, and below-par ads getting a score under 100 while higher-scoring ads receive a score over 100. We chose to set our index baseline of 100 to the average Consumer Packaged Good (CPG) ad since it is such a large and broad ad category. Our results are as follows:
Our recently published EC-1 on Roblox recounts the origin story and growth prospects of the company. But there’s one more piece to the story: what Roblox’s impact will be on gaming and the broader startup industry, if the company manages to multiply its current 90 million users.
Sources: TechCrunch, VentureBeat, Roblox
We’ve distilled three key ideas out of the EC-1 — lessons that may apply not only to game developers and gaming entrepreneurs, but also to the broader startup industry.
Lesson 1: UGC is a missed opportunity in games
Roblox has shown that user-generated content (UGC) is a missed opportunity for much of the game industry. The company aspires, in a way, to be the YouTube of games. And it is succeeding, with 2 million experiences to date.
The game industry generally has two problems with UGC. One is the games themselves: AAA games today are too complex, and lack the flexibility and simplicity needed for robust UGC. Roblox shows that a simpler look and feel is a valid alternative to today’s super-sized, beautiful AAA games. (Minecraft proved much the same.)
The other problem is the greater complexity of making games than, say, videos or music. Roblox solved this problem by building its own game engine, which is designed solely to output Roblox-style experiences.
But increasingly, engines like Unity are capable of accomplishing similar feats: games are getting easier to build. It’s now possible that savvy entrepreneurs could build a platform like Roblox, without building an entire game engine.
Lesson 2: New opportunities in gaming are still coming
The game industry is infamously cyclical. New platforms emerge, become promising, then grow overcrowded and competitive. Usually, this cycle relates to hardware (the iPhone, virtual reality helmets, game consoles like the Nintendo Switch) or massive changes in consumer behavior (the emergence of Facebook, the early growth of the internet). But Roblox, a pure software play, shows that exceptions could exist.
It’s still early days. Roblox reported that it paid out $30 million to game developers in 2017, doubling to $60 million in 2018. Since Roblox keeps 65 percent of revenue from its games, that means it made around $230 million total in 2018. Its top 10 developers made about $2.5 million each. Seven of its games have also entered a “billion plays” club:
Adopt Me, a newer game, hit 440,000 concurrent users in June, a new record for the platform.
When a new platform appears, it’s usually found by amateur developers first. That’s certainly the case with Roblox: its successes are being created almost exclusively by first-time game developers in their teens and twenties. At some point, professional developers are likely to conclude they can do at least as well. The current market is particularly exciting because many games are fairly simple and lightweight — recent breakout hits like Camping 2 and Weight Lifting Simulator 3 are significantly smaller than comparable games on other platforms.
For entrepreneurs interested in creating new platforms or portals Roblox’s success as a combined game engine and self-contained platform also shows that opportunities still exist — if you have the patience to wait for them to mature.
Lesson 3: Patience can create amazing growth cycles
It took Roblox 15 years to grow to its current point. But most of that growth is recent: as seen in the chart above, Roblox experienced 10x growth in about 3 years, from 9 million users in February 2016 to 90 million in April 2019.
So what went into the decade or so during which Roblox was a much smaller platform? As we tell it in the origin story: a great deal of work, and very little paid acquisition.
In its early years, Roblox did buy users, to seed a user base while it worked on an impossibly large vision that included a game engine, platform, social features, a creator community, and its own games. But after a few years, it stopped buying users.
All of its growth since has been organic. That’s from two main sources: word of mouth, and YouTube users who watch one of the many Roblox streamers. Of course, any company can try to do the same. But Roblox had the patience to build a unique product — one which took years of work to even reach partial completion.
The key to it all was long-term adherence to a long-term goal: the creation of a new category, which it calls “human coexperience”. Today, Roblox still can’t be called part of a new category; it’s a game platform. But with more years of work, it may eventually get there.
Facebook has launched a tool for UK users to report ads they suspect of being scams.
The feature can be accessed by clicking the three dotsin the top right corner of each ad on Facebook, then selecting ‘Report ad’, then ‘Misleading or scamad’ and finally: ‘Send a detailed scam report’.
So if you want to think of it as a reporting ‘button’ it’s a button that actually requires four presses to function as intended…
Once a scam ad report has been filed, the feature will alert a dedicated internal ops team at Facebook that is tasked with handling reports — so will be reviewing reports and removing violating ads.
The new consumer safety feature follows a defamation lawsuit filed in April last year by consumer advice personality, Martin Lewis, who had become exasperated by the volume of scam ads misappropriating his image on social media to try to trick users into parting with their savings.
Earlier this year Lewis announced he was withdrawing his lawsuit after Facebook agreed to beef up its response to the problem by saying it would add the scam ad reporting feature — which is exclusive to the UK for now — and establish a local team to monitor ad trends for dubious activity.
Facebook also agreed to donate £3M worth of support in cash and Facebook ad credits to UK consumer advice charity, Citizens Advice, to fund the setting up of a Citizens Advice Scams Action (Casa) service — which has also launched today.
This service will provide specialist one-on-one help to those worried they’re being scammed or who have already lost money as a result of fake ads. It will also undertaken scam prevention work, including by raising awareness of online scams in the UK.
Writing in a blog post today on the money saving advice website he founded, Lewis confirms both the Facebook scam ad report tool and Casa have launched — the former some three months tardier than Facebook had suggested at their joint press conference in January.
As regards Casa, UK Internet users who think they have been, or are being, scammed online — either by ads or other methods — can now call the service on 0300 330 3003 for one-on-one help, or access http://www.citizensadvice.org.uk/scamsaction for more info or a web chat.
Face to face appointments will also be available in England, Wales and Scotland at local Citizens Advice bureaus. Lewis writes that the service is expected to help at least 20,000 people in the first year.
“These initiatives, which are available from today, are crucial, as scam ads can have devastating consequences,” he adds, noting that his own complaints to Facebook vis-a-vis scam ads bearing his image led to more than 1,000 ads being taken down.
“The adverts, placed by criminals, often use fake celebrity images or endorsements to dupe people into investing in fake ‘get rich quick’ schemes, buying diet pills and more.
“They can lead to many people being conned out of their cash – in the case below a man in his 80s lost almost £50,000 – and have a serious impact on people’s mental health and self-esteem.”
We’ve reached out to Facebook with questions, including whether it has plans to extend the scam ads reporting tool to other markets.
In a statement provided to Lewis, Steve Hatch, Facebook’s vice president for northern Europe, said: “Scam ads are an industry-wide problem caused by criminals and have no place on Facebook. Through our work with Martin Lewis, we’re taking a market leading position and our new reporting tool and dedicated team are important steps to stop the misuse of our platform.
“Prevention is also key. Our £3 million donation to Citizens Advice will not only help those who have been impacted by scammers, but raise awareness of how to avoid scams too. At a global level we’ve tripled the size of our safety and security team to 30,000 people and continue to invest heavily in removing bad content from our platform.”
Also commenting in a statement, Gillian Guy, chief executive of Citizens Advice, added: “We know online scams affect thousands of people every year. We’re pleased the agreement between Martin Lewis and Facebook meant we could set up this dedicated service to give more help to people who have fallen victim to online scams.
“This project means we can not only support people who have been targeted, but also raise awareness of what to look out for to help prevent online scams happening in the first place. Citizens Advice Scams Action will work alongside the free and impartial help we already offer to anyone who needs advice — whoever they are, whatever their problem.”
While celebrating the launch of Casa, Lewis’ blog post points out that the initial funding “won’t last for ever” — and he calls on other big online ad players to “follow Facebook’s lead, and put their hands in their pockets”.
At the press conference in January Lewis was especially critical of Google for being less responsive to the issue and for not having easy ways for users to report scam ads running on its networks.
We’ve reached out to Google for a response.
In another recent change to its ads platform, Facebook is also now providing users with more information about why they are seeing an ad — if they click through the menu to the option ‘why I am seeing this ad?’.
The company had been criticized for displaying only extremely general targeting criteria — making the feature appear more like a smokescreen than a genuine step towards ad targeting transparency. But last week Facebook said it was now showing “more detailed targeting, including the interests or categories that matched you with a specific ad”.
It also said it will be “clearer where that information came from (e.g. the website you may have visited or Page you may have liked)”.
Facebook also announced updates to the Ad Preferences menu to provide its users with more information about businesses and third parties that upload lists containing their personal data, such as their email address or phone number, to Facebook to target them with ads — though limiting the data to a 90-day snapshot.
“This section aims to help you understand the third parties and businesses who have uploaded and shared lists with your information,” it wrote of the changes. “In this section, you’ll see the business that initially uploaded a list, along with any advertiser who used that list to serve you an ad within the last 90 days.”
Despite this, Facebook still does not let users deny advertiser uploads of their personal data to Facebook via Facebook itself.
In order to do that a Facebook user would have to contact each and every advertiser individually.
Two years have passed since Snap Inc first struck a deal with Baidu that authorized China’s largest search engine to be a reseller of Snapchat ads for companies in Greater China as well as Japan and South Korea, where Baidu runs a portfolio of mobile apps.
This week, the pair announced they have renewed the sales partnership without revealing how revenues are divided between the two and when the extended agreement expires.
Despite being blocked in China like most other western social media services, Snap has shown interest in China in various capacities, including a research and development center in Shenzhen for Spectacles. It’s also serving the country’s game developers, e-commerce merchants and other export-led advertisers who wish to capture the network’s 190 million daily active users around the world.
None of the western social giants can go it alone in China, which is why Snap chose Baidu to be its local partner to not only overcome regulatory restrictions on foreign entities but also tap the latter for language support, account management and an extensive advertiser network.
Through the deal, companies that purchase media through Baidu gain access to all forms of ad slots in Snap’s videos, real-time selfie effects, overlays and more. The return can be satisfying. Besides the opportunity to capture a predominantly young user base, advertisers are reaching a sticky group who, on average, opens Snapchat over 20 times and spends over 30 minutes on the app every day.
“With its young, vibrant user base, Snap’s advertising platform has been instrumental in driving growth for our game AFK Arena,” said Chris Zhang, vice president of Shanghai-based Lilith Games, in a statement.
“Our partnership with Snap Inc. provides Chinese companies new avenues to expand their businesses through Snapchat advertising,” said Sheng Hu, head of U.S. strategy and partnership at Baidu’s Global Business Unit that operates a range of overseas products such as Japanese keyboard app Simeji. “We look forward to connecting with marketing executives in China and beyond on behalf of Snap to discuss the benefits of these advertising solutions.”
Tomorrow, representatives from Facebook, Google, Amazon and Apple will testify before Congress in the second hearing organized as part of the House Judiciary Committee’s antitrust investigation into the world’s largest technology companies.
While the first hearing focused on the ways technology companies busted the traditional news business, this one promises to look at the “impact of market power of online platforms on innovation and entrepreneurship,” according to the committee.
Unlike the previous hearing, which featured representatives from media outlets and industry trade organizations attacking or defending the ways in which online advertising had gutted the news business, this latest outing led by Rhode Island Democratic Rep. David Cicilline will have actual tech company execs on hand to answer congressional queries.
One section of the testimony will feature Google’s economic policy head, Adam Cohen; Amazon’s associate general counsel, Nate Sutton; Facebook’s global head of policy, Matt Perault; and Kyle Andeer, Apple’s chief compliance officer.
Others expected to appear include Tim Wu, the Columbia Law professor who’s been an outspoken critic of technology consolidation and an advocate for more stringent antitrust oversight of tech companies, and Maureen Ohlhausen, a partner at Baker Botts and the former acting chairman of the Federal Trade Commission in charge of its antitrust actions.
Wu and his views sort of encapsulate much of the thinking from critics of these companies’ current dominance in the market.
“I would love, in fact, if a serious Facebook challenger took down Facebook, and I would stop calling for any antitrust action. It’s just when you become suspicious that the barriers have gotten strong enough that a company could survive, then maybe we need to have antitrust law loosened up, get things moving, and provide for the market cycle to take its place. Now eventually it will happen, but we can’t wait for 50 years,” Wu told the American Enterprise Institute in an interview earlier this year.
“It’s also possible that history would suggest that a company like Facebook, and perhaps Amazon, will soon try to get government on their side to defend themselves against competition. I don’t know what it will look like, but maybe Facebook agrees to some kind of privacy law, which for some reason is very hard for new entrants to adhere to. Amazon may try and instantiate itself as basically the national e-commerce monopolist, kind of like a Bell-regulated monopoly. That’s a next natural step, especially as a big star, to become less competitive. And so before that happens, I think we give the antitrust law its turn.”
Policy watchers can expect market criticisms of the big technology platforms to come from a few different angles (each company has different, slightly overlapping, issues that policymakers find worrisome).
For Alphabet, criticism stems primarily from the company’s dominance in online search and the ad networks it controls through its ownership of DoubleClick and AdMob (along with its ownership of YouTube’s wildly popular video platform). At Amazon, it’s the ways in which Jeff Bezos’e-commerce behemoth hoovers up sales information and uses it to inform pricing and potentially anticompetitive practices that stymie the development of new e-commerce players by promoting its own brands and products.
For Facebook, it’s the dominance of the company’s social media platforms (including Instagram and the messaging service WhatsApp) that are a cause for concern — as is its unwillingness to open its social graph for other startups. The company also elicits howls from consumer advocates for its abysmal ability to protect user privacy and data.
Finally, Apple’s control over the entire ecosystem it pitches to consumers — and the pricing policies it enforces that some critics have called extortive are cause for concern among the political class.
These competitive concerns also play out against the outsized ambitions that these technology companies have in other areas. Facebook is trying to make an end run around the existing global financial system through the launch of its Libra cryptocurrency; Alphabet, Amazon and Facebook all have designs to dominate the development of artificial intelligence in open markets; and then there’s the work these companies are conducting in areas as diverse as healthcare, mobility technologies and even space travel and high-speed networking.
With so many interests in so many areas and core businesses generating so much money, it’s easy to conflate a broader unease with these companies’ ambitions and the core anti-competitive arguments that are worthy of discussion.
For this hearing — and indeed the Congressional investigation to be successful — the focus should be less on the global ambitions of these technology companies and more on the practices they’ve enacted to stifle competition.
Now that we've moved to CA, I suppose it's a good time to share what I'm up to next! In two weeks, I'll be joining Facebook as a PM Director starting up a new initiative under the recently formed NPE team (https://t.co/HzK6Bjqzqx)
Toff’s experience also includes time spent at Google, most notably as a Product Lead for YouTube before exiting to Vine in 2014. At the short-form video app maker, Toff worked as Head of Product for a year, then became Vine’s General Manager.
Vine, of course, was later snatched up by Twitter — and there, Toff moved up to Director of Product Management before boomeranging back to Google, where his initial focus was on AR and VR projects.
Most recently, Toff worked as a Partner at Google’s Area 120, Google’s in-house incubator where employees work on experimental projects.
That’s not all that different from what Facebook appears to have in store with its own NPE Team ambitions. Similar to Area 120 or Microsoft Garage, for example, the NPE Team plans to deliver apps that will “change very rapidly” in response to consumer feedback. It will also be quick to close down experiments that aren’t useful to people in fairly short order.
Many of these efforts were fairly high-profile at launch, which made their eventual shut down more problematic for Facebook’s image. With NPE Team — as with Area 120 or Microsoft Garage — there’s a layer of separation between the test apps and the larger company. Many of the apps that the NPE Team puts out will bomb, and that’s the point — it wants to get the failures out of the way faster so others can find success.
While Toff can’t yet say what he’ll be working on at Facebook, there’s a lot of speculation that NPE Team will try to come up with some sort of answer to TikTok, the Beijing-based short-form video app that sucked up Musical.ly in 2018 and now is a Gen Z social networking hit with some 500 million-plus monthly users. Toff’s background with Vine could certainly be helpful if that were the case.
Toff says he’s hiring for NPE Team, including both UX designers and engineers.
I can't talk project specifics but can share that I'll be HIRING. I'm looking to assemble a diverse and mighty 2-pizza dream team full of creative can-doers, so if you're a UX designer or engineer (or both) and thrive in zero-to-one environments, HMU!