2019.06.21 Last Week in Digital Media

A longer newsletter this week, but I can promise it’s worth it. There was some major news from and about Facebook during the week, so starting with those updates first:

Facebook: Calibra / Libra

After several months of speculation, Facebook confirmed the development of Libra, a cryptocurrency that would be stored in a digital wallet called Calibra. You can pre-register your interest in Calibra, but Facebook’s COO, Sheryl Sandberg says that Libra is a long way from launch (although the Libra Whitepaper suggests a mid-2020 launch).

Libra will be overseen by an entity called the Libra Association (see this website)  with the vision of being a “digitally native, reserve-backed cryptocurrency built on the foundation of blockchain technology“.  In plain English, it’s a proposal for a single global unit of currency. The whitepaper on the Libra website that explains the overall approach, that it’s a non-profit, backed by real reserves, and supported by a host of companies, not just Facebook (although notably no banks).

While Facebook claims on their blog that Calibra/Libra will be kept private from Facebook, it will be integrated into Facebook Messenger and WhatsApp. All of which has raised concerns with regulators. In the US, the Senate Banking Committee has scheduled a hearing on Facebook’s cryptocurrency approach as well as privacy considerations with a proposed date of July 16th. In Europe, France has organized for a G7 task force to investigate Libra given concerns about how Libra could be used for money laundering and is outside any form of regulation. All of which makes Libra look like a brave move considering Facebook is already under scrutiny for a host of reasons. Libra and Calibra just add further fuel to the fire.

Facebook: Content Moderation (Community and Brand Safety)

A must read article was published on The Verge this week. Authored by Casey Newton, the article examines the role of the outsourced army of people who moderate content across Facebook. The article features stories from whistleblowers who are violating their NDA to share specifics. You will notice I haven’t yet provided a link to the article, that’s because it demands a warning and reader advisory. The story is disturbing, features descriptions of violent acts, harassment, PTSD, and more. It also highlights the huge disconnect between the promise of AI/Machine Learning content moderation vs the reality of humans being needed to police the internet. There is no escaping the reality that community and brand safety requires people. The story is an important read but one final reminder, please be advised the content is disturbing, here’s a link to the full article.

Facebook: Privacy Practices

There’s a WSJ article that suggests that as part of the ongoing FTC investigation into Facebook’s Privacy Practices, emails have been uncovered that indicate Zuckerberg was more aware and involved in Facebook’s privacy discussions than previously disclosed, including participating in discussions on how much data developers collected. Facebook responded to the article “At no point did Mark or any other Facebook employee knowingly violate the company’s obligations under the FTC consent order nor do any emails exist that indicate they did.” This will be one of those things to watch to see how things play out.

Of course, there’s more to the digital media world than Facebook, here’s the other news from the last week in digital media that you may have missed.

GENERAL
  • As the 10th Anniversary of Vidcon gets closer, it has been announced that next spring Vidcon will be coming to Mexico. This brings to 4 the total number of cities that now have Vidcon events (Anaheim. Amsterdam, Melbourne, and Mexico City).
  • In news out of Cannes (and congrats to J&J  – UM Studios for 5B for the Lions Grand Prix), it’s reported that Quibi has booked US$100MM in advertising revenue prior to launch. P&G, Pepsi, Walmart, and Google are claimed to be advertisers and there’s still US$50MM worth of unsold revenue.
  • Amazon’s game streaming service twitch acquired Bebo for US$25MM. For those who don’t know, Bebo was a social network that launched a year after Facebook, went bankrupt, and then pivoted to eSports. It’s believed twitch will be leveraging Bebo’s team to build out the twitch eSports offering (FYI, bebo.com is now offline).
  • YouTube is bringing AR lenses, or what they call “immersive brand experiences” to the platform. MAC Cosmetics is the first brand to participate in the alpha of AR Beauty Try On, providing the ability for users to try on beauty products on YouTube. The underlying ad format that powers it is called “Swirl” and this tool is in limited beta.
  • the latest MAGNA advertising forecast is out, global advertising revenues are forecast to grow for the tenth consecutive year in 2019, reaching US$600BN. Linear advertising sales will shrink by -3% while digital ad sales will grow by +14%. Closer to home, in the US, digital growth has started to slow down but will still grow at 13%. You can read more details from the MAGNA Advertising forecast here.
PRIVACY, TRUST, and SAFETY
  • Reddit has partnered with Oracle to improve brand safety on the platform as Reddit continues to court advertisers. The solution focuses on “contextual intelligence” and not only covers User Generated Content (UGC) but also brand safety within custom feeds.
  • it is being reported that the FTC is investigating YouTube about privacy concerns specifically children’s privacy. Somewhat related to this, there are rumors that YouTube will spin all kids content into a separate app (WSJ paywall). There are also apparently internal debates at YouTube to turn off auto-play and content recommendations on kids video. While this may seem straight forward, it would have a broad impact on YouTube and advertising depending on how they classify children’s videos.
  • in the UK, the Information Commissioner’s Office published an “Update report into Adtech and real-time bidding” (PDF link) that raises questions about the collection of behavior data, to quote the “creation and sharing of personal data profiles about people, to the scale we’ve seen, feels disproportionate, intrusive and unfair“. The 25-page report does indicate that in 6 months there will be an “industry sweep” to ensure personal data is collected and processed in a compliant way.
  • YouTube is testing hiding comments entirely. Spotted in India but now reported in other markets, comments are displayed if a user clicks to expand them, but otherwise, YouTube suggests other videos. The test is not broadly available but is not surprising given the community and brand safety problems YouTube has had with comments of late.
  • it’s reported that Brand Safety was a hot topic at Cannes, with one of the big announcements being that 32 companies (including IPG) have formed the Global Alliance for Responsible Media. Founded by the WFA, the alliance “recognizes the role that advertisers can play in collectively pushing to improve the safety of online environments”.

Something a bit more fun after all the serious news. YouTube has remastered some classic music videos in HD. So far the music videos are only from Universal Music (as a result of licensing agreements), here’s hoping more labels sign up.

Have a great week.

Joshua