Bits: Farhad’s Week in Tech: Netflix Gets a Star, and Google’s Conflicted Ad Blocker

But as Netflix keeps driving trucks of money to TV’s top producers — it plans to spend $8 billion on new content this year — the script has flipped. More and more, it’s the people who haven’t cut the cord who are missing out. Today, if you subscribe just to regular TV and don’t bother with Netflix, Amazon, Hulu and other online services, you’re missing some of TV’s biggest and most acclaimed shows. Plus, you’re paying more.

Cable subscriptions have been declining for years, and last year the decline accelerated. But the YouTube expansion shows that cutting the cord keeps getting easier, and the Netflix deal shows how non-cable services keep getting more attractive. This suggests an even faster pace of decline for cable. The bottom is going to fall out of the market, probably very soon.

Do you want Google as your ad blocker?

Chrome, Google’s popular web browser, can now block ads. This seems weird because Google is the internet’s largest advertising company. So how does an advertising company design ad-blocking software? Very, very carefully, it turns out, in a process rife with conflicts.

Google argues that over all, the internet ad business has been great for the economy and society, but that a few bad apples are ruining it all. Google, then, wants to “maintain a balance,” because “if left unchecked, disruptive ads have the potential to derail the entire system,” the company said in a blog post this week. (In a recent column, I took a different view, arguing that the digital ad business is at the root of most of the internet’s problems.)

So Google’s new ad blocker is designed to block some ads, not all of them. The software will eliminate a dozen types of ads that the company deems intrusive or disruptive. But most ads, including most from Google, would skate through just fine.

But how does Google decide which ads are too disruptive? The company says it relied on input from an ad-industry group, the Coalition for Better Ads. But as the The Wall Street Journal reported, the group’s membership and its research were heavily influenced by Google. This has led to recriminations in the industry, with rivals charging that Google is using the veil of self-regulation to diminish its competitors.

It’s an interesting fight, but it may also be an irrelevant one. What’s unclear is whether Google’s limited ad blocker will stem the rising popularity of more restrictive ad blockers. For many people who hate online ads, it could already be too late for half measures.

Which tech stories would you like to read?

The New York Times’s tech reporting team is gathering in San Francisco this week for a team-building offsite. I’m looking forward to forgetting to catch Mike Isaac in a trust fall. We’ll also be talking about some of the major themes we’re aiming to cover in the tech world this year — artificial intelligence, crypto and the responsibility of tech companies, for example.

But enough about us. What would you like to read more about? Which technologies, people and ideas in the tech world do you think deserve more scrutiny, investigation or wider notice?

Send your thoughts — but, please, not pitches for your company — to bits_newsletter@nytimes.com.

Farhad Manjoo writes a weekly technology column called State of the Art. You can follow him on Twitter here: @fmanjoo.

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As ad dollars erode, tech investments point the way forward for networks


There’s no doubt that linear advertising revenues are going to decline in the coming years for big networks.

Squeezed by Facebook and Google on one side, and impossible consumer expectations created by Netflix, Amazon and other streaming services on the other, the idea of an ad-supported entertainment business is under siege.

This chart from the analyst firm Moffet Nathanson shows just how grim the situation is for companies not named Google or Facebook.

But in a wide-ranging conversation at the Code Media conference in Huntington Beach, Calif., the top executives of Turner and A+E Networks elaborated on how their app businesses and investments in startups are driving new growth.

While it’s not a revelation that apps are a great way to make money and build a deeper relationship with consumers, and that technology is the future for networks (frankly the tech companies that have overrun Hollywood in the past few years are a stark example of this new reality), the success of Turner’s Boomerang service and the investments that A+E have made in companies like Atlas Obscura and Vice highlight alternative ways to make money (I’m also looking at you, Vox and Recode).

Turner launched Boomerang last year as a subscription service for cartoons in a joint venture between Cartoon Network and Warner Brothers. The app now counts roughly 150,000 subscribers, according to Turner chief executive John Martin. Martin also said the company was seeing success with its Filmstruck service, which leverages the Turner Classic Movies brand to offer a curated slate of movies to watch.

Martin said Filmstruck “provides a learning experience into what the future of this business is going to be which is tapping into fandom.” 

For Martin, the idea of curation is going to be increasingly important as the amount of available distractions and stories explodes across different media properties. If the future of Turner is, as Martin says, “being responsible for controlling the consumer experience from start to finish,” then guiding people to apps where Turner can control that experience just makes sense.

Meanwhile, A+E has leveraged its investments in Atlas Obscura and Vice to provide new types of marketing dollars and open the network to an entirely new audience, according to chief executive Nancy Dubuc.

Dubuc pointed to the company’s investment in Atlas Obscura as being a great way to move its audience from television at the History Channel, through Atlas Obscura to experiential marketing campaigns for a credit card company like American Express that would give benefits to new applicants.

Dubuc also said that Vice Media has been a success for the company. “Vice came to be around converting a channel so that you can reach a millennial audience,” Dubuc said of the A+E decision to convert its H2 channel over to Viceland.

“They have the second most upscale audience to Bravo,” Dubuc says of the Viceland channel. While the channel hasn’t seen tremendous subscriber growth, it’s reaching an audience of 18-34-year-old males with household incomes over $60,000, she said.

Those numbers will appeal to any marketer.

Nor are the two networks alone in looking to technology for returns. According to people with knowledge of the situation, that’s one of the reasons why Fox bought TrueX four years ago — to improve the experience for consumers watching ads online.

“Putting aside the investments in other companies, it’s about having deep relationships with consumers however you get there,” says one technology exec at a major studio. “Having an app on somebody’s phone is perhaps the best way to get there… There’s a fundamental thesis there. In today’s world you not only have to think about being broad you have to think about being deep too.”

Featured Image: kentoh/Shutterstock (IMAGE HAS BEEN MODIFIED)

Unilever warns social media to clean up “toxic” content


Consumer goods giant Unilever, a maker of branded soaps, foodstuffs and personal care items and also one of the world’s biggest online advertisers, has fired a warning shot across the bows of social media giants by threatening to pull ads from digital platforms if they don’t do more to mitigate the spread of what it dubs “toxic” online content — be it fake news, terrorism or child exploitation.

“It is critical that our brands remain not only in a safe environment, but a suitable one,” CMO Keith Weed is expected to say at the annual Interactive Advertising Bureau conference in California today, according to extracts from the speech provided to us ahead of delivery. “Unilever, as a trusted advertiser, do not want to advertise on platforms which do not make a positive contribution to society.”

The remarks echo comments made last month by UK prime minister Theresa May who singled out social media firms for acute censure, saying they “simply cannot stand by while their platforms are used to facilitate child abusemodern slavery or the spreading of terrorist or extremist content”.

Unilever’s Weed is expected to argue that consumers are worried about “fraudulent practice, fake news, and Russians influencing the U.S. election”, and are sensitive to the brands they buy becoming tainted by associated with ad placement alongside awful stuff like terrorist propaganda and content that exploits children.

“2018 is either the year of techlash, where the world turns on the tech giants — and we have seen some of this already — or the year of trust. The year where we collectively rebuild trust back in our systems and our society,” he will argue.

Online ad giants Facebook and Google have increasingly found themselves on the hook for enabling the spread of socially divisive, offensive and at times out-and-out illegal content via their platforms — in no small part as a consequence of the popularity of their content-sharing hubs.

While the Internet is filled with all sorts of awful stuff, in its darkest corners, the mainstream reach of platforms like Facebook and YouTube puts them squarely in the political firing line for all sorts of content issues — from political disinformation to socially divisive hate speech.

The fact Facebook and Google are also the chief financial beneficiaries of online ad spending — together accounting for around 60 per cent of online ad spending in the US, for example — makes it difficult for them to dodge the charge that their businesses directly benefit from divisive and exploitative content — all the way from clickbait to fake news to full blown online extremism.

Facebook’s 2016 dismissal of concerns about fake news impacting democracy as a “pretty crazy idea” has certainly not aged well. And CEO Mark Zuckerberg has since admitted his platform is broken and made it his personal goal for 2018 to “fix Facebook“.

Both companies faced a growing backlash last year — with a number of advertisers and brands pulling ads from YouTube over concerns about the types of content that their marketing messages were being served alongside, thanks to the programmatic (i.e. automatic) nature of the ad placement.

While Facebook got a political grilling over hosting Kremlin disinformation — though Putin’s online dis-ops clearly sprawl across multiple tech platforms. But again, Facebook’s massive reach garners it a greater share of blame — as the most effective channel (we currently know of) for political disinformation muck spreading. (Last fall, for example, it was forced to admit that ~80,000 pieces of Russian-backed content may have been viewed by 126M Facebook users during the 2016 US election.)

Google responded with alacrity to boycotts by its own advertisers last year, saying it would expands controls for brands to give them more say over where their ads appeared on YouTube, and by taking “a tougher stance on hateful, offensive and derogatory content” — including demonitizing more types of videos.

As part of its attempts to de-risk the user generated content its business relies on, and thus avoid the risk of further spooking already spooked advertisers, it’s recently been removing videos of the so-called ‘Tide Pod Challenge’ — i.e. where people film themselves trying to consume laundry detergent. Videos which it had previously left online.

Incidentally Tide Pods aren’t a Unilever brand but their parent company, Procter & Gamble, also roasted social media firms last year — calling for them to “grow up” and slamming the “non-traditional media supply chain” for being “murky at best, and fraudulent at worst”.

Unilever’s Weed also takes aim at ad fraud in his speech, noting how it’s partnered with IBM to pilot a new blockchain tech for advertising — which he touts as having “the potential to drastically reduce advertising fraud by recording how media is purchased, delivered and interacted with by target audiences, providing reliable measurement metrics”. (Can blockchain really fix click fraud? That Unilever is entertaining the idea arguably shows how far trust levels have fallen.)

But his main message is tilted at social media giants’ need to “build social responsibility” and invest in trust and transparency to avoid damaging the precious substance known as ‘brand trust’ which these tech giants’ revenue-feeding digital advertisers depend on.

Though the speech seems rather less clear on exactly what they should do to vanquish the toxic content their business models have (inadvertently or otherwise) been financially incentivizing.

Governments in Europe have been leaning on social media giants to accelerate development of tech tools that can automatically flag and remove problem content (such as hate speech) before it has a chance to spread — though that approach is hardly uncontroversial, and critics argue it whiffs of censorship.

Weed’s message to social media can be summed up as: This is a problem we’ll work with you to fix, but you need to agree to work on fixing it. “As a brand-led business, Unilever needs its consumers to have trust in our brands,” he’ll say. “We can’t do anything to damage that trust -– including the choice of channels and platforms we use. So, 2018 is the year when social media must win trust back.”

Unilever is making three specific “commitments” relating to its digital media supply chain:

  1. that it will not invest in “platforms or environments that do not protect our children or which create division in society, and promote anger or hate”, further emphasizing: “We will prioritise investing only in responsible platforms that are committed to creating a positive impact in society”
  2. that it is committed to creating “responsible content” — with an initial focus on tackling gender stereotypes in advertising
  3. that it will push for what it dubs “responsible infrastructure”, saying it will only partner with organizations “which are committed to creating better digital infrastructure, such as aligning around one measurement system and improving the consumer experience”

So, while the company is not yet issuing an explicit ultimatum to Facebook and Google, it’s certainly putting them on notice that the political pressure they’ve been facing could absolutely turn into a major commercial headache too, if they don’t take tackling online muck spreading seriously.

tl;dr massive, mainstream success has a flip side. And boy is big tech going to feel it this year.

Facebook and Google both declined to comment on Unilever’s intervention.

Featured Image: Bryce Durbin/TechCrunch/Getty Images

Google fined $21.1M for search bias in India


Another antitrust fine for Google. India’s competition commission has issued a 1.36BN rupees (~$21.1M) penalty on the search giant for abusing its dominant position in the local search market for online general web search and web search advertising services.

“Google was leveraging its dominance in the market for online general web search, to strengthen its position in the market for online syndicate search services. The competitors were denied access to the online search syndication services market due to such a conduct, writes the Competition Commission of India (CCI) in a press release.

“Further, prohibitions imposed under the negotiated search intermediation agreements upon the publishers have been held to be unfair as they restricted the choice of these partners and prevented them from using the search services provided by competing search engines.”

Detailing a specific instance of Google’s search bias, the CCI says its investigation found that Google was directing web users who were searching for flights to its own flight search page — and thereby disadvantaging businesses trying to gain market access, while also unfairly imposing its products on users of general search services as well.

The watchdog did also clear Google of any competition violations related to other elements of its business — specifically specialized search design (OneBoxes), AdWords, online intermediation and distribution agreements.

The original complaint against the company was filed in India in 2012 by a local matchmaking website.

Commenting on the order, a Google spokesman told us: “We have always focused on innovating to support the evolving needs of our users. The Competition Commission of India has confirmed that, on the majority of issues it examined, our conduct complies with Indian competition laws.

“We are reviewing the narrow concerns identified by the Commission and will assess our next steps,” he added.

The size of the CCI’s fine was calculated based on Google’s revenue from its operations in India only, and equates to around 5 per cent of its turnover in the market.

Meanwhile Google’s parent company, Alphabet, reported full year revenue of $110.8BN for 2017. So $21M really is just pocket change for the US tech giant — which also continues to flesh out the feature set of its vertical search products.

Last summer the European Union’s Competition Commission made its presence more firmly felt by slapping Google with a record breaking $2.7BN antitrust fine relating to the Google Shopping search comparison service and following a multi years investigation.

In that case search placement that privileges Google’s own commercial products also got the company into hot water.

The EC’s antitrust watchdog objected to it systematically privileging its own shopping product in search results and also found that it had been demoting rival vertical search services in its general search results. That combination of actions was deemed illegal under the bloc’s competition rules.

In the EU Google has since made changes to how it displays shopping search results to try to remedy the situation — and avoid further fines — by letting anyone bid for the ads it displays at the top of product-related search results.

However recent analysis of how that remedy is working suggests it’s not made material difference to competitors — with Google’s own shopping search ads still accounting for more than 99 per cent of the ads displaying alongside shopping searches. And Google rivals have called for more changes.

The EU watchdog is also continuing to actively investigate other areas of Google’s business, including its Android operating system.

And has publicly acknowledged complaints against other Google products — including maps and travel search, with the bloc’s antitrust chief suggesting it may open other investigations.

Featured Image: Carlos Luna/Flickr UNDER A CC BY 2.0 LICENSE

German antitrust office starts asking questions online ad platform giants


Germany’s national competition regulator has announced it’s looking into market conditions in the online advertising sector, responding to to concerns among advertisers that a lack of transparency could be skewing market conditions.

It says it could open up a full sector enquiry depending on results of its initial probe.

The antitrust office says it will start by looking into the effects of technical developments on the market structure and market opportunities of the various players involved. It also specifies it will investigate whether large ad platforms like Google and Facebook are operating as “walled gardens”, and consider potential impact on competition.

Together the two tech giants accounted for more than 60 per cent of US online ad spending in 2017, according to eMarketer.

“Due to the great economic importance of this sector for advertisers and content providers active on the Internet and in view of discussions about the difficult competitive environment in this market, we have decided to examine this sector,” said Andreas Mundt, president of the Bundeskartellamt, in a statement.

“The issue of access to and the processing of data is also highly relevant from a competition point of view,” he added, saying “large single companies with considerable market relevance like Google or Facebook have emerged which, in the view of some market players, have been able to set up closed systems, so-called ‘walled gardens'”.

The global turnover of online advertising is estimated at more than $200BN last year, according to eMarketer data, cited in a report by the Federal Cartel Office. Of that €5.5BN is generated in Germany — accounting for around 30 per cent of the overall ad spend in the country.

As a first step, the Bundeskartellamt says it intends to hold discussions with industry players to gather viewpoints and aim to narrow down the scope of its probe.

Questionnaires will be sent out to market participants this spring, it added.

After that it could move on to conduct a full sector inquiry — saying this could be triggered “if specific circumstances suggest the competition in a sector may be restricted or distorted”.

We’ve reached out to Google and Facebook for comment but at the time of writing neither company had responded.

The Bundeskartellamt has also published a paper on online advertising, which sets out some of the issues of concern and contention.

Among the concerns it lists is how Google’s launch of accelerated mobile pages (AMP) — ostensibly for supporting faster load speeds of mobile web pages — could “lead to advertisers being tied to Google” on account of AMP-enabled delivery of sites being via Google’s servers.

Google expanded the AMP project by adding an AMP for Ads program, in July 2016, encouraging marketers to create similarly optimized ads. (Facebook, meanwhile, has its own mobile accelerated format, called Instant Articles, though it added support for Google’s AMP format in May last year.)

The antitrust office points out that improved load times for AMP-enabled sites also means they will end up with a better Google ranking, and critically flags “the fact that AMP also impacts SEO”, before discussing other technical developments which Google is driving that could also impact a site’s Google’s ranking.

“Google is also currently rolling out a new mobile-first index,” it writes. “In future, preferentially the content of the mobile version of a website, rather than that of the desktop version, will be added to databases used to generate search results. This development, which will directly affect Google searches, could have a considerable impact on SEO and thus on a key aspect of online advertising, critics claim.”

The report also discusses the advertiser criticism of big ad platforms for operating as walled gardens — saying the complaint is that a lack transparency makes it more difficult for advertisers to independently measure coverage or impact.

Walled garden platforms are also accused of prioritising their own inventory on their own platforms — a claim the report points out is “hard to make out given that the platforms are closed to third parties”.

A lack of transparency is also cited as a potential contributing factor for fueling ad fraud — combined with the growth in programmatic advertising (the latter is also flagged as a brand safety issue, as a result of programmatic systems automatically placing ads — something caused problems for YouTube last year).

On the issue of access to data, the report says the concern is big platforms have “huge market advantages” on account of combining their reach with data depth. And it points to concerns raised previously by the Monopolies Commission over how a concentration of ad-relevant data in individual companies could create competition problems.

“Where the quality and quantity of data increasingly become a fact which is critical for the success of placing targeted advertising, concentration in this field could have considerable competitive feedback effects on the online advertising market,” it writes. “This in particular applies where individual companies have exclusive access to particularly relevant data volumes, for instance on account of interacting directly with users.

“Network effects could also have a role to play here.”

Facebook Bans Ads for Bitcoin and Other Cryptocurrencies

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Although Facebook’s chief executive, Mark Zuckerberg, has expressed an interest in digital currencies, the company said ads for them were “frequently associated with misleading or deceptive promotional practices.” Credit Jeff Roberson/Associated Press

SAN FRANCISCO — Want to get rich quick through Bitcoins or other virtual currencies? You’ll have to do it without Facebook.

The social network said Tuesday that it would ban all ads for Bitcoin and other cryptocurrencies, in order to stop promotions that it sees as “frequently associated with misleading or deceptive promotional practices.”

Under Facebook’s new policy, no ads from well-known digital currency exchanges or for initial coin offerings will be allowed. Among those who will be affected is James Altucher, a self-described “crypto genius” whose viral ads have become a talking point in how the cryptocurrency boom has led to scams and wild price fluctuations.

The New York Times Explains...

Facebook’s move followed questions about whether it has done enough to protect its site from bad actors. The company has been trying to clamp down on misinformation and false news after admitting last year that Russian agents had used it to spread divisive and polarizing messages.

The world of cryptocurrencies, which people have flooded into as prices soared in recent months, has also increasingly raised fears that parts of the market are dogged by scams. The Securities and Exchange Commission said Tuesday that it had halted what may have been a fraudulent initial coin offering that asked people to fund what was supposed to be the world’s first “decentralized bank.”

Rob Leathern, a Facebook product management director, announced the ban on cryptocurrency ads in a blog post. He said the ban was intentionally broad, as Facebook seeks to “better detect deceptive and misleading advertising practices.”

Mark Zuckerberg, Facebook’s chief executive, has recently expressed an interest in digital currencies. In a Facebook post this month, he wrote that he was studying how to introduce cryptocurrency to his company, adding that he thought it would “take power from centralized systems and put it back into people’s hands.”

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Google expands controls to let you mute those annoying ads that follow you on every site


You know those ads that seem to follow you to every website? You went to one site one time to check out a thing and bam! that site’s ads now pop up on every site you go. Well, now Google will let you mute them.

At first, it may seem an odd move. Google makes money on its ads business and giving advertisers free reign to stalk you on every site seems really good for companies hoping to remind you of that thing you checked out one time. But the search giant wrote in a blog post out today that it wants to give you, the consumer, more transparency and control.

It’s also good for business. Barraging you with reminder ads for the thing you are no longer interested in is not useful for you and is a waste for the business hoping to get you to come back.

Google uses the example of someone looking for snow boots so we’ll go with that. You look up Snow Boots Co. for some research but decide to go with another type of snow boot not on that site or just decide you’re no longer interested. That site might still be sending you ads, even though you’re not into them anymore. It’s very annoying to keep seeing the thing you don’t want everywhere. But now you can shut it all down by muting that advertiser.

You could already mute ads and adjust ad settings these past few years but now Google is offering a way for you to mute those pesky reminder ads in a new control in Ad Settings.

It will also mute the ad across devices. So if you mute it on your smartphone, Google will also mute that ad on your laptop.

It also plans to roll out the new controls on more platforms in the future like Youtube, Search and Gmail.

On top of all that, Google is also expanding controls for another unwanted ads feature it implemented in 2012 that allows you to mute ads you don’t want to see anymore.

“Millions of people use Mute this Ad on a daily basis, and in 2017, we received more than 5 billion pieces of feedback telling us that you mute ads that aren’t relevant,” Jon Krafcik wrote on the Google post explaining the updates. “We incorporated that feedback by removing 1 million ads from our ad network based on your comments.”

Of course, these updates only affect ads rolled out within Google so you may still see reminder ads from other places. It also can’t get rid of the annoying barrage of ads from your Facebook and Instagram feeds.

The good news is all you have to do to shut down those annoying reminder ads now is to go to Google’s Ad Settings to see the ads currently targeting you and hit mute.

Featured Image: Getty Images