The Privacy-Enhancing Technologies We Need Today

Cameron D’Ambrosi [00:00:05] Welcome to State of Identity. I’m your host, Cameron Ambrosi. Joining me this week is Mathieu Roche, CEO at ID5. Mathieu, welcome to State of Identity.

Mathieu Roche [00:00:15] Well, thanks for having me. Cameron I’m a I’m a big, big listener, so it’s an honor to be on this to make today.

Cameron D’Ambrosi [00:00:20] Well, flattery will get you everywhere, as they say, but I’m really excited for the conversation. You know, this area in particular that we’re about to dive into, I think is one that remains intensely relevant to the broader world of digital identity. But it’s, you know, a subsector, if you will, that I don’t think we have given as much love to on the podcast as maybe we should be. So hopefully this is a trend in and we’ll continue talking about kind of the the advertising and marketing space in general. But to kick us off, you know, would you mind giving us an elevator pitch as to a little bit of your background in, you know, how you came to to lead the 85 team?

Mathieu Roche [00:01:02] Sure. So I’m a I’m a I’m a I’m an ad tech guy and I’ve been in ad tech for close to 20 years now, which which gives you an idea of of my age and and I’ve been up on the on the on the data side. So doing you know data data marketing for brands and publishers basically and stumbled upon the the limitations of how we were identifying people or recognizing their device more likely in the in the mid 20 tens and and yeah and decided to jump to jump ship and to and to launch a company to to basically reinvent the notion of identity or the notion of identifier for digital advertising. So that was the that was a genesis of of 85 and fast forward five years now we’re we’re a team of 45 people. We’ve raised 10 million in venture capital money and and we’re on track to yeah. Helping brands and and and publishers interact it with like you know a data driven capabilities to make advertising interesting for both parties.

Cameron D’Ambrosi [00:02:12] I would love to hear a kind of a 15,000 foot overview of of what ID5 does and and maybe how you’re unique but maybe to kind of set the stage. And we’d certainly love some of your context here because I’m definitely not an ad tech specialist, but you know, the narrative, as I understand it across the advertising space was Internet ads, by and large, kind of started off similar to how advertising had been done historically, which was we make assumptions about the audience consuming the content. So, you know, similar to TV, like if it’s a TV show about cars will assume it’s a certain demographic that’s watching this. And we’re going to target advertisers that want to get in front of that demographic. And then more recently, to your point, we kind of went a bit down this rabbit hole of we can try and learn more about the individual devices and the assumptions about who is behind those devices. And rather than tying the type of ad that is being served to the content itself, we’re going to try and tie it to that individual person and basically follow them around the Internet so that if I’m a 27 year old man who they think is going to get engaged because I’ve been looking at diamonds, it doesn’t matter if I’m on a car Web site or a website about my dog or WebMD, I’m going to keep seeing ads that are relevant to like my interest as a consumer to buy an engagement ring. And that has led to, I think, a number of of challenges around, you know, one, increasing data privacy regulations, but two, opened up avenues for ad fraud and kind of malicious behavior. And then three, in many ways has severed the relationship between the publishers and their advertising base, which I think to some degree has created some some negative externalities. I would love your perspective, but how did I do in terms of kind of laying out some of those trends and and historical developments as to how we got to this current moment?

Mathieu Roche [00:04:16] So I think you’ve you’ve you’ve done a good job of painting the picture of, of of like the evolution of the past ten years. I think you’ve focused a lot on the on the negative consequences and some of the abuses of some of the, you know, some of the practice that have that have taken this notion of identity for advertising a bit too far. I think if you if you go back, if you rewind right like the way we did, we do advertising on non digital devices like linear television or press, right? Even even like paper newspapers is, is very much like same ad for everyone and the level of targeting will be contextual. As you said, car show, car ad Right. Make sense or based on kind of a modeled audiences. So we have a panel of 10,000 people and. We look at their behavior and we estimate that, you know, this behavior help us qualify the audience that would be watching this show or reading this paper. What what digital has introduced is the notion of a of a device which is which can be individualized. And that’s where, you know, we’re not talking about identity the way users usually talk about identity. On the podcast, we’re talking about identity as a as a proxy to understand different behaviors, mostly a device level, right? And so it’s really about individualizing device rather than identifying people. And the purpose of individualizing devices is to be able to serve a different ad to to person that are browsing the same websites or that are watching the same the same a video on the on a on a website. The benefits is that the value is so much greater. Right? Because as a brand, there’s two things you care about. One is allocating your your marketing investment in the best possible manner. So avoiding wastage in terms of, you know, not serving like I’m I’m married already, I’m not going to buy another engagement ring. Right. So it doesn’t matter that your advertising engagement ring to me, I’m I’m not a client. So a optimization of investment is one major benefit of that. The second these measurements is the ability to know what works and to kind of close the loop between your investment and the results that they can drive. Right? There’s this famous say that, you know, half of my marketing investment is useless, but I don’t know which half. Well, the promise of digital advertising is that you can, you know which half and you can actually optimize recording. So that’s the that’s the, that’s the positive, you know, benefit of, of having the ability to differentiate devices, differentiate people, you know, according to their behavior so that you can do not so much 1 to 1 because I don’t know a single brand who wants to advertise to a target of one, but you can package audiences in a much more efficient manner and you can track performance in a much more efficient manner. Now, obviously there’s been abuses, right? And you’ve you’ve mentioned things like ads that follow you around the Internet. You mentioned things like like fraud or kind of clickbait website or, you know, made for advertising websites. All of these have been kind of byproducts of the value created by digital advertising for brands and publishers. But let’s not. You know, lose sight of the of the of the big benefit of digital advertising, which is that it’s been paying for content and services that we all enjoy every day on the Internet. And that’s because it is so much more efficient and it brings so much more bang for the buck than traditional advertising.

Cameron D’Ambrosi [00:07:49] Yeah. You know, I think that’s what’s so been so interesting to me as a as somewhat of an outsider to this space is we’ve seen, you know, these challenges for platforms that are serving up all of this content and challenges of making kind of the ad driven model work, so to speak, for publishers. And yet we know for a fact, like people are consuming more content than ever. So it’s felt like a bit of a a disconnect in the sense that we know people are consuming more content and that these ads are arguably maybe more valuable than ever. But we’ve struggled to. To monetize in a way that’s kind of creating value across the chain. You know, how is ID5 looking to to solve for that? Like what are those pain points that you think need to be addressed and how are you kind of bringing your platform to bear towards solving those?

Mathieu Roche [00:08:45] So I think not everyone has struggled to monetize, right? Q The walled gardens. The big winners of the past 20 years and the big winners of the kind of data driven user level advertising trend have been Google and Facebook, right? And so are are. And this is mostly because they are able to recognize people and devices much better than anyone else. Our mission at 85 and why the reason why we’ve built the company and launched launched into the the the effort of rebuilding ID capabilities for advertising is that we want to bring those same capabilities to recognize device at scale. To the the open web, to premium publishers, to the to the CNN’s and the daily emails of the world. Right. So that’s so we can help them. You know, sustain and grow their advertising business model, because in the end of the day, advertising is what pays for the free Internet. And a free Internet has a lot of benefits for for for society at large. So. We’ve looked at it as a way to say some people have won more than others in this space. Right. Because they have better identification mechanism. Right. You’re logged into most of Google services, you’re logged into Facebook and Instagram. And because you’re logged in, you have access to you know, you have a method to recognize devices and and do a better job at identifying people’s interests, behavior, understanding their interaction with ads, and so provide value back to brands as a result. So our goal is not to make the Internet logged in for everyone because I don’t think that’s necessarily the dispirit or the or the or the the right way forward. But at least to rebuild, you know, scalable identification capabilities for for advertising across the open Web or, you know, open premium premium publishers. And by doing that also to encompass a strong can of data protection capabilities at heart. And we can probably, you know, spend more time on this. But like the notion of data protection, privacy, the recent regulations that you mentioned, they’re seen as as a limitation because they change the status quo. They, they, they they they’re seen as challenges. But I think they are really opportunities not only to rebalance the power play between the brand, the walled gardens and and and the premium publishers. We’ve seen recently that, you know, an application of the GDPR had led to a fine of over €400 million to meta. So that’s one way of rebalancing the power, right, is to going to make sure that they abide by the same rule and that the rules are are are clear. So now we have clear rules for what it means to to engage with with consumers and to use consumer data. Great. Let’s make sure everybody can use consumer data according to those rules. That’s really 80 five’s mission.

Cameron D’Ambrosi [00:11:34] And, you know, one of the more interesting things that you mentioned, I think is right, this shifting balance of power that the winners have been these these walled gardens. And it’s left, you know, folks outside those walls struggling. One of the trends that I’ve been noticing in in 2023 is right across all facets of identity. This notion of a shift to first party data that platforms are realizing like, you know, Google and Meta are not my friend, they will try and steal my customers or sell their data to my competitors for the highest bid if they can. And folks are really looking to keep more of their identity data in-house, so to speak, and or developing direct relationships. You know, we saw Bloomberg, for example, effectively announced that they are no longer going to serve up any ads to ad networks. They’re going to basically keep it all. First party relationships with advertisers directly is the trend you’re seeing from your end. And it sounds like Fiverr in particular is a great toolset that can help. You know, for example, at Bloomberg that’s looking to to cut out, you know, the real time ad auctions, monetize their audience more effectively and directly.

Mathieu Roche [00:12:49] Yeah, absolutely. I mean, data is obviously core to the promise I made earlier. I explained earlier that, you know, brands want to be able to address their target audience and only their target audience, right? So you need to know who the target audience is and need to be able to recognize it. So so that’s that’s very clear. It’s always been the case, but I think it’s even more the case. What’s changing, though, is that it’s it’s been historically very difficult for a publisher, offer a brand, for that matter, to protect their first party data, because what we’ve been using to identify customers or identify devices as being cookies, which is the least secure method, everybody can have access to their own cookie ID and use it without you being able to say or know anything.

Cameron D’Ambrosi [00:13:35] Amazing. Mathieu, thank you again. Really, really appreciate it. This is obviously an area of intense interest and I think really, really rapid growth and evolution. So thank you again for your time and for your knowledge.