Oracle is subtracting social sharing widget AddThis from its marketing cloud.
As of May 31, Oracle will permanently terminate all AddThis services globally, including in the US.
The AddThis dashboard and support for all features will no longer be available. Oracle is asking anyone that uses the service to remove all related code and terminology from their websites.
Some publishers were alerted in mid-April.
Oracle did not respond to multiple requests for comment from AdExchanger, but, on the AddThis website, Oracle characterized the shutdown “as part of a periodic portfolio review.”
The move isn’t altogether surprising.
Behind that rather anodyne statement – “as part of a periodic portfolio review” – is a lot of drama and history, including a preemptive move by Oracle in 2019 to stop including unconsented AddThis data from Europe in third-party audience segments in an effort to not run afoul of the GDPR.
Best-laid plans
When Oracle first acquired AddThis in 2016 for $200 million as another data source for its ID graph, it had big ambitions for its advertising business.
Oracle spent billions over roughly six years to assemble a marketing and data cloud to compete with Salesforce and Adobe.
Let’s take a quick walk down memory lane, shall we?
Between 2012 and 2018, Oracle acquired:
- Social media publishing software provider Vitrue for $300 million (2012)
- B2B marketing automation solution Eloqua for $810 million (2012)
- Cross-channel marketing software company Responsys for $1.5 billion (2013)
- Data management platform BlueKai for between $350 million and $400 million (2014)
- Offline purchase data provider Datalogix for $1.2 billion (2014)
- A/B testing and personalization platform Maxymiser for an undisclosed sum (2015)
- Social bookmarking and content recommendation widget AddThis for $200 million (2016)
- Cross-device graph vendor Crosswise for $50 million (2016)
- Digital analytics and measurement firm Moat for $850 million (2017)
- Contextual targeting startup Grapeshot for $400 million (2018)
But trouble began brewing in 2018 with a double whammy.
The first blow to Oracle’s data cloud business came in March when Facebook, in response to its Cambridge Analytica scandal, announced it would stop allowing third-party data providers like Oracle, Acxiom, Epsilon, Experian and TransUnion to offer targeting data directly through its platform.
The loss of this relationship had a palpable impact on Oracle Advertising’s revenue, according to Insider.
Then, just a few months later, GDPR took effect in Europe, consent became an imperative and Oracle didn’t want to leave itself exposed.
The AddThis business model was to offer its code to publishers for free so they could access features like social bookmarking, social sharing and content recommendation. In exchange, AddThis would track URLs and user IDs, which would feed into Oracle’s ID graph.
But that model was problematic because AddThis didn’t have a built-in consent mechanism, meaning that anyone visiting sites running AddThis code would presumably not know their data was being collected.
Permission problems
Under GDPR, there are several legal bases for processing personal data, including consent and legitimate interest.
Legitimate interest allows controllers and third parties to process data without consent if they need the data to run their business or prevent fraud or other illegal activity. This is kosher so long as any processing that happens doesn’t violate a data subject’s rights under GDPR.
Some ad tech companies and data providers had been hoping to skate by using legitimate interest as their legal basis rather than consent, but Oracle rejected that approach.
On stage at AdExchanger’s Industry Preview event in January 2019, Eric Roza, Oracle’s then SVP and general manager, declared that “anyone who is relying on legitimate interest to do advertising – audience-based advertising – is putting themselves and their company at risk.”
Calculated move
Roza’s statement was a harbinger.
Shortly thereafter, Oracle quietly began shutting down its AddThis business in Europe.
By March 2019, Oracle stopped using AddThis data originating from Europe to create audiences for targeting, although European publishers were still able to use its tools for free.
While no doubt a necessary move, no longer monetizing AddThis audience data didn’t stop Oracle from being in the regulatory crosshairs.
Oracle is the subject of multiple ongoing lawsuits, including a 2020 complaint over third-party cookie tracking in Europe and a similar class-action lawsuit in the US filed last year.
The company has also conducted multiple rounds of layoffs affecting its advertising unit, including in 2019 and again last year.
In addition …
Oracle Advertising is still chugging along, but the clock has clearly run out for AddThis, which was no doubt a small enough revenue driver to make the juice no longer worth the squeeze for a company as large as Oracle.
Sunsetting a tool “that primarily functions as a third-party cookie distribution network” is a logical evolution, said Kevin Mullen, chief product officer at Roq.ad, an identity solutions provider based in Europe.
“[We’ve] seen increasing focus on customer first-party data sets within the DMP market, as many seem to be retooling toward CDP status,” he said.
But maintaining the AddThis system may have also simply become a pain in the butt for Oracle.
During the shutdown of AddThis in Europe, Oracle had concerns internally about being able to effectively extricate all the data necessary to be fully compliant with GDPR, said Brian Monroe, manager of digital security and infrastructure at BPX Energy, who served as head of cybersecurity for Oracle Data Cloud between 2014 and 2020.
Beyond extricating the AddThis data, even just locating it in all the different places it had been pulled by analysts – including separating it from other data sets with which it had been combined – was the sort of task that would make Sisyphus look like he worked an easy 9 to 5.
“My impression from people still around was that, due to regulations, the overhead of managing that platform far outweighed the benefit,” Monroe said. “It’s been known for a while that Oracle Advertising was going to pivot to reputation-based advertising – Grapeshot and Moat – and away from identity-based advertising like AddThis, BlueKai, Crosswise and Datalogix.”
Oracle isn’t alone in reevaluating its approach to identity-based advertising – and for good reason, said Jamie Barnard, CEO of privacy tech startup Compliant and Unilever’s former general counsel for global marketing, media and ecommerce.
The canary has been singing its tune from Europe for years, and regulators in the US are closely watching the online ad ecosystem.
“The digital advertising industry needs to realize that European regulatory enforcement is a bellwether for the US,” said Barnard, who noted the escalation of GDPR-related fines since the law went into effect in 2018.
In the three years after GDPR, there was a total of 300,000 euros in fines issued, he said. But over the past two years, that number has jumped by 10,000 times to more than 3 billion euros – and that’s without taking into account the $1.3 billion fine Meta just incurred over illegal data transfers to the US.
“State-level regulation in the US is going to continue this trend,” Barnard said, “and in the US, it will happen even faster.”
