The State Of Evidon: Meyer on Regulation, Extending Into Performance and The Roadmap Ahead

State of EvidonScott Meyer is CEO of Evidon, an online advertising technology company.

As part of its "State of..." series of articles with industry executives, AdExchanger.com sat down with Meyer to discuss his company, his views on the space, and the state of Evidon today.

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AdExchanger.com: Where do you think we are with the online ad tech space today, generally speaking?

SCOTT MEYER: There's totally an inflection point. I've been at this a long time and I think this is the third wave, if you will. There was the first big bubble, and then there was the second one, and you can see that we're reaching another crescendo. The apex of it is still a year to 18 months away. What you're starting to see now is a pattern that has repeated itself in the past, and it will become apparent this year, which is the separation of the great from the merely good.

You're going to start to see companies that are accelerating. And as we've seen, the creation of RTB technology shows how easy it is to get into the market now with the readily available, venture capital.

So, in each category you're going to see who the market leaders are. The other ones are not going to fade away, but they'll consolidate.  That's the big picture thing that I see going on.

What keeps Evidon safe from a world of commoditizing technology?

In order to be the company that we are - doing compliance and transparency - it's very hard to be credible unless you're very cautious to never be seen as going into competition with your clients, right?

That's why we never trade in any form of media or data. We just don't. We've been around for more than two years, and everyone has seen that being a technology platform for compliance and transparency is a great business. No one's worrying anymore about, "Oh, what's the Evidon pivot? What day are they going to show up and say, ‘We're now the Evidon ad network? Thanks for trusting me with all your data.’" Frankly, that was written into our contracts with all of our clients from the beginning and was never an issue.

The other thing that's happened is that the business has evolved. The “Ad Choices” business of getting icons into ads and on websites is continuing to grow. We had a tremendous end to the year, and that momentum hasn't slowed down into the beginning of January in terms of just icons on ads. And, we're now serving almost 10 percent of our traffic outside of the U.S.

Next, we're rolling out a new service called Evidon Encompas (see release) as we've made the linkage between privacy, data security, and performance. That puts us into an even bigger market, but it's still a much bigger market that doesn't involve trading in data or media.

No one is immune from macroeconomic forces and execution risk. But we are essentially defining a brand new space, and we're the only serious company in that space. As we expand out into transparency more broadly, it's because we've got such a unique approach based on the Ghostery data. We may not be in a multibillion dollar revenue category like media, but I'd rather have us be the most respected and the largest player in a narrower but still significant space.

What comes next in the Ad Choices space?

What comes next is helping brands and networks become compliant in Europe. We're close to  having 20 clients in Europe, which is a combination of our big, US ad agency contracts and big US network and DSP contracts that have been extended to cover the EU, as well as new contracts with new customers that are just European‑based companies.

We also opened an office in London in the fourth quarter.

What's the overlap in terms of Evidon strategy between the US and, let's say, Europe, or globally? How much of your strategy has to be customized on a per‑country basis?

It's always been a global strategy. We built the platform from the beginning to be able to meet technical requirements of different policy situations around the world. Today we can support the local language in 16 different countries in Europe. We also support French, Spanish and English in the United States. So we have a lot of customizations that enable our clients to essentially work with one partner to handle compliance around the world.

The big evolution that's happening now is the concept that privacy equals performance and security. That's the bigger picture of global strategy. Because while privacy has started the conversation around the world, what's accelerating it is that you have to know who is on your website in order to be compliant with the rules, especially in Europe, but also in the United States.

If you don't know who's on your site, then you can't appropriately disclose what's there to give consumers the ability to opt-out or - as may happen in certain parts of Europe – offer some form of opt‑in. That's why we've launched this new service.

We have the only technology that enables you to accurately know who's there, because it's derived from the Ghostery library and the Ghostery panel. And this is essential. We can very quickly - without the client being required to deploy technology on their site, - tell them accurately all the companies that are collecting data.

Then, we go even farther in terms of how those companies’ tags perform - are they fast? are they slow? Then we can enable them to benchmark their company's performance against their competitors because we've got the data that's coming to us every minute of the day from the more than 300,000 Ghostery panel members.

We're actually re‑launching our website to change our positioning a little bit. Privacy is an essential piece of what we do. But, privacy is part of a larger conversation in the online advertising ecosystem about data security and performance.

It sounds like you're getting more into the analytics business.

I wouldn't say analytics. Performance.  Analytics implies that we're now dropping cookies to do things like content optimization. We're defining a new space because the Ghostery data set has given us a perspective on how websites perform and how the tags on those sites perform. Where we go over time, we'll see. We've been selling the raw Ghostery panel data to some networks in other companies, for more than a year.

But the idea for Evidon Encompass was created by our clients coming to us and saying, "Here's the specific problem I have. I have no idea who's on my website and I have X thousand websites in Y number of countries. And, I need to solve this in order to comply with the privacy guidelines. Can you help me?"

That was when the light bulb went off for us last summer to create what is now Evidon Encompass.

Can you go back to that ad network part and how it works with the Ghostery data? What's the use case there for working with Ghostery data? Do they license it from you?

Ad networks will license it because they don't know where their tags run because as they go through RTB (real-time bidding) environments, they don't have data on where ads run [in spite of dropping] their pixels.   Also, they may have code on pages that they don't know about.

A key thing that's cool about Ghostery is the data that's fed into Encompass. It allows companies to benchmark themselves. The biggest difference between your traditional analytics company and what we do now is because we've got the data from the Ghostery panel, no one has to install any code to make our service work.  We can provide companies with very powerful benchmarking against their competitive set.

So, the first level is, "OK, I need to know who's on my website in order to be compliant with these privacy programs." The next step is, "Are these companies fast or slow, good or bad? How do they impact my business?" And then the next one is, "Well, is this a lot or a little? How does this stack up relative to my competitors?" And that benchmarking is very powerful.

And where it all comes back around is through what we call "Evidon InForm" which is the compliance service that runs the Ad Choices icon and enables you to use it much more effectively because you can actually tie the data feed from what's on your website directly into the disclosures that are on your site and in your ad.

Let’s talk about the regulatory environment around online behavioral advertising and cookies. What are your thoughts on the current state of the U.S. government's look into this?

The industry and Chairman Leibowitz of Federal Trade Commission was very complementary of the work that we've done in creating the self‑regulatory program in the U.S.  When I look at the penetration, especially amongst networks and DSPs of compliance with the self‑regulatory guidelines, I think we've done a great job, but we're hardly done. There is a low threat of new legislation and/or more restrictive regulation in the United States right now. There are two areas that people need to focus on next, because if we don't, there is a risk that the goodwill that we have from Washington could turn against us again.

The first one is mobile, and the second one is companies' own websites. While the vast majority of network ads today that do behavioral advertising are running the icon, the websites on which that data is collected - especially those websites that don't serve any ads, which is all of the brand websites, for example - their disclosures are not where they need to be.

I fear that if companies get complacent and slow down on addressing the real situation on their own websites that we could be in trouble.

And then the other piece is mobile. The statistics around mobile growth are just staggering, and we've got an opportunity now as an industry to design in privacy as the mobile market develops in a way that we didn't do on the desktop.

We've kicked off a project, a project called "Mobile Choice" working with a large group of leading mobile networks and technology providers, and we're coordinating it with the DAA, which is very focused on mobile in 2012.

What about Europe?  What’s happening with regulation there?

In Europe there's a law. The E‑Privacy Directive is real. Most of the eyes are on the U.K. because the Information Commissioner's office, which is the equivalent (or closest analogy) to the Federal Trade Commission in the U.S., has been very clear that they expect companies to be compliant by May 25th of this year, so that's in four months. Exactly how you comply and the key concept is this concept of “consent” – basically anybody  that's going to be collecting data of any form except for essential website operations needs to get consent. Now, there are two important things to keep in mind about that.

The first one is it's much, much broader than behavioral advertising. So while any network that's running in Europe should absolutely be running the Ad Choices icon because that is an essential part of making them compliant, there's a lot more that you have to do, especially if you're a brand in Europe, because you need to get consent for all forms of data collection.

It's not just cookies. It's all forms of data collection including research, analytics, optimization - all of that stuff.

Let's bring it back to Evidon, the company. Can you talk a little bit about the company’s profitability and revenues?

What I can say about revenues is that we grew substantially last year, and we are very well funded. We have very strong support from Warburg Pincus. Our revenue last year was in the millions, and the company should at least triple in revenues this year. The other thing is that we have essentially more than 100 percent renewal rate because all of our existing clients have renewed – and a lot of our clients are adding more volume.

So, just on the funding front, it's sort of an open wallet from Warburg, right?

There are no open wallets from any investor. There are no open wallets at all.

But, we have very strong support from an excellent investor in Warburg Pincus who we are fortunate is 30 billion dollar fund, so I would say we're fortunate in that we have the resources to move very quickly at scale when we see opportunities which makes us unique. It's also makes us a very stable partner which is essential when you're providing a service like this to so many companies. Companies have a lot of faith in us they need to know that we're not going to go anywhere, which we're not.

So just in terms of maybe milestones you're looking at in the next 12 to 18 months for Evidon, what are some of those milestones that you're going to want to accomplish?

I've set out a few milestones for our team. The first one is to basically continue to pull away from the pack in terms of the U.S. compliance business.

Number two is there's a tremendous opportunity for us in Europe, and become the lead product there as well as establish the Evidon Encompass service.

The third one is we will roll out our mobile choice solution this year.

That’s a lot to do. If we get those three things right, which I know we will, that's going to position us well for the natural volatility and unexpected nature of the way things work in this market.

By John Ebbert

Follow Scott Meyer (@scottmeyer), Evidon (@evidon) and AdExchanger.com (@adexchanger) on Twitter.

 

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