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As Google’s Privacy Sandbox remains under scrutiny over competition concerns, the tech giant has released an update claiming experimental ad-targeting techniques it’s developing as part of the plan to depreciate support for third party cookies on its Chrome browser show results that are “nearly as effective as cookie-based approaches”.
Google has been working on a technique — called Federated Learning of Cohorts (FLoC) — to target ads based on clustering users into groups with similar interests, which it claims is superior from a privacy perspective vs the current (dysfunctional) ‘norm’ of targeting individuals based on third parties tracking everything they do online.
It wants FLoCs to enable interest-based advertising to continue after it ends support for third party trackers.
However the proposal has alarmed advertisers who argue it’s anti-competitive. And earlier this month the UK’s Competition and Markets Authority (CMA) opened an investigation of the Privacy Sandbox proposal after complaints from a coalition of digital marketing companies and others from newspapers and technology companies alleging Google is abusing a dominant position by depreciating support for third party trackers.
On the privacy front Google’s self-styled Privacy Sandbox isn’t exactly attracting effusive plaudits, either.
The Electronic Frontier Foundation has, for example, dubbed FLoCs “the opposite of privacy-preserving technology” — warning in 2019 that the approach is akin to a “behavioral credit score”. It said then that the proposals risk sustaining discrimination against vulnerable groups of people, whose online activity would be pattern-matched with others without their say-so; and could also lead to leaking sensitive info about them to third parties — without offering web users any way to escape being put in a ‘interest based’ ad targeting bucket.
With objections piling up from on sides of the aisle (advertiser vs user) — and now active regulatory scrutiny of the competition issue — Google has its work cut out to sell its preferred replacement for tracking cookies to all the relevant stakeholders. Though advertisers (and competition regulators) currently seem front of mind for the tech giant.
In an update about the Privacy Sandbox proposals today, Google appears to be hoping to alleviate advertisers’ concerns that the demise of tracking cookies will degrade their ability to lucratively target Internet users — writing that tests of the FLoC technology suggest advertisers will continue to see “at least 95% of the conversions per dollar spent when compared to cookie-based advertising”.
It’s not clear how much test data was involved in Google generating that percentage, however. (We asked and Google did not have an immediate response.) So there’s zero meat on the bone of the ‘95% minimum’ claim.
Its spokesman did note that it will be opening up public testing in March — and expects advertisers to join in kicking FLoC’s tires then. So there’s clearly going to be more detail to come on this front.
“Chrome intends to make FLoC-based cohorts available for public testing through origin trials with its next release in March and we expect to begin testing FLoC-based cohorts with advertisers in Google Ads in Q2,” writes Chetna Bindra, group product manager for user trust and privacy in the blog post, adding: “If you’d like to get a head start, you can run your own simulations (as we did) based on the principles outlined in this FLoC whitepaper.”
It’s unsurprisingly that Google continues to emphasize the relative openness with which it’s developing the Privacy Sandbox proposals — as that may help it fight antitrust accusations. But it’s also noteworthy being as the adtech industry, which has been fighting to block/delay its depreciation of third party cookies, is busy spinning up its own contenders to replace trackers — and developing those competing proposals typically with a lot less transparency than Google.
Nonetheless, Google seems a whole more comfortable quantifying FLoC’s potential impact on ad revenue (tiny, per its latest claim) vs articulating what privacy gains Internet users might expect from the proposed shift from individual tracking to run behavioral ads to being stuck in labelled buckets to run behavioral ads.
Google’s blog post has a few fuzzy mentions — like “viable privacy-first alternatives” and ‘hiding individuals “in the crowd”’ — but there’s no metric or data offered on how much privacy users stand to gain if its preferred post-cookie future comes to pass.
Test results it published in October also focused on seeking to demonstrate to advertisers that FLoCs can deliver on other relevant ad metrics. Funnily enough, Internet users’ privacy — and what happens when degrees of privacy are lost — is rather harder for Google’s computer scientists to measure.
"advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based advertising". What's the per cent of privacy improvement? #GDPR #DigitalServicesAct #ePrivacy
— Lukasz Olejnik (@lukOlejnik) January 25, 2021
“The idea is to make it so that no one can reconstruct your cross-site browsing history,” said the company’s spokesman when we asked about how the proposal will improve users’ privacy standing.
“We’re trying to address non-transparent forms of tracking, across websites, with privacy-safe mechanisms for consumers, and make it so it can’t happen. And to do so while still enabling opportunity and fair compensation for publishers and advertisers. So it’s really not even a matter of trying to approximate a kind of privacy: We’re trying to address a root critical concern of users, full stop,” he added.
FLoCs are just one part of Google’s Privacy Sandbox proposals. The company is working on a slew of aligned efforts to simultaneously replace various other key components of the adtech ecosystem. And it gives an overview of some of these in the blog post — covering proposals for (post-cookie) conversation measurement; ad-fraud prevention; and anti-fingerprinting.
Here it dwells briefly on retargeting/remarketing — referring to a new Chrome proposal (called Fledge) that it says it’s considering for a ‘trusted server’ model “specifically designed to store information about a campaign’s bids and budgets”. This will also be made available for advertisers to test later this year, Google adds.
“Over the last year, several members of the ad tech community have offered input for how this might work, including proposals from Criteo, NextRoll, Magnite and RTB House. Chrome has published a new proposal called FLEDGE that expands on a previous Chrome proposal (called TURTLEDOVE) and takes into account the industry feedback they’ve heard, including the idea of using a ‘trusted server’ — as defined by compliance with certain principles and policies — that’s specifically designed to store information about a campaign’s bids and budgets. Chrome intends to make FLEDGE available for testing through origin trials later this year with the opportunity for ad tech companies to try using the API under a “bring your own server” model,” it writes.
“Technology advancements such as FLoC, along with similar promising efforts in areas like measurement, fraud protection and anti-fingerprinting, are the future of web advertising — and the Privacy Sandbox will power our web products in a post-third-party cookie world,” it adds.
Discussing Fledge’s potential, Dr Lukasz Olejnik, an independent researcher and consultant, said there’s still a lot of uncertainty over how it might impact user privacy. “The Fledge experiment looks potentially interesting but it mixes in various proposals in this test. Such a mix would need to get a specific privacy assessment as the offered privacy qualities might be different than original claimed. Furthermore, the current tests will have many privacy precautions intended for the future, turned off initially. It will be tricky to gradually turn them on,” he told TechCrunch.
Twitter is launching what it calls “a community-based approach to misinformation.”
The Birdwatch project first came to light last fall thanks to product sleuth Jane Manchun Wong. Now Twitter has launched a pilot version via the Birdwatch website.
The goal, as explained in a blog post by Twitter’s Vice President of Product Keith Coleman, is to expand beyond the labels that the company already applies to controversial or potentially misleading tweets, which he suggested are limited to “circumstances where something breaks our rules or receives widespread public attention.”
Coleman wrote that the Birdwatch approach will “broaden the range of voices that are part of tackling this problem.” That has brings a broader range of perspectives to these issues and goes beyond the simple question of, “Is this tweet true or not?” It may also take some of the heat off Twitter for individual content moderation decisions.
Users can sign up on the Birdwatch site to flag tweets that they find misleading, add context via notes and rate the notes written by other contributors, based on whether they’re helpful or not. These notes will only be visible on the Birdwatch site for now, but it sounds like the company’s goal is to incorporate them to the main Twitter experience.
“We believe this approach has the potential to respond quickly when misleading information spreads, adding context that people trust and find valuable,” Coleman said. “Eventually we aim to make notes visible directly on Tweets for the global Twitter audience, when there is consensus from a broad and diverse set of contributors.”
Given the potential for plenty of argument and back-and-froth on contentious tweets, it remains to be seen how Twitter will present these notes in a way that isn’t confusing or overwhelming, or how it can avoid weighing in on some of these arguments. The company said Birdwatch will use rank content based on algorithmic “reputation and consensus systems,” with the code shared publicly. (All notes contributed to Birdwatch will also be available for download.) You read more about the initial ranking system here.
“We know there are a number of challenges toward building a community-driven system like this — from making it resistant to manipulation attempts to ensuring it isn’t dominated by a simple majority or biased based on its distribution of contributors,” Coleman said. “We’ll be focused on these things throughout the pilot.”
Source: https://techcrunch.com/2021/01/25/twitters-birdwatch-fights-misinformation-with-community-notes/
TechCrunch is embarking on a major project to survey the venture capital investors of Europe, and their cities.
Our survey of VCs in Stockholm, and Sweden generally, will capture how the country is faring, and what changes are being wrought amongst investors by the coronavirus pandemic.
The deadline is the end of this week.
We’d like to know how Sweden’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and, generally, how your thinking will evolve from here.
Our survey will only be about investors, and only the contributions of VC investors will be included. More than one partner is welcome to fill out the survey. (Please note, if you have filled the survey out already, there is no need to do it again).
The shortlist of questions will require only brief responses, but the more you can add, the better.
You can fill out the survey here.
Obviously, investors who contribute will be featured in the final surveys, with links to their companies and profiles.
What kinds of things do we want to know? Questions include: Which trends are you most excited by? What startup do you wish someone would create? Where are the overlooked opportunities? What are you looking for in your next investment, in general? How is your local ecosystem going? And how has COVID-19 impacted your investment strategy?
This survey is part of a broader series of surveys we’re doing to help founders find the right investors.
https://techcrunch.com/extra-crunch/investor-surveys/
For example, here is the recent survey of London.
You are not in Sweden, but would like to take part? That’s fine! Any European VC investor can STILL fill out the survey, as we probably will be putting a call out to your country next anyway! And we will use the data for future surveys on vertical topics.
The survey is covering almost every country on in the Union for the Mediterranean, so just look for your country and city on the survey and please participate (if you’re a venture capital investor).
Thank you for participating. If you have questions you can email mike@techcrunch.com
(Please note: Filling out the survey is not a guarantee of inclusion in the final published piece).
This morning, investor and SPAC raconteur Chamath Palihapitiya announced two new blank-check deals involving Latch and Sunlight Financial.
Latch, an enterprise SaaS company that makes keyless entry systems, has raised $152 million in private capital, according to Crunchbase. Sunlight Financial, which offers point of sale financing for residential solar systems, has raised north of $700 million in venture capital, private equity and debt.
We’re going to chat about the two transactions.
There’s no escaping SPACs for a bit, so if you are tired of watching blind pools rip private companies into the public markets, you are not going to have a very good next few months. Why? There are nearly 300 SPACs in the market today looking for deals, and many will find one.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
Think of SPACs are increasingly hungry sharks. As a shark get hungrier while the clock winds down on its deal-making window, it may get less choosy about what it eats (take public). There are enough SPACs on the hunt today that they would be noisy even if they were not time-constrained investment vehicles. But as their timers tick, expect their dealmaking to get all the more creative.
This brings us back to Chamath’s two deals. Are they more like the Bakkt SPAC, which led us to raise a few questions? Or more akin to the Talkspace SPAC, which we found pretty reasonable? Let’s find out.
Keyless locks = Peloton for real estate
Let’s start with the Latch deal.
New York-based Latch sells “LatchOS,” a hardware and software system that works in buildings where access and amenities matter. Latch’s hardware works with doors, sensors and internet connectivity.
The company has raised a number of private rounds, including a $126 million deal in August of 2019 which valued the company at $454.3 million on a post-money basis, according to PitchBook data. The company raised another $30 million in October of 2020, though its final private valuation is not known.
As Chamath tweeted this morning, Latch is merging with TS Innovation Acquisitions Corp, or $TSIA. The SPAC is associated with Tishman Speyer, a commercial real estate investor. You can see the synergies, as Latch’s products fit into the commercial real estate space.
Up front, Latch is not a company that is only reporting future revenues. It has a history as an operating entity. Indeed, here’s its financial data per its investor presentation:
Doing some quick match, Latch grew booked revenues 50.5% from 2019 to 2020. Its booked software revenues grew 37.1%, while its booked hardware top line expanded over 70% during the same period.
That could be due to strong hardware installation fees, which could later result in software revenues; the company claims an average of a six-year software deal, so hardware revenues that are attached to new software incomes could lowkey declaim long-term SaaS revenues.
Update: Adding some clarity here, the above are “booked” revenues, which I’ve made more clear, not actual revenues. Its net revenues, better known as actual revenues, were $18 million, with $14 million of that coming from hardware. So, today, the company is certainly more hardware-heavy than I first thought. Damn non-S-1 filings!
While some were quick to note that the company is far from pure-SaaS — correct — I suspect that the model that could get some traction amongst investors is that this feels a bit like Peloton for real estate. How so? Peloton has large hardware incomes up-front from new users, which convert to long-term subscription revenues. Latch may prove similar, albeit for a different customer base and market.
Per the deal’s reported terms, Latch will be worth $1.56 billion after the transaction. And the combined entity will have $510 million in cash, including $190 million from a PIPE — a method of putting private money into a public entity — from “BlackRock, D1 Capital Partners, Durable Capital Partners LP, Fidelity Management & Research Company LLC, Chamath Palihapitiya, The Spruce House Partnership, Wellington Management, ArrowMark Partners, Avenir and Lux Capital.”
Goalsetter, a platform that helps parents teach their kids financial literacy, announced the raise of a $3.9 million seed round this morning, led by Astia.
PNC Bank, Mastercard, US. Bank, Northwestern Mutual Future Ventures, Elevate Capital, Portfolia’s First Step and Rising America Fund and Pipeline Angels also participated in the round. The round also saw participation from a handful of individual investors including Robert F Smith, Kevin Durant, Chris Paul, Baron Davis, Sterling K. Brown, Ryan Bathe, CC Sabathia and Amber Sabathia.
Goalsetter launched in 2019 out of the Entrepreneurs Roundtable Accelerator. Founded by Tanya Court, who lost over $1 million in the 2001 bubble burst, the platform teaches financial literacy to children of all ages, helping them learn economic concepts, lingo and the principles of financial health.
After long stints at Nickelodeon and ESPN, Court understands deeply how kids learn and what keeps their attention. She vowed to make sure that her children were never ignorant of what it takes to protect their wealth and create more.
The app also allows parents to give allowance through the app, and even pay out their own specified amount for every quiz question the kid gets right in the app. Plus, family and friends can give ‘goal cards’ instead of gift cards, helping kids save for the things they really want in the future.
The company recently launched a debit card for kids, as well, letting parents control the way the card is used and even lock it until their kids have passed the week’s financial literacy quiz.
Families save an average of $120 a month on the platform, and Court says that two families saved over $10,000 in the last year.
The company is also launching a massive campaign next week for Black History Month with the goal of closing the wealth gap among Black children and kids of color through financial education.
“It’s one thing to put a debit card into your teenager’s hands,” said Court. “That’s great. That teaches them how to spend money. It’s another thing to teach kids the core concepts about how to build wealth, or to know the difference between putting your money into an investment account, or putting your money into a CD versus a mutual fund versus a savings account. We teach what interest rates are, and what compound interest means. Our focus is on is financial education because it’s not enough to teach kids how to spend.”
Goalsetter raised $2.1 million in 2019 and now adds this latest round to that for a total of $6 million raised. This latest round was oversubscribed, giving Court the opportunity to be super selective about her investors.
“Every single one of these investors has a demonstrated commitment prior to people marching in the streets in April, to social justice and to investing in diversity and inclusion initiatives and people,” said Court. “Every single one of them. That was really important because we were oversubscribed and we had the luxury of being able to pick who our investors were. Every one of the investors that we invited to our table were investors who we knew invited folks who look like us in 2019 and 2018 and 2017 to their table.”
Source: https://techcrunch.com/2021/01/25/goalsetter-raises-3-9-million-to-teach-financial-literacy-to-kids/
