Krux Digital Study: Significant Data Skimming Leads to Revenue Loss for Premium Publishers


Krux Digital Study: Significant Data Skimming Leads to Revenue Loss for Premium Publishers

Third parties initiate 31 percent of all data collection, resulting in annual revenue exposure of at least $850M for premium publishers

 
SAN FRANCISCO - November 9, 2010 - Krux Digital today released findings from a first-of-its-kind study that uncovered the immense scope and scale of data skimming and data theft across the advertising-supported digital media landscape. Looking at the top fifty Web sites nationwide, the Krux Digital study found that data leakage via third party data collectors resulted in at least $850 million in lost revenue annually for premium publishers and affected the overall experience for consumers.
 
The study, which utilized a proprietary cloud based data scanning technique, also identified and analyzed the categories of companies that actively collect data, on what site and how those companies gain access to Web sites and audiences. Key findings include:
 
31% of all data collection was enabled by parties other than the publisher, often without their control or consent
55% of all companies collecting data on a website also brought in other companies to collect data as well
27% of all collection was conducted by parties that are potentially competitive to publishers in media or data sales
167 different companies were observed participating in active data collection across just fifty publisher sites, few of whom appeared to be doing so in the publishers' interest or at their request
"The publication of these findings represents an important step forward for the industry," said Peter Naylor, EVP of Digital Media Sales at NBC Universal. "Krux's study, for the first time ever, puts the numbers to the scale and economic impact of this troubling market trend."
 
'Gray market' harvesting and reuse of consumers' data signatures is becoming commonplace, enabling a massive shift in ad spending away from premium publishers into audience-based buying via secondary channels. Data piracy at this scale represents a threat to consumer privacy and poses huge business risk for publishers, as third parties effectively reap the gains of publishers' investments in the content that brings consumers to their Web sites in the first place.
 
"Publishers who leak data leak revenue," said Tom Chavez, Krux Digital co-founder and CEO. "Market middlemen represent the most immediate threat when publishers' data is used to create directly competitive audience-based offerings for advertisers. The mid-term threat is page latency – the more rogue pixels that get crammed into a publisher page, the longer the wait time for users, the lower the publisher's search rankings and the sharper the decline in overall site traffic over time."
 
Across the fifty ad-supported Web Sites Krux sampled, a digital publisher could see as many as forty data collection events with every single page view they serve. Each of those events represents an instance when a 'cookie' is either set, referenced or modified on a user's browser. Parties other than the publishers themselves initiated approximately a third of this data collection, indicating huge volumes of unauthorized data skimming or theft. In every such instance, the data that is skimmed could be used to build broad audience segments to enable targeting elsewhere on the Internet.
 
To assess the revenue exposure publishers face from these types of data collection, Krux collaborated with its team of Stanford economists. Both the revenue exposure analysis and the cross-industry data collection study were conducted in August and September 2010 and examined fifty top ad-supported Web properties. These properties included major content portals, social media sites, general interest sites, and niche publishers, providing a broad, diverse, and representative sample of Web destinations.
 
Summary and detail findings from the Krux Cross-Industry Study, as well as the companion revenue exposure report, can be found on the company's website at www.cis.kruxdigital.com.
 
About Krux Digital:
 
Krux Digital, founded in early 2010, gives websites a platform to safeguard, manage, and make responsible use of consumer data signatures across multiple sources, formats, and devices. With Krux, websites become more secure, more intelligent conduits of consumer interests, behaviors, and intent. With Krux, consumers gain confidence that their favorite websites are operating under the plain light of day. Many digital media publishers are adopting Krux technology, including companies such as Forbes.com and msnbc.com. Find out more at www.kruxdigital.com.
 
Press Contact:
Ben Crain
ben@kruxdigital.com or press@kruxdigital.com