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tv   Key Capitol Hill Hearings  CSPAN  August 26, 2016 7:00pm-8:01pm EDT

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education, but in particular higher education are very difficult to quantify. and in the absence of clear, agreed upon metrics for quantify occasion of outcomes, you end up makes a lot up. i do think, however, there's a baseline for which we can build. there are certain aspects that are -- social outcome. objective outcome measures about program completion. there similarly are rather objective measures about what happens to people after they complete, who goes on to graduate school, who goes on to productive employment. is that productive employment related to their field of study. and then beyond that there are outcome measures that i think are best defined by institutions themselves, according to their mission. and i think it's incumbent on all folks who lead institutions
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or parts of institutions to challenge ourselves to be more rigorous in identifying the outcomes that we value and beginning to build up a body of work, measures of those outcomes that we can talk about over time. i think the holy grail in all of this is to be able to develop longitudinal systems of data about outcomes and tracking changes in individual's lives over time. and at the state level, there are several states well along in this project. i wish we were further along in the federal government. and i think there's an opportunity for not only institutions, but companies to develop tracking systems that would help institutions measure the process of the folks who participate. >> so you have, as i think many in the room know, some of your own scars in outcomes
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measurement. as i read in the "the new york times," you and i, we didn't talk about this at the time but u read in the "the new york times" when you took your job president obama had in mind a college ratings system pretty clearly in his head that he wanted you to do. you showed up and he said ted, i need you to do this for me. and you said i expect mr. president, i'm going to try. and then how many trips did it take to the white house to kind of talk him off of that to ultimately what you were able to accomplish? >> well, so like all things, this was definitely a team sport and it was an evolution and a learning for a lot of people across government as we looked to build out a ratings system. and in the end i think that we all made the right decision to do a better thing. and we chose to enhance our college score cord with new data and information on that score
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card that had been previously unavailable, including a data match between our data and inside federal student aid and inside the governments enrollment numbers and ipads to co combine that with irs information to give the first reliable portrait of income outcomes for graduates both at their three years out and at ten years out, which we hope give users a sense of trajectory. we want to improve on that by moving from the institutional level to the program level and we'll keep at it. what we essentially decided in the nugget of our decision was that rather than tell people what the government thought about institution xy and z -- >> which was the president's idea? >> which was the original idea. >> this is why he's in politics
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and i'm not. >> rather than tell people what the government thought, we would create a flexible tool where students, parents, families could ask the questions they wanted, that they valued and so students can now search by average income, they can search by the diversity of the student body, search by the size and shape of the institution, they can search by completion rate, they can search by net tuition, by family income which is another important advance to be able to ask the question, not just is this college expensive and look at the sticker price, but what's this college going to cost for a family in my circumstance. and that's turned out to be rev la toir for many families as they compare the sticker price of well-endowed private institutions against struggling public institutions, for example. so long version, try to make it a little shorter, is that we believe the tool that we have
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put up is a tool that is flexible, that responds more to the expressed needs of students and their families, is a helping tool to counselors and others who are working on increasing college going among first generation and low-income students. and the other thing we did, which is probably longer term better benefit, is that we made the determination in the spirit of the president's directive that we be a very transparent administration. that we made all of the data available. so not only are the data available on spreadsheets but we created open apis. and as we speak, there are developers and entrepreneurs who are making use of the data we have provided to create tools for students and families and counselors. and we think that that's probably the long term best benefit -- >> right. >> -- of that work especially as we continue to improve the data. >> and if you're an education president or zar and you had a
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compliant congress and all of the other federal agencies you could command, what other data would you get? to make the most perfect data system there. private sector, public sector, critical. what other data sets would you like to see in there other time, if you could? >> we would love to see social security administration data. we've bedwun to make crosswalks between data in the department of defense and the va with our federal student aid databases. the aim of that crosswalk is to make it possible for us -- there's a legislated student loan discount rate that active duty service members can earn. and now rather than applying for that, we're able to just draw across their service records and make the adjustment automatically. but we also want to be able to
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make those data about -- for example, service members experience, using department of defense gi bill money. we want to make that available as well. on the social security side, we announced last week that we had done a similar match with social security to identify americans who are totally and permanently disabled who still have student loans. and we found that there are about 385,000 americans who are totally and permanently disabled who have student loans. they're eligible to have those loans relieved. so even if we aren't putting the data out, we're working with our colleague agencies to create much, much better -- make government work much better. one more, josh, is the department of labor, is that whether it's at the end of a credential program, a certificate program, an associates program, a bachelor's program, a ph.d. law degree, md, all of the higher education is
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preparing people for the world of work. i think if we were to have open access to all of that information we would be able to have a much clearer sense of the pathways that students actually take through their careers and where higher education in particular and an investment in higher education has a disproportionate positive impact in people's trajectories. >> so now that we're done walking out on a topic, let's go to a political third rail topic. >> can we stay on the -- >> no. >> i could talk about hhs and the relationship of health outcome. >> i'm going to grab the third rail. we'll see how this goes. this is a me and you thing. i regulate capital for a living. are we in an adversarial relationship? where is our relationship? how are we doing in. >> i think we're good. >> are we okay? maybe what i'm really asking is,
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you know, during the obama administration there was obviously a controversy if you were a higher ed investor and i can imagine any number of investors and managers and others fairly hard done by education, by the department of education's policies during this period. i heard secretary duncan talking in new york saying frankly if we could have done more, i wish we would have done more. he was completely unapologetic. if you want to aes relationship, pick the hardest topic. what do you say to folks who wonder what you did there and why you did it, and what should the lessons be to folks on my side of the relationship coming out of that? >> yep. couple of things. so secretary duncan says, and i have said on the record, secretary king as well, that we really are agnostic about
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organizational form, what we care about. >> capital structure. you don't care. >> don't care. what we care about are outcomes. show me institutions that are working for students and i'm going to stand up and clap. show me institutions that are screwing students over and i'm going to do everything in my power to change that. and i think that that's the situation that we found ourselves in. and hopefully we have sent powerful market signals to our colleagues across the higher ed sector that outcomes matter and that we'll all hold each other accountable for that. i think at an even deeper level, josh, it's not antagonistic because, as u said a while ago, education is a long term play. it's a long term play from a policy point of view and in an investment point of view.
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in the end there is such a thing as gravity. and that gravity is all around student outcome. and working on improving student outcomes is good investment strategy and working on good student outcomes is a great regulatory strategy. so i think in the end they come together. i think what joins us along the journey is focus on data, transparency and information that feeds the how are you doing on the outcome side. i think that it's quite important for us to have good information. it's quite important for investors to have good information about how understand cushions are doing. so my hope is that hour joint interest in improving and insuring high quality student outcomes for low-income minority students will be best served by making more data more available more of the time so that we can, from our various vantage points,
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be making the right decisions to support the institutions that are doing the right thing. they're going to prosper. >> so having draped that third rail and not gotten entirely electrocuted, let me move to maybe another. accreditation. >> now we're really out of time. >> does it need to be -- no. we have four minutes and 32 seconds. can we talk about accreditation? can we do that? >> yeah, sure. >> does it need to be fixed? is it broken. >> no. did i go through those fast enough? so i will put my cards on the table. i am a former acreditor. i served for the western association of colleges and universities for i think six years. i've seen accreditation from the point of view of the accreditor and i've certainly seen it from the point of view of the institutions being accredited and now we have a chance to lock at accreditation from the
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national policy level. i'm going to sound like a broken record and we've said this for the last several months. we need to focus accreditors more on student outcomes. for too long the process of accreditation has been measuring proxies for outcomes, whether those are the number of tenured faculty. in the old days when i was an accreditor it was counting library books. >> so your advice to them is the same as your advice to us. expect us you can make us do what you want but them you can't entirely. >> can't entirely. i've learn a lot in my time in washington. the department of education authorizes, recognizes accreditors. it's not just the big name. it's the small beauty schools, cosmetology. we recognize the organizations that do that in collaboration with a committee that stands
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between us and the acreditors that is made up from nominees from the house, the senate and the executive branch. and so while ultimately we can make determinations we need to work through that process. that group meets twice a year, has quite a full docket. we've got a docket coming up in june that will be interesting. but we've literally sent a message to the accrediting community about getting focused on student outcomes, on identifying for their portfolio of institutions, what they regard as minimal outcome standards and then holding institutions accountable to those standards over time. that will be one of the pieces of incomplete business that we'll leave. but we certainly hope to have work with some accreditors and convinced them to be more serious about that.
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>> moving on to another topic, a big one, and in a concise way, student debt costs, et cetera, big complicated political challenging, free college, et cetera, it's all in the air. give us a couple bullets. >> sure. i'm going to do free and then i'm going to go to where we are now. so a lot of conversation about free college in the campaign. to be clear, free is good only if the quality you get is good. we always need to talk about quality when we talk about costs and debt. so costs are going up. the costs are going up most in public institutions. and that's driven in large part by pretty radical state disinvestment in higher education that began with the great depression when states needed to make very tough policy choices. but as the economy as come back,
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state investment continues to lag. what that does is it puts higher pressure on tuition costs and because of the increasing diversity of our college going population, it is in fact forcing higher tuition payments on families who can least afford it. that moves into the debt. so how do you fill the gap. you borrow money. the good news is that for the majority of students who finish their degree, they leave with manageable debt, averages around $30,000 and are able to repay that. there are students who have problems, we need to work hard with them to address their student debt challenges. but mostly we need to go back to this issue of completion, get through, put them in a position to pay off their debt. >> and in our last couple of seconds, what's next for ted? this administration will come to an end? can we ask? >> so first of all, there are 275 days left.
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>> i saw that on your iphone. >> i do have the app. 275 days left and we've got a lot to accomplish. so i'm basically -- >> you're on it. >> you and i both married women who are far smarter than we. >> we did. >> so i'm waiting for any instructions. >> your orders? >> yes. >> excellent. i want to thank you again for your public service. it's been a pleasure. >> thanks. [ applause ] well we have more presidential debates tonight on american history tv here on c-span 3.
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beginning at 8:00 p.m. eastern the first debate of the 2000 general election between texas governor george w. bush and vice president al gore. then we'll show you the town hall debate from the 2000 presidential election. and later a 1996 debate between president clinton and the republican nominee, former senator bob dole. for campaign 2016, c-span continues on the road to the white house. >> we need serious leadership. this is not a reality tv show. it's as real as it gets. >> we will make america great again. >> ahead, live coverage of the presidential and vice presidential debates on c-span, the skrrks span radio app and monday september 26 is the first presidential debate lye from the university in hempstead new york. and then on tuesday october 4th, vice presidential candidates debate at longwood university in
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farmville, virginia. and on sunday october 9th, washington university in st. louis hosts the second presidential debate. leading up to the third and final debate taking place at the university of nevada, las vegas on october 19th. live coverage of the presidential and vice presidential debates on c-span. listen live on the free c-span radio app or listen on demand at sunday night on q&a -- >> there was an average, imagine, of one racial lynching a week in the south. and it was a brilliant psychological device to hold down a race. because if you were black, you're afraid that this could happen to you. >> the author talks about his literary career, including his latest book "the lynching", about the trial following the 1981 killing of 19-year-old michael donald by the kkk in
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mobile, alabama. >> michael is a teenager. he's trained to become a bricklayer. he's the youngest of seven children. he's home with his mother in their house and his aunt asked him to go out and get a pack of cigarettes. goes out, this old buick pulls up behind him, tiger noelles pulls out his pistol and orders him into the back seat of the car. he knows what's going to happen when he gets in the back seat of that car. >> sunday night at 8:00 eastern on c-span's q&a. up next a conversation on the pros and cons of internet advertising from the annual techcrunch technology and innovation conference in brooklyn, new york. this is about 40 minutes. ♪
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>> all right. we're going to do a little bit more audience participation before we started the interview. how many of you have downloaded and use an ad blocker. 40% of the room. mostly the front part. it seems like people at least are expieosed to the technology. i'm a journalist. i get paid mostly through advertising and wonder events like this. if ad block plus takes off, obviously it has taken off. if it continues to grow, am i going to be out of a job? >> no. i think what is potentially hurting is a business model that doesn't hurt and apps that clearly don't provide any value to the consumer is to me a failed business model, which is i think is the reason why this needs to evolve. and the interesting thing is that almost all of the people that install an ad blocker don't hate ads, they're annoyed by the
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really intrusive ones. that's why we started a program called acceptable ads, which basically means we're helping publishers to show alternative less intrusive ads, specifically targeted at people who have opted out of traditional online ads. and what we found out is that fewer but better ads provide much better value. we're creating a win-win situation in which the user gets a much better experience at the same time publishers can make more money while still honoring user choice. >> let's talk about the acceptable ads program. just to make sure i understood you, there are publishers now who make more money with acceptable ads than they were with the traditional banner ads before? >> it's important to realize there are a different segment of users, the regular users that may be completely fine with the flash banner ads.
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but then there are especially the tech savvy people that install an ad blocker and they need to be addressed in a different way. what we're establishing is a way to target users not only on their profile but just on their ad preferences. and i think this really creates a lot of value for publishers. which is why now out of the top 100 websites in the u.s., 40 of them have acceptable ads on their page and i think that shows that this works for publishers but also the users are on board. >> tell me a little more about what makes an ad acceptable? what's the distinction there? >> so i think the most important part is every user can decide that for themselves. so with ad block plus, every user can configure what kind of preferences they have. but for us it is of course very important to have good default settings that find exactly the perfect balance between good user experience on the one hand and another opportunities for
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publishers on the other hand. we've put a lot of research in finding that balance but we're in the process of opening that up. so we're currently establishing an independent committee which will have members from all of the relevant stakeholder groups that have a stake in online advertising. and by handing over control over what constitutes an acceptable ad, we believe that we can really evolve the program. we're have journalists there, publishers and tuesday advertis. if we bring everybody together at one table we can evolve the program. >> there will be like a council essentially, like a board or something like that? >> we call it the acceptable ads committee. >> they'll set what the broad guidelines are but then the individual user can still decide what their settings are and then if they want to see acceptable ads at all? >> absolutely. >> there are some people who see this idea hey we're an ad
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blocker but we make money from tuesdaying is hypocritical or extortionist. how do you respond to that? >> well it's of course nonsense. but the only reason why we are as successful as we are is because we have millions and millions of users that support our vision and because we provide a lot of incremental ref knew for our partners. of course ad blocking is controversial. i think disruptive technology kind of has to be controversial. so coming up next is randall, and i'm very sure that he's going to continue his very personal rant about me, about my team. i think that just really a huge distraction or an attempt to distract people from the real reason why we're in this mess, because the iab has failed to create an advertising ecosystem that is sustainable and healthy.
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>> so when you say that, i mean, you know, it's a disruptive technology and that's why it's controversial. but certainly there are going to be publishes who are hurt in a concrete way by this. don't you think it's fair for them to say this is really bad for us? >> what we're all about is empowering our users to have control over their browsing experience. at the same time we're working with publishers on user friendly monitor rye zags efforts. this is really what is needed. you cannot have a business that relies on pissing off your user base. >> this is one thing that's interesting. users have this complete control and the vast majority of them are willing to see your acceptable ads. they don't opt out of advertising entirely. why do you think that is? >> because so far we're really managed to find the perfect balance between a good user experience and the monitor rye
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zags needs of publishers. if you ask people who have an ad blocker installed rarely ever say that are against all advertising. it's always just the really intrusive experience that leads them to installing an ad blocker. >> one of the things i found out backstage is that you actually come from this background of online marketing yourself. this is actually in some ways a world you know even though you've now come into this controversial position within it. >> yeah. many people from our team have a background in advertising. and i think that's also important. because we really want to bring both sides together. and i think this is really what has been lacking in the past, is that there was real innovation in online advertising, especially user friendly innovation. we're in a very good position to facilitate that. >> so let's talk a little more about the formula. you talked about giving users choice. at the beginning, acceptable ads
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basically meant text based ads, ads without images. can you talk a little more about what you think a good ad looks like? >> well i think the most important aspect is it cannot be disruptive. so if you're reading an article and right next to it there's an animation that is screaming for attention, that's just something that bothers most people. so the new apps out there blend better into the content of the site and just overall are much less disruptive experience. >> uh-huh. so you guys are always then giving publishers other tools, including this new product you announced called flatter plus. what is that in. >> flatter plus is going to be the very first payment system that is going to work for content on the web without any friction for the user. so it's going to work automatically for every website and users can just decide how they want to compensate. if they decide they don't want
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to pay for content, they can decide how much content on the world is worth to them and then by signing up, their funds will be automatically distributed to all of the websites they've engaged in. >> they don't have to hit a button, it's just automatically tracking the sites that they're looking at? >> exactly. i think this is what has been missing so far is a payment system for content on the web that works everywhere and completely frictionless for the user. >> do you feel confident that there are going to be a significant number of users willing to pay for content in. >> yeah, definitely. i think we have exactly the right kind of audience that are looking for alternatives. the majority of people will always be fine with just seeing obnoxious ads. but then there are people that just want to have more control and they want to decide how they
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compensate and i think we're in a very unique position to facilitate that. >> just to be clear, a publisher has to actually partner with you in order to receive the money from flatter plus? >> they just have to tell us where to send the money to. >> they just have to accept the check basically? >> exactly. >> you're working with flatter on this as the name implies founded by one of the founders of pie pirate bay. do you want to work with us and some of the publishers say screw you, we have absolutely no interest in doing that. >> no. more publishers understand we have to e valve business models on the web. and if we make it easy for the user to contribute to the content they consume, then i think we can establish something we've never had before. >> let's talk a little bit more about how much money the publishers are going to make.
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the terms are that you guys will take a 10% fee and then the rest goes to the publishers, right in. >> right. >> and as i understand it, the goal is that by next year you should be paying half a billion dollarspublishers? >> we estimate that by the end of next year we'll have over 10 million uses and on average they'll spend $5 a month. but what's really interesting is if you look at modernization, it's a shocking how little value the ads create. by spending that much per month, you can create the same value for publishers without having to see any of the intrusive advertising. >> when you say that ads create little value for publishers, you mean on a poorer eyeballer, that it can -- if you get enough eyeballs it can add up to a really big number but individually it's really tiny.
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>> exactly. if you look at the revenues generated through advertising on an individual basis, it's very tiny. so you as a user, if you spend 5 bucks a month, you can create the same kind of value for the publishers but you don't have to accept intrusive advertising. you don't have to accept tracking and malware risks and all of the other things that are wrong with advertising today. >> and you guys -- so you announced flatter plus last week. but people haven't actually been able to use the product yet, right? >> no. we're going to open up beta by the end of the month hopefully. so right now people can go to the site, and leave their e-mail address and we'll notify them as soon as we open up the beta program. >> right now flatter plus is a completely separate product from ad block plus but there could be
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integration? >> exactly. we're in a unique situation to make this work. we have so many people using ad block plus that it fits really perfectly into what we've always been all about. that is user friendly modernization. we've already proven that fewer but better ads actually provide more value and now we're providing more choice to the users and how they want to compensate us. so as a user you can really decide how you want to be monetized. this is really important. the web is all about user choice. >> let's talk a little bit about ad block plus more broadly. how many downloads have you seen at this point? >> well, i think we're getting close to a billion downloads now. but what is huge milestone for us that actually we just very recently achieved is ad block plus is now being used on over 100 million active devices. so i think that just shows that
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more and more people are just completely frustrated with the current ads and they're actively seeking out alternatives. >> and you launched last fall. how much growth have you seen there. >> we launched on android and ios in september and since then we've seen over 10 million downloads. compared to the overall user base, that is not super huge yet. but besee that more and more people are complaining about the mobile ad experience, they're complaining about issues of band withconsumption and page load time. we anticipate there's a lot of opportunity for us to grow on mobile as well. >> can you say anything in terms of how much money the acceptable ads program is making right now? >> we're not releasing any of our financial data. but i think we're in a -- from a business perspective, in a healthy situation, we can grow
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and that validates our model because we have created tremendous amount of value of incremental values for our partners and the user are on board for this. this is very powerful. >> going back to the publisher question. the way some publishers have responded to ad blockers is they'll have -- instead of an ad it will say hey we saw you have an ad blocker turned on. maybe consider turning it off or we saw you had an ad blocker turnsd on, with we're not going to show you the story or the content until you turn it off. what do you think of that? >> that kind of dialogue is good. we made it a prominent feature with ad block plus to turn it off on a given site. use theed a blocker responsibly. you also have to show them better ads if they decide to do so. otherwise they will turn it back
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on immediately. and that is exactly what we're trying to achieve with acceptable ads as well, making sure that the ad experience for those users is a lot better than a regular ad experience. if you don't provide them with the experience they want, they will move elsewhere and the traffic statistics of those sites that are blocking the ad blocker users, i think they're telling the whole story. users don't come back if they don't like the experience. >> do you feel like the conversation around advertising and what constitutes good advertising has changed as a result offed a blockers? >> yeah, i think when we started a few years ago we had to create that there is a problem with online ad. but now at least all of the people in charge acknowledge that along the way they've lost the consumer. and we can bring them back. >> and we've also obviously been seeing enormous growth with ad block plus but with ad blockers
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in general and new technologies with ad blocking is a component but not an ad blocker per se that has ad blocking as a component. as that happens, how do you think ad block plus needs to evolve so that it's still competitive in. >> well i think thanks to the success of ad block plus, it's no surprise that everybody wants to have the ad blocking procedure sbe kbrintegrated int product. for us we will always provide the best user experience. people can move on to a different ad blocker. especially since we make a point out of not blocking all of the ads, we have to make sure that the experience for the users with ad block plus is always the best. >> we're almost out of time. my last question since we're going to have randall on stage and other people from the ad tech and media industry will be watching this video, is there anything you would change about
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the ad tech industry that you think would make the industry as a whole better? >> i think it is really time to work on user friendly innovation. and for that we need to bring everybody together. we need the agencies, the publishers, the ad tech kpans, the consumers, we need all of them to agree on certain standards. i think the iab should have done that years ago. they've completely failed in that, which is why we are now establishing this committee. and i think we're going to be much more successful because we're the only ones that actually take the consumer seriously. >> great. thanks so much for joining us. >> thank you. [ applause ] ♪ >> hey, till, you want to stay here with me for a second? come here. we got obviously ad block and then iab is coming on stage and they don't want to hang out together, which is understandable.
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we couldn't do a panel. but i think maybe you guys could shake hands. >> happy too. >> randall rothen berg from iab, why don't you come on out here. come on. he doesn't want to. i'll shake your hand. good job. okay. randall rothen berg is going to do the other side of that conversation. have fun out there, man. yeah, go on out. sorry. slightly awkward transition. >> thank you for joining us, randall. and so we're going to talk about a bunch of things in the advertising and publishing industry. not just ad blocking but we might as well start with ad blocking. so you've actually said in the past -- it as not a surprise that you're not a huge fan of ad blockers. you think they're a threat to creativity and diversity. can you unpack that statement for the 40% of people who said they use ad blockers?
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>> i have no argument against anybody using ad blockers because i think there is a very strong kernel of truth when it comes to the impea dense of user experience. but what i've said before and i think you heard it very directly in your conversation is this is an extortion based business and it hurts publishers, primarily small publishers. the overwhelming majority of revenue earnedly publishers around the world from all sizes comes from advertising. these are companies -- the for-profit companies i'm talking about here, like ad block plus, these are companies whose business is trying to take chunks of that revenue and divert it into their own pockets. it's very straightforward. i mean your company is one of the biggest sufferers, one of the biggest victims for years because it's by primarily tech
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sites and gamer sites that have been hurt by this. >> yeah, no. >> and i also noticed, i was listening to the interview, he didn't answer any of your questions. he didn't say what is an acceptable ad, didn't answer that. refuses to talk about what their revenues are. they're very high. he's a rich man from blocking advertising. >> so one of the things he did say is he thinks that the iab hasn't done -- he said the iab has failed to create a sustainable ecosystem which is why there's an audience for something like ad block plus. do you think that's fair? >> i wish it were fair. i would love to be that powerful that i could fail at something. the fact of the matter is any trade association in the united states can create standards that have to be voluntary. we're not allowed to enforce them according to u.s. anti-trust regulations. that's true for any kind of standard, even the three-pronged plug at the ieee recommends.
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it's fair to the extent that this is an industry that is very fragmented, very diverse, and well in the early days of iab, the founders were very successful at coming together and creating different kinds of standards. say for standards on the format of advertising. over the past, say, seven to ten years it's been more difficult because the financial incentives in the industry itself led by short term venture capital favor differentiation and customization and lack of standards rather than standardization. i wish it were different. obviously we dristrive to coles this fragmented industry around standards for the supply chain but it is pushing a boulder
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uphill absolutely. >> i suspect a lot of people don't know what the iab is. interactive advertising bureau. >> right. >> what is the iab like. who do you represent? >> iab was founded 20 years ago by about 50 top publishers. these were companies that primarily created first party content, many of them in those early days began in the television, magazine or newspaper business and they sold advertising as their primary source of revenue against that created content. over the 20 years it's grown to about 650 or 700 members. most of them are still first party publishers. our board of directors, for example, 70% of the board of directors are publishers.
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"the new york times," conte nest. we do what most trade organizations do in no particular order. we're involved in training and development. we have an iab digital certification for ad sellers, a qualifying test that 12,000 people have taken in the three years we've had it. executive vice president of nbc is here. there he is. he was the founder of this program. we do a lot of market research and consumer research on consumer attitudes about content and advertising and user experience, market research on what buyers are thinking of and not thinking of. we run marketplaces. we're right in the middle right now of the annual digital content new fronts where about 40 creators and distributors of original digital video content
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are presenting their offerings to about 10,000 ad buyers in presentations over this two-week period. that's a very exciting event because you get to see lots and lots of original content. we represent our industry in washington. i have a people of three or four lobbyists in washington to work on everything from malware and spyware related issues to privacy to internet security. and we do lots and lots of things in between. >> so i wanted to get into a couple of the different things. the first one being new front since we're in the middle of new front, a really exciting time. i think this year is interesting because there's a lot of companies that haven't done new fronts before. they're doing them -- this is maybe the obvious salacious one but playboy is having a new front on friday. i will be there. >> depends on what you mean by
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salacious. playboy is not publishing pictures of naked people because there's so many naked free people -- >> i've never looked at internet pornography. i don't know about that. how many new fronts did you get to go to. >> i went to pretty much all of them last week. i went to 25 or so. and this week i don't get to go to any because i have to go to lisbon tonight for the iab conference. >> and you're missing a couple to be here. >> i am missing a couple to be here. but you can't say no to ned. >> online video, it's exciting, we're making a lot of money. what else. >> we're seeing it evolve for the past few years. there's not anything that i've
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seen that's dramatically new kind of with one exception. and that kmepexception is the de to which virj wall reality narratives have come into play. a lot of publishers are working on virtual reality. the me the insight i got there -- i'm on the education board at the international center of photography. and we introduced a graduate program in new media narratives over the year. i've seen it there as well. the big thing there that's very exciting is two years ago, three years ago i thought this is technology driven and this was kind of a solution in search of a problem. now it's very clear to me, especially from looking at the new front, that it's being creatively driven. that creative people are very interested in virtual reality narrative. so that's been a really interesting -- i saw the "the new york times" is doing it, con
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tooe nest is doing it. that was one big trend that was interesting. in terms of things evolving that are pretty exciting, the concept of the in-house agency or it's primarily known as a content studio has become a real fixture. in my previous job i worked for a big consulting firm and we did a pretty big report in the early 2000s in which one of our recommendation to publishers was look, you have to get into the marketing services business. that was a very foreign concept to publishers back in 2001, 2002. and now i would say every major publisher in the united states has a content studio where they are creating content on behalf of their clients on they're co-creating it. that's a very, very interesting evolution. >> and for people who sort of aren't kind of really involved in that, we should say basically that means that basically a team
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that's involved either primarily or in partnership in terms of creating native advertising. >> it's called native advertising. the problem with the word native advertising is it actually means about a hundred different things. we did a report about two years ago called the nay ty advertising play book. all of these things i'm mentioning are free on the iab site. you can go on and download it. it's still the best study that's been done on native advertising. and we found so many different definitions that we had to create a three-dimensional model to understand what people are talking about. so native advertising means everything from in-stream advertising. so the ads that you see on facebook when you're flipping through on mobile which are really, really not that different from television ads or magazine ads in that they're ads that kind of interrupt the flow of content but in a seamless and natural way. all the way through to
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customized advertising that is content based, narrative based, looks like or is contextually relevant to the way a site is designed. those are very, very, very different things. so, yeah, content studios are creating all of the above and that's why i like to think of them more as in-house agencies that are creating content with a very specific and explicit knowledge of their audience, which i think is a very important point. >> do you think there's usually a pretty clear church and state division? like you're the content studio, here's our team that's doing the real journalism. >> everything that i have seen from mainstream publishers, yes. and also, the federal trade commission has been very, very, very clear on this. that if you try to fool people, you will get hung. you'll get caught, and you'll get hung, and you should be. we worked -- the ftc issued
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guidelines just within the past couple months on native advertising, where they taught, you know, in great detail about what the expectations are in terms of disclosure, and we've said from the very, very beginning, disclosure is not optional. it is a must-have. are there publishers that violate that? i'm sure there are. and there will be. and i'm sure the ftc is looking for sample cases, kind of salivating at taking some of them on to prove the point. we had the -- we had senior ftc staff members up at the ieb, i think, three times over the past year to meet with publishers as they were developing the guidelines, so it was a very good, i think, open process. we don't agree with everything that they said, but their instinct around disclosure is definitely in the right direction. >> so i want to get back to ad blocking for a second.
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and you know, you've explained why you're not necessarily opposed to people using ad blockers but why you think the companies themselves are not really great players in the ecosystem but if part of your job is to bring these different constituents together, isn't it part of your job to have a good conversation with the ad blockers? >> there are about 200-odd ad blocking companies out there. we actually have conversations with lots of them. i'm trying to make a point, and we are trying to make a point that extortion is not a viable business model. i've got no argument with companies that aim at trying to improve the user experience or give users control of their own experience. i do have an argument with companies that fly the flag of user benefit but whose actual business model is based on stealing money out of the pockets of publishers, especially small publishers. this seems to me self-evident.
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and -- >> for you, the key distinction is if you're an ad blocker and you're making money from advertising, then you're an extortionist. >> yeah, if this dude thinks he's in the public service business, why doesn't he open up and do it for free? give me a break. you got a couple hundred other companies that are out there doing it for free. he should do it for free too. i mean, to me, it's -- look, there is, as i said, there is real truth in the issue that there are obstructions in the way of user experience. this is why ieb has pioneered what we call the lean principles for light encrypted ad choices supporting noninvasive advertising. this is why we're introducing a lean scoring mechanism, a market-based mechanism to drive better behavior from publishers and advertisers. this is why we're doing all these things. these are real issues with slow load times. too many data calls from an
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advertising asset, you know, really horrible object latency, the swamp of tags and pixels, this is bad stuff that does need to be fixed, absolutely agree with that and we're doing everything we can to work with our publishers and ad tech suppliers and others on this. but the idea that, saying, we're in it to improve the user experience when you're trying to extract tens of millions or hundreds of millions of dollars out of the pockets of publishers, that to me just -- it's a fatuous argument. >> so, when you -- your argument, partly is there are these problems and we're -- but at the same time, you know, at the beginning, you sort of were saying, the iab is a trade organization, there's only so much we can do and i think a lot of the issues you're talking about is really foundational issues with online advertising, so i mean, is that ever going to get fixed? >> well, i think a lot of it is
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actually foundational issues relating to the architecture of the internet itself. to me, the real -- >> that sounds even more pessimistic then. >> it's not pessimistic as much as it is being realistic. i think the fundamental underpinning, and this is, i think, especially important for this audience of technologists and disrupters, the internet at large, the source of our innovation is also the source of our vulnerability and that is that we live in a very open supply chain in which anyone can participate. you don't even have to have a lot of money to do it. as i've been saying for years, any 14-year-old can build a global television network with the apps that come built into her laptop or are available in the cloud, and everybody here knows a couple 14-year-olds who have already paid for their college education by doing exactly that. that's a remarkable, remarkable thing, the number of people who
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have made livings from the internet. i mean, we did calculations a couple years ago in 2009 that found harvard study that more than 3% of usgdp is premised on internet advertising. i mean, it was hundreds of thousands of jobs in every congressional district in the united states. so, this is a great thing. on the other hand, everybody can play, no matter how immature, no matter how corrupt in the sense of, you know, it's not well put together, and no matter how criminal. a lot of the malware that's out there is based, you know, on organized crime. interpol. we've been working with interpol and the justice department on trying to fight the stem of fraudulent nonhuman traffic that is based on malware derived bot nets so the source of our
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innovation is the source of our vulnerability. it seems to me that there are only three ways to deal with it. way number one is you muddle along, you don't resolve the problem, companies don't find a way to come together, ad blocking rises, and the ad supported diversity of media gets further and further and further pressed down. way number two, which we are seeing, is an increasing reversion to oligopoly, a handful of giant platforms that have complete control of their own borders become the favored platforms for media and advertising distribution. and way number three is that the industry finds a way to come together and, through self-regulatory activity, and possibly some regulatory activity, resolves these problems. we are betting on way number three, and i think way number three is a better way, because
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it preserves the diversity of the open internet. as a former journalist and still a journalist in my soul, i think diversity of communications is a very, very high value. it's the highest value that i hold in life. >> so, it seems like as the head of the ibm, part of your job is to push for number three. what would you say are the odds that number three is the actual outcome? >> i would say the odds are good but not great. i would give it 65 to 70%, and the reason i say that is because i think there is a natural human impulse to want to communicate and to want to communicate openly and freely, number one, and i also think there's a natural human impulse to want to work for yourself rather than work for the man. and so i think that the system and the human beings that are
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the system, that inhabit the system, will work -- strive very hard to self-regulate, to preserve that openness. >> so, last sort of quick question before we run out of time. what do you think are the odds that ad blocking is sort of going to kill my profession in a few years? >> i don't think -- again, i don't think it will happen. listen. let me just say that for all the money ad block plus is making for all the money he's putting into his pocket, for all the stuff they're not disclosing about their finances and their ownership, we're finding, as we canvas our own publishers, is that it's not -- it's still not having that much of an impact outside of tech sites and gamer sites. we've been following this for -- >> that's not much consolation to me. >> no, i know. it's harder for you, and i think for the folks in the audience, you've got to consider how much you're going to be willing to pay for a tech crunch subscription or how much more you're going to be willing to pay --
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>> pay a lot. >> or how much more you're going to be willing to pay to come to this conference or for you, how much less you're going to be willing to work for. >> i don't like ending on that note but let's end of that note. thanks a lot. >> thanks, anthony. >> hey, randall, could i -- okay, cool. american history tv airs on c-span3 every weekend telling the american story through events, interviews, and visits to historic locations. this month, american history tv is in prime time to introduce you to programs you could see every weekend on c-span3. visits to college classrooms across the country, to hear lectures by top history professors, american artifacts takes a look at the trshz at u.s. historic sites, museums and archives. real america, revealing the 20th century through archival films and newsreels. the civil war where you hear about the people who shaped the civil war and reconstruction.


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