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Publicis Buyback Ends Dentsu Partnership

French advertising group Publicis has bought back 18 million of its own shares from Japan’s Dentsu for €644.4m, bringing an end to their nine-year partnership that analysts say has yielded little value.

The companies had been partners since the Japanese agency – the country’s largest marketing services group by revenues – teamed up with Elisabeth Badinter, a member of the founding family and the biggest shareholder in Publicis, to act in concert.

The buy-back strengthens Ms Badinter’s hold over Publicis, the world’s third-largest marketing services group. The daughter of the founder now owns 11 per cent of the shares and 20 per cent of the voting rights.

She will play a key role in appointing a successor to Maurice Lévy, the Publicis chief executive who was due to retire last year but was asked to stay on to see the company through the global economic downturn.

Mr Lévy said the relationship with Dentsu had been “amicable and exemplary” and that he would carry on with the two Tokyo-based joint ventures with the Japanese firm, Beacon Communications and Dentsu Razorfish – in which Publicis owns 66 per cent and 19.35 per cent respectively.

Dentsu said it would book an extraordinary gain of Y2.1bn ($27m) in its consolidated accounts in the financial year to March as a result of the share sale. Its president and chairman will resign from Publicis’ supervisory board.

The ending of the Publicis partnership had been predicted for more than a year after Dentsu sold down a portion of its stake in 2010. Mr Lévy has also stated previously that he needed to preserve funds in case Dentsu decided to sell its stake in Publicis.

Google+ On A Tracking Safari

Google and other advertising companies have been following iPhone and Apple users as they browse the Web, even though Apple’s Safari Web browser is set to block such tracking by default. How have they been able to do it?

By default, Apple’s Safari browser accepts cookies only from sites that a user visits and generally blocks cookies that come from elsewhere. However there are exceptions to this rule, including if you interact with an advertisement or form in certain ways, it’s allowed to set a cookie even if you aren’t technically visiting the site.

Google’s code, which was placed on certain ads that used the company’s DoubleClick ad server, was uncovered by Stanford researcher Jonathan Mayer, took advantage of this loophole.

The code was part of a Google feature that allows its “+1” button to be embedded in advertisements which users would click to indicate that they liked the ad. However, Google faced a problem: Apple’s Web browser Safari blocks most tracking by default and is the most popular browser on mobile devices.

To put cookies onto Safari, Google’s ads used an “iframe,” an invisible container that allows content from one website to be embedded within another site, such as an ad on a blog. Through this iframe window, Google received data from the user’s browser and was able to tell whether the person was using Safari. If s/he were, Google then inserted an invisible form into the container. The user didn’t see or fill out the form – in fact, there was nothing to fill out. But the Google code submitted it automatically.

The cookies were temporary; the blank one was set to expire in 12 hours, and the cookie for logged-in users was set to expire in 24. Google said the company tried to design the +1 ad system to protect people’s privacy and did not anticipate that it would enable tracking cookies to be placed on user’s computers.

Google’s Rachel Whetstone said the temporary cookie served to create a “temporary communication link between Safari browsers and Google’s servers”. She said the goal was to ensure that information passing between the user’s Safari browser and Google’s servers was anonymous – effectively creating a barrier between a user’s personal information and the web content they browse.

But even the blank cookie could then result in extensive tracking of Safari users. This is because of a technical quirk in Safari that allows websites to easily add more cookies to a user’s computer once the site has installed at least one cookie. Safari allows this so that sites such as the Facebook and Google+ social networks can install cookies in widgets they place around the Web, as long as the user has visited the original site.

An update to the software that underlies Safari has closed the loophole that allows cookies to be set after the automatic submission of invisible forms. Future public versions of Safari could incorporate that update. Paradoxically, the people who handled the proposed change, according to software documents, were two engineers at Google.

Does anyone really care? The WSJ tried to blow the story up but so far the mainstream media hasn’t really piled in. Maybe privacy fatigue has set in or the realisation that privacy is effectively dead anyway. Maybe. On the consumer front there seems to be little damage, but the fall out with regulators could be disastrous. We as an industry are already up-to-our necks in draconian legislation around privacy. This certainly hasn’t helped the cause for self-regulation.

Are Skype Ads Heading For The Microsoft Ad Exchange?

Microsoft Advertising will begin selling Skype advertising on PCs and mobile devices in international markets, including France, Germany, Japan, the Netherlands, Spain, Taiwan, the UK and on PCs in Russia. Advertisements in Skype will first appear in the U.S., the UK and Germany next month, with initial advertisers including Groupon, Universal Pictures and Visa.

Microsoft acquired Skype in an $8.5bn deal that closed in October 2011. Microsoft Advertising is still working to determine what kind of advertising works best within Skype. It is now testing in-call advertising with several advertisers and getting feedback on user experience.

In a blog post, Skype assured users its plan was to only show ads from just one brand per day in each market where advertising was sold. It also said the ads would not disrupt users’ Skype experience with pop-ups or banners in the middle of calls.

The announcement will also see the roll out of mobile advertising, with sponsored ads appearing at the top of Skype’s home and message screens. Audio-in-call advertising is a new format being tested for roll out in new markets – ads will appear on Skype’s home and message screens during a one-to-one Skype-to-Skype audio call.

Andy Hart, general manager, advertising and online at Microsoft UK, said, “Skype is an exciting addition to the Microsoft Advertising portfolio. From today, our customers will be able to target more people in new ways, delivering innovative digital storytelling at a vast scale. Skype’s platform supports rich, interactive brand ads at the same time as giving advertisers a broad reach: combined with MSN homepage advertising, brands can now reach 18.4m or 43 per cent of the total UK online audience.”

The real question though is whether or not Microsoft will make these Skype ad impressions available through its ad exchange. That’s a lot of inventory for the European market, and would solidify Microsoft’s position as number one brand inventory source in the automated channel across Europe.