The biggest shake-ups to online advertising can come when outsiders get a glimpse of how web monetization works, are revolted and force change as a public service.
For example, in 2011, Max Schrems was a law student on a semester abroad at Santa Clara University in California, near Facebook’s Menlo Park office. One of Facebook’s privacy lawyers was invited to speak to the class, and Schrems was shocked at the man’s lackluster understanding of European privacy law. Today, Schrems-led lawsuits have nullified multiple data-sharing arrangements between the US and Europe.
And then there’s the California Consumer Privacy Act, which emerged from a ballot initiative backed by a realtor named Alastair Mactaggart, who said he took up privacy advocacy after a Google engineer explained online ad tracking to him in a passing conversation.
Which is a long way of introducing Adalytics, an online ad transparency tech startup created in 2020.
Its founder, Krzysztof Franaszek, who goes by “Kris,” is a computational biology researcher by training, which involves the convergence of data science and medical information. He was attracted to ad tech by the oceans of available data, from log files and campaign info held by brands, publishers, agencies and ad tech systems to the public data that anyone with JavaScript experience can parse from webpages.
He was also disturbed by how advertising supported the spread of misinformation during the 2020 US election and by his experience of being served ads for completely off-base businesses, like luxury housing on continents where he’d never even visited, Franaszek said during a panel hosted by Chalice Custom Algorithms last October.
The question “Why did I see this ad?” eventually led Franaszek to launch Adalytics followed by a string of blockbuster ad tech exposés.
The company
Adalytics is a small business, with just one full-time employee in Franaszek and zero investors.
To help with thorny engineering challenges, Franaszek told AdExchanger, he sometimes works with part-time staff and people who have hands-on ad tech experience.
But one thing Adalytics hasn’t needed is a sales team to get its name out there.
The company is now well-known for its research, the fruit of often monthslong investigations that culminate in reports that are hundreds of pages long.
Many people probably think Adalytics is a research company.
But it’s not.
Adalytics is a software analytics solution built for brands and ad buyers.
Advertisers provide Adalytics with read-only access to their advertising system accounts. A pro bono offer includes a one-time general report based on analysis of that data, such as how much a brand spent on MFA sites over the past year or how much of their ad dollars went to sites on their exclusion lists.
Users pay to unlock specific information about which tech vendors, publishers and campaigns improperly served their ads.
Adalytics is built on Snowflake. Its IP is the set of algorithms it uses to run Snowflake queries across large data sets assembled from log files, as well as conversion data from a client’s CRM or CDP, commercial data and public info via site crawlers and browser embeds.
Although Adalytics focuses its reports on discrete topics, such as the Google Search Partner Network or IAB Europe’s Transparency and Consent Framework, the company also offers traditional marketing analytics, like ROAS measurement.
The controversy
In terms of its business model, Adalytics is a freemium ad analytics tool with a skeleton crew, and it isn’t the first such company. So what’s the big deal?
The big deal is that Adalytics publishes headline-grabbing reports, which drive new customers to its business.
Most recently, Adalytics has scored a string of hits on Google. One report called out YouTube’s misrepresentation of TrueView video placements, another censured YouTube for serving personalized ads to children and a third explored some of the darkest, yuckiest corners of the Google Search Partner Network.
But before this trio of Google revelations, Adalytics uncovered an error in Gannett’s ad reporting in 2022 that incorrectly labeled ads served across small local newspaper sites as having served on the flagship USA Today site. Yahoo, Magnite, Index Exchange, consumer data brokerages and other digital media platforms have all been the subject of uncomfortable Adalytics investigations.
Google, however, was the first to push back on what it calls an apparent conflict of interest, which is that the Adalytics reports serve as content marketing and a customer prospecting tool for the Adalytics business.
“Adalytics is operating with an agenda,” a Google spokesperson told AdExchanger on background last November, on the day Adalytics published its damning report on the company’s Search Partner Network.
“They are a for-profit company that is looking to make money from raising concerns with advertisers about ads products,” the Google exec said of Adalytics. “Its business interest lies in creating distrust and gaining attention with reports, even flawed or inaccurate ones.”
Yet Google has offered only flimsy substantiation for its claims that the reports produced by Adalytics are flawed or incorrect.
Part of the power of these reports and why they resonate is that they’re independently corroborated. Reporters and industry operators are encouraged to fact-check findings and recreate scenarios Adalytics presents in its research.
The collaborators
Speaking of fact-checking, Adalytics also attracts Google’s ire because the startup has a network of supporters and collaborators who are unabashed detractors of Google.
For instance, Franaszek was a panelist at an Advertising Week event (well, Advertising Week-adjacent) last October hosted by Chalice, a startup co-founded by Adam Heimlich, a well-known partisan in the debate over Google’s alleged antitrust violations. The panel was moderated by Lou Paskalis, another vocal Google antagonist.
Heimlich, Paskalis and other Google gadflies – including agency and ad tech execs who benefit when advertisers spend less with Google – populate the roster of background and on-the-record experts who support the publication of Adalytics reports.
The outsider
Franaszek doesn’t have it out for Google specifically, said one agency buyer who’s worked with Adalytics to provide data and feedback for reports.
Rather, Adalytics zeroes in on nontransparent ad products and has a record of scoring real hits. Google operates the largest and least transparent ad platform out there, followed by Meta and Amazon.
According to another Adalytics ad tech collaborator, Franaszek doesn’t care about the web of competitive friction that exists between Google and the agencies, advertisers and ad tech experts who provide Adalytics with data or expertise.
If the same agency and ad tech execs tried to collaborate among themselves on a similar report, it would likely fall apart, said the same source. Agencies don’t readily share information between themselves, especially when it can be damning and, by necessity, must include raw log file and user data.
But Adalytics can slip into this complexity of relationships without much care. As an industry outsider, Franaszek doesn’t abide by the same unspoken rules as other ad tech researchers. Adalytics is also insulated because it only works with brand marketers who aren’t concerned about a tech company’s hurt feelings if Adalytics is able to claw back campaign refunds.
This is also the critical difference between the Adalytics reports and, say, the ANA’s Transparency report, the second half of which was published in December.
The ANA doesn’t – and can’t – call out specific vendors, media sellers and data sources because it relies on advertisers and platforms to share their data. In many cases, the ANA is bound by NDAs and limited to server data.
But when Adalytics cited Procter & Gamble ads running on unsuitable Google Search Partner Network inventory, it hadn’t discovered those placements as a P&G vendor. It proved those placements could exist by prompting and then observing them. There is no NDA required to take a screenshot.
This is important, because most ad analytics services rely on the data that’s in brand log files and servers – but that’s not the full picture. If ads ran in unsuitable placements and the advertiser wasn’t charged, or if the placement-level data isn’t revealed, Franaszek said, the open-source intelligence (OSINT) tactics employed by Adalytics are the only way to demonstrate the problem.
These findings are eye-opening for buyers, said one Fortune 500 consumer brand marketer.
It’s like only ever having eaten fish sticks, he said, and then someone “shows you a can of worms and how they gut a fish.”
And there are other ways in which Adalytics skips the etiquette, you might say, that exists among ad industry players.
Adalytics didn’t provide Google with copies of its reports prior to their release, like a reporter or most industry researchers would before publishing something, according to multiple Googlers who complained about that to AdExchanger.
But fact-checking or asking for comments ahead of time doesn’t necessarily make a report more factual. And Adalytics would risk deflating its own work, which is powerful because people can recreate the results themselves. It’s one thing to be told about prompting ads on illicit, unsafe or downright pornographic sites and another to be able to do it yourself.
With a little heads-up, Google could rectify issues uncovered by Adalytics, and then a report would land with a thud.The weekend before Adalytics dropped its report about Google’s Search Partner Network in November, several illicit sites actually did disappear from the network, as reporters followed up for their own fact-checking and Google got wind of the problem.
The future
Despite three Google-focused reports last year that vaulted Adalytics into the spotlight, there is no animus toward the company, Franaszek told AdExchanger. Upcoming reports on the Adalytics docket don’t involve Google.
Maturing Adalytics into a more orthodox analytics startup is also part of the plan.
Franaszek said he intends to grow the company, including hiring what might be dubbed “customer success” reps who can also help with client education.
When asked whether he plans to continue focusing on advertising or go back to something meaningless like biomedical research (lol), Franaszek said he still sees so many advertisers in need of this service.
Because programmatic isn’t going stop being, well, programmatic.
For instance, at the Chalice event referenced above, as Franaszek talked onstage about “orthogonal” data signals and OSINT collection as a way to reveal gaps in ad server and log file data, his voice was drummed out by dudes in the crowd arguing among themselves on a previous and irrelevant bit of DSP minutiae. (At one point, Paskalis got up and made himself a drink, in apparent frustration with the audience.)
So, if you can bet on anything in this world, it’s that the data-driven ad industry will continue to need transparency reports.
Despite its notoriety and growth plans, however, Adalytics hasn’t taken investments or changed much about how it operates, aside from adding new brand customers. But who knows what the future holds.
“Adalytics is close to what VCs are always talking about,” Franaszek told AdExchanger, “an inflection point.”
