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The unintended consequences of the Online Safety Bill will have a dramatic effect on our ability to communicate securely, including in Ukraine, where it is needed most
- Robin Wilton
Published: 05 Aug 2022
In a 21st century war, what happens online impacts events on the ground. Reliable, secure communication channels in Ukraine have delivered crucial information from President Zelenskyy directly to the people, and allowed him to broadcast appeals to the world and recruit international support.
Secure communication has empowered Ukrainians to combat disinformation, organise relief efforts, and protect evacuees. It has undoubtedly saved lives and guided Ukrainians to safety.
As Western countries support the Ukrainians with defensive and humanitarian aid, they must also defend Ukrainian citizens’ ability to communicate safely.
In the UK parliament, Nadine Dorries, secretary of state for digital, culture, media and sport, recently noted: “WhatsApp [a secure messaging app] has launched an end-to-end encryption service that the Ukrainian people can access to find out what is happening in their location on a minute-by-minute, real- time basis and where they can get emergency support and help.”
When people have no option but to entrust their communication to third-party services, some of which may be actively hostile, end-to-end encryption provides the highest level of security, because only the sender and receiver have the key to the messages. Just imagine their plight if that encrypted service was designed to facilitate third-party access.
Astonishingly, even as the UK government praises end-to-end encryption abroad, it is undermining it at home. The Online Safety Bill, which continues to proceed through parliament after being mentioned in the Queen’s Speech, will target platforms that use end-to-end encryption by “placing a duty of care on service providers within the scope of the draft bill to moderate illegal and harmful content on their platforms, with fines and penalties for those that fail to uphold this duty”.
To comply, providers offering end-to-end encrypted services would be forced to weaken, bypass or even remove encryption, putting the security and privacy of their users at risk.
Then, imagine someone still in Ukraine is trying to contact family members who have made it to the UK. Or a UK citizen is working with the aid agencies on the ground. Is their messaging app allowed to have secure communication in Ukraine, but only compromised encryption – or none at all – in the UK? It’s a recipe for chaos.
Encrypted communication needs to be secure, no matter where you are. We cannot let the UK be the weak link in that chain.
The same end-to-end encrypted services are critical for journalists, who depend on them to keep information channels open despite government censorship. When the BBC’s Russian website was blocked, the broadcaster used encryption to circumvent some of the restrictions and continue publishing through alternative channels.
Supporters of the Online Safety Bill will doubtless point out that journalistic content is exempt, which is, frankly, irrelevant. Individual citizens should be able to send evidence of war crimes, confidentially and securely. The act of sending it should not put their own safety at risk; nor should platforms and intermediaries be reluctant to convey the evidence on the basis that it might be “offensive” or “disturbing”.
It’s as if the government either hasn’t considered the cross-border implications of its anti-encryption policy or isn’t worried about the “race to the bottom” it would create.
At a time when Ukraine needs us to step up, the UK government is instead on the brink of undermining end-to-end encryption with the Online Safety Bill. We are seeing, under the most tragic circumstances, how dangerous it is when a country’s citizens cannot communicate securely and cannot access reliable information safely.
It may be true that, as the saying goes, “the first casualty of war is the truth” – but that’s no reason to help it die.
Robin Wilton is director of internet trust at the Internet Society
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Media Buying Briefing: M&A shows no signs of letting up despite economic headwinds
Here’s a question: With inflation running rampant, interest rates surging and an economic downturn lurking around every corner, what will happen to the once-red-hot mergers and acquisitions marketplace in agency land for the rest of this year and into 2023?
Those who expected a cooling-off in M&A as a result of the darkening clouds were in for a surprise last week when The Brandtech Group put out a terse statement saying it’s entered exclusive negotiations with French investment firm Fimalac to acquire Jellyfish Group, a digitally focused marketing services agency run by Rob Pierre, in which Fimalac owns a majority stake.
Though none of the parties would comment on the proposal, it seems it’s not just private equity firms that are out to buy agencies in these challenging times. The Brandtech Group, run by ex-Havas leader David Jones, has assembled an interesting assortment of services to become, as Jones told Digiday back in June, “the Salesforce of marketing.”
But the company has been light on the media side of its holdings, which makes a Jellyfish acquisition seem smart, said an executive at a media consultancy who declined to speak on the record. “As much as they’d love to pursue the big global accounts, they’re not going to get anywhere near it because of their size,” said the exec. “With Jellyfish, they would have a very sizable, very scalable, global media offering, albeit digitally focused, to compete with the Stagwells and S4s, who they probably haven’t been been able to get close to. This fundamentally gives them scale and credibility in that media buying and implementational space.”
Beyond Brandtech Group’s surprising but smart move, other investment advisors argue this could be another strong M&A market. Last year, total M&A for agency and marketing services totaled over 400 deals for nearly $10 billion from strategics and PE firms, according to Michael Seidler, founder and CEO of M&A advisory firm Madison Alley. This year so far, Q1 totaled over 115 M&A deals for over $4.5 billion, and Q2 totaled 125 deals for $1.5 billion.
That activity has convinced Seidler there is a “trillion dollar market opportunity” for the broader marketing communications world, if you lump in consultancies and ad tech. “The marketing services groups only are about 10 percent of that,” said Seidler, listing consultancies such as Accenture or Deloitte as well multinational firms like Tata, Wipro or Infosys. “So we see a huge opportunity that plays out among the marketing service groups as they start to build their development capabilities, their custom software development and strategic digital transformation.”
Ryan Kangisser, managing partner of strategy at MediaSense, points to retail media as an area where specialty shops might be in demand. “We’ve seen the growth of retail media in the U.S. and yet the expertise around that is still quite scarce,” he said. “So if there are independent businesses out there that are able to gain traction with brands, clearly there’s going to be some some activity there.”
Mark Penn, CEO of holding company Stagwell, said after the company’s earnings call that it plans to continue acquiring — part of a long-term strategy to take on the traditional holdcos. “Our strategic goals are to expand more globally and to expand our technology footprint,” said Penn. “Foreign exchange is a big factor — the strong dollar means that you can go buy 30 percent more of…some company in another jurisdiction. So if you have a 20 or 30 percent reduction in [agency valuation] multiples and a 20 or 30 percent currency advantage, at least as a U.S. company as we are, I think that may create some openings for additional M&A.”
Then there’s the private equity world, which will not sit quietly, especially as several two-to-four-year-old acquisitions approach the flipping point (most M&A advisors agree that PE firms usually flip their acquisitions within five years). Seidler noted several independent agencies purchased in that time frame could be on the block before long, including Real Chemistry, Bounteous and Tinuiti. Even PMG, which just won a large chunk of Nike’s media duties, could be a target for acquisition, Seidler added.
One other consideration that’s just as important is culture, said Doug Baxter, head of Agency Futures, a London-based M&A consultant. “Are there dynamics, both culturally and from business services and synergies points of view, that allow the power of one and one to equal five?” Baxter asked. “That’s really what you’re looking to do, is to find people who really do share a common vision, but also have ways that they can integrate their business that makes sense.”
Color by numbers
As content becomes more targeted, advertisers looking to reach diverse audiences might want to consider in-cinema advertising. National CineMedia shared stats with Digiday that show broad representation in movie seats. Some highlights:
- “Jurassic World: Dominion” delivered a multi-generational audience comprised of 41% Caucasian, 25% Hispanic and Latino, 16% Black, 15% Asian and 5% other viewers;
- NCM says it’s seeing 58% diversity demos on average for opening weekends, generating higher reach than endemic players among the 18-34 age demographic;
- Compared to linear TV, NCM says movies have the second highest reach of Hispanic consumers 18-34, behind only Univision, while claiming to out-deliver BET on Black viewers 18-34 by more than two times;
- Compared to 10 years ago, movie audiences are now 30% more multicultural, 40% more Hispanic, 30% more Black and 46% more Asian.
Takeoff & landing
- Dentsu’s iProspect promoted two longtime executives to new positions, as the performance marketing agency goes full service in media: Michelle Snodgrass becomes executive vp, head of strategy, up from senior vp; and Rachel Starr becomes executive vp, head of planning, up from senior vp. Both will report to North American CEO Danielle Gonzalez.
- Social listening and analytics firm Sprout Social is adding Instagram Reels to its video management capabilities to help brands and agencies use the platform, after having signed up Tik Tok recently.
- Independent digital agency BAM Strategy, based in Montreal, picked up work for online grocery delivery service FreshDirect, for which it will build the brand’s first loyalty program.
“The strategic decision to make Gale a creative media consultancy — to bring creative and media together — [attracts] accounts that would have gone to two separate agencies in the past. They [brands] now realize that online marketing requires such greater coordination between creative and media, that I think we’ve hit a new sweet spot in the marketplace with this combination.”
Stagwell CEO Mark Penn in explaining how Stagwell agency Gale achieved 150% growth in the last year.
- In huge ad-tech news, Digiday senior ad tech reporter Ronan Shields, with help from senior news editor Seb Joseph, broke the news that Apple is launching a demand-side platform.
- Senior media editor Tim Peterson has also broken a lot of news around Instagram, first reporting that the Meta-owned social destination is paying media companies to post on Reels, and then that it is shutting down its affiliate commerce program on Reels.
- I wrote about two new tools designed to optimize client media spend: Max Connect’s Kudos product, which helps auto and other advertisers alter their ad flights, and Disqo’s Outcomes Lift platform, which helps clients see consumer action taken after seeing their ads.
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