Former Facebook Execs Launch Startup, Adding to Efforts to Improve Ad Measurement

Now Messrs. Mudd and Smallwood are launching a new company called Anonym to replace some of those capabilities. Anonym’s first product, launched on Wednesday, is a privacy-conscious data-attribution tool that allows advertisers to more effectively measure which ads led users to install an app or make a purchase.

“What we’re trying to do basically is build a new infrastructure that supports a more privacy-safe approach to digital advertising,” said Mr. Mudd, who was previously Meta’s vice president of product marketing for ads and business products until he left last spring. Mr. Smallwood, Anonym’s chief executive, was previously Meta’s vice president of marketing science until he left about two years ago. The two have raised $8 million in seed funding and have built a team of 15. 

Anonym is one of a flood of companies building technologies to help brands mine data sets for insights about consumers in a way that better anonymizes individual users. U.S. marketers are expected to spend $21.9 billion on third-party data and related services this year, according to management consulting firm Winterberry Group.

This includes so-called “clean rooms,” which make it possible for multiple companies to pool data without letting any company view the entire pool or see the personal information of consumers. A clean room can act as a Rosetta Stone to match up company data sets, find users who overlap and analyze which customers made a purchase after seeing the ad.

A Meta spokesman declined to comment.

Anonym aims to use encrypted data sets to tell advertisers how effective their ad campaigns were while maintaining individual user privacy. These data sets include the ads displayed and the purchases made on the advertisers’ sites. Anonym brings together two encrypted data sets in a secure environment where they are unencrypted and matched together to produce analytics that advertisers can use to glean information about the effectiveness of their campaigns. 

No one, including Anonym itself, is able to access the data sets while they are in the secure environment, ensuring that consumers’ private data are never compromised, Mr. Mudd said. The company also applies algorithms to ensure that data can’t be used to re-identify individuals, Mr. Mudd said.

“We send the aggregate, anonymized and privacy-safe results to the advertisers and ad platforms so they know whether the campaign worked and who it worked with, but they don’t get to learn anything about any individual,” Mr. Mudd said. 

Later this year, Anonym says it hopes to launch a second service that will enable ad platforms to deliver relevant ads to users while maintaining data privacy. 

The need for tools such as Anonym’s became more acute in April 2021 when Apple introduced privacy changes into its mobile operating system, iOS, that made it much more difficult for advertisers to measure whether their ads purchased on services such as Facebook and Instagram were effective at driving sales.

To help ad platforms better measure their ads, Apple created SKAdNetwork, software that can help advertisers measure whether their ads in iOS apps and on the web worked to drive a purchase, but doesn’t release data on individual users. Apple has issued multiple updates to SKAdNetwork, providing increasingly granular data to advertisers.

The software released limited amounts of data, governed by algorithmic controls that were designed to thwart any efforts to re-identify a user or derive insights about small groups of users. Developers have been frustrated by Apple’s limits on the data in early versions of the software.

Like some current and former Meta executives, Mr. Smallwood is critical of how Apple acted as an ad-tracking gatekeeper even while running its own ad platform.

Apple is “increasingly a major media business that’s using the data for all sorts of things,” Mr. Smallwood said. 

Apple’s ad platform only uses first-party data to personalize ads and allows users to choose whether they would like those types of ads, a company spokesman said. 

“We believe privacy is a fundamental human right and a user should always get to decide whether to share their data and with whom,” he said.

David Fischer, Meta’s former chief revenue officer and now an Anonym investor and adviser, said marketers want data on the effectiveness of ads from third parties rather than from ad platforms. That independence can help maintain accurate measurement results and user privacy, he said. 

“I can’t tell you how many times over my decade-plus at Facebook I heard that comment from marketers saying, ‘We don’t want platforms, including you, to be grading your own homework,’” Mr. Fischer said. 

Since their departures from the social media giant, Mr. Smallwood and Mr. Mudd have been building Anonym’s technology and building relationships with regulators and privacy advocates. Mr. Mudd is scheduled to testify before the House Energy and Commerce Committee Wednesday regarding data privacy. 

The two are also pushing for more regulation, such as the American Data Privacy and Protection Act, which would create a base level for how companies treat consumer’s data and ensure their privacy. 

“This is why we’re really focused on being in Washington pushing for legislation, because we do think that there needs to be a backstop to how data can be shared,” Mr. Smallwood said. 

Write to Salvador Rodriguez at salvador.rodriguez@wsj.com and Patience Haggin at patience.haggin@wsj.com