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Advertising’s great unknown: Why audience intent matters more than identity

August 10, 2020 | By Kristy Schafer, VP Americas – Permutive @Permutive

Today’s publishers are leading the way when it comes to reimagining advertising in a world without third-party cookies. They started thinking about a future based on first-party data long before Google announced that it would discontinue support for third-party cookies.

But now, publishers have an opportunity to reshape the industry for the better by focusing on relevant audiences and intent rather than identity. 

Advertisers don’t need to know the identity of an individual that they are targeting; they just need to know that they are reaching a relevant group of people for their brand. And individuals will be able to retain their right to privacy.

Aiming for the right target

How has identity become such a hot topic??

Publishers have been hit by an onslaught of restrictions about the way they use data, with regulations such as GDPR and CCPA, and browser changes from Apple’s Safari and Mozilla Firefox barring third-party cookies by default.

After these browser changes, publishers were no longer able to target their audiences with third-party data in Safari and Firefox. Publisher CPMs are lower in Safari compared with Chrome because these users are not able to be tied to a record or matched to a third-party identity. This has negatively impacted publishers’ advertising revenue. 

With Chrome still in play, many advertisers have simply shifted spending and seen reasonable returns. Although as much as 40% of traffic falls on browsers where tracking cookies are blocked, they are currently able to monetize and measure their campaigns on Chrome. However, that will soon change. Before the end of 2021, advertisers will have no option but to find a new way of targeting users.

Attention has turned to the thorny issue of identification. Without third-party cookies marketers will struggle with audience targeting, frequency capping and attribution. They require new ways to measure their campaigns that are not blocked by browsers or inhibited by privacy standards.

Key considerations

As advertisers, publishers and ad tech providers start to reimagine the entire ecosystem, there are three key things to consider:

Are identity solutions privacy compliant? 

Ad tech vendors are developing solutions to replace cross-site tracking with third-party cookies. Many of these solutions are still based on third-party cookies or probabilistic matching. This approach is a band-aid solution, not the answer. The IAB’s solution through DigiTrust had to shut down because of its very reliance on third-party cookies. For authenticated solutions where an email (or similar ID) can be leveraged to match users, there is the issue of scale.  

Before considering investing in an identity solution, publishers should ask:

  • Does  incorporate techniques that could be fingerprinting? Is the user being probabilistically matched to target them in a new environment without their knowledge?
  • Has consent been accepted in all areas where user data is being leveraged? Are you able to provide data on a user or delete it easily if the user requests access?
  • Will this solution work without third-party cookies?
Are you prioritizing user trust?

On publisher sites, users typically fall into three distinct segments: authenticated, recognized (via a 3p cookie) and anonymous. To ensure scale for targeting, publishers need to address each.

Authenticated users are logged in or have a common identifier; recognized users are based on third-party cookies or device IDs; anonymous users are not associated with an ID but their behavior or contextual data can be viewed by publishers. 

Across the majority of publishers, the number of authenticated users will be limited. They are typically loyal readers that trust the brand enough to form a relationship. On average, less than 10% of a site’s traffic will be authenticated and even with driving efforts it’s unlikely that number will rise above 25% for all but a few.

Publishers should be thoughtful around how and who they share this user data with in order to retain that trust. 

There are some great solutions for authenticated audiences however it is important to recognize that when you factor in match rates to advertisers data is going that scale will be limited.

Considering the type of identifier that a vendor is asking the publisher to release is important to evaluate. Once an identifier leaves the publisher’s environment, whether in hashed form or not, it is susceptible to many different types of nefarious activity, including fingerprinting which is aggressively being blocked by browsers.

The most pertinent considerations for publishers are:  

  • Is an identifier being shared in the bidstream that can expose user identity without their knowledge? Are you protecting your most valuable and unique audience by sharing an identifier that can be probabilistically matched? 
  • What is the long term impact of sharing identifying information on your revenue and business? Who benefits from the data?
  • What percentage of your audience can be reached through this tactic? What is the plan for non-authenticated traffic? Is there unique first-party data that can be used for campaigns instead of third-party data?
How will you target anonymous users and scale your audiences with first-party data? 

When Chrome starts blocking third-party cookies, the only companies that will be able to collect and process data on these “anonymous” users will be those with direct relationships, such as brands or publishers. In order to view data on these users, companies must have both a legal relationship (i.e. ability to collect consent) and a technical relationship (own the inventory). 

Publishers will essentially become their own walled gardens and will hold the keys to audience data for advertising because they gain legal consent directly from users on their site and serve ads on the same domain. They will be the gatekeeper of that audience data on behavior or context for these anonymous users and should ensure that this unique data retains value. Publishers must focus on collecting first-party information on both anonymous and authenticated users, including browsing behavior and contextual data.

For example, Entrepreneur Media, a large business-focused publication, was missing out on valuable revenue opportunities because it was unable to target users in real time on Safari and Firefox with third-party cookies. 

Working with Permutive, Entrepreneur Media was able to segment and target users across Safari and Firefox without third-party cookies and immediately benefited from a 7.6x increase in targetable inventory. Entrepreneur’s ability to provide advertisers with rich first-party audience offerings allowed the publisher to drive an impressive 11x (1094%) ROI within just two months.

Publishers should look at their existing data and understand:

  • Are they collecting first-party data on anonymous users?
  • What can they do to prepare for the time when Google blocks third-party cookies?
  • What should they be offering advertisers today to start the transition away from third-party data targeting?
  • Are their sellers able to communicate the value of their own data? What steps can be taken to make teams more operationally ready to be successful in leveraging data?

Trust and transparency will help build the bottom line

There has been little transparency around the fidelity of third-party data. And, frankly, the industry has done too little to change – until now. Publishers have an opportunity to ensure that their data is the cornerstone of a new currency. But we must have honest, collaborative conversations about the framework needed.

There are paths in place with the IAB data labels and consistent taxonomy. But for it to be successful, publishers need to build a long-term strategy.

An advertising industry, built with privacy in mind, can deliver what users expect. True targeting and personalization connects with an audience in the moments that matter, and you don’t need a name (or an email address) for a marketing campaign to be successful.

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