It remains to be seen when third-party cookies will be fully phased out. But it’s clear that the priority should remain building a solid and flexible first-party data strategy that can withstand constant shifts in privacy and audience accessibility. Publishers who do so will be best positioned to help advertisers fill the gap between privacy and personalization while uncovering new monetization opportunities. The Seller-Defined Audiences strategy is emerging as a way to reinforce the connection between publishers, advertisers, and the consumer. 

Seller-Defined Audiences, commonly abbreviated as SDA, is the latest addressability specification created as a privacy-friendly alternative to replace third-party cookies. Collaboratively designed to drive the adoption of publisher first-party data, SDA is a cohort-based targeting approach that leverages well-established advertising standards to allow for scalable audience targeting without compromising data privacy and security.

Despite being proposed almost two years ago, the IAB Tech Lab has just released standardized taxonomy and transparency guidelines for SDA. And while cohort-based targeting isn’t new, SDA offers exciting privacy-first opportunities for publishers who wish to monetize their first-party data.

As it addresses common bottlenecks, such as data scalability and operational overhead, SDA empowers publishers to market their data to multiple buyers across all major advertising environments, including browsers, apps, and OTT/CTV. It does so without relying on third-party cookies and IDs and doesn’t risk data leakage along the way.

How SDA works 

Instead of sharing sensitive user-specific identifiers and personally-identifiable information with advertisers, publishers can leverage SDA to organize their anonymized first-party data into standardized audience cohorts based on user interactions and other data points gathered on owned sites, apps, and platforms. This way, SDA allows publishers to easily assemble and curate their first-party data while maintaining complete control over it.

The process can be summarized in four steps:

1. Audience Segmentation

Publishers, with or without the help of their DMP, must map their first-party data into standardized demographic, purchase intent, and interest audience segments following the IAB Tech Lab’s Audience Taxonomy 1.1. 

This includes 1600+ tiered segments that provide a common naming convention and taxonomy, allowing normalization, uniformity, and comparability across SDA from different providers. In addition to audience signaling, SDA can also support contextual and content signaling, but both use cases have yet to be standardized for industry use.

2. Documenting SDA Metadata

Publishers include the segment ID and taxonomy ID in the ad call using their ad server or the header bidding wrapper following IAB’s Data Transparency Standard (DTS). Or then can leverage a prebid RTD (real-time data) module created by a data provider. 

3. SDA Activation

Publishers can activate SDA on the SSP level for buying on both open auction and PMP. In the first case, the SSP must relay the SDA metadata in the bid request. In the second, SDA can enrich direct deals and cross-publisher auction packages.

4. DSP Bidding 

Upon receiving the bid request, the DSP will be able to read the included SDA metadata, segment, and taxonomy IDs and decide whether to bid on the ad call or bid on an SDA-enabled Deal ID.

On the advertiser side, SDA allows buyers to leverage publisher-standardized first-party data without the need to contact each provider to create one-to-one deals. Streamlined and scalable access to pre-packaged cohorts through deals or via Open Auction will drive the usability of publisher first-party data, ultimately making it more appealing for advertisers.

Opportunity exists, but publishers will need to be a driving force 

By offering standardized, scalable, and easy-to-activate audiences, publishers can unlock new revenue streams and efficiently monetize their first-party data. However, the benefits of SDA will only be fully tangible when there is significant adoption of the IAB-sponsored specification across both publishers and advertisers.

The adtech platforms also play a big part in driving the use of SDA. As mentioned, SSPs need to be able to transmit SDA in the bid request, whereas DSPs should be trained to recognize SDA metadata to allow the selling and buying of data-enriched inventory. 

Publishers can enlist help from DMPs to segment and map their user data to standardized cohorts. And the rapidly evolving data clean room solutions will further empower data collaboration between providers bringing cross-publisher SDAs to the market.

Curated marketplaces may prove to be indispensable in further streamlining SDA adoption. It offers publishers an easy yet controlled channel for distributing data to many advertisers. Given its advanced deal management capabilities, curation will lower the entry barriers for publishers who are not yet ready to share segments transparently on the open market but want to access large-scale demand for their SDA.

Publishers, with support from their SSPs and other tech vendors, will serve as the main driving force for educating the market and driving the adoption of SDA. This is an exciting new addition to existing addressability solutions and embracing it will benefit the entire industry. When paired with other solutions, SDA can significantly ease the transition to the soon-to-be cookieless world and help publishers maximize ROI while remaining in control of their first-party data.