A data gap is growing in digital advertising as regulators become stricter, users choose cookie-blocked browsers, and Chrome slowly kills the third-party cookie. It has caused addressability in the open web to tank to 30%. However, publishers are in a powerful position to fill the data gap and already have a sustainable solution using their first-party data in direct deals. This means that publishers can create powerful and differentiated endemic and non-endemic, interest-based audiences for advertisers to reach 100% of users without compromising privacy.
As part of DCN’s Hot Topic series, Joe Root, CEO and Co-founder at Permutive, sat down with David Minkin, SVP of Digital Operations and Client Success at Dow Jones, to talk about how the publisher’s first-party data strategy has evolved, and where they are seeing revenue growth. Dow Jones is a division of News Corp and is home to leading publications, including The Wall Street Journal, Barron’s, MarketWatch, Mansion Global, Financial News and Private Equity News.
Here are some of the highlights from that conversation.
Open marketplace decline
Publishers have seen open marketplace revenue decrease by 25% year-on-year in Q4, which makes it hard for publishers to forecast. Based upon his experience, Minkin puts this down to several factors. These include the death of the third-party cookie, the walls of the walled gardens getting higher, and traffic disruption from Google sending less traffic to sites, and Facebook sending less traffic to news publishers. “All of that puts downward pressure on the open marketplace, and its ability to maintain CPMs where they’ve been historically, and that loss of traffic is resulting in a loss of open marketplace revenue for many publishers,” he said.
Most of Dow Jones’s digital advertising revenue comes from direct-sold, where they see “a strong interest and continued interest” as buyers leverage their first-party data. The direct deals they see include audience-guaranteed transactions, so a programmatic guaranteed (PG) deal with an audience layered on, and PMPs with audiences with that first-party data available.
“I welcome that trend to continue,” said Minkin. “The yields are better in terms of those eCPMs we’re getting out of all those flavours of [direct] transaction. Also, I think there’s a lot in the open marketplace regarding ad quality issues. I’d rather know who is advertising with us and who is on our site. So as we move more to a world of direct PG and private marketplace (PMP), that certainly helps give me that sort of visibility I want.”
Publishers may favour certain types of direct-sold deals over others, for example, a PG deal over a PMP because of the guaranteed spend over a period of time. Dow Jones has seen “substantial growth” in PG, where the yield is substantially higher than what the publisher gets from the open.
Starting with the data
Across Permutive publishers, in Q4 2022, audience-driven direct-sold was up 37% year-on-year and in Q2 2023, this increased to 62%. As publishers start to see the benefits of the shifting tides to direct-sold, they recognise it starts with building a strong first-party data strategy. This includes exploring how you go to market and getting the RFPs required around the audience.
From Dow Jones’s perspective, their first-party data strategy has been a “seismic shift” that gained momentum when Google announced its third-party cookie deprecation a few years ago. Initially, it was about understanding what first-party data was available. What data needs to be available based on the demands from RFPs and what clients are requesting? And having the right technology in place, from building lookalikes to segmenting the data. “We’ve now gotten to the point where we’re virtually 100% only using first-party data,” Minkin said.
This focus on first-party data must also translate across the business, particularly to go-to-market teams. According to Minkin Dow Jones has “done a lot of education over the past few years” to bring their sales team up to speed and confident in talking about the publisher’s first-party strategy. “A lot of that success is really because of my team – who are building a lot of these products and actioning a lot of these segments – working very closely with our product strategy team to roll this out to the sales team,” he said. “It’s really been an evolution.”
When publishers build valuable first-party audiences, pricing strategies require some attention, especially around unique premium audiences. An example from Dow Jones is financial advisors, where the publisher is the best place to go to reach them at scale. “There are only about 300,000 or so financial advisors in the U.S. That audience is not commodified, and that commands a much higher CPM,” said Minkin.
When it comes to the future of their data strategy, Dow Jones plans to continue to build upon everything they’ve developed and implemented over the past few years. Minkin sees Dow Jones’s advertising product suite as truly mutlifacted and adaptable, where some solutions are high touch, and highly customized, while others are meant to be low touch and extremely scalable.
The aim is to automate as much of the low-touch solutions as possible, allowing their teams to focus on the premium, high-touch campaigns. This approach “ultimately is going to bring in the bigger dollar values and have more impact for our clients.” Minkin added. “We want those campaigns to be as successful as possible to get more of those renewals.”