Articles by: "Mike Woosley, COO – Lotame"

Publishers: context is king … but traffic is queen

August 1, 2022 Mike Woosley, COO – Lotame

Are you mis-valuing your first-party data? Context may be King but your traffic is Queen so give it its due respect.

In the current environment, with vast changes in technology and regulation, there is a powerful narrative that first-party data — often derived from context — will be more valuable simply because third-party data will be scarcer. The reality here is that the value of your data is determined by the impact on marketer acquisition costs — and your traffic may have much more to offer than context confers.

Consider this analogy. Goods meant for consumption become more valuable when they are scarce. When food is scarce, it costs more. When gas is scarce it gets expensive. Marketers don’t buy data for direct consumption, though. Marketers purchase data to increase their efficiency by reducing customer acquisition costs. So, the value of that data is determined by its ability to impact those costs.

For a marketer selling a luxury auto bought equally by male and female irrespective of creative, gender data might not be worth a sou. However, a history of past Audi purchases might be worth a mint. If the marketer’s data shows that she can meet the target acquisition cost of $350 for each in-dealership test drive by touching past Audi buyers at $18 CPM, she will buy those Audi purchaser impressions for up to $18. She can’t pay $20 CPM, because that will take her over her allowable acquisition cost. If a sudden dearth of third-party data means she has many fewer Audi buyers that she can find for $18, she’ll simply have to reduce total spend.

A flawed message: scale is the only challenge in a context-driven world

In a world of crumbling cookies and increasing challenges in linking identity and data, many in digital media technology have emphasized the value of a discipline that has been around for a long time: contextual targeting.

The narrative goes like this: “With third-party data becoming more scarce, contextually derived first-party data will become more valuable. The only problem you might have is scale. When data derived from a person’s behavior on other domains isn’t so readily available, you may not have sufficient traffic to meet a particular marketer’s needs.

Some adtech providers suggest: “Hang on. We can solve this problem too. We will build a common taxonomy of attributes and interest that layers your data with that of every other publisher who delivers the same context.” If I want to reach people who like anime, I may get those 3M profiles by targeting an anime node in the common taxonomy. I get 1M from you, and 1M from each of your two competitors.

Wait a minute. A publisher’s first-party data is more scarce and more valuable. Yet I am supposed to dump it into a taxonomy node with all my competition, undifferentiated, where I have little pricing power, and let marketers pay a single rate? Like oil in a barrel or grain in a silo? Isn’t that the definition of commoditization?

And just because a publisher operates an anime-focused property, what if their traffic is 50% luxury auto-intenders who have bought Audis? How do they get paid for that in the anime node?

An empowering message: your asset is your traffic

With all the renewed focus in the past two years on making context your primary first-party data asset, these messages may seem pessimistic. Don’t despair. They should be empowering. Your traffic is your asset. Attract the best with compelling content, and you have something valuable. Sell it for full value.

About a decade ago, programmatic advertising went from zero to around 80% of all display advertising because it enabled bidding and increased publisher yield. Despite cries of “leakage” and unequal information, the programmatic system works well for publishers and advertisers.

Going back to those anime lovers: If a bidder knows that certain traffic has a high auto-purchase intent, the buyer can bid more. Maybe she’ll offer to pay those $18 CPMs for that anime traffic. Publishers should seek the highest value for their traffic based not only on what they know, but what the market knows.

Creating a traffic value proposition

How do you get the most value out of your traffic?

Do what context adherents have been saying: aggressively collect and characterize context data for your traffic with widely available collection tools. Its first party data, it has value, and more is better.
Enhance your knowledge of your traffic with third-party enrichment tools. While this approach is more strenuous with more regulation around privacy and transparency, it can be worth the lift. Cookieless identity tools support this process.
Get deeper insights from your authenticated traffic with the classic info-barter. Use these rich “seeds” to build modeled audiences that meet surgical needs for marketers.
Expose your traffic in programmatic environments where the market may know what it’s worth. Pay attention to yield and optimize. There’s leverage here.

If the new world in digital media, marketing, and regulation has you sitting by the wayside, or placing self-imposed limits that harm your value proposition, it’s time to reconsider. First-party data derived from context is valuable, but it won’t provide a comprehensive picture of your traffic. Bulk channel sales in a common taxonomy will only serve to commoditize your work. You know that Google, Apple, and Facebook who have nearly 100% authenticated traffic won’t be limiting themselves to context. If you’re a quality publisher with valuable traffic, why should you?

Advertising | Perspectives | Supporter Spotlight

On the Anniversary of ATT, two players to watch are Snap and Facebook

May 16, 2022 Mike Woosley, COO – Lotame

Since Apple’s App Tracking Transparency (ATT) framework came into effect, the company has started confronting users with daunting warnings about favorite apps tracking you across apps and websites owned by other companies, and inviting consumers to opt out of this tracking. The impact on measurement has been material. Tim Cook would call such opt-out language “merely descriptive” — and would neglect to recall that Apple invented IDFA for sound and pragmatic reasons (including privacy). However, it could be argued that the language is scary and intended to persuade people to opt-out. It is important to note that app publishers are not permitted to include their own justification at the point of decision. Only Apple’s framing is available.

Since the changes were made in April of 2021, estimates of opt-out rates have been all over the map. Our initial models (chart below) used 80% (meaning 80 people opt out of tracking and 20 people permit it). Since that time, we’ve seen estimates ranging from 95% to 60% opt-out rates. But credible players in mobile infrastructure who see data on thousands of apps across all hardware types have noted that the opt-out rates have been declining since the initial surge, and an estimate of 60 to 65% is probably more accurate today. But Apple not the only company to keep an eye on when it comes to tracking and measurement.

Two key players to watch in terms of evolution of measurement are Facebook and Snap. Both companies are mobile-forward, and both have built material businesses around delivering measurable advertising for customers on phones. Facebook has acknowledged that the changes in iOS would have “on the order of” $10 billion impact on sales in 2022. Analyzing the 2022 revenue impact from Apple’s privacy changes, Lotame estimates that the IDFA change will have a total impact on the companies of almost $16 billion (+9%). Again, with the lion’s share of that impact (81%) coming from Facebook.

Both companies have spoken extensively about the impact of the iOS changes on tools and capabilities, and both are adapting rapidly. For SNAP, the company has said it is adapting by a combination of pushing customers to use Apple’s SKAD Network (“SKAN”) and by developing and enhancing native tools such as the Snap Pixel and their Advanced Conversions (“AC”) tools. Snap also acknowledged that many of its customers would have to move their focus “up the funnel”.

The issues are that the native tools may have limitations and may require Snap to interoperate more with other ad tech players. As for Apple’s SKAN tool, it provides only aggregated data, and it delivers with a 24-hour delay. These are very material limitations for conversion-oriented marketers. Snap has said it will take time to work through all of this.

Facebook, equally frustrated, even used the term “rebuilding”: we’re rebuilding a lot of our ads infrastructure so we can continue to grow and deliver high-quality personalized ads. Facebook called its new tools “Aggregated Event Measurement.” But at the same time Facebook also threw Apple under the bus for providing data that is both delayed and aggregated. The suggestion is that Facebook — which does not play well with the rest of Ad Tech — will have difficulty providing measurement better than Apple’s dumbed-down SKAN utilities.

One major initiative at Facebook did become highly salient: its focus on ecommerce infrastructure for its marketer customers. This was described by Sheryl Sandberg as one of seven key initiatives, and it was mentioned numerous times in the 4^th quarter earnings call. The idea is for Facebook to continue to deliver and enhance end-to-end tools for its ecommerce seller. From the first marketing impression, to the ecommerce store and experience, to financial fulfillment, customer retention, and remarketing, Facebook wants everything to happen on Facebook.

The issue is that any time any part of the chain moves outside of Facebook’s app, Facebook can’t deliver the measurement and attribution its customers require. This became painfully clear with the iOS changes. Facebook’s mission to fix it will lead it to the erection of higher walls around its version of the internet, and more firmly bunkering its marketer customers inside.

When you consider how other players may be future-proofing mobile marketing strategies, initiatives will be similar to those of Snap and Facebook: using the SKAD network while holding their noses, building home-grown measurement tools that often won’t work as well, and relying on the ad tech industry to provide adapted tools, such as the Lotame Panorama ID which can link identity across devices and platforms without the IDFA. App developers will also be looking to those partners that provide tools and infrastructure, such as AppLovin or MoPub to deliver new tools and techniques.

And all this enthusiastic turbidity and debate leaves all of us wondering: “What will Google do?” Keep in mind that Google doesn’t have the fire to lock down mobile phone ad IDs that Apple does. Apple uses the cover of “privacy” to make these changes. But others feel that Apple is restricting the ability of others to monetize traffic on its devices without its direct involvement (and economic participation).

Google, on the other hand, for the infrastructure it delivers, has benefited by providing tools and capabilities that are open and used by everyone. In June of 2021, shortly after Apple made its changes, Google announced it did not plan to bother users with a push demand for opt-in on each app (both Apple and Google always have allowed global device opt-out). After that, Google was quiet until it capitulated a few weeks ago. As of mid-March, Google is saying that it will “replace” GAIDs (Google’s version of the IDFA) on phones with its web-based “privacy-sandbox” tools, and then phase out GAIDs in about two years.

What does that mean for cross-application tracking today? Well, even if we lay aside second-best workarounds that are progressively emerging, there is still a lot to do with mobile ad IDs. In the U.S., iPhones have about 58% market share, but some reports are seeing 40% of users opt-in. Android phones have about 42% market share and will have GAIDs available for at least two more years — an ocean of time. Considering this collectively and scoped to the U.S., that still leaves marketers with access to a mobile advertising ID on about two-thirds of inventory. Have fun while it lasts!

Perspectives | Supporter Spotlight

The real big 3 to watch in adtech: CTV, publishers, and identity

March 7, 2022 Mike Woosley, COO – Lotame

The digital advertising world is no stranger to innovation and agility. As we know, the ecosystem has evolved significantly over the past year, highlighting opportunities for the future as well as challenges that need to be addressed. As the big tech players inch closer to their deadlines to address privacy concerns, here are some trends that advertisers and publishers should keep an eye out for in 2022.

2022: The year of CTV. And 2023, 2024, 2025, etc.

We all remember the “year of mobile” in the ad tech world – since it lasted more than a decade. Well, we can expect Connected TV (CTV) to continue to dominate the headlines for the foreseeable future. And why not? After getting a considerable boost in adoption thanks to consumers’ pandemic behavior, it is predicted to grow quite a bit more over the next five years.

More companies are seeing the value of one of the fastest-growing channels in digital advertising. Therefore, we are likely to see even more innovation in the space. More CTV inventory will become available to marketers as identity resolution and connectivity solutions come to the forefront to address the fragmentation in the channel.

And praise be, there are no third-party cookies to battle over in CTV. The explosive growth of CTV will only continue to eat away at linear TV’s share. This year, brands will refine their strategies and unlock incremental linear reach with CTV spend.

Small and independent publishers will finally be heard

Even though third-party cookies will disappear, that doesn’t mean third-party data will. The reality is that third-party data will stick around because the alternatives that will crop up in its absence aren’t feasible options for smaller publishers.

There is a misunderstanding about third-party data in the industry where people believe that it can’t be privacy-compliant. It absolutely can: it just requires checking the source of the data. As my colleague said: “advertisers should hold [third-party data] providers accountable by asking whether they use and how they use privacy by design.”

Simply put, first-party data or contextual targeting can’t be the solution for publishers who don’t have enough data to scale. Contextual data works only inside one’s own domain, which for small publishers is, well, too small. Plus, marketers are less willing to engage with sites that don’t have as many monthly visitors as the larger ones. Context remains a useful tool — as it has always been. Lotame findings show that 52% of publishers and marketers are testing or planning to test contextual solutions. But can it stand alone once again?

The industry as a whole needs to come up with solutions that will work for everyone, especially for publishers as they build their post-cookie strategies. Publishers will need a plan B for the billions in lost programmatic ad revenue. McKinsey estimates $10 billion is at risk for U.S. publishers alone In 2022, the screams of these smaller publishers will be better heard and addressed.

Dear identity partners: Stop the infighting!

With 80 identity solutions in the market today (and counting), industry professionals may very rightly feel overwhelmed and confused. A multitude of tech vendors and more are throwing their hat in the identity ring — from media companies to DSPs, agency holding companies to TV manufacturers. And their interest is justified: Identity is big business for digital advertising. Research and Markets reports that the global market for digital identity solutions is projected to grow to $49.5 Billion by 2026, up from $23.3 Billion in 2021.

ID solutions for the open web are going to be invaluable for publisher monetization. So, we’re going to see collaboration will dramatically increase. ID partners in 2021 operated in the identity arena like a circular firing squad. Everyone claims their privacy is better than others, and everyone who has a solution wants to say theirs is the only one that works. In reality, all have to work together. Our global survey, “Beyond the Cookie: The Future of Advertising for Marketers and Publishers,” reports that both marketers and publishers overwhelmingly agree that digital advertising relies on a connected ecosystem that supports the open web and diverse, ad-supported content.

Put down your arms, identity vendors, publishers, and marketers. Instead, let’s focus on our common goal of giving the consumer transparency and control while making everything more efficient. The end result will be better for everyone involved.

Consumers are forever changed by the global pandemic but have proven resilient in adopting new habits the world over. Marketers and publishers, too, have proven flexible in the face of enormous change in their personal and professional lives. The major industry changes afoot present us with two options: we can either work together to ensure the ecosystem thrives or we can just look out for ourselves in silo. I believe that working collectively this coming year will bear the most fruit for all involved. And I hope you agree.

Advertising | Perspectives | Supporter Spotlight

Two truths and a lie: Why what you think you know about identity will hurt you

September 13, 2021 Mike Woosley, COO – Lotame

Current uncertainty about the tech underpinning digital media has left most of us wondering what happens when cookies disappear on Chrome. It’s easy to forget that Safari and Firefox deprecated cookies a long time ago. This, in turn, created a natural test bed for newer and better post-cookie technologies. The good news is that these changes create opportunity and prospects for a better industry. If you are a publisher, here are two truths and a lie for you to consider, and five ways to ensure your business is not disrupted.

Truth one: Don’t count on FLoCs

Google has said its FLoCs are private and can be used as a proxy for enhancing traffic with data. But, Google has only released the results of a single test on this black box technology, which has murky methodology and opaque applicability. Even Google’s publicized test showed results less effective than cookie-based advertising.

Meanwhile, Google has been hit with criticisms that FLoCs use consumer data without consent. The company postponed its testing in Europe, where the technology may not comply with GDPR. Over the summer, it became evident that Google is becoming mired in uncertainty around the technology. It’s actions also raised concerns around Google’s market dominance. Bottom line: If you were counting on FLoC, you may want to take another look at your options.

Truth two: Don’t count on context

The same can be said for those leaning towards going all in for context. These state-of-the-art circa 2006 solutions don’t just limit the breadth of data you can associate to a profile. However, they almost always curb the concept of identity to a single domain.

Contextual providers are telling you that without cookies, third-party data will vanish (which is not the case). First-party data will be much more valuable, they continue. The thesis is that first-party data is like gold, becoming more valuable when it becomes more scarce. This ignores a fundamental economic truth in marketing: A marketer can afford to pay only her target acquisition cost and not more. A dearth of data means the marketer may need to pay a lower CPM on less-enhanced impressions. If she can afford to pay $5 CPM for “women”, then $2.50 will be the max that can be paid for “people”. Those digital impressions aren’t like gold — they are more like gold-bearing ore. The value depends on the assay.

Lie: Programmatic was/is/forever will be bad

Contrary to what we often hear, programmatic has been good for non-gigantic and independent publishers. Most non-giants don’t have the scale to hire a sales force, or the traffic to attract marketers without aggregation, or enough contextual insights to sell that traffic for what it was worth. Smaller publishers rapidly adopted programmatic five years ago because it gave them the opportunity to be paid based on what their traffic did somewhere else.

Programmatic is often criticized for data leakage in the bidstream and allowing buyers to come in with more insights on traffic than the publisher. But let’s remember the volume of impressions surfaced in the auction gives sellers inherent protection against cherry-picking. If impressions are better characterized via third-party data, bidders can find that auto intender among a “lover-of-cats” crowd that had been relegated to air freshener promos. The publisher selling the cat lover should want that asymmetric knowledge in order to get the best bid.

Five ways you can prepare for a cookieless future

So how in this new and changing landscape, should publishers sustain monetization when cookies are completely gone? Here are my top five recommendations of the very real steps publishers can take to prepare for 2023.

There’s a chance that Google has pushed back the cookie deadline because it needs more time to refine its own tools, with the intent of preventing or abolishing third-party ID interoperability. Take every opportunity to be vocal about your right to bring your own tech to the party.
New identifiers emerging in the marketplace will promise scale and interoperability — but you’ll need to test any solution early. Real interoperability is elusive, but out there, so exercise caution.
The industry may see great value in the 40% share of the browser market that Chrome doesn’t own. You can start testing solutions with Safari and Firefox today.
Delaying the adoption of new identity solutions may simply prolong the headaches from the third-party cookie model. Third-party cookies are costly to sync, carry privacy risks, and take more time to show ROI than newer technologies. Don’t hope for Google to provide another reprieve.
Definitely use context in your strategy. It’s data. You have it. Use it. Context should be part of the monetization equation. However, be realistic that context alone won’t save you. It simply can’t compete with technology that delivers richer information across domains. Don’t get hung up on old solutions just because they’re familiar or wrapped in a sexy new buzzword like “edge computing”.

It’s not all doom and gloom for publishers in the next two years. For independent publishers, the cookieless future is filled with opportunity. Just don’t embrace the false narrative that your traffic is inherently gold. You need the right tools to make sure your assay is strong, realizable, and increasingly lucrative.

Advertising | Perspectives | Revenue

Diversify your advertising options to drive revenue

June 3, 2021 Mike Woosley, COO – Lotame

Media owners may feel like their cups are half empty. Admittedly, it’s a tough business to be in right now. Certainly, the advertising industry is in the middle of a “Great Reset.” However, we must remember that change also means opportunity. Like most businesses, media owners don’t want to guess about the future and they don’t want to make directional bets that could leave their business in dire straits. The good news is they don’t have to.

Although media owners aren’t fortune tellers, they don’t need a Magic 8-Ball to see that they have a wealth of choices as they move forward. Upheaval driven by the deprecation of the decades-old technology of cookies, a global pandemic, and new regulation focused on consumer consent and transparency have all enabled a tremendous amount of innovation in our industry. As a result, tools for media owners are rapidly becoming more agile and more privacy forward. They are also becoming more effective.

Now, you can target in context. You can target in real time. You can target on first-impression. And you can target across devices, sequentially, with managed frequency, with your own data, with second-party data, with enriched data.

Diversify to thrive

Diversification is key for media owners as we continue into this new era. Marketers want and need options. Many publishers are leaning into contextual as a response to the changes in our industry. While context is a fine option to realize the value of publishers’ great content, it’s not the only lever you can pull, nor should it be.

Marketers agree. In fact, two-thirds of marketers are not confident that contextual targeting alone is a sufficient replacement for audience targeting. That’s a significant percentage of paying customers looking for alternatives.

Media owners, marketers are looking to you for those alternative solutions. Are you comfortable putting all your eggs in one basket and one that appeals to a fraction of your customers?

No one said change would be easy. However, media owners have the tools and partners available today to compete. Google is only part of the story — but you shouldn’t let them be the only story.

Yes, the Chrome browser is important. However, when you zoom out, there are multiple browsers in common use; tablets and phones that are proliferating in the billions; connected televisions, and a vast proliferation of connected devices, spanning the globe. There’s a prodigious open web opportunity up for grabs. Consumers are hungry for your content and willing to pay good money for it.

Real solutions

Google may not embrace identity within its walls (except on its own account, of course) but identity solutions are plentiful across the open web. The walled giant may try to woo you with dumbed down tools. However, you can be sure that, for their own marketer clients, they’ll be surfacing all the sophistication attendant to the rich wealth of data that they have for their own clients. Don’t force your buyers to reprogram dollars to those walled gardens. (And by the way: Enriched data can still be activated via Deal IDs, even in Google.)

It would be wise to fill your cup up with solutions designed for you. From deterministic to probabilistic and everywhere in between, there are smart people working hard to ensure your content, your employees, your business can gain an advantage. So, give them a chance to show you what your options look like.

Deterministic will help you drive your known customers to repeat purchases, while probabilistic will fill the funnel with the other 80-90% of customers that you don’t know or can’t recognize. New privacy regulations are driving better tools for consent and transparency — not the reverse. You’ll be surprised how motivating consumer privacy is for many in the industry. Remember, we’re consumers too. This is the time to test, test, and test again. It will get easier with each test and iteration.

The current climate may seem rough and complex, full of new regulation and uncertain tech modes; however there is no shortage of solutions. There is an extensive buffet of partners and technology that can make identity frictionless in a regulated world, so you can focus on results and not painful implementations. Have your cake and make room for more!