Login
close
Login is restricted to DCN Publisher Members. If you are a DCN Member and don't have an account, register here.
Search

Digital Content Next

Menu

Category results for "Perspectives"

Perspectives

DCN’s must reads: week of July 29, 2021

Here are some of the best media stories our team has read so far this week:

DCN’s must reads: week of July 22, 2021

Featured Post | Perspectives | Supporter Spotlight

4 Media industry twists and turns you don’t want to miss

The business of digital media is not dull. It can be a bit like the not-so-well-wish “may you live in interesting times,” though. Keeping up with it all is a big job for digital media executives tasked with keeping their organizations healthy and at the forefront of this industry. A clear-eyed look into what’s next is important in order to keep up with the pace of innovation in this industry. To help, I’ve outlined four trends I’m watching closely during the second half of 2021:

1. Pandemic-era rebound in advertising market

Big takeaway. Knocking on wood, but all digital revenue indicators are trending positive in 2021 through midyear for premium publishers. DCN distributed both its proprietary annual benchmark and first quarter revenue reports in the past month. The reports are only available to participating members. However, I can share the top-line good news: Year-over-year growth was strong. And that’s even prior to the favorable comparisons to the depressed market from the onset of Covid in the Spring of 2020. CPMs have also strengthened in the open market where advertisers are finally putting in more diligence to know where their money and brands are delivering.  

Watch this. The largest challenge to the premium publisher business is keeping pace with the massive consumption in the back-half of 2020 due to a record convergence of captive audiences and riveting news cycles. Putting aside what is good for our business for a moment, it’s nice to see outdoor activities once again competing for attention! And for the booming digital audio market, that has some upside as well.

Surprise twist. The Delta variant looks like it may drive many Americans back to some of our early 2020 habits. Clearly, Covid continues to concern all of us personally and professionally. How it impacts economic and media consumption trends is to be determined as we approach the Fall.

2. Privacy and data protection

Big takeaway. 2021 will be the year that killed “tracking” – regardless of how successfully Google protects the soft underbelly of its surveillance business model. Apple will continue to distance itself from Google in an effort to position itself as the consumer champion by carrying the privacy torch. They pressed forward with iOS 14.5 in Q2 with installations now approaching 75% of the market. Why does this matter? It’s the first major operating platform to require consumers to grant companies permission to track them outside of the apps they’re choosing to interact with.

Watch this. This move better aligns iOS with the tracking prevention values long held by the Safari browser and those increasingly held by consumers. Given the market power of Apple, it has triggered a war with Facebook, the second largest tracker on the internet. In fact, Apple’s impact on Facebook’s future revenues was mentioned repeatedly on Facebook’s Q2 earnings call yesterday with future headwinds dominating the press headlines (despite their efforts to talk about the future “metaverse.”) As global regulators have frequently noted, a majority of Facebook’s data (and with that, their revenue) has long been derived from tracking users.

Surprise twist. The Attorney General of California also announced last week that their office had accelerated sending out warning letters to companies that weren’t properly honoring consumers’ opt-out of tracking requests via the Global Privacy Control. This should send fear through Google and Facebook as California law has defined tracking consumers as a “sale of data.” That definition will be mighty uncomfortable for two empires built on exactly that. And the California AG’s moves will accelerate pressure to create a federal law where Facebook and Google already have multiple regulatory issues to deal with. All of this has forced industry to accelerate its “reality check.”

3. Growing consumer revenues

Big takeaway. After a robust 2020, consumer direct revenues — including subscriptions — continue to grow, albeit at a slower pace. Overall, non-advertising revenues grew in the first quarter of this year. And they are trending up to 30% so far this year.  

Watch this. Although “subscription fatigue” continues to be a topic of discussion, DCN’s prior research and industry trends have shown nothing short of an insatiable appetite for quality programming. Yes, even when it bears the price of subscription. It doesn’t hurt that making a purchase is now as easy as a thumbprint on mobile.

Surprise twist. Gen Z (yes, the kids who grew up with iOS) don’t seem to mind advertising. DCN will be releasing research in September that shows that Gen Z’ers (16-24) actually have something in common with Gen Y (25-40). Both groups are very open to advertising in their programming. Whether they pay or opt for a free service, the existence of advertising doesn’t seem to be a major factor for younger media consumers.  

4. Strong streaming market

Big takeaway. No market has had more of a dichotomy between advertising and subscription-supported models than the red-hot video market. In fact, DCN broke out the “advanced video” segment for the first time in our most recent quarterly revenue report. And it nearly tripled in our first year-over-year comparison. 

Watch this.  Apropos to this heading, America can’t seem to get enough to watch from these trusted brands (and DCN members): Disney Plus, HBO Max, Peacock, Discovery Plus, Paramount Plus, and the many other services that have gone direct to the consumer and are reaping the rewards.

Surprise twist. The 10-ton giant of streaming video, Netflix, missed earnings in Q2. It lost hundreds of thousands of U.S. subscribers in Q2, with metrics that looked more like a traditional cable TV company. Maybe it’s a momentary lapse from last year’s stay-at-home streamers. But it could be a sign of migration to the newest competitors. Either way, I’ll be watching.

Trend watching and trendsetting

As someone whose job it is to promote the value of quality and trusted media brands and to call out those who seek to disintermediate them, monitoring trends can be one of the most fluid and head spinning parts of the job. The team at DCN will continue to champion the trusted providers of content that informs, entertains, and delights because that is what consumers expect and what we believe will ensure a healthy future for our industry.

Rounding up these current trends, I see a lot to be excited about – particularly with the next generation – as we continue to learn the lessons, both good and bad, from the pandemic. It’s never a dull business and I can’t wait to see what’s next.

Perspectives | Supporter Spotlight

Opt out of the bad ads that ruin in-app gaming

Since the inception of smartphones, mobile games have been one of the most popular app categories. However, there is one major downside to mobile gaming: the influx of bad ads.

Anyone who’s developed a minor addiction to a mobile game – be it a classic title like Candy Crush, Words with Friends, or a modern sensation, such as Roblox or Among Us – is all too familiar with the frustration of an intrusive ad. User expectations around in-app advertising differ for gaming vs. non-gaming apps. That said, all users draw the line at malicious advertising.

Striking the balance

For app publishers, trying to strike the right balance between monetizing your app effectively and not inundating users with ads is always a delicate process. However, that’s especially true for gaming apps. The success of mobile games is entirely dependent on the user experience. Therefore, a malicious, interruptive, or offensive ad can entirely derail the entire user experience. Ultimately, when it comes to advertising in-app, it’s about serving safe, relevant, and brand-suitable ads for your users.

The good news for app publishers is that gamers are receptive to advertising so long as it adds to the experience. When that happens, ads can enhance rather than detract from the gamer’s experience. Moreover, gamers are more than willing to view ads in exchange for in-game goods, such as extra lives, power-ups, new levels, and in-game currency. These ads help game makers monetize their titles. But they also make the game itself stickier, inducing users to play longer and more often.

Caution: Hazards ahead

Aside from an offensive ad creative, users are exposed to a myriad of threats after clicking on an ad. Because gaming apps appeal to consumers of all ages and all levels, apart from strict ad content parameters, app publishers must recognize the hazards of malicious advertising.

Recently, malvertisers have shifted their gaze from the ad itself to the landing page the ad leads to. And gaming users are often the target of malicious or deceptive attacks, both of which come at the expense of the user experience. Threats include cloaked landing pages leading to scams to father sensitive personal or financial data. Here, the challenge is sifting out the bad actors and ads with a fine-tooth comb to ensure that only high-quality ads make their way onto your app.

A virtuous circle

When it comes to in-app advertising, bad ads have an immediate impact on monetization and the ability to work with valued monetization partners. For instance, the top five in-app platforms avoid apps with a low rating. Additionally, low-quality ads lead to bad reviews, low ratings, user churn.

Unhappy users will to switch to competitors’ apps, and at the very worst, apps may be kicked out of the App Store/Google Play. Additionally, app developers may be banned from the digital ecosystem due to ads that violate Apple’s new ATT policy. To safeguard users and ensure high ad quality, app publishers can follow the three ad quality guidelines: Ads must not contain malware, disrupt the user experience, or feature off-brand or offensive content.

Closing the loop on bad ads

Here’s what tools in-app publishers can implement to maintain high ad quality:

  1. Adopt a real-time bad ad-blocking solution to thwart all malicious attempts.
  2. Use proactive low-quality ad filtering to eliminate user experience killing ads.
  3. Leverage automated and manual content management tools to define and enforce ad content parameters.

Identifying bad actors is difficult. But, luckily for publishers, they can use ad monitoring tools to conduct automated, round-the-clock surveillance of their ad networks and root out bad ads before they ever have a chance to show up in their games.

The best philosophy is to block in real-time. This eliminates any lag in response time and saving energy while preventing bad users experiences from appearing. These days, it’s critical to be certain you are part of the proactive new world vs. a reactive, old world.

Perspectives | Supporter Spotlight

Publishers: Use your data to close and retain more deals

To convert brands in direct-sold sales conversations, publishers are tasked with proving the quality of their audience and inventory. From prospecting to sales decks to wrap-up reports, we’ve increasingly heard questions about how publishers can use third-party data to support the sales process. The good news is that most organizations already have a lot of valuable data that is leveraged by other teams.

However, just because your organization is collecting data doesn’t always mean that it’s being used successfully. This can be due to lack of alignment on organizational strategies or data living in siloed or complex systems. Often, it’s simply about having a lack of time to understand how to effectively leverage the data. Most ad ops teams are plugged into a variety of data sources that can also provide valuable insights and compelling stories to support the sales process.

Ad sales teams can increase direct sales by using data to zero in on the right buyers and showcase value in pitch decks. They can also use it to effectively package inventory and report on campaign performance in a meaningful way to clients. 

Finding the perfect buyers

Prioritizing the right buyers is one of the largest challenges for sales teams everywhere. Leaning on existing relationships or brand recognition can work up to a point. However, informing your prospecting with additional data sets allows you to quickly identify the right prospects to approach and shed light on new market segments. One example of this can be found in a publisher’s programmatic data. With normalized advertiser data, sales teams can identify the biggest spenders on open exchanges for more detailed buyer analysis.

Once those potential buyers are identified, it’s important to understand compatibility to ensure you can tell a story that aligns with a brand’s goals. This typically comes in the form of media quality data from verification vendors that measure metrics such as viewability thresholds, fraud rates, and brand suitability. Based on specific brand goals, content alignment and risk tolerance, publishers can further narrow their list to only include prospects that match up with what their inventory has to offer.

Highlighting inventory and audience value

As a premium publisher, it’s not enough to simply tell buyers that you know your audience. Advertisers only pursue direct deals if they’re confident that the inventory purchased is reaching their ideal audience. First-party data can be helpful here. It allows you to discuss content engagement, demographics, traffic and other metrics that showcase site performance and your user personas.

However, this story becomes even more powerful when combined with third-party measurement and contextual data such as overall viewability, engagement metrics, invalid traffic rates, and more. All of these use established industry standards such as those supported by the Interactive Advertising Bureau (IAB).

The biggest challenge here is understanding how to line up these data sets. They you can decipher which metrics are going to resonate most with buyers who want an objective truth. More specifically, which metrics gives them the confidence that delivered impressions will reach these users consistently. When used in conjunction with data-driven prospecting, data used during this stage of the sales cycle can provide an opportunity to easily show clients how you can meet their needs.

Advertisers also want to understand where their creatives will go and how they might perform.  Creating compelling, tailored packages using all of the available first- and third-party data can level up your pitch. It also helps ensure that expectations are clear going into each campaign.

Telling the performance story

Now that you have the client, how do you retain and expand the relationship? Traditionally, campaign wrap-up decks include run dates, traffic drivers, top-performers and other KPIs. This is a great place to leverage data from different sources to drive home how quality, engagement, and context help brands meet their goals.

Third-party data enables you to confidently highlight benefits such as:

  • You serve zero fraudulent impressions
  • Your campaigns met the client’s viewability thresholds
  • Campaigns were served alongside content that positively supports the brand’s image
  • Make goods won’t be necessary due to successful targeting

Whether campaigns meet buyer expectations or not, third-party data sets can serve as a retention tool and allow you to speak the same language as your customer. Your team will be able to outline what worked and what didn’t, while including data-driven recommendations for the next campaign. This strategy will give buyers more confidence in your ability to course correct and maximize their return on ad spend.

TLDR: It’s important to infuse your sales strategy with data

Gone are the days where the only sources of buyer friction came from viewability discrepancies and buffering requirements. Yes, those still remain. However, buyers increasingly value inventory that is brand suitable, fraud-free, and in-geo. This makes inventory scrutiny and sales conversations more complex. But the right data can cut right through that to increase conversions and drive business.

Perspectives

DCN’s must reads: week of July 22, 2021

Here are some of the best media stories our team has read so far this week:

DCN’s must reads: week of July 15, 2021

Perspectives | Revenue | Supporter Spotlight

The great privacy reset is here. Publishers, are you ready to capitalize?

The advertising industry needs to adjust its focus from big tech’s micro-changes to the bigger privacy picture.  

Something is happening at a macro-level that requires more attention than incremental changes and band-aid solutions that we see at the forefront of digital advertising. We are heading towards a great privacy reset. A sharp focus on privacy is pushing everything towards the protection of people’s data and strengthens the requirement for first-party data and closer relationships between publishers, advertisers and their end-users. 

Unfortunately, publishers and advertisers are currently working through a disruptive and chaotic period caused by changing privacy regulations and regular browser announcements. And the results aren’t positive. A study conducted by Permutive in June, surveying 501 senior decision-makers within publishers in the U.S. and U.K., shows that almost three-quarters (74%) of publishers say that browser updates negatively impact advertising business models. And 75% say that privacy regulations are impacting the ability to future-proof advertising revenue. 

There is another way. We need a stable and sustainable foundation for digital advertising that protects publishers’ work, enables advertisers to reach their consumers, and protects people’s privacy and access to information. That approach and solution exists today. It’s an advertising ecosystem built from publishers’ first-party data that prioritizes privacy and protects revenue.   

First-party data drives brand results 

The way media is traded is rapidly changing, shifting fundamentally from third-party cookies and identity to consented first-party data. With this shift towards privacy, first-party data is becoming the new gold standard. This creates an opportunity for publishers to be fairly compensated for their data and improve campaign performance. 

In a recent event, held by Permutive and New Digital Age, publishers pitched their first-party strategies to a panel of agencies. The pitches showed agencies the maturity of publishers’ solutions for advertisers and the impact of first-party data on brand metrics, compared to third-party and publisher averages. 

One publisher was the Guardian, one of the world’s leading English-language news publications that reaches 8.8 million readers daily. The Guardian showed that its first-party data had an average brand lift of 65% and ranked 39% higher on preference and intent metrics. For one particular campaign, the Guardian created a bespoke cohort for luxury furniture brand Rimadesio focused on readers interested in architecture, interiors, art and luxury. The campaign achieved a brand consideration increase of 102% and an intent uplift of 79%. 

Digital Media Services (DMS), the digital arm of Choueiri Group — the leading media representation group in the Middle East – also took part in the event. In a campaign for a telco brand in Iraq aiming to drive awareness of 4G in the nation, DMS created first-party cohorts from data points across its 40-plus sites. 

The campaign resulted in an 85% increase in clickthrough rate, a brand awareness increase of 12% and an ad recall increase of 38%. The agencies who participated, including Starcom, Carat, Mindshare, and Havas, concluded that publishers’ first-party data stands up as a privacy-safe solution for the open web that’s available today. 

Focusing on first-party collection and scale 

Publishers recognize the value of their data as they look to build direct relationships with advertisers. The in-depth-cohort insights they can proactively promote and add in their RFP responses only looks to secure that revenue stream. In our study of the impacts of privacy, consent and browser updates, 80% of publishers say that collecting more first-party data to fuel advertising revenue is a priority.

This is also reflected in buy-side demand for these insights, as almost half (49%) of publishers say their first-party audiences are requested in over 60% of RFPs. Insider, for example, launched its first-party platform, SAGA, in February 2020. The publisher is seeing 400% growth year-over-year with advertisers using Insider’s first-party data for their campaigns. Today, 19-out-of-20 of Insider’s top advertisers are using SAGA.   

An appetite for these audience insights has spurred publishers to collect more behavioral and contextual first-party data and invest in technology to scale first-party data. In fact, according to our research, these are the top two priorities for publishers within the next six months. 

Upside of first-party relationships

The benefits of building privacy-safe direct relationships based on first-party data are many. It adds transparency between the buy and sell-side, first-party data is used to create cohorts that improve campaign performance, and it protects people’s privacy. Plus, it’s a solution that is available today and does not require third-party data or the use of identifiers. 

When publishers and advertisers control their data, they control their fate. Significantly: User privacy is centred, not an afterthought. The great privacy reset is here. Those that don’t take it seriously open themselves up to risk. Publishers are proving that digital advertising can be successful for both themselves and advertisers without using identifiers and third-party cookies, all while increasing revenue and maintaining users’ trust. 

By resetting to protect privacy, publishers and advertisers can build a foundation for digital advertising based on knowledge, understanding and experience and run successful data-driven campaigns without sacrificing privacy for performance.   

About the author

Michael Ogunjobi is Manager, Customer Success, Americas, at Permutive. Michael, and the customer success team, consult with enterprise publishers to enable them to increase their data-driven advertising revenue and make revenue diversification a reality — while keeping user privacy at the heart. Prior to joining Permutive, Michael was Senior Customer Success Manager at Qubit, responsible for product adoption and customer retention. Michael champions the value of publisher first-party data, especially as the industry navigates the impact of data deprecation and identity challenges.

Perspectives | Supporter Spotlight

The best conversion strategy media and publishing companies still aren’t using

When talking about conversion strategies within the digital media industry, we often focus our efforts on the same tried-and-tested methods: email marketing, social media campaigns, SEO, PPC, etc. These are all important and effective ways to drive readers along the path to registration. They make up the foundation for a complete digital strategy, including subscriptions. 

But there’s one aspect of the online content offering that is too-often overlooked, despite being pivotal to a publisher’s bottom line: the on-site user experience.

By UX we don’t simply mean a seamless UI and attractive website design (although these are vital, too). We’re talking about data-driven, deeply personalized, unique experiences that make anonymous visitors far more likely to register, and repeat customers far less likely to churn. 

This improvement can take many forms, such as differentiated trigger points for your most engaged readers, messaging dependent on on-site behaviors, and personalized offers.  Any move to more closely align value with offering – in other words, every step taken into deeper personalization – makes your relationship with  customers stronger and more likely to last.

Ultimately, optimizing the user experience is a commercial gamechanger. It significantly affects two major KPIs : lifetime value (LTV) and customer acquisition cost (CAC).

Optimize the user experience to drastically lower CAC

With more competition than ever and customer expectations at an all-time high, customer acquisition is tough. This is particularly true in the overcrowded market for digital content. 

However, experience optimization makes it much easier for publishers to target and convert their audiences. When it comes to messaging, 72% of consumers won’t respond to marketing efforts unless they are personalized, according to SmarterHQ. And while personalized messaging alone may not lead directly to a sale (although, it very much could), it may be just what your business needs to stop visitors falling at the first hurdle. If you can’t get your readers to engage, there’s no chance they are going to convert. 

But this is just the first step in a first-party data strategy. Progressively profiling readers by collecting new information at different stages of the subscriber lifecycle allows you to accurately target readers with registration walls at the right time, using user data such as on-site activity, device type and time of day. The incremental build up of your datasets gives your commercial decision makers a better understanding of the customer base. This, in turn, informs their ability to tweak messaging and experiences to nurture leads.

Further down the funnel, unique user experiences will also help get new customers over the line. The first-party data collected on registration can then inform tailored content, offers and timing. This accelerates conversation rates and keeps bounce rates low.

 It takes a lot of effort (time and money) to get users from awareness to intent. So, turning them off with an ill-timed paywall or irrelevant content offer leads to an automatic loss. On the other hand, Marketing Insider Group found that tailored content offerings increase purchasing intent for 78% of Americans. This makes triggers such as a datawall or paywall a make-or-break point for digital publishers.

Focus on personalization to increase LTV

Optimized experience increases your chances of converting a user. However, focusing on the customer experience straight after purchase also sets the foundation for higher value, longer-term subscribers. 

Maintain personalized content to keep engaged readers happy. This paves the way for an upsell opportunity for your most loyal advocates. It is famously 10x easier to sell to a current customer than a new one. However, this is often forgotten in the world of media. Increasing subscription value, or lengthening subscriber lifetime directly boosts revenue and profitability. Doing both has a double whammy effect on your commercial goals.

And personalization isn’t just for those at the top of the funnel. Use customer engagement and behaviors to identify churn risks — the subset of your customer base that seem disengaged and are therefore disproportionately likely to leave. Give them a tailored offer, potentially even a downsell to a lower plan, or nudge them with relevant content to maintain each and every relationship. 

Conversion is nothing without retention. Personalized experiences at the beginning of the customer journey (such as getting the right users to convert with relevant messaging) help keep churn at a minimum just as much as last-ditch attempts.

The bottom line

Experience optimization is the best conversion strategy publishers aren’t doing, But they should be. That’s because it has such a direct impact on commercial outcomes. Purchases are made on relevant, unique experiences just as much as bad impressions are via irrelevant or ill-timed messaging. 

And at the end of the day, optimizing the user experiences at each point of the subscriber lifecycle is an improvement that every publisher can make without needing to build a new team, or create a new marketing channel from scratch. Getting it right can turbocharge revenues. Getting it wrong can ruin all your other commercial efforts.

For most, it’s a simple yet powerful step that you just can’t afford not to take in today’s media landscape. 

Perspectives

DCN’s must reads: week of July 15, 2021

Here are some of the best media stories our team has read so far this week:

DCN’s must reads: week of July 1, 2021

Perspectives | Revenue | Supporter Spotlight

Viewability + engagement = highly valuable impressions

Imagine that you’re driving down the highway and many of the billboards you pass are facing in the wrong direction. Advertisers paid for their messages to be displayed. However, some percentage of these ads have no chance of being seen.

If you were an advertiser, would you be willing to pay a higher price for only those that were guaranteed to be viewable? Or would you rather pay a lower price to buy all the billboards and roll the dice? Perhaps this is a simplistic way to look at the programmatic landscape, but I hope it makes the point. Ads that have a low probability of becoming viewable have little or no value.  

In the land of the blind, the one-eyed man is King

If the above makes any sense, then why does the Media Rating Council

continue to enforce such a low requirement for viewable impressions?  The MRC deems that an impression counts as viewable when only 50% of the pixels are in view for one second. If your answer is that “it is what it is,” then perhaps we in the industry should raise our expectations. Let’s consider setting a higher standard for ourselves and our advertisers, AKA, the lifeblood of our businesses.

Viewable impressions are more valuable to advertisers, command higher CPMs, provide a better ROI, and increase publisher income. So, let’s find a sustainable way to increase supply without jeopardizing the quality of our content, degrading user experience, or resorting to disruptive devices.

Plus ça change, plus c’est la même chose

You spend hundreds of thousands or millions of dollars annually creating exciting, informative, entertaining, beautiful, provocative, and inspiring content for your audiences. Your goal is to engage readers in this content so they spend more of their most precious resource, time, on your site. They read your stories and move from the home page to below the fold with deeper dives into your content. And ad units scroll into view and are revealed during these engaged user sessions.

Intuitively we already know that an ad you can see is worth more than a non-viewable one. However, logically, one that is viewable while you are engaged in consuming content that is of interest is even more valuable than the billboard you cruise past at 70 mph.

When I was a magazine publisher, ad buyers regularly asked for their ads to be placed “far forward on a right-hand page.” They believed that these were more likely to be seen than those within stories in the magazine. The reality was then as it is today: that an ad adjacent to content where a reader is engaged is far more likely to be seen and effective.

And the cookies came crumbling down

While Google’s recent announcement has given all of us a reprieve, we know that the times are a ‘changing. So how do we respond now that publishers have bought some time and tech companies have a longer runway to build alternatives?

There is no question that there will be dozens if not hundreds of “better” data mousetraps in the marketplace during the coming months. Yet the fact is that we already have many of the tools necessary to enhance the value of our websites for advertisers. Your sites already have the right target audiences. You capture their attention and interest with your content. And they’ve come to right place to enjoy that content. Maybe the missing link is that some of your billboards have been installed facing the wrong direction.

So, here’s the big idea. Serve ads only to readers when they are engaged in content and continue to serve them viewable ads for as long as they remain engaged.  It can be done. It is being done on hundreds of sites. (Check out Inc.com or Rightmove to see.) You can do it too. And when you do, your programmatic ad revenue will increase by 20-40%.

About the author

Bruce Brandfon is Chief Media Officer of Duration Media. Prior to that he was EVP of Webspectator, and before that VP and Managing Director at Publicitas. Before joining Publicitas, Bruce was VP and Publisher of Scientific American. He has also held leadership positions at The Philadelphia Media Network, Newsweek, and Time Inc. Bruce is Director of the Board of Advisors at Planet Forward, and an Adjunct Professor of Media Studies at Westchester Community College.

Perspectives | Supporter Spotlight

Why third-party cookies should be dead to you (regardless of what Chrome does)

On June 24, Chrome shook the industry once again by announcing it will delay the deprecation of the third-party cookie, which was expected to be in 2022. When the news broke, many industry players gave a sigh of relief. The two-year time frame to migrate to a cookie-less infrastructure was quite tight for many. And not all companies were prepared to buy and sell data and inventory without the good old third-party cookie.

Transitioning a multi-billion-dollar industry to a new framework is not a trivial matter. This is keenly felt in a highly interconnected ecosystem like digital advertising. However, it’s a crucial step that we all must take. The cookie-based infrastructure has been called into question by data privacy regulations, such as GDPR. It is also inefficient.

The many limits of third-party cookies

Third-party cookies are domain-specific and can only be read by the server that created them. Technology platforms need to synchronize IDs with each other to create a common reference and share user-level information. This process, also known as cookie matching, takes place on advertiser and publisher websites. Significantly, this creates several issues:

  • Value loss: the pool of identifiable users is reduced by 10-20% each time platforms match IDs with each other, creating lost opportunities for publishers to monetize their assets and for advertisers to reach their audiences.
  • Privacy compliance: cookie matching represents an exchange of personal data. This is difficult to align with the requirements of data protection regulations such as GDPR and CCPA in terms of control and transparency.
  • Data leakage: because of cookie matching, user data can be accessed by companies that lack a business relationships with advertisers and publishers. This puts their data at risk.

In November 2019, ID5 commissioned a study to assess the scale of the problem. The study, conducted on 68 top news and magazine websites in Europe, found that 58% of vendors that were registered with the IAB TCF had never been seen to take a GDPR consent parameter in their pixel.

Some vendors that were not being sent the consent string were sharing a completely fabricated consent string. The study also found that some of the companies triggered to monetize publisher-branded segments on their sites had no relationship or contract with publishers.

Therefore, we must transition to a cookie-less infrastructure to operate more efficiently and protect consumers’ data. And yes, that’s regardless of what Chrome decides to do with cookies.

Two of the major browsers have already deprecated cookies

The cookie matching process is far from being efficient or privacy-compliant but it still enables user identification which allows the deployment of campaign strategies such as targeting, retargeting, frequency capping and measurement. However, let’s not forget that cookies are already not available on 30+% of the traffic since they have already been blocked by Safari and Firefox. So those valuable campaign strategies cannot be applied in those browsers. That’s the main reason why cookie-less traffic is massively under-monetized. A study by Google estimated that the ability to identify users accounts for 50 to 60% of publishers’ ad revenue. Another study conducted by Bidswitch shows that eCPMs are 50% lower on Safari and Firefox.

Furthermore, Publishers’ first-party data loses its value in cookie-less browsers. First-party data belongs to the domain that has collected it. To activate it and power retargeting or prospecting campaigns, media owners need to find a way to share it with their monetization partners. This has been historically done with third-party cookies. In browsers where cookies are blocked, first-party data sharing represents a challenge.

By adopting solutions that enable privacy-compliant identification without relying on third-party cookies, publishers can benefit from all the capabilities that cookies offer without any of the hassles associated with them.

Use the extra time wisely

Publishers have multiple alternatives available to them. So, they have no reason to continue relying on cookies, which puts their users’ data at risk and causes them to miss out on revenue opportunities.

Many smart publishers have already integrated with future-looking solutions. These enable the individualization of consumers in browsers where cookies are blocked. This enables them to get incremental value from their Safari and Firefox traffic and to lay the foundation for the future when all traffic will be cookie-less. This also allows them to offer their customers a better and more privacy-compliant experience on their website.

If you haven’t started this process already, Chrome’s delay is certainly good news for you. However, you shouldn’t wait. The time to act is now.

There are different approaches and solutions that enable user identification in cookie-less browsers. However, it takes time to evaluate, integrate and measure which of them bring the best results and offer the best level of service. Use this extra time wisely do not delay the process further. Start integrating and testing next-generation identity solutions and encourage your monetization partners and clients to do the same. Migrating to a new infrastructure requires a collective, industry-wide effort. And publishers are positioned best to lead the way.

Perspectives

DCN’s must reads: week of July 1, 2021

Here are some of the best media stories our team has read so far this week:

DCN’s must reads: week of June 24, 2021

Perspectives | Supporter Spotlight

Will iOS and cookie privacy updates affect Facebook?

Facebook is a peculiarity, even among its fellow ad-supported media giants. Their ability to collect data from their two billion plus users, and package that data for advertisers, is second to none. Facebook’s business model is inherently more insulated from many market fluctuations that affect other advertising platforms because of Facebook’s network effect. Every new Facebook user adds new data to the system. That gives Facebook even more advertising data to sell to advertisers.

Yes, Apple’s iOS14’s App Tracking Transparency (ATT) changes, and Google’s plan to phase out third-party cookies, now delayed until 2023, will have an impact. However, the amount of user data being collected within Facebook and the value of that data is gold. And that’s even without tracking users across third-party apps and websites.

With Facebook’s vast internal network and collective data, Facebook ads aren’t going away. Instead, Facebook is adopting new privacy standards and will continue to play a significant role in the growth of small and niche businesses. Chief Executive Mark Zuckerberg stated that as a business, he believes Facebook can manage through the changes. He thinks it may emerge even stronger if it becomes harder for small businesses to navigate data targeting without Facebook. Here at MediaRadar, we decided to take a closer look.

Niche industries and ad targeting

Facebook reported revenue of $26.17 billion for the quarter, which was up 48% compared with a year prior. Facebook attributed the significant increase in revenue to a 30% year-over-year increase in the average price per ad and a 12% increase in the number of ads delivered.

The biggest spenders, accounting for 7% of ad spend, were entertainment brands, more specifically streaming brands such as HBO Max, Disney+ and Amazon Prime. One could assume, based on these numbers, that ad spend from large companies like these services accounts for Facebook’s success. Instead, what truly sets Facebook apart is how it caters to very niche audiences.

When looking at our  data, of the percentage of retail industries that advertise on Facebook, a startling 62% fits into the “other” category which is made up of hyper-focused retail categories. Mind you, MediaRadar tracks over 7,500 product categories, and over half of them are incredibly specific.

Niches such as leather goods, herbs, telescopes, or cheese shops are not relevant to a majority of users. However, Facebook pinpoints who needs to see these types of advertisements the most. In addition, Facebook targets people with ads from industries that other platforms don’t. And,  since they target users ads from plenty of market subsets, Facebook’s reach and revenue adds up.

Facebook is quite aware of its niche marketing prowess, and takes pride in it. In prepared remarks for the Q1 earnings release, COO Sheryl Sandberg chose to highlight someone who runs a yoga studio, and how Facebook helped her get the word out, as opposed to highlighting a major brand. It shows the value of their marketing strategy, and how appealing to the everyday consumer is what attracts advertisers to the platform.

Similarities to other platforms – and differences

Facebook’s reliance on niche marketing is strengthened by the fact that they are quite similar to other platforms in areas such as retention and campaign length. We found Facebook had a 34% retention rate between 2020 and 2021, similar to the overall industry average. As for campaign length, 44% of campaigns lasted one month or less, while 38% of campaigns lasted from two to four months. 

The advertiser overlap rates between Facebook and other major forms of media is also a reason to point to niche markets as its success. In reviewing the data, we saw there was a 34% rate of overlap between Facebook and major broadcasters such as NBC and Fox, and those numbers are slightly lower when looking at podcasts and Snapchat.

The key stat for Facebook here is that nearly half of their advertisers are exclusive to their site, including nearly 60% of retail advertisers. While advertisers have the same buying patterns as everyone else, Facebook also attracts a lot of brands that aren’t selling on other platforms, and that makes them even more valuable.

What can we learn

Facebook’s success with niche markets provides a valuable lesson for us all: know your audience. No matter how big or how small, it’s important to make sure you market to your customers in ways that your competition cannot. With their vast network effect and their ability to package granular advertising data, Facebook’s dominance will only continue to grow regardless of whether they are able to track users across third-party apps and websites. But of course, they’ll need to ensure that they get privacy buy-in from their users, particularly as policy and user preference around this topic evolve .

©2021 Digital Content Next. All Rights Reserved.