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Advertising | Perspectives

Building a 360-degree customer view to thrive in post-cookie publishing

Last year was a whirlwind ride in ad land. Publishers navigated through a tumultuous period of reduced ad spend, axed campaigns, and overzealous keyword blocking. However, 2021 brings with it a new and arguably more significant challenge: the deprecation of third-party cookies and other universal identifiers.

But don’t listen to the nay-sayers as they opine the prospect of a doomed ad ecosystem. Instead, know this: The impending changes to online advertising, while no doubt disruptive, present incredible opportunities for advertisers and publishers alike. Publishers and content creators possess troves of first party data. Given their direct relationships with audiences, they may be in the best position possible.

Publishers: Seize your moment

Eliminating third-party cookies and other universal identifiers alters the dynamics of the digital advertising market. The “cookie-free” world aims to serve the needs and wants of consumers first and foremost. Consumers will set the terms for digital advertising. This marks a fundamental change from what we’ve been used to.

Publishers currently have the strongest and clearest connection to consumers through their large networks of audiences. As the market makes its shift away from universal IDs, we can expect to see many brands and advertisers work more closely with publishing partners. But this additional leverage doesn’t mean publishers can get away with business as usual. Innovation is crucial. For publishers to establish staying power, they’ll need a sophisticated first-party data strategy that’s proactive and meets the needs of today’s advertisers.

Diversification is key

As the digital advertising industry moves beyond personal identifiers, diversification will be key to success. A single-point, silver-bullet solution to replace cookies or MAIDs isn’t what anyone’s calling for. It’s unlikely that such a solution will exist given the ubiquity and heavily embedded infrastructure we rely on today.

Rather, the answer will more likely involve a diversified portfolio of solutions and approaches to data-driven targeting and measurement. The fundamentals for sound data strategy won’t change, though. In the “cookie-free” world, publishers will still need to:

  • Preserve customer experiences and deliver heightened value to visitors
  • Support advertisers in reaching the right people with the right message at the right time
  • Optimize yield through diversified approaches to inventory packaging

Strategic shifts

However, changes to data strategy will center around three core areas. Publishers will need to maximize data to build stronger advertiser relationships, leverage context-based technology to increase understanding of one’s inventory and commit to measurement that extends beyond baseline metrics.

Publishers must:

1. Maximize the value of your greatest assets: Harness the power of data and enrich the understanding of your customers.

As premium publishers move towards a subscription model and first-party data becomes critical, we expect to see the shift to gather as much known first-party data as possible. Many will leverage new subscription models in order to do that. The new data will primarily reveal demographics and online behavior restricted to a publisher site portfolio. However, publishers will need to enrich that data to get a 360-degree view of their audience to better sell inventory.

2. Learn how contextual intelligence drives value.

There are myriad signals on a page. Sentiment, for example, reveals the tone and context of an article. Understanding this context (and doing so at scale) will play a more integral role in ad targeting as cookies disappear.

ID-free technology such as contextual intelligence maintains an acute focus on content and consumer mindset. This allows intelligent publishers to curate inventory packages, based on high value content, which their advertisers seek.

Tapping into reader sentiment will be of particular interest to both advertisers and publishers. Research shows the value of emotionally connected customers. They buy, visit, and pay attention at higher rates compared to people who don’t share the same emotional connections. As context gets more advanced, expect to see this area explored with great interest from both advertisers and publishers as they aim to create detailed views into the content interests and subsequent consumption behaviors of their audiences.

Furthermore, brand safety, suitability, and sentiment-based decision making opens up publishers to more curated, bespoke solutions. This will more accurately value their supply and subsequently make addressable media more valuable. Plus, contextual advancements across a variety of formats, coupled with new and more data-informed approaches to context, will create additional opportunities for advertisers to reach people in an anonymous capacity. Sky’s the limit for the future of contextual.

3. Find out how analytics and insights matter more than ever.

Among the adtech lessons of 2020—media moves fast. Measurement must keep pace during critical times. It must also operate across all channels and platforms to ensure a comprehensive view of success and uncover areas for optimization.

We can also expect a greater focus on analytics with limited reliance on personal identifiers. Publishers will want to prove that their sites are safe for advertising. They’ll need viewable inventory that features low invalid traffic (IVT). They will also want to provide rich insights to show the best creative performance, media attention across multi-format content (such as video, CTV or streaming audio, eSports, desktop, and mobile).

A portfolio approach for the future

We cannot overstate the importance of looking ahead, beyond universal IDs. Digital advertising exists to evolve, and businesses need to adapt. The change to identity unquestionably baffles the best of us. However, some may mistakenly invest in only one solution when we’re certain another shift will closely follow. The nature of this business requires more forethought and imagination, especially now. By widening the array of solutions and ap

Advertising | Perspectives | Revenue

How to choose the right approach – and solution – for a cookie-less world

The demise of third-party cookies offers an opportunity for the digital advertising industry to rebuild on a better foundation. This is particularly true for publishers who are willing to leverage the right approaches and technologies to monetize their audiences and protect their data.

When Google announced its deprecation of third-party cookies in Chrome, advertising technology providers, industry consortia, and Google itself started to work on alternatives. The goal is to build solutions that ensure addressability without compromising privacy compliance.

Finding a valid alternative to the cookie is particularly important for publishers and ad tech platforms operating in the Open Web. Google and other Walled Gardens can count on billions of authenticated users to deliver personalized ads. However, the rest of the industry needs to find alternatives that enable them to address users efficiently to stay competitive.

Publishers can already see what a non-addressable internet looks like. In Safari, where third-party cookies are already blocked, media owners see their CPMs decrease by 50% as compared with Chrome.

Two popular approaches to identity

Today, there are two popular approaches to solving the identification challenge in the post-cookie world. One is based on cohorts and the other uses pseudonymous universal identifiers.

The cohort-based approach

Google has been working on its Privacy Sandbox. This collection of proposals is aimed at preventing individual user information from being shared with the ecosystem. The initiative focuses on local data processing. The goal is to provide technology platforms with APIs to collect aggregated data about user profiles, as well as aggregated campaign performance data. According to Google, the mission of the Privacy Sandbox project is to “Create a thriving web ecosystem that is respectful of users and private by default.”

Grouping users in cohorts may give the illusion of compliance because, arguably, you cannot individually address people. But this is not the real problem. This approach prevents publishers from engaging in a real conversation with people about the value exchange between their data and the services they receive. Moreover, it doesn’t offer transparency and control to consumers. They have no way of knowing in what group they have been added and why. They also lack the ability to remove themselves from a cohort.

The approach based on pseudonymous universal identifiers

The other method available is based on pseudonymous identifiers that are created when a user opts in to share some pieces of information with the publisher or authenticates on a website. This information can be used as a consistent identifier by all the websites that have collected and passed along the advertising value chain. Brands can use the ID to collect information, deliver messages and measure the performance of campaigns.

Pseudonymous identifiers can be created using different types of information and require users’ consent to comply with data protection regulations. When publishers can provide signals such as hashed email addresses or login IDs, these can be used to anchor consistent identifiers across the websites that have collected them.

Most of the time, email addresses and login IDs are not available. With this approach, probabilistic algorithms use passive identification signals, such as IP address and the device’s user agent string that are shared via the HTTP Protocol. This enables the ability to infer the uniqueness of a user across websites. This method can be particularly useful to address and monetize users that are not ready to authenticate yet but are willing to share some level of information with the website.

Why one approach is better than the other

Unlike the Privacy Sandbox, universal identifiers work in all browsers, not just Chrome. Thousands of publishers that are keen to monetize their cookie-less traffic on Safari today and in all browsers tomorrow have already adopted universal identifiers. Chrome’s Privacy Sandbox, on the other hand, is still a set of proposals at their infancy stage. And, so far, they’ve only been tested by Google.

So why would you sit still and wait for Google to develop and test its Privacy Sandbox when universal identifiers are already available and working? Even more so, why should publishers and the rest of the industry rely on an alternative that will further increase its dependency on the tech giant and, most likely, work on Chrome only?

By partnering with the right identity providers, publishers monetize cookie-less traffic in Safari today and prepare for the post-cookie world.

Choosing the right universal identifier

So, if you decide to try the universal identity approach, the first step is to choose which ones to use. As of today, there are over 25 different identifiers that publishers can test in preparation for the cookieless world. No publisher will have the bandwidth and resources to try them all. So, below are some questions and considerations that can help to select the most suitable options for testing.

Privacy and transparency

Does the identifier use privacy-by-design technologies to capture consumers’ data privacy preferences? And does it give consumers the option to opt-out in the future if they decide to revoke data processing access? Make sure that your identity solution provider can guarantee your users’ privacy protection and control over their data.

Data protection

What about your data? What mechanisms does the identity solution provider have in place to ensure the information that you’re sharing in the bid stream is only accessed by your authorized monetization partners? Data leakage was one of the main concerns with third-party cookies. Ensure that your identity partner can safeguard your and your users’ data.

Footprint and adoption

How many platforms have adopted the identifier? An identifier is useless if ad tech platforms are not using it. If you’re considering several identifiers, verify they have enough footprint to provide some results. Most user ID modules are available on Prebid. (See how many platforms have adopted each of them.)

Cross-domain linking methods

What methods does the identity solution provider use to link IDs across domains? Most of them use deterministic methods and are only able to link authenticated users. No matter how many logged in users and email addresses you have, you will always have unauthenticated users visiting your website. So why miss on the opportunity to monetize that audience if they are willing to be addressed through passive identification signals?

Prepare today to thrive tomorrow

There are only a few months left until cookies are deprecated by all browsers. If you haven’t started testing universal identity solutions yet, start now. You can already see what the cookie-less world looks like in Safari so use this to your advantage. Utilize Apple’s browser as your testing ground and work closely with your monetization partners to understand what solutions bring the best results and why.

Advertising | Perspectives | Revenue

4 proposals for navigating post-cookie identity

In early March, Google announced that it was committing to its FLoC method of targeting and would not support alternative identifiers in any of its adtech products. The industry had a small, and understandable, panic attack.

Don’t worry. This is good news. There are still a lot of alternatives available for each use case. Alternatives include cohorts, contextual, authenticated identity, and probabilistic identity.

Cohorts

FLoC (Federated Learning of Cohorts) is technically the addition of a semantic classifier to the Chrome browser. It will scrape page content and URL data and qualify users into small segment groups based on their navigation history. Everyone’s still being tracked, but now only by Google.

It’s a pretty blatant data land grab. Google is using the specious legal argument that if a consumer browses the Internet with Google Chrome, all of the data collected while they browse is the first-party data of Google. Publishers, marketers, and most importantly users of the internet should take a careful look at what Google is doing.

Critical questions:
  1. Is the algorithm that builds these cohorts going to be open to publishers and partners for investigation?
  2. How exactly will Google decide what cohorts to qualify users in? And how can we be sure they won’t be the cohorts that make Google the most money?
  3. How will Google differentiate between valuable and less valuable scraped content?
  4. If one company controls the advertising of, the discovery of, the navigation of, and the monetization of the internet, how is this not an antitrust issue?
  5. Are cohorts privacy safe and are there controls for the consumer? Why, for example, has the Hague flagged FLoC as potentially non-GDPR compliant? 

If it’s neither privacy-compliant, nor competitive, nor pro-publisher, then what’s FLoC’s value to the industry? 

Contextual targeting

Contextual has gained a lot of traction in recent months. There are some that think contextual targeting is a privacy carte blanche. The truth is a little more complicated. Contextual does not require user consent as long it’s scoped to a single page of content.

However, as soon the context of more than one page is combined, even in session, even on a single publisher’s site, it becomes tracking. Thus, it carries the same legal burden of consent as any other tracking method. Further, without cookies, device IDs or other third-party identifiers, contextual has obvious struggles. These include precision, scale, frequency capping and, most importantly, measurement, which is critical to attract spend from advertisers.  

Our recent survey of publishers and advertisers found more than 69% of U.S. publishers are bullish on contextual targeting as a replacement for audience targeting. However, 66% of advertisers disagree. That’s a big enough divide to question placing all bets on context.

Authenticated identity (deterministic)

Authenticated, or deterministic, identity requires the user to provide a known piece of personally identifiable information, such as an email address. To obtain that email address, publishers, data providers, and brands ask consumers to log-in or register to a site/app to access free content, deals, or other services.

There are a lot of worthwhile pros here. Because it can be tied to a person, it’s a highly accurate solution and great for targeting and measurement. Additionally, user consent is easy to track, which allays privacy concerns.

However, how much of the web requires logging in? Early estimates expect the authenticated web to capture 10-20% of users. Scale is a real issue. Some publishers have a clear advantage in the authenticated lane. The vast majority of publishers will struggle to drive authentication, while others have built their value around free and open content. Without deep technical and monetary resources to draw on, authentication could be a game-over for many.

Non-authenticated identity (probabilistic)

To capture the rest of the 80% of the open web, publishers can use non-authenticated identity. This is better known as probabilistic ID. The tech behind the probabilistic method assigns a cluster of devices and browser signals to an ID that can be moved via established pipes into activation channels. Publicly available, IAB-approved signals can include IP address, time stamp, or browser user agent.

Probabilistic identity is the perfect complement to deterministic identity. Probabilistic is data minimized with no email, home address, or phone number required. It scores points for consumer privacy and ensuring that no brute force attack on an encrypted ID can reveal an email or a phone number.

Unfortunately, probabilistic identity is also widely misunderstood in the industry. While it does rely on IP address, some misconstrue it as fingerprinting. In fact, probabilistic identity has no more or less privacy burden then multi-page contextual targeting that leverages a first-party cookie. IAB Europe Transparency and Consent Framework 2.0 stipulates that “with consent, vendors can create an identifier using data collected automatically from a device for specific characteristics, e.g., IP address.”

Certainly, it’s up to you to pick the best solution for your business. That said, it always makes sense to diversify your toolset to capture the most revenue possible. It’s too early to tell which tools will perform best for which marketers. So, having all of them at your disposal allows you to work with more brands.

Advertising | Perspectives

Farewell cookies, hello true omnichannel experience

While we all know the end is coming, we’d usually rather not contemplate it. That’s the approach most media and adtech companies have taken toward cookies over the past year or two. 

These companies have long used cookies to monetize their content. Yet we all know the end of cookies is near. However, Google drove the final nail in the coffin with the announcement that they won’t support alternative identifiers after they kill cookies across their stack (including Chrome).

Really, this should come as no surprise to anyone. Content companies have been looking down the barrel of this gun for a long time. A few years ago, I was at a Google summit for adtech leaders when the company announced it would do away with third-party cookies in Chrome. You could almost feel the panic. Without cookies, how would adtech platforms grow revenue? And without adtech, how would media companies monetize their content? 

After Google’s most recent announcement, adtech stocks, which have been on a tear in 2021, took a hit. But in all likelihood, the market will stabilize and rebound. Many of the stocks already have. Content companies that already shifted their attention to strategies that are less cookie-dependent (CTV, subscriptions, curated communities, etc.) are thriving. 

Logged in

However, content companies that don’t have a cookie-less strategy need to get one, fast. Relying on contextual advertising or alternative identifiers is far from a panacea. The good news is that many media companies already have good customer understanding, or the tools to get there. 

These days, we live in a subscription-based world. Many sites require registration — if not payment — before accessing content.  Gartner has predicted that by 2023, 75% of B2C companies will offer subscription services, and for good reason: The success rate of selling to an existing customer is 60-70% compared to 5-20% for new customers.

Without the cookie, content companies are now “forced” to create a direct, permission-based relationship. A positive side effect could be a level of personalization and customer engagement that the cookie could not provide.

Positive steps

As content providers and publishers shift from cookies to a new paradigm of permission-based services, here are three areas of focus for content companies:

  1. Create a better customer experience. Admit it: the cookie spoiled you. You were tracking that visitor to your site with a focus on scale and not quality. However, a better, truly omnichannel experience will drive behaviors that your advertising customers will appreciate. Consumers will gladly subscribe to your content and give you permission (and declared data) to help you better serve them. And their increased engagement will drive up page revenue.
  1. Have a data strategy. The cookie made you beholden to your ad/martech partners. Now that you have formed a relationship with your customer, own that relationship. Build the right product tools and platforms, and don’t leave it to someone else to determine your success (or failure). The first-party relationship you are creating with your readers, viewers, and customers gives you direct data on their habits and interests. These are things that third-party platforms could only infer. 
  1. Build more digital products. Be everywhere. Host virtual events, like Complex Networks ComplexLand. Create curated members-only communities, like Fortune Connect. Embrace new ways of generating revenue. Experiment! Be agile (and Agile). Don’t be afraid of fragmentation. Own your relationships and customer experience by having an omnichannel strategy. 

The death of the cookie isn’t the catastrophe you might think it is. It is a necessary evolution. If you embrace it, it can actually set you up for long-term customer engagement and sustained higher revenue. Change has come … and it is good.

About the author

Chris Hansen is senior vice president of 3Pillar Global’s media and information services client service vertical.

Advertising | Perspectives | Revenue

Retiring third-party cookies: Stop panicking and start planning

Last January, Google announced the end of third-party cookies by 2022. The industry went into a frenzy. 

All the while, Google forged ahead quietly on its own. Occasionally, it would pop up to say, yes, we really are going to stop supporting third-party cookies and no, the pandemic hasn’t changed our plan.

It wasn’t until last this past January that Google fully reappeared announcing its plan to start publicly testing Privacy Sandbox. This included some associated privacy controls, and early performance results for FLoC, or “Federated Learning of Cohorts,” which allows ad targeting at large groups of users based on common interests. And just a few weeks ago, they affirmed that they would not adopt new tracking tech after phasing out third-cookies. Their claim: It’s no longer necessary to “track individual consumers across the web to get the performance benefits of digital advertising.”

The end of ad tech?

Another frenzy ensued. First reactions predicted the end of non-platform ad tech. And many companies saw their stocks drop. But then, by the second day after the announcement, some observers started pointing out that Google hadn’t actually done much besides make it clear (yet again) that support for third-party cookies will end this year. They also stated that they aren’t going to adopt a solution like Unified ID 2.0, which The Trade Desk, Prebid.org, and IAB are lining up behind.

That wasn’t the only announcement of note in the past few weeks. IAB Tech Lab released draft guidelines for advertising identifiers like Unified ID 2.0, LiveRamp, ID5, etc. The Trade Desk announced the start of beta testing for Unified ID 2.0, with advertisers being able to transact on impressions using the tech. And just a week after Google’s identity announcement, the company published another blog post with initial details of a plan to extend publishers’ first-party “Publisher Provided Identifiers” (PPIDs) from private marketplace deals to open auction.

Pointing out that the ad landscape is confusing and in flux for publishers is a bit of an understatement. And that’s without mentioning Apple’s moves on tracking consent and IDFA. Let’s try to clarify things a bit.

Prepare to have options

Between Google, Apple, and the “open web” ad tech players, there seem to be at least three different approaches publishers will need to test and adapt to: 

  1. Google’s FLoC, which might (or might not) become an industry standard;
  2. Apple’s strict app tracking rules and Safari ITP limits; and
  3. Unified ID 2.0 or whatever other standard emerges from the IAB TechLab working group, assuming that either regulators or the browsers don’t block those cookie replacement solutions.

Publishers and advertisers alike have fought an increasingly brutal battle against the walled gardens. Chatter has abounded that the cookieless future could tip things in their favor. Google’s latest announcement actually runs counter to that theory. Their publicly confirmed focus on Privacy Sandbox means, in the words of Magnite CTO Tom Kershaw, that Google will “actually use the same tools as the rest of the industry.” The end result could be a peaceful coexistence of the Chrome solution, user logins and publisher first-party segments. And that would mean choice for publishers, advertisers, and consumers alike. 

Focus on first-party data and identity

While there’s an element of self-interest, it does seem clear that Google is developing solutions to make it possible for publishers to activate first-party data. These include non-PII user IDs in the Google ad ecosystem. Of course Google relies heavily on first-party data and known user identities in YouTube, Search, Gmail, and its other properties. So, limiting publishers’ ability would be hypocritical. It would also be risky at a moment when the company is under antitrust investigations in more than one country. However, from a publisher perspective, this is further reinforcement of the need to focus on first-party data and identity.

Start your transition now

In some ways, we’ve been our own worst enemies in the run-up to third-party cookie deprecation. Many publishers and advertisers have awaited Google’s next move as if we were pawns in a drawn-out chess game instead of coming up with a plan and starting to execute on it. Let’s not so quickly forget that where third-party data offered efficiency, it often lacked effectiveness, due to uncertainty of where it comes from and, therefore, its accuracy. 

Six steps for transitioning away from third-party cookies

There are six areas you need to cover as you begin your shift away from third-party data:

1. A minimum amount of zero-party data

It’s not just about first-party data. Zero-party data — the data that users volunteer to you via other explicit data-capture tactics like registration forms — will be just as important. You need a certain amount of data to generate effective lookalike segments. To do that, it’s necessary to start targeting some segment of your audience and guiding them to register and provide their data with incentives such as the ability to access locked content.

2. Tools for storing and managing consent

Whether it’s a data-management platform, a customer-data platform or a consent-management platform, figure out now where you will store all of this data and consent.

3. Audience segmentation tools

You need audience segmentation tools to create subsets of your users. This can be based on like characteristics extracted from zero- and first-party data. They can also leverage lookalike modeling to produce larger audience pools.

4. Collect data at the right moment

Collecting more data over time requires thinking through the right moment in the customer journey to ask for it. At each stage, aim to understand how to move users deeper into the funnel with the right offers that will net you more data to round out your customer profile. 

5. Vet identity partners

You need one of these to replace cookie-matching and activate all that zero- and first-party data you will collect. Be sure that you vet their offerings to see which identifier could work best for your business.

6. Start testing solutions now

As Travis Clinger, SVP, Addressability and Ecosystem at LiveRamp, said in our recent Piano Academy event: you don’t want to get caught trying to apply new technologies and strategies in the middle of the Q4 holiday season. It’s worth testing different solutions, including identifiers and different data- or consent-management platforms, now.

We’ll be sure to hear more from Google publicly throughout the year. It will remain important to read successive announcements with a critical eye. We’ll need to remain focused on the steps required to prepare for third-party cookie deprecation now (as opposed to needless panicking). And remember you have a whole industry navigating this transition with you as we move towards a new era of privacy-first personalization.

Advertising | Innovation | Perspectives | Revenue

How cookie deprecation puts publishers in a sweet spot

Among the many changes witnessed in 2020, cookie deprecation has sparked conversation throughout the industry. Technological shifts, driven by browsers, alongside increased privacy legislation combine to create new challenges for advertisers looking to reach specific audiences. As a result, IAS found that 49% of industry experts surveyed in our 2021 Industry Pulse Report listed third-party cookie deprecation as the top challenge for the upcoming year.

The implications for advertisers have been widely listed: targeting, measurement, and attribution will all be affected. But what does it mean for publishers? And how will it shape relationships with advertisers and ad tech vendors? 

How did we get here? 

While browsers are undoubtedly driving the pace of cookie deprecation, consumer concerns about privacy and data collection also play a role. Last year, IAS found that 88% of consumers are aware that websites and apps collect and share their data for advertising purposes. And, unaspiringly, this finding coincides with increasing global privacy legislation. Between cookie deprecation and legal requirements, the industry is witnessing a seismic shift in how digital ads will reach consumer audiences. 

What are the implications? 

The bad news is obvious: Third-party cookie deprecation challenges current methods of audience targeting, attribution, cross-channel targeting, and measurement. However, that doesn’t mean third-party cookies provide the best method for reaching consumers.

Third-party cookies are not only limited to web environments, but they also have device and household limitations. In other words, third-party cookies don’t necessarily have a one-to-one relationship to actual consumers. Therefore, it can’t represent a precise “identity.” The good news? Knowing this, third-party cookie deprecation presents the industry with an opportunity to find something better. For publishers, the shift creates an opening to regain control over the value of their media and how they provide it. 

How do publishers play a role? 

In the short term, publishers can help advertisers leverage current technology that bypasses the use of third-party cookies. By proactively responding to the shifting environment and enabling the use of existing, developing solutions, publishers can establish themselves as partners to advertisers in this new era of digital advertising.

Verify that inventory is viewable, brand safe, and fraud free 

Publishers should take time to review their inventory and assess for viewability, brand risk, and fraud. Ensuring that ads have the opportunity to be seen by real people, in brand suitable environments will remain the first step for advertisers looking to connect with consumers. By proactively evaluating content, publishers will be positioning themselves as partners to advertisers in the evolving digital landscape.   

Work with a partner to optimize advertiser KPIs 

Verification companies can provide more than reporting capabilities. Publishers should consider partnering with a verification provider that delivers solutions which automatically optimize their inventory toward advertiser KPIs. 

Unlock value with contextual targeting

As the industry seeks alternatives for audience targeting and identity resolution, contextual targeting is experiencing an innovation renaissance. Industry innovators have been revisiting the technology, improving it, and creating new, exciting solutions to propel targeting tactics forward.

Publishers who package their inventory with content in mind will have an advantage in building relationships with advertisers shifting toward contextual methods. Additionally, publishers can work with verification partners that pre-screen pages and develop curated pre-bid segments to ensure they’re helping brands target the right environments for their audiences.  

What about the longer term? 

In the long run, the future of identity resolution will require advertisers to work directly with trusted partners across the entire ecosystem. While there is unlikely to be a single silver bullet solution, publishers should be considering the consumer, what devices they’re using, and how to marry various identifiers to create a robust understanding of their user.

All aspects, from email addresses in an effort to build Pseudonymous Deterministic Authenticated Identification, to latitudinal and longitudinal coordinates, to CTV IDs should be considered when thinking about working with brands to identify consumers. With direct access to first party data, publishers have intimate knowledge of their consumer base. This will allow them to help advertisers start to piece together identity in the absence of third-party cookies. 

As cookie deprecation approaches, publishers should expect brands to become more reliant on their data and content expertise. However, despite the challenges ahead, publishers hold the key to establishing themselves as trusted partners in this rapidly changing ecosystem. 

Advertising | Perspectives | Revenue

The year of publisher-driven identity

Many publishers have not realized the full promise of programmatic advertising. And that is largely thanks to the use, and misuse, of third-party cookies. By providing user information access to everybody who would listen, and by enabling less scrupulous players to harness this information outside of the publisher sites, third-party cookies have devalued premium publisher inventory. These practices have enabled brands to harvest and reuse data. They have also put user’s personal privacy at risk.

Programmatic advertising could have driven vastly increased yields for publishers. Initially, many publishers benefited from opening up to global competition so that they reached more brands and marketers than they could contact directly. Programmatic advertising offered the ability to monetize each user individually to its true value. The publisher was able to access the increasing amount of programmatic demand funneled through the agency trading desks, and with much more transparency and control than working with ad networks.

Algorithms could be set to optimize for further revenue growth. This freed up the sales team to focus on more strategic buyers, higher margin activities like creative solutions. It also increased the importance of technical operations. Its growing efficiencies and economies of scale could be delivered by this automation.

Sadly, many publishers have yet to fully experience these benefits. Instead, many have suffered from a race to the bottom in terms of prices, from information imbalance with buyers and ads that have had a negative impact on their users’ experience.

Third-party problems

The single biggest factor responsible for these missed opportunities is third-party cookies. Therefore, it will come as a relief to many publishers that third-party cookies are being deprecated from browsers. Both Safari and Firefox are already blocking them by default. And Chrome plans to deprecate them from its market-leading browser “within two years” of January 2020.

Publishers should view this as an opportunity to redefine the user identification infrastructure that powers the digital advertising ecosystem. The year of publisher-driven identity has arrived.

However, it would be a mistake to wait for third-party cookies to crumble without working on an alternative. We still need advertising to be workable, and for all parties, but in a more balanced way.

Solution-oriented

Brands require user identification capabilities to engage with their audience online in a controlled manner to measure the performance of their marketing investment. Because of this, having no identification would be worse than using an imperfect identification system. In fact, there is a significant risk that it would drive brands’ investment to the places where they can identify users without third-party cookies. (Yes, that means the walled gardens with their logged-in authenticated audiences which have volunteered a wealth of personal data.) Many savvy publishers understand this and have already invested in identity solutions that work for them as well as clients.

Publishers are the “first party” that their readers, viewers and listeners engage with. Their audiences trust them to provide valuable content and reliable service. Thus, publishers are in the best position to inform users of the value exchange between content and advertising, gain their trust, and collect their consent to enter into a personal relationship. In the privacy-first world we now inhabit, they are in the driving seat.

Publishers are also in the driver’s seat from a technical standpoint. Now that Apple and Google have decided to end autonomous access to devices by third parties – via the removal of cookies and MAIDs – identification will be enabled by publishers. It will be websites that decide when and with whom to share user IDs. It will be media owners who will allow brands to identify users, access data, manage frequency capping, and measure campaign performance. And they will reserve this privilege for the brands who truly value their audiences and will refuse it for all the “free-riders” who have exploited them over the past decade.

Identity matters

When working with identity solution providers, it is important that publishers keep these objectives in mind. They must ask themselves the following questions: Can I control the user IDs I am sharing with brands? Is my audience data protected by these solutions? Do I have guarantees that the privacy choices my users make will be respected? Only a clear, positive answer to these questions will ensure that publishers’ leading role in the future of identity management is guaranteed, and that they come out as the clear winners of the current infrastructure transformation.

The core benefits of programmatic advertising remain clear. Price discovery, increased competition, granular audience segmentation, and automation will continue to provide value to publishers who can harness them. But with increased control over when, how and by whom their audiences are accessed and used, these benefits will truly translate into incremental revenue for publishers. The pendulum is about to swing back towards publishers. And this serves the greater good for the open internet, digital advertising, and consumers.

Advertising | Perspectives

3 trends that will define media success in 2021

Covid-19 hit some sectors of the media industry hard (live sports, concerts and trade shows). The global entertainment and media industry saw its largest revenue decline in more than two decades. However, the pandemic has also presented an opportunity for companies embracing digital strategies that are aligned with consumer trends and expectations. 

Disney, for example, lost over $6 billion in revenue from the closure of its theme parks. But Disney+ reached 50 million subscribers worldwide two years ahead of schedule. In January, Fortune – once just a print magazine – announced its redesigned website, an immersive video hub, and other premium offerings. All of this strongly positioned them strongly to counteract the advertising slump that hit the industry last spring. In October, the company launched Connect, a membership community and online platform for purpose-driven, mid-career professionals. 

Here are three trends we’re likely to see this year: 

1. The relationship with the content consumer matters more than ever. 

Cookies were a convenient crutch. They were the building blocks for digital advertising and helped drive revenue for media companies as they transformed. Now that cookies are nearing their end, some companies are panicking while others are evolving. The ones that succeed will be the ones that focus on creating a continuing relationship with the consumer. This means engaging with them differently, through a soft or hard paywall, or as a curated member experience (e.g. Fortune Connect). This not only preserves advertising, which is a significant source of revenue, but opens the door to new, diversified revenue streams.

The ultimate death of the cookie will turn out to be a blessing for the media industry, even if it creates disruption in the short term. Necessity drives innovation. The cookie’s demise will revamp the way companies post content and interact with their consumers. In 2021, we will see even more innovative media business models that will define the coming decade. 

2. Pandemic-driven changes won’t revert. 

There is no going back, so let’s embrace the change. Let’s highlight some of those changes. In the first 28 days on Netflix, The Queen’s Gambit was watched by 62 million households. No, it didn’t reach M.A.S.H. season finale numbers of 106 million. However, M.A.S.H. aired on a major broadcast network at a time when there were only a few. 

We’ve seen an acceleration in media companies following in Netflix’s footsteps. Peacock is betting on a network show that first aired in 2005 – The Office – to drive premium subscriptions at $5 a month. Who is the largest audience for that show? People who aren’t old enough to have worked in an office. 

Just as the music industry needed to evolve and find new ways to engage and monetize consumers when streaming took off, so must media companies. Experiments bringing what would have been blockbuster movie releases like Mulan, Soul, and Wonder Woman 1984 to Disney+ and HBOMax will forever change, but not completely destroy, the theater industry. (Alamo Drafthouse-like experiences may well be the theater experience of the future). And let’s be clear, the definition of media is evolving. Consider Peloton: a fitness company? Sure. A hardware company? Maybe. A media company? Absolutely.

Successful media companies aren’t embracing a move to digital. They are disrupting their own legacy business models to become digital. Spectator events have become intimate digital experiences. (Think DJ D-Nice spinning to 120,000 live viewers including Diddy, President Joe Biden, and Janet Jackson on IG Live in the early days of the pandemic). 

Sporting events are better with fans in stands. However, sporting experiences can, and should be, complemented with connectivity to the players, drivers and coaches. Leagues have already embraced fantasy sports, but could they openly embrace sports betting? And are there opportunities to connect with online gaming to create a full-surround fan experience, digitally? 

It is critical to focus on the consumer and how they consume and where they consume and providing new ways to consume – directly. This will create new and stronger revenue opportunities.

3. Legacy media companies can succeed. But they have an uphill climb ahead. 

Legacy media companies have the most to gain from transformative change. However, they start at a massive disadvantage compared to new media companies like Complex Networks and Spotify. (Yes, Spotify particularly with the acquisition of podcast content companies such as Gimlet). 

These brands and what they represent have lasting value. However, they demand reinvention with a focus on digital channels, habit-forming digital products, multiple streams of monetization and libraries of content. When Maven bought Sports Illustrated last year, it did so with the intent of “revitalizing and strengthening” the publication for a new era by focusing on technology. 

Past the tipping point

A recent McKinsey report noted that Covid-19 has “pushed companies over the technology tipping point.” Media companies that want to succeed will have to rethink their digital business models in 2021. And they have no time to waste. 

While most software products were once developed on a 6-to-12-month timeline, the pace of change has accelerated. Consumer expectations are far more immediate. But with the right digital product strategy, the media industry could see a game-changing resurgence in 2021. 

About the author

Chris Hansen is senior vice president of 3Pillar Global’s media and information services client service vertical.

Advertising | Perspectives

To thrive in the post-cookie era, web publishers must act now

As we enter a new year, most tech departments look to create a product creation and upgrade schedule for the year, which then gets divided into two or three-week sprints. As publishers undertake that process this year, I have two overarching thoughts:

First, recent events continue to suggest  that Google will deprecate the third-party cookie by the end of this year. As a CTO, it seems to me that publishers must deploy minimal but real changes to code-on-page to take advantage of new identity marketing solutions.

Second, most publishers declare a “code freeze” in the fourth quarter due to heavy advertising volume. Indeed, with its lower ad volumes, the first quarter is when publishers typically implement new technical capabilities.

These two facts lead me to recommend that web publishers immediately begin to deploy the code associated with new identity resolution services. This will allow them to capture the highest revenues, avoid hectic scrambling, and minimize technical risk.

Will Google eliminate the third-party cookie on schedule?

Early last year, Google announced it would eliminate third-party cookies “within two years.” Subsequently, Google officials stated that this timetable might be delayed, mainly if the industry’s replacement solution was not in-place.

At BritePool, we believe Google will follow-through with its original timetable. At a recent PRAM (Partnership for Responsible Addressable Media) meeting, Stu Ingis, chairman of the Venable law firm, discussed the urgency of completing PRAM’s work (in conjunction with the IAB Tech Lab) to be prepared for the elimination of third-party cookies.

Similarly, eMarketer recently spoke with industry experts to review the changes confronting advertisers and publishers that will have “significant effects on how they do business.” This list prominently included “Google’s planned deprecation of third-party cookies in Chrome by early 2022.”

But won’t Google provide a lengthy notice period?

Google’s initial announcement included a schedule, with a two-year period, for the adtech ecosystem to prepare for the demise of third-party cookies. There is no reason to believe Google will provide an additional lengthy notice period before acting. It is easy to imagine that at the start of this year’s fourth quarter, Google will simply confirm that by the end of the year, it will eliminate third-party cookies, as planned.

How does this fit into privacy reform?

BritePool’s COO previously wrote that a Democratic election victory would lead to national privacy legislation. Now, Republican concerns associated with social media “censorship” mean a bipartisan consensus for legislative reform is developing.

In this firmament, we believe Google will conclude that it will benefit by following Apple with privacy-centric browser management. Moreover, Google officials who suggested the possibility of delay indicated Google would act when the industry is ready.

Now, multiple industry solutions are available.  For example, BritePool and LiveRamp have both demonstrated the viability of their cookieless identity resolution offerings. And PubMatic has launched its Identity Hub.

My advice? Act now

eMarketer concluded its review by stating, “It’s critical for advertisers to start testing approaches to targeting these types of users and measuring results now—while the traditional signals are still available for them to make comparisons.” My advice for web publishers is the same: It is critical to start implementing new cookieless targeting capabilities.

Acting now benefits publishers in multiple ways. It eliminates the high technical risk potentially associated with scrambling to adopt identity resolution services late this year. Publishers gain experience by running pilot campaigns with these new capabilities and can optimize their offerings for 2022. Finally, it increases the CPM’s for programmatic traffic throughout this year, in part by accessing the users of Safari and Firefox browsers, which currently block third-party cookies automatically.

Editor’s note: This article was submitted, and set for publication, before this week’s Wall Street Journal article confirming that Google would eliminate third-party cookies. This Journal reporting reinforces the significance of the related analyses in this article.
Advertising | Industry-Research

Publishers accelerated diversification strategies in 2020!

As publishers reflect on 2020, most will agree that Covid-19 took center stage. The year was filled with business struggles, but it also offered some growth opportunities. What’s New in Publishing’s (WNIP) year-in-review, Media Moments 2020, identifies “diversification” as the paramount lesson from 2020. Importantly, the report makes it clear that publishers who are dependent on advertiser revenue need to rethink their strategies and include consumer revenue streams.

WNIP’s report covers the industry’s focus on “trend acceleration.” Certainly, while there has been marketplace disruption the past two decades, nothing has accelerated market shifts quite like Covid-19. Media Moments looks at 2020 to showcase these market changes and identify winning publisher strategies.

Notable 2020 highlights

Print final shift to digital

Any print publisher who survived 2020, will need to go fully digital in 2021. In fact, Poynter reports that nation­al newspaper circulation in the U.S. is down 30% since 2016 and 60 newsrooms closed recently due to the impact of Covid-19.

Launching a differentiated digital brand with fresh content is vital in this marketplace. Revenue diversification is key for sustainability. Offering virtual events, newsletters and podcasts are important touchpoints to broaden revenue opportunities as well as develop consumer loyalty.

Audio is an expending revenue source

Audio has proved to be a strong and viable business for publishers and they look to expand their audio businesses in 2021. Some have their business by producing dedicated podcast content while others grew through acquisitions. Many publishers are testing new formats for podcast integrations in content outside of news. Other examples include a new commentary format from AMC to complement their video business and Marvel’s experimenting with fictional content.

Spotify, iHeartRadio, and Apple are a few of the leading podcast platforms. While Spotify is among those building their content portfolio of content, others are building their podcasting infrastructure like iHeart.  This year alone, Spotify acquired content producers Gimlet and The Ringer. iHeart, on the other hand, acquired podcast analytics company, Voxnest. Even given the coronavirus’ negative impact on advertising spend this year, podcasting did not register large declines. PwC’s updated predictions approximate $814M for podcasting ad revenue, just 6% below PwC and IAB’s original forecast.

Publisher exercise first-party data

In January 2020, Google announced that Chrome would phase out support for third-party cookies in the browser within two years. This didn’t come as a big surprise, given that Mozilla FireFox and Apple’s Safari made similar announcements in 2019. Of course, this trend will mandate reducing digital advertising’s reliance on cookies. As a result, an already tough seller’s marketplace for publishers is getting tougher. Fortunately, many publishers acted early and started to develop first-party data strategies, benefitting from their trusted relationship with consumers.

Once again, publishers are touting the merits of contextual advertising.  And many publishers are building the tools to serve contextual advertising better than ever before. In fact, Vox Media launched Concert Ad Manager, a self-service tool for publishers to build and implement ad campaigns across the marketplace. Publishers using this tool include NBC Universal, Penske Media, Quartz, and others. This type of tool is extremely helpful to small and medium size publishers.

As the pandemic transformed our world, consumers searched for news and information to help them navigate the crisis. From dropping paywalls to record traffic, publishers responded, and they were reminded of the trust consumers place in them. By concentrating on consumer value, publishers can prioritize a consumer-first strategy and register growth in consumer revenue.

Advertising | Perspectives

Why cohorts is a privacy detour the media industry should avoid

With the end of cookies and Mobile Advertising ID’s fast approaching, there is no shortage of discussion about ways to maintain some form of user identification. We need to figure out how data-driven advertising will work within the scope of privacy regulations and technical possibilities. Lately, this debate has revolved around two very different strategic approaches: shared user IDs and cohorts.

Shared user IDs

Shared user IDs aim at solving three main issues related to third-party IDs (and their disappearance):

  • The inefficiencies related to cookie matching and the drop off between platforms using different identification framework. This renders up to 50% of web-based user data and inventory to be unusable.
  • The need for user IDs to be accessible to 3rd parties to the main web server. Instead, these will be replaced by a shared first-party ID, which the server itself provides.
  • The need for greater control around the usage of IDs and associated data, particularly concerning privacy preferences expressed by users.

On paper, shared user IDs are a very efficient and privacy compliant replacement for cookie-based IDs. Their main challenge is adoption by publishers and technology platforms as a scalable alternative to third-party identifiers. Like any currency, their value grows exponentially with usage. This implies a limited value to start with and a difficult take-off (the infamous “chicken and egg” challenge). The next few months will be critical for shared identification solutions to establish themselves as viable and scalable alternatives to third-party identifiers.

Cohorts

On the other hand “cohorts” approaches aim at grouping users into segments to avoid user-level data distribution. They have become a topic of discussion following Google Chrome’s Privacy Sandbox experiments. Cohorts have even been presented as the solution to privacy concerns. They are not.

Cohorts are merely a way to avoid the problem. The approach aggregates people’s data  to pretend that we are treating them as groups rather than individuals. However, no regulation prevents marketers and publishers from addressing individuals. Instead, it requires those individuals to be informed about the data that is collected on them, how it is processed, the purpose of that processing, and to say whether they are ok with it.

A personal approach

Is it better to harass a group of people who have seen a particular product on a website until they buy it? Or is it better to engage in conversation with a single person to understand whether they are truly interested in the product and should be shown the ad?

Personal data is not the problem; it is how we use it that matters. Circumventing privacy by grouping personal data into “cohorts” and pretending we’re off the hook is a way to trick the letter of the law. However, more importantly, it is a way to trick users from the transparency and choice they deserve. And also, maybe, this is a way to trick the Open Web into using suboptimal methods to identify people and leverage marketing data to power advertising investments.

Another critical issue is that this may provide an opening for the large platforms to – in all impunity and under the disguise of (forced) consent — to exploit the largest “personal data vacuums” ever created.

The road to a privacy-first shared user identification future is a bumpy one. Using cohorts may seem like a safe way to avoid the bumps on the road. But they are merely a detour. And as often, taking a detour is longer and less efficient. This is particularly true if that road is controlled by an entity that can raise the toll price at will.

Advertising | Perspectives

To understand where the cookie is headed, let’s look at its history

Note: This is the first article in a two-part series.

Almost a year ago, Google announced that Chrome would sunset support for third-party cookies by the end of 2021. These days, the discussion of the replacement technologies for “life after cookies” dominates the digital media industry press. The IAB’s Project Rearc, Google via its Privacy Sandbox, and multiple companies (including BritePool) have all developed or pledged to create technologies that will power advertising in the cookieless future.

To develop a perspective on third-party cookies and what should replace them, this is a deep dive into the cookie’s history.

Cookies came from a virtual shopping cart

The cookie was created in June 1994 by Lou Montulli. He was a programmer working at what would become Netscape Communications Corp., best known for its once-dominant web browser. Montulli was working on an e-commerce app for Netscape client MCI, which had effectively asked for a virtual shopping cart (a novel idea at the time).

Montulli and his team devised a way for the Netscape browser to place small files on a website visitors’ computer that tracked what each visitor did on that site. This allowed the telecom giant to avoid placing the data on its servers.

Grand ambitions with inherent problems

In a 2001 interview with The New York Times, Montulli said that he designed cookies to be a flexible tool, with the potential to be “a next-generation communications system.” He said, ”We wanted people to be able to use it for other uses” besides shopping carts. That included ”things we hadn’t thought about.”

In April 1995, a working group was established to propose a set of standards for cookie usage. David M. Kristol, a scientist at Bell Laboratories, led the group. But the longer the group collaborated, the greater its concerns about how cookies might invade consumer privacy.

Original restrictions to protect consumer privacy

According to the Times, the engineers developing cookies sought to avoid “a privacy nightmare” by deciding “not [to] identify web users by name” and rejecting “an idea for creating a single ID number that a person’s browser would use in all Web explorations.” Montulli said, “We didn’t want cookies to be used as a general tracking mechanism.” Instead, protocols required that sites assign a unique ID number to a visitor’s computer, one that could only be read by the issuing site or a sister web property.

At the time, the ability for companies to circumvent this restriction was foreseeable. A Dutch member of the 1995 working group, scientist Koen Holtman, warned that companies could, by agreement, place cookies across a network of related sites. Those cookies would be able to track user activities at multiple sites across the web.

Advertising co-opted the cookie

Holtman proved prescient as companies began working to do what he predicted. Soon DoubleClick, Engage, and others were serving banner ads across thousands of websites, using a shared cookie that allowed the issuing company to recognize a visitor wherever he or she went on the web. This innovation allowed these companies to control users’ ads as they moved from one site to another.

In 1996, to potentially provide privacy protection, Netscape and Microsoft both altered their browsers to distinguish “cookies coming directly from the site being viewed from third-party cookies.” This initiative proved meaningless, as consumer browsers automatically accepted third-party cookies by default.

In 1997, in a last-ditch effort to protect consumer privacy, Kristol’s working group tried to thwart the use of cookies for advertising tracking, recommending that browsers automatically block third-party cookies. This effort failed as Netscape and Microsoft’s Internet Explorer embraced these so-called third-party cookies despite Montulli’s protests.

Montulli described the advent and ascendance of third-party cookies, for advertising tracking, as a surprise. ”That’s the one ‘gotcha’ we had,” he told The New York Times.

Similarly, Lawrence Lessig, a Standard Law School professor and leading expert on the Internet and public policy, made this observation: “Before cookies, the web was essentially private. After cookies, the web becomes a space capable of extraordinary monitoring.”

Lessons for today

This brief history suggests two takeaways for managing the next quarter-century of web advertising:

First, while most of the critical technologies for web operations reflect several generations of development, the cookie, a 1990’s technology, has remained the fulcrum for Web advertising delivery. In essence, outdated technology is now central to managing over $300 billion in global annual spending on digital advertising.

Second, the initial development of cookies raised privacy concerns, which led developers to deploy safeguards. Subsequently, ad management firms circumvented these restrictions. Hence, it was inevitable that the unchecked and unregulated expansion of web advertising would invade consumer privacy.

Next (Part II): Privacy Ascendant and Life After Cookies
About the author

Bruce Judson is Vice President of Communications at BritePool. His 1996 book, NetMarketing (Random House/Wolff), was a sleeper bestseller which accurately anticipated the rise of the web as a powerful vehicle for the direct sale and marketing of products and services.

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