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Publishers are in a data race as Google shakes the ad market, but who will prosper?

With Google set to sunset the tracking of third-party cookies on Chrome by 2022, many industries are worried about how the so-called ’Privacy Sandbox’ will rock their business. For publishers, the first-party data pageantry begins now. We look at how they are talking up their quality environments, audience data, measurement tools and insights. But remember, the next generation of digital advertising will have its losers too...

Google is wiping out the third-party cookie – the favored tracking and measurement apparatus of the open web – on the grounds it is intrusive and breaches privacy laws. It says solutions offering “a level of user identity for ad tracking across the web” will not be sustainable – news to the firms developing these solutions and whose stock dropped accordingly. There’s no cookie 2.0 in the works either. Google has no plans to develop identifiers that track individuals, and as the owner of the most widely used web browser – as well as some of the most used apps and services online – it has the power to decide these things.

One tool in the Privacy Sandbox is the in-browser Federated Learning of Cohorts (FLoC), which offers anonymized segments organized by interest automatically generated using machine learning algorithms. In early tests, it reportedly saw 95% of the conversions per dollar spent on cookie-based advertising. Further tests are coming in April’s Chrome 90 update, but not in Europe due to GDPR concerns.

Publishers scratched their heads. They thought no one attracts and organizes people by interest quite like them (eg, a cycling mag will assemble a keen cohort of cyclists to whom you can sell a cycling brand’s cycling gear). Some will have the resource to buy this audience contextually from publishers, while others will be excited by an announcement that came a few days later from Google when an old idea found new life – the publisher provided identifier (PPID).

“We believe that publishers that have built first-party relationships with their audiences should be able to provide personalized ad experiences to those customers,” read the announcement.

The PPID – very much still in development – can theoretically be attached to logged-in users, or those tagged with first-party cookies. Publishers can develop custom audience segments and broadcast them through Google Ad manager as “encrypted signals directly with Authorized Buyers or Open Bidders with whom they already have a direct relationship”. Google says it is working to expand PPIDs to function in “more programmatic campaign types”, such as open auction. Publishers will reportedly have full control of which intermediaries receive the signals. Meanwhile, Google promises not to read or decrypt the signals.

Some publishers are enthused by the opportunity for their long-fought-for audiences to attract more value than ever before if the race to the bottom for micro-targeted eyeballs is truly over.

New alliances

There’s no one approach publishers should take. Revenue sources should be diversified and even in advertising, no one’s eggs should be all in one basket. Everyone is testing and learning, which makes alliances such as the Ozone Project even more important. The adtech platform has united inventory from The Guardian, News UK, The Telegraph, Reach, TimeOut and Stylist to offer a reach of about 45 million UK adults. For brands looking to cross the gamut of UK news media, it is appealing. Damon Reeve, its chief executive, says the business is weaning itself off of third-party data and focusing instead on what’s available through first-party solutions.

“Scale remains a critical factor for advertiser engagement, delivery of campaigns and – in the case of first-party data – creating an actionable view of reader behaviors across multiple publishers domains.”

This paradigm shift empowers publishers, he believes. ”They have the audience, first-party data and inventory third parties need to exist. Publishers should be comfortable they are getting fair value for the data they are sharing and shouldn’t be simply giving it away without confidence or certainty in the revenue they are generating.”

He says they need to be active in delivering solutions that don’t over-rely on Google, which would grant it the “authority to generate revenue from this data on opaque commercial terms”. Guard your data as tightly as possible is his advice.

Publishers need to be aware of the coming consolidation in adtech. “Those with opaque business models that solely rely on third-party cookie data or that are not working directly with brands or publishers will struggle.”

Seeing the Future

Meanwhile, at media platform Future, PPID offers the potential to make more of those special interest audiences it has been cultivating for years.

Nick Flood, global commercial operations director, is supportive of Google’s reforms and says: ”This is one of the biggest changes in 10 years – maybe since the launch of programmatic or open auction bidding.

“For years, we’ve attracted high intent audiences, which in many ways are our cohorts – people who want to do, read and buy something. They’re almost self-selecting, so we have a pretty advanced search strategy. I honestly believe that premium publishers – and Future in particular – can capitalize on all the change that’s coming in.”

Cheap scale may now play second fiddle if publishers can show how their environments deliver results. “We’ve been offering really enhanced contextual and behavioral targeting capabilities for years,” says Flood. Future is now working with a few identity firms, including PubMatic, iD5 and Live Ramp, to build an understanding of audience that can be packaged for advertisers in a privacy complaint manner, aware the future of identity solutions could take any shape.

He counts more than 90 ID vendors and thinks they’ll consolidate into three or four big ones once best practises are established. Publishers and brands will be more selective about the vendors they work with and PPID could theoretically attract direct clients that want to “view and control their buys and get detailed reports on the pages their ads have run“.

Flexibility and agility are key, and with its own CMS and ad platform, Flood says Future can adapt. Additionally, having bought price comparison giant Go Compare, Flood suggests few UK publishers will have as much first-party logged in and PII records.

Zack Sullivan, the UK chief revenue officer at Future, worries that “smaller publishers will have a tough time. “When you’re dealing with sub-segments of segments, niches within niches, it gets to the point where the audience isn’t operationally worth the time to buy.”

Some can keep delivering top content marketing, or keep pushing smaller, highly engaged audiences, but without scale they’ll be ”squeezed”. New York publisher Salon.com told Digiday of its concerns about having to erect an ID gate to authenticate users, which we know can be a deterrent to new and fleeting audiences.

That’s not Future’s worry in this race. In February, 36 new clients adopted its first-party data solution, varying from FMCG conglomerates to niche players. He says it was “really helpful” that Future built a first-party data business “early”. Secondly, he’s enthused the organization still has “big global sales teams, ops teams and marketing teams” to offer all that support to clients. Rivals have downsized these teams when they’ll be needed to talk-up the strength of these solutions in a congested market.

Julia Beizer, chief product officer and global head of digital at Bloomberg Media, thinks more of the same is the answer: ”We need to focus on what we – premium publishers – do best, which is building deeper relationships with our audience and delivering the best user experience and content.”

Some publishers are navigating dual revenue streams – in Bloomberg’s case, subscriptions and ad revenue. These efforts feed into each other: “Super-serving our audience – especially as more publishers prioritize their subscription business – will in turn help super-serve the needs of brands looking to reach specific audiences,” says Beizer.

In appeasing deeply engaged subscribers, publishers can then serve up happy, specific audiences for advertisers. “In the end, if publishers and marketers do what’s in the best interest of the audience, we all win.”

The buyer’s view

Brad Herndon, the managing director and personalization, data and analytics practice lead at Accenture Interactive, outlines the battle ahead for publishers: “The better their data, the better ad performance will (hypothetically) be, which in turns means more bids for inventory.”

Buyer’s will be testing audiences and solutions like never before to find the best fit. Through the PPID, buyers could see a granular level of data they would alternatively have been able to see in direct buys. But there’s still a lot to learn. With the data supposedly anonymized, there remain questions around the accuracy of segmentation and the effectiveness of frequency capping.

The winners will be publishers with high authentication rates and engagement, paired with rich product, preference, purpose, geographies and demographics – publishers that can offer both efficiency and performance gains through their data.

”They’re all in a race to show why their data is better than the rest, so at the end of the day it will be a crowded space,” concludes Herndon.