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Founded: 2013
Staff: 80


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Private gardens: how businesses will succeed with the demise of the third party cookie

by Philip Raby

18 November 2020 18:14pm

Over reliance on third-party cookies has resulted in the digital advertising ecosystem becoming polarised and in a state of disequilibrium. In 2019, almost two-thirds (63%) of UK ad spend went to Google and Facebook despite the fact that consumers spent the majority of their time (66%) on the open web1. The biggest driver of this inequality is the fact that Google and Facebook have an enormous amount of data which enables media buyers to implement precision targeting strategies.

While precision targeting will remain a priority, the demise of the third-party cookie makes private gardens a necessity for publishers and retailers to fight the dominance of the walled gardens. By using their own first party data within a controlled private garden publishers and retailers are able to give much more control and transparency to users which is the founding pillar of transforming advertising for the better. Yes, there will be obstacles to overcome in the next two years and the likes of Google and Facebook will do well in the absence of third-party cookies, but there is a real opportunity for publishers and brands to seize control and regain their rightful share of ad spend.

Transforming from pawn to queen

In many ways, publishers have become pawns in digital advertising with media buyers sacrificing them from plans making the walled gardens the queens of the game. The risk of remaining a pawn in a cookieless world is significant. If publishers do not actively address the current challenges associated with first-party data driven advertising - scale and relevance - then globally, on average they can expect a 52% drop in revenue2. Doing nothing will simply allow the walled gardens to take advantage and many quality, independent content contributors that are the backbone of the open web will face extinction.

Play them at their own game

There are two major pillars to success in digital advertising: precision targeting capabilities to serve only the most relevant ads, and scale, both of which the walled gardens have in abundance. In order to succeed over the coming years, publishers and brands must start thinking and acting like the walled gardens and create their own private gardens.

Private gardens are similar to walled gardens with one exception - the data contained within a private garden belongs to the data owner but is visible to buyers enabling them to have more visibility and a deeper understanding of the audience without losing control. It is this collaborative approach that makes it easier to measure efficiency against a common metric using independent solutions. This is what addresses the scale challenge that publishers face. Driving targeted, relevant advertising is where publishers can really come into their own - with the right technology in place. Logged in, first-party data enables publishers and brands to really analyse and understand what makes their audiences tick when it comes to engaging with advertising, which in turn means they can create their own targeting tools and be completely self sufficient. The use case is similar for brands who also have plenty of consumer data which is highly valuable when housed in a private garden and is visible to media buyers.

For brands and publishers, the key to success lies in partnering with technology companies and forming alliances that enable a private exchange of CRM data, building agile cookieless targeting solutions, and building independent artificial intelligence (AI) solutions. With these three things in place we can fight back against the walled gardens and regain control of the value chain.

Early success stories from pioneers

Groupe Casino, a French mass-market retail Group, has a database of 33 million consumers of online and offline shoppers across 15 ecommerce websites and Retail Brands including Cdiscount and Monoprix. Using mediarithmics’s real-time database which encompassess both data management platform (DMP) functionality and customer data platform (CDP) technology Groupe Casino built their own private garden - relevanC - for retail containing data from 40 sources.

By centralising all customer data Groupe Casino are able to bundle a very precise set of segments, including purchase habits, add some insights to Brands and measure the offline and online efficiency of their campaigns. The quality of the data within relevanC is of such a high quality that Group Casino have been able to provide brands with a broad spectrum of precise data segments that can be retargeted inside and outside of their own eCommerce websites. This key differentiator has driven €41M incremental revenue, effectively doubling their revenue from last year.

With more than 24M logged in users, Channel 4 has a significant volume of 1st party data, which to date has been built into audience segments allowing advertisers to target audiences based on demographic, contextual and interest based targeting. This year, by partnering with mediarithmics, Channel 4 has now built a private garden that allows advertisers to upload their customer data on a safe room system managed by Infosum. This enables advertisers to target relevant audiences in a cookieless environment through real-time data matching. Building further on this concept, the Channel 4 data science team overlay their own algorithms and apply bespoke machine learning scoring and look-a-like modelling to add further scale. This product is called ‘Brandmatch’.

The mediarithmics platform has also enabled C4 to deliver two further products. Approved, which allows advertisers to buy against pre-defined data sets such as Acxiom segments via the mediarithmics platform; and Bespoke which for the first time allows brands to overlay C4’s 1st party data to create segments specific to their needs.

What’s next for private gardens?

Publishers are leading the way with private gardens but we’re already seeing a rise in popularity among brands. One of the core technology challenges to be overcome is creating ecosystems with the flexibility to provide brands and publishers with an open environment in which data can be seamlessly integrated, in real-time with no compression and aggregation. We also need to solve the challenge of creating an architecture in which media buyers and sellers can easily segment audiences and where artificial intelligence (AI) and machine learning (ML) solutions can work across hundreds of delivery platforms. It goes without saying that all this must be done in a privacy and security compliant way.

For brands to fully capitalise on the potential they will need to establish trusted data co-ops which will take time but we should see significant strides forward over the next 12 months. The main uptake will be among large, mass-market retailers such as Sainsbury’s and Tesco, telcos such as BT, Sky, and Virgin, and publishers such as ITV and The Guardian. Mass market apps such as Spotify, National Rail, and Citymapper are also primed to create their own private gardens.

And in a way, these players might enter or consolidate their position in the advertising businesses with Assets that would differentiate themselves from the 3 existing leaders: know what their audience are really buying offline, what do they watch on TV, etc.

With increasing numbers of publishers and brands playing the private garden card there will be fewer opportunities for the walled gardens to take full control and the digital advertising industry will be a more open, even playing field. With publishers and brands in control of their own data and technology the value chain is transparent and media will be transacted fairly, which is something mediarithmics is passionate about.


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