An addressability crisis has resulted in just 30% of the web being reachable with current marketing tactics – publishers have the solution, but it requires access to responsible, scalable first-party data.
Until recently, marketers and adtech have collected data from internet users at the expense of their privacy – but that’s changing. Consumers have felt a shift in the traditional value exchange that powers the internet: Free content is no longer worth being tracked around the web, and consumers are using the tools available to them to opt out of sharing their data for advertising.
Today, consumers have a range of tools available to them to protect their personal data: Browsing in hidden environments (such as Safari or Firefox), using Apple devices, and engaging with Apple’s privacy mechanisms (such as ATT and hide my email), disabling tracking cookies in Chrome, using Google’s “reject all cookies” button in Europe. The list goes on.
The result is that 70% of the open web is already unreachable today. Because of this, buyers are – often unknowingly – spending the majority of their budgets on a 30% sliver of the market, consequently driving up CPMs and diluting a budget’s potential reach and performance, not to mention completely missing a large portion of potential customers. This is akin to spending a huge slice of budget on advertising during a major sports event only to reach three out of 10 viewers.
In this new era of declining reachability, we spoke with Danner Close, Senior Director, Strategic Demand Partnerships at Permutive, about why buyers need to focus on maximizing their budgets, why we need a standard for publishers’ first-party data, and why the future of advertising depends on scalable first-party data across publishers.
Focusing on Maximizing Budget
Lynne d Johnson: Why is it important that the advertising ecosystem not wait for the cookie’s complete demise to begin testing and thinking about how to best use alternatives to the third-party cookie?
Danner Close: Programmatic platforms, which inherently rely on data-driven marketing to provide value to buy-side and supply-side clients, also suffer from this dwindling reachability. By limiting reach to only 30% of online users, a platform is not only reducing a client’s ability to deliver against its entire budget (and therefore discouraging greater budgets in the future) but also costing its clients more to do less. This reality of higher costs, lower reach, and inefficient budgets causes an inherent risk to platforms’ value to their clients and therefore their business models.
Even when we look at identifiers that attempt to replicate the functionality of a cookie, the same problems arise, including privacy concerns, high opt-out rates, reduced scale, and constricting regulations. Without a privacy-first focus, these identifiers fall prey to the same pitfalls as cookies, inevitably returning the market back to its current state.
As advertising increasingly feels the pains of declining reachability – a trend that will undoubtedly grow alongside continued regulations and increased consumer opt-outs – it becomes clear that waiting for the complete demise of cookies or relying on unsustainable identity solutions is not a winning strategy.
The Role of Standardized First-party Data
LdJ: One of the issues with making first-party data available for advertisers is that not all first-party data is created equal. What I mean is not all publishers are categorizing or valuing their first-party data the same way, which makes it harder for buyers to scale across the ecosystem. How can the industry solve this?
DC: Ultimately, solutions that don’t harness the depth and breadth of publisher first-party data inventory won’t be positioned for success in this new era of programmatic advertising.
Fortunately, publishers can help solve this addressability crisis and transform advertising using first-party data derived from their high-value and fully consented audiences. Because publishers are responsible for the consumer opt-in process and can collect valuable data on 100% of consented users without relying on a third-party cookie, they are uniquely equipped to provide the market with rich, scalable data.
Historically, publishers have used publisher-specific criteria to define their audiences, creating fragmented audience definitions for buyers. For example, publisher A may define an auto-intender as someone who visits pages on vehicle reviews and ratings twice in a 60-day period. Meanwhile, publisher B may instead only require users to visit content related to car maintenance and vehicle recalls once over 90 days to be defined as an auto-intender.
With standard cohorts adoption and publisher first-party data, buyers can take a single audience definition and activate it across multiple publishers.
This lack of consistency creates a meaningful challenge for buyers who seek to activate unified audience definitions across multiple publishers while preserving user privacy and scalability.
A powerful solution is standard cohorts, which streamline a buyer’s activation of scalable first-party data by providing standardized, consented audiences that are consistently defined across all enabled publishers without the need for third-party cookies.
By mapping standard cohorts to the industry-standard IAB Audience Taxonomy and leveraging transparent behavioral and contextual inputs, audiences can be segmented based on the same definitions from publisher to publisher.
With standard cohorts adoption and publisher first-party data, buyers can take a single audience definition and activate it across multiple publishers. Further, by not relying on third-party cookies, buyers can activate across hidden environments, unlocking the 70% of the open web that’s unreachable today. These publisher-informed user groups based on unified interests, characteristics, and behaviors reduce buyer complexity and simplify the activation process and provide privacy-first scalability across 100% of the consented web.
As standard cohorts allow publishers to highlight unique features in their data and audience insights that advertisers can’t get elsewhere, marketers are realizing the benefits. For example, a global beverage CPG brand was able to course-correct over-indexing in Chrome and serve 78% of their impressions in Safari and other cookie-blocked environments, as well as achieve 21% lower CPC and 123% higher CTR compared to the benchmark.
A Consented Ecosystem
Lynne d Johnson: In this new era of privacy-first ethical data, it’s coming down to a division between the data-rich and the data-poor. Not all publishers have the treasure trove of data that a New York Times or Bloomberg has. What is the solution there?
Danner Close: Success in this new era of digital advertising will require infrastructure that empowers publishers to unlock and activate their otherwise untapped first-party data, making it available to the wider ecosystem. Access to responsible, scalable first-party data across a variety of publishers will enable adtech to preserve the health of digital advertising by being an enabler and not an intermediary.
As advertisers seek out privacy-centric addressability solutions, platform partners that make rich, first-party publisher data more accessible to advertisers and monetizable for publishers will enable all parties to thrive in a privacy-forward environment.