For years, the digital advertising industry has grown on the back of user data by creating an ecosystem that is complex, opaque, and leaks data. But today, privacy is dramatically changing the way advertising is bought and sold, where the data that was once accessible by third parties is increasingly out of reach.
Several factors drive the disruption faced by publishers and advertisers. Firstly, consumers are more informed than ever about how their data is used. Secondly, there is increased scrutiny from regulators across the globe. Finally, we know that browsers are moving away from third-party cookies and “identifiers” – Safari and Firefox have already done so, and Google plans to phase these out in Chrome by 2023.
As a result, we need an advertising ecosystem that protects user privacy while protecting revenue. But, how do we go about delivering this?
To rebuild requires a privacy-first infrastructure that will empower publishers to build first-party data strategies and direct relationships with advertisers, and provides advertisers with a way to build their own trusted network of publishers and a sustainable solution to continue to reach their consumers.
Publishers’ First-Party Data Is Essential
The ISBA Programmatic Supply Chain Study found that for 15 advertisers to buy media across 12 publishers, information was passed through 300 different supply chains. Digital advertising must shift away from this complex system, where most of the value is being taken by intermediaries with no direct relationship with users, to a place where publishers can collaborate with advertisers and where publishers first-party data is at the heart of the value chain.
Publishers’ first-party data is becoming extremely valuable as advertisers seek privacy-safe insights into their audiences, particularly as third-party data deprecates. This is because publishers have a direct, first-party relationship with each user that comes to their website. Publishers understand user interests, time-on-site, frequency of site visits, and have a real-time view of how browsing habits change — without identifying consumers and compromising privacy.
Many publishers are achieving great results for advertisers via their first-party audience insights. The Guardian reported a 65% higher than average brand lift when using its first-party data, including a 102% increase in consideration for a luxury furniture brand campaign when targeting a bespoke first-party cohort. Immediate Media also saw that switching to first-party data targeting increased click-through rates (CTRs) by 132%.
Publishers are also building first-party data businesses on a privacy-first infrastructure. Future plc launched a first-party audience data platform called Aperture in 2021, which will enable marketers to reach high-intent audience segments. Future plc joins other publishers with first-party audience platforms such as Insider with SÁGA and Bauer Media with Illuminate, to name a few.
Technology Should Be an Enabler of Direct Relationships
As digital advertising increasingly requires privacy at its core, publishers and advertisers will need a privacy-first infrastructure to control, connect and scale their first-party data while planning and buying campaigns. And technology should be an enabler here, not an intermediary.
A privacy-first infrastructure powered by on-device technology enables publishers and advertisers to connect safely globally. No data is leaked, and personalised advertising at scale is possible. This is because on-device technology provides significant privacy benefits.
On-device technology allows for data processing to happen in real-time in the environment it is created, so data doesn’t leak. And because the data stays on the device, it’s privacy-safe and can run on a billion devices for scale. Many platforms are now pivoting to on-device as privacy disrupts digital advertising.
Being able to scale direct relationships is another challenge publishers and advertisers face as ad spend shifts from open marketplace to direct deals. Infrastructure enables publishers to leverage their first-party data capabilities and provides buyers with a way to bring in their own first-party data and access multiple publishers at scale.
Embrace the Next Generation
A privacy-first advertising ecosystem and infrastructure can yield many benefits for the next generation of digital advertising. It creates a stable and sustainable model for media trading that will instil trust and create much-needed transparency and efficiency in digital advertising. And it’s crucial to ensure that user privacy is robustly protected.
Disclaimer: The views, opinions and ideas expressed in this post belong to the author/s and do not necessarily reflect those held by State of Digital Publishing.
