If News Corporation launching its own global ad exchange is anything to go by, it would appear that publishers are finally waking up to the power of their own data and the monetary value of using that data in the programmatic space. So why has it taken so long and is it the answer to falling CPMs?
Historically, the media has enjoyed a consistent relationship between its consumers and advertisers, yet there was an early reluctance on the part of the media to embrace the internet. It’s easy to see why: gone were the boundaries, the safety of controlled distribution, and in its place a vast landscape, filled with creatures more prepared to receive than to give.
This wasn’t just true of consumers: as online audiences ramped, so too did the need to sell the resulting inventory. Ad networks were created and opportunists lay traps to trip up the wary and rob them of a very new under-realised commodity: data.
Krux Digital estimates the cost in revenue to publishers from data leakage to be in the region of $850m. On the flipside, comScore recently estimated that 36% of web traffic is non-human, while Incapsula and MDotlabs put it closer to 50%. Consumers are fed up and taking control with the use of ad blockers, up 43% this year, and use of Do Not Track (DNT) is up to 25% in some countries, according to Mozilla. Whatever the figures, there’s little good news for publishers in the era of data-driven advertising.
Or is there? Much of what is wrong with online advertising is as a result of the cookie, or rather the use of it and its limitations.
Firstly, cookies, while useful in first-party mode, blight the internet in third-party guise, mapping content and context to consumers without their knowledge or permission.
Secondarily, we live in a fragmented universe. Smart phone adoption is rapidly growing, itself divided between mobile web and in-app usage, tablets are replacing desktops, and our cars are moving multimedia machines. With no standardisation in consumer identification in this new landscape it’s difficult for publishers to even see their audience, let alone monetise them.
Thirdly, the arbitrage of media has become smarter and in order to shift the balance of power back to the publisher, solutions such as Private marketplaces (PMPs) and Data Management Platforms (DMPs) are providing some safeguards, but it’s not enough. Whilst Programmatic CPMs have increased, they are not linear to the decline in direct or traditional media, nor have publishers been able to fully control how these environments use their data.
Sounds like more problems, but not so. If we conclude that third-party cookies are bad for both consumers and publishers, then we have provided a single point of context for a solution. That solution needs to be one that not only honours consumer rights, but also helps to protect a first party’s data, is device agnostic and protects the advertiser from buying imaginary traffic.
What’s good for goose is good for the gander too; richer contextual data from increased sources benefits the marketplace and the buyer. So, ultimately, universality is key. As an industry we need to get behind a single solution, and work together to provide guidelines and best practises in audience tracking, in the interests of the future of our industry, before it’s done for us.