The underlying theme from last week’s first-ever INMA Asia/Pacific News Media Summit was a joltingly global one: Data has always been the fuel for digital and cultural transformation, but it is now more urgent than ever as publisher advertising will soon be put at great risk.
With Google extending the implementation time frame for the elimination of third-party cookies from its Chrome browser to the end of 2023, INMA is hearing relief from publishers without first-party data strategies or poor implementation of advertising sales structures on that basis — and even a few miffed elite companies that were ready to go.
Here’s what the 635 attendees from 35 countries heard about data and digital advertising at the July 15-16 Asia/Pacific Summit.
What comes after third-party cookies?
To set the stage for the urgency of a first-party data strategy, INMA asked Craig Macdonald and Siddharth Gopalkrishnan of McKinsey & Company to brief attendees on what comes after third-party cookies.
The 2023 phaseout of third-party cookies in Google’s Chrome browser is coming because of tightening privacy standards and regulatory environments worldwide. The phaseout is being delayed because the advertising, agency, publisher, and tech ecosystems are simply not ready for the change next year.
What is at stake for news publishers is profound: With US$40 billion in digital advertising powered by third-party data, a Google study in the United States suggests an estimated 52% reduction in monetising capability, Macdonald told INMA attendees. In the short-term, that could mean an estimated US$20 billion in the United States alone will shift from the open Web to “walled gardens” like Google, Facebook, and Apple — as well as retailers setting up media networks. If there is a shift to walled gardens, expect inventory pricing to go up.
Macdonald put it more philosophically: There is a class of data that is moving out of the market, and there is a class of data moving into the market. There will be a short-term shift to walled gardens with large data maps such as Google and Facebook and thus a re-balancing of the advertising ecosystem – followed by, potentially, a re-balancing of the re-balancing as CPMs go up and open Web alternatives emerge.
What will those alternatives to third-party cookies look like in the open Web? Likely old-fashioned contextual advertising that will rely on tagging that provides data clues to advertisers, Macdonald said. The challenge is that contextual advertising will have a lower ROI than more precise third-party data, so the expectation is that their ability to measure and target will go down.
Publishers that don’t do a better job of tagging content to provide access to a contextual ad or building some way to provide the same types of maps or insights on consumers that can be fed through first-party data will compromise the ability of advertisers to reach them, Macdonald said.
Advertisers and marketers will have to invest in technology to orchestrate data around audiences in new ways, Macdonald said. Publishers are responding with authentication systems and processes to log in and provide information to capture first-party data and associate with the content they consume. The agencies and advertisers are trying to target audiences, while publishers are coming to market with different levels of fidelity around data ID mapping that need to be evened out.
As part of this environment, changes in how advertising data is delivered will impact how media is measured. Losing one-on-one tracking capability with the death of third-party cookies is prompting concerns over measuring media effectiveness. There are no silver bullets, Macdonald said: Tests must be done, feedback systems rebuilt, and expectations re-balanced for ad spend.
Gopalkrishnan urged publishers to create teams that are looking at what’s happening in the fast-moving digital management platform (DMP) space — that is, technologies that show who is reading content, assuring that it’s privacy-protected and auditable, and can articulate that segment to the market and make available for advertising sales. Publishers need a “higher metabolic rate” to adjust to this because what is at stake for their advertising sales.
Publishers speaking at the INMA Asia/Pacific News Media Summit had different ways of telling their data stories. All built on the need and urgency for developing first-party data strategies.
First-party data strategies driving advertising
For the South China Morning Post and News Corp Australia, their first-party data strategies are in place, they are layering on capabilities for smart audience segments, and they are turning to the advertiser market:
- South China Morning Post: The Hong Kong-based South China Morning Post created Asia’s first publisher data platform (Lighthouse) and are moving toward authenticated login IDs to profile users. They have been masterful at creating audience segments, with 24 pre-built. These can be used across direct and programmatic advertising activations, and SCMP is adding contextual segments to mirror buyer demand.
- News Corp Australia: News Corp Australia is leveraging its scale across networks to provide first-party fuel for its advertising sales – namely, data layers that include transaction, intent, consumption, and local data sets. Through trusted environments and premium context, they are demonstrating to advertisers high attention qualities. In fact, they have created a News Corp Attention Suite for native, video, and display advertising.
Data and common IDs fuel transformation
Echoing classic transformation stories with data at the center were Nikkei, Asahi Shimbun, KG Media, and Sin Chew with the creation of common IDs a recurring theme:
- Nikkei: For example, Nikkei has invested in a common ID across its services as central to its first-party data strategy. In its subscription journey, Nikkei is pricing digital the same as print, emphasising direct communication with customers, and diversifying revenue based on the company’s purpose.
- Asahi Shimbun: Japan’s Asahi Shimbun has put data at the heart of their digital and cultural transformation as they maximise value for more customers with diverse products and services. They have implemented Asahi ID across surveys, events, subscriptions, shopping, and more. They have elevated newsletters for engagement. They are using data for topic probability analyses and identifying reader segment interests. And this data emphasis is having a major impact on its newsroom with advertising sales is next.
- KG Media: Indonesia’s KG Media is using data to transform its core business to maximise its resilience and empower a creative growth engine. This involves digitizing conventional products and building a marketing and advertising solution ecosystem. In the process, they are accelerating digital revenue and making innovation work.
- Sin Chew Corp: Malaysia’s Sin Chew Corp puts data at the core of what they do as data should back all decisions. Democratising access to data through internal champions in editorial, audience, marketing, and tech are key to this cultural transformation. Yet Sin Chew also is fixing its tech stack to create a personalised user experience, using data to fuel membership and registered user growth, and creating a one-stop solution for its digital content and media lab.
Still other Asian/Pacific publishers are building on these capabilities to redefine what they are doing in advertising and audience targeting while finding smart ways to create products:
- Singapore Press Holdings: Singapore Press Holdings is redefining its advertising value proposition, focusing on a premium audience and 360-degree engagement. They are focused on omni-channel solutions and more fluid formats for messaging. At the same time, content marketing is on the rise while they next focus on more integrated solutions to drive impact.
- JoongAng Ilbo: A similar cross-department focus could be at South Korea’s JoongAng Ilbo which developed “Listen For a Smart Life” to target Millennial and Gen Z women. Yet this project required collaboration on content substance, tone, manner, and branding that grew subscribers across newsletters, YouTube, and podcasts.
- Nine: INMA heard from Australia’s Nine on their product/editorial partnership: with an audience development team as an intermediary, developing a single source of truth, aligning around shared goals, problem-solving, and organising projects (yet having a fast lane for quick projects).
The global challenge behind the phaseout of third-party cookies is ushering in a new era of first-party data strategies for news publishers. What we see in the Asia/Pacific region are publishers that are smartly attacking this challenge in new, different, and clever ways — showing what data-mature companies and those on-ramping now can achieve.