Citing privacy concerns, Google said goodbye to individualised advertising. News publishers are urgently planning scenarios of their ad business future. Many are expecting an increase in value of their first-party user data and rich content data.
Google announced Wednesday it plans next year to stop using technologies that identify individual Web users and track them as they browse across multiple Web sites.
“Once third-party cookies are phased out, we will not build alternate identifiers,” wrote David Temkin, Google’s director of product management, ads privacy, and trust.
Considering Google’s market position — 30% share in the 2020 U.S. digital ad spend, 63% share in worldwide browser usage, and 85% share in smartphone operating systems — this move signals a profound change in the digital advertising ecosystem.
IAB Europe Chief Economist Daniel Knapp said: “It’s no surprise that Google abandoned the idea of preserving individual targeting. What threw the ad industry in disarray is that Google said explicitly that it wouldn’t allow others to use individual tracking technologies on the Google’s ad tech infrastructure. A big part of the open Web is forced back to targeting by clusters of anonymous users and by context. It’s a profound change, full of uncertainties, and for which many have not prepared.”
INMA interviewed Knapp and executives of Amedia in Norway, JP/Politikens Hus in Denmark, Mediahuis in Belgium, and Tamedia in Switzerland to draft implications for news publishers.
First party-data play
Publishers that collect first-party user data, such as Amedia in Norway, will continue to offer targeting to individuals within their walled gardens.
They expect a higher demand and see an opportunity in cutting middlemen in ad tech or the media buying space, and they hope to be finally able to price quality inventory at a premium.
Amedia, a regional news publisher, reaches 40% of Norwegians, and 80% of its pageviews are generated by logged-in users.
The size of those gardens matter, so publishers might wish to form alliances with peers and, for example, pool data to create targetable segments across media brands. Amedia teamed up with Aller Media in Norway, for example.
Christian Thu, vice president/advertising sales at Amedia, explained: “You need reach, user data at scale, make ads easy-to-buy, provide insights, and document effects of campaigns. If publishers stand alone, they won’t provide sufficient value for ad buyers.”
The INMA interviewees don’t expect Google to entirely block personal data from flowing through its infrastructure, used by many publishers, such as Google Ad Server, assuming the use is privacy compliant. “This could flag up massive anti-trust concerns,” Knapp of IAB Europe said.
Yet uncertainties remain. Publishers await clarification of privacy rules from other tech giants, such as Apple, which recently forced mobile app publishers to ask users for permission to track them across apps.
Contextual targeting play
News publishers sold ads based on context for decades, in print and online. Advances in data analytics made this form of targeting quite sophisticated and yet fully privacy compliant. Content signals can be combined with insights based on first-party data or surveys.
For example, JP/Politikens Hus in Denmark built a technology to let advertisers target the same kind of segment of users, but not the actual users across Web sites. Last year, it invited six peer publishers, such as TV2 and Berlingske Media, to join its Publisher Platform.
Thomas Lue Lytzen, head of product development and insights, ad sales and tech at JP/Politikens Hus, said: “Publishers need to come up with standards for contextual targeting to be effective. Currently, we’re using the IAB taxonomy of topics to classify content, but we need a true news-centric taxonomy that would represent the true value of our content.”
The shift towards contextual targeting likely benefits premium publishers, as the access to their exclusive inventory becomes more valuable. In the era of audience-based ads, advertisers could track users of premium sites to cheaper ones and save.
Unfortunately, as the INMA interviewees observed, the advertisers and their agencies had been slow in shifting, fearing lower effectiveness of contextual ads, and revenue from this kind of targeting remained marginal.
Knapp estimated the total spend on online contextual ads in Europe in 2020 at €1.5 billion, or 5% of total display ad spend.
Publishers who haven’t amassed first-party data and those who haven’t broken free from the tech platforms’ infrastructure — read: most publishers in the world — will likely depend on whatever Google builds, and their dependence will grow. They will potentially surrender control of their audience value to the Google’s black box algorithms.
Christoph Zimmer, chief product officer at Tamedia, described the Swiss publishing industry’s push towards logging in users. In 2019, publishers formed an alliance and plan to build a single sign-on across media outlets.
Today’s reality is different: “In Switzerland, Google generates more ad revenue than all other media companies combined. Therefore, its decision to block third-party tracking entails a significant revenue risk for Swiss publishers and Tamedia.”
It’s not much different in Belgium, where most publishers, advertisers, and agencies use Google’s tech stack, while Mediahuis invested in a data platform and offered targeting based on its first-party user data. Interestingly, while in the United States 85% of ads were sold programmatically in 2020, in Belgium it might have been less than 30%.
“So, we are less stressed than stretched. We have several task forces on a local and group level, we talk with publishers internationally, and look at scenarios of how the ad market might evolve,” said Gert Desager of Mediahuis. “One thing is clear, since Darwin had observed: It’s not the strongest of species that survives, nor the most intelligent, but the one that is most adaptable to change.”
Google promises to replace individual identifiers with the Privacy Sandbox technology. In a nutshell, it clusters users based on interests and targets ads in a browser on the user’s device, keeping individuals anonymous to advertisers. It named the clusters flocks, like birds travelling together.
“Advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based advertising,”declared Chetna Bindra, group product manager, user trust, and privacy, after internal tests.
Google expects to begin testing the new tech with advertisers in the second quarter.
- INMA Report: The Third-Party Cookie Trigger, INMA, June 2020.
- INMA Knows: Third-Party Cookies and Advertising curated by Dawn McMullan.
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