The third-party ecosystem as we know it isn’t working anymore. What will replace it will be infinitely better for the news media industry.
Pre-pandemic, this was the biggest topic in the industry. During Wednesday’s INMA Virtual World Congress module, it once again took center stage as media executives from around the world took part in the “Smart Data In the Shadow of the Cookiepocalypse” session.
Tom Betts, chief data officer at Financial Times, described it most succinctly: “The third-party cookie is going away. I think that’s something we should celebrate.”
This is both a consumer and an advertising issue, said Yasmin Namini, a digital media consultant and former chief consumer officer at The New York Times. Namini, who moderated Wednesday’s session, was struck by the fact that Financial Times had more than 80% of users logged in while many smaller publishers in the United States are lucky to have 5%. Financial Times was one of five case studies shared during the Wednesday session.
“How do we get people to give us their information and then log in, to participate in the engagement value exchange?” she asked. “Particularly now in the coronarvirus days, that’s obviously a news story that we can build the customer journey around. How do we take that really important, valuable lesson learned and use it with other news stories? I truly believe you can use that concept of capitalising on the news agenda. It doesn’t have to just be about pandemics. Newsrooms and publishers need to be thinking about how to take these lessons learned from COVID and apply them to other aspects of their content strategy.”
Media executives who spend their days focused on this issue agree. They’re preparing for a world without third-party cookies and aren’t looking back.
Third-party cookies have destroyed value for publishers, Betts said. Publishers may be making a mistake in trying to predict what happens after third-party data. Instead, they should be playing offense rather than defense, he said: “We’re an important industry, and I don’t think that what we do and how we do it should be determined by changes in technology.”
Thomas Lue Lytzen, head of product development and insights at JP/Politikens Hus, told INMA delegates that poor quality and tracking issues are serious issues with third-party data, and the tracking issues especially are creating wider problems for the programmatic ecosystem.
Tracking and targeting capabilities are being consistently diminished as new legislation crops in in the wake of data privacy scandals, and browsers themselves are taking action to address privacy issues by removing cookies from the equation. Apple’s Safari browser recently released a new ITP that fully blocks third-party cookies, and Lytzen said this is not just about the cookie.
“What they actually did was declare war on tracking,” he said. “Many people think it’s just the third-party cookie they don’t like, but it is tracking in general.”
While others try to find loopholes in the regulations, JP/PolitikensHus developed Relevance, its own first-party data platform. Many others have done the same and shared their stories as part of the World Congress.
Why content is important
Jarrod Dicker, vice president of commercial at The Washington Post, had this to say: “What we believe is that where cookie and behavioral data was the currency of the Web [with third-party cookies], the new currency is content. And what Google and Facebook and [other] platforms lack is content. So, we’re really giving power back to publishers and understanding what that value exchange will be once the third-party cookie is deprecated.
“It provides a real way to better dive in and engage, which was not thought of before. But to do that, publishers need to shift their attention back to the user login so they will be able to collect information. For users to provide that log-in information, they need to see value in what they get in return for their personal data, and publishers will need to grow the value of their offerings and use the information to drive a better consumer experience.”
Why relationships are important
The content is the first step. Relationships are the second.
“When we look at this from the consumer point of view, we have to look at why they want to give us that information,” Dicker said.
The answer is a relationship based on content.
“No matter how things evolve, publishers are going to have value if they focus on building user relationships, learning how to drive user action, and collect first-party data,” said Michael Silberman, senior vice president/strategy at Piano. “That’s the solid foundation of a media business now, whether you’re focused on ad revenue or reader revenue.
“In the past, there was tension between those business models, subscription teams and advertising teams. But with the landscape changing, that’s no longer the case. Both teams are unifying around the most valuable known users and the value of context and the value of content.”
Betts agreed. If publishers could only do one thing to support growth, it should be building direct consumer relationships, he said.
Financial Times has been on a subscriptions journey for a long time, driven by growing direct relationships and optimising them. The company has reached 1.1 million subscribers, with 80% of those paying to consume digitally. Data has been key to this growth. In B2C relationships, Financial Times wants to sell subscriptions that are platform and channel agnostic. In B2B, FT has developed a unique demand-based pricing model which measures engagement of individuals and organisations based on relationship data.
Without this relationship, Betts said, FT would not have grown so quickly.Without those direct relationships, the company’s experimentation and learnings would be impaired. If publishers cannot identify the customers behind data, they make inferences about what the customer wants, or why they did or did not buy a subscription. The identity of the customer and the data the company collects is critical, Betts said.
“If you want to double down on subscriptions growth, then having a really clear first-party data strategy is critical to supporting the pace of experimentation necessary to drive this kind of revenue growth,” he said.
Without first party relationships, publishers allow someone else to control their destiny, Betts said. Fundamentally, platforms are in a relationship with the audience and have more control over users if publishers do not own the direct consumer relationship: “If we don’t have that relationship, we’re relying on third party platforms to promote our journalism.”
The data of the future will center around zero-party and first-party data — basically, data given by people with who media companies have a relationship.
Zero-party data, a term coined by Forrester Research and used by Piano, is data explicitly given by the reader to the company: name, birthday, gender, perhaps newsletters they subscribe to. And it is the most valuable information because the accuracy is high and the sourcing is obvious, Silberman said.
First-party data is any data collected through a direct relationship, say, between a news media company and its registered users. This is implicit data gathered when the reader is on your Web site: what they are looking at, what device they are on, their general location.
This is where media companies have a leg up.
“Because of the direct relationship they have with users, it’s easy for ask for zero-party data and collect first-party data,” Silberman said. “You’ve got that relationship and you’ve got that trust. You’ve got content and experiences. All of that creates the environment where you can ask for that zero-party data.”
How all this looks post-third-party cookies is still an open question, Betts said. He invited INMA delegates to participate in the discussion about the future of cookies. Even though he does not believe in third-party data, Betts said if publishers do not participate in the discussion about the future, they allow other players to set the rules.
Betts summarised the issue as concisely as he opened it: “Hope is not a strategy.”
Publishers should not have to rely on unreliable data and should double-down on existing strategies. He urged publishers to go on the offense: “Make an investment in better knowing your customers, because it’s the right thing to do, it’s the right thing to do to support growth of your business, and not just as a defensive strategy against cookie changes.”
The Congress continues on Friday with a module on the content-to-commerce revolution. Register here for individual sessions or the entire Congress (the latter includes access to this and previous sessions).
Banner image courtesy of Vitaly Sacred on Unsplash.