2022 Has Unintended Consequences From the Pivot to Privacy

With at least 18 months on the clock until Google withdraws support of third-party cookies in Chrome, 2022 is shaping up to be the year the marketing and media industry really kicks the tires on alternative identifiers. While identifiers’ viability for targeting audiences is on the docket, the consequences—intended or otherwise—of a global push for privacy will emerge. Among those consequences are further consolidation, ratcheting tensions around who owns publisher contextual data and, as scaled audience targeting withers, the further growth of already domineering tech platforms. This year, publishers, tech vendors and marketers, spurred by tightening regulation and browsers' own privacy measures, will continue to test solutions for audience targeting and ad delivery. And those tests present a market opportunity: There are over 100 cookieless solutions out there vying for attention, attracting money to new corners of the industry. The race to find identity solutions means all companies are adapting to survive. One example is ad verification companies diversifying into adjacent areas, like keyword-based targeting. That struggle can cause tensions, for instance, from publishers asserting control over their own contextual data. As such, “2022 will be a big, pivotal year,” says James Prudhomme, chief revenue officer at data platform Optable. “As legislation gains in importance, partners will need privacy-centric ways to connect data.” Contextual land grabbing Old-school methods of contextual targeting, like serving football ads on sports sites, are having a moment. But who owns the contextual data that's used to segment site content and environments for ad buyers is turning into a battleground. For years, the pendulum has been swinging away from the old system, by which marketers chased specific individual profiles, powered by cookies, and toward contextual targeting based on where and what people are browsing. You don't need user data to reach yoga moms on wellness sites. That's just one way marketers can spend their budgets in a privacy-first marketing landscape. Aside from consumers, who will most benefit from the global push toward greater user privacy? “The biggest benefit will be for brands that have a true value relationship with their consumer audience. The burden has shifted to communicators so that consumers can expect some value in return to make it worthwhile to share their data, no matter how minor.” —Liz Caselli-Mechael, Head of Content & Digital, Nestlé The concern is that some vendors commercialize publishers' intellectual property outside of their contractual means, claiming to act on behalf of ad buyers. Ad verification companies with brand safety capabilities are beefing up their contextual targeting tools for ad buyers—just look at Integral Ad Science's contextual tool Context Control and DoubleVerify’s acquisition of contextual targeting platform OpenSlate. And publishers say their intellectual property—namely, their audience data—is at risk. Third-party web crawlers span publishers' sites, reading pages, hyperlinks and headlines, and collecting data through contractual agreements for brand safety purposes. Publishers are broadly supportive of this since buyers demand a certain level of standardization and brand safety assurances. The concern is that the data is then being commercialized as contextual targeting segments and products by intermediaries who charge buyers. Typically, these segments are made available to ad buyers via demand-side platforms. And therein lies the rub: Publishers feel they need to work with vendors on brand safety products in order to attract inventory, but then are vulnerable to having their pages scraped to inform commercial segments for buyers. “It’s like buying fruit at a gas station,” says Scott Messer, senior vice president, media, Leaf Group, of buying contextual-based segments from vendors. And since the data has mostly already been collected, he adds, the damage has been done. “What will continue to get worse is the battle over who owns contextual.” Publishers are blind to the scale and impact of the issue because they don’t have visibility on that side of the automated ad buying process. That makes testing how to reduce their dependence risky. Shutting off the brand safety capabilities from ad verification vendors—and with it, the web crawlers responsible for segmentation—reduces publishers' sellable, brand-safe and brand-suitable inventory. Just how much inventory that is and how much revenue that equates to is data under the stewardship of demand-side platforms. The size of the role contextual targeting will hold in marketers' budgets for privacy-first tactics once cookies disappear has yet to be determined. Publishers, as custodians of audiences' first-party data, are in a better position than they have been since digital ad trading began—but aside from scrutinizing contractual clauses, auditing their partners and building direct relationships with advertisers where possible, their reliance on third-party vendors is keeping them in an uncomfortable position. Commerce comes to the forefront The convergence of content and commerce will reach new heights in 2022, as publishers—those audiences trust—are well-placed to maximize their authority as sellers, too. Many of them are investing in technology to streamline the buying experience. BuzzFeed’s adoption of on-site buying is one example. Others, like Food52, are setting up physical stores so they can take up more permanent, physical residency in buyers’ minds. By now, almost all publishers at least dabble in commerce, from simply plugging in with affiliate partners to involving audiences in product creation, with each showcasing new muscles to flex, especially in mitigating against supply-chain problems. But it’s publishers’ content creation abilities, their use of flywheels between content, audience and commerce, that stand them in stronger stead than your average direct-to-consumer company. Just how this plays out will vary, but the deeper the integration with the business, the greater the opportunity. Just look at The New York Times' early success with affiliate service Wirecutter, netting 10,000 subscriptions in its first month. “As a result of the rising popularity of contextual targeting, the increased use of web crawlers deployed by third-party vendors is an abuse of their market position," says Richard Reeves, managing director of publisher trade body the Association of Online Publishers. "Publishers must be stringent in inspecting their service contracts to make sure all web crawlers are deployed and used only for what they were originally intended, robustly enforce these terms and urgently investigate unusual activity.” Walled gardens fortify Marketers’ public exasperations with walled gardens like Google and Facebook are varied and range from frustration about the lack of transparency or control to metrics mishaps, brand safety bungles and broader societal impacts. But the fact remains that core spend often goes to those platforms for performance and scale, Vivian Chang, vice president of growth for The Clorox Company’s direct-to-consumer group, told CafeMedia. “The audience is there, regardless of how you want to cut the pie,” Chang says. “As long as the audience is there, they still hold a lot of leverage.” The ugly truth is that many brands are still relatively unprepared for a world without third-party cookies, which could leave them reliant on the walled gardens that still have targeting capabilities when the time comes, further entrenching the power of the platforms. Few have started migrating to first-party data, according to shared user identifier vendor ID5. In late November, the vendor released a guide for brands to ease the transition to cookieless targeting. It estimates taking up to eight months to assess current reliance on third-party cookies to test shared IDs by running campaigns with cookieless traffic in Safari or Firefox, which have both already ended support of cookies. For as long as marketers can use third-party data for audience targeting, they will. The fear is that when the huge drop in addressability comes after Google Chrome ends cookie support, marketers will allocate a significant portion of their budgets to the traditional, tried-and-tested walled gardens, funneling more power and control to a few players and ultimately reducing competition. “We all want to prevent that,” says Optable's Prudhomme. “Publishers are leaning into first-party data. More are aspiring to be mini walled gardens themselves. How can they turbocharge that? Publishers are more empowered than ever to be the custodians of audience data.” And it's not just publishers. Retail and media giants Walmart and Discovery are also strengthening their gardens with first-party data. But the dividends are unequal. The top five media companies in 2020—Google, Facebook, Alibaba, Bytedance and Amazon—generated $296 billion in ad revenue, or 46% of the global total, according to GroupM analysis of public company data. By way of comparison, the top five media companies in 2010—which included Google and networks like Disney and Fox—had a combined total of $70 billion in advertising, or 17% of the global total. That’s sobering. And GroupM predicts media-owner consolidation will become more pronounced among the top players but also lower down the chain for those companies looking to acquire others and compete for audience scale and ad revenue. All of this leaves publishers facing a dilemma: Further consolidation in the space means they need to fight harder to show how first-party data differentiates them from tech platforms as an environment for marketers to advertise with them. But they also need to recognize the need to standardize and simplify the journey for buyers. Check out all of our Outlook 2022 coverage here.

Outlook

2022 Will Be a Year of Unintended Consequences From the Pivot to Privacy

Publishers and platforms brace for a battle over contextual data

Lucinda Southern

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Lucinda Southern