There is a growing consensus within the advertising industry that the demise of third-party cookie tracking is an opportunity.
Advertisers, agencies, publishers and analysts are all in favour of a fairer internet – as our Make Possible series of events shows. But we also acknowledge that there are still steps to take, and that different actors are moving at different speeds.
The way advertising works today is being challenged by new browser security restrictions and regulations. And Covid-19 has further disrupted the industry, threatening publisher revenue streams and accelerating the need for change.
At Permutive we believe these changes are for the better. The industry has been ignoring user privacy for too long. In order to set themselves up for revenue growth in the new world, publishers need to place more value on their data and protect it. By focusing on first-party data they will have greater control, allowing them to build trusted relationships with advertisers while becoming more profitable.
This month’s Make Possible panel discussion, hosted by Permutive, was entitled Putting privacy first – addressing the identity crisis. Permutive’s co-founder, Joe Root, and I challenged Mark Howard, chief advertising and partnerships officer at Penske Media Corporation, and Fatemeh Khatibloo, Forrester VP and principal analyst, on the equitable future of advertising.
Howard told the audience how his business was reimagining the future in a data-informed way. First party data is not only leading to better advertising outcomes but also shaping the company’s very strategy. From subscriptions to advertising, content and affiliate marketing, its wealth of first-party data gives Penske an edge.
“Data is a valuable asset for a publisher, and if you can embrace that mindset, understand all the behaviours, trends and interest then you can form many different commerce revenue models and build out much richer views of your audiences,” he said.
“The Chrome announcement around retiring the third-party cookie has forced everyone to think about their own individual responsibilities as part of this ecosystem – and also the responsibilities that we have to our audiences.”
He added that “everything that has been done to this point” has effectively commoditized publisher inventory, yet publisher first-party data had not been commoditized: “With publisher first party data we are on the cusp of really unlocking the value that it possesses.”
Conversations with clients increasingly center around unlocking audiences and inventory through unique, deeply-mined first party data.
For Khatibloo, the biggest first hurdle was ensuring that a ‘privacy-first’ ecosystem meant just that. She said: “If we believe that privacy is a fundamental right – which Europe does and much of the rest of the world does – then the onus shouldn’t be on consumers to manage that per se.”
Consumers were most concerned about cross site issues – behavioral tracking across platforms and sites, whereas they were likely happy for individual sites, such as Rolling Stone, to use their data to make their on-page experience better.
She shared that more than half (62%) of US consumers were aware of the data economy and believe it’s wrong for brands to track them across devices. As uncovered in Forrester’s Consumer Technographics Online Benchmark Survey, more than a third of consumers said they don’t trust companies to keep their personal information data. “As a result, 77% of online consumers in the US use at least one security or privacy preserving tool, including the 43% who clear their internet history on a regular basis, the 21% who block information sharing across their devices and the one in five to use private browsing or incognito mode,” said Khatiboo.
“We have failed to bring customer trust along and unfortunately, now people are taking steps that actually hurt our entire ecosystem,” she continued, noting that the browsers were stepping up their game as ‘user agents. “This is a real shift from where we were even 18 months ago. Unfortunately, digital advertising isn’t just dealing with consumer concerns for the browser situation with the deprecation of data.
“That’s why we need to build the relationship in the first party. It’s a big part of why I talk about the data safe haven and why the direct advertiser-publisher relationship is so important… This is the sort of stuff that saves us, ensures that consumers are not freaked out and that we are building trustworthy relationships with them.”
Moreover, advertising based on segments rather than hyper-personalization is healthier, she added.
There are solutions, and the situation, as Howard noted, is not bleak. He urged all publishers to explore the “opportunities and optimism about what the future holds, as opposed to being concerned or afraid about what privacy regulation and other changes are going to mean for us”.
It is time for all of us to reimagine the future of advertising online, in a way that is both privacy-compliant and better for business, rather than the price (over value) led, commoditized approach of yesterday.
If you missed the event and would like to watch the panel on-demand, you can do so here.