How the NYT and SHE Media are Making Better Advertising Possible for All

The New York Times will no longer apply third-party data for advertising targeting from next year as it looks to first-party solutions to support its mighty subscription-based business.

The newspaper, which has the world’s biggest digital subscriber base, launched a portfolio of first-party audience-oriented advertising products in July 2020, after a year of planning and building bespoke solutions.

Sasha Heroy, Senior Director of Ad Products and Platforms, outlined the Gray Lady’s advanced advertising plans in our latest customer event. The second half of the session saw SHE Media’s Ryan Nathanson walk the audience through how they’ve successfully begun the transition towards a first-party data focused future.

Harnessing valuable reader relationships for the benefit of advertisers

The NYT’s key aim is to build its subscription business but “one of the core tenets is that this can also form the basis of a very successful advertising business”.

Heroy said: “Whereas in the past, our first-party audiences had typically consisted of people who read pages of interest in a specific time period, our July launch was the result of extensive internal collaboration and a methodology that went far beyond what we’ve done in the past.”

It was core to the endeavor to ensure that the first-party solutions would “perform as well as, or better than, our best third-party alternatives” and use methodologies and criteria the publisher felt comfortable sharing with advertisers.

“Our primary goal was to demonstrate that we could harness the Times’ relationship with readers for the benefit of our advertisers,” she added.

Responding to the regulatory challenges

The change of direction had been accelerated by measures such as the European Union’s General Data Protection Regulation (GDPR) which, she says, drove a “sense of urgency” around preparing for industry changes. It was necessary for the NYT to reduce its reliance on third-party data companies.

“Coming out of GDPR preparations, our senior leadership team was more than receptive to the idea that lessening our reliance on third-party data should be an enterprise priority,” Heroy said.

In July last year the publisher pulled together a task force, combining stakeholders and experts from across data science, analytics, product, audience insights, legal, data governance and ad tech in order to build a proof of concept.

At its core was the need to “build new targeting capabilities while preserving reader trust”.

The NYT already had initiatives to build on top of. Having previously launched five distinct ad targeting capabilities built on top of machine learning models, it had a well-established relationship with the data science team, which was crucial to the project. “They share a vision for a more respectful, privacy-safe and transparent advertising business.”

She continued: “Although we gave ourselves a full year to prepare for our initial market test, in order to develop a truly viable and comprehensive replacement for third-party audience data before the end of this year, we had to parallel track a number of things at once. We undertook data collection, modeling work, data validation steps, and planning for an always-on strategy for maintaining and refreshing our data.

“In addition, we also put substantial effort into our go to market and training efforts. Customer education continues to be a major focus of the team.”

Reimagining the value exchange

So far, the first party piece has been applied mainly to data collected from survey responses, although Heroy said that other first party avenues were available to publishers and that they themselves hoped to utilize in the future.

She said that the team had spent time debating giving something tangible to give users in return for their data. “In the end we opted just to be transparent with them about the purposes for which they are giving us information and our belief that this would be better for our users in the long run,” she said.

“There are plenty of opportunities to offer something tangible. And I think that the Times as well as other publishers should think through what that is. But that wasn’t the work we’ve done so far.”

The team responsible for the Times’s first-party audience program expects to continue bringing both creativity and rigor to bear on the development of new audiences for the foreseeable future. Other initiatives in the works include an array of inference-based interest segments to add to the initial 45 survey-based offerings released earlier this year. In developing the new collection of audiences, Heroy says the team drew on the breadth and depth of the Times’s content to identify unique solutions to specific marketing challenges.

A first-party future for all

Ryan Nathanson, SHE Media’s SVP of Operations, broadly agreed with the NYT’s direction of travel, suggesting that “first-party data infrastructure and resources have matured to the point of being more accessible to all sizes of publishers”, and giving his insight into how to deliver this. His company, part of Penske Media, looks after both owned and operated sites and an exclusive network of over mid to scale sized independent publishers. In all delivering 84M US Unique users per month.

He urged other publishers: “Dedicate at least one person to work solely on your data strategy. They should help define the what, why and how and then work with the rest of the organization to bring it together.”

And don’t give up: “A lot of what you’ll be doing is building for the future,” Nathanson suggested. “A future state of cookieless targeting, a future RFP, unlocking new ad product innovations, being ahead of future regulatory policies etc”.

“The idea is to keep tabs on your user’s interests and behaviors so that in the future you know the exact user(s) to reach out to when you need to deliver a certain type of performance – clicks, purchases and so on. “In order to do that you have to think about what data is useful today and may be useful tomorrow. You can’t activate on data you don’t already have”.”

Both publishers are convinced that first party solutions will shape the advertising ecosystem of the future but both know there is work to be done, particularly in the education of a new publisher premise.

As Nathanson said: “It can be a little challenging to describe why what you’re doing brings more value to an advertiser than what they’re doing already.  However when they see the results: Increase in spend efficiency, performance, brand safety, compliance with complicated regulatory policies and just increase in sales to name a few, they begin to get curious and that’s when the start of a long and successful partnership begins.”

Get it right, though, and publishers can climb the online value chain to become the gate-keepers of this new privacy-compliant world – creating a better and richer experience for publishers, advertisers and readers alike.