By Jaan Janes, Vice President, Publisher Partnerships at PubMatic
New consumer privacy regulations and the loss of established audience identifiers are fundamentally altering the digital advertising landscape. Many of the addressability signals that underpin targeted advertising are disappearing from the landscape, posing challenges to publishers’ current mechanisms for generating advertising revenue.
These addressability challenges are compounded by other financial pressures on publishers, including the loss of anywhere between $11.9 and $13.9 billion a year to Google and Meta, which siphon off traffic (and ad revenue) in their roles as news distributors. Such losses, on top of emerging ad targeting challenges, led to a rough first half of 2024 in terms of newsroom layoffs.
On the surface this situation may seem daunting, even insurmountable. But in reality, there’s more good news than bad news. In the changes brought by signal deprecation, there is a path for publishers to grow and thrive as never before. Let’s explore three strategies that need to be in a publisher’s mix.
First-Party Data: Monetizing Authenticated Traffic
In recent years, a tremendous amount of attention has been paid to the growing role of publishers’ first-party data in an identity-challenged landscape. There’s a good reason for this, as publishers that can obtain and activate a deeper understanding of their audiences will be better positioned for enhanced monetization.
There are a number of paths to first-party data for publishers, and proper gathering and organization of such data requires a high degree of intentionality. Common sources of first-party data for publishers include (but are not limited to) registration and login systems, website analytics and content engagement, email marketing, and mobile apps. Through these methods, publishers can build comprehensive profiles of their audiences, enabling more personalized and effective advertising opportunities for brands.
First-party data alone is not sufficient when it comes to closing the addressability gap being opened by ongoing audience signal loss. What matters most is what publishers do with it once they have it. That’s where alternative IDs and segmentation strategies become so important. There are dozens of alternative IDs in the market, including LiveRamp’s RampID and The Trade Desk’s Unified ID 2.0, that can be used to scale and enrich a publisher’s first-party data. To better drive monetization, particularly in cookie-restricted environments, publishers need tools that allow them to manage, implement, and configure multiple partner IDs.
Second-Party Data: Putting Advertiser Data to Work
Going beyond first-party data, second-party data—that is, data shared between trusted partners for mutual benefit—offers a path to enhanced monetization for publishers due to its power to supercharge campaign performance. While second-party data can originate from a variety of places, one of the most powerful partnerships publishers can leverage lies in the data of their own clients—advertisers with customer data residing in CRMs, CMSs, and other platforms.
Care must be taken to ensure data exchanges happen in a secure and privacy-safe way. In that regard, data clean rooms serve as valuable tools in orchestrating one-to-one direct deals. Publishers should set up a secure, neutral environment where both parties can upload their first-party data without it leaving the controlled environment. Today, there are multiple independent clean room providers within the marketplace, and clean room services are also offered by most major walled garden environments. The clean room option best suited to a given publisher-advertiser data exchange will depend on the nuances and goals of the partnership.
Within the clean room, publishers can then use privacy-safe methods to match data sets based on common attributes (e.g., hashed email addresses) without revealing individual identities. The publisher and advertiser can perform joint analysis within the clean room environment to generate insights, build audience segments, or measure campaign performance.
Third-Party Data: Finding a Privacy-First Path Forward
Much like advertisers, publishers have a lot to gain when it comes to enriching their first-party data with third-party insights for a deeper and more actionable understanding of their audiences. By some estimates, third-party data can help publishers increase ad revenue by as much as 50-60 percent. The key for publishers, moving into the new data reality, is two-fold:
- Third-party data partners must be reputable and adhere to all modern privacy standards.
- The third-party data publishers employ should bring valuable new dimensions to their audiences that reflect rising consumer behaviors.
Particularly regarding the second point, our industry is seeing—and should increasingly be fostering—a convergence of data and insights around both commerce media and CTV, two increasingly important components of audience’s online behaviors. By tapping third-party data around online transactions and CTV viewing, publishers can not only understand their audience members on a more holistic level, but they can also help their advertisers to target and engage their audiences in an informed omnichannel capacity.
At the same time, publishers should embrace their roles as purveyors of third-party data within the new digital reality. By working with reputable partners, publishers can monetize their data beyond their own walls in a privacy-safe way while still preserving the full value of their unique audience relationships and insights.
To maintain and grow revenue into the future, publishers need a fundamental understanding of today’s addressable advertising solutions and how they’re evolving. Despite headwinds, publishers have significant opportunities to better position themselves within a privacy-first landscape by embracing the evolving first-, second-, and third-party data strategies. Importantly, publishers must be prepared to screen their partners according to these strategies to ensure they’re delivering the needed infrastructure and guidance to preserve addressability in the digital advertising ecosystem of the future.
