By Michael Nevins, Smart, Chief Marketing Officer
Everyone is in mitigation mode. Marketers and publishers are burning the midnight oil to figure out how to keep their revenue from pancaking as we move into the post-cookie/IDFA reality, especially after Google’s recent unsurprising “bombshell.” It is an open question whether Google will or will not support identifiers of any kind beyond the third-party cookie. There is a range of opinions regarding Google’s motives, but one thing is clear. Consumer privacy and choice can no longer be taken lightly, let alone dismissed. And while all of the efforts around getting consumers to provide consent is important, it is a fait accompli that consented traffic will diminish significantly, therefore, monetizing non-consented traffic also has to be at the heart of considerations. I would bet that not nearly enough players are thinking nearly enough about this. They should.
Maintaining consented traffic at scale is a natural priority, but redoubling efforts to monetize non-consented traffic should also be a big part of industry due diligence. The good news is that no consent doesn’t necessarily mean no advertising and no data doesn’t necessarily mean no conversions along your consumer journeys. Instead of running for the exits, perhaps it might be helpful to remember that advertising was a multi-billion dollar industry long before the cookie. In fact, we need to wean ourselves off of this addiction.
Key opportunities for non-consented traffic monetization for publishers are contextual (including semantic) targeting, more robust subscription and commerce initiatives as well as a greater emphasis on cultivating “Private Garden” relationships.
Contextual Targeting: Powered by Machine Learning
What’s old that is new again is now supercharged by major advances in machine learning. Contextual targeting was first defined 10 years ago by associating brand messaging with targeted content verticals like sports or music. In 2021, contextual targeting 2.0 has become way more granular by matching brand messaging with page categorizations, of which we have an infinite number of segments. In the past, limited signals fed contextual targeting algorithms. In 2021, contextual signals have proliferated by orders of magnitude, giving Machine Learning more power.
According to a DailyMotion/Adweek survey from November 2020, contextual relevance is quite important for publishers and brands as a strong proxy for consumer intent. 74% of consumers in the study want to see ads that match the page content. 72% agree that content impacts the perception of ads. Similarly, leading measurement company DoubleVerify reported that 69% “would be more likely to look at an ad if it was relevant to the content they were reading.” DV is quite bullish on the future of modern contextual targeting, predicting $412 billion on contextual ad spend by 2025. Ultimately, publishers with strong brand assets and deep user relationships will have the upper hand.
Expanding the Monetization Mix
Now is the time for publishers to recognize the opportunity their paywall businesses present for sustainable long-term yield. Publishers have historically been a bit intimidated by the idea of moving headlong into the subscription marketplace, but they should no longer ignore ample evidence that a scaled subscription stream would not just improve revenue but would do so without jeopardizing brand integrity. In the UK, The Telegraph registered 522,000 paying subscribers in 2020, totaling £14.3 million in profits. This is consent in its purest, most direct manner. Similarly, strategic ecommerce collaborations can also drive incremental value for audiences and publishers. Buzzfeed has heeded the call by creating shoppable content on online stores that enrich user experience while generating new revenue. This still may sound a little too daunting if you don’t have the brand heritage of these well-established players, let alone the brand equity of a New York Times or a Wall Street Journal. If you are a smaller, less established publisher, there are gateway steps you can take before hopping on the full subscription locomotive, like accelerating newsletter sign-ups or site registration.
Time for Publishers to Till Their Private Gardens
Publishers should also take advantage of this transformative moment in the history of programmatic advertising to become less reliant on the Walled Gardens. They should reprioritize to a more curated direct transaction model in what I call a premium “Private Garden” environment. This streamlined trading environment simplifies a more transparent deal process with enhanced accountability, efficiency, and eliminates the threat of data leakage lurking in the open exchanges. From the marketer’s perspective, closer trading with publishers will allow brands to gain direct consent from audiences and access richer pools of first-party data for precise ad targeting. This increased cooperation would act as an evolutionary step in the supply path and demand path optimization that has been happening in recent years.
While the recent Google announcement was upsetting to many in our space, we should all take a breath and try to take in the big picture. If publishers start diversifying their data-driven strategies to go beyond cookie-based to non-consented traffic, they will look back and regard Google’s non-identifier support proclamation as just one tree falling in the forest. They will come to realize that it was not the tinder to the brushfire that burned it all down.