Digital Publishing Reader Revenue
4 mins read

As the third-party cookie crumbles, is first-party data the key to successful publishing?

Getting your Trinity Audio player ready...

It’s been a tough twelve months for magazines and journals many of which are desperate to generate more revenue. One major concern is Google’s intention to phase out third-party cookies on their Chrome browser. Safari and Firefox started this trend in 2013, but the significance of Chrome following in their footsteps is huge as they have the biggest footprint with 56% market share. Microsoft’s Edge browser sends a ‘do not track’ signal for the download of third-party cookies but does not actively block cookie downloads. First-party cookies that track the basic data about your website’s visitors are likely to remain safe and perhaps it’s these that hold the key to more cash.

Before we move on, let’s be clear how publishers source revenue form the tech giants. If they generate enough traffic, publishers can opt to be part of the Google ad display network. By placing a code snippet on their page, publishers allow Google to show adverts that are targeted to the individual user. For every click the publisher earns a small percentage from the ‘cost per click’ that Google charges brands advertising their product. This is a low friction way for publishers to generate advertising revenue while showing relevant ads to their readers, without having to build relationships with brands. When third party cookies are blocked, this revenue stream will be significantly impacted.

To replace this income publishers will need companies to advertise directly on their platform. They will also need to develop their own solution, which uses their first party data, if they want to deliver a robust and targeted advertising solution to companies.

YUDU, the company I work for, is a perfect example. Using Google’s third-party advertising cookies, we are currently able to show our ads to customers who have visited our site on any of the millions of websites that have opted into Google’s display network – effectively following them around the web.

Kings of first-party data

Social media giants such as Google and Facebook are the kings of first-party data and are thriving. How can individual magazines get a piece of this action? Perhaps we should take a moment to understand this type of data and why it’s so important to advertisers. First-party data is the information that organizations can collect from their own sources whether it be their magazines, their website, their apps or surveys they run. The data will likely include detailed information about their customer’s online journey including their interactions, their purchase history, their age and interests. Deep, rich data to say the least.

Better yet this data can be collected for free and gives you great insight into your customers’ actions and interests.It can be grouped into different demographics enabling you to divide your customers into specific audiences. This should be very appealing to your advertisers and should help them to deliver the right ads to the right audience and in doing so the publisher reaps the rewards. One concern is that regulations such as PECR and GDPR require opt-in cookie consent making it harder to collect first-party data.

New York Times

Let’s take a look at what the New York Times is up to. In June 2020, they launched an advertising data program that uses their own data and data science techniques. In their own words: “This first-party program is our answer to the shifting landscape of online advertising data and part of our move to better protect our readers’ privacy. Our program doesn’t rely on third-party data or cookies, but instead focuses only on what readers do on our site and mobile apps.”

In 2019 digital ads in the NYT that used their first-party data accounted for just 7% of their advertising revenue, by 2020 that had risen to 20% of the total.

The NYT is behind a paywall which is where first-party data really scores. It enables the publisher to build an accurate picture of their readers which they can then offer to their advertisers. The advertisers then select from various demographics and negotiate the cost-per-click rates. Readers should welcome not being bombarded by ads that are not relevant to them, some of which may be deeply irritating.

The money generated from the ads can then be kept by the publisher rather than hived off to Google or one of the other digital giants. While at the same time the paper’s audiences are offered a palpably more pleasant reading experience.

BBC magazines

In the UK, Immediate Media which publishes the BBC’s magazines including the Radio Times, Top Gear magazine and BBC Good Food has taken a similar path. Their new data management platform looks to first-party data and beyond.

Dominic Perkins from Immediate said: “The whole point of quality content is to generate really good behavioral insights. We are the owners of the content and, therefore, that data. It is something we can build out more than any third-party data segment and be very transparent on what that data segment looks like”. Now they want to go beyond first-party and are looking to harvest customer email addresses in exchange for products.

Third-party cookie crumbles

The third-party cookie may crumble and be replaced by something new. What that might be is still unclear, but publishers should retain the majority of their first-party information. There is a general sense, that many are still not using their data to their best advantage and some worry that first-party only really works for the larger brands.

This may be true but offering your advertisers great insights on your readers and having those readers placed into segmented audiences must be the future. At least until Google and the rest tell us where they are heading next.

Jim Preen
Director, YUDU

Launched in 2007, YUDU Publisher transforms print magazines into digital editions. We provide advanced tools needed to control distribution, gather GDPR-compliant data, review engagement statistics and ensure readers have the very best interactive experience. Our clients include corporations, publishing houses, associations, and educational establishments. YUDU Sentinel is our crisis management software. Launched in 2016, Sentinel keeps key stakeholders informed, allows crisis
teams to coordinate response efforts, and puts vital documents in the hands of all staff – all on one platform.