With the Apple privacy changes happening now (Apple ATT — App Tracking Transparency) and a cookieless future not far beyond (2022), shock waves are being felt throughout the ad tech space. In this republished column, Matthew Scott Goldstein focuses his insights solely on that topic in all the earnings announcements.
Identity overview, my 2 cents
- Minimal Privacy Discussion — Surprised that so many media companies did NOT mention anything to do with the recent Apple announcement or Google’s vision for a cookieless future, especially Google who said nothing. Was the lack of discussion an attempt to downplay the level or importance of these changes or will these changes truly have no impact on these companies business models.
- Apple –– Apple also mentioned pretty much nothing as they hold many of the cards in the upcoming Identity war
- Analyst Community — I was even more surprised that the analysts, for the most part, did not ask more and press harder on the identity topic, I guess they are financial experts not ops and tech
- The Trade Desk — Jeff Green, CEO of TTD, said MORE about identity than all the other CEO’s combined. I was blown away by the detail he went into. May have been too much and perhaps this is why the stock went down so much? Maybe the investment community is not ready for the complicated and uncertain story about identity, maybe investors like the black box approach better?
- Criteo – -Criteo also went into some nice Identity details including the new Single Sign-On software called OpenPass built to support UID2, and to provide publishers and retailers the tools to use first-party data as an alternative to third-party cookies
- Pubmatic — Pubmatic did a nice job and said that the majority of revenue on our platform now has alternative identifiers to the third-party cookie and Apple IDFA which underscores the leadership position we have taken in the addressability transition
- Magnite — Magnite Identity comments were disappointing, though there was a good question asked
- Twitter – -Twitter, which had very short opening remarks, made up for that with some comments in the Q&A part of the call
- iOS 14.5 — According to the earnings calls, at this point, there is not that much of an impact of IOS 14.5, which was recently released at the end of April
- Apple/Facebook — The war between Apple and Facebook remains heated and I don’t see that stopping anytime soon
- Facebook — Facebook is rebuilding meaningful elements of their ad tech so that the system continues to perform when they have access to less data in the future and talked about the negative impact on SMB advertising
- DR vs Brand — Overall, much more impact on DR vs. Brand advertising and improve performance with less data, so
- Ad Yield — Apple’s recent changes to IDFA will create some short-term pressure on advertising yields primarily in Q2 and Q3
- Market Support of Apple – -Conversely, many of the platforms went out of their way supporting Apple and were pleased they had so much time to work on alternatives given the delay in 14.5
- Apple SKAd Network — Twitter and SNAP talked a bunch about the Apple SKAd Network
- First-Party Data — Many mentions of first-party data and how this can be critical of the success of these companies across the ecosystem
- No One Size Fits All Solution – -No easy answers and most all companies have a different approach, should become clearer in the next few quarters
- LiveRamp — No Insight from LiveRamp in my analysis, as they are announcing earnings on May 25, disappointingly late as I was looking forward to what they had to say, though late because it is the end of their fiscal year WNIP [Update: WNIP reached out to LiveRamp and this is what they had to say… “Our earnings will indeed be available next Tuesday, but as is becoming clearer, first-party identity is crucial for opening more opportunities in the post-cookie, post-MAID world of evolving regulatory compliance.”]
- Opportunity — Seems like a real opportunity in the ecosystem to build something better, that is privacy compliant and serves all constituents — marketers, publishers, consumers, platform and hardware makers.
Lastly, I highlighted and underlined some of the comments I felt were the most interesting.
Identity related comments taken directly from the earnings transcripts
SNAP: The vast majority of smartphones in the world are powered by Android, and our Android user base is now larger than our iOS user base, a critical milestone that reflects the long-term value of the investment we made to rebuild our Android application.
We are also committed to working with our advertisers as we navigate the App Tracking Transparency related changes from Apple. We are supportive of Apple’s approach because we have always believed that advertising should respect customers’ privacy. The fact that these changes are coming later than we anticipated has provided additional time to adopt Apple’s SKAdNetwork and begin implementing and testing with our partners. Advertisers that represent a majority of our direct response advertising revenue have successfully implemented SKAdnetwork for their Snap campaigns. Beyond that, we are currently designing an array of privacy-centric solutions, both short and long-term, to ensure we deliver a privacy-first experience for our community and best-in-class offerings for our partners.
We are really focused on helping our advertisers make the transition to the best possible measurement and optimization tools smoothly. The change happened later than we expected, which gave us a lot of time to prepare and SKAdNetwork is one part of that. So, we’re really pleased to see that advertisers that represent the majority of our direct response revenue have implemented it so far. But we know that there’s a lot of work to be done to transition smoothly.
We’re working closely with Apple to understand the rules of the road and we’re prepared to follow them. And I think importantly, we really support Apple’s approach because we’ve always believed that great advertising and customer privacy are not mutually exclusive. And it’s a huge core value of Snap privacy. And so we’re excited to be implementing this alongside our partners. It’s been a huge cross-functional effort between products, engineering, the sales teams, the marketing teams to work with our customers to ensure that this transition goes as smoothly as possible.
Google: Finally, as we look ahead to the rest of 2021, our big themes continue to guide us, first, building and providing the most helpful products and services, second, continuing to earn the trust of our users by investing in high-quality information and keeping users data safe and private, third, strong execution as a company, particularly as we start to reopen our offices, and fourth, building sustainable value in our own business and for our partners.
And what I keep referring to is operational excellence, things like our technical infrastructure, systems to improve productivity, to improve velocity of our product teams and then the very important efforts around privacy and security and content moderation.
Facebook: On the second part, headwinds. Yes, there are challenges coming to personalized advertising and we’ve been pretty open about that. We’re doing a huge amount of work to prepare. We’re working with our customers to implement Apple’s API and our own Aggregated Events Measurement API to mitigate the impact of the iOS14 changes. We’re rebuilding meaningful elements of our ad tech so that our system continues to perform when we have access to less data in the future. And we’re part of long-term collaborations with industry bodies like the W3C on initiatives like privacy-enhancing technologies that provide personalized experiences while limiting access to people’s information.
It’s also on us to keep making the case that personalized advertising is good for people and businesses, and to better explain how it works so that people realize that personalized ads are privacy-protective.
Small businesses don’t have to understand the alphabet soup of acronyms they’ll need to comply with, but they do need to have confidence that they can still use our tools to reach the people who want to buy what they’re selling in a privacy-safe way. We’re confident they can, and that they can continue to get great results as digital advertising evolves.
And then, your second question was regarding any surprises with iOS 14.5. Look, I think it’s really early. They just began rolling out the update. So, it’s sort of a very, very low kind of penetration rate of the new OS at this point.
But a couple of things, I’d say, we continue to be concerned about the impact that this update is going to have on the ability of small businesses to use their advertising budgets effectively. That said, the impact on our own business, we think, will be manageable. We continue to expect it will be a headwind for the remainder of the year, but we’re making encouraging progress, as Sheryl mentioned, on our own solutions to help advertisers navigate these changes. And that includes helping advertisers work with the Apple API as well as our own approach to using aggregated data for targeting and measurement that we call Aggregated Events Management. So, the goal there is really to maintain it in the long run, even improve performance with less data, so.
And then, I’d also add that just in addition to these mitigations, we’re also just seeing very strong overall ad demand, which is contributing to a more positive outlook for 2021. And I would say, just overall, the impact of these — the specific iOS 14 changes are one element of some of the challenges with Apple. But, we think the impact of the Apple approach is really much bigger than this particular update around third-party data usage. Apple has a number of private APIs on hardware and software that advantage their own products and services in ways that are challenging, and we face that issue with — in places like our messaging products and even with the hardware products we’re launching. So, we generally don’t think that this closed approach is the best one for the industry from an innovation perspective.
Pinterest: Finally, I’d like to note that like the entire online advertising industry we are faced with changes to the privacy landscape. We’ve talked for over a year about the steps we are taking to ensure advertisers understand the effectiveness of their ads, while also keeping Pinner privacy in mind. This includes investments in new first-party solutions enhancements to ad targeting.
People naturally come to Pinterest to search, shop and find ideas for brands and creators. Personalization based on its onset activity won’t be affected by the upcoming changes. That said, it’s still early days, it is not yet clear what the long-term impact will be.
To close, I’d like to note that this past year has reinforced the importance of our mission. Pinterest is not the place to read the news or compare yourself to other people. It is a positive place to be inspired and get ideas in your future life. This is reflected in our content and ad policies, our efforts to combat COVID vaccine mis-information, our new Creator Code and Comment Moderation Tools designed to keep new content formats positive and inspiring and our continued focus in engineering products for positivity with new inclusive search features like skin tone ranges now available in 13 countries.
Twitter: We’ve been actively preparing for the changes that Apple just released as part of iOS 14.5. Our outlook for Q2 2021 assumes a modest impact from the rollout of changes associated with iOS 14.5 across owned and operated ads and MoPub. Long term, we’re confident that our brand advertising strength and better performance products position us well to help advertisers achieve their goals. There are no changes to our long-term plans.
So when you implement the SKAdNetwork and you can provide advertisers with aggregated data on how their campaigns perform, because of the way that we were leveraging the signal that we were getting from iOS, we just now have access to over 30% more people to show MAP ads. So these people were seeing ads before, but we weren’t able to target them appropriately to show them MAP ads and then report back to advertisers in a way that gave us confidence that we could give them good outcomes before the way that we can now.
This is just one example of the work that we’re doing to remediate any impact that we feel from the changes in 14.5. We think this when we step back to it, likely it has more impact on DR than it does on brand. We think it likely levels the playing field in terms of signal that people have and we’ve layered modest impact from ATT into the guidance that we provided for Q2.
So, first on SKAdNetwork. So, if we don’t have confidence that we can deliver a relevant MAP ad to somebody, we weren’t showing them a MAP ad. And there was — we weren’t able to report out to advertisers the success of their campaign without having access to something like the SKAdNetwork or something that another measurement partner in the past was able to provide to us. And so with SKAdNetwork, we’re able to provide better reporting to a MAP advertiser across a broader group of people than we were able to before who are using iOS.
Now, remember MAP advertisers will have to decide in an ATT world if they’re getting the data that they want in order to show their ads and deciding what price they’re willing to pay in order for those ads to hit because they’ll be getting aggregated or campaign-level data as opposed to device-level data and the entire ecosystem will have to adjust to that.
Certain advertisers’ objectives aren’t changing. They want to acquire the same number of customers. They want to know as much about them as they can and the economics for their businesses aren’t changing. So, it’s going to take a while for the broader ecosystem to adjust to this. And as we said, we’ve incorporated some modest impact from ATT into Q2 and it will take a while for us to know exactly how this is all going to play out.
Apple: Across our products and throughout our software ecosystem, we continue to deploy industry-leading new tools to protect users’ fundamental right to privacy. In addition to the App Store privacy nutrition labels that we discussed on last quarter’s call, we’re proud to have launched the full implementation of App Tracking Transparency. This powerful yet simple idea gives users a choice over how their data is used and shared across the apps that they love and use every day.
Criteo: Moving to our third priority, first party data. As everyone knows, this is a critical area for the industry and for us, an area where we’re actively and methodically securing our moat and differentiation. First of all, all the retail media on site solutions leverage first party data and do not rely on third party cookies. This means that our growth in retail media on site is not only tremendous in size, but also sheltered from changes and third party identification and therefore brings steady durable predictable growth. This is important in light of our fast growth in this business and the central role that retail media plays in the traction of our commerce media platform.
In their early March blogpost, Google interestingly reminded everyone of the strategic importance of first party data to the entire online ecosystem. We found Google’s raps to be music to our ears as the foundation of our commerce media platform is first-party data that we operate on behalf of our partners. Our first-party media network enables this data to power marketing and monetization across the open Internet at scale.
In partnership with our clients, the constant, safe and protected flow of first-party data within our broad network is the cornerstone of our data identity strategy. As changes come in iOS 14 and third-party cookies go away, we’ll further lean into this asset and continue to offer our clients the ability to achieve their marketing and monetization goals via third-party data.
As I mentioned earlier, the strong focus of that is to make our clients first-party identity data fully interoperable across our first-party media network, to ultimately power the commerce media platform in the most seamless way. This means creating durable connections between first-party identity data operated on the demand side of our business with first-party data operated on the supply side of our business.
Our effort requires investment and infrastructure for seamless data rights management, privacy protection, and integration with the programmatic ecosystem to differentiate. Third, in collaboration with industry partners, we further advanced the integration of the Universal Identifier UID2 solution into our Commerce Media Platform. We worked with the trade desk, and our new Single Sign-On software called OpenPass built to support UID2, and to provide publishers and retailers the tools to use first-party data as an alternative to third-party cookies.
The OpenPass software will be open sourced and available for all publishers and retailers to easily install on their site and technology stack. We started testing OpenPass with consumers, publishers and retailers, and in Q1 and Q2, and then anticipate that it’ll take up to about 12 months to build scale.
As we’ve said before, OpenPass and UID2 are built for interoperability with other consent and identity solutions. And OpenPass will operate with identifiers other than UID2, which means both will also enhance other solutions publishers and retailers choice to use.
And finally, we’re excited about our customers interest are and are already seeing in our first of its kind of contextual advertising product. It’s built with the best of Criteo AI to merge content classification with first party transaction data to close the loop between what — between the cohorts of consumers buy and their affinity for specific content.
It’s also important to note that our shopper graph data for it’s particularly relevant for cohort advertising use cases to drive higher reliance for consumers and performance for marketers. We believe this positions us well ahead of testing Google’s FLoC and FLEDGE proposals over the coming months and quarters.
Second on execution. But sticking to a strict we do what we say we’ll do discipline, we nurture a culture of high performance and accountability in everything we do. And third, on first party data, using our competitive moats of protected first party data across our advertiser and publishing network, and focusing on the various techniques we have available to us, we feel good about our position in the market post cookies.
H2 becomes a little tougher. And that is, as you said, the privacy identity impacts. Q2 assumes about $11 million of incremental identity revenue. So we’re doing really, really well. We’re executing well, certainly in retail and e-commerce. And unfortunately, some of that goodness is kind of sucked up with the privacy impact.
Yes, I think where you were headed is, have we seen a change in our ability overall to target audiences. I would just say, it’s a little early to say because obviously, consumer behavior has to catch up with the ATT, the seven-day window, and we have to, we have to actually get a read on their response rates versus the disappearance of IDs that are not permitted. So far, it’s safe to say that the consumer response is a little better than the market has predicted which is positive.
But we’re not getting ahead of ourselves, to talk about what we see in terms of impact to audience targeting overall until enough time has passed that we can take a new baseline. Waiting to see the contextual solution that I described, for instance, is useful for web and mobile companion properties, as well as for web only. So we’re taking an approach of doing some testing there. Obviously there are other things we can do with cohorts. And you heard Megan talk about some of our direct SDK wins, to just get a better direct supply path to the application market despite what was happening with AT&T.
Zynga: Our guidance assumes modest initial top line contributions from our 2021 new game launches. We have also factored into our guidance that Apple’s recent changes to IDFA will create some short-term pressure on advertising yields primarily in Q2 and Q3. However, our teams have multiple strategies in place that should more than offset this potential headwind, including yield optimizations and opportunities to expand our advertising inventory.
I think one of the things that we thought about was the value of having first-party data extend higher in the funnel through a lot of the things that ad tech companies do. We have this great first-party data around what our and services do. Again, some of these games have been around for 12, 15 years. So we have really great, rich behavior what people like, what they don’t like. But it was a little opaque to us as we were doing third-party handoffs into our first party. And post IDFA, a lot of that data handoff goes away. But when you start to step into an opportunity like Zynga plus Chartboost, that data continues to flow all the way through because it’s a first-party solution from demand all the way through in game.
And so from my perspective, it was a very clear opportunity for us to vertically integrate into ad tech. It would allow us to have a lot more information, so that we can make better product decisions, better service decisions, better investment decisions. It will also tell us at the top of the funnel, what’s hot and what’s not out there in terms of trends in the marketplace long before it would start to appear in the charts. And so from our perspective, we look at the point of view of how do we maximize this combination of these 2 teams and what possibilities does it open it up for additional game development, better investment decision-making. And I think IDFA is a component of that. And as we’ve moved through the last 1.5 years or so, the unfolding of GDPR and the California rules for privacy, we’ve embraced those — our players care about privacy. And from our standpoint, that’s the value of our company that we also as it changes the rules and how you operate, we’re making those adjustments, so that we can do both.
Meredith: With that, let’s dive deeper into our performance for the quarter. Starting with the digital side of the National Media Group, our team delivered outstanding performance. Digital advertising revenues were $102 million, up 21% from the prior year period and a record high for a third quarter. Powering our digital business is our proprietary technology platform that brings together all of our content, our unique taxonomy, first-party data and our user graph.
We attribute this success to several factors, including our powerful brands, which include PEOPLE, Allrecipes, Better Homes and Gardens and Southern Living. These brands are backed by a tremendous creative engine and collectively reached and engaged nearly 95% of American women, more women than any other media portfolio in the United States, investments in our National Media Group digital platform and our deep first-party data and analytics capabilities. Together these assets and capabilities are Meredith’s differentiators and form the basis of our value proposition to advertisers and shareholders. They also position us to benefit from incremental advertising spend as the economy recovers.
Video was up as well and was premium programmatic. So as you know, only 40% of our revenue comes from open. Our direct salesforce sells our premium programmatic pipes, and people are coming to us as well for that. And that’s where they can get our first-party data. I think that’s going to be increasingly important as third-party cookies just go away.
New York Times: Our growth in registered users has propelled the rapid expansion of our first-party data products, which are proving effective for marketers while affording our readers privacy from third-party trackers. Demand for these products is strong, driving 20% of our digital advertising revenue in the first quarter, compared with less than 10% in the same period last year. And, as of the first quarter, we have fully eliminated our reliance on third-party data targeting in direct-sold advertising.
And in fact, what we’ve learned is that the demand is really highest for our new products, including fundamentally a higher-margin endeavor. Demand is getting stronger and stronger for our first-party data products, which confirm registration-based models, we’re now making faster-than-expected progress on.
IAC/DotDash: And the reason the content performs, this gets to the second point is because it has real utility, and it has real context. So we’re not guessing what somebody is interested in. And we don’t need any personally identifiable information. We know that somebody who is asking about making lasagna is making lasagna, and the people who want to sell products to people who are making lasagna can reach them at that moment when they’re cooking, when they’re in the kitchen, when they’re getting ready to go shopping to make a meal. And same is true for planning a trip or for thinking about their health care.
And when you see the rest of the market, what’s happening is there is a large portion of the market that was using other content as an excuse to aggregate personally identifiable information, and then use that to triangulate what somebody might be interested in. That is a very effective way of figuring out what people might be interested in and that can lead to performance. But what we’re seeing in the market right now is the platforms and individuals are making decisions that say that trade off isn’t a fair trade off anymore. It’s just not a tradeoff people are willing to do anymore.
And what happens is now the advertisers who are spending on that model need another model to spend to know where to reach users who may be interested in their products. And they can do that now through our platform without any personal information. All of our users are anonymous, all of our users can be anonymous, can remain anonymous, and they can still see ads that are relevant to what they want to do, which works for the user and works for the advertiser.
Roku: So in terms of some of the privacy regulation as well as changes to applications and operating systems that we’re seeing, I mean, what those changes are generally doing is making it more tenable to have a targeted ad business or a data-driven ad business when you have a first-party relationship with your customers, like Roku does.
That relationship allows you to offer a lot of value to the viewers and allows you to get any kind of consent or opt-in as needed with fairly high take rates. When you don’t have that direct first-party relationship, it becomes very difficult actually to do targeted ads in the environment that we’re seeing to shape up.
So we think we’re in a good position in that regard. And then, Scott, I don’t know if you want to add or talk about the Nielsen relationship? Yes. I think on the privacy points. You hit it. We’re uniquely positioned as a platform to leverage our identity and data to help advertisers reach our users and it is a more challenging environment for independent ad tech, for example, with the deprecation or more difficult access, I should say, to IDFA on iOS and the pending changes around cookies.
Magnite: On the identity front, we feel we are very well prepared for the future. The elimination of third-party cookies makes our role significantly more important than in the past. Most importantly, our pub side solution our audience marketplace, which relies on consented first-party identifiers managed by publishers continues to grow as a percent of our business and dovetails perfectly with our strategy for CTV. We also saw IDFA restrictions come into play just a couple of weeks ago. This change is very new, and we have not observed any discernible impact yet. But we are well-positioned to help the ad community pivot to a new identity framework.
I think you touched on a really important point there, Nick, and that is I think that generally speaking before this whole addressability and identity, call it, crisis, certainly exacerbated by the deprecation of third-party cookies and IDFA. I think that we were never thought of as a category, the supply side. Strategic is perhaps the demand side, because the demand side was closer to the data implementation for the advice from their clients and we’re just the aggregator of inventory.
And so I think that, generally speaking, people view that as a more strategic piece of the marketplace. And I think there’s a growing understanding that, if that was indeed the case, if that was — value was being attributed to DSPs because of their role in being able to make this ad buying smarter, well then you certainly can see that in the SSP world now, where no matter what the solution is, whether it’s Apple, whether it’s Google, if you’re consented, and you get the consent of the individual, then you are able to use first-party cookies.
And the only person that can do that really is the publisher, they have the relationship. And they need an SSP to help them normalize that information, put it in taxonomies. It’s understood by buyers, create secure level so that only buyers can do certain things with that. All those things fall to the SSP to help the publishing partner. So we feel as though we’re in a terrific crossroads here for the industry and for Magnite, in particular, just given the evolution of the shift from third-party to first-party.
We’re in the single digits in terms of folks that have downloaded the operating system or bought a new device that has the operating system installed. So it’s just — it’s too early to tell. I mean, I do think that the marketplace is pretty prepared for it. The things we’ve been doing in the audience marketplace on our side working with publishers, of course, as you well know, our exposure to IDFA, it hasn’t been all that great. And obviously, in the CTV business, that’s not your main. So, we feel confident that our predictions that IDFA will not have a material impact to any of our revenue forecasts that we put out there exist.
PubMatic: I’m pleased to share that today. The majority of revenue on our platform now has alternative identifiers to the third party cookie and Apple IDFA which underscores the leadership position we have taken in the addressability transition. Having alternative identifiers available at scale in many cases, identifiers that provide greater addressability than anonymous identifiers like the third party cookie provides an environment to drive even greater utilization of our infrastructure.
We expect these identifiers to grow the share of spend in the open Internet and on our platform in particular. We’ve achieved this milestone through long term investment in a portfolio of solutions that together meet the growing and evolving needs for audience addressability.
Our audience encore solution allows buyers to access high quality publisher first party data to execute effective and privacy safe advertising campaigns at scale. We have a variety of data partners in the retail, CPG, healthcare, automotive and other industries. For example, we recently announced a partnership with Samba TV to integrate their extensive first party connected TV data to deliver TV audience targeting to omni-channel programmatic advertising buyers. This partnership allows European advertisers to reach audiences based on TV viewing behaviors, and drive incremental reach by targeting audiences that are not exposed to linear TV advertising.
We’re also investing in contextual solutions to improve advertising efficacy and fourth, we are working with Google and the World Wide Web Consortium on Google’s privacy Sandbox proposals, including FloC. Audience addressability is something that publishers need to solve for, and we understand that it will not be a one size fits all approach. With our long term investment in this area with the portfolio of solutions we think we are well positioned to help our publisher and buyer customers find highly relevant audiences at scale and improve the efficacy of the open Internet as compared to today.
So I would say there is a, broadly speaking, there is a degree of iteration and experimentation across the ecosystem as the whole industry transitions from anonymous tracking, whether it was the third party cookie, or the Apple IDFA towards different set of solutions. And I think what’s clear is that there will not be a one size fits all kind of single solution. And so what we are doing with publishers and buyers whether it’s advertisers or agencies, as you mentioned, is really to position ourselves to be at the forefront of innovation and be leading the conversation in the industry, and innovating with our customers and with our partners.
And so the way that we have approached that, and we’ve been investing here for two or three years now, in anticipation of this change coming, is to build out a portfolio of solutions. And I think you see the strength of that in the metric that we shared that the majority of revenue on our platform now has alternative identifiers. I think what’s particularly exciting about that is these alternative identifiers are in many cases better or more granular than the past identifiers, the anonymous identifiers and they also include consumer consent. So the consumer is aware of what’s happening, and they have a choice to make in that process.
And so I think what we’re going to find is that the open Internet will take share, as we come through this transition. And our goal is to make sure that PubMatic, in particular, continues to grow its market share.
Microsoft: The threat landscape has never been more complex or challenging and security has never been more critical to our customers. This is driving increased demand for our end-to-end capabilities across identity, security compliance and management backed by cloud-scale AI and human expertise encompassing all clouds and all platforms.
IPG: With the deprecation of third-party cookies, all businesses are increasingly focused on realizing value from their first-party data. We’re finding partners with whom they can pool data assets. As important, this needs to be done in a way that’s respectful of people’s privacy and anticipates likely regulatory development. We remain well positioned to benefit from those opportunities.
Equally important is getting those messages to people in ways that are relevant, respectful of their privacy and ultimately connect with them in meaningful ways. Further, we make clear that we operate with a core expectation that individuals deserve control over their data and that we are responsible for promoting high ethical standards in terms of data privacy and security.
Working closely with the Acxiom data teams, Kinesso deployed its enhanced identity solution with half a dozen large clients. This has already driven double-digit lifts in campaign efficiency. Kinesso also expanded its range of direct data integrations with prominent platforms and ad tech companies.
Acxiom, Kinesso and Matterkind, are working together to bring end-to-end data and identity solutions to clients in collaboration with a number of IPG agencies, we’ve seen the impact of this recently in new wins and expanded assignments in the telecom, auto, health care and financial services sectors.
We worked over the years to embed digital capabilities throughout our organization and build a foundational layer of tech and data infrastructure that informs all our work. As a result, we have a deep understanding of audiences at the individual level based on the strong legacy of ethical data practices. Personalization, privacy and accountability are only going to grow in importance and value going forward.
Omnicom: Turning to Omni, our data and insights platform, as I’ve mentioned in our last call, looking beyond our media business, our practice areas are increasingly leveraging Omni to identify insights for their specific disciplines and clients. Last quarter, Omnicom Public Relations Group launched omni D, a solution that allows clients to evaluate the outcomes of earned media with the same precision as paid media. More recently, our Health Group launched Omni Health which integrates key healthcare data sets within a privacy compliant ecosystem. Thanks to this momentum, the Omni platform has trained 20,000 users in more than 50 markets and it has become the foundation of our agency operating systems company wide. Since we launched Omni three years ago, we’ve continued to invest in it’s credentials as the industry’s leading marketing orchestration and insights platform. As compared to other solutions built on limited proprietary data sets, Omni’s open source approach connects more data sources across more media and commerce platforms to deliver better outcomes to our clients.
In Q2 we will be launching Omni 2.0, using next generation API connections to seamlessly orchestrate identity sources and platforms in one collaborative workspace and at greater speed. Better and faster orchestration of data leads to more actionable insights and superior decisioning for our clients across all our networks and practice areas. Just as important, Omni 2.0 continues to build on our commitment to consumer privacy and transparency. Our data neutral approach which results in the most diverse compilation of data sets continues to be rooted in a robust data privacy compliance methodology. This approach puts us in a strong position for a post cookie world. Through our pioneering work creating data clean rooms, we have direct connections to the first-party data of many of our clients, because we are open source and data neutral, Omni works seamlessly across all garden environments, as well as the broader ecosystem.
At the same time we orchestrate data sets from about 100 privacy compliant sources to provide a comprehensive view of the consumer across devices. As the marketplace and technologies continue to rapidly advance, we are confident our talent platforms and the strategies built on a foundation of our creative culture give us a competitive advantage in effectively serving both new and existing clients.
The Trade Desk: Let me start the discussion of identity by clarifying what we’re talking about. This discussion on identity is bigger than cookies. It’s bigger than any company or any channel. Cookies are not present in CTV. However, a privacy safe identifier for CTV will be a major factor in driving relevant ads and managing reach and frequency across apps, channels and devices. CTV needs this kind of approach in order to maintain or increase CPMs in a way that help fund the amazing content that has kept most consumers sane during this pandemic. The current TV content arms race cannot be financially sustained for providers or consumers without relevant ads.
So you can see how the identity discussion is bigger than cookies or even CTV or Google’s decision to deprecate cookies for the browsing Internet. This is a discussion about how the Internet pays for itself. It’s also a discussion about control. Is the Internet going to be controlled by a few large tech companies? Or will power be distributed and will choice sit with consumers and their relationship with each content owner.
We launched the UID project with the goal to improve the Internet. This is not merely a marketing campaign about how deeply we care about consumers, the quality of the Internet or consumer privacy. Of course, we deeply value all of those things, which is why this is not about marketing, but about action. It is a movement.
We are working with the leaders in the open Internet to build a better Internet. We want consumers to have control in a privacy-forward manner that transcends a single company’s ecosystem, and that’s why identity continues to be the hottest topic of conversation in our industry. It feels like every media outlet from The Wall Street Journal to the advertising trades is covering identity these days.
Google has issued several blog posts over the past couple of months clarifying their position on identity. They plan to use a Google log-in at the core part of their identity solution. But at the same time, in some cases, they’ve been critical of others doing something very similar. While we’d like to see Google support the open Internet more publicly, given DoubleClick is one of the most important open Internet players, they are doing a good thing by making privacy a priority for Google.
Fortunately, for The Trade Desk, since founding the Company back in 2009, the health of the entire digital advertising ecosystem has been a core value of our company. We care deeply about improving the entire Internet, not just our small corner of it. We have a guiding principle that informs every product we ship. What do I, as a consumer, want the experience to be for me, for my family? We enter these questions first. And then, of course, work to make sure that everything conforms to both the letter and spirit of the law.
New ID is built for consumers with better content and an Internet where power is distributed, not consolidated. It is designed to operate with a clear consent framework, better explanations about the value exchange of free content and improved consumer controls. We have always believed that taking a consumer-first approach is the only way to address identity over the long term in a way that meets the growing regulatory and consumer focus on privacy.
We’re skeptical about solutions that lean on opaque cohorts or solutions that try to make decisions for consumers instead of providing consumer choice. We do not believe those options are sustainable as privacy conscious in the long term. They don’t empower consumers sufficiently. And that’s also why the open Internet is rapidly adopting UID 2.0 because this is much bigger than The Trade Desk. UID 2.0 is about a better Internet. It will be open sourced with independent government.
Personally, I was inspired this last quarter when working directly with Artur, the CEO of Publicis, to make sure that their ID and UID 2.0 were interoperable. Like Artur, there are so many people and leaders across the open Internet that are engaging with us and recognizing the significance of this moment. The momentum behind UID 2.0 is beyond anything I could have scripted. And for me, it’s probably the most inspiring movement that I’ve experienced in this industry.
I don’t think I’ve explained to Wall Street how UID 2.0 has gotten so much scale so quickly and why I’m so positive about this movement. Let me try to add more clarity. Remember how UID work. A consumer sign-in once with their email address and then opt in site by site, just once per site or at or channel. This is a significant improvement to the consumer Internet experience today, where intrusive toast or cookie pop-ups, appear on almost every premium content site and seemingly every time you go there.
Some have mistakenly thought that UID 2.0 is an SSO or a single sign-on and that we are trying to build something like Gmail with the hope of attracting billions to a new brand and a new consumer-facing log-in service. It isn’t. It’s a common ID that can be used by many different advertisers and publishers. It often originates from publishers with existing sign-on systems. Consumers can then engage with privacy settings and opt-out directly from the services they know.
While we’re partnering with several industry leaders like Criteo to build a new SSO to help medium and smaller publishers, those efforts are innovations on top of UID 2.0. With UID 2.0, the first e-mail authentication provides the consumer with the explanation of the value exchange of the Internet. The goal is to make it clear and consistent. And with adoption by a who’s who of leading publishers and supply-side partners, the UID 2.0 community has already achieved significant scale.
UID 2.0 does not need some magic number of single signs to be on par with the billions of cookies out there to be successful. We are already seeing widespread adoption by integrating with existing publisher sign-on systems. The Wall Street Journal reported 50 million UID authenticated users in the U.S. a couple of months ago, and we have seen more partners adopt since then, multiplying that user number.
And remember, we’re only a few weeks into beta testing. The list of publishers, advertisers and data partners that are currently in the integration process or committed to UID 2.0 is larger than those that we’ve announced publicly. The progress we’ve made on USD 2.0, the momentum we are seeing is all beyond anything we could have envisioned this early. I’m so glad to have worked with executives at the biggest brands and biggest agencies and biggest TV companies, biggest websites to implement something bigger than any one of us.
It’s an honor to partner with so many companies and to UID 2.0 evolve as something that belongs to the community, and this is not just a U.S. phenomenon even though we are early in the journey outside of the U.S. We’re seeing rapid progress in key markets such as Australia, Southeast Asia and in Europe with major publishers and advertisers joining this industry-wide effort. I’m convinced that over the past month.
The momentum behind UID 2.0 has only been hastened by Google’s latest position statement. Those blogs galvanize an entire industry on a new approach. The Trade Desk our agency partners, advertisers and premium content partners care deeply about consumer privacy. Remember that most major brands and many premium content providers have a decades-long relationship with their consumers.
I’ve never met a large brand or a content owner that wants to ever violate consumer trust. They worked so hard to build that trust over many years, and that’s why trusted brands such as Hershey’s, have declared their support for UID 2.0. And because of our commitment to trust and transparency many content owners are happy to partner and share data with companies like The Trade Desk. It’s the companies in the middle that they’re concerned about.
And that’s why we’re excited about one of the innovations we’re building on top of UID 2.0. It’s being developed initially for certain broadcast networks and it’s called double encryption for publishers or DEP. DEP allows publishers to encrypt UID 2.0 and only unencrypted for designated parties — such as a particular advertiser or partner. DEP protects against data leakage and the publisher has the power to control the process with precision.
As such, DEP is an important innovation for publishers as they integrate their single sign-on process into a broader ecosystem. This can be used to prevent a company in the middle, even in the ad-serving wall garden from taking data or insight. By the way, this is just one example of how UID 2.0 allows for innovation on top of the core open source technology.
In this way, UID 2.0 will ultimately prove to be an innovation that supports more than just today’s privacy expectations. At the same time, it’s also important to note how UID 2.0 can accelerate the goals of the California Consumer Privacy Act and Europe’s GDPR. We believe that UID 2.0 best meets the evolving regulatory principles around privacy that are being put into place around the world.
So you have to focus on the principles, and those principles focus on consumer control, which is the design point of UID 2.0. In many ways, we believe UID 2.0 is the vehicle that enables regulations such as GDPR to realize their full potential. Another important aspect of UID 2.0 beyond the core identity service is its emerging role as a new common currency of the open Internet.
Advertisers have the ability to deterministically measure more effectively across channels, and to better manage frequency across channels and devices in a way that is simply not possible with cookies, for example. It is also in this context that our partnership with Publicis becomes important. Publicis has recently announced that they would make their Epsilon core ID interoperable with UID 2.0, and that The Trade Desk would become the exclusive third-party DSP for Publicis’ core IV services.
The epsilon core ID graph includes IDs for more than 250 million users and a wide range of on-site and off-site data. The ability to integrate with this kind of offsite data is critical, as advertisers think about activating their own first-party data in a new identity environment. Whether we are talking business performance measurement or broadening audience segments or brand safety, partnerships with companies such as Publicis and Walmart are so important to realizing the full potential of data-driven advertising, and there are many more in the works.
Take the shopper marketing industry as an example. According to some estimates, the TAM for shopper marketing is well over $100 billion. More and more retailers are recognizing the value and power of their shopper data. Listen to almost any retail earnings conference call these days, and you see how companies want to activate their first-party data or monetize their proprietary data.
Retailers are starting to work with us on strategies to liberate data so their suppliers can market more effectively in a secure privacy safe way. The go-to-market approach for each retailer may be slightly different. But the common threat is that these retailers understand that the only way to realize the full value of their data is on the open Internet. There’s no point in building walls around it. Brands will, over time, always gravitate to places where they can be deliberate and where they can measure ad impressions across channels.
There are some companies, mostly those with a dominant walled garden approach that believe the Internet can be controlled by a few. Then there’s the rest of us who believe that an open competitive Internet marketplace is the only real viable approach that preserves value and opportunity for all participants. By the way, I don’t think there’s anything in the advertising world that will unite fierce competitors today more than its principle. Many of our largest customers are fierce adversaries with each other every single day.
But they agree on this, and we are honored to be working with all of them to improve privacy standards and practices across the Internet. We all agree that the open Internet is the best way to activate first-party data and to measure campaign performance against real business goals with a much clearer understanding of actual consumer actions, which leads me to the third point I want to cover today, the launch of our new Solimar platform later this summer, which incorporates many of these principles.
Just think about the pressures that today’s marketers are under proving the ROI of every advertising dollar, which means that advertisers want better measurement and the ability to tie measurement to actual business outcomes like sales in a Walmart store or foot traffic onto an auto dealership, activating valuable first-party data in a secure way that respects consumer privacy, all in a new identity environment. And completely rethinking how to approach EV advertising, which is the largest channel for many of our advertisers.
Absolutely and very much appreciate the question because there’s so much that has been said, so much that needs to be said about this. And despite our best efforts, I still think there’s a lot that can be said to provide clarity. So let me start by just saying Unified ID is a privacy-first initiative that is — was initially started by The Trade Desk, but it is something that is a movement among the entire open Internet. And it’s so much bigger than our company at this point with hundreds of companies working on this at this point, in part because of our efforts to open source it and get the entire community involved.
And because of the fact that it, by itself is encrypted as well as it comes with terms of service, it is a substantial upgrade to cookies and creates a better Internet for everybody. And that’s one of the things that I think is just a little bit different about what we’re doing here is that we’re trying to create a better Internet for everybody. We’re not just trying to protect ourselves, which I think there are a lot of tech companies that that’s their primary focus, and we’re trying to create a better Internet. Because that’s been our focus, when we go talk to major publishers and content owners and advertisers about joining this movement and they realize the way the tech works as well as what we’re after, it’s really easy for them to get on board.
Now, of course, you have to understand the technology, which is somewhat esoteric. But because of the fact that we’ve gotten so much support from companies like Criteo and from LiveRamp, from Nielsen from the Washington Post, and industry initiatives like — or bodies like Prebid and Pram and IV, we’re really excited to have that sort of support and momentum. We — in The Wall Street Journal, I know they printed a month or two ago that there have been 50 million UID authenticated users in the United States alone.
We’ve seen that increase by multiples since then. So the momentum is just unbelievable. And the number of companies that are in the process of implementing is exponentially higher than those that we’ve issued press releases on. So anybody that wants to go see the caliber of companies that we’ve been working with. You can see a double-digit number of press releases of companies adopting that and supporting it.
I’ve had multiple CMOs from the biggest brands in the world say, we’re with you. If there’s anything we can do to help you, please let us know. We’ve heard the same thing from TV — content owners, the biggest content owners in the world. So it’s just been fantastic. The momentum is unbelievable. And then just two last points that I want to cover on this, one is some people say, well, what does this mean? And what does the momentum mean?
What will the world look like next year when cookies are deprecated and we’re relying on unified ID and things like it?I personally think the Internet is going to be a lot better. And it’s going to be a lot better because you’ll get rid of those annoying cookies on this site, and you’ll lost in one time per Internet with an e-mail address, so in other words, one time. And then you opt in one by one for each site and for each app so that you’re giving them consent, which I think is in line with what GDPR and CCPA and even what Apple is trying to do, which is give empowerment to the consumer and better explain the quid pro quo of the Internet.
And because I think we’ll — as a general Internet community, do a better job of explaining the quid pro quo of the Internet. I also think that data companies that are doing the right thing, meaning getting consents and operating in a way that we would all want them to be operating, they’ll thrive and they’re going to be doing better than they’ve ever done before. Cookies were actually a really crappy methodology for them to build their best businesses on top of. So I think that’s going to be a lot better.
To answer your more sort of esoteric or nuance question about DEP, so what Unified ID enables in part because we’re open sourcing it and we’re making it so that people can innovate on top of it. That’s the thing that’s really great about open source code is that you can create innovations on top of it. And that’s where our work with Criteo and others to build a single sign-on comes in. That’s an innovation on top of Unified ID. And that’s also where DEP comes in.
The Others: AT&T, Verizon, Spotify, Discovery, Comcast, Ebay, Amazon, Chegg, Nexstar, Viacom, News Corp, Gannett, Activision Blizzard, Iheart, Disney and J2 had no meaningful mentions of Privacy, Apple, Chrome, Identity Safari or ATT (App Tracking Transparency)