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“It could be a far better world for publishers”: How first-party data helps publishers grow revenue

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Nearly $10B in publisher revenue is at risk, according to a McKinsey analysis, as Google prepares to phase out third-party cookies by the end of 2023. It will be the end of programmatic advertising as we’ve known it, states the latest Innovation in Media report from FIPP. However, this seismic shift presents a great opportunity for publishers. 

In fact, it could be a far better world for publishers, one they may even have a key role in shaping as a part of the digital advertising system finally hives off from Big-Tech and the hellish world of scale, clicks, and eyeballs that they have imposed on us for decades.

Innovation in Media 2022/23 World Report

“Fickle friend for publishers”

“Digital advertising has long proven to be a fickle friend for publishers, stacked as it is in favor of Big Tech,” the authors write. “With global privacy concerns putting an end to third-party data tracking there is an opportunity for publishers to focus instead on leveraging their own first-party data as a proposition to sell to advertisers.” 

The report suggests a three-step process for publishers to scale their first-party data operation:

  • Develop a comprehensive data strategy to prioritize investment and garner buy-in 
  • Test, learn, and measure to determine the best activation methods 
  • Build robust in-house tech capabilities while relying on strategic partners for other kinds of expertise

Many publishers collect as much data as possible but this is counter-productive as it burdens readers, increases technology and personnel costs as well as the risk of data breaches and other privacy violations. 

The effective way of going about this is to identify what data is essential and create organization-wide strategic goals for collection and investment. This would require hiring people who understand data, as well as getting a manager to spearhead these strategies.

“Thinking through the right moment in the customer journey”

First-party data is very useful in delivering personalized experiences. The report recommends publishers use a test-and-learn approach to determine what should be personalized and the level of personalization needed. 

For example, a publisher may decide to focus on one customer segment and so it would need to invest only in the data and technology required to test that particular use case. The personalization strategy can be expanded to include more segments and deploy additional technology like artificial intelligence after the initial steps have proven their value. 

Collect more data over time by thinking through the right moment in the customer journey to ask for it. At each stage, aim to understand how to move users deeper into the funnel with the right offers that will net you more data to round out your customer profile. Don’t try to collect too much data at one time. 

Michael Silberman, SVP Strategy, Piano

Next publishers need to determine which capabilities are best kept in-house and the ones that can be outsourced. The report shares findings from a Boston Consulting Group study which recommends a “hybrid approach where the technology stack and capabilities related to data analysis are kept in-house while agencies can provide strategic advice.”

“We went from millions to tens of millions”

Many publishers including the New York Times, Vox Media, Washington Post, South China Morning Post, and Future Plc have built their own first party-data platforms. “We’ve seen trends over the past few years where [the client-publisher] relationship has been growing: more focussed on direct, more focus on unique products even beyond branded content, but how we target, how we understand consumption,” said Jarrod Dicker, VP of Commercial Technology at WaPo. 

Publishers have a unique advantage in this next phase because consumption data is something that we’ve always deeply understood – we know what type of content users prefer, how they navigate through sites, and all of this can be worked out without ever having to know a user’s identity.

Jarrod Dicker, VP of Commercial Technology, WaPo

Vox Media’s platform, Forte, was launched at the end of 2019 and despite the pandemic’s onslaught in the following months, it had a good year. More than 100 brands used it and by the end of 2020 Forte data was used to drive “nearly half” of Vox Media’s display ad revenue, according to the publisher’s CRO, Ryan Pauley. The share grew to about 66% in 2021 and is expected to grow further.

“The bulk of the data Forte uses to infer audience interests and intent comes from the content Vox Media’s audience consumes across both Vox Media and New York Media,” the authors explain. “It draws from other sources too, including offline data about people who have attended in-person events, as well as subscriber data gathered from New York Media and commerce data gathered from New York Media’s commerce brand, The Strategist.”

Insider launched its first-party data platform, Saga, in early 2020. It had over 140 advertisers running ad campaigns on Insider using Saga data, up from 48 the previous year. Further, these advertisers had a renewal rate of 48%, and the amount of money they spent on average tripled. Overall, revenue generated from campaigns using Saga rose 175%. 

We went from millions to tens of millions [in revenue]. 

Jana Meron, SVP, Programmatic and Data Strategy, Insider

“Start thinking about what they can do on first-party data”

While there is overwhelming evidence to support the case for a first-party data play, it will be tough for smaller publishers. “Without third-party cookies and targeting, they don’t have the scale to compete,” says Fran Wills, CEO, Local Media Consortium. 

“I fully understand not all publishers can afford such a thing,” notes Thomas Lue Lytzen of JP Politikens Hus. “But I would at least recommend they start thinking about what they can do on first-party data.” 

“If they can’t build something themselves, then they could probably talk to some of the companies out there trying to help media companies organize first-party data. Start first with evaluating or finding what you actually have on the first-party side and then try to look for some other media companies and work with them.”

Thomas Lue Lytzen, JP Politikens Hus

The full report can be downloaded from FIPP:
Innovation in Media 2022/23 World Report