Overcoming Third-Party Data Dependence: Experts Weigh In

This article was originally written for my company’s blog http://www.lineup.com/newsroom

In the midst of ongoing speculation and conflicting views, we’ve shared a considerable amount of information regarding data regulation. It’s a puzzle the digital advertising industry is still trying to piece together, and most current data-centric content is inspired by fear and based on opinion. Our end-goal? To share facts and helpful tips proven successful by the industry experts we collaborate with daily.  

When new privacy laws and global trends affect our customers, we feel the impact as well, which is why a large part of our 2019 Global User Conference was centered around data best practices. Top media companies gathered from over 20 different countries to discuss the successes and setbacks they’ve recently experienced first-hand.

Agreeing on consent, first-party data and identity as solutions to data-driven challenges was easy. The hard part? Accepting the fact that most publishers are still relying on third-party cookies and data for monetization without a clear exit strategy.

What are Third-Party Cookies, Anyway?

A “web cookie” or “internet cookie” is a bit of data sent from a website and stored on a user’s computer by their web browser as they’re surfing the internet. Cookies help websites store information on user visits and activity. They set your language preference, store login information, and even keep products added to your shopping cart. 

Third-party cookies, specifically, are created by domains other than the one you are visiting directly. They’re often used for cross-site tracking, retargeting and ad-serving. 

Frequent use of third-party cookies means user data is often fragmented across numerous sites and devices. The lack of regulation and privacy around the collection of third-party data is one reason the industry is predicting “the death of the cookie” and preparing for a cookie-less future.

The Truth About Third-Party Data

Earlier this year, Google and Apple tightened controls on third-party cookie tracking and, just last month, Mozilla did the same when they switched on Enhanced Tracking Protection (ETP) for all Firefox and Android smartphone users by default. Their anti-tracking feature is meant to put an end to third-party data tracking for purposes such as ad profiling.

But tracking and targeting users via third-party cookies has never been a brilliant strategy, even prior to GDPR and anti-tracking features. Here are a few reasons why: 

  • Cookies are blocked when a user opens a browser in private/incognito mode
  • Web browsers reject about two-thirds of cookies
  • The majority of mobile devices don’t accept cookies, making cross-device tracking nearly impossible, especially in a mobile-first world

Cookies weren’t always the greatest thing, they were sloppy,” says Michael Barrett, Rubicon Project president and CEO, in a recent video interview with Beet.TV. Publishers and advertisers have to come to terms with this reality thanks to the growth of ad blockers and strict data controls. 

Expert Advice Backed by Experience

When it comes to third-party data, industry experts are advising to abandon ship or, at the very least, start implementing other strategies to diversify your revenue streams. 

“If most of the monetization on your sites is through third-party data fueling programmatic, you’re probably going to struggle.”

News UK’s Bedir Aydemir

During the digital panel at our user conference last month, Bedir Aydemir of News UK, mentioned he believes a lot of publishers still have work to do in order to become truly GDPR compliant and future-proof revenue growth. 

“If most of the monetization on your sites is through third-party data fueling programmatic, you’re probably going to struggle,” Bedir said, referencing the near future. “If it’s through people buying your first-party data you can do a little bit better. But I actually think publishers need to focus on what they do really well, which is produce content. They can do native and commercialize contextual targeting.”

Contextual Targeting is Evolving

Contextual targeting is no longer just targeting based on the context of the article a user is reading online. To today’s publishers and advertisers, GDPR-compliant contextual targeting can mean ad targeting based on:

  • Moods
  • Opinions
  • Engagement levels
  • Time-of-day
  • Day-of-week
  • The weather

News Corp and Hearst have reported great success with these types of targeting tactics, growing ad engagement by up to 45%.

Ask Your Data Provider the Right Questions 

“RTB is based on buying lots of third-party data and paying middlemen to police and activate that way of buying. It is, by its very nature, data leakage and non-GDPR compliant. And so we may see that go away. We may see the death of third-party data we may see the death of the cookie,” Bedir explains.

If you’re still relying heavily on third-party data, what steps are you taking to hold your partner accountable? If you’re not set up for first-party success, it’s important to ensure you’re receiving quality third-party data as you plan your transition to a more first-party friendly strategy. Here are five questions to ask your data provider or DMP partner regarding their data:

  • How are you collecting your data?
  • How often is your data scrubbed and how recent is it?
  • How do you verify your data?
  • Is all of your data compliant with each type of data law and regulation?
  • Do you model your data?

The Silver Lining

“The money that’s gone into programmatic over the years is not going to just dissipate. There’s going to be a lot of money freed up that was being taken by these middlemen that could potentially come back to publishers.” Bedir said optimistically. 

Media owners are now becoming conscious of the power and opportunity they hold. What does this power entail and what are they doing to leverage it? Stay tuned as we share more advice from our partners and industry experts in the coming weeks.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: