Brands are ill-prepared for privacy changes that will lock down data in digital marketing, and publishers stand to lose billions of dollars under new restrictions coming from Apple and Google, according to the Interactive Advertising Bureau, which issued an annual state of data report on Thursday.
The IAB’s report said that as Apple and Google restrict consumer data on web browsers and devices, brands will need to find new digital marketing tactics. Meanwhile, publishers stand to lose $10 billion in revenue as personalization becomes harder online thanks to the deprecation of third-party cookies.
“Publisher revenue is really in jeopardy,” says Orchid Richardson, senior VP, programmatic and data center, IAB. “It’s at $10 billion, we’re forecasting that [publishers are] going to lose, because we’re not going to be able to do audience targeting and leveraging third-party data, if we don’t come up with a solution.”
“Brands were the group that was most unprepared for the cookie going away,” Richardson says. “They almost had a wait-and-see [strategy], they felt like it was someone else’s problem to solve.”
The IAB has become the most vocal body within digital advertising, lobbying for cooperation among the major stakeholders to create new identity programs to replace the older methods. This week, the IAB hosted its annual leadership meeting with speakers from platforms like Google, Facebook and Amazon; ad tech companies like LiveRamp, Magnite, Pubmatic and MediaMath; and brands like Unilever, Mastercard, PepsiCo and Ocean Spray.
The IAB’s data report sought to quantify how much money the online publishing world could lose in the coming year as both Apple and Google end data-sharing practices that have powered the open web and advertising for years.
Last week, Google announced when it moves away from third-party cookies, which are the files that track internet users through their web browsers, it would not replace them with IDs that rely on similar levels of personal information. Instead, it is moving to “cohorts,” which is a method of targeting and measuring ad campaigns based on pools of users who are not individually identifiable. Apple has already restricted tracking on its Safari web browser, and it is about to release its latest iPhone iOS 14.5 software that will set up more barriers for marketers to match users through their devices.
Publishers have relied on data-sharing to fill ad inventory, and brands use data to target and measure ads. IAB is working on a number of different answers that would develop “unified IDs” that publishers and brands could adopt. The conversation at IAB’s leadership summit centered around new identity programs and what brands could do with first-party data, the information they collect on their own with the consent of the consumer.
“You will be able to take first-party data and use it in a secure way to create segments and create audiences and address those audiences in ways we never thought possible,” Tom Kershaw, chief technology officer at Magnite, the ad tech platform, said during the conference.
On Wednesday, Nicole Lesko, Meredith’s senior VP of data, ad products and monetization, issued a response to Google’s cookie changes.
“The only surprise about Google's announcement is the industry's response," Lesko says. "Google has indicated that this is their direction for the past 15 months. Publishers are wary of solutions that rely on a hashed email address to replace the third-party cookie in the open programmatic space.
“Scale issues aside, an email is deterministic and is not easily controlled once it is shared universally, regardless of purported anonymity," Lesko added, referring to concerns about any ID products that rely on personally identifiable information like emails, which many publishers have access to through signed-in users. "As publishers and guardians of that email address, a consumer trusts us to keep it safe in exchange for utility such as personalized content, experiences and marketing on our properties."
Kershaw of Magnite had a similar opinion. “The moves by Apple and [Google] Chrome didn’t just come out of their own,” Kershaw said at the leadership summit. “It was consumers and outcry and concern that led to a different situation, and we are in control to reinvent it.”
There are still clear disagreements with how to reinvent the landscape, though. Lesko gave pointers to publishers about how to work with ad tech vendors and data partners, advising publishers not to rely on identifiers that still pass along personal information like readers’ email addresses.
Big publishers that invest in their first-party data and use it appropriately could make up for lost revenue, Lesko said.
IAB’s Richardson says that brands will also need to adjust by making the most of their first-party data, and they can’t rely on the murky underside of programmatic advertising to make connection with an audience. “The really smart brands, the direct-to-consumer brands … [they are] shifting to a reliance on the walled gardens and leveraging that to get to their audience,” Richardson says. “It’s the more traditional brands that are really thinking about, ‘How do I improve my first-party data, what type of partner do I need to bring on to help me reach my audience.’”