The Dirty On Clean Room Services; Are Publishers Paying For Their Paywalls?

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Clean Rooms Get Messy

The point of clean room tech is to safeguard user data by limiting access to that data while still allowing it to be queried for analytics or ID matches. But does the proliferation of clean room services – and the increasing need for interoperability – defeat the purpose?

Not only are there too many clean rooms in general, but the clean room tech on offer from the walled gardens is somewhat myopic. They only analyze their own media. Google does Google, Amazon does Amazon, Facebook does Facebook – you get the picture.

With retailers and even brands building out their own versions, “the biggest problem is having 700 clean rooms out there – it’s not scalable,” Publishers Clearing House exec Chris Moore tells Digiday.

An explosion of post-cookie identity solutions designed to centralize and anonymize data only complicates matters further.

For now, it looks like clean rooms will require a tedious, one-by-one approach without consistent analytics across services.

“Everyone is thinking [clean rooms] will be a panacea, but they only give a view into an individual publisher,” says one agency buyer.

Back Against The Wall

Publishers have been leaning heavily into paywall strategies in recent years as they’ve shifted their priorities to focus on subscriptions and authenticated, logged-in traffic. 

But paywall tactics require a great deal of nuance, because a blunt paywall approach – blocking all readers or giving only one or a few free articles before requiring a credit card – can often end up turning off new readers or curbing distribution. 

Quartz, a business news site that was an early backer of a paywall model, decided to drop its wall in favor of soliciting free email sign-ins, The New York Times reports. 

Although its subscriber count grew from 17,680 in 2020 to 25,000 paying members today – which ain’t too shabby from a percent-based growth perspective – that can’t sustain a 50-to-100-person newsroom.

Ads still make up most of Quartz’s revenue. Dropping a paywall often improves traffic and drives a much higher rate of revenue to advertising. 

In other paywall news, Dow Jones & Co, publisher of The Wall Street Journal, sued the news subscription aggregation service Nic.kl, which Dow alleges uses 18 individual subscriptions to the Journal to redistribute login credentials to its users. It’s a tactic Nic.kl calls “commercialized password sharing.”

The Marketplace Market

The VC firm Andreessen Horowitz has published its third annual Marketplace Top 100 list, which tracks consumer-facing marketplace startups.

Since the list began in 2019, it’s largely mirrored fluctuations in consumer behavior as seen during the pandemic.

But it is an instructive benchmark, and the ad industry should keep a close eye, because marketplace companies that don’t already operate ad businesses are liable to enter the category.

One big trend Andreessen Horowitz points out is marketplaces acquiring other marketplaces.

For example, the music catalog platform Bandcamp, no. 29 in 2021, was acquired by Epic Games – which separately debuted as no. 20 this year with an in-game creator marketplace. 

Uber IPO’d in 2019, thus “graduating” out of contention for the startup list. But last year it bought two companies from the top 100: Postmates and Drizly. Etsy acquired a fashion resale marketplace, Depop.

Instacart has an iron grip on the top spot. It accounted for 71.5% of the entire marketplace’s gross merchandise value combined – though that’s down to 64.2% this year.

Andreessen Horowitz predicts “a wave of exits for companies that defined digital marketplaces combined with new technologies and an evolving business model has created opportunity for the next group of marketplace giants to step in.”

But Wait, There’s More!

Listen: Unpacking Google’s deprecation of its ad ID and the Privacy Sandbox for Android. [Mobile Dev Memo]

Elon Musk swoops on Twitter with a $43 billion cash offer. [Reuters]

… but Twitter’s board is not interested. [The Verge]

Snowplow joins the Snowflake Partner Program. Brrrr … [release]

New data from Adjust shows record in-app revenue for fintech, ecommerce and gaming. [release]

Digital consultancy startup Backbone raises $14 million in seed funding. [TechCrunch]

Alexa devices now support TuneIn Premium radio streaming. [Engadget]

You’re Hired!

The Brandtech Group hires Linsey Loy as chief growth officer. [release]

Aki Technologies makes Katherine Herb senior sales lead of a new auto division. [release]

Vevo brings in Univision vet Greg Osborne as VP of West Coast ad sales. [NextTV]

Former Jellyfish exec Kevin Buerger joins Incubeta as US CEO. [release]

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