"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Corey Weiner, CEO of Jun Group.
As the ad tech industry shifted in the last five years toward more privacy-conscious advertising, first-party data became the golden child. The pitch was short and sweet: Why buy ugly, third-party data from a sketchy data aggregator when you can compile fresh, actionable data yourself?
First-party data buzz permeated the discourse in the last few years as General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) cracked down on privacy violations in recent years, and the tech giants started walling up their gardens with the death of the third-party cookie and Apple’s Identifier for Advertisers (IDFA).
But in 2021, a new term has begun popping up all over the ad tech world: zero-party data, a form of data that describes an even more direct relationship between brand and consumer.
What is zero-party data?
Coined by Forrester research back in July 2020, zero-party data encompasses any data that a customer provides to a brand or company willingly and intentionally.
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Ads Are There For You
Publishers attempting to cut themselves a slice of the commerce pie are running into an unlikely – or maybe not so unlikely – competitor: Google. Seems like everywhere they turn, there’s Google with a new way to penalize them for experimenting with alternative revenue sources.
Take BuzzFeed, which has emphasized the growth potential of its commerce business in the lead-up to its impending IPO. But here’s the problem: BuzzFeed’s commerce revenue slowed to just 14% in Q3 from 80% in the first half, and all signs point to another shortfall in Q4.
What happened? Well, it’s no coincidence that earlier this year Google adjusted its search algorithm to diminish sites with affiliate-style links to outside merchant shops. Publishers with affiliate links saw traffic reductions of 20% to 30%, The Information reports.
But as commerce falters, advertising is there to pick up the slack. BuzzFeed is still on track to meet its overall revenue goals for 2021, largely on the strength of its ad business. Vice is in a similar boat. As it prepares for its own IPO, Vice has increased its focus on video content and branding – and yet 35% of Vice’s revenue still comes from advertising, Insider reports.
Guess publishers will have to keep on leaning into ad revenue to support themselves – although competitors lurk there, too. (We’re looking at you, Google.)
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Roast turkey wasn’t the only thing to gorge on this Thanksgiving weekend.
On Friday, the Competition and Markets Authority (CMA), the UK’s top antitrust regulator, published a 125-page document outlining the next phase of its ongoing antitrust investigation into Google’s Privacy Sandbox. (You can read the whole shebang here.)
The document contains an updated set of commitments from Google designed to prevent the company from developing its Privacy Sandbox proposals in ways that impede competition.
The CMA announced its investigation of the Privacy Sandbox in January after receiving complaints that Google’s plan to phase out third-party cookies in Chrome will give it an unfair advantage in the digital ad market over anyone that isn’t Google.
The CMA will consult on the new commitments – and receive public feedback – until December 17. If the CMA accepts its changes, Google said in a blog post that it will apply them globally.
Take one
But let’s take a step back.
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“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by George Ivie, CEO and executive director at Media Rating Council.
Most transactions are predicated on a good-faith promise. Parties agree to exchange goods, services or funds of agreed-upon value with the explicit understanding that they will not only be delivered, but also accurately reflect the value that was assigned to them.
Mechanisms of accountability make such agreements work. One party accepts the other’s promise of delivery of stated value, with safeguards in place that the receipt of value will be verified. This is what enables agreements to be confidently entered into. In the absence of some framework of accountability, it would be difficult for transaction agreements to be executed, especially at scale.
That is certainly the case for advertising, where the verification mechanism is primarily one of measurement.
In light of this, it’s puzzling to me why there is sometimes resistance to the concept of standards and determinations of compliance with standards. Standards, especially as they relate to measurement, are the foundation of trust and accountability.
They provide an agreed-upon benchmark as to how verification should be approached and assessed, and the verification itself is as critical as the standards.
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Subscription Conniptions
We live in a “subscription economy” now, writes Nieman Labs. You don’t buy the Aladdin DVD; you subscribe to Disney+ “until you die or your card expires.”
But as subscriptions become more important business metrics, particularly in news and entertainment, it’s important to be honest about what companies mean when they report subscriber numbers.
The Information, for example, which charges $400 a year for full access, recently reported more than 225,000 subscribers – but that counts people who subscribe to a free newsletter. There’s a big difference between a free email and $400 per year.
Fluffing up subscriber numbers is a common practice among publishers, and subscriber disclosures will only become more convoluted as publishers like The Information, The New York Times and The Atlantic experiment with newsletter subscription bundles and create rosters of newsletter writers (à la Substack).
Connected TV is also rife with subscription inflation. Some streaming services report subscribers similarly to how apps report their user numbers, as in without disclosing paid versus free accounts. Disney bundles Hulu, ESPN and Disney+ apps, but users retain individual accounts.
Streaming services and publishers also dish out huge discounts and freebie sign-ups via partnerships with mobile providers or other subscription players, such as Spotify or Amazon Music. And, that’s right, they count those subs with the same weight as full-paying, reauthorized subscribers.
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A weekly comic strip from AdExchanger.com that highlights the digital advertising ecosystem...
Many of the shopping behaviors that developed over the past couple of years due to COVID-19 have solidified and appear here to stay.
The majority of consumers (56%) say they plan to shop primarily or exclusively online this holiday season, and more than three-quarters say they’ll use in-store pickup services this year as much or more than last year, according to recent research from performance marketing agency Tinuiti.
But many shoppers aren’t just going to show up without confirming that what they want is in stock.
Forrester found that nearly one-third of US online holiday shoppers will check online first to see whether an item is available before heading to a physical store.
That means retailers should expect and prepare themselves for a sizable wave of in-store shoppers, an uptick in curbside pickup and a high volume of requests coming in from online shoppers looking to secure limited stock items, said Phil Melson, a retail client partner at data analytics provider Fractal Analytics.
“The mental math done by individual shoppers choosing to rush to a store to buy something off the shelf versus securing online and picking up later will be case by case and interesting to see,” he said.
But retailers have their own mental math to do.
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"The Sell Sider" is a column written by the sell side of the digital media community.
Today's column is by Roman Garbar, marketing director at Tenjin.
While the eyes of the world were recently locked on the rebranding of Facebook to Meta, something with more immediate and concrete implications for the advertising world was happening.
Facebook, which used to be the king of attribution, is now deferring to Google and Apple as the attribution data sources for Facebook campaigns. The impact of this move will be felt by nearly every mobile advertiser on the planet.
What happened?
Facebook quietly started using Google Play Install Referrer to pass Android install attribution data. Incredibly, this is available to all developers – regardless of the attribution tools they use – making it effectively free. In fact, Facebook has explained in great detail exactly which data can be transferred in this way and how mobile publishers can utilize this new option.
It’s a big change in direction. Previously, mobile publishers needed to pay certified Facebook Mobile Measurement Partners (MMPs) to get access to attribution data. No new MMPs have made it into Facebook’s MMP program for almost four years, meaning that it effectively became a walled garden.
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Bolt From The Blue
Twitter Blue, Twitter’s $3-per-month subscription service, was met with applause this month by digital media and news publishers thrilled to see a tech platform cut them a rev share. Participating publishers offer ad-free articles on Twitter’s in-app browser and earn a share of the Twitter Blue subscription pool in return. The rev share is apportioned per user based on time spent.
Twitter’s stated goal is to earn at least 50% more with ad-free Twitter Blue stories than on ad-supported articles. More than 300 sites have signed up so far. But although the subscription share is the big draw, Twitter Blue has other enticements. For one, publishers own the Twitter Blue reader data as if the activity is happening on their own site, which it is. Publishers don’t see the same data with Facebook’s in-app browser. (Also, take that, AMP.)
But Twitter pales in comparison to Facebook in terms of referral traffic – 1.6% to 24.1%, as per Parse.ly. But walled garden platforms have treated news partnerships as an extension of their “black boxes,” and Twitter is changing that up with a transparent model, Mathew Ingram of the Columbia Journalism Review tells Adweek. “Platform relationships in the past have typically just been, ‘We give you money.’ This feels far more tied to reader activity.”
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The subscription business has never been easy. But this is perhaps the toughest season ever for subscription-based companies.
On the one hand, physical product shortages and ecommerce delivery struggles make digital subscription deals more compelling. Consumer products like Masterclass, Peloton and Audible all sell subscriptions.
But those same businesses are among the most keenly affected by Apple’s ad targeting and data restrictions. Their MO has been to track individuals and optimize campaigns carefully so as to understand how much they can spend on marketing to profitably acquire new customers.
There’s also a lot of competition. The market is awash with companies from news and entertainment, gaming and ecommerce to financial apps, learning resources and more all fighting for a spot on the finite roster of subscriptions that any given person can carry per month.
The result is that subscriber acquisition costs have spiked across all major platforms, including Apple’s App Store and iOS, Google’s Android and Facebook.
One way to deal with that dynamic is to simply say “eff it” to customer acquisition and lifetime value calculations and go heavy on price cuts and promotions to keep the new sign ups flowing, albeit at a less effective profit rate.
A lot of companies are doing just that.
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