Local news publishers aren’t waiting around for ad tech vendors to solve their third-party cookie problems for them.
In late March, the Local Media Consortium (LMC) launched NewsPassID, a single sign-on solution and ad network, designed to help the 5,000 local publishers represented by the LMC to aggregate their first-party data and clean up their supply chain.
The need for such tools is obvious: There’s almost nothing murkier than a publisher’s supply chain, regardless of initiatives like the IAB Tech Lab’s Ads.txt, said Scott Cunningham, founder and former GM of the IAB Tech Lab and currently the owner of Cunningham.Tech, a consultancy he founded in 2016.
“Some Ads.txt files have 1,000 authorized resellers – that’s a business problem for publishers – and we need to make sure that they’re able to represent their inventory in a way where not anyone can just sell it anymore,” said Cunningham, who helped design and develop NewsNext, a recent initiative within LMC that houses multiple working groups focused on improving the monetization of online journalism and creating privacy compliant solutions to support that goal.
NewsPassID is one of the first fruits of NewsNext. Four LMC members – two newspapers and two broadcasters – are in the midst of integrating NewsPassID in anticipation of a pilot phase this quarter. The plan is to roll it out to additional LMC members later this year.
AdExchanger spoke with Cunningham and Fran Wills, CEO of the Local Media Consortium.
AdExchanger: What are the main problems you’re tackling with NewsNext?
FRAN WILLS: With all of the disruption and change happening in the digital marketplace right now, we think there is an opportunity for local media to redefine and reset its standing in the digital ecosystem and to provide a more sustainable way to connect advertisers and consumers that will better benefit publishers than the current supply chain.
SCOTT CUNNINGHAM: I’ve been harping about the lack of transparency here for a long time. But this year a lightbulb went off. The supply path to fact-based information … pretty much no longer exists.
One of the main things we keyed in on is the tech tax from the ISBA report to try and understand exactly where the disintermediation is occurring.
WILLS: If publishers are only realizing 51 cents out of every dollar an advertiser spends, that’s also not good for advertisers. Streamlining access to supply won’t only benefit publishers, it will also help advertisers spend more efficiently.
How exactly does NewsPassID work?
CUNNINGHAM: The purpose is to give publishers a trusted seal they can use to have a conversation about the value exchange. But there are actually two parts to NewsPassID: a single sign-on piece and an ad network.
On the consumer-facing side, the walled gardens all have persistent logins, and the local news industry needs to come together to create something similar. There are a number of advantages to this beyond just advertising, including allowing us to create a minimum standard for obtaining permission that can be applied across states in a way that helps publishers comply with regional privacy regulations. Publishers can also work together to offer free content or subscriptions.
NewsPassID is an opportunity for greater interoperability and it creates a layer of transparency for the ad network model.
How does the ad network work?
We’re working with ad tech companies and existing ad tech infrastructure, including SSPs and DSPs. We’re not reinventing the wheel.
But this is also a lot more than just aggregated ad inventory. NewsPassID comes with a unique whitelabeled first-party identifier that will allow us to see how consumers move through the funnel with permission. But we’ve stopped short of committing to email right now.
Email isn’t off the table for us and we are watching what’s happening with the identity resolution providers and other ad tech companies trying to establish email as a new currency to replace cookies. But we’re not just going to throw email into the pot, because the scale isn’t there and it could devalue the relationship between publishers and consumers.
Devalue it in what way?
CUNNINGHAM: The big one is, what if there aren’t the appropriate permissions? There are a lot of other things we can do right now rather than anchoring ourselves into one thing, like email.
But I do get a kick out of all of the proposals coming from non B2C-facing companies that are trying to focus on talking to the consumer right now. I understand why. They also need to reinvent their consumer funnel and figure out what will make consumers opt in.
What do you think of Unified ID 2.0?
CUNNINGHAM: From a standards body and self-regulatory perspective, I’d say that the technical specifications and some of the flows make a lot of sense, like the opt-out mechanism that somewhat mirrors the AdChoices program.
But from a business perspective, if I’m a news publisher or any kind of publisher, honestly, I’m not running to hook up all of my deterministic data.
Let me share an anecdote: We’ve told the publishers we work with to experiment with ID resolution providers focused on email across a small sample and to make sure to ask, “Can you show me the ROI of doing this?” And the answer has been, overwhelmingly, that these companies can’t show direct ROI – and, if that’s true, what’s the point of putting this very premium signal into the supply chain?
It seems like the SSO [single sign-on] landscape is turning into a land grab. Are we headed for the fragmentation of identity on the open web, and how will that impact the ability to buy and sell programmatically?
CUNNINGHAM: It’s a concern and I appreciate that we need to think about whether we’re headed towards more walled gardens. But the reality is that market dynamics have created a vortex and local news publishers can’t compete individually on the open web. They need to create a communal layer so that publishers can band together to compete for scale and addressability.
WILLS: Yes, there may be other players that aim to provide some of the same services, but there is a very big opportunity here for local media to restructure so that there’s independent third-party governance, interoperability and some form of oversight.
We don’t want to simply end up with an opaque supply chain all over again.
This interview has been edited and condensed.
