“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Paul Bannister, co-founder and executive vice president at CafeMedia.
“You have no control. Who lives, who dies, who tells your story.” – Washington and Company, “Hamilton”
The Google Chromium team announced on Tuesday the tectonic change that everyone should have seen coming, but no one really believed would happen. Google finally really did it or it’s finally doing it two years from now (or maybe longer). But now that the news is official, and some amount of the documentation is available to understand how this will be approached, we can start unpacking what this will mean for publishers.
There are two large philosophical components of the announcement that are worth exploring before analyzing the winners and losers. The first is that Google is not just ripping out the third-party cookie infrastructure from browsers, but removing all cross-site tracking capabilities including fingerprinting and other technologies. Philosophically, this is very aligned with what Safari and Firefox have done to date. However, unlike Apple’s half-baked (and half-hearted) schemes to support advertising on the web, Google is proposing a massive new set of privacy-centric infrastructure and technologies to replace the existing ecosystem approach. It’s a huge undertaking, one of the largest remakings of web technology ever.
The second philosophical component of the announcement is a shift of power from web servers to web browsers. Today, much of the tracking, targeting and analyzing of users is done by servers run by publishers and a litany of their technology partners. In the new world, much of the processing, analysis and privacy protection work will be done by browsers, using technologies such as Google’s FLoC. This transfers power to the edge and removes a lot of the knowledge from the companies that currently possess it. Interestingly, these proposals also transfer more power to the browser creators, requiring them to authenticate browsers and other things that will lock in the existing dominant browser companies and make it harder for new entrants to gain ground.
So who wins?
As everyone had forecast, publishers with large logged-in or recognized user bases will be winners here. If, via an email or other unique identifier, a site knows who a user is, that publisher will be able to target ads much more effectively. This will create a bifurcated web, with those identified areas being very valuable and those non-identified being far less valuable. Login-gated sites will gain more popularity, and sites with high-quality content will do better than others. The main issue here is that few publishers have much scale in this area, so while it will be highly valuable, it will remain very scarce, and even the largest publishers will have vast swaths of their inventory devalued as traffic from non-logged-in users becomes less desirable.
Another obvious set of winners will be publishers with significant contextually-relevant content. If your sites are places users visit before making purchasing decisions, those sites will be far more useful to advertisers. Contextual targeting systems – already the rage – will become much more sophisticated, although it remains to be seen if general purpose systems will produce enough valuable signals for targeting, or if publishers are better suited to build systems that are specific to their content type and can provide much richer information to buyers. Programmatic advertising, in particular, will need to adapt and allow for contextual signals to be passed with bid requests so buyers can take action on them.
Mobile app publishers, of course, come out of all of this unscathed. Until Apple and Google also stop all tracking within apps and their leaky IDFA/MAID standards, the mobile app space will continue to gain ground over the open web. However, mobile apps aren’t really a panacea for publishers as discoverability of content across apps is so poor and unlikely to change anytime soon.
The unlucky ones
Small and large local news organizations, already plagued by issues, will be hit hard by the death of the cookie. With limited contextual information, few logged-in users and no real ability to prove performance to advertisers, their access to advertising will diminish even more than today. There are many initiatives to try to help this critical group of publishers, but it’s hard to see how this change doesn’t drive another nail into their collective coffin.
Publishers reliant on DMPs to manage multiple domains and their own first-party data could also lose out here. One critical issue that is overlooked is when people talk about first-party data, they are often referring to the business meaning of data that is owned by that company, but a first-party cookie is a technical definition that is bound by a single domain. In other words, first-party cookies are matched against a single domain, so a publisher with a single domain will be able to track users within that domain but not across domains. Large publishers with multiple domains could see their data splintered and devalued, and they may not be able to take advantage of their aggregate scale. A component of Google’s documentation contains the first-party sets proposal that would address this issue, but at this point there are many unknowns.
Clickbait! Well, if there’s one likely silver lining here, it’s that clickbait-driven sites will see a big drop in their performance. Lacking contextual relevance, having no engaged audience and no data of their own, they will see a huge decline in ad revenue. Some will adapt and create higher-quality content, others may find new revenue streams, but many will be significantly challenged. Few will shed a tear.
[Carrie Bradshaw’s voice] Maybe the past is like an anchor, holding us back. Maybe we all have to let go of cookies and move into a bright, new world, of Google’s design, and adapt our businesses to become something new.
There’s much work to be done to more deeply understand all of the proposed specifications, and it is critical that publishers are a part of creating these standards. While Google made the announcement, many of the standards are with the W3C – the global community that sets standards for the web – and there is a lot of time to positively shape the way they will work for the open web ecosystem. It’s incumbent on all of us to give our feedback and push to build these standards to continue supporting high-quality content, and to do so in a privacy-friendly way. I know I’d like to see more winners than losers come out of this.