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Weekly Roundup: GDPR’s Impact on Revenues, The Trade Desk’s OpenPath, NewsPassID, and More

CMA's Report on GDPR's Impact
“The commitments we have obtained from Google will promote competition, help to protect the ability of online publishers to raise money through advertising and safeguard users’ privacy"

Summary

  • Canadian Marketing Association reported on the negative impact of GDPR on publishers, consumers, and advertisers
  • The Trade Desk launched a direct-to-publisher bidding solution named OpenPath to minimize Google’s unfair advantage in programmatic advertising
  • Local Media Consortium’s proprietary identifier NewsPassID shows encouraging results after the pilot testing phase. 
  • Google announced banning cross-device tracking on Android and the introduction of Privacy Sandbox for Android devices within the next two years
  • Meta (formerly known as Facebook) and Mozilla propose their cross-device/cross-browser attribution solution called Interoperable Private Attribution
  • Competitions and Market Authority accepts Google’s revised commitments addressing anti-competition concerns regarding Privacy Sandbox on the same day that the European Publisher’s Commission files an antitrust complaint against them
  • Future of Tech Commission reports US citizens to be in support of a robust federal technology policy
  • ECI Media Management’s report highlights consumer price inflation in the US, while ad price inflation is projected to increase in a comparatively moderate fashion
  • Fortune aims  to build revenue by prioritizing branded content
  • Dotdash to combine ad stacks with Meredith and focus on contextual advertising to prepare for a cookieless future
  • Texas Monthly makes a shift to video in a bid to attract visitors and potential subscribers

Data Privacy Updates

Canadian Marketing Association Highlights the Negative Impact of GDPR

CMA’s (Canadian Marketing Association) report highlighted GDPR’s negative impact as it seems to have unintentionally affected publishers, advertisers, and consumers. The report revealed that the GDPR has had the worst impact on small-to-medium-sized enterprises (SMEs). While larger organizations can effectively implement GDPR, smaller organizations have hardly been able to compete.

As a result, SMEs are losing out on advertising and partnership opportunities. It has also resulted in slower economic growth as SMEs contribute more to the economy than larger companies. It has further stifled free-to-access services, with consumers having to subscribe or pay directly to access the content previously supported by targeted advertising. 

Further, GDPR has forced organizations to block users from the EU, as that seemed a better option than facing the burden of compliance. It has also led to budget cuts within organizations to build a GDPR-compliant infrastructure. Furthermore, consumers seem to have not perceived any tangible advantages apart from being asked to consent to the usage of browser cookies on all EU sites these days.

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The Trade Desk Launches OpenPath

With OpenPath, The Trade Desk has launched an effort to stifle the unfair advantages and opaque practices carried out by Google’s Open Bidding that controls the programmatic supply chain. Google’s Open Bidding, an effort by the tech giants to quash header bidding and the revelations of the recent Jedi Blue project, has resulted in a  loss of faith. The Trade Desk, which earned $1.2 billion in 2021, has made the bold decision of ditching Google’s Open Bidding with the launch of its proprietary OpenPath. 

The Trade Desk’s OpenPath claims to provide advertisers with unfettered access to ad impressions from several high-value partner publishers. Their initial set of clients includes The Washington Post, McClatchy, USA Today Network, Tribune Publishing, etc. OpenPath allows direct integration for advertisers while providing publishers with the opportunity of maximizing revenues. They would, however, not be providing supply-side services such as supply-chain optimization or yield management.

“OpenPath levels the playing field for advertisers, ensuring they get transparent and objective access to the very best digital advertising inventory, starting with many of the world’s top journalistic outlets.”

– Jeff Green, Chairman, Co-founder, and Chief Executive, The Trade Desk (Src)

Cookieless Advertising

NewsPassID Passes Pilot Testing Phase

There’s good news for publishers. LMC (Local Media Consortium) has completed its pilot phase of tests with its proprietary identifier NewsPassID, and the results are encouraging. The trial concluded that NewsPassID provides significantly better outcomes for publishers in an open programmatic auction than other identifiers available in the market.

Involving a small portion of each of the participating publisher’s inventory in a cookieless environment like AMP or Safari, NewsPassID resulted in 90% higher CPM rates than the control identifiers. In environments that accepted third-party cookies, NewsPassID showed 45% better results. Furthermore, inventories carrying NewsPassID sold 25% more than inventories that did not.

However, it faces the problems of competition from vendors and scale. Without scale, no advertiser would find this solution attractive. Although LMC’s membership of more than 192 million US internet users is considerable, they are spread out across groups, and implementing the identifier amongst them could prove tricky. What’s more? Many of the smaller member publishers of LMC do not have adequate expertise and resources, making it difficult for NewsPassID’s smooth implementation. With LMC’s plans to increase the types of inventory this identifier supports, including CTV inventory, the problem of scale can still be tackled.

Privacy Sandbox for Android

Google, like Apple, has also announced that it would be blocking cross-device tracking on Android devices. Simultaneously, it also announced Privacy Sandbox would be brought to Android. This means that user-data sharing with third parties would be limited, cross-app identifiers would be removed, including advertising IDs. The announcement further revealed that this move would limit covert data collection techniques, making integration with advertising SDKs (software development kits) safer through its SDK Runtime solution.

“The industry must continue to evolve how digital advertising works to improve user privacy,”

– Anthony Chavez, VP, Product Management, Android Security and Privacy, Google (Src)

Developer previews for this proposal will be released over 2022, with a beta release slated for Q4. With the target of addressing some primary use cases like targeting, retargeting, measurement, and attribution, the Privacy Sandbox for Android proposal will include app versions of Google’s existent Privacy Sandbox solutions like FLEDGE, Topics API, and Core Attribution API. Due to differences in browser and app OS, technical differences will exist, but design approaches and core use cases will remain aligned. Google will build a separate community of publishers, developers, and various companies across the adtech ecosystem to work on this proposal.

Meta and Mozilla’s Ad Tech Proposal

Meta (formerly known as Facebook) and Mozilla proposed a joint agenda to improve cross-device/cross-browser attribution that is compliant with most Apple and browser-based privacy policies at the first meeting of W3C’s PATCG (Private Advertising Technology Community Group). Named the IPA (Interoperable Private Attribution), the proposal works by creating an encrypted match key for any device connected with a particular log-in. 

When a user logs in using the same/different browser across a device, the match key can connect an ad seen on one device/browser with a purchase made on another device/browser. However, the account login information must be the same, and the browsers must be interoperable. Batched reports of the number of conversions related to ad clicks/impressions are sent, and companies can create open-source match keys for anyone to use their footprint.

As per Meta’s claims, since no user can be connected with a conversion or be de-anonymized, privacy is theoretically not violated. Unlike Apple’s SKAdNetwork, which can be reverse-engineered to identify individual users, IPA ensures individuals can never be distinguished from the larger group.

Standardization across the entire adtech ecosystem, however, can prove to be a hassle as most prominent tech companies like Microsoft, Apple, and Google plan on using their attribution solutions and not someone else’s. A consensus – which can take ages – is essential for IPA to work.

An Eventful Week for Google

It has been an eventful week in terms of antitrust complaints Google is facing.

On the one hand, the UK’s Competitions and Market Authority (CMA) has accepted revised commitments made by the tech giant, to assuage anti-competition concerns pertaining to its Privacy Sandbox. These legally binding commitments include not removing third-party cookies until the CMA is satisfied with Google not gaining an unfair advantage. Google has further promised to collaborate with the Information Commissioners Office and CMA while developing or testing its Privacy Sandbox proposals. They also promised to publish test results and engage more openly with third parties. Other commitments include restricting data-sharing within Google’s sites and apps and not prioritizing its adtech once third-party cookies are phased out. 

These commitments come after the ad industry had previously revealed its displeasure at Google’s prior obligations to the CMA not having a robust enforcement mechanism and Google’s opaqueness as to how it uses data. If dissatisfied, the CMA reserves the right to ‘take further action,’ which can mean reopening the investigation.

On the other hand, within the hour of the CMA’s decision, the EPC (European Publisher’s Commission) formally filed an antitrust complaint with EC (European Commission), accusing Google of carrying out anti-competitive practices in the ad market. The EPC’s complaint is reminiscent of the Texas antitrust lawsuit against Google. The EPC’s complaint accuses Google of manipulating publisher revenue and stifling competition within ad exchanges. It also claims that Google is phasing out third-party cookies for profit and highlights the tech giants’ Project Bernanke program.

AdTech Trends

US Citizens Support Tech Regulation to Protect Democracy

As many as three-quarters of Americans feel that US democracy is at risk unless stronger regulations are created to curb misinformation online. These revelations are part of a poll conducted by the bipartisan advocacy group the Future of Tech Commission. The commission hired Benenson Strategy Group to survey 1,000 Americans, revealing strong support for more robust privacy regulations and increased spending on better broadband and cybersecurity.

The survey revealed that 78% of Americans believe that an ‘opt-in’ function is necessary before tech companies collect their data. 76% think that these companies shouldn’t collect their data beyond what is required for the provided service. 75% of responders further believe that companies should be prohibited entirely from collecting personal data of anyone aged 16 or below. 

This survey was essential in revealing the consensus of the American public, especially at a time when Congress has been thinking about reigning big tech. Congress wants to implement new restrictions on them, introduce new privacy-related bills, and even impose limitations to Section 230 of the Communications Decency Act of 1996.

Ad Price/Consumer Price Inflation in the US and Worldwide

According to ECI Media Management’s report, consumer-price inflation reaches a 40-year high, increasing by 7.5% this month. Ad price inflation, on the other hand, grows relatively moderately. Media buying costs in North America are projected to rise by 5.4%, while the world is expected to experience a 4.5% inflation in 2022. 

Advertising Cost inflation in 2022

Reference Image Source: MediaPost

Although the overall ad industry is going through inflation, offline ad price inflation is declining while online ad price continues to expand. Most markets have recovered from the post-pandemic slump, implying that inflation is expected to continue rising even in 2022, with TV and online ad inflation continuing to climb all over the world.

Offline vs online Ad Cost inflation

Reference Image Source: MediaPost

Publisher’s Strategies

Fortune’s Focuses on Branded Content

Fortune, the American business magazine, has reported $100 million in revenues last year, with a third of it coming from digital advertising and subscriptions. After being sold by Meredith in 2018, Fortune prioritized branded content partnerships, courtesy of Fortune Brand Studio. They have been building multiplatform bespoke programs for their sponsors around topics such as AI, sustainability, equity and inclusion, diversity, etc. 

Their branded content includes creating reports, podcasts, and live and online events. Other ways of connecting with sponsors include Fortune Connect and Fortune Education. While the former offers an intricate curriculum of asynchronous and synchronous cohort-based learning, the latter is an education platform that helps in qualified lead generation from high-intent prospects for Fortune’s partners.

Fortune is in the process of building dedicated teams to look after core areas like crypto, Web3, investment/career advice, etc., that business leaders find critical to give direction to their branded content. Their digital marketing strategy has led to a 50% YoY rise in unique visitors in December 2021. The publisher is currently working on a third-party model, with direct partnerships having guaranteed impressions triumphing over programmatic deals. However, they are in the process of building a first-party solution, with plans to venture into CTV and video.

Dotdash’s Perspective on Cookieless Advertising

Dotdash, a digital media company owned by IAC, acquired Meredith for $2.7 million in October 2021, rebranding itself as Dotdash Meredith. Currently, it plans to restructure the organization and combine each other’s ad stacks focusing on contextual targeting. Dotdash, known for intent-based endeavors, would benefit yield improvements, efficiency, and performance by combining its ad stacks with Meredith, which has focused on first-party, logged-in user data.

This decision of combining Meredith’s scale with a digital-only model for some of the publications under IAC’s portfolio should increase programmatic opportunities in the future. The restructuring will also see each brand overseen by a general manager responsible for the content, product, tech, and everything related to that brand.

“Cookies and all these trackers are going away, [and] in the long-term we don’t need them. If somebody is searching on how to speed up my router, we know everything about them we need to know.”

– Neil Vogel, CEO, Dotdash Meredith (Src)

IAC saw $1.2 billion in revenue in Q4 2021, a 52% YoY increase. Out of this, revenue generated by Dotdash Meredith accounted for $252 million.

A Shift to Video Could Help Texas Monthly Attract Subscribers

Texas Monthly acquired TCR (Texas County Reporter) and its production team in December 2021. TCR is a documentary-style independent TV show, which enjoys an average of 1.3 million viewers across its cable TV and broadcast airings. The acquisition will give the publisher the potential scope of increasing ad inventory and boosting digital and print subscriptions for the publisher.

TCR will have to collaborate with Texas Monthly’s editorial team and create additional content for TexasMonthly.com. Shorter-form stories pertinent for the camera will be produced as part of this collaboration. Apart from this, the publisher will continue selling rights for story adaptations with Hollywood studios since 2019 after partnering with the talent agency CAA. A call-out will be included in every video urging viewers to visit TexasMonthly.com to learn about the topics in depth.

“The print magazine is growing, but [advertising] will never again be the thing that pays fully for the entire operation.”

– Scott Brown, President, Texas Monthly (Src)

Moments That Matter

  • CNIL passes ruling banning French websites from using Google Analytics because the latter transfers data to US servers – CNIL
  • How to practice first-party addressability in a cookieless world – AdExchanger
  • What does 2022’s ad spending narrative suggest – Digiday
  • Meta and Google should pay for news as per the Canadian journalism industry – PressGazette

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Automatad Team

At Automatad, we help publishers to monetize better without hampering the user experience. Our products are live across hundreds of publishers, earning them incremental ad revenue with every passing second. You can request a free audit to get an estimated revenue uplift today.

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