How Publishers Can Get The Best Value from Audience Data
When we talk about the future of marketing, we often focus on the way that brands see that future because they're the ones footing the bill: even in a worldwide pandemic, they spend over half a trillion dollars a year on advertising around the world (40% of which in the U.S. alone), and that certainly gives them financial leverage to shape the marketing ecosystem to their liking.
But that doesn't make the seller-side of the equation any less important. After all, publishers stand at the front lines: most of the time, consumers interact with them first, before they get to connect with marketers. That proximity gives them a direct understanding of people's behavior, and a direct opportunity to affect that behavior too. In ad tech speak, this translates to richer first-party audience data, better segmentation, and more effective activation strategies.
For marketing to work well, there needs to be a balance between buyers and sellers (i.e., marketers and media companies, advertisers, and publishers). That means that they need to work together, find common ground, and hopefully raise the bar for all.
Easier said than done. Most real-time bidding systems are still designed to find cheap inventory for watered-down audience segments. Direct ad rate negotiations still take place, but in a world where media fragmentation is far outpacing media budgets, nine times out of ten, the net result is depressed CPMs.
However, the quick rise of privacy regulations around the world (and the corresponding phasing out of cookies, mobile ad IDs and other personal identifiers) is jolting the industry past its earlier divisions and towards much more cooperation. The recent passage of the CPRA in California is far from the last U.S. initiative on the privacy front. Many other states have privacy proposals in the pipeline, and discussions at the federal level are back on the table.
This common challenge is bringing new energy to the industry. Necessity is the mother of all invention, isn't it? What started out as a purely defensive strategy (how can we replace the cookie?) has led to a fresh new vision for what a marketing ecosystem should look like in the future: one based on building bridges between brands and publishers, not creating divisions; and finding new value in audience data, not reducing them to their lowest common denominator.
What should media companies do to prepare for the future of marketing?
First and foremost, publishers need to remind themselves that future audiences will remain addressable. It won't be done with cookies, or IDFA, or browser agents, but through identity-based solutions like Neustar's Fabrick ID that will tie their first-party audience data to trusted external datasets. This is a great opportunity for publishers to enrich their data with new attributes (i.e., verified demographic, psychographic, geolocation, and behavioral data) and unlock new value for their advertisers. But it also puts pressure on them to clean up their first-party data and collect the metrics that their advertisers really care about.
Another priority is inventory valuation. It’s really at the heart of the equation for publishers. There are myriads of ways to value ad inventory, but third-party programmatic systems have limited everyone's imagination over the years. Like TV ratings did before them for the valuation of TV advertising. Taking a step back from those systems gives media companies a chance to finally value their audiences for what they're really worth.
But it won't happen automatically: They'll need to sit down with their clients, understand what specific business outcomes each of those clients is aiming for, and be ready to come up with one-on-one solutions to unlock true value. Thankfully, tech companies are developing clean rooms (equipped with encryption, privacy compliance safeguards, and sophisticated data access tools) where this type of one-on-one experimentation can take place almost right out of the box.
Finally, media companies should maximize their monetization opportunities by making sure their assets are fully integrated with their clients' marketing ecosystems: advertisers need to be able to access those audiences and activate them in real time. That integration needs to happen at the user level (through identity-based IDs) and at the audience segment level (through custom segments).
And there's another way for publishers to monetize their inventory in this new economy: by licensing it in bulk inside trusted second-party data marketplaces. As brands develop their competitive edge, they'll need to add distinctive features to their identity graph, and a permanent connection with a publisher's data (for instance, TV usage data, geolocation coordinates, or mobile habits) might just be what the doctor ordered.
In the late-1800s, newspaper ad rates were published in ad-hoc directories, with no clear standards for the cost of media. All circulation numbers were self-reported, and buyers and sellers had to work together to understand what made an audience more desirable than another.
The Audit Bureau of Circulations (now the Alliance for Audited Media) brought much-needed order to the whole ecosystem in the 1910s, but it also paved the way for the standardization of ad rates. Today, CPMs are used to determine the value of audiences on virtually every channel, from print to television, online search to social media. But by and large, on each of those channels, ad inventory has become commoditized—putting pressure on publishers to deliver the same audience at a cheaper price.
We're not advocating a return to the old ways, of course, but there's something to be said for a system where buyers are again connecting directly with sellers to understand the unique value of their audiences.
Click here to learn more about how Neustar is contributing to the future of media, and find out how to become a Fabrick Publisher Partner to take full advantage of the opportunities offered by our new Fabrick ID.