Optimising First-Party Data for Publishers & Advertisers - How publishers are using first-party data to improve addressability and privacy

In a recent piece of research by Digiseg and AdExchanger titled - Optimising First-Party Data for Publishers and Advertisers Study, it found some great insights into the challenges facing digital publishers today.

The study conducted by Digiseg and AdExchanger analysed how top publishers are using first-party data to improve addressability and privacy – and drive more advertising revenue and campaign success. The study establishes benchmarks for first-party data addressability, scalability, and privacy issues. Also included is the value of tracked and untracked data solutions, the use of granular neighbourhood and household level audience data, and other key opportunities related to these issues.  

Specifically, the report offers insights and benchmarks across the range of digital publishing and advertising initiatives including:

• Publishers’ biggest digital inventory challenges and goals
• eCPM Pricing benchmarks
• Industry knowledge of untracked audience solutions
• Data privacy issues and responses
• Various audience solution ratings by publishers

The analysis is based on a survey of leading publishing executives from both consumer and business markets, serving a range of industry sectors. The survey was conducted in June and July of 2023 and received 103 responses.

Exec Summary

In today’s digital publishing and advertising industry, the predominant concerns revolve around privacy and addressability. While the initial vision for digital publishing and advertising is aimed at tailoring content and advertisements for large audiences down to individuals, this vision has encountered a growing number of obstacles over the past couple of years.  

Audience and consumer demands for data privacy and control have been on the rise and have now become the primary stumbling block. Various factors, including evolving technologies, platforms, data collection methods, browser-based tracking prevention, and shifting global regulations, have compounded the complexity of consumer privacy driven challenges for publishers and advertisers alike.

This study has quantified these challenges and identified the top three critical issues:  

1. browser-based tracking prevention (cited by 64% of publishers),  

2. privacy legislation (53%), and  

3. low audience match rates (40%).  

These challenges not only affect day-to-day operations and services but also have a detrimental impact on advertising revenue.

Specifically, publishers are seeking improved privacy-centric digital advertising solutions that emphasise audience addressability and scalability while safeguarding consumer privacy. Above all, publishers require digital advertising solutions that instil and uphold trust, ensuring the privacy protections demanded by their audiences. While the promise of digital publishing and advertising remains very much alive, it is expected that many of these issues, challenges, and opportunities will continue to evolve over the coming years.  

This study offers valuable research insights and benchmarks for the industry, focusing on how publishers utilise first-party data to enhance addressability and privacy. Key insights from the study are summarised in this Executive Summary.

Key Insight #1 There’s a wide eCPM revenue gap between publishers’ addressable inventory and iOS/Safari and unconsented audiences. Publishers’ eCPMs suffer when consent is missing, or visitors use iOS/Safari.

The absence of consent and anonymity among iOS/Safari visitors significantly impacts publishers' eCPMs, leading to a substantial reduction in revenue. According to the survey data, iOS/Safari visitors generate an eCPM that is, on average, 70% lower than that of publishers' addressable inventory. Similarly, unconsented visitor audiences exhibit an eCPM that is 81% lower compared to addressable inventory, as revealed by the findings.

The rate that publishers are affected today really depends on the percentage of your traffic from non-Chrome browsers. In countries like USA, UK, Australia this is ~40-50% of their traffic.  

To illustrate these disparities, the bar chart below represents these eCPMs as a comparative index, with the average rate for addressable inventory set at "100." For iOS/Safari visitors, the eCPM index stands at "30," while for unconsented traffic, the index figure is a mere "19." Clearly, addressability should be a critical concern for publishers.

Numerous factors converge to exert pressure on publishers' capacity to boost digital advertising revenue. The combination of low addressability, a lack of audience consent, and tracking prevention collectively contributes to the decline in eCPM rates, creating a substantial revenue gap between addressable and non-addressable audiences and inventory.

Source - Optimising First-Party Data for Publishers and Advertisers Study

Key Insight #2 Publishers are optimistic that audience addressability will increase over the next few years, yet with the number of industry challenges it’s hard to see how that will happen.

Over the next two years, publishers anticipate an increase in the proportion of their inventory that can be targeted, despite encountering obstacles such as privacy legislation, growing tracking prevention measures, cookie deprecation, and ad blockers.  

The survey data demonstrates a broad range of expectations, but it's worth highlighting that a collective 56% of publishers currently state that half or more of their inventory is already addressable. Looking ahead to the next two years, a total of 75% of publishers anticipate that over 50% of their inventory will become addressable.  

This optimism seems rooted in the belief that the data and advertising technology sectors will ultimately deliver on their promises, even though many current solutions still involve a type of consumer and user tracking with a third-party "trust" layer introduced between the publisher, advertiser, and the consumer/site visitor.

Publishers maintain their optimism in the face of numerous obstacles. However, other findings from this study suggest mixed sentiments concerning several critical industry issues. This prompts the question of whether this optimism is based on a faith in forthcoming technological innovations or on the possibility of privacy efforts being rolled back, both in terms of regulatory actions and consumer attitudes.

Source - Optimising First-Party Data for Publishers and Advertisers Study

Key Insight #3 Publishers are using and testing cookie alternatives that they don’t believe are very privacy safe.

A significant majority of publishers have explored or are contemplating the use of tracking methods such as ID Solutions (82%) and Clean Rooms (70%). However, there is a notable gap in perception regarding their privacy safety. Only 29% of publishers believe Clean Rooms to be very privacy safe, and an even smaller 16% of publishers view ID solutions as very privacy safe.  

This is likely driven by the rise in the use of fingerprinting technology for browser identification, and the use of personal information when utilising Clean Rooms, both posing a direct risk to consumer privacy.

This disconnect raises concerns about the long-term viability of these solutions, especially considering evolving consumer and legislative trends in data privacy. For instance, browser vendors are reducing the signals available for use by fingerprinting delivery solutions, reducing the viability of such a solution.

This disparity also indicates that publishers feel somewhat constrained in their choices, and they believe they must act, even though they are hesitant to unilaterally abandon these tracking methods. The paradox lies in the fact that publishers anticipate increased addressability, while consumer demands and legislative measures are likely to push for more stringent privacy controls. This juxtaposition underscores the challenge publishers face in navigating the evolving landscape of data privacy and addressability.

AdFixus – How we can solve for these three concerns

Key Insight #1 - There’s a wide eCPM revenue gap between publishers’ addressable inventory and iOS/Safari and unconsented audiences. Publishers’ eCPMs suffer when consent is missing, or visitors use iOS/Safari.

The AdFixus platform addresses this exact issue. Our patented ID solution has no loss of data from any major browser, and we have enabled our publisher clients to reclaim 100% of their browser traffic, making it addressable once again.  

Secondly, we promote a consented, user actioned implementation to ensure that you have captured consent and are able to conform to stringent privacy requirements.  

Our identity solution is deterministic, and first-party by design, it does not leverage browser signals, moving away from fingerprinting and ensuring on-going viability. The publisher owns the ID and we do not collect, store or monetise the data in anyway shape or form.

Key Insight #2 Publishers are optimistic that audience addressability will increase over the next few years, yet with the number of industry challenges it’s hard to see how that will happen.

As mentioned above we can enable our publishing clients to have 100% addressable audiences today.  

IAB have suggested that the industry commands a 25% increase in ad yield for an addressable audience – our clients are realising this additional revenue today.  

Case study - Carsales gains a 300% increase in addressable audience reach to drive advertising and marketing opportunities

Key Insight #3 Publishers are using and testing cookie alternatives that they don’t believe are very privacy safe.

We are seeing strong demand from premium publishers across the globe who are looking to solve for these issues. The AdFixus ID is privacy first and our solution has several key features built into the platform that enables us to be confident in our claim of being privacy safe:

1. We collect zero PII data,
2. We are 100% deterministic and do not collect any data signals from the browser, partners or systems to ‘fingerprint’ a customer’s ID together,
3. We are decentralised and only stored in the client’s browser after a double encryption methodology that has been patented in the US and other countries,
4. We also offer a Match Room that does not consume or use any personal information, enables joint customers (publishers and/or advertisers) to match in completely private and safe environment.

Conclusion

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The industry is seeing a lot of upheaval now. With third-party cookie deprecation and the rise of consumer privacy publishers are looking for solutions to reclaim the lost traffic and make every ad addressable. While they remain confident that this situation will improve, they are not confident in the solutions that enable it. AdFixus provides solutions that generate identifiers and offers activation mechanisms to guarantee compliance with the strictest privacy and data security standards, all while not capturing or monetising consumer data.