IAB Fit Gap Analysis Ignores Publisher Opportunities, Ongoing Challenges for Related Website Sets via 5 Domain Cap

The IAB’s 100+ page report released yesterday on the “Google Privacy Sandbox 'Fit Gap Analysis ’” is filled with a variety of interesting statements from ad tech experts trying to navigate the complexities of the privacy sandbox.

I haven't finished studying the entire document / all concerns, but while initially some details ring true, large sections feel like folks complaining about not being able to continue deeply invasive legacy behaviors that are purposefully being deprecated – not accidentally being broken.

It reads like a document created via dozens of random suggestions from mostly ad tech intermediaries, and personally it feels like almost no publisher groups or serious publisher feedback is being gathered and distributed. The opportunities for publishers to regain control of their monetization processes are being framed as missed opportunities for intermediaries to inject more ad tech taxes.?

Furthermore, in the IAB report there is one brief section about the Related Website Sets , which is purposefully integrated into Chrome right now and is a permanent addition to the privacy sandbox built to empower specific types of publisher groups and tech solutions – the only mention in the IAB report I've found is:?

"Sandbox does support 1st party sets for publishers who own multiple websites, with a maximum of 5 related sites (as defined in the Sandbox) but the requirement that a creative is associated with an Interest Group implies that Interest Group owners will be demand partners, not website owners (unless the Publisher has created their own Interest Group to sell their own inventory)."

The IAB are missing an opportunity to advocate for an uncapped RWS list so that Google isn’t arbitrarily deciding that publisher groups can be 4 websites + 1 service site, and the IAB are apparently approaching RWS as though it isn’t 100% unrestricted and permanent 3rd party cookie access between domains you own and control – and ignoring that multiple publisher groups have already gotten domains approved for RWS and live in Chrome right now for “frequency capping” + IP address tracking (potentially for ad targeting).

For folks just tuning in -- some of those purposes above may seem to contradict the intended goals of the privacy sandbox -- but it's important to recognize that the privacy sandbox is not meant to impact 1st party experiences -- only 3rd party data flows -- even if they are both inextricably intertwined within publisher monetization schemes.

Is it possible that RWS will break the privacy sandbox promises due to abuse? Absolutely. But that’s also why it’s a public list (live here on Github ) and organizations can be audited / held accountable for problematic behaviors across their sites.

Inclusion in RWS doesn’t mean a publisher can ignore privacy frameworks – it merely provides opportunities for specific types of legacy behaviors within an owned and operated network, and empowers publishers instead of intermediaries.

Is the IAB ignoring the 2019 Google Experiment "Effect of disabling third-party cookies on publisher revenue"?

I remain most concerned about the 2019 report by Google, “Effect of disabling third-party cookies on publisher revenue ” which found huge revenue drops for publishers after 3rd party cookie deprecations:

"We disabled access to cookies for a small fraction of randomly selected users (the treatment group). We observed that for the top 500 global publishers, average revenue in the treatment group decreased by 52%, with a median per-publisher decline of 64%"

The report continues:

"While a handful of publishers have a small revenue loss (<10%), the majority of publishers have losses of 50% or more, with some losing over 75% of their revenue."

If those revenue drops don’t have publishers and publisher groups worried about their futures, the “Additional Reflections” from the Google researchers should crystalize that there is work to be done for publishers if they care about end-user experiences and the future of their business:

"We only measured first-order effects in our analysis. Removing third-party cookies could have second-order effects on publishers, such as?1) decreased spend by their advertising clients as a result of lower return on investment from non-personalized ads and moving budgets to different channels, and?2) increased overhead costs as a result of publishers having to adjust their business models when third-party cookies are disabled."

Publisher groups need to be investing money now and not later into this process. Waiting really isn't an option.

Google researchers continued by explaining the frequency capping and ad / interest group targeting problem:

"Another observation from the randomized experiment: users expressed greater dissatisfaction with non-personalized ads because they were not interested in what the ads were showing them. Users can choose to stop seeing an ad by clicking on an 'X' that appears on a display ad to close the ad. We saw a 21% increase in user clicks to close an ad by the treatment group (who encountered non-personalized ads). When prompted with a list of reasons why they wanted to stop seeing an ad, there was a 21% increase in user clicks on the reason “Not interested in this ad” and a 29% increase in user clicks on the reason 'Seen this ad multiple times'."

There isn't time to complain about non-ideal solutions

My understanding of the 'problems' created by the privacy sandbox: poor targeting + frequency capping problems (many other niche issues) – some of those issues can be slightly improved by Publishers 1) Owning/Creating their own Interest Groups for their web visitors and 2) Using Related Website Sets and existing sandbox APIs to integrate frequency capping across O&O publisher sites / interest groups. Will these publisher groups need tons of potentially external ad tech support for this 1st party RWS optimization scheme? Sure. Yes. Absolutely. New ad tech tax incoming.

Now does that also seem too simple? Sure. I’m over-simplifying the solution for publishers, but I’m also spit-balling because there aren’t a ton of folks looking at what experiences break with 3rd party cookies, what new features are available within the privacy sandbox, and how to get ramped up with RWS testing to prevent the horrifying potential publisher revenue drops from bad ad experiences and poor interest group to creative targeting.

It doesn’t seem like the IAB is even thinking of solutions for publisher groups or speaking their concerns validly to the industry, and the lack of advocacy around the 5 capped domains within Related Website Sets essentially proves that the IAB doesn't have their eye on the ball.

RWS isn't the only solution in the privacy sandbox, and it certainly isn't a solution that works for all players within the ad tech ecosystem -- but it could work for publisher groups in ways that make them stronger and help them to get through some of the big changes ahead.

One of the worst case scenarios for the 3rd party cookie deprecation would be even more major news organizations going bankrupt. And this isn’t just a hypothetical. The 2019 experiment from Google found:

“When we restrict our analysis to publishers categorized in the News vertical, we saw an average revenue loss of 62% with a median loss of 60%.”

If we saw revenue loss like this broadly across the news industry, it would make current newsroom closings and layoffs look quaint. If publishers and publisher groups don’t wake up to the impending 3rd party cookie deprecation and start focusing on solutions available to them like Related Website Sets, and stop waiting for big ad tech and folks at the IAB to come swooping in with solutions, we’re all going to be eating the impacts from this next year.

Conclusion: Related Website Sets "5 Domain Cap" is Bad for Publisher Groups

Why is the Google Chrome Related Website Sets list still capped at 5 domains?

Why should Google set the total number of websites that a publisher group can own and operate?

Didn’t the industry learn from the Google GDPR “Funding Choices” disaster that publishers are always going to be more in control and more empowered when data controllers like Google aren’t arbitrarily capping the size of their business or number of partners they work with??