Publishers: Direct Relationships & Data Connectivity Need to Go Hand in Hand

On the surface, the narrative around first-party data could feel confusing for publishers.

On the one hand, the future is in first-party data with direct relationships, and gone are the days in which data is unfairly monetised by entities who do not own that data on the open web. Open web (open programmatic, auction, and its common references) has become synonymous with terms like mass leakage, fraud, and flawed infrastructure. Much of this is for good reason, and many now urge publishers to focus only on those direct relationships we all started with 15 or so years ago.

On the other hand, many of the most credible technology providers are building infrastructure that connects that most prized asset publishers are doubling down on to collect, namely our first-party customer data, with open web advertising.

There are aspects of these two things that can feel incompatible or, at least, incongruous. If it is the failing infrastructure of open web advertising that has allowed for the systematic undervaluing of publishers, then is connecting it with rich signals anchored to our logged-in customers nothing but harmful short-termism? There is a well-understood hesitancy among some to connect this data with a revenue channel associated with so much risk and decline.

Our Understanding of Open Web Advertising Needs to Change

Accelerating direct sold relationships built on first-party data and enhancing open web channels with collaborative capabilities on this same data should both be prioritised. Here are three reasons why:

1. Open web advertising is not going away any time soon. This is obvious. Frankly, it makes too much money for most publishers to entertain the idea of deprioritising it, let alone switching it off. Data collaboration capabilities offer a chance to pivot and support a new core component of what open web advertising could be. Connectivity with premium supply offers all the benefits associated with open web advertising, but few, of course, of those associated with a direct 1-2-1 deal between publisher and buyer (unique formats, insight, data, content, expertise, optimisation, etc.).
2. Accelerating logged-in users is great, but the real value for publishers comes when that customer relationship is being leveraged by all parts of an organisation, including advertising. Rapidly scaling logged-in users without subsequently adopting them commercially with your ads team is like storing all your saved cash under a bed. Sure, there’s value in having money under your bed, but you could have so much more, and it doesn’t have to be as risky as you think it is. (Let’s avoid the obvious flaw in this metaphor about how the cash would likely be worth less over time.)
3. The biggest media owners out there are making it clear that building connectivity is vital for their ads businesses. We’re seeing platforms such as Netflix, Disney, Shopify, etc., offer the pipes that enable outsiders to connect and activate their data with these platforms. If it’s an important component for them, then likely it ought to be for us traditional publishers too.

Accelerating direct sold relationships built on first-party data and enhancing open web channels with collaborative capabilities on this same data should both be prioritised

The bottom line is that we can prioritise first-party data and direct relationships while also facilitating data collaboration opportunities via the Open Web. Doubling down on first-party data and those decisions in which you have the greatest autonomy should be a big focus. But one of the requirements of the new era of privacy-oriented ad solutions will be the connectivity we build around these quality customer relationships we’re building our future on.

None of Us Can Do This on Our Own

Relying solely on direct relationships for our future revenues just won’t cut it for most of us. At the same time, as browsers and regulations shift ad fundamentals like retargeting and measurement, advertisers with customer data will look to collaboration infrastructure as the standard for lots of what is currently facilitated by third-party cookies. For so many, particularly those teams specialising entirely in open web activation, banging the direct sold only drum by publishers will fall on deaf ears.

Publishers must recognise that an important aspect to them effectively monetising their open auction opportunities in the future will be in the data connectivity they build.

And we can do this without selling our souls or giving everything away like perhaps we’ve felt we’ve had to in the past. This is not about the indiscriminate sharing of IDs with every Authenticated ID or clean room provider out there. But a balance needs to be struck where we learn lessons from the past (think FB audience pixels, third-party DMP pixels for 0.5% incremental revenue) while recognising the requirements of building a sustainable open web advertising model.

Which Solutions Are the Best?

The topic of ID providers is almost impossibly complex. I recently posted an article on “which you should back,” but the point really is that lumping them all into one category is meaningless. When we think about logged-in customers and connectivity, what we’re really referring to is mainly clean rooms and/or traditional authenticated solutions, although even these lines can be blurred. Check out the IAB's clean room standards for more info, and there’s plenty online about how consented emails are leveraged for open web advertising.

I’ll Finish with Five Simple Recommendations Based on the Above:

1. If you haven’t already, establish a cross-functional team representing legal, marketing, ads, data, and indeed anyone else with shared interests in driving your logged-in customer base. We know marketing has been focused on this for years, but making it a much wider, cross-functional initiative will enable publishers to build a more sustainable business model where everyone is working together (or at least understanding each other’s world).
2. Having done the above, agree on some interdisciplinary KPIs to track and assess success. Sure, marketing wants to double registrations in the next two years, and ads want to deliver half a million in clean room revenue, but what do the combined efforts of your success look like?
3. Build your data collaboration features as close to your core data infrastructure as possible. The fewer hoops you need to jump through to collaborate with an advertiser, the better. It’s that simple. Additionally, make it your business to continually enrich as much of your first-party data with more of the signals you have available to you. Data silos will always exist in large media organisations, but just focusing on bit by bit continuously tying as many signals to your central activation platform will be prudent. The more complete your picture of the customer, the more compelling this will be for insight, activation, and collaboration.
4. Pick partners with low barriers to entry. Those that give you space to test and learn with low fees that grow in line with the success that you hopefully get as the product(s) or demand scales. If the provider brings their own demand too (many do), even better. This as always must be balanced with the degree of control you retain!
5. Make it accessible to sales. This can’t just be something someone from Adops is wheeled out for every time a client wants to know whether you offer any data collaboration opportunities. It also can’t just be that “magic black box data sharing thing” you do. Build an approach that gives enough information for sales that they feel they can really lean into it.

So what?

We must avoid, as publishers, whether consciously or subconsciously, a notion of reserving anything of any value for direct sold relationships only. This is naive. Yes, we’ve been burned by letting our walls down in the past (or frankly, at times, not having any), but a lot of the value in the future of open web advertising will come from data connectivity.

As always, any thoughts, feedback, or disagreements with the above, please let me know either in the comments or over email.