Can “Identity Marketing” Thaw the Cold War Between Brands & Publishers?
Just as publishers were waking up to the fact that half of their traffic is mobile and that mobile traffic is really hard to monetize, Apple comes along and opens the doors for ad blockers. As if monetizing mobile was not challenging enough, large portions of publishers’ assumed human audiences are now blocking the ads that are intended to monetize visits -- whether on desktop or mobile devices.
Adding to this challenge is the fact that half of some publishers’ traffic appears to be “robots.” Robots aren’t confined to desktop or mobile, they’re just robots and they love ads more than humans. The robots that visit publishers’ sites never use ad blockers: They eat ads for breakfast.
Who doesn’t love an ad eating robot? Advertisers.
But Who Cares About Effective Digital Advertising?
Everyone. Whether they like it or not, everyone cares about advertising. Everyone has an opinion about digital advertising. But like politics, there are often more than two sides to an issue.
Advertisers who use demand-side platforms (DSPs) probably couldn't care less about publishers’ problems with ad blockers. After all, advertisers who bid using DSPs likely don’t pay for ads that are blocked and, besides, ad blockers may actually improve campaign results by limiting ads to those most receptive to them. In effect, ad blockers reduce fraud for advertisers and their agencies by not wasting spend on people who wouldn’t ever click.
To counter ad blocking technology, an increasing number of publishers are using native ad strategies in order to trick both humans and robots into not blocking or even clicking on the ad -- depending on who the visitor is. Without traffic and ads, most online publishers have negligible (if any) revenues, because ad supported models have been enshrined at the expense of old fashioned subscriptions.
The ad-blocking craze, if it can be called that, clearly leaves ad-supported publishers in a precarious position. Estimates are that publishers are going to earn nearly $22 billion less in 2015, and adoption of mobile ad-blocking is only going to make it harder to monetize the faster growing category — and future — of publishers’ inventory: your omnipresent phone.
Why Can’t This Be Solved?
Since the “viewability wars” began in 2012, advertisers haven’t trusted publishers. According to a report released by Distil Networks, ad fraud takes $1 of every $3 spent on advertising. Let’s be clear: Publishers, out of fear of circumvention, have not been comfortable sharing their user data with agencies and advertisers for fear of being disintermediated, and frankly most digital ad agencies wouldn’t know what to do with a customer file anyway – that’s been the province of email marketing providers for the last two decades.
Which leads us to where we are today: a standoff. Instead of what is needed to move forward: Détente.
Maybe It’s Time to go Back to the Future
In the “old days,” publishers were accountable to advertisers and had to report their audience numbers through accreditation processes: ABC and BPA for B2C and B2B publications, respectively. Verifiable “subscribed” audiences were long the basis for rate cards, and discounts from the rate card were offered to advertisers who committed ad spend up-front.
The concept of a rate card and a verified audience has largely been tossed to the wayside in the era of RTB, which is digital speak for “pay as you go.”
Is it time for publishers to start verifying and counting their audiences? How could this be accomplished in a modern digital monetization environment?
Enter the Paywalls
Publishers with paywalls gather the most valuable customer data (email addresses) from their biggest fans (subscribers). By having this so-called “CRM data” which identifies a subscriber irrespective of the device the subscribers are using, the publisher has an asset the advertiser understands, wants and needs: real verified people. In a mobile world, where people juggle three devices a day, we all know that attention is fragmented. The thing that bridges these devices is identity — in the form of login data.
Logged in identity is the common element that can bind publishers and advertisers: Advertisers want to find their customers where they are paying attention. And Publishers exist to create valuable audiences to monetize.
Advertisers need the valuable CRM data (email login data) that publishers have. And publishers need to build the trust that their audience data matches the desired audience of the brand.
Implementing login-based paywalls — costing nothing more than a valid email address — is a simple way for publishers and advertisers to align their interests and activities around a new kind of marketing: “Programmatic Identity,” the process of marketing to known audiences on third party properties.
How Can Programmatic Identity Bridge the Gap Between Advertisers and Publishers?
In order for advertisers to leverage their valuable purchase data online, it’s critical for publishers and advertisers to work together to create standards around “people-based marketing,” the process of distinguishing humans from robots and reaching people when they are logged into publisher sites.
What Kind of Standard Are We Talking About?
Simple customer file audits would be a start. For B2C publishers, it can be as simple as a reporting on the size of their email list and the percentage of that list that logs in to a site or opens emails any given month. Files can be matched to 3rd party DMPs to produce audience profiles. High login frequency determines site quality. Lower percentages of random non-logged visitors define audience loyalty. Robots don’t sign up for sites, open emails, and click on ads.
As logged-in audiences become the norm for publishers, the next step will be ads sold and bought based on identity matches, much like Facebook and Twitter operate today with their Custom Audience and Tailored Audience services. Why should publishers sell their audiences using outdated cookie and site targeting technology when identity-based advertising is already proving to be more effective?
People based marketing, as many pundits have theorized, will be the future of the digital advertising industry: delivering consistent messaging to a consumer irrespective of device, based on unwavering and authenticated identity.
Let’s Not End Up Like Dr. Seuss’s Lorax.
Publishers and advertisers working together can dictate the future of people-based marketing, but they must align soon, before the time comes when there is no inventory to sell and no place for ads to run.
The Cold War ended not with a bang, but a whimper. The Soviet Union ushered in an era of glasnost and cooperation with the United States, which led to an era of peace and prosperity that, at one point in history, seemed impossible.
What’s the first step towards building a sustainable détente? Publishers and advertisers can adopt login-based paywalls that block out robots, build publisher CRM files, and provide advertisers with a viable and verifiable audience to reach their shared audiences wherever they are paying attention – which is, as we all know, increasingly in mobile.
As president of LiveIntent, Dave Hendricks devises corporate strategies and tries to simplify marketing language. Before growing LiveIntent, Dave was executive vice president (EVP) of operations at PulsePoint (then known as Datran Media), where he worked alongside LiveIntent chief executive (CEO) Matt Keiser and ran Datran's ESP StormPost (nka PostUp). A member of the founding executive team at ExperianCheetahMail, Dave began his email adventure at Pioneering ESP MessageMedia. Dave was named one of Business Insider's "Top 100 Technologists" in 2011 and Alley Watch claimed he was one of 15 people "changing advertising" in 2014. He plays electric guitar and you should follow him on Twitter @davehendricks.