Data Leakage Devalues Publishers' Biggest Asset -- Their Audience
I’ve worked on countless media kits. Every one of them talks about how well the publisher knows its audience. Big Data says they know your audience, too. They tell advertisers not to waste money paying a premium to reach buyers in your magazine or website, because their scary data analytics can pinpoint buyers even better.
Big Data takes many forms in B2B, including Google and LinkedIn. The now ubiquitous ad exchanges, aka DSPs (demand side platforms), are an extension of this. These are veritable bazaars where the transactions for most programmatic ad buying and selling take place. My vision is that of the old, stereotypical stock trading floor with men in short-sleeve white shirts and ties calling out offers and orders – except in DSPs you have algorithms working in real time.
Years ago when I ran a B2B ad network, ads were sold on a waterfall basis: You knew the floor price each network offered and set up your ad server from highest offer to lowest. Usually Google Adsense was last in line. As an impression became available on your site, the ad server would make calls to each network in turn. If the highest one did not have an ad to fill your webpage hole – in microseconds – it went to the next lower offer and the next. Google would often fill that spot as a last resort, but you got paid based on CPC rather than CPM.
Now programmatic accounts for nearly 80% of all online ad buying and selling. The nature of B2B online publications, most of them being too niche to generate big traffic (as opposed to general business media), creates a situation where the majority of B2B publishers sell direct, avoiding programmatic and DSPs entirely. However, it is foreseeable that your biggest advertisers may push you to sell programmatically whether you want to or not.
How Data Can “Leak” from Your Website
This is where the playing field tilts to give you a disadvantage. “It’s getting worse than you might imagine,” said Prescott Shibles, Senior Vice President, Data at B2B publisher Randall-Reilly and a leading industry expert. “There are now new ways of gaining your audience data without an ad even rendering. In order to get a bid on your inventory, you have to give up some data about who is on the other side of the ad impression. That helps the system decide what the ad is worth; but it also gives away nuggets of audience data to many, many players in the adtech ecosystem.”
Todd Garland, CEO of BuySellAds.com, explained the underlying process known as header bidding. To communicate with the DSPs that are willing to buy ads from you, you must place a “header bidder script” on your website. Within this script, an “adaptor” is installed for each exchange that you allow to bid on your ads.
Rather than the waterfall method with predetermined price levels, each time an individual ad call is made, the multiple adaptors go to work sending data about that site visitor to the DSP’s database. Shibles said, “It could be something as simple as ‘Miami Dolphin fan’ and ‘NFL Gamepass Subscriber.’” These DSPs gladly take the data you can provide about each of your audience members. Even if they do not offer you an ad in return, they save your data.
This is data leakage. In effect, you are supplying your Big Data competitors with a richer and richer view of your audience. You are giving them the tools to do exactly what they say, making your unique audience increasingly less specific to your publication – commoditizing it.
Ad Exchanges Are Building Their Own Audiences
It doesn’t stop there. Most ad exchanges you work with are using those adaptors to place cookies on the browsers of your readers, says Garland. With that they can “fingerprint” your users. The combination of an IP address and the user agent in their browser creates a unique identifier. If that user is already in any particular ad exchange database, new data points are being added to their profile. If not, then a new profile is created. Not only are you obligingly passing a snapshot of each user during the ad call, you open a back door of data leakage to each DSP ad infinitum.
These ad exchanges are likely buying, and appending, even more data to each record you are now helping them build. Plus they are gathering more leaked data points from other publishers. By definition, they now have more data than you do about your readers. Almost certainly they have more data-crunching firepower than you, a mere publisher. Arguably after a month or three they have also aggregated essentially all of your users.
It would be unheard of for such a data aggregator to come after your publication head-on. They are not going to suggest advertisers buy the audience of Zookeeper Digest instead of buying direct from the publisher. Rather, they will simply sell access to all zookeepers for less than that publisher. And yes, they may well have more zookeepers than you do on their list. At least in their opinion.
The Need for Data Protection Is Growing
Garland’s BuySellAds is a strong advocate for data protection. They enable publishers to expand their reach without sacrificing the digital privacy of their readers. They offer ads on websites like yours based on your type of audience, available impressions, and prices you have set. The difference is they are not touching your data and are instead creating a direct ad-serving relationship between you and the advertiser. Like those media kits I have worked on, BuySellAds “believe deeply in curated audiences.” Marketers are then guaranteed they can reach those audiences without having to rely on suspect targeting methods.
Todd Garland wanted to be sure and note he is not saying purveyors of ad networks are evil people. I’m (pretty) sure he is right. But there is no doubt they are after your ad dollars, so I’ll let you characterize them any way you prefer.
How bad a problem is this? Respected tech angel investor Esther Dyson told Mike Azzara who writes for MediaPost, “The advertising community has been woefully unforthcoming about how much data they’re collecting and what they're doing with it. And it’s going to backfire on them, just as the Snowden revelations backfired on the NSA.” One can only hope.
Andy Kowl is a journalist and entrepreneurial publisher with more than 30 years developing, marketing and growing publishing companies. He is senior vice president of publishing strategy for ePublishing Inc., the leading enterprise publishing system (EPS) provider which manages content, audience data, workflow, newsletters and e-commerce for hundreds B2B online publications. He helps publishers increase reader engagement and response by integrating behavioral data with contextual content, and shows them direct ways to monetize the results. Andy writes the B2B Beat blog for Publishing Executive magazine. His background in B2B includes publishing, editing and/or owning magazines and information products covering specialty retail, horse breeding, real estate, credit unions, Wall Street compliance and wireless technology.