Data: A Series for Today's Online Landscape!
Let’s take a trip down memory lane, shall we? The year is 1980, and you're using your landline to dial into Compu-Serve to read your newspaper online for the first time. Fast forward 14 years, when you see your first ever digital ad campaign from AT&T (“You Will”), which predicts the future of the internet (among other things). During this time, the cookie is invented to track users online. Why? To make advertising more relevant among other things. Fast forward to 2016 and beyond, and the world is looking at GDPR and CCPA as a way to protect themselves from the invasiveness of the cookie and how companies track their once illusory anonymous behavior online. Fun journey thus far right?
During this time, the cookie is invented to track users online. Why? To make advertising more relevant! Fast forward another 22 years as the world looks at GDPR and CCPA to protect itself from the invasiveness of the cookie, and the many means by which companies track their once illusory anonymous behavior online. Fun journey, right?
Data has become fundamental in recent years for a variety of reasons, depending on the viewpoint you choose to look at it from. Big Tech companies (like Google, FB, Amazon, etc.) have built their entire businesses on knowing ANYTHING and EVERYTHING about their users. Wonder why this kind of meme exists?
UPS: “Your Package is in your city, on a truck driven by Mike. It will arrive on your doorstep at 6:27PM today.”
FEDEX: “Your package is coming. You’ll get it when we get there.”
USPS: “What package?”
Amazon: “We are already inside your apartment. Check your bathroom.”
Facebook: “We know you were thinking about getting a toaster yesterday. Here are 20 ads for a toaster.”
There is tremendous value in knowing this kind of information. Advertisers pay MILLIONS of dollars a year to leverage someone else’s data (3rd Party Cookies) with hopes of getting in front of the right consumer to build their brand or make a purchase. Publishers arguably have the best source of data anywhere, and are slowly putting strategy in place to capture it or take action on it. Unbeknownst to the reader/ consumer, there is a power struggle that occurs behind the scenes on a daily basis among all of these parties.
Publishers have 3 main ways that they can use data: email capture, paid subscriber acquisition and/or advertising. Email is one of, if not the strongest marketing channel for a publisher, yet most do not give much thought to it. An email capture is the beginning of the conversion process from anonymous user to paid subscriber (if that is the business model of a publisher). Once an email is captured, the publisher now has a great piece of 1st party data in its system to build upon, and can foster a personal relationship . These additional data points will allow for trust to be built and show value, so that a publisher can then ask for the reader to become a paid subscriber/ supporter (which comes with benefits, in more cases than none). The final way that all of this data will be used on site is to build out segments for the purposes of advertising to ensure higher CPM’s will flow into the site, and all advertisements will be highly relevant. Mind you, this is an ideal scenario, and the reality is a much uglier process.
Advertisers use data to ensure they can increase brand awareness or get their potential consumer to make a purchase of some kind. They, too, will ask for email which comes with a reward (15% off, Free Shipping, etc.).
Once they have that email, they are free to track your behavior on their site and through the web (for the time being with 3PC still in play) and entice you to not leave those wonderful items in your cart. This is a similar conversion funnel as that of a publisher and all the data points it can get on a customer and build upon that will allow them more sales. Again, this is an ideal scenario. In reality, this process is extremely flawed and in most cases, annoying to the end user.
Lastly we have Big Tech companies (Google, Facebook, Amazon, etc.). These companies have built their empires on data. When I say data, I mean they know EVERYTHING and ANYTHING about their users and will then use this to dictate the terms of how ads should be viewed across the internet (Coalition for Better Ad Standards), how items should be purchased, how individuals should be tracked online, as well as what kind of tech should be used. Almost every single piece of privacy-related legislation that has come up in the last 5+ years involved one of these companies. They will force publishers and advertisers to use their platform and play by their rules, sometimes to the detriment of the publisher or advertisers business. This is the power data has given them.
In future articles, we will look at the individual categories of Publishers, Advertisers and Big Tech and their realistic relationship with Data in the online ecosystem. The articles will delve into potential strategies that can be employed, mostly for Publishers and Advertisers to gain some power back in the ever changing online landscape.
Rich Bobé, Vice President, Publisher Development