Month: April 2022

With the introduction of iOS 14, users were notified that they could opt out of being tracked for targeting across apps and other sites. This tracking is done via a mobile identifier called the Identifier for Advertisers (IDFA) which is crucial for advertisers to know whether someone bought an item or downloaded an app after they saw an ad that promoted it. As more people opted out of sharing those identifiers, increasingly bigger gaps were created in data for marketers.

But they didn’t immediately feel the impact. The changes rolled out slowly, given Apple announced iOS 14.5 in late April but didn’t push users to upgrade until late May when iOS 14.6 was released. So it took time for people to actually download iOS with the ATT prompt. By the end of June 2021, more than 77% of iOS users had updated their systems. At present, that figure has dropped slightly to 75% and new operating systems have since been released. Per eMarketer, 37% of US-based iOS users opted-in to tracking via the ATT prompt.

In the first few months of Apple’s actual crackdown, return on ad spend and cost-per-acquisition numbers weren’t anywhere as good as they used to be, according to Freddy Dabaghi, svp of media at MMI, a Texas-based, full-service agency, who added that the agency, which serves clients like Microsoft, Olay and Amazon, ended up spending more money or more time running campaigns to glean some learnings on performance.

As Dabaghi put it: “Attribution is always going to be the million-dollar question.”

Wholistically, marketers’ budgets have moved away from Apple in light of the update. In early February 2021, eMarketer reported that marketer budgets were split relatively evenly between iOS and Android operating systems, 43.84% of ad spend went to iOS app install campaigns and 56.16% went to Android. Apple’s share of budget dropped to less than 30% in June, just a few short months into the privacy crackdown, sending Android’s share of budget to 70.29%, according to the report.

The trend is a reflection of advertisers fearing less data would mean poorer ad performance. Early reports made it seem as though the changes rendered in-app ads worthless at large, but often they weren’t, according to Jordan Maddocks, director of strategy and analytics at Gupta Media.

Prior to Apple’s crackdown, Fender, a Gupta client, was apprehensive about scaling on other platforms like TikTok or YouTube, where attribution differed from the precision offered by Facebook and its products. The changes, however, forced the advertiser to reconsider and they “loosened up with some of their attribution [return on ad spend] targets,” said Maddocks. In turn, ad dollars were rebalanced across platforms beyond Facebook to include YouTube and ultimately, the total spend on advertising vs. the amount or revenue Fender was making from acquiring new users improved, according to Maddocks.

A push to diversify

ATT gave the industry another chance to reconsider where and how media dollars are spent and caused ramped-up efforts to diversify media spend.

“Overall, we saw a lot of the costs were much more expensive on [Facebook] and we were seeing less effective clicks, conversions, [return on ad spend], [cost per acquisition] or whatever we’re optimizing to work,” said Dabaghi, who did not provide exact figures.

Some channels raised prices which heightened the issue. In Q3 of last year, at the height of ATT changes, CPMs on Facebook averaged around $3.85 according to Gupta Media’s live Facebook CPM tracker. Those figures have remained steady, spiking at certain times of the year, including around the holiday season, reaching just over $7 at one point. Pre ATT, in Q2, those figures averaged $3.29.

To describe the overall impact of iOS 14 on the advertising industry, Maddocks said essentially, there are various courses of action a shopper can take when faced with an ad. With the privacy changes, not all of those actions are being reported as they used to. “You have to be able to look at other ways to get a sense for what the impact of our advertising is [having],” he said. Meaning that advertisers, including Fender, will need to look at overall consumer trends.

Lemonade out of lemons

For the last year, advertisers have been taking the lemons Apple’s crackdown has doled out and tried to make lemonade.

When iOS 14.5 was first enacted, Brandon Biancalani, head of paid advertising at social agency Modifly, said client accounts that previously performed well began to struggle with KPI consistency. The California-based agency has worked with clients such as Super Coffee, Celsius fitness drink and Beam CBD.

“Across the board, we noticed holes in our data, which oftentimes painted a different picture than what we found looking at the bottom line (artificial results),” Biancalani said in an email. 

To fill in these gaps, Modifly leveraged attribution platform Wicked Reports to create a more comprehensive view of customer journeys, allowing the team to attribute and adjust paid media quickly. The team also put an emphasis on pursuing more varied creative, including more video ad formats. Per Biancalani, it didn’t solve the base level problems that iOS 14 created, but it did give advertisers more places to look for learnings about ad performance.

With the lack of data and learnings, advertisers are having to pull more levers to squeeze out reports on ad performance. Per Biancalani, that looks like creative insights and testing plans to make up for the data gap. 

“Banging on the same doors with that same single image graphic and relying on a slot machine algorithm clearly does not cut it anymore,” he said. 

Maddocks at Gupta Media made similar comments, noting that those levers also look like tapping various digital performance channels.

“In an environment where there’s an imperfect attribution, and the tolerance for a higher CPA was there, we were able to scale up on these other channels,” Maddocks said. “It made us come back, look at things more holistically. It changed the way people perceived digital advertising.”

That’s not to say that advertisers’ initial panic over the changes wasn’t worth the fuss. The first quarter was costly and chaotic, according to media buyers. Eventually, however, the panic turned to pragmatism. 

Holistic approach

For many advertisers, digital advertising boiled down to be a tool exclusively for conversion at one point. Per media buyers, metrics like brand awareness, brand lift or audience growth were factored into the bigger picture of advertising success. The changes pushed the industry to take a more holistic approach. Not only diversifying media spend, but also making room in their reporting for a broader set of KPIs, including metrics like brand lift and brand awareness, to get a better understanding of a customer’s journey.

“Marketing is an art, and right now we’ve moved back towards impressionism vs. realism, where the constraints of fewer strokes force us to focus on the whole rather than the detail,” Maddocks said via email. “How do we drive overall brand lift, and what do our efforts do for LTV [lifetime value] are an even bigger piece of how we report post-ATT.”

As more data privacy measures are slated for the near future, Dabaghi said it’ll be a race to find first-party data and other creative solutions.

“Some of these changes will inhibit some of those quick online, make-a-ton-of money schemes. But brands that are going to be in for a while, it’s just a little bit of a hiccup,” he said. “They’ll get through this as we’ve seen with other challenges and disruptions in the industry.”

— Seb Joseph, Digiday senior news editor, contributed to this report.

Half-baked

The key hits: 

• The New York Times is taking a “conservative” approach to assessing potential solutions to the third-party cookie exit.
• The Atlantic is “fully prepared” for the demise of the third-party cookie and has not opted into any data consortium. 
• Daily Mail is expecting to use a mix of solutions and has already seen a 69% increase in programmatic revenue from Q4 2021 to Q1 2022 after starting to use a probabilistic data alternative to third-party cookies.

A little more than a year before Google officially starts to phase out third-party cookies in its Chrome browser — unless it delays yet again — publishers are facing the approaching deadline amid an unsettled ad tech and privacy landscape.

The publishers most confident in their post-cookie preparations seem to be the ones going it alone. But not all media companies, particularly those without a strong subscription business or shallower first-party data set, are awarded that luxury. And those latter publishers are feeling less prepared at this point. 

The Atlantic and The New York Times are two publishers sitting relatively pretty thanks to their respective subscription businesses and the corresponding first-party data sets those businesses provide.

“We are fully prepared for the cookie apocalypse,” The Atlantic CEO Nick Thompson told Digiday a couple weeks ago. “We have a strong, cohesive, well-organized plan to transition to first-party data that emcompasses our live events, our advertising, our consumer business and our data science team.” 

The New York Times, too, seems very secure in the ability its first-party data has in driving its advertising business forward. The publisher has even taken a hard stance against vendors trying to swoop in and take some of the share of the market that media companies are in position to control with their datasets in a post third-party cookie internet. 

“We have a saying, ‘What happens on The Times stays on The Times,’” said Lisa Howard, global head of advertising at The New York Times. “We’ve been on this little exploration of our own proprietary data products and I think we’re bucking the trend a little bit there in that we don’t work with any third-party partners on the ad targeting side. We’re building it all ourselves.” 

But other publishers are seeking strength in numbers.

The third-party cookies’ removal from all major browsers may benefit publishers by making advertisers more reliant on their audience data for targeting purposes. But given the choppy waters of the current ad tech and privacy seascape as well as the scale challenge of clean rooms as a post-cookie solution, publishers without big enough data boats could benefit from being part of an industry-wide armada. 

“Industry standards should be adopted as much as possible,” said Jeremy Gan, svp of revenue operations at Daily Mail. “Publishers with resources should band together and compare notes openly in terms of what is working and what is not” when it comes to available solutions.

The safe harbor of in-house solutions

Some publishers are faithfully keeping to the confines of their own first-party data and hoping that that will be enough to sustain a successful programmatic advertising business in a cookie-less future. 

While The Atlantic does work with one outside vendor, revenue management platform Carbon, “we have not joined any sort of consortium of data collection across other media brands,” Thompson said. 

In last week’s Media Briefing, I spoke with Thompson about the survey strategy his team was taking to collect first-party data from subscribers and newsletter readers that was focused not on geographical information and identity, but on people’s jobs and interests. “It’s one of the top priorities of the company right now,” he said, because the segments of readers drawn from this data are valuable for advertisers looking for the brand association with The Atlantic name. 

The Times is investing in producing proprietary tech, but mainly this is due to not finding an existing solution that’s appealing enough to incorporate into its advertising business. 

“We haven’t seen anything that we have fallen in love with and are getting behind at this moment. But we’re watching, and I think it is going to take a little time for people to figure out what works,” said Howard.

The holding pattern of potential privacy regulation

At The Times, Howard is also keeping privacy and regulations top of mind, which has led to a very “conservative” approach in how much data is collected and the means by which it is collected. 

“There’s a lot that we could do, legislation aside. There is still a lot that we could do to track people, whether it’s allowing for pixels, or tracking people from site to site, whatever, [but] we choose not to do that at the Times, because we’re really trying to be on the right side of this thing,” she said. 

The reality that more privacy regulations, like Europe’s General Data Protection Regulation and the California Consumer Privacy Act, will get passed in the coming months is what’s keeping Daily Mail’s Gan from claiming as much confidence in his publication’s preparedness level, compared to his counterparts at The Times and The Atlantic. 

“We don’t know what the privacy regulation landscape will look like in 12 to 15 months, so that’s a huge factor and that determines the type of solution that publishers would eventually invest in and buy into,” he said. 

Bridging the gap with probabilistic data

The third-party cookie’s demise is splitting publishers into haves and have-nots: Those who have first-party data, and those who have not yet accumulated enough first-party data. “The goal for every publisher [will] eventually be deterministic, [which] is creating that one-to-one relationship with the end reader. But the reality is that not every publisher can do that [right now],” said Gan. 

In the interim, since last September Daily Mail has been using 33Across’s Lexicon technology that uses probabilistic data collected from about 800,000 websites to predict audience behavior. This helped the publisher better understand the 65% of Daily Mail’s audience that visit its site using cookieless browsers — such as Apple’s Safari, which is a top browser among audiences coming in from mobile devices. 

From this, Daily Mail’s programmatic revenue increased by 69% from the fourth quarter of 2021 to the first quarter of 2022, according to the company. Gan declined to share hard revenue figures.

But 33Across’ Lexicon technology is only one piece of Daily Mail’s cookie apocalypse preparedness plan, and there are some solutions in the market that are more appealing to Gan’s team than others from a success standpoint, he said. The nature of the publication is going to put limits on which solutions he gets behind, however. 

Gan used Daily Mail’s breaking news coverage as an example because putting important news behind a paywall and growing a subscription base is “quite difficult,” he said.

Data clean rooms might cause more confusion than comfort

One of the larger frustrations voiced by publishers at the Digiday Publishing Summit in Vail, Colo., in March was that there were too many data clean rooms to make publisher participation sustainable and worth the hassle. 

“Maybe clean rooms are the solution — everybody’s talking about them — but I don’t know yet,” said Howard. “You can have better performance on the contextual side and so the question is not, ‘What is the bare minimum that we have to do in order to get by and not get our hand slapped?’ It’s more than that. It’s about what is actually working and what do we need to do just to get the performance?”

Gan agreed that it doesn’t appear clean rooms will be the solution for all publishers, especially those without a subscription or membership business in place.

“There are some publishers that are great at acquiring subscribers and that will allow them the opportunity to try solutions, such as clean rooms, because clean rooms require that log-in and that [personally identifiable information], which would then create that handshake with the end advertiser,” said Gan. “But if I don’t have enough PII, then it’s kind of worthless, right? I can’t take an email address and go and try and match with an advertiser in a clean room.” — Kayleigh Barber

What we’ve heard

“If someone is going to convert, it takes about four months to go from Daily Brief reader to becoming a member.”

— Quartz CEO Zach Seward

BuzzFeed Inc.’s upfront presentation gets more Complex

In its first upfront presentation since acquiring Complex Networks last year, BuzzFeed Inc. revealed how it is folding the publisher into its pitch to advertisers. BuzzFeed’s presentation was held at The Times Center inside The New York Times’ building on Wednesday, April 27 — a week before this year’s four-day NewFronts event held by the Interactive Advertising Bureau kicks off on May 2. — Sara Guaglione

The key details:

• The Lighthouse first-party data solution now includes data from Complex Networks.
• A new festival is coming this fall, featuring BuzzFeed Inc.’s food verticals, including Complex’s First We Feast.

• BuzzFeed’s creators program is now called Catalyst and includes the roster of creators and talent at both BuzzFeed and Complex Networks.
• BuzzFeed will offer a new branded vertical video ad product for social platforms.

Other announcements at BuzzFeed’s upfront included a new home vertical for Tasty coming this summer; the relaunch of HuffPost Voices; and a new BuzzFeed News award for Gen Z leaders in areas of sustainability, activism, innovation and business, called “19 Under 20.”

Lighthouse

BuzzFeed’s suite of data products now also provides advertisers with first-party data from Complex Networks’ verticals. While advertisers had access to data from BuzzFeed and HuffPost, within the last week data from Complex Networks has been integrated into Lighthouse’s tools, meaning it now includes audience data from more than 125 million “food lovers, sneaker heads, young parents, luxury shoppers – you name it,” BuzzFeed CEO Jonah Peretti said during the presentation.

Food festival

BuzzFeed Inc. is combining BuzzFeed’s food vertical Tasty and Complex’s First We Feast for a live event called “Eat Your Feed Festival.” The event, which is scheduled to take place this fall, will be a “traveling food experience,” where attendees can “watch their favorite shows in person” and meet creators, said Hannah Bricker, gm of Tasty & lifestyle at BuzzFeed.

Catalyst

BuzzFeed’s creators program, which currently features more than 100 creators, is now called Catalyst and incorporates creators and talent from Complex Networks. The program helps creators secure branded video deals, sell ads programmatically against their videos and generate affiliate marketing revenue. The company’s goal is to double the size of BuzzFeed Inc.’s creator network this year.

Upshots

The new branded video product is an evolution of a previous one called BuzzCuts, which cut down brands’ videos and optimized it for platforms like YouTube. For Upshots, BuzzFeed will produce vertical videos for brands designed to run organically on platforms including TikTok, Instagram Reels and YouTube Shorts. Any advertiser will be able to pay BuzzFeed to produce these videos.

Numbers to know

$8.2 billion: How much ad revenue Google generated from selling ads across its network of third-party sites and apps in the first quarter of 2022.

>150: Number of employees working on The New York Times’ Opinion section, which has doubled in size since 2015.

$44 billion: How much money Elon Musk has agreed to pay to acquire Twitter.

What we’ve covered

How Apartment Therapy is using commerce to link the virtual and in-person elements of its hybrid Small/Cool event:

• 3,000 people attended the in-person event in its first weekend.
• Apartment Therapy makes money from the event through a mix of sponsorships and commissions from sales.

Read more about Apartment Therapy here.

How Twitch streamer Blizzb3ar quit his job to become a full-time creator:

• During the pandemic, Blizzb3ar started more seriously live-streaming on the Amazon-owned video platform while working a day job for military contractor British Aerospace Engineering Systems.
• The Digiday Podcast interview with Blizzb3ar is the third installment in a four-part series focused on creators.

Listen to the latest Digiday Podcast here.

What happens when the monetary appeal of publishers’ NFTs isn’t enough?:

• The secondary resale market for Forbes’ recent NFT drop hasn’t been robust.
• There has been a slowdown in the broader NFT market.

Read more about publishers’ NFTs here.

Publishers seek reader payments without the pressure of a paywall:

• Quartz has joined Vox and The Guardian in moving to a non-paywalled membership model.
• Vox has grown its number of contributors by 40% over the past year.

Read more about publishers’ non-paywall approaches here.

Inside the relaunch of The Economist’s subscription mobile app:

• For $7.99 a month, The Economist’s Espresso app offers a selection of the publication’s output.
• The app averaged around 200,000 active users per week prior to the March relaunch.

Read more about The Economist here.

What we’re reading

Congress inches towards federal privacy law:
As seems to happen at least once a year, members of Congress are talking about passing a federal privacy law that would rein in companies’ collection and use of people’s personal information and could preempt state privacy laws like the California Consumer Privacy Act, according to The Wall Street Journal.

BuzzFeed sues to block employees’ IPO-related legal action:
After BuzzFeed employees filed claims against the publisher for allegedly misguiding them on how to sell shares in last year’s IPO, BuzzFeed has filed its own lawsuit in an effort to block the claims’ arbitration, according to Bloomberg.

The conflict between media company IPOs and editorial investments:
BuzzFeed’s stock market debut and subsequent culling of its newsroom offers a case study for the concern that, as digital media companies look to go public, the public investor scrutiny will pressure the publishers into downsizing their editorial operations, according to Nieman Lab.