Publishers Need to Pivot to First-Party Data

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Photo above by Jens Johnsson.

For any digital publisher, keeping an audience’s attention and growing revenue is the holy grail. Facebook and Google together own 60% of the ad market, and their dominance isn’t changing. On top of that, new threats seem to emerge daily, whether from Amazon or buzzy mobile-first players like ByteDance.

Publishers have responded to advertising challenges by testing new inventory strategies. Typically these include more video, more podcasts, and more branded content. Some have even formed off-platform partnerships with the duopoly. Each new endeavor requires significant investment, and each comes with a level of risk. The recent news cycle reflects this trend. Simply expanding inventory and ad opportunities isn’t necessarily a magic bullet for a publisher.

This is where first-party data becomes so important. Rather than developing entirely new inventory strategies, which is a heavy lift, publishers can look to what they already have—rich behavioral, subscriber, and social data, most of it seriously under-leveraged. When used properly, first-party data can help publishers drive revenue in two ways—directly and indirectly. It can help them to stop working harder and start working smarter.

For example, publishers can use existing first-party data to make their audiences more appealing to advertisers. For many, this means organizing audience data from across various media properties, allowing them to scale richer audiences. Better audiences mean more effective ads, which means more advertisers.

Another opportunity involves using data to land a higher average CPM. Better targeted audiences are more sellable. When audience data is segmented for insights about that audience, the inventory becomes that much more valuable to advertisers. When advertisers know they’re reaching an engaged audience on your site, they’ll pay more to have their ads there.

The opportunities aren’t limited to a publisher’s own properties. They can even sell their first-party data to advertisers. This is a growing trend in advertising as brands are constantly seeking high-quality data sources for targeting. A publisher can place its data on the open market for anyone to buy programmatically. Or they can sell data directly to another company through a private exchange or partner marketplace. Jeremy Hlavacek, head of revenue at IBM Watson Advertising, recently talked up the benefits of this option to eMarketer, emphasizing its potential as a high-margin revenue stream. Five years ago, publishers would have never considered “selling” their audience. But the tide is turning.

Still, when it comes to the benefits first-party data offers publishers, there are barriers to entry. Consumer privacy concerns are a chief example. In the ad market, concerns over privacy have grown. Policies like GDPR in Europe and looming data legislation in California—along with the potential for federal action—have attempted to address the issue by focusing on consumer consent. This has created complexity and driven up costs for first-party data collection by publishers, who will need to reckon seriously with privacy concerns and coming regulation to handle audience data safely and lawfully.

Sourcing the technology and talent needed to take advantage of first-party data is another obstacle. Publishers are content experts by nature, but they now must become technologists, building their own tech infrastructure to take full advantage of their own data. This requires data scientists to work with marketers who understand how to take advantage of the full value of first-party data and enhance its appeal to advertisers. For digital-first publishers, the transition has been easier. But for traditional publishers with a print legacy, the shift has been more challenging.

Publishers that want to not just compete but thrive in today’s market need to look at what they already have in their back pocket. We often talk about the pivot to video or the pivot to podcasts. The pivot to data is really the biggest opportunity in the market today.

As Chief Strategy Officer, Jason leads Lotame’s efforts across business lines to evaluate market opportunities, refine product positioning and drive growth. He leads product, marketing, sales development, and strategy, while continuing to oversee the Lotame Data Exchange (LDX). In his first 7 years at Lotame, Jason built and grew the LDX into one of the world’s largest and highest-quality data exchanges. After graduating from the Wharton School of Business at the University of Pennsylvania, Jason spent 10 years at Bain and Company, consulting for a range of companies in the Fortune 500. Prior to joining Lotame, Jason spent more than 10 years as an entrepreneur in various fields.