Ian Hocking (pictured below) VP, Digital at South China Morning Post, talks exclusively with ExchangeWire about what the demise of third-party cookies spells for the ad industry.
The termination of third-party cookies will have a range of consequences for different parts of the industry. Which do you think will pose the greatest threat to digital advertising?
There are many ad tech vendors that don’t have first-party relationships but require data at the core of their offering. Tightening privacy restrictions will mean it’s harder than ever to create a compelling offering. I expect that we will see a lot of consolidation of these companies.
We’ve recently been discussing the value of detailed geotargeting here on ExchangeWire. What are your thoughts on this alternative?
Location is important from a copy localisation perspective, you can significantly drive the effectiveness of a campaign by building in local preferences and opinions, but you are probably doing this at a country or regional level.
Using IP location to infer user profile data is fraught with problems. It’s far too easy for a user to present a location that is quite different from where they actually are and for the terminal to be used by multiple users.
Real-time GPS location sounds cool, but I’m not sure the industry has the dynamic creative flexibility to make the most of it across activation channels.
What unique challenges does the phasing out of third-party cookies pose to the APAC ad space?
Whilst in Europe and North America there are a number of identity players could provide a workable solution, there doesn’t appear to be an equivalent in Asia.
I think this is a massive opportunity for publishers to come together and create a unified single sign-on and SCMP would like to lead that initiative. SCMP is uniquely placed to drive this in Asia. We have strong relationships and a leading role with industry bodies like Wan-Ifra and the IAB and a large user base in the region. I believe there is an amazing opportunity for publishers to come together and create a scaled solution. Through either a single sign-on partnership or even a full consortium. Personally, I think that a single sign-on with premium content producers leveraging their first-party data at scale would be extremely compelling.
How do these challenges compare to those in Europe and North America?
There seems to be a lot more focus from solution providers in the US and Europe. This will inevitably mean more progress is made in these regions.
If you think about the providers that are pitching ID matching as the solution, then there are inherent scale issues as match rates are typically low and individual publishers are not likely to see a significant revenue increase from this (at least until they get their sign-on strategies up to speed).
The probabilistic solutions may be scaleable, but they don’t really work for publishers either – They can’t truly recognise the value of a publishers audience.
The challenge is to find an agnostic, privacy-compliant ID that allows publishers to bring to bear their first-party data and allow marketers to scale their buying decisions.
We understand that SCMP plans to develop a Unified Persistent ID to help overcome the upcoming changes. What can you tell us about this?
We know that scale alone is not enough anymore and that being able to build a profile of our users can add value across the business. So we have focused on creating a single ID for all our regular and loyal users. Right now we have a semi-persistent ID for 75% of our onsite monthly active users.
At the same time, we have launched a range of experiments to try and drive persistent IDs via a single sign-on. Increasing this number will be our focus over the next year.
SCMP is in a great position with strong relationships across the region to lead a conversation with Asian premium publishers about the possibility of creating a shared single sign-on ID.
What do you think is the most viable solution for firms that don’t have access to first-party data?
There is already a massive push to probabilistic data (even for those who do have some first-party) in order to be able to continue to offer data-led activation and with no other scaled solution at hand, this may well be enough for now.
But it’s unlikely that this kind of targeting will draw marketers money out of the walled gardens and it still comes with plenty of privacy issues to navigate. Long term, it’s a difficult position to be in.
Ultimately, those with first-party relationships (such as publishers) will be in a much better position to deliver return on investment and create products that drive ad tech innovation.