Cookies or not, German publishers are already monetizing their inventories with alternative solutions

Google may have sent shock waves through the industry in July, when it changed its mind on deprecating cookies in its Chrome web browser. But to some German publishers, the aftershocks were not much of a concern.

That’s because they’ve spent years insulating themselves from such whims, preparing for a post-cookie future by putting together their own suites of solutions. These give advertisers addressable audiences at scale in a privacy-conscious way — and bolster publishers’ ad revenues in the process.

“From my perspective, this [trend] is unstoppable. Especially in Europe, with its stringent data protection regulations,” Martin Pichler, chief sales officer at German publisher highfivve, tells The Current. “Despite Google’s decision, those who have invested in alternatives continue to benefit.”

The German market is a bellwether for the health of digital advertising in continental Europe. Given Germany's status as the country with the highest spend and second-highest growth in digital ads this year, and the Continent’s largest economy, there is a lot at stake for publishers to get right.

Against the background of stringent E.U. privacy regulations and high consumer expectations for control over their personal data, German publishers BCN, Funke Mediengruppe, and gutefrage.net | highfivve have added The Trade Desk-backed European Unified ID (EUID) recently, among other alternative IDs, to their rosters of privacy-conscious ad solutions. These also include first-party data and contextual advertising offerings.

“This combination of different solutions has been helping us effectively monetize cookieless inventory for quite some time,” Pichler says.

The picture is similar at Funke and BCN. “We integrated several third-party ID solutions like LiveRamp, Utiq, ID5 and EUID. We use EUID in combination with The Trade Desk’s OpenPath, and results have been very good so far,” says Pascal Charpentier, team lead of programmatic and partner at Funke.

“We recognize that no single solution will dominate the post-cookie landscape, which is why we have developed a comprehensive suite of tools,” says Nadeem Qureshi, team lead of product management at BCN.

The context

Publishers the world over are adding email-based, logged-in identity solutions to their ad offerings to help tackle the existential risks to their businesses.

These risks were laid bare in a study from digiseg and AdExchanger last year, which showed that tracking prevention in browsers and low audience match rates were among the top issues for publishers surveyed.

These issues likely resulted in significant revenue loss — the study found that eCPMs for iOS/Safari anonymous and unconsented visitors was 70% lower on average, compared to that achieved on publishers’ addressable inventory. Effectively, that’s a 70% discount that publishers are giving to advertisers in unaddressable environments.

The challenges

The many addressability solutions available allow publishers greater freedom in choosing how they want to monetize their content. But with the industry in flux, publishers are testing and learning, with an eye on how media buyers react.

“We currently find it very challenging to test Privacy Sandbox,” says Pichler. He says another challenge is collecting high-quality first-party data, which is “often a significant burden for publishers.” And media buyers are only slowly warming up to contextual ads, say Pichler and Charpentier.

Advertisers are also facing a fragmented alternative ID landscape, which, according to Qureshi, can make it "difficult for buyers to appreciate the full potential of these solutions.”

More collaboration from ad tech players may be what’s needed. Last year, The Trade Desk and ID5 partnered to make each other’s ID solutions — the email-based EUID and the probabilistic ID5, respectively — available to advertisers, helping publishers monetize visitors regardless of their logged-in status.

The opportunity

For publishers that get the balance of monetization solutions right, the rewards are ample. And advertisers are set to benefit too.

“Publishers are regaining control over their data,” says Pichler. “This shift also places publishers back in the driver's seat concerning third-party activities on their inventory.”

“With Prebid Server and Prebid.js being treated equally, developing a server-side ad stack becomes feasible without major concerns,” continues Pichler, referring to the open-source technology that allows publishers to run auctions from many bidders at once. “This leads to a significantly optimized setup, bringing substantial benefits to all parties involved: the demand side, the supply side, and the users.”

The identity revolution could be a generational opportunity to realign publisher monetization, advertiser demand and consumer privacy expectations.

“One hope would be that we as publishers can profit from higher demand for our first-party data, which until now has been more of a niche product,” says Charpentier.

“We encourage advertisers to engage in testing these new solutions with publishers and their platform partners while third-party cookies are still in use,” says Qureshi. “This is a critical learning opportunity, and time is of the essence.”

The Current is owned and operated by The Trade Desk, Inc.