Apple’s ITP 2.2 & Monetization

The discussion around user privacy is on the rise. The amount of information that companies have about you is massive and they can build a pretty big profile on who you are with random snippets of information that is collected from around the web.

And up until recent laws (GDPR and CCPA), there was really no way for the consumer to opt out of that scenario. If you went to a website, you were likely being tracked, that data was being used to target specific advertisements to you, and then it was potentially being sold.

But nothing has really been done about it from a business perspective, which shouldn’t surprise anyone.

Google and Facebook are giant ad platforms that depend on user data. A majority of a publisher’s programmatic advertising is likely coming through Google, so the publisher isn’t going to care.

The only platform that has expressed any interest in being pro-privacy is Apple. And they’ve become aggressive. In 2017, Apple added something called Intelligent Tracking Prevention to Safari. Here’s a definition from Digiday:

ITP is a feature that Apple added to Safari in 2017 to curtail companies’ abilities to monitor people’s browsing behavior when they visit other companies’ sites. Initially, Apple took aim at the third-party cookies that platforms like Facebook and Google, as well as a bevy of ad tech vendors, place on sites they don’t own that allow them to track people across the various sites that carry their third-party cookies. Then earlier this year, Apple updated ITP to account for a workaround that companies came up with in which they have a site drop a first-party cookie that mimics the functionality of the third-party cookie. With ITP 2.1, Safari deletes these first-party cookies seven days after they were installed on a browser.

Apple just released ITP 2.2, which cuts that down from seven days to one. And without that cookie, the ability to target advertisements becomes very short-lived.

If you run an ad-based business that requires targeting, ITP was a punch to the gut. Ad tech sources told Digiday that the initial roll out of ITP resulted in a 40% drop in open exchange CPMs. In a blog post, Google says it is worse:

First, blocking cookies materially reduces publisher revenue. Based on an analysis of a randomly selected fraction of traffic on each of the 500 largest Google Ad Manager publishers globally over the last three months, we evaluated how the presence of a cookie affected programmatic revenue. Traffic for which there was no cookie present yielded an average of 52 percent less revenue for the publisher than traffic for which there was a cookie present. Lower revenue for traffic without a cookie was consistent for publishers across verticals—and was especially notable for publishers in the news vertical. For the news publishers in the studied group, traffic for which there was no cookie present yielded an average of 62 percent less revenue than traffic for which there was a cookie present.

Ouch…

It’s harder to know the hit from ITP 2.2—from 7 days to 1—but you can imagine there will be some sort of a drop.

Unfortunately, it doesn’t stop there.

There are some unintended consequences from ITP 2.2 that Apple understands exist, but doesn’t actually care. In their post, they wrote that “when faced with a tradeoff, we will typically prioritize user benefits over preserving current website practices. We believe that is the role of a web browser, also known as the user agent.” Easy for you to say, Apple. Your ad business sucks.

But here are the two big unintended consequences:

• Federated login using a third-party login provider
• Single sign-on to multiple websites controlled by the same organization.

The first is pretty straight forward. Ever gone to a website and been presented with the opportunity to login with your Facebook information and then stay logged in? That uses OAuth, which is a type of federated login. Without being able to cookie the user, the login doesn’t remember the user, so users will be forced to login more often.

The second is more complicated and annoying. If you run a network of five websites and you want to offer single sign-on whereby a user can login to one and then access all of them, then ITP 2.2 is going to hurt. There are no clear cut strategies that I’ve seen—or thought of—to deal with this problem other than to require a user to make five accounts. That hurts.

Now, on the ad front, there are a couple of ways to deal with this. Joe Root, co-founder of Permutive, a DMP, told Digiday two ways that publishers are dealing with this:

For instance, some publishers have found that by setting up private marketplaces for their Safari audiences directly with agencies, they have managed to recoup some of the revenue they lost with the initial ITP update…

Another temporary fix for advertisers has been to try and find these audiences in the app ecosystem. Advertisers can still track users across the app ecosystem with Apple’s identification for advertising.

As a quick aside, is anyone surprised that Apple is all anti-tracking except when it comes to the app ecosystem, which they control? Classic case of do as a I say and not as a I do.

The reality is, both of these options are fine until they don’t work. What happens when agencies start wanting more tracking even with their PMPs? What happens if the agency doesn’t believe the Safari traffic is the right audience source? And what happens if Apple stops being hypocritical and makes tracking in the app ecosystem impossible?

These are all interesting questions and ones that we need to figure out. Personally, I think the days of cookie-based ads are increasingly becoming a thing of the past. We’re close to 50% of all browser sessions being nearly cookie-free. If Google does as it says it will and actually care about privacy, then we’ll inch closer and closer to 100% being nearly cookie-free.

According to AdAge:

Publishers like The Washington Post have already been adjusting to the new realities of online advertising. The company is developing technology to evolve the first-party data it generates from users, relying less on tracking technology and more on the intent of a reader and what goes on within a user’s session on its own site. 

Said in a very simple way, this is delivering ads based on context. So, advertisers that want to target people who have expressed interest in sports can now start to do that. Though, for hard news publishers out there, this is really going to hurt.

Recall an earlier issue that talked about advertisers not wanting their ads around news. Without targeting, the quality of programmatic ads that can fill against news will be even lower quality. In turn, this results in even less revenue for the publisher.

I’ll be curious to see what other data The Washington Post can glean from a user’s session, but it’s going to be a lot less than what they have been working with.

For ad-based media companies, the punches keep coming and there are no saving graces.

Your weekly reminder about Facebook’s News Tab

According to The New York Times, “Facebook plans to hire a team of editors to work on a news initiative called News Tab.”

These journalists would be responsible for curating some of the news that shows in the tab. The bulk of the content would be delivered with an algorithms. Naturally, Facebook is looking to bring on seasoned professionals from various outlets to fill out this team.

My advice for journalists? Stay far away. It’s highly unlikely that the News Tab works, in which case that journalists will be let go. Facebook will get bored of dealing with news. It can’t help itself.

Don’t believe me? Does anyone remember Facebook’s Trending Topics? Columbia Journalism Review has a quick reminder for everyone:

Facebook’s previous attempt to curate the news turned into a fiasco. The company hired editors to help select some headlines for its mostly automated “trending topics” feature, which began in 2014 as an attempt to compete with Twitter as a breaking news platform. All seemed to be going well, until Gizmodo ran a story in 2016 that quoted some of the company’s hired editors admitting that they often deliberately excluded some conservative websites from the trending topics lineup. The truth of the matter turned out to be much more nuanced than the headline portrayed it (as even the editor of the piece later admitted), but the damage was done. Conservatives soon howled that Facebook was biased against them, and the company scrambled to apologize and make amends. The human editors were fired, and eventually the feature was shut down completely.

The going got tough and Facebook gave up. And when the going gets tough again with News Tab, will Facebook give up? Since Facebook doesn’t actually care about publishers and journalists, the answer is likely yes.

Nevertheless, Facebook intends to introduce News Tab to 200,000 people in the next couple of months with a broader roll out expected in 2020. I haven’t heard any reports of the major media brands agreeing to license content, so I would be curious to see if News Tab is dead on arrival.

You can expect more words from me on this topic.