Guest Columns
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From the end of 3rd party cookies to SPO strategies: Challenges and opportunities facing publishers

The upcoming death of the 3rd-party cookies, the ads.txt failure, and twisty supply paths can be considered the  ‘horsemen of the apocalypse’ staring down the ad tech industry. While publishers may be in the dark about how all these twists and turns will impact their revenues, light, in the form of new opportunities, may serve to illuminate their path. 

The fall of 3rd-party cookies: The nail in the coffin for data-driven marketing?

A year ago, Google stated that its browser, Chrome, would no longer support 3rd-party cookies by 2022. For over two decades, publishers and brands have been relying on cookies for the sake of data-driven marketing, including behavioral targeting, retargeting, and display advertising.

Moving away from the 3rd-party cookie ecosystem will be one of the biggest hurdles for publishers moving forwards. On the one hand, they will need to put more effort into intensifying the quality of their target audiences, scaling it, and focusing on the basic aspects of buying and selling their ad inventory. On the flip side, this might be the push publishers need to innovate beyond 3rd-party cookies and attract more advertisers.

Put simply, the major ad tech players are already actively exploring and developing their own solutions to replace the 3rd-party cookie. However, there’s no sign that a reliable substitution, accepted by all industry stakeholders, will be discovered and adopted by the time 2022 comes around.

Fragile transparency of ads.txt 

Another challenging aspect publishers face is the state of the ads.txt initiative. Launched well-intentionally in 2017 with the promise to bring greater transparency to inventory selling, combat ad fraud, and mitigate unauthorized resellers, ads.txt hasn’t been able to fulfil its potential or justify its lofty reputation.

An extensive investigation by Zach Edwards in July 2020 revealed several weak points of ads.txt. Crucially, the investigation revealed that it doesn’t really bring actual transparency to detecting inventory resellers. Of course, major ad tech companies come in ads.txt file under their names, but many other hidden resellers are not identified in any other way than just “reseller”. Edwards pointed out the risks of maliciously modified domains, and those raised by selling the “blind” inventory these unlabelled supply participants can bring in. Does that mean that the original idea to shed light on Authorized Digital Sellers and to reduce inventory resale is a dead-end? 

IAB Tech Lab, the originators of the ads.txt specification, don’t think so and have written about their own perspective on the initiative. Along with an aspiration to address this particular case, IAB Tech Lab also highlights that it’s essential to implement ads.txt properly and ideally to have it accompanied by other tools: json.seller and SupplyChain Object specification. However, they admit that the technology isn’t 100% perfect.

New hope of growing influencer marketing

But it’s not all doom and gloom for publishers, however. As people have become home-bound due to the pandemic and are naturally spending more time online, influencer marketing has seen a spectacular rise. So far, 96% of US and UK consumers who follow influencers are engaging with them.

All kinds of influencers have sprung up across various media channels, and this trend is likely to continue. According to preliminary estimates, the influencer marketing industry will be worth up to $15 billion by 2022, growing from $8 billion in 2019. 

Unlike programmatic, the whole influencer marketing story will never be fully automated, as choosing the right partner influencer requires human insight. However, that doesn’t stop advertisers: this year, 63% of marketers plan to increase their investments in this field. Publishers need to carve out their niche and align with influencer marketing trends.

Video content is another rising trend, particularly content served across CTV. CTV offers publishers producing video content a promising opportunity to extend their audiences. Other trends involve creating more value-driven content, searching for new forms of influencer media, and focusing on diversity and inclusion.

Game on: The rise of gaming 

Mobile and video games have always had their audiences, but as Julia Shumaker says, the pandemic has shown that the “world is made up of gamers.” Since the first lockdown, global game downloads and subscription model use have seen an impressive rise. As a result advertisers have begun to look at gaming as a viable channel to invest ad budgets. 

This creates an opportunity for publishers who are ready and willing to garner gamers’ attention and dive into gaming technologies. One of the most prominent vectors relates to immersive technologies that not only help create a fantastic user experience, but also provide unprecedented opportunities for advertisers. For instance, in 2017, Unity, the engine used to create rich, immersive, and interactive 2D, 3D, VR and AR experiences, released Virtual Room, a type of interactive ad, letting brands themselves create immersive experiences. This technology has yet to achieve its full potential, however, as VR requires further advancements to enable brands to make the most of VR immersion. But that time will soon come, as the tech is being constantly improved. 

Supply chain optimization: Reducing the number of links

One more robust approach publishers need to include in their strategies is SPO (supply-path optimization), helping both buyer and seller sides combat programmatic buying opacity, getting rid of the vague resellers, and overall, make the supply chain a better place.

Embracing SPO won’t come overnight,  however, there are specific steps publishers can take to increase transparency and shake off the middle-men biting off pieces of ad-buy budgets. Publishers need to establish direct partnerships with the demand side. By eliminating numerous intermediaries, they can eventually reach transparency, raise their total revenues, and reach fair collaboration with the buy-side.

Addressing challenges and embracing opportunities

The ad tech industry is continuing to evolve, meaning that we’ll eventually see some sort of replacement for cookies, get rid of supply intermediaries, and embrace new trends including influencer and CTV video marketing. But that doesn’t mean publishers should just wait for these changes to occur. Publishers need to take the lead on the changing trends of the industry to create a competitive edge and take advantage of the opportunities offered.

Seeking direct partnerships in order to earn well-deserved revenue for their inventory without paying any opaque fees, contributing to audience quality and quantity, embracing trendy formats, channels, and technologies, and, basically, capitalizing on their business in every single way should be a top priority in 2021.

Nick Platonenko
CEO at VlogBox

Based in Delaware, the purpose of VlogBox is to revolutionize the world of video content distribution, proving that it’s time to go beyond YouTube monetization. Striving to perfect its suite of content distribution services, VlogBox covers app development, approval procedures on CTV/OTT services, and ad monetization, bringing high yields to content creators.