KASPER WORM-PETERSEN, head of Strategy, Ekstra Bladet & Signe Skarequist, DIRECTOR OF DIGITAL SALES AND AD TECH, JP/POLITIKENS HUS
By now, most people have heard of Apple’s Intelligent Tracking Prevention (ITP), which blocks third-party cookies, thereby preventing all ad targeting to Apple users.
Yet so far, it seems that the industry has not truly acknowledged the consequences of ITP. Instead, it has chosen to simply look away and hope for the best. In countries with a lower iPhone penetration, the position has been that the issue was not of significant magnitude but that may be about to change. Firefox is now implementing similar policies (which has caught the attention of the German market where Firefox is a dominant browser) signaling yet another step towards a world without third-party data.
Denmark is an Apple-country, with more than half of all Danes surfing online via a Safari-browser. To be more precise, 60 percent of users and 55 percent of all visits to ekstrabladet.dk (the largest Danish news site) come from a Safari-browser. As a result, we have already seen the consequences of blocking third-party cookies. With this post, we hope that our experiences might serve as a warning and potentially a guide for other countries and markets.
With 60 percent of Danish users on Safari-browsers, and hence unreachable by targeted advertising, one would think that ITP would be the number one priority for all stakeholders in the market. After all, we have yet to encounter an advertiser who are willing to sacrifice over half of their target audience by default. Nevertheless, we typically observe one of two reactions, when the topic comes up:
” The industry cannot allow that. There is too much money and too many interests at stake, so surely a solution will be found.” (A variation of this that recently has become more popular: “It’s just a technicality that requires another work-around. We have seen and done this many times before”)
“Yes, we may be heading in that direction, but right now, it is not of much concern. I’ll cross that bridge, when I get to it.”
Let us go through them one at a time:
"The industry cannot allow that"
The advertising industry is no longer in charge. Apple is the undisputed shot caller, when it comes to what you can and cannot do in their Safari-browser, and they have made it very clear, that they will not tolerate third-party tracking. They recently published a Tracking Prevention Policy, in which they very clearly state their views on the matter:
” [Third-party tracking] should be prevented by default by web browsers. These practices are harmful to users because they infringe on a user’s privacy without giving users the ability to identify, understand, consent to, or control them”.
At the same time, they take away any hope that they will listen to the prayers of the advertising industry and make an exception for third-party advertising. They explicitly mention "targeted or personalized advertising" and "measuring the effectiveness of advertising" as areas which they are willing to sacrifice, as long as third-party tracking is being used.
And no, Google and their “tech stack” are not spared. This is evident when we analyze campaign-data on our own sites. Spending from Google technologies skews heavily away from Safari-browsers as they are simply unable to maintain their ID’s and hence unable to target Safari-users. Google themselves also made their problems abundantly clear when they launched their own privacy-initiative Privacy Sandbox in a blogpost in mid-August. The blogpost began with a scantily disguised criticism of “other browsers” (= Safari and Firefox), whose privacy-initiatives Google experience to have "unintended consequences’" (= negative impacts on Google’s products and earnings).
Furthermore, the blogpost was accompanied by a study, in which they attempt to show how damaging it is to block third-party tracking (read here for a nerdy yet methodically valid critique of the study). This is a well-known lobbying move from Google which clearly shows that Google is feeling pressured. If this was only a “technicality”, Google would put their own programmers on the case and have them fix it. That would be both easier and cheaper. Yet they have acknowledged that there is no technical work-around, that can fix this issue, so now the lobby- and legal forces are being deployed instead.
Furthermore, it is not only Apple’s ITP, that challenges the sovereignty of the advertising industry.
With the introduction of GDPR, legislation is also joining the battle on privacy and tracking. Despite a slow start, the European Data Protection Agencies are starting to pay attention to the advertising industry, and by wielding the GDPR, they may prove to be more impactful now than in previous cases. For example, the English data protection agency (ICO) has issued an unusually strongly worded criticism of the digital ecosystem, and made it clear, that they think the system is “broken and must change”.
Therefore, it is no longer solely op to the advertising industry to determine its own destiny. Clearly, there are strong interests outside the advertising industry working to change "business-as-usual", and they all share a profound distrust and reluctance towards third-party tracking. It is hard to imagine where the solution to the challenges surrounding third-party tracking will come from…
” I’ll cross that bridge, when I get to it”
Obviously, it is up to each individual or company to asses, when they stand close enough to the proverbial bridge. But even now, third-party tracking is heavily challenged, and it already has tangible consequences for the advertising industry in most markets. Let’s look at some data from Denmark.
We ran a series of tests on ekstrabladet.dk to decipher the situation.
As previously mentioned, about 60 percent of the users on ekstrabladet.dk use the Safari-browser. When we test standard reach-campaigns and refrain from applying any form of third-party data, the campaigns reach 40-60 percent Safari-browsers – just as expected.
However, when we run the same campaigns and add rather simple third-party data points (e.g. gender, age or frequency two to news articles), we get less than 10 percent Safari-browsers.
We also tested another hypothesis: If third-party tracking is blocked in all Safari-browsers, we should see a corresponding decrease in the size of the segments that use third-party data. And sure enough, when we test segments that use first-party data against segments that use third-party data, the first-party segments are consistently 60-70 percent larger than the third-party segments.
Therefore, for both Safari and Firefox-browsers, it is no longer a question of when the demise of third-party cookies will take effect. The effect is here, it is unquestionable, measurable, and surely, it must impact the effectivity of digital campaigns.
As we see it, we have to options:
We can rigidly, and stubbornly, try to prolong an era, which in many ways has already ended. We can discard all Safari and Firefox-users, and only target the diminishing user base, where third-party data flows freely (at least for now).
Or we can accept the new reality, explore what opportunities it brings, and start developing and building new solutions and products.
At Ekstra Bladet and on behalf of JP/Politikens Hus, we have decided. We do not want to sit idle, and therefore, we are in the process of developing and testing new advertising opportunities based on first-party data, which take the conditions of the new reality we face into account.
The development is in close cooperation with selected operators in the media market, so we can ensure a solution that grants the media buyers access to high-quality data with great reach.