The open web strikes back: why brands need to nurture first-party audiences

Walled gardens have gained an unmerited ad-spend advantage on the back of privacy concerns – but now it’s time for brands to take action

With targeting solutions already available that out-perform those offered by third-party cookies it makes no sense to wait for deprecation, argues Ryan Afshar, UK Head of Addressability at LiveRamp

With customer engagement increasingly fragmented across geographies and devices, online advertising has traditionally had problems connecting these disparate data points. As a result, brands have struggled to properly identify their full audience or attribute value accurately across different media channels. 

Compounding these problems in recent years are growing concerns around consumer data privacy, which have led Governments and major tech platforms to introduce new restrictions on how advertisers can track and target individuals online. With many of the personal identifiers traditionally used to target and retarget ads out of bounds to marketers and use of ad blockers now widespread among consumers, advertising on the ‘open web’ [open to all users, without guardians or gatekeepers] has become harder for media buyers to justify. 

Meanwhile, walled gardens, such as Google and Facebook, have excelled at offering the ability for advertisers to reach consumers with personalised advertising, thanks to the vast amount of data they have at their disposal. This has led marketers to allocate a disproportionate amount of ad spend to the walled gardens, currently investing 60% of ad spend into them, in the belief that these logged-in environments are the most effective way to reach people.

The problem with so much ad spend flowing into these closed ecosystems is that in actuality, consumers tend to split their time more equally between walled gardens and the open internet. This means that advertisers are over-indexing on walled garden spends, and under-indexing on the open web; making it more difficult for their campaigns to reach their intended targets, as well as more expensive. Meanwhile, the open web suffers as advertisers decrease their budgets there. 

Thankfully, there are now first-party data technologies which provide the supporters of the open web with the opportunity and the tools to level the playing field. 

The rise of first-party data

According to AOP’s recent Digital Publishing: Meeting the Future Report 2022, developing new first-party data strategies will be a core priority for publishers this year. However, for this new wave of authenticated data solutions to be effective and provide advertisers with what they need – tools to target and measure digital campaigns – brands too must be transacting on high-quality first-party data. 

Unfortunately, the historical misuse of consumer data has led to a wide-scale loss of trust by consumers, making them less likely to share the data that is needed. Brands, therefore, must urgently create a value exchange with their customers to encourage them to share their data, as well as demonstrate the benefits to them doing so.

Individuals want to control their personal information. Marketers want to improve the experiences they deliver and improve their relationships with individuals. Publishers want to increase and diversify their ad revenues while also rebuilding relationships with their audiences. To achieve all three, we need a people-based digital advertising ecosystem that can bring publishers and marketers closer to each other and restore the value exchange between brands and their customers. 

Addressing the future

As a starting point, businesses need to consider all of the ways their customers might interact with their brand, like point-of-sale, web, customer service or billing. Without a strong identity strategy to connect all of these interactions, marketers will not be able to tap into the data they need.

By embracing people-based marketing, and leveraging signals tied to identity rather than to devices or other characteristics, marketers can reach consumers with targeted, addressable, relevant advertising.

While publishers and brands may be thinking of addressability in conjunction with the deprecation of third-party cookies and other identifiers, it’s worth noting that, in many instances, new addressable solutions already outperform techniques based on third-party cookies. This means that brands who move to people-based identifiers may see the benefits of this switch now, as well as the increased measurement potential and improved visibility across all platforms.

Shifting to a new ecosystem reliant on authenticated first-party data also creates an environment where advertisers and publishers can work more in unison to deliver meaningful outcomes for brands. This closer collaboration is imperative, not just for the continued success of advertisers and publishers, but to ensure that the open web remains competitive, diverse and privacy-focused – offering a genuine alternative to the walled gardens. 

The deprecation of third-party cookies, the increasing number of privacy regulations, and the rising importance of authenticated first-party data has presented the global marketing and media industries with an opportunity to build an improved digital advertising ecosystem. 

This new ecosystem allows publishers, platforms and advertisers to deliver true people-based marketing and restore the fair value exchange between brands and their audiences. It promises greater return-on-ad-spend, more accurate measurement, larger audience reach, all while staying privacy-compliant.

Rather than worrying about adapting to a post third-party cookie world, it is time for brands to embrace first-party addressable solutions, which have the potential to be more effective than third-party cookies ever were.