The One-Two Punch of 1st-Party Data

For years, knowing your audience wasn't a priority. Instead, publishers outsourced that responsibility to adtech vendors. Since most monetization was done with 3rd-party cookies anyway, the publisher didn't really care. Or, if they cared, they didn't have the will to overcome the competitive disadvantage they found themselves in.

But with a continued pull away from 3rd-party cookies due to browsers like Safari, Firefox, and Chrome (one day) blocking them, publishers have had no choice but to start thinking about who their audience is. I've long believed that the best thing to happen to media companies is the death of the 3rd-party cookie. It's caused a lot of headaches in the short term, but for publishers that have been able to evolve and gather 1st-party data, it'll give them a significant advantage.

This has set up an exciting opportunity for publishers as they engage with advertisers again. Now, rather than just being able to say "we've delivered pageviews," publishers are in a position to articulate more about who was behind those pageviews. And that can be unbelievably powerful.

Let's use a hypothetical b2b media company about banking as an example.

Through various tactics, this banking publication has built a database of 1st-party data. We know what types of banks the readers work at, their job level, and their job function. On its own, this is valuable. Your sales team can sell quite successfully against this information. If we use the boxing metaphor, this is the first punch.

From here, you can provide a variety of advertising choices across your properties. Since you know what % of the audience comprises decision-makers, you can get very specific with your targeting. This is the bread and butter of 1st-party data ad targeting. And it's what many advertisers are looking for today—and will look for even more as Chrome gets rid of 3rd-party cookies.

But where the second punch comes into play is when the reader interacts with your content. It's one thing to say, "hey, we have that reader in our database" or "hey, we had 1,000 people read that piece of content you sponsored." It's something entirely different to say, "yes, we have that reader in our database, and that person reads the content you sponsored."

This fundamentally changes the conversation. One of the mistakes many media companies have made is that they focus exclusively on the number of people. In their minds, the only way to scale a media company is to get as big as possible. But I would argue that scale can come either by getting bigger or by offering much more depth. And with the scenario of knowing who, individually, read the content, you can go so much deeper.

Consider this... What's more impactful? Ten thousand random people reading a piece of content or 100 of the perfect reader. If you go to your advertisers and tell them their target buyer is reading the content, they will come back and sponsor more.

There's one way to partially and cost-effectively do this, and then a way to do it perfectly but with more cost. Let me explain both.

The "more cost-effective" way to do it is to rely on your ESP. In essence, you have all of your 1st-party data in your platform, so when a user clicks a link to a story on your site, you know that they've "seen it." You pull a report from your analytics and then pull a blended report of all the people who clicked from the newsletter whose 1st-party data you have. You basically say, "here are the types of people that read your content." It's a good approach, but it's imperfect.

The problem with this approach is that you're stuck relying exclusively on your email subscribers. Anyone that comes to your site from another source is left out of your reporting. It's a better approach than nothing, but only part of the way.

The pièce de résistance comes when you use a customer data platform (CDP). This extends the life of all that 1st-party data across your site irrespective of traffic source. For example, let's say I sign up for your newsletter on a Monday. You capture all sorts of 1st-party data about me. A week later, your site shows up on Google, and I click over. The cost-effective way wouldn't be able to track me because I didn't come through email. However, a CDP would still be able to track me.

You might say, "but how? I thought Chrome was getting rid of cookies." That's the nuance. It's getting rid of 3rd-party cookies. But when a CDP drops a cookie on your reader, it drops a 1st-party cookie. So those aren't going anywhere because the internet would actually be worse without them.

What becomes really powerful is that some CDPs can cookie your visitors even if they haven't signed up for anything. So, you're able to track what they are consuming anonymously. Then, when they do sign up, you can relate that consumption data with the email address. Voila, you have a ton of 1st-party data.

Now, when you report to your advertisers, you can look at all your traffic sources and provide a much more complete picture. As a result, the return on investment can be significant.

The problem is it takes time. Not everyone will sign up for your newsletter right away. And, even if they do, they might not instantly tell you who they are. Without that 1st-party data, the person remains an anonymous reader. And so, you have to invest up front and then wait until you reach critical mass with data.

But this enables the one-two punch. Not only can you tell advertisers who have read your site, but you can relate the who with what they've individually read. But it can get even better than that.

The third punch

If you really want to get fancy, you can use this data in a consultative way with your advertisers. Since you can track who is reading and what they are reading, you can start to tell advertisers what matters to your readers and when that changes.

Advertisers are operating blindly. They might rely on market research firms and focus groups to tell them what matters, but there is a delay. But you have data that tells you in real-time what people care about. And when that changes, you can tell your advertisers this so they can change their messaging.

Here's a great example that Sean Griffey, CEO of Industry Dive, shared with me on the podcast:

Now you can tell advertisers who the readers are, whether they read the sponsored content and whether the reader is interested in new things. That's the knockout. Being able to tell advertisers that CFOs were not as interested in Covid meant advertisers could change their messaging in lock-step with the reader.

When you're able to offer all three, you can really maximize the monetization on your site. But it all starts with that 1st-party data. If you haven't started collecting anything, you're at a serious disadvantage because this takes time. Start. Make that your goal. The return on investment will come, I promise.

Thanks for reading today's newsletter. I will be taking next week off to recharge. But I will be back the week of June 6th with even more AMO. Thanks and have a great weekend and, if you're in the United States, a great holiday.