Whether we like it or not, the third-party cookie is going to slowly meet its demise. Apple has already blocked many cookies on mobile and Safari continues to get stricter and stricter as time goes on. It's why I have been a broken record about needing to invest in collecting our own first-party data.

Dotdash Meredith, though, has chosen a different path.

But first... A message about our sponsor, Omeda.

While many enterprise ESPs pride themselves on being able to serve a multitude of industries, our needs as publishers are unique. We need to be able to send newsletters—to both free and paying subscribers—while also promoting our events, driving paid marketing messages, and nurturing readers.

That’s why you need an ESP that was built with media company use cases in mind. Omeda is that ESP.

Omeda doesn’t try to be a one size fits all solution. The team there knows that media companies are different. We’re sending millions of emails a month across multiple lists. Omeda can support that. Across the publishers that use its software, it sends billions of emails every quarter.

A lot of ESPs say they can support what media businesses do. But it’s all talk. Omeda is a high-volume powerhouse that can back it up.

Check out Omeda today.

Now let's jump in...

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On May 9th, IAC reported its Q1 2023 financial earnings. Buried in the shareholder letter was this announcement about Dotdash Meredith's soon-to-launch ad product:

Last week, the tool named D/Cipher launched and Axios' Sara Fischer wrote about the technology:

This makes perfect sense for Dotdash Meredith. The vast majority of the sites in its network are intent-based sites. If I am reading an article about BBQ, I'm probably in the market for BBQ-related information and ads.

That's a very linear example, though. BBQ content should have BBQ-related advertising. That's straightforward contextual targeting. The same would happen on any site. AMO sells contextual ads.

But if we look at DDM's site, there are a couple of examples that demonstrate a deeper understood intent. Here's one. The client is looking to target "Retirement Savers." The basic contextual targeting are the first two article suggestions:

• What's the best retirement savings account for me?
• Should I invest in mutual funds?

Those make sense. But the third one demonstrates a deeper intent that might not make sense at first glance:

• How much does Alzheimer care cost?

Of course this would relate to retirement savers. Perhaps someone who is actively saving for retirement has a parent who was diagnosed with Alzheimer's disease and they are now worried about themselves. Or maybe they are already preparing to retire and just want to cover their bases.

In both cases, having the right retirement accounts is important. And so, these savers are likely to react more positively to a targeted advertisement.

Here's a less emotional example. The target audience is "Home Entertainers." Here are the three article examples:

• What are the best grill appetizers?
• Best decor for a dinner party
• How to remove red wine stains?

I guess it was a damn good party. At first glance, you might not think that a "remove red wine stains" article is related to home entertainers. But it starts to make sense, so of course an advertiser would want to promote on that page.

This is a great idea, but it's not a new idea. Google's entire search ad business is built on intent. And so, for DDM to be able to provide that same intent-based advertising is a big leg up. And the team clearly believes it'll perform better than any cookie-based ad since the company is offering performance guarantees.

Here's the reality... For the past 15 years, intent didn't matter in most advertising. It's why you could read an article about the President of the United States and see an ad for underwear (the same underwear you had looked at an hour prior on a website). The content simply didn't matter.

But I would argue that this was a mistake. Why do grocery stores promote items on the end cap? They're easy to grab. Intent-based ads are the same way. If you're already in the mindset for something specific and you see an ad promoting that, you're far more likely to react.

For smaller sites, this is hard to pull off. We simply don't have the scale to provide that level of intent-based targeting. But frankly, I don't think we need to. If we are selling to advertisers that are contextually related to our content, there is already some intent baked in. I know my readers are often on the look out for a new ESP, which is why the above Omeda ad works.

A simple way to execute on this sort of ad product would be to introduce category-based advertising. Figure out what the largest categories from a traffic perspective are on your site and then sell takeovers of those. It's a low risk way of leaning into this sort of intent-based advertising without needing to invest as aggressively as DDM did.

There are two paths forward in advertising: first-party data and contextual targeting. If you don't have the first-party data or the content, you're going to struggle as time goes on. There's no way around it.

Newsletters for retention

Adweek has a good story this week about how New York Magazine's portfolio of newsletters has contributed very nicely to its subscription retention rates.

Those are amazing numbers. As the story explains, no one is signing up just to receive the Succession Club newsletter. But for the 23,000 paying subscribers, losing access to it is likely a big reason to continue paying for New York Magazine. You can see that with the 80% open rate; these readers care.

What I didn't quote, but is a key part of this story, is that many of these newsletters are popups. When Succession is over, Succession Club is going to go away. Historically, I have been lukewarm on popup newsletters. You create a product, get people to subscribe to it, and then shut it down. Why? Getting those subscribers takes work and then you lose them when it's gone. But this attitude is very much advertising focused. If I have a list of 25,000, why would I want to stop publishing?

With paid subscriptions, though, a niche list that might be too small to support ad revenue can more than support audience retention. And that is good enough when the revenue per user is in the multiple dollars per month versus a few dollars per year in advertising. The math changes when you're playing with subscriptions versus advertising.

What I particularly like about this model is that it's not terribly resource intensive to create one of these to test whether it serves it purpose of reducing churn. You can try it out, see how many paid subscribers sign up, and then compare those churn numbers to those that are not on the email lists. If you're retaining far more people than the control list, you have something worth more investment. If it doesn't work? You move onto the next idea.

Retention is critical to a healthy subscription business. And paid-only newsletters are one of the many ways media companies are working on that.

Thanks for reading today's AMO. If you have thoughts, hit reply. Become an AMO Pro member to start receiving the Friday edition of AMO, for an invite to the AMO Slack, and for paid early bird registration to the upcoming AMO Summit on October 26th here in NYC. Have a great week!