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    Webinar: Preparing for a World Without Third-Party Cookies

    Sarah Hartland | Industry Analysis | 24th September 2020
    Webinar: Preparing for a World Without Third-Party Cookies

    The 'death of cookies' has been a topic of conversation for the media and advertising industries for a few years now, but in some ways third-party data has been on life support while publishers debate what to do next. With Chrome disallowing cookies by 2022, iOS 14 already restricting them, and data privacy laws on the ballot in some US states, let's face it: it's time to pull the plug.

    But what comes next? In this interview with Zephr CTO, Chris Scott, we discuss why publishers have struggled with this issue, and what they should do next.  Read the transcript below, or view the webinar on-demand here:

    Watch Webinar On-Demand

    Webinar Transcript:

    [00:04:56] Sarah Hartland: Well, welcome, everybody, on this early morning for those of us in the U.S. and the afternoon for those of you in UK and Europe, thanks for joining us across multiple times. We really appreciate that. Just for kicking us off, a quick introduction. I'm Sarah Hartland, I'm the head of marketing here at Lineup. And so excited today to have a guest with us, Chris Scott, who is the Chief Technology Officer at Zephyr. Zephyr is one of our commercial partners. We have loved working with them over the past several months, developing an integration with Amplio. And we'll talk about that more at the end. But suffice it to say, the Zephyr team is great. They are really experts in this area. Zephyr is a customer journey orchestration solution and we'll share a little bit more about that at the end. But, Chris, welcome. Thanks so much for joining us. [00:05:47]

    [00:05:48] Sarah Hartland: The topic today comes from that partnership and the many discussions that we've had around this and other topics. So definitely more to come, but we're really excited to dive in with you all today. We want to keep this fairly casual and conversational, so please feel free to jump in with comments and questions. We will circle back to those questions at the end... Anything else that this audience should know about you, Chris? Before we dive in? [00:06:32][43.5]

    [00:06:34] Chris Scott: No, I think that was a good introduction. Thank you very much. Thanks for having me. [00:06:37][3.3]

    Why have publishers procrastinated on preparing for the end of cookies?

    [00:06:38] Sarah Hartland: Great. Well, to start with, I wanted to frame this discussion with sort of the why we're talking about this today. Right. So 38 percent of publishers admitted to Digiday that they won't have an identity solution that will work post-cookies. This is despite the fact that we've been talking about the end of cookies, the death of third party cookies, the need to move away from cookies for years now. So that begs the question, why the procrastination? We've noticed so much commentary out there. And that was the first thing that the Zephyr team and my team noticed as we were diving into this paper and wanting to discuss this, the thing is there's so much commentary on so many of these great publications over the implications of this and why it matters, et cetera. But not a lot of concrete advice. So while we've seen lots of speculation over which identity solution is going to be the new standard, whether this is really problematic or actually really promising for the industry, which is something we've commented on in the past. I think that despite all of that commentary, a lot of publishers just weren't sure how to start. And it's very human to procrastinate, to kind of wait and see where the chips fall. [00:07:56][77.2]

    [00:07:56] Sarah Hartland: But right now, we're we're in the death of cookies. It's a slow death, but it is happening. And so it's time to buckle down and get ready. And that's what we're here to talk to you about today. And so with that in mind, we created this e-book to be focused on the path forward and not just discussing and debating the implications and what would happen to the industry next, but be more practical. And so these are the seven steps that are outlined in the e-book. You'll all get a copy of it if you don't already have one. And it's a great way whether you dive in and read it cover to cover, or just skim for the things that are most applicable to you. We've compiled a lot of sources across the industry and also internal expertize from Lineup and Zephyr to really dive into this topic and give practical advice. But rather than go through everything that's already in the e-book today, what we're going to talk about is some of that, the concepts related to all of these steps and discuss the things that you should keep in mind before you even dive into these things. [00:09:02][66.3]

    After a publisher has assessed their current situation, what should they do next?

    [00:09:04] Sarah Hartland: But I did want to point out here, we've labeled the first step as 'assessing your situation' and everyone here is going to be at a different point in that journey. You might be way behind and really need to do that. Or you might have already assessed the situation and realized, do we need to focus on that? So if that's the first step. My question to you, Chris, is, is there another prepatory step, like a one-point-five that publishers should be looking at? [00:09:30][26.4]

    [00:09:33] Chris Scott: Yeah. I mean, sure. Absolutely. So apart from the fact that you have to work out what your current situation is, there's also the broader ecosystem. So I would guess that a large reason why that procrastination is happening is not only is there a lot of work to be done, but everything is shifting around the need to say you have things like the chromium projects, the privacy sandbox, and you have potential reactions to it, to the market. But how ad value is going to change when these segments become less or less focused or perhaps harder to share? So until it first happens, until you actually third party cookies go away completely, nobody is going to know what they're aiming for. Right. We saw the same thing happening with GDPR. Everybody knew for a long time that it was going to happen. And a lot of companies were still a couple of months out from the deadline not having done it, right? And same kind of reasons here. We don't really know how everybody else is going to react. We might want to follow. We might let some people make mistakes first. So I think that's two things, as one is assessing your current situation and the other is trying your best to predict what's going to happen outside of your own control. [00:11:00][87.1]

    [00:11:01] Sarah Hartland: Right. And one of the things that we talk a lot about at lining up is the importance of talking with other publishers, especially today, where you have to really make an effort to do that. You know, the industry conferences aren't happening. You have to look for creative ways to get in touch with other publishers, to get in touch with people in the industry to attend things like this, because it is an ongoing discussion. One of the things that you had mentioned in our pre-interview, as well was the importance of really understanding your objective, like what you need to achieve, to start. And I think that's a great part of, you know, assessing the situation and really starting off with clear goals before you dive in and try to solve, you know, the problem. And so I think that's a great place to start. [00:11:46][45.3]

    [00:11:47] Sarah Hartland: We may return to this list and chat through some additional steps. I'm guessing we won't have time, but never fear we'll send notes on the webinar. And of course, everything that's listed on this slide is available in this e-book for you to read or skim. And I think it's a really great resource. So feel free to check it out. [00:12:08][20.4]

    [00:12:11] Sarah Hartland: Continuing on. [00:12:12][0.6]

    To what degree is the 'death of cookies' responsible for the industry's shift towards subscriptions?

    [00:12:12] Sarah Hartland: So more stats that frame some really important questions. Fifty-seven percent of publishers list growing subscriptions among their current top priorities. This comes from an independent research report with the North American Publishing Company (NAPCO) that we did with them. That's actually going to be released in just a few weeks here. So you're the first to see these stats. But they're pretty interesting. We also found that of those publishers, seventy-six percent listed the desire to collect better first-party data as a major driver of this shift. But the question that I have for you, Chris, but also for all of you in attendance, is what influence has the death of cookies had on the rise of subscription models among media companies? [00:13:07][54.6]

    [00:13:09] Chris Scott: Right. Well, so so look. The obvious answer is, of course, it has had some influence, has definitely sped this process up. But this isn't the first time that people have been talking about moving to subscriptions, ads revenue, in particular, has been increasingly challenged as incognito in private browsing, and Firefox and all of these concentrations of this come about ad blockers. All the rest of it has been talk about how to get a more balanced fair value exchange for pretty much as long as programmatic has been around. But that said, the quote-unquote, "death of cookies" is is absolutely a really big catalyst in that process. But I think I think you have to look at it a bit holistically and look at what cookies mean to a publisher. I mean, no, I would say I might be told this is a little rubbish on the comments, but I would say no publisher directly wants third party cookies. It's at best a tertiary concern. So what a publisher needs to do is to monetize the content, right. That's the primary goal. Some publishers do that through advertising. And so getting a good deal is a secondary need. And in order to do that, you potentially need third-party cookies so you can have a third party identity, and so you can share data. So like in and of itself, the death of cookies isn't necessarily a problem. And the big question is, will other technologies come in to take that place? Will they do it as effectively? And will it do it in time to keep these companies running, keep revenue took over? [00:15:08][119.4]

    [00:15:09] Sarah Hartland: Right. Well, I love how you pointed out in the beginning of what you were saying there, how this was kind of already the trend and this is just speeding it up. I feel like that is so much the story of 2020 overall, of every trend that was already happening, whether it's working from home, a trend towards subscription models or even just consumption of news media that was already trending one direction or another, 2020 came along and just added fuel to the fire. And similarly, yeah, the looming end of third party cookies is definitely bringing attention to a blended revenue model that I think most media organizations, especially those largest players where we're looking at already in the report that I mentioned previously, that's coming shortly. [00:15:59][49.7]

    [00:16:01] Sarah Hartland: Thirty eight percent of the respondents to that survey listed the reduction of cookies as the significant reason for shifting towards subscription. So that's just under you know, that's around the 40 percent mark, just under half. And that's significant. So it's definitely a factor not the factor. But I think it's it's one of the the drivers, certainly. [00:16:21][20.2]

    How can we improve the value exchange between readers and publishers?

    [00:16:25] Sarah Hartland: You mentioned ad blockers in your comments. So we're going to talk a little bit more about that more. So eMarketer says more than 30 percent of consumers use ad blockers, many more simply just ignore ads. We become blind to them over time. Just your news feed is full of them, right? I think the number is ad blocker numbers is actually higher, but I took a more conservative one for the sake of conversation. But it begs the question. To me, that signals something is off with the value exchange between readers and publishers. How do we correct that gap? [00:16:58][33.2]

    [00:17:00] Chris Scott: Yeah, right. And so, I mean, you talked about in the seven steps, you put that one point five, which is what are your objectives? And both the previous side on the death of cookies and this one on ad blockers, things like that. And those are all factors that are driving to what those objectives are. Right. So before we get into the details, I would say, like, you can list a few of them off top of my head. You've got I'm clearly diversifying revenue. So that's like this is going to absolutely touch on that and building the capability to experiment. So if cvid and 2020 in general shown us anything, it's that things can shift really quickly. So being able to test things out, like different ways to build a value exchange, for example, being able to test those things out quickly and get valuable data and react to it is going to be an absolute objective for most publishers and absolutely building first party data. And you talked about it a little bit earlier on. And the differentiator between one property and another when it comes to the SSP is will absolutely be the first-party data. And the publishers that have it will be able to command better ads revenue publishers have done. But not only that, they'll be able to feedback into their product management. They'll be able to get people to actually subscribe and pay cash for things - that will be the massive battleground. And I think that's going to be a, you know, a huge factor. And on a similar note, there's also going to be a big differentiation between potentially low value content and higher value content. Right. So what happened over the last 10 years or so is it became much easier for an advertiser to target a segment to target. So people targeting identity across the web, wherever they went. And so what you saw off the back of that was that things like click bait became a really good way to make a bit of money. [00:19:20][140.2]

    [00:19:21] Chris Scott: Right. You want to get more eyes on your page. You don't really care who they are. You don't really care about the quality of the content as much, because the advertisers don't. They want to get in front of the person, not in front of the content. But if you rewind like 10 years or so, you would see much more commonly things like The Daily Telegraph in London during a home page takeover where one brand had a massive splash on the whole thing. But in that case, first of all, I don't see a direct relationship, but also it was the quality, the content,and the quality of the community that drove where the advertiser put their money, not who they were, who they were putting in front of. And another objective that I would throw into the bag is like having a look at the content that is going to be monetized and attractive. So that really does come down to this value exchange stuff, both between the advertiser and the publisher and the publisher and their readers. And there are a few facets to that one. And another objective I'll throw in before we can go back in and get more detail into the value exchange, is being a little more conscious about the audience you want to attract. Again, it used to be that an eyeball had a set amount of value. It almost doesn't matter where it came from. But if the lack of third party identity in particular and certainly third party data behaves in like the most obvious way. So that is you won't be able to easily remarket people visit your site. You won't be able to easily target people who are put into a segment based on third party data. Then the information they advertise is going to have is what's the content and what's the community like? [00:21:16][115.1]

    [00:21:16] Chris Scott: So any publisher who can really attract a known, respected kind of community that has an added value, it's easier to comprehend. They will probably do better as well. So there's all of these objectives the publisher is going to need to be steering towards and, you know, as you call that, a lot of them will end up with that value exchange happening. How can that be optimized? So not just getting an eyeball equates to this kind of value. It's got to be the the the reader actually wants to be there. I want to be that so they can be resolved on treasons, but also so that you can get proper first party data, right. They want to be there enough, for example, to register seeking for registration, will maybe a meet and registration will get people to stop, tell you explicitly who they are so you can build first party data. That is is completely accurate. And you own can do it if you do. Actually, we should maybe come back to it. That's where the walled gardens that Facebook and Google of the world have got the huge advantage. Now, like this is another thing, a bit like the GDPR, where third party cookies wont harm them. Facebook and these ones with direct relationships, they have the best first-party data in the world. They don't care. They're not getting it from a third party. But the people who will suffer are the publishers who don't have that relationship. So, you know, again, a small side point that things like if your only log in is through Facebook social, you don't really have all the data that you're giving the data to Facebook. So by having this value exchange where you're building content that you believe in and you're throwing up some kind of barriers and people need to get through whether that's providing data or actually paying something. And by doing that, you can build a sustainable long term business model. [00:23:42][145.7]

    [00:23:43] Chris Scott: If you can't do that, then there's this question, this introspection that the publisher will have to have. Like what? Why is this content not valuable enough? If nobody is willing to give any information or any money in order to read this, then is the content of high enough value? And it might be that it used to be, based upon the way that ads were sold, going forward, perhaps it won't be. And that, again, leads to this market force thing going on. Can the Web maintain hundreds of publishers that have very similar stuff? I'm talking about bloggers. I'm talking about small organizations all the way through to the big established publishers. If the content isn't differentiated, if it isn't considered highly valuable. [00:24:37][54.0]

    [00:24:38] Sarah Hartland: Right. There's two underlying themes that I think you touched on that I want to emphasize, too. The first is really understanding your audience and the importance of that. And this is something that permeates so many of the discussions that our two teams have together of not just solving the identity question, but also understanding the value a reader brings to your business. Not just their subscription fees, but the ads that they view and click and their engagement rate and seeing all of that in one place and really understanding your audience. You can either take a huge scale of third party data and try and make deductions from that, or you can have first-party data that you own and that you deeply understand. And that I think it's going to be the new challenge is not only gathering first-party data, but ensuring data literacy. [00:25:29][50.7]

    [00:25:30] Sarah Hartland: And the second thing I want to point on it. I love how every point you made highlight the fact that this issue, the question of moving from third party cookies to first party data and the implications for the industry are not just a question of how it impacts advertising revenue, but also how it impacts subscription revenue and points to the fact that more and more, those two revenue streams have to work together for the success of a media organization. Those strategies have to be in sync. And as a part of that, I think, is making sure that your team is working together across different departmental silos. Right. That the ad team and the subscription team and even the editorial team has to be talking to each other to really get this value exchange right. And I love hearing from our customers how they're doing that better and more and moving the needle forward in that way. But I think it's going to become even more critical. And I see that as a theme underlying a lot of what what you were saying is none of these things work if you're not communicating within your organization, what the objectives are, what the steps are, and how those different pieces of the puzzle have to fit together for this to work. And I think it's really encouraging the ways that we're seeing publishers collaborate more and more internally and with other publishers. It's definitely an exciting shift I'm seeing in the industry, I love everything that you had to say. No disagreement for me, but those are the two themes. I think beneath all of that. [00:27:06][96.2]

    [00:27:07] Chris Scott: Yeah. I mean, so I completely agree. And the the fact is that diversified revenue is is absolutely what the end goal has to be, right. So now we're talking about what happens when third party cookies disappear. But there's a pretty good chance we're going to go into one of, if not the worst global recession that has been seen for a very long time. Right. So let's say that you magically converted all of your revenue into subscription revenue tomorrow. That might be something that seemed attractive in the through the lens of a losing third party cookies. But then suddenly, if everybody had less expendable income, you don't really want to be managing the churn on high subscriptions pool. Right. [00:27:56][49.3]

    [00:27:57] Chris Scott: So, like, personally, I think having actual paid for content really is the best and only way to prove that you're providing real value. And I would always have a subscriptions route if it's at all possible. However, what you need is a good diversified mix of revenue. And when it comes down to the quality of the content, it's if if it's not there. If the value exchange is a little off, then it forces you down a single revenue path, which is programmatic ads and such. So that's the problem, right? Having content where there's real value and real audience and real community opens up the options so you can build a diversified revenue mix that you can maintain for the long term. [00:28:47][50.1]

    [00:28:48] Sarah Hartland: Yes. Absolutely. I'd love to hear if anyone wants to share in the comments whether your team is doing this really well or struggling with this. [00:28:56][7.6]

    Why do readers share their personal data?

    [00:28:56] Sarah Hartland: Like if you're from the advertising or the subscription side, what are your relationships like with the content and editorial team that love to hear from you either right here in the chat? Or give me an e-mail at the end, because I think. Yeah, that's definitely the next conversation. Cool. All right. So first party data. Data is critical. We've covered that. It's critical for both the subscription and the advertising revenue. But before we can gather first party data, we have to understand why readers share their data in the first place. And Chris, I know you, Zephyr has done so much on exactly this question, so I'll let you answer it. I think it's a great discussion point. [00:29:38][41.7]

    [00:29:39] Chris Scott: Right. So I think you put this into two categories. And actually, for context, I'm particularly talking about where readers are explicitly sharing their data. Like, of course, you can build a model of somebody through what they consume, behavioral data. But I don't think that's really what the question is going for. And so if somebody is going to provide you explicitly with some information, they're going to do it for one or two reasons. [00:30:06][26.9]

    [00:30:07] Chris Scott: One is the registration wall or some variant of that. So basically the value exchange there is somebody is like it's part of a community. It's part of membership. They understand that this is content they want to keep consuming. And the publisher has told them the price for consuming. This is you need to tell us who you are. You need to register. Right. And that can absolutely work. It's a really fairly explicit way to do that. We've had a lot of customers and some big option groups that have had remarkable success where they they didn't necessarily expect it beforehand. Right. They had free content that was available to anybody without any restriction at all, entirely monetized through ads. And by putting up a registration wall, they got these really huge, unexpected uplifts in the amount of people who actually said, yeah, sure, I will tell you that information, because I read this content frequently and I know it's high value and that feels a fair value exchange. Right. So that is about community. That is, they feel a connection with the brands and they're willing to do it. Right. And the question is, is it a hard registration wall? like SaaS products are typically hard registration walls - If you go into Jira or whatever, you can't get a little bit of access. You have to sign up before you can do anything. So that's one option. A lot of B2B publishers do that quite a lot. Or you can go with the metered approach for registration. Where you offer some content for free and then drop the reg wall, also very common. And coming back to that objective, number one, and the ability, the capability, to experiment, that's going to be crucial because the question is, if you have a registration wall after three page views per week, let's say, wheren did three a week come from? Is that the right number? Almost certainly the answer is no. You're going to need to experiment. You need to try five. You need to try one. You're you to need try three a day. And then you're going to need to try page views vs. unique pieces of content. You're going to need to try having different meetings at different times of the day. And even if you then work out the perfect number, which for the record doesn't exist, you then have to go and make that more personal, more specific. [00:32:34][147.4]

    [00:32:35] Sarah Hartland: So I would say that number may be different depending on who it is. [00:32:39][3.6]

    [00:32:40] Chris Scott: Exactly. Yeah, absolutely. So you have to build a decent single customer view or some kind of store like that. And you need to start testing on different segments and maybe applying machine learning and things like this. And you can start to get it really optimized for the individual, not just the best number, since there's two steps for both of them need a lot of input, a lot of effort and a lot of experimentation, a lot to be done. And so that's one whole family if this getting a reader to explicitly provide data. The other is not so much about community, but it's where you're offering some functional benefit to doing it. And so the most to my mind, the most obvious example about which is is very, very common is things like content marketing, white papers. Right. Download this white paper if you supply your email address. And again, it's pretty clear it's Havruta, the value exchanges. You're being added to a CRM and then you become a prospect in some of these sales pipe. And in exchange for that. You get to read this concept where they've got a bunch of evidence producing it. And so that's a very common example without words. It's more of a transactional exchange instead of a community exchange. But those get a bit wider and more creative. [00:34:04][84.0]

    [00:34:04] Chris Scott: So examples of that would be if you want to follow a topic. So we have to do this very well. The famous my F.T. example, if you want to say email me updates about U.S. politics. Right. Then you're explicitly saying, I want you to do this. And I clearly need to give you my email address in order for you to send me the up. Or I clearly need to give you a username and password so I can load back in to see, like, my collected reading list or something like that. So it's going to fall two categories. One is just asking for data because a reader feels an affinity to the brand. And that may be more than just the hard ritual as well. You can incremental that you can come back a few weeks later and ask for a bit more information. Somebody who is engaged with the community will hopefully be willing to do that, or that can be those explicit functional triggers. In order to get the email newsletter, you need to do as right now. [00:35:08][63.9]

    [00:35:09] Sarah Hartland: Right. I'm thinking of examples where it's a little bit of both. Right. So the one that comes to mind, because it's the news that I consume is The New York Times, which is a combination of you get a third number of articles for free before they're going to push you to subscribe. But they also make a community almost emotional appeal in a lot of their marketing of, if you like, what we're doing and think it's important to subscribe that they support us. Right. So it's kind of the combination of the two. It is transactional, it is functional, but also there are elements of community there. [00:35:39][29.8]

    [00:35:39] Sarah Hartland: And I think that will become more popular as well. So, awesome,  if any of this is sounding like a lot a lot of ideas for how to experiment and what to do next, Zephr posted a great guest post on our blog yesterday, actually with five tips of how to do this. That's a great introduction to what customer during orchestration could mean for your business and how to get started with that. And I'm sure that we'll do more in the future. But we're just crossing the 30 minute mark, which is perfect timing. We'll tell you a little bit about what Zephr and Amplio are and how we're working together and then wrap up with questions.

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