How the digital ad industry is forging a path to privacy-safe data 

With the deprecation of third-party cookies underway, there has seldom, if ever, been a more urgent moment for publishers and advertisers to revisit their data strategies. And those strategies must include collaboration.

“As third-party data sharing becomes obsolete, privacy-safe data collaboration is important because it’s a growth driver. With increased risks of data misuse, sharing user data to enable ad planning, activation and measurement is becoming increasingly difficult,” said Bosko Milekic, Chief Product Officer at Optable. “Collaboration is about the ability to take your user data and combine it with user data from your partners in purpose-limited ways to glean meaningful insights, enable measurement, and activate and model audiences with.”

Interoperability is also essential to post-cookies data success. 

However, amid changes in identity and data sharing, publishers, advertisers and other stakeholders embracing the importance of interoperability are challenged by the very underlying understanding and definition of “interoperability” itself. And that’s putting them at risk of falling short of creating privacy-safe ad products.

Integration, compatibility and testing are foundational for interoperable environments

In an interoperable environment, multiple systems can understand, interpret and use each other’s data or functionalities without extensive modifications or custom integrations.

“Interoperability is taking collaboration apps and making them seamlessly work with all of these different clean room service layers,” Milekic said. “You’re not going to get a lot of value from collaboration if every collaboration is complicated and expensive, and it limits your ability to work with numerous partners.”

To achieve this outcome, publishers, advertisers and other ad tech players are turning to data collaboration solutions provided by technology partners, including data management platforms (DMPs) and data clean rooms (DCRs). However, there are several factors to consider when evaluating the interoperability of these platforms. 

First, a platform must foreground integration with leading data warehouse (DWH) clean room service layers. These APIs and interfaces enable the joining of disparate organizations’ data sets while minimizing data movement. For instance, by automating the flow of data to and from a DWH and federating code to these environments, an advertiser with audience data in DWH A can easily match it to a publisher’s first-party data (the matching itself would happen within the same DWH).

Additionally, compatibility with open, secure multi-party computing (SMPC) protocols enables matching beyond the data warehouses. For collaborators, SMPC enables double-blind matching on encrypted data without requiring data decryption throughout.

Built-in entity resolution, audience management and activation, with deep integration to all major cloud and data environments, streamlines the process for organizations to plan, activate and measure with data collaboration systems effectively. Organizations or their partners may have data across multiple environments in a fragmented ecosystem, including CRM, cloud storage and DWH.

Finally, platforms should offer a flexible identity solution that allows for alternative ID management, including second-party IDs, as well as seamless data enrichment to increase addressability and monetization optimization (including both direct-sold and programmatic).

Gauging how prepared organizations are for interoperability

As organizations progress toward a privacy-safe framework of de-siloed interoperable data environments, there remains room for improvement. For instance, consider two organizations at different points in their data collaboration transformation.

Publisher A is beginning to lean into its privacy-focused monetization strategy. It has invested in collecting first-party audience data through newsletters, sweepstakes, subscriptions and other means, storing that information in a DWH. The publisher is also managing consent through a consent management platform and deploying it across all properties. With the use of DCRs, Publisher A is identifying overlap matches and setting up campaigns with advertising partners. 

As part of its strides toward privacy-safe media, Publisher A is developing new ad products, increasing CPM and asking for larger commitments for partners to use its collaboration solution. Publisher A has a small team of one specialist seller and a few operational folks that partner deeply with its ad sales and operations teams to sell these new products.

Meanwhile, Publisher B has expanded its data collaborations to include second-party data companies, which gives it new attributes with which the organization is building custom audiences. Publisher B’s partnerships with retail media and media measurement providers allow the organization to offer measurement solutions rooted in ROAS, attribution and audience delivery to its advertising partners.

“Interoperability will also allow for organizations like Publisher B to connect their data to other important parts of their systems and different technologies, allowing them to work with more partners,” Milekic explained. “It’s another advantage for partners that work with systems that are interoperable, creating more growth opportunities.”

The organization has also scaled a sales and operations team that is selling larger advertising commitments, having expanded the verticals they are selling to and increasing overall ad revenue. 

Publisher B is beginning to implement a new DMP, which allows it to combine event-level data across all sites with its known user data. The DMP provides more insights into the publisher’s audience reach and attributes so the team can sell directly and enable bid enrichment through ID partners to capture more demand programmatically. Ultimately, this allows Publisher B to combine ad server data for enhanced campaign and measurement reporting.

Privacy-safe, interoperable environments are driving growth and collaboration

If Publisher A is scoring at a basic level of interoperability across data compliance, data integration, cross-platform compatibility and usability, Publisher B has grown beyond Publisher A’s capabilities and is scoring at an advanced level of interoperability.

For Publisher A to make progress and catch up with Publisher B, it will need to grow its ad products, which may involve building and experimenting with different audience types. Increasing the amount, types and complexity of data Publisher A is working with requires optimizing the secure usage and activation of this data. For Publisher A this may also mean growing the team focused on these solutions to bring in more and new types of data-centric skill sets.

“Privacy-safe collaboration enables growth for both publishers and brands,” Milekic said. “User data is extremely valuable for advertising, but in this post-third-party cookie world, publishers and brands have to be a lot more responsible. That’s what data collaboration and interoperability enable.”

This level of interoperability is critical for organizations to unlock the potential of data collaboration. With this in mind, businesses are poised to continue investing in DMPs and DCRs in 2024.

Sponsored by Optable

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