Last-click attribution in a cookie-less future: A battleground for brands and publishers

There's been plenty of talk around user privacy in the advertising world these days. Google and Apple have definitely placed pressure on brands by removing the crucial component of tracking – the ad ID. Just last month, Google said in a policy update that the ad ID will be removed in late 2021 when a user opts out of internet-based advertising or ads personalisation. As such, the ad ID will be unavailable and advertisers will receive a string of zeroes in place of the identifier. Meanwhile earlier this year, Apple rolled out its iOS 14 which requires users to give developers permission before tracking them via the identity for advertisers (IDFA). Users are also allowed to change permission preferences in their settings.

These have certainly posed a challenge to not only advertisers, but publishers as well. A 2019 study by Google which surveyed the top 500 global publishers, the average publisher revenue decreased by 52% when it disabled access to third-party cookies, with a median per-publisher decline of 64%. While a handful of publishers had a small revenue loss of less than 10%, Google found that majority of publishers had losses of 50% or more, with some losing over 75% of their revenue.

While the industry, in general, has concluded that contextual targeting is one of the ways to overcome this hurdle, last-click attribution will still be impacted as a result of the lack of identifiers. As of now, the main focus has been on user privacy and the next steps advertisers should take. Publishers and developers, however, are also expected to struggle amidst these new developments. 

For example, DMG Media's publisher Martin Clarke, told tech publication Recode that the changes at Apple, in particular, makes it tougher for the company to monetise its Apple app users. DMG Media, which is the parent company of publications such as UK-based newspaper Daily Mail, is said to have "an incredibly loyal readership" and according to Clarke, 1.2 million readers use its MailOnline iOS app daily. Based on this, Clarke added that "there is no point" in offering an app on a platform that will not monetise as well as other platforms.

Meanwhile, Eugene Wong, executive director and group CEO of Malaysia-based Sin Chew Media Corporation, told MARKETING-INTERACTIVE that its strategy has always been focusing on first-party data as it believes that the future of new media lies in the building of a solid community via its proprietary digital assets, as well as meaningful engagement with the audience. This includes initiatives such as membership, newsletter and other loyalty efforts along with CRM. 

Thanks to the legacy of traditional media, we have inherited a business network and track record with clients. Hence, we are able to rely less on programmatic and open exchange, which is highly reliant on non-first-party data.

"The impact of the apocalypse of cookies will be more on those publishers who lack the ability to provide direct solutions to advertisers, or those news aggregators that solely count on programmatic and exchange," he explained.

To overcome this, Wong said advertisers may revisit and reevaluate contextual advertising which is advantageous to news publishers, instead of taking the "shortcut" of allocating lion shares of spending on the lower funnel of consumers' decision making. Also, creativity, credibility, viewability, and brand building may have a new breath of life as a result. "News media publishers ought to continuously champion their forte," he added.

Industry players weigh in on publisher impact

The moves by Apple and Google will create a major shift in how mobile ad targeting and measurement is executed, Cindy Deng, App Annie's MD, Asia Pacific, said. While the bigger publishers can be somewhat better protected with large proprietary first-party data sets that are built from their user base, the smaller companies will likely suffer from a lack of scale.

According to her, this change is also leading to more consolidation in the market, especially in mobile gaming where publishers are buying adtech companies or taking programmatic media in-house to take greater control of their business.

For example, American social video game developer Zynga acquired adtech firm Chartboost in May this year. The latter is said to have more than 700 million monthly users and over 90 billion monthly ad auctions. One of the main reasons for such acquisitions is if user acquisition is becoming more challenging, and user acquisition cost rises with less precise targeting, the ability to retain and cross-sell existing users within a publisher's own network of apps or games becomes more critical. Such acquisitions also help achieve more effective returns on ad spend, and customer lifetime value estimations to support audience testing and experimentation, she explained. 

"In this case, publishers should segment and classify their own user base and run creative testing to identify optimal messaging. There is a higher likelihood to connect with a consumer when the ad creative is aligned with the context of where the ad is placed. While there will inevitably be near term pain, these changes should also be seen as opportunities to innovate and invest in new technologies," Deng said.

The deprecation of cookies and ad IDs, however, does not signify the end of last-click attribution. Instead, AdColony's VP, demand operations and supply, APAC, Asim Rehman, believes it is here to stay and will evolve. Nonetheless, publishers that are reliant on performance advertising dollars will feel the biggest impact, assuming opt-outs are high, Rehman said, adding:

When marketers cannot accurately measure, or hold vendors accountable, they will not pay the premiums they have historically paid. There will also be implications on audience buying and retargeting efficiencies.

However, all is not lost for publishers because gaming is the largest genre in terms of downloads, usage and time spent within the mobile app ecosystem. The good news for publishers, according to Rehman, is that there has been a greater receptiveness towards gaming audiences, as after all, mobile is a natural fit for brand marketing core objectives such as brand safety, viewability and fraud. Also, as ad agencies continue to embrace this medium, Rehman added that brand dollars are expected to follow and hence, an increase in spending in campaigns that do not tap on last-click attribution.

How can advertisers determine where their ad dollars are channelled to?

Advertisers typically work with various partners for campaigns, from supply-side and demand-side partners to measurement firms as well as media and creative agencies. With last-click attribution impacted, they will also face the challenge of determining where exactly their ad dollars are being channelled to. This then requires advertisers to go back to basics.

App Annie's Deng explained that brands should leverage old school instruments such as incrementality testing.According to AppsFlyer, incrementality is the measurement of the overall value that can be attributed to advertising spend. It measures how effective marketing campaigns really are and assists marketers in determining the most effective strategy to achieve their goals. When applied, AppsFlyer said incremental measurement can provide insights into the true value of distinct advertising channels and campaigns and help determine which of those campaigns have the strongest impact on revenue or other business KPIs and allow to optimise budget accordingly.

This helps advertisers measure value by attributing spend to revenue that would not have been expected without that activity. 

In general, the industry will need to move away from deterministic, user-based attribution and measurement. These changes will force companies to adopt statistical modelling and data science approaches to measure and maximise the value of businesses.

In a post-IDFA or Google ad identifier world, Deng added that companies can learn to adopt a unified data approach, driven by AI and data science to combine first-party data signals with market data and aggregated insights. Doing so will offer "the best bet" for a robust and sustainable solution to engaging audiences in a privacy-compliant manner, Deng said.

Similarly, with the focus shifting towards contextual and cohort-based targeting, M&C Saatchi Performance's director of growth, Roshat Adnani, said the old school concept of "knowing your customer" will become critical for any media campaign. According to him, this concept had taken a backseat in the past few years due to the reliance on behavioural targeting. Moving forward, advertisers will need to spend more time on research and first-party data and make decisions for media accordingly. "There will be growing reliance on hypothesis-based testing and action planning frameworks for media buying which shall result in success," Adnani added.

Aside from determining how their ad dollars are being channelled, advertisers will also face the challenge of knowing how much exactly to pay publishers. The cost per mile (CPM)-based buying has always been the foundation for digital media buying, Adnani said, but publishers have also created their own buying methods such as cost per click and cost per day, for example. Based on the recent developments, he expects the industry to once again rely on the CPM method. 

"One big change that should happen in the industry would be the advertisers will have to start measuring the ROI from ‘attributed results’ to ‘incremental results’. With the impact on overall attribution, the focus on incrementality measurement will increase and this will also elevate the perceived value of the publishers thus helping them command justifiable premium rates," he added. As with general industry consensus, Adnani is also of the view that publishers and developers will have to focus on building first-party data to help them understand their customers better.

How can publishers and developers monetise?

While this might be a challenge, for now, it is certainly not something publishers and developers cannot overcome. Publishers and developers can also take ownership of first-party data to justify higher CPMs through greater visibility on audience segments, App Annie's Deng said. With less third-party targeting signals available, she said the onus is on publishers to understand more about the value of their audiences and surface that to the buyers. There are still tools available to publishers, such as the identifier for vendor (IDFV), which Deng said can offer data points and signals to help publishers to understand and segment their users by customer lifetime value. 

At the same time, publishers and developers can aim to improve the likelihood of app tracking transparency opt-ins. App Annie's Deng explained that while the general belief is that the opt-in rate will be low, publishers should still take measures to increase the likelihood of user consent by optimising the user journey.

"This includes measures such as A/B testing on what is the most effective pre-emptive message to display in order to encourage users to give consent and when in the user journey should the app tracking transparency pop-up show up," she said.

One of the best ways for publishers to monetise their apps more effectively is to provide contextual signals of their inventory in the ad call. Based on deeper understanding of its user base, publishers can package these audiences into deal ID segments for advertisers to target.

Meanwhile, impactful creatives are also more important in capturing users' attention. According to Deng, high impact ad formats such as rewarded video can generate more engagement and viewability which generally leads to higher CPMs.

When considering new ad experiences, especially for in-game, publishers can look beyond just a virtual billboard in a 3D game. Instead, AdColony's Rehman said they can also include custom executions such as a brand object in gameplay, or non-standard sponsorships opportunities such as customising the cloth on a pool table. Another option to consider is creating subscription options where users pay a nominal monthly fee to access content, he said. While this might be an option for some developers, it is still a better alternative than littering apps with ads which will eventually create a negative user experience and overtime, decrease usage and revenue. 

"Publishers should also review their existing tech stack and monetisation partners. Some publishers have a reluctance to install third-party SDK and inadvertently are turning down ad revenue," he added.

Photo courtesy: 123RF