Fighting our way out of Open Web Enshitification

With first-party data, stakeholders can take control and re-engineer a better advertising experience on the web. This might just save the day for publishers, advertisers, journalism and content consumers.

(This is part 2 in a series. Read part 1 here)

There is a path….it involves publishers and other stakeholders taking a risk and investing and building their own assets. And if recent struggles are any evidence, all of this is uncomfortable because, frankly, it doesn't involve a rev-share, which goes against all the conditioning of the adtech industry for the last 20 years.

For the sell side, there are three pillars to reducing enshitification 

1. Invest in a first-party data graph you own: Let us be clear. Owning your own data and identity means you own your future. Said differently, advertisers and publishers must invest in their assets to control their destinies and prevent dramatic drops in ad effectiveness and CPMs. WIthout per-person targeting, publishers and advertisers will be forced into contextual-only targeting. Further, continued reliance on third parties for ID  and data will leave you out of control and bereft of the very currency you earn with your investments in customer relationships.
2. Control Data Leakage: stakeholders must proactively control data leakage, or risk further marginalization from others 
3. Take ownership, not a revenue share: the hardest to change, and it will take time. Revenue share models are easy and seemingly low risk. However, if everything is done using a revenue share model, stakeholders will continue losing control of their data and future. For instance, in most revenue share deals, publishers give up data control, inventory control, and often their relationships with their readers.  

So, where do we go from here?

Most readers today begin their online journey by scrolling through social media feeds or reader platforms, searching for specific articles rather than actively seeking to establish a relationship with the publisher. This behavior is further reinforced by the subpar user experiences often encountered on publisher homepages, as discussed in the previous post.

The lousy homepage cluster &^%$ has sparked one of the largest consumer boycotts in history–Adblock– signaling a growing dissatisfaction with the clutter and noise prevalent on too many web pages. The deteriorating web user experience is unsustainable, demanding a transformative shift in the ad-sponsored model.

Fortunately, spurred by regulation, privacy concerns, and the collective action of boycotts, stakeholders are being forced to enhance user experience within their communities and strengthen their position within the digital ecosystem.

Leverage the potential game-changing solution: first-party data.

Seismic shifts exist as the industry transitions to using first-party data as its primary currency. Contrary to the doomsayers, this transition heralds a new era of empowerment for publishers, enhanced return on ad spend (ROAS) for marketers, and improved user experiences for visitors to the open web. Here are the key publisher and user benefits of this monumental transition.

Better User Experiences: Third-party data and cookies “race to the bottom” has incentivized many publishers to overburden the page with ads. Because 42% of users have installed ad blockers to render 3rd party cookies of all types useless (thus destroying the publisher’s revenue future for that user). Worse still:  that single abusive publisher that has frustrated a user so much that they install the ad blocker consequently destroys the revenue potential for all subsequent publishers this user visits with the adblocker installed.

With first-party data (the publisher’s understanding of their users), users can be targeted more confidently, so publishers can (and should) reduce ad loads, pop-ups, pop-overs, interstitials, etc. This cleaner, more deterministically-targeted user experience will command higher CPMs and curate an experience with the user that helps build the publisher’s loyalty and return traffic.

Increased Privacy: Third-party data is often collected without users' knowledge or consent, which can raise privacy concerns. On the other hand, Publisher first-party data is collected directly from users, who are typically aware of and consent to the data collection. This means that publisher first-party data is more compliant with privacy regulations, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States. Further, publishers are more reluctant to let this data leak into other systems, given users' trust with the publisher.

More Accurate: Third-party data is regularly inaccurate or outdated. This is because third-party data providers aggregate data from multiple sources, which can lead to errors. On the other hand, the Publisher's first-party data is collected directly from users, so it is more accurate and up-to-date…and consented! When more accurate data powers the user experience, the end user faces less irrelevant and noisy cruft on a page.

Increased Effectiveness: Third-party data is less effective than first-party data for targeting advertising. Third-party data is often based on demographics or interests irrelevant to the advertised product or service. On the other hand, first-party data is based on users' behavior on the publisher's website or app, is more relevant to the advertised product or service.

Is First-party data advertising’s Obi-Wan Kenobi?

With all these benefits in the offing, stakeholders can use this moment to secure their data and its importance to other collaborative partners, reconstruct the user experience, restore a better experience on the open web, and restore consumer trust…and defeat the evil empire (whatever you believe that to be)

…Or not.

If stakeholders fail to invest in the opportunity and continue to be told what to do by the dominant ID and adtech vendors, they will continue to remain the servants of these large businesses as they get larger,  more entrenched, charge higher fees, and enshitify the Open Web as they grow richer.

First-party data is a better path for online advertising. It is controlled, more privacy-compliant, accurate, and effective than third-party data. Stakeholders that collect and use first-party data benefit from increased relevance, improved user experience, and stronger relationships with users and advertisers. Users of a first-party data-driven experience will be respected. They will enjoy better experiences– and thus become more loyal to publisher communities to reduce traffic acquisition costs and repeat traffic. The end result will be an advertising experience that sustains journalism and the broad diversity of voices humanity needs at this moment in time.