Monetizing your First-Party Identity Graph

How do I make money once I have a first-party identity graph?.

Once you have a Firsty-Party Data Graph, the next logical question is, "How can I turn this valuable asset into revenue?" In this article, we'll explore several revenue-generating strategies that leverage your first-party data to address the evolving landscape of digital advertising.

1. Direct Sales

Direct sales have been a cornerstone for publishers but come with challenges, especially for smaller players. You'll need a Data Management Platform (DMP)or similar data platform to create custom audience segments to succeed in this space. Additionally, licensing demographic data is often necessary to meet advertisers' specific targeting requirements. However, the rising costs of DMPs and the human resources needed for managing direct deals can pose challenges for smaller publishers. Licensing and managing a full-service DMP rarely pays for all but the largest publishers. Over the last two years, lighter-weight DMPs have emerged, and some DMP vendors have given away their technology for rights to data and media assets. 

Pros: 

• Precise targeting control over campaigns
• Significantly higher CPMs
• Predictability

Cons: 

• High operational costs 
• Resource-intensive
• Additional technology expense

Within direct sales, publishers can use emerging privacy-enhancing technologies like data clean rooms to match publisher first-party data with brand CRM data. These buys typically have less scale but deterministically target the exact user a buyer seeks - and they pay more to reach them.  While a complicated process requiring overhead, it does empower publishers to create deep and sticky relationships with key buyers to curate exactly what these buyers need.

2. Bid Signal Enrichment

Bid Signal Enrichment is an innovative approach to leverage 1st-party data. Publishers share their first-party data with potential buyers in the bid request to make sure the buyer understands the impression better, thus enhancing the value of impressions. This strategy shifts the focus from third-party to first-party data sources, aligning with online privacy trends.

Pros:

• Enhanced impression value 
• Data-driven decision-making

Cons: 

• Technical complexity
• Buyer-specific requirements
• Changing protocols and processes make this complex for a publisher to manage alone

3. Building Private Marketplaces (PMPs)

Private Marketplaces (PMPs) offer premium ad inventory to select advertisers. Using 1st-party data for PMPs involves syncing your data with Supply-Side Platforms (SSPs) or Demand-Side Platforms (DSPs). This enables you to tap into traditional Real-Time Bidding (RTB) channels.

Pros: 

• Premium ad inventory 
• Targeted ad placements
• Higher COMs than Open se

Cons: 

• Small publishers may face challenges partnering with SSPs and DSPs
• Seat needed on SSP to create Deal ID
• Staff and infrastructure needed to support 
• Complex process from end to end to do alone

4. Reach Extension and Retargeting

Reach extension involves using your first-party data to target your existing audience and similar audiences across different platforms and websites. This expands your audience and boosts ad rates and the ability to service a client’s demand/reach requirements – ultimately increasing revenue.

Pros: 

• Audience growth
• Improved ad rates
• Fulfillment of client requirements

Cons: 

• Data quality
• Compliance considerations
• Requires additional overhead and seats on SSPS or DSPs

5. Data Sales

In the digital advertising landscape, data is invaluable. First-party data generated from direct user interactions provides a clear view of audience behaviors and preferences. Publishers can package and sell this data to advertisers seeking reliable information if appropriately consented.

Pros: 

• New revenue stream
• Actionable data segments

Cons: 

• Evolving technology
• Standardization challenges
• Need for scale
• Privacy concerns
• Brand concerns (pub relationship to users)

Conclusion

The future is coming faster than we might like:

In the dynamic world of digital advertising, possessing a first-party identity graph provides a bridge to the cookieless future and presents a myriad of revenue opportunities at your fingertips. Yet, it's essential to acknowledge that navigating these opportunities and successfully monetizing your first-party data requires a well-thought-out strategy. Sitting on your hands is no longer an option. Fortunately, these processes can be easily managed with the right partner by your side.

As we've explored various revenue-generating strategies, it's clear that each avenue presents its unique set of advantages and challenges. 

• Direct sales, while offering precise targeting control and higher CPMs, can be resource-intensive and costly. 
• Bid Signal Enrichment, an innovative approach, enhances impression value.  However, the current deployments are cumbersome, SSPs are inconsistent in their absorption of these signals and can cause page performance issues. 
• Building Private Marketplaces (PMPs) unlocks premium ad inventory but may pose hurdles for smaller publishers in terms of partnerships and infrastructure. 
• Reach Extension and Retargeting broaden your audience and boost ad rates but require careful data management and compliance considerations. 
• Lastly, Data Sales can open up a new revenue stream but comes with evolving technology and privacy concerns.

The key takeaway is that while the revenue potential is vast, choosing the right path and effectively managing it is crucial. This is where a partnership with a trusted and transparent vendor becomes invaluable. Such a partner can help you navigate the intricate terrain of adtech, offering solutions that streamline operations, mitigate challenges, and maximize your returns.

Whether you're a seasoned online media veteran or a newcomer, the intersection of data, identity, and monetization is ever-evolving. Adapting to these changes and making the most of your first-party data asset requires a strategic mindset. By considering the expertise of the right vendor, you can confidently navigate this landscape, ensuring that your first-party identity graph becomes a powerful engine for revenue growth as you continue to build your community and quality content.