GDPR is leading to more second-party data deals

While the General Data Protection Regulation hasn’t decimated the digital advertising industry as once feared, it has accelerated demand for risk-free buying options. Contextual targeting has enjoyed a bump, as have programmatic-guaranteed deals. Now, second-party data partnerships are getting a second wind, according to some major publishers.

The Guardian, News UK and Business Insider have all claimed a noticeable increase in the number of requests for ways to co-mingle advertiser first-party data with their own customized audience data sets.

Second-party data partnerships can be divided into two buckets. The first is a co-mingling of advertiser and publisher first-party data sets to target known and locate new, similar audiences across the publisher’s portfolio. In the second form of partnership, a publisher is willing to decouple its data from its own inventory and sell it to advertisers who can then use it to target users off that publisher’s sites.

GDPR puts publishers on the hook for fines if their audience data is leaked and processed by another party in a non-compliant way without the publisher’s permission. That makes the second option rarer.

“The challenge for publishers is around commercial and [GDPR] compliance control of a valuable and sensitive data asset,” said Danny Spears, director of programmatic for the Guardian. “That’s the reason most don’t sell data separately from their media.”

But interest in both varieties has increased over time, and GDPR has given the trend added momentum, publishers claim. Advertising clients increasingly want to know how their customer data can be married with a publisher’s in a way that not only targets their known customers but that finds more like them — in a manner that is GDPR compliant, according to Ben Walmsley, digital commercial director at News UK, which owns The Times and The Sun national newspapers.

“This is now one of the first questions asked [in meetings],” he said. “It was accelerated by knowledge that GDPR was coming and there has been a growing backlash to third-party data which has often been questionable in its composition, and often quite inaccurate.”

In August, Group M agency Essence publicly revealed it had reduced its buying of third-party data audience segments by more than half, though stressed that the move hadn’t been triggered solely by GDPR. Omnicom’s trading desk Annalect will also likely reduce the total volume of budget that goes on third-party data audiences. The natural gap for that budget to fall is in second-party data partnerships, according to Miles Pritchard, head of data and technology strategy at Annalect. “The buy side has been over-leveraged on third-party data for a very long time,” said Miles. “GDPR has refocused the attention on extracting full value from first-party data.”

Publishers have been devising new ways to package these kinds of opportunities for advertisers. Business Insider is working on ways to scale the second-party data opportunities across its global programmatic ad offering. Meanwhile, in June, News UK rolled out its parent company News Corp’s advertising platform News IQ to the U.K. The platform pulls together all audience data from across its properties, that advertisers can then target based on their opinions and emotions, and marry their own data with.

“News IQ is a GDPR-compliant way of creating lookalike audiences,” added Walmsley.

Interest in the rarer option — where data is decoupled from media — remains an untapped opportunity. Publishers remain too reticent about what data they share with advertisers, according to Ryan Skeggs, gm of digital sports publisher GiveMeSport. But doing so would strengthen their chances of competing with the likes of Google, Amazon and Facebook, he added.

“It needs to be a trade-off where the publisher gets the big deal, and in return they’ll share their first-party data for free, from the campaign in real time,” said Skeggs. “So a buyer can execute using real-time-bidding, sequential messaging, and frequency capping all the way down the purchase funnel.”

The Guardian, News UK, The Telegraph and Reach hope to open up some of this potential via their alliance offering Ozone. This has the usual alliance bells and whistles: pooled inventory to offer advertisers bigger scale, via a single buying point. But what separates it is its technology play. Ozone is essentially a giant server-side wrapper solution, built using open-source pre-bid technology. With the publishers owning the tech, they’re better placed to guarantee the advertiser’s money is going to the publisher, rather than being lost among a long chain of ad tech middlemen, according to Ozone CEO Damon Reeve.

Although the platform is still fledgling, the concept could open a new way for one of the publisher partners to offer advertisers the decoupled customized audiences they want, but across the combined properties of all publisher partners.

“The responsibility for who is sharing audience data has shifted very much to the publisher, but there are opportunities as well as obligations,” added Reeve. “Publishers have a lot of value trapped within their businesses, and part of the strategy for Ozone is to unlock that audience data and share it advertiser first-party data, but in a GDPR-safe way.”

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