The Guardian will be paid for permitting the collection of contextual data on its site

This is a publisher-ad tech story with that rarest of things: a happy ending.

And it starts, like all these stories do, with a publisher (in this case The Guardian) being frustrated over the amount of money it’s losing to ad tech vendors — (specifically ad verification companies). It’s a particular source of contention for the publisher because those vendors are selling contextual data taken from its site without its say-so.

This isn’t a new concern per se. 

Publishers have had this beef with ad verification companies for several years. They’ve never liked the fact that the same companies scanning their pages for contextual signals on whether advertisers should advertise there are also selling those signals to advertisers to advertise there. Nevertheless, publishers resigned themselves to the fact that it would happen regardless. But now, they see a chance to draw a line in the sand by being able to set the terms of how those contextual signals are collected, and ideally get paid as a result.

It turns out that dreams can come true for publishers. 

The Guardian announced this morning (April 20) that it’s working with a contextual ad firm that has agreed to more equitable terms for both parties. In a nutshell, those terms mean Illuma will pay the publisher so that it can collect and subsequently sell its data for targeting. The financial agreement was not disclosed.

“The technology we’re offering has its benefits in that it uses a wider breadth of contextual environments, but it’s not the thing that’s solving the issue here,” said Illuma’s CEO Peter Mason. “Really, this is about having a legal contract that says publishers should have a right to decide who does what, with intellectual property that they own.”

However, desires for this legal protection for publisher data has fallen on deaf ears, as they normally do when publishers are involved. They don’t have much leverage. That power rests with advertisers. All publishers can do is continue to draw attention to the issue, and hope that most companies want to explore these types of data licensing agreements.

Happiness isn’t a guarantee for The Guardian and Illuma after this honeymoon phase is over. Ad verification companies haven’t exactly been a shoulder for publishers to cry on, as they have maintained they’re not doing anything wrong to publishers.

After all, publishers are remunerated every time an advertiser buys an ad on one of their pages on the back of that contextual targeting. It’s the data scraped from that page (i.e. the classification data) that allows advertisers to know that the page is a good place to advertise, and therefore buy the impression. Any additional commercial agreement on top of this current one would mean the publisher gets paid twice for the same impression. 

It’s a frequently made point, albeit one that has a bit of contention around it. 

The first point of contention for publishers is that they see notably less money when an ad is bought via an ad verification tool instead of them. They don’t know how much they’re missing out on but they know it’s a lot, when over half of Integral Ad Science’s programmatic revenue in 2022 came from a similar offering. 

As Paul Thompson, country manager at ad tech vendor Seedtag, explained, “The publisher only gets paid once for the impression and doesn’t really get to set a fair price for it if they are being disintermediated from the source of the advertising investment by what is effectively an unfair technology tax.”

Publishers also take issue with the data problem in these exchanges. What’s sold to advertisers by these ad verification firms aren’t always categorized the same way by publishers. Ad verification vendors use the sub-words in a URl to inform how they categorize pages for advertisers. Publishers would argue they’re better placed to categorize their own pages. 

True, the more accurate and advanced the classification, the more the publisher should benefit. But publishers clearly don’t feel like this is happening enough. 

“They [ad verification companies] may say that they’re making us lots of money because we’re enabling marketers to buy you as a news publisher, but we often doubt that,” said Katherine Le Ruez, director of commercial strategy and operations at The Guardian. “We have no evidence of that actually happening.”

There’s no required level of transparency here. Publishers can’t say for sure how much money these companies are making from data scraped from their sites. They don’t know how their pages are being categorized. They’re not clear on which ad verification firms are friend or foe. All they do know is that if they refuse to work with any of these companies outright, they essentially lose any ad dollars that have brand safety or verification needs tied to them.

“Some level of comparable licensing deal would mean that we have better sight of who is buying what, what has been categorized in what way and whether it is net positive or actually net negative,” said Le Ruez. 

Whether it’s possible to get the ad verification vendors to pay for something they are currently getting completely free is anyone’s guess. Le Ruez understands this. However, she’s also aware that the current impasse isn’t sustainable in the long term. Not when there’s so much money publishers are already losing due to this issue as well as due to the inventory that is incorrectly and bluntly blocked by the same ad verification companies.

“Ideally, we would be able to have conversations with lots of vendors to try to understand what might happen in the future,” said Le Ruez. “And I think equitable and fair is a fairly good basis for us to go into those conversations and say, ‘OK, this is what’s currently happening, this is what this means for publishers, and maybe there is a different way for us to do business.’”

Really, this boils down to what publishers believe they’re entitled to. They feel more threatened by anything that undermines their efforts to sell their own data directly to advertisers. The loss of tracking signals across the market promises to finally tip the scales in their favor in this regard. Ad verification companies threaten this future by putting control over contextual targeting firmly in the hands of advertisers. Publishers don’t want this, given the amount of money they stand to lose.

“The opportunity is there for simplified connections to the proprietary contextual data of publishers,” said Richard Reeves, managing director of trade body the Association of Online Publishers. “Historically, however, the conversations on this matter would be bilateral with each individual publisher in order to be able to access that aggregated scale for the contextual piece. The more we approach this, there is the ability to deliver that simplicity in a comparable way.”

https://digiday.com/?p=500219

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