Last August, integrated advertising platform Adform announced the launch of its first-party ID solution, aimed at providing a way around the recent restrictions planned around third-party cookies. CTO Jakob Bak explains how it will work and why the industry needs to pay attention.
Last August, integrated advertising platform Adform announced the launch of its first-party ID solution, aimed at providing a way around the recent restrictions planned around third-party cookies. CTO Jakob Bak explains how it will work and why the industry needs to pay attention.
For some industry players, Google’s decision to phase out third-party cookies (and similar moves by Apple on Firefox and around the IDFA) is a play towards ever more restrictive walled gardens. What are, in your view, the consequences of these decisions for the media and advertising industry?
Undoubtedly, Google and Apple have evaluated the business impact these changes have on their own “gardens,” and this plays a major role in their decision. But there is almost certainly, also a significant part of the decision that is simply based on providing consumers with better privacy, as this is desired by many. The consequences are quite significant for a lot of systems in use, since third-party cookies are used by many advertising platforms ranging from email to display ads. So, the consequences are vast, but I do not believe that they signal the end or even cause a dramatic impact on most activities such as programmatic advertising. Looking at programmatic in isolation, the consequences will be that first-party IDs and data will take over third-party IDs and data. That will have the consequences that, generally speaking, bigger premium publishers will see a higher return on their assets while long-tail publishers will see the opposite. It will also significantly benefit the large, full-stack platforms such as Adform, since scale and full vertical access to publishers IDs and data become a technical necessity to run entirely on third-party IDs and data.
How important is it for advertisers and publishers to look for new options in that context?
It is absolutely critical to do so within the next year. Time is ticking down and a web of technologies stitched together with third-party cookies is not valid soon. So, planning should start now. Particularly, publishers need to start adopting first-party IDs and building up first-party data. While this is not rocket science, big publishing groups move slowly and need to set their direction right now. It is often missed that for most publishers, Safari and Firefox traffic – which today doesn’t support third-party cookies – is a significant part of their traffic and selling at low CPMs. So, there is an immediate revenue opportunity in “going first-party.”
How does the new Adform first-party tech work, exactly?
While technically complicated since it spans our SSP, DSP, DMP, and ad server, and affects over 1,000 physical servers, it is remarkably simple. In essence, we have replaced our own IDs, which are based on third-party cookies, with first-party IDs from publishers and advertisers. These IDs mainly come from cookies, but since they are so-called first-party cookies, they are unaffected by the Safari changes or future changes on Google Chrome. When using these IDs instead, we are still able to address some of the main use cases, like targeting, frequency capping and reporting, albeit with some added difficulties due to these IDs being different across domains – it is not trivial to link them together.
How is it GDPR-compliant?
The use of first-party IDs as well as first-party data, whether based on first-party cookies or log-ins, is by default subject to the same GDPR requirements as when based on third-party IDs. It is all to be considered personal data and thus, the usual consent requirements and so forth apply. The IAB TCF framework works just as well for first-party IDs and data, so there is no additional need related to running first-party set-ups. That being said, there are some GDPR advantages with first-party, because third-party cookies are no longer needed and thus, some complexity in the European ePrivacy regulation, as well as GDPR, can be avoided.
Many industry players are developing new technologies based on first-party data. Couldn’t this lead to a fragmented and too complex landscape?
Yes, but I’m particularly annoyed by the white noise which we feel is enshrouding this topic in the media. There is a lot of talk that doesn’t really connect with what technically makes sense. Any effort to build first-party data assets, both for advertisers and publishers, will not be in vain – although the technology choice might need to be revised later on. We are sure that the world will consist of many different IDs, particularly across major publishers. So, our approach is to make sure that our platform is neutral and can connect all relevant IDs. We do not believe that a significant part of the Internet will be behind a single “log-in wall.” For example, it is hard to see that happening on a brand website: “If you would like to see our products, then you must log in!” It is inevitable that a multi-ID approach is the right way forward for us.
Adform’s solution relies on partnerships. How will this work across different markets globally, and in the Middle East in particular? Are you talking to potential partners, publishers specifically, in the region?
Yes and no. We have had the need for some big publishing groups and advertisers to help us roll out the first version that we launched; but as mentioned, it is fully neutral to the first-party IDs. So, we connect and work with any publisher or advertiser that can transmit their proprietary first-party IDs. We are getting close to some SSPs sending 10% of their traffic with first-party cookie IDs, so on that side, we don’t need partnerships and that then facilitates use cases like frequency capping, algorithmic optimization and reporting. However, when it comes to first-party data activation from publishers, we are deeply dependent on publishers joining what we call “The first-party.” That is going quite well though, as basically, publishers only have advantages from doing so.
