The ad industry is changing—here’s what publishers can expect

The advertising landscape is undergoing its most sweeping transformation in years. Apple just released the new version of Safari, which prioritizes user privacy; an updated version of Google’s Chrome, with a new ad filter, comes out in January; and new rules on data protection in the European Union take effect in May. These changes will give individuals more control over their data and rein in annoying and intrusive advertising.

Digital user data has become the lifeblood of modern advertising. Ads are increasingly targeted based on behavioral data, rather than on demographics. This is why nearly all of digital advertising revenue growth now goes to platforms like Google and Facebook: Those platforms are able to collect unimaginable amounts of data on billions of users and to deliver ads directly to them.

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But the tradeoffs for such precision in ad delivery have led to a chaotic, and potentially catastrophic, landscape for publishers who rely on ad dollars. More than 28 percent of US internet users have installed ad blockers. This has been the worst year since 2000 for WPP, the world’s largest ad agency, after, earlier this year, two of the biggest ad spenders in the world, Procter & Gamble and Unilever, decided to slash ad spending in part because of concerns around the transparency and performance of hyper-targeted ads served by algorithms.

The ad industry and the publishers that depend on it continue to struggle, with the decline of print ads and now the loss of faith in digital advertising. While some publishers are uneasy about the coming months, they ought to welcome the wake-up call.

Here’s what publishers can expect:

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The platforms

Apple’s Safari update, released last month across desktop and mobile, prioritizes user privacy and experience over ad dollars. This is an easy move for Apple to make, considering advertising is a negligible revenue source for the company.

The Safari update contains two features relevant to publishers: Autoplay Blocking, which allows users to block autoplay video, including ads (on iOS, video is only blocked if it isn’t muted), and Intelligent Tracking Prevention, which reduces cookies used for cross-site user tracking. Many publishers have become aggressive in their use of trackers as they try to compete with the data collection capacity of Facebook and Google for advertising dollars.

Read more: What iOS 11 means for news publishers and readers

Google is tackling the rise of ad blockers by putting out a “filter” for Chrome, the most popular browser in the US, in 2018. Google has been hit hard by ad blockers because it serves ads across sites on the open web, and has had to pay to get its ads through the most popular blocker, AdBlock Plus. Google is a founding member of the Coalition for Better Ads, and released guidelines for what types of ads are acceptable on Chrome. In Google’s first “ad experience report,” the LA Times was one of dozens of publishers listed as “failing,” primarily for use of pop-up ads, while others like The Salt Lake Tribune and Smithsonian got warnings. This puts the burden on publishers to overhaul their ad systems while skirting a major issue users have with how Google serves ads: a lack of privacy. For users who still want to continue using  ad blockers while visiting a publisher’s site, Google has a program in place for publishers called “funding choices” that allows users to do so—for a price—and takes a cut of what goes to the publisher.

Google has responded to Apple’s plans by introducing a Google Analytics cookie so that AdWords campaigns on Safari will not be affected by the browser’s data purge. Google will also end autoplay video in Chrome in January, unless the video is pre-muted or a user has previously “expressed an interest” in the type of content on the site, whatever that means.

 

The GDPR

Next May, the European Union will begin to enforce the General Data Protection Regulation, the most sweeping data protection legislation in decades. It will require both publishers and platforms to obtain consent from users in the EU to have their data collected, and to know exactly what is collected, and how it will be used. Readers will have to be presented with a clear option to explicitly opt in, and to easily opt out if they change their minds.

While some publishers are concerned this will affect their bottom lines, it could work out in their favor. For example, if platform companies are less able to aggressively collect data, this could level the playing field—slightly—between platforms and publishers competing for advertisers. While it will take effort to figure out how to convince readers to consent to data collection, it will be easier for quality publishers who have invested in a relationship with readers, like the subscription-supported Financial Times. That consent, in turn, could motivate publishers to reduce their dependence on shady trackers, and brands to place ads on their sites.

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The publishers

News publishers are overdue for a radical rethinking of the future of advertising and publishing. And with all of the upcoming changes, it makes sense to do so now. Some publishers are seeking new sources of revenue, while others are taking steps to improve the advertising itself: Fusion recently promised to give engaging ads bonus impressions.

One of the most significant efforts yet on the part of publishers to address trust with advertisers is a new ad exchange created by Digital Content Next, the leading trade association for digital publishers. While it doesn’t directly address user targeting and tracking issues, TrustX cuts out platforms like Facebook and Google as middlemen. According to the site, “the trust between marketers, publishers, and consumers has deteriorated.” (See, for example, the latest controversy around Russian ad spending on Facebook leading up to the election, concerns about ads placed next to terrorist and hate content on YouTube, and mismeasurement of ad performance on both platforms.) It promises to bring an unprecedented level of transparency, by showing all participating marketers and publishers what ads are on the exchange, and monetizing only ads seen by humans. Even the Association of National Advertisers endorsed the exchange because, according the the group’s CEO, “Trust, safety, and transparency have dominated the digital media conversation in recent years.”

There is no guarantee that TrustX, Fusion’s bonus impressions, or any other effort will work, but it’s a good sign that publishers are beginning to take things into their own hands. As user trust erodes toward those data-hungry platforms, so too will trust toward journalists for participating in their ad ecosystems.

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Nushin Rashidian is a research fellow on the Platforms and Publishers project at Columbia Journalism School's Tow Center for Digital Journalism. She is also the co-founder of the news organization Cannabis Wire. @nushinrashidian