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Data leakage and evolving the publisher licensing model

Data leakage has long been a problem in digital media. It typically occurs when an advertiser or third party vendor collects data on a publisher’s audience and uses it for their own purposes without the publisher’s consent. The uncomfortable truth is it’s actually fairly easy to capture data without a publisher knowing. In fact, any advertiser leveraging an ad server, data management platform, or attribution vendor can do so. Each time a publisher plugs into a supply-side platform or ad exchange, they are exposing their data to potential theft. And, as programmatic continues to evolve, publishers are exposing their data to an increasing number of demand sources in an effort to maximize revenue (ie. Header Bidding), further increasing risk.

Let’s be clear. The capture and use of publisher data without consent is wrong. Full stop. However as illustrated above, it can be difficult for a publisher to combat. First, it’s hard to know where data is leaking, who the offending parties are, and how the data is being misused. Second, while there are bad apples, most players are upstanding and leverage a publisher’s data for approved uses such as frequency capping and campaign attribution. If a publisher were to forbid these use cases, it’d be akin to throwing out the baby with the bathwater.

So, what’s a publisher to do? For most, there’s an inherent tradeoff between protecting data and maximizing revenue. If a publisher wants to be as safe as possible, it would disallow all or most third parties from accessing their property, effectively becoming a “walled garden.” Unfortunately, unless you’re a titan like Facebook, Amazon or Tencent in China, this is unlikely to be a practical solution. For this to work, the publisher would need 1) The funding, talent and infrastructure to develop it’s own full stack to provide services advertisers require but typically receive from third parties 2) Data and inventory of enough scale and quality that advertisers would be willing to plug into a solution sectioned off from the rest of their activity. There’s a good reason why the most successful walled gardens are also some of the most valued companies in the world.

While not a silver bullet, a more realistic and deployable approach for publishers is to work with their agency and brand partners to broker data licensing agreements which clearly stipulate who owns what data and how different parties can use it. By making their data available legally on their terms, publishers effectively take the gun out of the hands of those who might steal their data. Also, this creates an additional revenue stream to offset actual and potential losses due to data leakage.

A few forward-thinking publishers have begun doing this, but most are hesitant and continue selling data only when packaged with inventory. This could be out of fear for additional data leaks, or that advertisers will be less incentivized to purchase on-site if their audience can be reached off-site. Both are unfounded in my opinion.

On the former, given the existing leakage risks publishers face, the incremental hazard is immaterial. Data contracts should also clearly stipulate accepted use cases and terms denoting the shelf life of a publisher’s audience within the buyer’s platform. On the latter, while leveraging publisher data to address audiences offsite is powerful, delivering ads in a premium, contextually relevant environment will always remain valuable. The use cases are different, synergistic and not mutually exclusive. Publishers who recognize this in today’s ad space will enjoy a first-mover advantage and see increased investment from buyers.

I believe within the next 10 years, publishers selling their audience data in a controlled manner will be as common as selling inventory. As for today, data leakage remains very much an issue. However, it also provides the industry an opportunity to adopt more democratic uses of publisher data. This opens new revenue streams for publishers whilst allowing savvy marketers the means to better reach their customers and deliver smarter, more valuable ad campaigns.