Welcome to all the new subscribers! If you’re new here, I send two issues a week—Tuesdays and Fridays. The styles are either long-form essays or, in this case, analysis and opinion on what others have written. If you ever have thoughts, feel free to reply to this email. I typically answer everyone (and if I don’t immediately, I will soon).
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Google picks a date to go cookie-free
It appears that the final nail in the coffin of 3rd-party cookie-based advertising is upon us. According to a blog post published by Google, it has picked a time to start phasing cookies out.
…we are confident that with continued iteration and feedback, privacy-preserving and open-standard mechanisms like the Privacy Sandbox can sustain a healthy, ad-supported web in a way that will render third-party cookies obsolete. Once these approaches have addressed the needs of users, publishers, and advertisers, and we have developed the tools to mitigate workarounds, we plan to phase out support for third-party cookies in Chrome. Our intention is to do this within two years.
What has worked for so many years is finally coming to an end. But fret not because Google thinks that it will be able to come up with a solution—of course, with publisher and advertiser involvement—that will make everyone more money.
I can guarantee that Google will make more money. Google will do nothing that does not guarantee it makes more money.
What about the publishers, though? Will this just be another cut against publisher revenue in a time when there is already so little?
Apple and Mozilla have already gone down this path of blocking cookies. Microsoft has released its new Edge browser, which comes with cookie tracking automatically turned off. But Chrome accounts for 68% of total global browser usage. Without cookies, won’t this destroy publishers?
Matt Keiser, founder and CEO of LiveIntent, told StreetFightMag:
However, you know who else has access to first-party data? Anyone who drives audiences to their websites: Publishers and advertisers. If entities with audiences are smart and willing to work together with their first-party data, they’ll finally be able to mount a defense against the triopoly (Facebook, Google, and Amazon) and own their own destinies.
This is an important point worth discussing. Publishers have, for so long, been uninterested in collecting their own first-party data. But that apathy appears to be changing, with the most advanced publishers getting more serious about knowing who their users are.
Consider how much data you could collect on a user. You know where they are, what stories they’re reading on your site and if you’re smart about getting users to give data, you can continue to collect more.
But it’s the second point in Keiser’s quote that is worth mentioning. “If entities with audiences are smart and willing to work together…” What’s to stop two major publishing companies from working together from a data perspective?
This is technically referred to as a second-party cookie. Whereas a third-party cookie is dropped from a separate domain, a second-party cookie is when publisher A shares user data with publisher B. If the two publishers agree to share data back and forth, this could create even more information about those users, which in turn allows publishers to help advertisers target the right audiences on their properties.
That means publishers need to start thinking about these problems now. What kind of data are you collecting about your audience? If there is none, that needs to change.
It doesn’t stop there, though. Publishers are going to need to start figuring out how to use that data. That is going to require a few steps:
Start developing the systems now to collect and store that data. I would wager many customer data platforms are emailing operators desperate to get your business.
Figure out a relationship with the engineers and data analysts to figure out how to package this data into an actionable format.
Work with sales to create specific products that advertisers want to buy. By targeting based on first-party data, publishers should be able to charge more.
This does create an interesting hiccup, though. For large publishers, this is going to be an easy transition. They’ve got the infrastructure in place. However, for smaller pubs, this sort of a “pivot to data” as one person said to me recently is going to prove very difficult.
I would not be surprised if we see many of the same ad-tech companies that got rich on cookie-based advertising make a pivot to helping smaller pubs work with their first party data.
Fortunately, we know when it’s all coming. Google said that it wants to turn cookies off in two years. At least now, publishers have time to figure out the ultimate strategy. I wouldn’t wait, though.
Business Insider gives reminder of its legitimacy
I realized while reading a recent Poynter story that I have a bit of an inherent bias against Business Insider.
When I think about BI, the first thing I think about is those 40 or 50 page slideshows that had an ad between every third or fourth slides. I don’t know if they invented these online ad slideshows, but they certainly perfected them.
Without me really realizing it, though, Business Insider has turned into a legitimate business that has ambitions that I can’t help but admire.
Henry Blodget, founder and CEO of Insider Inc., told Poynter:
Insider Inc., the new umbrella name for the businesses, just hit a target for revenue diversification, Blodget said, with about a third from ads, a third from subscriptions and a third from data and research. “We’re not necessarily trying to be the fastest growing or biggest,” (even if the story seems to read that way), he told me. “We aim to be sustainable and are investing all the time in that.”
While other publishers are struggling to figure out paid strategies, Business Insider already has multiple lines of business there. First, it has its premium intelligence unit, for which it charges thousands of dollars for access. Second, it has BI Prime, which is a standard subscription business.
It’s going really well, too. According to the article, there are currently 200,000 subscribers. But how much revenue is that?
Back in February, Digiday reported that Business Insider had crossed $100 million in revenue in 2018 and was profitable.
Advertising is still driving a majority of the revenue for Insider. The company is working toward a goal where a third of its revenue comes from all forms of advertising, a third from subscriptions and a third from the other, aforementioned areas. “I’m not pegging a date to it, but let’s call it by the mid-2020s,” Spande said.
Business Insider ended 2018 with over $100 million in revenue. Now it generates a third from subscriptions. With the two subscription products, I wouldn’t be surprised if it’s earning at least $35-40 million in subscription revenue alone.
It’s clear that Blodget has lofty goals. He believes in the next five years, BI will hit 1 million subscribers. He also thinks that, across all of its sites, Insider will hit a billion users. Finally, he wants Insider to employee 1,000 journalists and analysts—double from where they are today.
They seem audacious to me, but honestly, I’ve been sleeping on Business Insider for a while now, so I’m not about to bet against Blodget now.
The story also offers a hint about where Blodget could see Insider Inc. headed over the coming years.
“Local journalism is going to be the last piece of the puzzle, but we are beginning to see the seeds (of success). It’s a market we hope to get into in another few years.”
Local journalism has proven to be a very difficult business. This wouldn’t be the first time someone tried to do local journalism at scale. Apparently Patch.com is now profitable, but at one time, it was a disaster of a business. Even though it is profitable, I don’t get the feeling it’s a huge business.
According to a Digiday article about Patch:
Key to its model is that it started requiring small advertisers to use its self-serve tools to promote themselves and goings-on. (Those wanting full service would have to spend $4,000 and up.) It created three DIY products, to promote jobs, announcements and events, and it’s improved their usage by putting a relentless effort into user feedback.
If full service kicks in at $4,000, it doesn’t sound like the deal sizes are ever going to be terribly large. How much additional revenue would Insider have to earn to justify the big expenditure into local?
But again, what started as a small site with a bunch of slide shows has turned into a profitable media business with nine figures in revenue. So long as they continue to preach sustainable growth—which many of the other nine figure revenue publishers still can’t figure out—I have no worries about their business.
Thanks for reading this week’s issue. If you have thoughts about either of the topics, be sure to hit reply. Please share A Media Operator with your friends and colleagues that would benefit from it. And if you’re new here, be sure to subscribe! Have a great weekend and see you on Tuesday.