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Turning decline into opportunity - how the deprecation of third party cookies could be a revenue boost for publishers

After experiencing significant declines due to the pandemic, newspapers and consumer magazines saw revenues in print circulation and advertising climb in 2021. Yet the overall trend remains the same and so does the challenge. How can publishers mitigate the loss of income in print via other channels? One answer may come from the increasing amounts of browsers that either have, or intend to block third party cookies.

Verifiable data: Publishers can deliver real value to advertisers

The use of third party cookies has previously allowed advertisers to provide targeted adverts to users based on their browsing behaviours. Once blocked on a large-scale, this will mean marketers and advertisers will need to rethink their approach to effective, targeted, digital advertising. We’re seeing the signs of a significant shift towards contextual advertising and audience data.

With leading brands shifting their focus to high-quality, first party data this puts premium publishers of newspapers and magazines in a strong position for appealing to advertisers. In a world where browsing history cannot be tracked across multiple sites, those with verifiable data on their users will be sought after.

In truth, third party data has always provided a limited snapshot of a user’s interests, and this is where publishers must articulate the value they can provide to brands. The in-depth data available to media owners gives them the ability to do effective targeted advertising at scale. Not only can media owners fill the gap left by third party cookies, they can go beyond it. Rather than serving adverts based on single visits to websites, users can be served with the right adverts that interest them based on an in-depth knowledge of their preferences. This provides not only additional value to advertisers, but also to users themselves, who are more likely to find adverts that are genuinely of interest to them.

Some publishers are already working together collectively through The Ozone Project to deliver value to advertisers across their titles. This is likely to become even more valuable as advertisers look to achieve scale with these trusted brands.

But this requires premium publishers to be proactive. It’s conceivable that advertisers start to pay less per click for real-time bidding due to the deprecation of third party cookies, but the value of the first party targeted premium inventory will soar. Publishers need to be clear about their value proposition and the uplift in ROI advertisers can expect from premium, targeted and contextual advertising.

Closing the gap: Managing the shortfall between digital and print revenue

There remains an imbalance in both revenue per user and overall revenues between print and digital. Print advertising can achieve both scale and context in a way that digital hasn’t in the past been able to.

But the picture is not universal. It’s notable that in 2023, we expect consumer magazines' overall digital revenues to overtake its print revenues. While we still expect a compound annual growth rate (CAGR) of -0.96% between 2022-2025 for consumer magazines, this is a far better picture than in newspapers where we anticipate a -3.51% CAGR for the same period.

But with the right strategy, there could be some premium publishers that manage to buck this trend and find digital revenues that can withstand the decline in print advertising. One area we’re seeing major global publishers invest heavily in is video content - to drive both subscription and advertising revenues.

However, now is the time for premium publishers to prepare for the transition away from third party cookies. The winners in this scenario will be those that have put the consumer at the centre of what they do. Those with more advanced subscription bases and/or registered users that have completed the requisite permissioning will be in pole position. Publishers also need to refresh their relationship with brands and agency buyers to optimise the direct/premium programmatic buys. With these things in place, there’s a chance to bring up the average revenue per digital user.

Those without enhanced subscription models or registered users should still be able to use their first party cookie data to enable targeted advertising to users, even if the overall picture of each user may be less complete.

Simplification of the supply chain may lead to increased revenues

The deprecation of third party cookies might result in closer interactions between premium publishers and advertisers, which in turn could help with a move towards more transparent supply chains.

In May 2020, research by PwC and the Incorporated Society of British Advertisers (ISBA) identified that 15% of advertising spend was lost to ‘unknown deltas’. That 15% is likely to be made up of a number of contributing factors, but one probable cause is the sheer complexity of open market programmatic advertising. In theory smaller, well-curated, fully auditable private marketplaces, based on accurate, verified and permissioned first party data, could reduce not just the unknown delta but also help mitigate risks with fraud, viewability and brand safety - all while retaining the benefits of programmatic advertising in targeting and in-flight optimisation.

A single unifying factor for success

Yet there is still one unifying factor that underpins success - the inherent value of the content. It is the content that drives engagement from readers and in turn, it is those engagements that build a picture of the user. So for all the technology and opportunity, publishers should not lose sight of their main purpose, because without content that engages readers, publishers will be unable to continue to provide that premium value to advertisers.

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Adam Edelshain

Adam Edelshain

Director, PwC United Kingdom

Tel: +44 (0)7813 112662

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