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How data marketplaces can solve the identity crisis

By Amina Begum, Director, Strategic Projects and Product GTM, Xandr

With the deprecation of the third-party cookie, new challenges are constantly emerging in ad tech. Whether it’s collecting and managing consent, developing a universal ID solution or bringing a new angle to contextual marketing – the identity crisis has been an opportunity to drive innovation. Whilst new technologies are emerging to tackle these challenges, they take time to test and adopt.

Meanwhile, it is important to look to existing technologies which are proving that they have a place in the new landscape. One of those is the concept of the ‘Marketplace’ which is now re-emerging as a real solution to identity challenges. The great thing about it: it’s a concept that both buyers and sellers are already familiar with, having worked for years with open marketplaces, private marketplaces and more recently, curated marketplaces. Now applied in the context of a first-party data marketplace, it uses the building blocks for a privacy-first ad tech landscape of the future – first-party data.

First-party data is king

It is clear that first-party data will play a prominent role in the ad tech ecosystem going forward. As the third-party cookies disappears, third-party data also loses its relevance and a shift to first-party data is the natural course. Due to this, the onus is on publishers and the publisher-consumer dialogue has never been more important than it is now. Publishers find themselves in a unique position where they have to explain the value proposition of targeted advertising to users. Do this well and in return, they have access to a myriad of unique data.

With this in mind, many publishers across Europe have spent the last year defining and implementing first-party data strategies. This has a legal element: doubling down on privacy efforts to ensure that first-party data is collected in a way that is compliant with local regulations. And a technical element: fine-tuning behavioural data collection by building up segments across their sites, whilst also building up their first-party cookie pool and their logged in user base. 

Tying into the wider marketplace

Traditionally, first-party data has not been accessible via the open market for buyers setting up programmatic campaigns. For buyers to access this data, a publisher would need to create a deal containing inventory plus data. While this continues to be a viable option especially in scenarios where commercial agreements require differentiated access, there are some challenges with this workflow. The operational overhead of needing to create and manage multiple deals, the lack of flexibility when targeting deals and a lack of visibility on individual audience segment performance when reporting on deals all make this a burdensome process especially when the deal doesn’t perform as expected.

The first-party data marketplace addresses these problems. Built within a buyers existing DSP, the first-party data marketplace would allow buyers access to use first-party data in the same way they’ve historically used third-party data. This affords buyers the familiarity of using existing workflows and processes. This would also allow buyers to go beyond the capability of deals today by allowing them to add targeting logic and make use of unique functionality of that DSP. For example, the Xandr DSP, using its ‘splits’ logic allows buyers to fine tune the distribution of budgets across different targeting parameters, shifting budgets across where one segment outperforms another – this is something that would not be available using the deals mechanism.

With a first-party data marketplace, the ecosystem has a solution to identity that exists now, is familiar and proven to work. Buyers are able to reach audiences at scale and deliver on their campaign KPI’s, and publishers are able to put to use their rich datasets.

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