Digital advertising's data reset

Welcome to this week’s edition of The Rebooting Show. This week’s episode is a sponsored Spotlight episode, where I feature a conversation with a sponsor of The Rebooting in order to get a better understanding of their approach to solving a challenge of building sustainable media businesses. The way these work is I agree on a general topic with the sponsor – how data plays an important role in building sustainable media businesses, in this case – and then the episodes are like any other. My goal is to make these as valuable and informative as any other episode. Please let me know your feedback – and get in touch if you’d like to sponsor upcoming mini-seasons on the creator economy, newsletters, subscriptions and more. My email is bmorrissey@gmail.com.

The entire tech industry is going through a broad reckoning over the collection, storage and use of consumer data. Government regulations, Apple’s new data policies, the demise of the third-party cookie and other market pressures are changing how a large chunk of advertising works. Look no further than Facebook’s historic stock price meltdown after disappointing results it blamed, in part, to new obstacles to targeting and measuring ads.

“We get a reset that gives the industry an opportunity to rethink a lot of things,” said Jake Abraham, chief commercial officer of Audigent, a data platform that works with publishers to better understand their audiences and turn that understanding into achieving business goals. “While it’s messy in the middle, ultimately we come out with a [situation where] the publisher is the source of truth, more transparency, better privacy and more tools to actually do what both advertisers and publishers want.”

Below are highlights of the conversation Jake and I had about how publishers need to think of their audience data as an asset class, the false dichotomy between contextual advertising and addressable advertising, and how Facebook gets small businesses hooked.

The negative impact of rampant data collection

The only people in the world who use the term “personalized advertising” are those who work in ad tech. For the rest of humanity, this is ad targeting or, increasingly, “surveillance advertising.” The backlash against the use of data in advertising is somewhat curious since there are seemingly far more worrying data trends, particularly how governments are using data sets, but likely ties back to the chaotic, complicated way digital advertising works in the hopes of getting the right ad in front of the right person. 

“Publishers are victims often. Their margins are squeezed harder than ever before. As the technology evolves, there's more and more middlemen. It's very hard in this ecosystem to understand the technology, and understand how those middlemen might be using the data and taking a vig on the transaction. Some of the [intermediaries] are super important. But there are plenty of others that, in a pretty unregulated industry, have found a way to insert themselves and arbitrage. And while that may not be illegal, it certainly doesn't provide a lot of value.”

Not all middlemen are bad

If digital advertising has an original sin, it’s likely the ability to separate the audience impression from the media. This was a nifty tri