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The Trade Desk’s ‘premium internet’ shift stirs concerns among publishers over ad dollar allocation

May 28, 2024
in Technology
The Trade Desk’s ‘premium internet’ shift stirs concerns among publishers over ad dollar allocation
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The Trade Desk has a clear message for publishers worried about missing out on ad dollars due to a lack of a large logged-in audience: It doesn’t have to be that big.

The panic started earlier this month when the ad tech vendor’s CEO Jeff Green drew a figurative line down the open web — a realm plagued by poorly targeted ads, fraud and “malvertising” on one side — and what he calls the “premium internet,” characterized by high-quality ad inventory bolstered by first-party data and user consent on the other.

It wasn’t a new claim from Green, but it had definitely been spiced up with a fresh twist — replacing “open internet,” which he’s backed for years, with “premium internet.”

What seemed like a simple tweak in wording to many has definitely caught the attention of publishers. 

“CEOs at major publishers are freaking out about what The Trade Desk is doing,” said an ad tech executive who works directly with publishers.

Why the concern?

Publishers fear that The Trade Desk is preparing to withdraw ad dollars from many of them, interpreting Green’s “premium internet” claim as a signal of this shift.

It might seem like a stretch since The Trade Desk supports quality media, but there’s a reason for their jitters: authenticated reach. To target, track and optimize programmatic campaigns without third-party cookies, The Trade Desk needs publishers to have a lot of email addresses. These emails form the backbone of a third-party ID called UID 2.0, which the Trade Desk uses to buy that reach.

The problem is that many publishers struggle to collect enough emails. And even when they aren’t struggling, publishers tend to think twice about supporting a third-party ID owned by The Trade Desk, as it could undermine their own efforts to grow and maintain their proprietary data.

“’The Trade Desk really wanted us to onboard UID 2.0, but we did not want to do that,” said a publishing exec who exchanged anonymity for candor about a meeting they had with the ad tech vendor last year. “We didn’t want to strengthen their business at the expense of our own.”

The publisher worried that UID 2.0 might not give them enough control over their data. And no, that’s not just them being overly cautious. With anything like UID 2.0, a publisher would need to share hashed email addresses with the operator of it to generate the identifier, potentially losing some control over that data in the process.

Sometimes that’s fine, like with login alliances or the Ozone ID, which are overseen by an independent arbiter. Other times, it’s not so great, like with UID 2.0, spearheaded by The Trade Desk. Understandably, publishers don’t want to lose control to a business like that if they don’t have to.

“Why should publishers like us give ad tech vendors like this our data so they can make a markup from it?” asked the exec. “It’s extremely arrogant from the ad tech side.”

Concerns like this were common at the Digiday Publishing Summit last autumn. Amid panels, networking and even town halls, publishers didn’t shy away from expressing their frustrations with The Trade Desk. Though the conversations were more hushed, the general message was clear: add The Trade Desk to the list of blunt truths publishers have to face.

Unsurprisingly, The Trade Desk doesn’t see things as starkly.

Execs there have heard these concerns from publishers for months but believe they’re overblown, especially regarding the amount of authenticated reach needed. Spoiler alert: it’s not that much. As little as 5% to 10% of their audience logged in would be enough to make a meaningful impact on their business and attract ad dollars from The Trade Desk, said Will Doherty, TTD’s vp of inventory development.

“I think those rates are achievable and we’ve already seen a number of publishers, web publishers achieve between 20% and 40% authentication rates with the right strategy,” he continued. “The first thing I’d say to a traditional web publisher is that you don’t have to have 100% authentication to be really competitive.”

Publishers will breathe a sigh of relief at that thought — at least to a point. They will still have to do heavy lifting to get authentication rates as high as 5%, let alone 40%. That’s a big task: It means convincing readers to log in for something they’ve never had to do before, especially across multiple publishers.

But The Trade Desk might have a plan for that, and it’s called OpenPass.

It’s a single sign-on solution that collects verified email addresses from users, converting them into targetable IDs. This gives publishers the authenticated reach they need to monetize their audiences effectively despite cookie depreciation. The hook? Rewards via provider Bonbon. When users share their email addresses with a publisher, they get perks like discounts and merchandise in return.

“If the friction in terms of authentication continues to decline and it subsequently becomes easier for publishers to get then I believe they’re going to be surprised at how much [authentication] they can get in return for that content,” said Doherty. “Having an identity strategy as well as an authentication strategy is existential to their long term survival — in addition to all the other things they have to do.”

He said the quiet part out loud: The only way for certain publishers to succeed in a world without third-party cookies is by putting the audience back at the center of everything they do. Not every publisher wants to hear this now, especially from a company that casts a long shadow over their businesses.

Like many such dilemmas, publishers gradually found themselves in this predicament as The Trade Desk inched closer over the years until suddenly realizing it was uncomfortably close. They barely raised an eyebrow when it started growing its sell-side team. That changed when The Trade Desk began replacing the ad tech middlemen they would normally deal with. This unease simmered until it came to a boil when the ad tech vendor started bidding below the floor prices set by publishers, seemingly undermining their control over inventory pricing.

“What The Trade Desk is doing isn’t necessarily a bad thing, and publishers don’t see it that way from the conversations we’re having with them,” said an ad tech exec who asked for anonymity in exchange for candor. “But they do have concerns and they’re more about the amount of control The Trade Desk has over their ads businesses. That doesn’t sit right with them.”

And yet it’s probably something they’ll have to get used to. The chances of The Trade Desk doing a U-turn on its plan to curate the best ad inventory outside of the walled gardens are slim to none.

There’s no reason to think that’s ever going to change. Not because the ad tech vendor dislikes publishers, but rather because it has to make prudent decisions in the interests of its advertiser clients and its shareholders.

Ultimately, this means doing what it can to ensure it can work, and a DSP like The Trade Desk only works when there’s a third-party identifier ID available. Without it they’re effectively blind when it comes to programmatic advertising.

That’s why The Trade Desk has been focusing on CTV and retail media — areas where it’s easier for media owners to collect email addresses for identifiers like UID 2.0. Publishers just don’t have that advantage.

“For the last 12 months, the industry has lined up around third-party IDs, but identity does not equal addressability,” said Joe Root, CEO of data management provider Permutive. “The Trade Desk needs identity to work and has been too slow to adapt. Because of this, they’re redirecting spend into CTV while blaming publishers for the fact that The Trade Desk doesn’t know who the audience is without an ID, even though the publisher does. Publisher data and inventory perform, but ad tech wasn’t built to work with it.”

Not all publishing execs are feeling the same looming concerns about what the “premium internet” will do to their positioning in the digital ad market, however.

One publisher exec, who spoke on the condition of anonymity, said that UID 2.0 is one of the alternative IDs presently in their arsenal. They took Green’s proclamation to mean, though, that The Trade Desk was attempting to steer advertisers’ focus away from walled garden ad environments to support publishers in the open internet — which is a big concern for media companies that don’t have CTV offerings and are seeing more and more ad spend being funneled into those channels.

“From my perspective, it’s more about maintaining the high quality [ad inventory],” the publisher said. They added it felt more like TTD was promoting minimum 30-second ad refreshes and pushing correct video ad placement categorizations, while excluding low quality open internet options like MFA sites.

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Copyright for syndicated content belongs to the linked Source : DigiDay – https://digiday.com/media/the-trade-desks-premium-internet-shift-stirs-concerns-among-publishers-over-ad-dollar-allocation/?utm_campaign=digidaydis&utm_medium=rss&utm_source=general-rss

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