data leakage is becoming a huge problem for publishers as ad dollars shift toward programmatic. For the latest installment of our anonymous Confessions series, in which we exchange anonymity for honesty, we talked to a programmatic buyer at an independent ad agency about publishers’ data ineptitude. The source said publishers have lost control over their audiences because advertisers can pluck information about users from ad exchanges without ever paying publishers for the data.
Here are excerpts from the conversation, edited for clarity.
What do publishers get wrong about their user data? It’s an asset that they generate that they should get compensated for. But they’re not. We’re able to cherry-pick their audiences by going around them.
How? Publishers fork over a lot of demographic and behavioral information about their users to programmatic exchanges. We can buy a few impressions, and layer over some third-party data we purchase from Acxiom or Oracle to build our own audience segments that we would pay publishers a big premium for if they had better control over their data and sold this information to advertisers directly.
What’s an example? Large consumer-facing publishers have business-to-business readers that they don’t take advantage of. There are executives that read publications like Sports Illustrated and GQ, but publishers don’t typically split the data up that way. Our B2B clients will pay $30 CPMs or more to reach their audience targets. But instead of paying the publisher $30, I build my own lookalike model with the data I glean from exchanges, and then I go buy the inventory for under $10 CPM.
Aren’t you worried that the third-party data is full of errors? It certainly isn’t foolproof. That’s why we’d pay the publisher more for this data if they sold it directly to us. But the third-party data helps us get such a discount on the audience segments that it pays off in the long run. We test buying across all of our segments before we launch them across big budgeted campaigns. If an audience segment we built isn’t providing return on investment, we will tweak it or scrap it.
