"The biggest challenge over the next two years is figuring out the post-cookie future."Mike Chowla, Senior Director of Product Management, PubMatic
My recent interview with Mike Chowla, Senior Director of Product Management at PubMatic, offers a programmatic perspective on how ad tech is evolving for a cookie-less future — and advice for those new to this rapidly changing industry.
What’s the greatest challenge of managing header bidding products — and how has that changed in the last year or two?
We have many great ideas on how to move our header bidding products forward, with the main challenge of prioritizing which ones to work on first — functionality that helps clients immediately — or leads to future innovation.
As an industry, we're seeing the maturation of header bidding moving beyond the early challenges of getting the pipes working, to where are the pipes working and how to provide additional value to publishers and buyers through those pipes.
How would you describe the OpenWrap building process? How long did it take — and what surprised you most?
PubMatic launched OpenWrap in May 2017, as an evolution of PubMatic's earlier header bidding product where development began over seven years ago.
The biggest surprise is the popularity and growth of Prebid.js, and how much Prebid.org overall has been able to accomplish. OpenWrap is built on the Prebid solution and I've been a board member of Prebid.org for almost two years. It's a real pleasure to involved in Prebid.org and collaborate with many key industry leaders to create a robust open source header bidding solution. I've been inspired by the commitment of all the Prebid.org member companies to collaborate to build the best possible header bidding solution.
What effects are you seeing — or do you anticipate — with the SameSite cookie attribute changes in Chrome 80?
We did a lot of preparation ahead of the Chrome SameSite attribute update, building awareness for the changes and providing best practices for our publisher clients and partner DSPs and DMPs. We are seeing minimal impact from the SameSite cookie change, and expect that to be the case moving forward.
How do you think Chrome’s future elimination of third-party cookies will affect programmatic advertising?
Chrome's elimination of third-party cookies is a seismic shift for the entire industry. While Safari and Firefox have already blocked third-party cookies, Google placed a timeline for Chrome to eliminate them — diminishing the effectiveness of third-party cookies for what was the remaining approximately 60-70% of browser traffic. Audience addressability through various identifiers has a significant impact on the value of a user and the performance of the ad targeting that user.
While we're currently in a period of industry uncertainty, we should view a post-cookie world as an opportunity to improve and solve the challenges of identity resolution. My prediction is that we'll continue to see multiple approaches as methodologies and partner technology are tested and measured. Publishers who can get their users to register will do so and identifiers derived from registration information (such as hashed email addresses) will be used for targeting. This registration-based model will not work for all publishers, and perhaps a privacy sandbox will fill in that gap, but the privacy sandbox (by design) restricts the level of detail at which a user can be targeted, which is likely to lower the value to advertisers and thus push down CPMs. Time will tell as things play out.
Publisher first-party data will become more valuable in a cookie-less world. How big and data-rich a publisher will be depends on the organization of their data for activation and standardization. However, my thinking is that it's a small minority of publishers who will see a net benefit from the increase in the value of first-party data.
"The best opportunity for the industry to benefit from a decreased reliance on third-party cookies is to find a solution that drives value for advertisers not only across all browsers today, but emerging ad formats on mobile devices and OTT platforms."Mike Chowla
Have you heard concerns about how these changes will impact clients’ abilities to personalize and target messages — and adequately attribute impressions?
This is the number one concern in the industry since Google's announcement in January. Everyone across the ecosystem will be affected if we don’t collaborate and determine a solution. The prevailing assumption is that industry-wide efforts like the IAB's Rearc and Prebid’s identity work will lead to a scalable solution.
In the meantime, publishers should already be figuring out their first-party data strategies for monetization. Buyers should be preparing for a world where current audience segments become obsolete, and measurement is more difficult. View-through attribution ends up somewhere in-between impossible and limited in this new world. Attributing results purely via last click is seriously flawed and buyers should be figuring out how to indirectly measure the benefits of view-through.
Preparing for this second round of consumer privacy is easier and less costly because many of the improvements we made for GDPR are also applicable to these new laws.
Our preparation falls into two major areas:
- We need to make sure our systems and operations are compliant
- We provide guidance and best practices to our publishers on how to implement compliance technologies such as Consent Management Platforms
We believe in being consumer-first and privacy-safe and are looking into ways to improve this for all users.
What are the greatest challenges and opportunities you see on the horizon?
The largest opportunity is that television ad inventory is steadily becoming addressable as consumers switch from traditional cable and satellite to streaming television (OTT, CTV). Television advertising is a $70B market in the U.S. alone and its ability to bring the benefits of programmatic to television advertising is a massive opportunity — not to mention linking all media formats for consistent and/or sequential messaging.
The biggest challenge over the next two years is figuring out the post-cookie future. Each layer of the ad tech stack will be impacted by the disappearance of cookies. As an industry, it's crucial to figure out a solution that maintains healthy monetization because that monetization is what makes a vibrant and diverse open Web possible.
What common misconceptions about programmatic advertising would you like to correct?
A common misconception outside of the industry is that programmatic advertising's goal is to invade consumer privacy. The industry has been happy with third-party cookies because they are anonymous and can’t be linked to an individual without great effort.
The entire goal around data in advertising is to show individuals advertising that is personally relevant and interesting. Behavioral targeting increases the value of an impression to advertisers — and publishers are the direct beneficiaries of that increase — but secondarily the users themselves, because that value exchange funds the content that we all consume (providing a better user experience). Publishers’ ability to get good value for their advertising inventory means more and better content.
What advice would you offer to those new to ad tech generally — and programmatic specifically?
I recommend spending the time to figure out how things actually work. Ad tech is challenging to ramp up on because of the length and complexity of the value chain. Each layer is conceptually simpler than it first seems. Read the OpenRTB spec, as it's the nuts and bolts of how programmatic functions.
There are a number of great sources that anyone new should study:
- Happens In Ad Ops Newsletter (and the old podcast episodes)
- Ratko Vidakovic's AdProfs Newsletter
- AdExchanger's “The Big Story” Podcast
- Anything written by — or interviews with — Beeswax CEO Ari Paparo
- MarTech podcast episodes with Granite Media CEO Danny Khatib
Mike Chowla is Senior Director of Product Management at PubMatic and a Prebid.org board member.
Many thanks to Mike for sharing his time and perspective, as well as that great list of resources!