Are marketers on track with the digital news ecosystem?

When data is often called the new oil, something we’ve said ourselves, the digital advertising industry finds itself at a crossroads. As consumers become increasingly aware of their digital footprints and regulators tighten the reins on data privacy, tracking digital news consumption patterns is becoming more challenging.

As previously reported by exchange4media, part of this paradigm shift is also driven by digital news publishers taking more onus over the kind of consumer and viewership data they procure and then provide to data vendors in turn. The shift is forcing marketers and advertisers to rethink their strategies, potentially reshaping digital advertising rates and models.

Anand Jain, Co-Founder and Chief Product Officer of CleverTap, highlights a critical tension in today's digital landscape. “The modern consumer experience has shifted from transactional to relationship-based, with consumers expecting personalized engagement driven by their unique behaviours and real-time shifts,” Jain explains.

A McKinsey study shows that 71% of consumers expect personalized interactions, with 76% expressing frustration when these expectations aren't met. Given the increasing role that Artificial Intelligence is playing in news creation, dissemination, and consumption, this is perhaps only to be expected.

However, this desire for personalisation clashes with growing data access restrictions. “As third-party data is on the verge of going extinct, the focus on zero-party and first-party data becomes crucial,’ Jain notes. This shift presents both challenges and opportunities for marketers aiming to deliver tailored experiences.

Kartik Mehta, CBO and Head of Asia at Channel Factory, sheds light on why publishers are increasingly implementing paywalls. “Publishers have realized that while these crawlers often use this data to generate revenue, the publishers themselves have rarely benefited from this,” Mehta explains. “Just because the content is available on the open web doesn't give anyone the right to scrape and monetize it without compensating the original creators.”

This move towards paywalled content is reshaping the data landscape. You may have noticed it yourself, as a consumer, when trying to access news on certain articles on previously free-to-view websites. You’ll be glad to know that this is now cutting both ways.

As Mehta points out, “Marketers will now have to pay a premium to access consumer insights, but the data provided by publishers will be more valuable because it comes directly from first-party sources.”

Ankur Dasgupta, Head of Marketing, India Region at NTT DATA, elaborates on how these changes are affecting marketers' ability to understand and target audiences, saying, “The limitations on access to consumer data and the rise of paywalls have restricted marketers' ability to track and analyse consumption patterns that were once readily available.”

Marketers have identified several factors contributing to this shift, including data privacy regulations like GDPR and CCPA, the rise of walled gardens like Facebook, Google and Amazon, increased use of paywalls and subscription-based models by publishers, and the growing popularity of ad blockers and cookie restrictions.

It should be noted that some of the experts that this reporter spoke to while working on this story acknowledged that there would be some industry-wide changes and impacts, it was too early to comment on them as of yet.

In response to the challenges that have been expressed, experts suggest several strategies for marketers and advertisers. Jain emphasizes the importance of first-party data: “Companies that effectively leverage zero-party and first-party data can create hyper-personalized experiences, enhancing customer engagement and loyalty.”

Dasgupta agrees, stating, “Marketers must shift their focus to first-party (primary) data, which is more valuable than ever. Collecting data directly from customers and prospects through owned or partner channels not only ensures compliance with privacy laws but also allows marketers to build deeper, more personalized insights.”

Despite data limitations, AI remains a powerful tool. Jain notes, “AI plays a pivotal role in this landscape by analyzing smaller datasets and uncovering valuable insights into customer preferences. AI-driven predictive analytics can anticipate consumer behavior, aiding in creating personalized marketing strategies.”

However, Dasgupta cautions that “AI's effectiveness is directly tied to the quality and amount of data it can process, and with access to that data becoming more restricted, the insights generated by AI may be constrained.”

As user-specific targeting becomes more challenging, contextual advertising is gaining prominence. Jain predicts, “Advertisers are likely to adopt contextual targeting, placing ads on websites or content relevant to their audience rather than depending solely on user data.”

Dasgupta emphasizes the importance of ethical marketing practices: “By prioritizing user privacy, respecting consumer preferences, and building genuine connections, marketers can continue to deliver meaningful value despite the increasing restrictions on data access.”

These changes are likely to have significant implications for digital advertising rates and models. Jain suggests that “the demand for platforms with robust first-party data may drive prices up.” However, he also notes that “some brands may even reduce ad spend due to these challenges.”

Dasgupta offers another nuanced view, saying, “With less precise targeting available, some digital ads may become less valuable, causing advertisers to spend less on certain placements. However, this presents an opportunity for brands to explore alternative platforms that offer more flexible data policies or more effective targeting methods.”

Jain predicts that some brands may “explore new advertising models like subscription-based or pay-per-view systems to maintain audience engagement in a privacy-first environment.”

Mehta highlights the opportunity for brands to "collaborate with publishers who have access to rich, highly relevant first-party data. Although it may come at a higher cost, this data is far more reliable and actionable, giving brands a deeper understanding of discerning audiences."

Dasgupta notes that “brands may initially face lower conversion rates, reduced ROI, and higher costs per acquisition (CPA).” This will necessitate a greater emphasis on tracking campaign performance and optimizing ad budgets.

As the digital advertising landscape evolves in response to changing data protection norms, marketers and advertisers face both challenges and opportunities. By focusing on first party data, leveraging AI responsibly, embracing contextual advertising, and prioritizing trust and transparency, brands can navigate this new terrain successfully.

Mehta concludes, “In short, first-party data is a gold mine, offering brands a competitive edge in reaching and understanding their target consumers.” As the industry adapts to these changes, those who can effectively harness the power of first-party data while respecting consumer privacy are likely to emerge as the winners in this new era of digital advertising.