Publishers are leaking $850 million in audience data, study says
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Publishers are losing an $850 million revenue opportunity to third-party data collectors, according to a study of premium publishers by Krux Digital, an audience data platform. The study looked at the top 50 ad-supported websites nationwide (based on traffic), including content portals, social media sites, general interest sites and niche publishers.
“That is an estimate at the low end of what that opportunity cost looks like annually,” Ben Crain, vice president of marketing and corporate development at Krux, said in an interview.
So-called “data leakage” has been a hot topic in publishing and advertising circles in the last few months. The term refers to audience data that's collected by third parties, sometimes without publishers realizing it, and used for targeting.
Krux started the study before The Wall Street Journal's series about audience tracking (which has been somewhat controversial in the publishing industry). Krux then aligned its study with the companies the WSJ examined, Crain said.
The results are pretty eye-opening: 31 percent of data collection on the publisher websites was enabled by outside parties. More than 150 different companies were observed in August and September participating in active data collection across the 50 sites. And more than a quarter (27 percent) of all collection was conducted by parties that Krux said is potentially competitive to publishers in media or data sales. (See a chart below for a breakdown of data collectors.)
Knowingly or not, publishers are allowing outside parties to capitalize on their audience. Krux noted that “data piracy” also poses other threats, such as privacy concerns and a decline in traffic. “The mid-term threat is page latency — the more rogue pixels that get crammed into a publisher page, the longer the wait time for users, the lower the publisher’s search rankings and the sharper the decline in overall site traffic over time,” Tom Chavez, Krux Digital co-founder and CEO, said in the release of the results.
Many of those third parties are benign and acting in the publisher's interest ― but the sheer scope and scale is still surprising, Crain said. “It suggests a lot of activities beyond the publisher’s control,” he said.
And the ever-growing number of players can make it difficult for publishers to keep track of them. “As you fill one hole another one emerges,” he said.
Some of those third parties are creating audience segments in secondary markets ― essentially applying the publisher's premium data on remnant advertising. “[Third-party data collectors] are essentially giving marketers a way to reach to premium audience in a much more cost-effective way than buying premium directly from the publisher,” Crain said.
As audience-based buying is set to continue to grow exponentially, Crain said publishers should get on top of the data opportunity by first plugging the data leaks and then managing and monetizing data. Like Krux, other supply-side platforms, such as PubMatic, are popping up to help publishers block unwanted data mining.
“You can’t manage data that you don’t have full control of, so protection is the right starting point,” Crain said. “Once you have that asset fully controlled then you can start chasing down the big data managing analytics challenge.”
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