Welcome to Press This, the WordPress community podcast from WMR. Here host David Vogelpohl sits down with guests from around the community to talk about the biggest issues facing WordPress developers. The following is a transcription of the original recording.
David Vogelpohl: Hello everyone and welcome to Press This the WordPress community podcasts on WMR. This is your host, David Vogelpohl, I support the WordPress community through my role at WP Engine, and I love to bring the best of the community to you hear every week on press this as a reminder, you can find me on Twitter @wpdavidv, or you can subscribe to press this on iTunes, iHeartRadio, Spotify, or download the latest episodes at wmr.fm. In today’s episode we have a very juicy topic we’re going to be talking about how WordPress publishers are dealing with the existential threat of Ad blocking and joining us for that conversation is someone very familiar with this, like to welcome back to press this, Mr Bill Erickson Bill Welcome back.
Bill Erickson: Hi, thanks for having me.
DV: Awesome. Well, glad to have you on today. I know that for folks you know building publishing sites or managing them directly or maybe they’re a freelancer agency, the notion of Ad blocking and the impact it has on the revenue sites being is on the top I think of everyone’s list these days, particularly with the kind of growth of Ad blocking and changes to browsers in general, just even broader things on the web. But before we kick off into all that bill I was hoping you could briefly tell me your WordPress origin story and you told me before but I forgot it.
BE: Well, back in 2005 I was a finance major in college, and I began building WordPress sites on the side. This is before there were pages in WordPress. Everything was just opposed. And then when the financial crisis hit all the job opportunities for finance majors went away, and I decided to try freelancing full time, and I never looked back.
DV: Alright, good deal. I bet you there’s stories like that brewing now around the neck and the lockdown. Lastly jobs started building or maybe you just did it on the side and turns into a career, have you inspire others bill. You recently you were like freelancing for the longest time is like under the bill Ericsson brand, but now you formed a company and you’re like doing stuff now tell me about that.
BE: Yeah, well, like I said I’ve been freelancing for a really long time, but from pretty early on, I realized that clients didn’t just need a developer, they often needed a designer and developer, and I found some designers I liked working with. And so it became a sort of informal process of cure my recommended designers started partnering with some and then it became a bit more formal. These are just the ones I worked with so it’s been about an eight year process but it was about time to finally coalesce around a company name. We’re a team of seven now and doing everything under my personal brand is getting a little stretched so we launched cultivate WP which is an agency specializing in WordPress publishers.
DV: So no, I remember at WordCamp us in St Louis See y’all all crowded around the breakfast table meeting about the improvements, you’re going to make to your publishing clients and a good team over there, a good group of folks thanks for sharing that. So let’s get to the topic at hand and I think, like it’s important to set the stage here. So how has ad or cookie blocking increased in the last few years, like, what has gotten perhaps worse about it from the publishers perspective.
BE: Yeah well ever since ads started appearing on websites there have been ad blockers, but for the most part it was sort of a niche thing the majority of users didn’t have ad blockers, so it wasn’t really a big issue that started to change recently, Safari, and Firefox, have now blocked third party cookies, and Chrome is getting ready to do that 2022 And a key there is third party cookies are very important part for making the advertising model working. And so, without third party cookies ads don’t really work. And we’re already seeing that in Safari and Firefox. We’re seeing RPMs drop about 60% compared to Chrome where they still have third party cookies.
DV: So you didn’t notice you kind of mentioned, of like the rise of the use of ad blockers in general. And then third party cookies that you specifically call that out and the third party cookies when you said RPMs were dropping 60% With these changes from some of the publishers you’re working with it, you make that distinction like is third party more like the issue does your or is it kind of,
BE: it’s it’s mostly the third party component so advertisers use third party cookies to track you across the web. And this allows them to create highly targeted advertising campaigns, very specific segments for instance, at cultivate WP if I wanted to run ads to attract new clients, I pay a much higher CPM to get in front of 1000 food bloggers, than just 1000 random people online. And so that is really what has driven at display ads, the way they work now. And that’s also what’s driven the high RPMs that publishers are seeing because people are able to really segment and display relevant ads to your audience with the loss of those, the ability to track users, we’re back to generic ads shown to everyone, revenue goes down, a lot of advertisers might say it’s not even worth throwing ads into this market. And so now the publishers and advertisers are trying to scrambling to figure out a new solution to this problem.
DV: I remember my first experience with digital ad buying back in the day one of the first lessons I learned was that the more targeted you are, the more expensive the ad buy is. And it sounds like what you’re kind of pointing out here is that because publishers can show ads to targeted groups of individuals via that third party cookies that what that’s resulting in is less ad spend, per mille e per 1000 impressions basically and so that’s the publisher gets gets less revenue. Maybe you can dig into that a little bit though like how specifically is this affecting publishers like they just have an overall lower overall ad revenue, any other effects you think you’re worth noting.
BE: So so I mean that the first thing is that it’s affected a small segment because Chrome is still by far the most used browser, and the fact that it’s rolled out on these other browsers first has given us the opportunity to see what effect we’re seeing down the line, but also because Google’s business depends on ads, they’re not just going to completely abandon the advertiser so they’re actively working to try and come up with solutions to make the ad business continue to work so luckily there is some light at the end of the tunnel and there’s some new solutions coming down the line, that should hopefully make the ad revenue. Go stay where it is or go up, but also just make the web a better place, and less dependent on very obtrusive tracking of everyone.
DV: Right, that’s a good distinction because it’s not, you know, ultimately at the end of the day it’s a balance between the users experience, the ability of the publisher to monetize and keep this with advertising and keep the content free. And then I guess the technologies that are available to do all those things. But that’s really an interesting distinction though around losing some access to intrusive tools, but maybe replacing them with things that are achieved similar outcomes without without being so intrusive. You mentioned that tracking codes at least to me prior to this are kind of the most valuable part of a display ad you kind of touched on this a little bit, but why do you think that like why are the tracking code so important.
BE: Well, I mean, the, like we said earlier, the ability to understand your audience, allows you to serve better ads, but it also allows you to gather more data about the user as they go around on the web, it just sort of build a better model of what that person is that can get pretty intrusive that you see every website they’re added, and really get a really detailed model of what that person is, and they don’t necessarily need that much data to still get similar value, but that’s that’s why we’re seeing the ability of having that third party tracking codes through cookies. As such a valuable component to the ads, and there are some, some ad technology that has come out like with amp that don’t have that and so we were able to use that as a comparison to see where, where the value is. But amp is a little bit different because it lacks the tracking code but it was also a smaller pool, because a lot of advertisers didn’t just create amp specific ads, and so we saw even greater drops in ad revenue in the amp space so we were seeing 60 to 80% Drop in RPMs compared to 90 of that so it’s, it, that was like our first inkling, a few years ago. And then recently with the move of Firefox and Safari, now we’re getting a better idea of like, okay, what is the value of those third party tracking codes to for analyzing traffic and how is that going to affect the revenue of these ads.
DV: All right, I do, it’s really interesting to think about it going, hitting the smaller browsers first and then giving us a chance to figure things out before it hits chrome I guess he said in 2022. When I talked to you about the amp stuff here in a minute but I think, you know, thinking about that profile that you’re building on that user behavior, it’s so funny because like I think like people think the worst when they hear that like oh my goodness, they know all the blogs I read and all the stuff I read and what are they going to do at this and like at the end of the day they just want to show you an ad for men’s shirts because you’re a man and you like shirts, and, like, it’s really interesting to think about like the technology we’re using in the window gives us maybe too big a window, but at the end of the day we’re really just trying to show contextual ads. I want to dig into the amp stuff though because I know a lot of folks are looking at that recently, we’re gonna take a quick break. We’ll be right back.
DV: Everyone welcome back to Press This WordPress community podcast on WMR. This is your host David Vogelpohl I’m interviewing Bill Erickson about WordPress and ad blocking the existential threat of Ad blocking bill right before the break, you were talking a little bit around the notion of tracking scripts, and the notion of building this profile of users, ultimately, to show them relevant ads, The balance of that against technologies that are used, that are too intrusive and that’s kind of the way I saw it anyways is like the forces at play here. He talks about amp though and you talked about how it had, at least in the context you were testing like 60 to 80% reduction in rpm and for those unfamiliar is revenue per 1000. Visitors Right Is that how you’re classifying right in the end can mean different things I guess in different contexts, but generally visitors in so with with Bill here, but talk to me about him, like, it’s already blocking a lot of tracking for ads, in my understanding of it. And so, like, how do those ads perform and he kind of talked about the revenue performance but then also, like, how does it work with like an amp ad if you if all of this blocking is happening.
DV: That’s really interesting. I know with core web vitals coming into Google’s view of ranking and speed and nae that is often referenced as the answer to that, I think, you know from the publisher perspective, those monetize your advertising and in particular through ad networks and sounds like I’m guessing for publishers that you have many publishers that do like direct ad sales through their own business or using ad networks
BE: for the most part they’re using ad networks, but there are some that that do direct ads and manage their own ad inventory. Usually, It’s a bit more involved, and offer additional parts like user registration so there’s different like touch points in there but yeah, Google for Wide Web titles is a Google that and a bit of trouble with AMP, because they are pushing it a little too hard. And so now there instead of the carrot of improved search results they’re bringing a new approach which is let’s just raise the standards that we’re expecting to be really past performance site, you can use AMP, you don’t have to use them. And if you’re not using amp, you better make sure your site loads fast and is good for the user experience like the layout shifts and stuff like that so it’s a similar approach but now it’s a little more open, because you can get to that end result with a bit user experience, in whatever way you want, which opens up a bit more flexibility on the ad side, then also on the publisher side because you can really make the decision of what’s important for you.
BE: honestly I haven’t dive too deep into that particular topic, I think, the more, if it becomes more popular, there will become more options around and the biggest problem with AMP right now when it comes to ADS, besides not having a tracking is just it’s such a small market, that the advertising like ad very big media buying can’t find enough advertisers to actually support those spots, but if amp was used by 50% of websites or something, then there would definitely be a lot more advertising opportunities for that so it could be a potential long term solution but given the, the D focusing of amp. The fact that they’re not promoting sites that are just fast they don’t have to be an app site. I think we’ll see a little bit less emphasis on the importance or focus just on building a good, fast, and website and looking at this for web Bibles,
DV: maybe there’s an advertiser out there like you said we need more publishers using it and then the publishers are like we need we’re advertisers you doing amp ads. Right. Seems like a chicken and egg thing it’s kind of interesting. Okay, so you’ve mentioned that blocking, third party cookies will likely hurt, RPM, they explained how earlier which was like well, if you block the third party cookies you can’t, you know track users across sites build a profile or what they might like and show them the right ads, because this is like if third party cookies are gone from a site say uses amp and so therefore is enabled to use third party cookies, is that going to hurt their RPM like the next day or is this more of like an insidious thing that happens over time.
BE: It will probably get, it’ll be like the next day, when the switch gets flipped and third party cookies don’t work anymore. I would expect to see the RPMs go down, but that like I mean like, he did it today as an individual site. Yeah, yeah, if you did it today as an individual site and you moved to amp and you were using amp ads, You would likely see a decrease in the revenue pretty substantially because have you now no longer have access to those types of ads, but the idea is that by the time that Google is going to flip the switch there will already be the resources in place where this will no longer be an issue. So, what Google has done. So there’s really two ways to deal with this future, where there’s not going to be third party cookies like how do we make contextual ads without that. There’s Google’s answer, and then there’s the wider answer for the market that includes the other browsers. So Google’s doing is what they’re calling their privacy sandbox, so what they did is they identified how are publishers using these third party cookies and how can we build privacy focused tools that give them those same benefits. So an example of that would be what they call flock federated learning of cohorts, where Google will anonymously group you with, like, browsing people so people who look at similar websites that have similar interests, and then advertisers can target that flock, without having to know any individual information about you, but that’ll be limited to the Chrome browser,
DV: and then presumably Google with would have to know the information on some level, so I’m sure privacy minded folks will think about that aspect. Were there any other areas of Google’s strategy I want to get to the, the other ones after the break, but anyone else on Google.
BE: Well, so Google has this whole series of things and they haven’t really defined exactly all the things they’re doing, but they’re they’re sort of beta testing at all in this general idea of the privacy sandbox. And so I haven’t gotten into too much detail on all the little bits but the idea is that instead of every advertiser, or ad platform, building their own knowledge graph on users and collecting more data than they necessarily need Google will take a, a stance where they are the ones deciding what is the right amount of information to collect, and then make the right information available to those advertisers so it helps to know in a way, because instead of lots of parties collecting all different kinds of information we now have sort of a standardized platform that you can then query this Google the clearinghouse for that it makes it incredibly.
DV: Okay, I got more questions I submit your question Yeah, build whenever you’re taking a quick break and we’ll be right back.
DV: Everyone welcome back to Press This WordPress podcast on WMR. We’re in the middle of our episode talking about ad blocking and cookie blocking and the effect on publishers are interviewed Bill Erickson for that bill right before the break, I was trying to catch you out so many good topics here, you were talking about Google’s approach, which was this notion as you put it like a privacy sandbox where fundamentally they would collect the data, cohort people anonymously and then allow advertisers to target based on those anonymous groups but we talked about how that kind of puts Google at the very center, like being the clearinghouse of private data in the lab, too, of course has its own implications, but I’m curious, is there anything else on the Google side and if not, what, what was everybody else going to do about this.
BE: Yeah, so on, on the other side. So I think everyone is going to interact with whatever Google is doing but that everyone’s not gonna put all their chips into Google. Because, I mean one, they want to build something that’s not so dependent on one of their competitors, as these app providers, but to it’s not going to apply to any of the other browsers like Safari, and Firefox. So, the more broader based tool is what’s generally referred to as authenticated traffic. So when you are on a website, if that website can know your identify you in some way, Usually by any email. They can then hash that email, and then use that as the tool for gathering related ads, and identifying you, so rather than depending on the third parties for tracking you across the web, the individual websites will encourage you to log in to get new features to save your favorite posts. To access the newsletter, whatever they can do to grab your email, and then use that email hash to, to generate relevant ads, and so there’s gonna be a big push, I mean there’s always been a push to capture emails for email lists and stuff but there’s gonna be an even bigger push. And so that’s layer one is just getting the email address, and then using that layer two is to collect as much first party data as you can and build your own graph of your own users so that, that means, once they’re logged in on your site, letting them favorite their favorite content, leave comments that you can do an analysis of that to get an idea of sort of building that that cohort of different types of people but on your individual website, and then use that knowledge graph that you created to, to get more relevant ads and the idea is that when you’re building your own first party data you’ll know more about your individual visitors than an advertiser will, and then you’ll be able to generate even higher RPM than you could nowadays
DV: with ad networks though have a better view of that user behavior with the third party cookies like, and how would it advertise your targeted cohort on a specific side they’re just curious if you know, because like would my cohorts be classified differently than someone else’s
BE: right so I think the way it’s going is the, the ad networks themselves are going to be helping you create these first party data’s and then integrate them into your, into their system, so it’ll be adthrive in media vine that are doing it so media vine has their new growth, nice service, which is doing exactly that, what they’re trying to do is give you the tools to collect first party data that can then integrate into their larger picture and deliver relevant more relevant ads across their entire network. So, so yeah it’s, it, there’s a lot of steps we’re basically trying to recreate the way that the third party cookies and tracking work now, by using first party data and then integrating that into your overall system based on consent, and present yeah I was gonna say,
DV: Assuming you have the right standard are following all the right laws. The downside is you don’t get to customize ads for, you know anyone that has cookies enabled but the plus side is, you’re doing it for people where you have email addresses, perhaps, and then, you know, maybe perhaps also how insights from how they’re engaging with your specific store. Now, you mentioned two ad networks that you work with that are doing this, I’m guessing like lots of other networks are doing the same. It’s kind of like, it’s kind of like the link networks only now we’re going to have, what do you call it authenticated traffic networks.
BE: Yeah and all, all of them are working on similar things and there’s systems that are used to connect them so that you can authenticate your traffic and then connect it to different systems. When it comes to the actual first party data collection, there’s going to be a specific ad network based solutions sort of like grown up needs for media vine, But then there’s also gonna be more general purpose once it’s like streaming something used by lots of publishers, and it allows people to sign in save their favorite content to get relevant content, and then that data can also be passed to whichever ad network you’re using so that gives you a little bit more freedom to move between ad networks and carry your data with you.
DV: Who there’s always something new to learn, thank you for sharing all this last question. What do you think the future of advertising is in this environment. Sounds like you think he’s probably just going to kind of adapt and morph in these ways, but I mean, like is it direct advise outside of the network’s these authenticated traffic networks is it all of it like how do you think it’s gonna change.
BE: Yes I think it’s a lot it’s going to change and I think at the end of the day it’s going to be about publishers diversifying their revenue sources. So on the ad side, you’ll likely see like a more ad 20 breakdown where it’s like 20% of your visitors deliver 80% of your revenue because those are the ones that are logged in generating the data that gives you the really good ad impressions, and then 80% of your traffic is getting the generic ads that don’t really deliver much. And then on top of it, Right. And then on top of that you’ll be building on direct ad buys and ebooks and basically any other ways you’re not so dependent on a single source of revenue, most of our customers have 80 to 90% of their revenue coming from just the standard ad networks, and they see how things are changing and so they’re, they’re working on changing that the balance of payments there so when one thing goes down it doesn’t totally take everything.
DV: Well this was stellar thank you so much, Bill.
BE: Thank you for having me.
DV: Awesome. If you’d like to learn more about what Bill is up to you can visit cultivate MVP.com, thanks everyone for listening to Press This WordPress community podcast on WMR. Again, this has been your host David Vogelpohl, I support the WordPress community through my role at WP Engine, and I love to bring the best of the community to you here every week on progress.