>>mhm Yes. Welcome back to the Qantas industry summit on the demise of third party cookies, the cookie conundrum, a recipe for success. I'm john furrier host of the cube. The changing landscape of advertising is here and Chip Gupta, founder of you of digital is joining us Chip, thanks for coming on this segment. Really appreciate, I know you're busy, you've got two young kids as well as providing education to the digital industry. You got some kids to take care of and train them to. So welcome to the cube conversation here as part of the program. >>Yeah, thanks for having me excited to be here. >>So the house of the changing landscape of advertising really centers around the open to walled garden mindset of the web and the big power players. We know the big 34 tech players dominate the marketplace. So clearly in a major inflection point and we've seen this movie before Web mobile revolution, which was basically a reply platform NG of capabilities. But now we're in an error of re factoring the industry, not re platt forming a complete changing over of the value proposition. So a lot at stake here as this open web, open internet global internet evolved. What are your, what's your take on this, this industry proposals out there that are talking to this specific cookie issue? What does it mean? And what proposals are out there? >>Yeah, so, you know, I I really view the identity proposals and kind of to to kind of groups, two separate groups. So on one side you have what the walled gardens are doing and really that's being led by google. Right, so google um you know, introduce something called the privacy sandbox when they announced that they would be deprecating third party cookies uh as part of the privacy sandbox, they've had a number of proposals unfortunately, or you know, however you want to say they're all bird themed for some reason, I don't know why. Um but the one the bird theme proposal that they've chosen to move forward with is called flock, which stands for Federated learning of cohorts. And essentially what it all boils down to is google is moving forward with cohort level Learning and understanding of users in the future after 3rd party cookies, unlike what we've been accustomed to in this space, which is a user level understanding of people and what they're doing online for targeting tracking purposes. And so that's on one side of the equation, it's what google is doing with flock and privacy sandbox. Now On the other side is, you know, things like unified, I need to point or the work that 85 is doing around building new identity frameworks for the entire space, that actually can still get down to the user level. Right? And so again, unified I. d 2.0 comes to mind because it's the one that's probably got the most adoption in the space. It's an open source framework. So the idea is that it's free and pretty much publicly available to anybody that wants to use it and unified, I need to point out again is user level. So it's it's basically taking data that's authenticated data from users across various websites you know that are logging in and taking those authenticated users to create some kind of identity map. And so if you think about those two work streams right, you've got the walled gardens and or you know, google with flock on one side and then you've got unified I. D. Two point oh and other I. D. Frameworks for the open internet on the other side, you've got these two very differing type of approaches to identity in the future. Again on the google side it's cohort level, it's gonna be built into chrome. Um The idea is that you can pretty much do a lot of the things that we do with advertising today, but now you're just doing it at a group level so that you're protecting privacy whereas on the other side of the open internet you're still getting down to the user level. Um And that's pretty powerful. But the the issue there is scale, right? We know that a lot of people are not logged in on lots of websites. I think the stat that I saw is under five of all website traffic is authenticated. So really if you if you simplify things, you boil it all down, you have kind of these two very differing approaches. >>I guess the question it really comes down to what alternatives are out there for cookies, and which ones do you think will be more successful? Because I think, you know, the consensus is at least from my reporting in my view, is that the world agrees, Let's make it open, Which one is going to be better. >>Yeah, that's a great question, john So as I mentioned, right, we have we have to kind of work streams here, we've got the walled garden work work stream being led by google and their work around flock, and then we've got the open internet, right? Let's say unified I. D to kind of represents that. I personally don't believe that there is a right answer or an endgame here. I don't think that one of them wins over the other, frankly, I think that, you know, first of all, you have those two frameworks, neither of them are perfect, they're both flawed in their own ways. There are pros and cons to both of them. And so what we're starting to see now is you have other companies kind of coming in and building on top of both of them as kind of a hybrid solution. Right? So they're saying, hey, we use, you know, an open I. D. Framework in this way to get down to the user level and use that authenticated data and that's important. But we don't have all the scale. So now we go to google and we go to flock to kind of fill the scale. Oh and hey, by the way, we have some of our own special sauce, right? We have some of our own data, we have some of our own partnerships, we're gonna bring that in and layer it on top. Right? And so really where I think things are headed is the right answer, frankly, is not one or the other. It's a little mishmash of both. With a little extra something on top. I think that's, that's what we're starting to see out of a lot of companies in the space and I think that's frankly where we're headed. >>What do you think the industry will evolve to, in your opinion? Because I think this is gonna, you can't ignore the big guys on this, has these programmatic, you mentioned also the data is there. But what do you think the market will evolve to with this, with this conundrum? >>So, so I think john where we're headed? Um, you know, I think we're right now we're having this existential existential crisis, right? About identity in this industry, because our world is being turned upside down, all the mechanisms that we've used for years and years are being thrown out the window and we're being told that we're gonna have new mechanisms, right? So cookies are going away device IEDs are going away and now we got to come up with new things and so the world is being turned upside down and everything that you read about in the trades and you know, we're here talking about it, right? Like everyone's always talking about identity right now, where do I think this is going if I was to look into my crystal ball, you know, this is how I would kind of play this out. If you think about identity today, Right? Forget about all the changes. Just think about it now and maybe a few years before today, Identity for marketers in my opinion, has been a little bit of a checkbox activity. Right? It's been, hey, um, okay, uh, you know, ad tech company or media company, do you have an identity solution? Okay. Tell me a little bit more about it. Okay. Sounds good. That sounds good. Now can we move on and talk about my business and how are you going to drive meaningful outcomes or whatever for my business? And I believe the reason that is, is because identity is a little abstract, right? It's not something that you can actually get meaningful validation against. It's just something that, you know, Yes, you have it. Okay, great. Let's move on, type of thing. Right. And so that, that's, that's kind of where we've been now, all of a sudden the cookies are going away, the device IDs are going away. And so the world is turning upside down. We're in this crisis of how are we going to keep doing what we were doing for the last 10 years in the future. So everyone's talking about it and we're trying to re engineer right? The mechanisms now if I was to look into the crystal ball right two or three years from now where I think we're headed is not much is going to change. And what I mean by that john is um I think that marketers will still go to companies and say do you have an ID solution? Okay tell me more about it. Okay uh let me understand a little bit better. Okay you do it this way. Sounds good. Now the ways in which companies are going to do it will be different right now. It's flock and unified I. D. And this and that right. The ways the mechanisms will be a little bit different but the end state right? Like the actual way in which we operate as an industry and kind of like the view of the landscape, in my opinion will be very simple or very similar, right? Because marketers will still view it as a tell me you have an ID solution, Make me feel good about it. Help me check the box and let's move on and talk about my business and how you're going to solve for my needs. So I think that's where we're going. That is not by any means to discount this existential moment that we're in. This is a really important moment where we do have to talk about and figure out what we're gonna do in the future. My just my viewpoint is that the future will actually not look all that different than the present. >>And I'll say the user base is the audience. Their their data behind it helps create new experiences, machine learning and Ai are going to create those and we have the data. You have the sharing it or using it as we're finding shit. Gupta great insight dropping some nice gems here, Founder of You of Digital and also the Adjunct professor of Programmatic advertising at Levi School of Business and santa Clara University Professor. Thank you for coming, dropping the gems here and insight. Thank you. >>Thanks a lot for having me john really appreciate it. >>Thanks for watching the cooking 100 is the cube host Jon ferrier. Me. Thanks for watching. Yeah. Yeah.

(upbeat electronic music) >> Welcome back to the Quantcast Industry Summit on the demise of third-party cookies. The Cookie Conundrum, A Recipe for Success. I'm John Furrier, host of theCUBE. The changing landscape of advertising is here, and Shiv Gupta, founder of U of Digital is joining us. Shiv, thanks for coming on this segment. I really appreciate it. I know you're busy. You've got two young kids, as well as providing education to the digital industry. You got some kids to take care of and train them too. So, welcome to the cube conversation here as part of the program. >> Yeah, thanks for having me. Excited to be here. >> So, the house of the changing landscape of advertising really centers around the open to walled garden mindset of the web and the big power players. We know the big three, four tech players dominate the marketplace. So, clearly in a major inflection point. And you know, we've seen this movie before. Web, now mobile revolution. Which was basically a re-platforming of capabilities, but now we're in an era of refactoring the industry, not replatforming. A complete changing over of the value proposition. So, a lot at stake here as this open web, open internet-- global internet, evolves. What are your, what's your take on this? There's industry proposals out there that are talking to this specific cookie issue? What does it mean and what proposals are out there? >> Yeah, so, you know, I really view the identity proposals in kind of two kinds of groups. Two separate groups. So, on one side you have what the walled gardens are doing. And really that's being led by Google, right? So, Google introduced something called the Privacy Sandbox when they announced that they would be deprecating third-party cookies. And as part of the Privacy Sandbox, they've had a number of proposals. Unfortunately, or you know, however you want to say, they're all bird-themed, for some reason I don't know why. But the one, the bird-themed proposal that they've chosen to move forward with is called FLOC, which stands for Federated Learning of Cohorts. And, essentially what it all boils down to is Google is moving forward with cohort level learning and understanding of users in the future after third-party cookies. Unlike what we've been accustomed to in this space, which is a user level understanding of people and what they're doing online for targeting and tracking purposes. And so, that's on one side of the equation. It's what Google is doing with FLOC and Privacy Sandbox. Now, on the other side is, you know, things like unified ID 2.0 or the work that ID5 is doing around building new identity frameworks for the entire space that actually can still get down to the user level. Right? And so again, Unified ID 2.0 comes to mind because it's the one that's probably gotten the most adoption in the space. It's an open source framework. So the idea is that it's free and pretty much publicly available to anybody that wants to use it. And Unified ID 2.0 again is user level. So, it's basically taking data that's authenticated data from users across various websites that are logging in and taking those authenticated users to create some kind of identity map. And so, if you think about those two work streams, right? You've got the walled gardens and or, you know, Google with FLOC on one side. And then you've got Unified ID 2.0 and other ID frameworks for the open internet on the other side. You've got these two very different type of approaches to identity in the future. Again, on the Google side it's cohort level, it's going to be built into Chrome. The idea is that you can pretty much do a lot of the things that we do with advertising today but now you're just doing them at a group level so that you're protecting privacy. Whereas, on the other side with the open internet you're still getting down to the user level and that's pretty powerful but the the issue there is scale, right? We know that a lot of people are not logged in on lots of websites. I think the stat that I saw was under 5% of all website traffic is authenticated. So, really if you simplify things and you boil it all down you have kind of these two very differing approaches. >> So we have a publishing business. We'd love to have people authenticate and get that closed loop journalism thing going on. But, if businesses wannna get this level too, they can have concerns. So, I guess my question is, what's the trade-off? Because you have power in Google and the huge data set that they command. They command a lot of leverage with that. And again, centralized. And you've got open. But it seems to me that the world is moving more towards decentralization, not centralization. Do you agree with that? And does that have any impact to this? Because, you want to harness the data, so it rewards people with the most data. In this case, the powerful. But the world's going decentralized, where there needs to be a new way for data to be accessed and leveraged by anyone. >> Yeah. John, it's a great point. And I think we're at kind of a crossroads, right? To answer that question. You know, I think what we're hearing a lot right now in the space from publishers, like yourself, is that there's an interesting opportunity right now for them, right? To actually have some more control and say about the future of their own business. If you think about the last, let's say 10, 15, 20 years in advertising in digital, right? Programmatic has really become kind of the primary mechanism for revenue for a lot of these publishers. Right? And so programmatic is a super important part of their business. But, with everything that's happening here with identity now, a lot of these publishers are kind of taking a look in the mirror and thinking about, "Okay, we have an interesting opportunity here to make a decision." And, the decision, the trade off to your question is, Do we continue? Right? Do we put up the login wall? The registration wall, right? Collect that data. And then what do we do with that data? Right? So it's kind of a two-fold process here. Two-step process that they have to make a decision on. First of all, do we hamper the user experience by putting up a registration wall? Will we lose consumers if we do that? Do we create some friction in the process that's not necessary. And if we do, right? We're taking a hit already potentially, to what end? Right? And, I think that's the really interesting question, is to what end? But, what we're starting to see is publishers are saying you know what? Programmatic revenue is super important to us. And so, you know, path one might be: Hey, let's give them this data. Right? Let's give them the authenticated information, the data that we collect. Because if we do, we can continue on with the path that our business has been on. Right? Which is generating this awesome kind of programmatic revenue. Now, alternatively we're starting to see some publishers say hold up. If we say no, if we say: "Hey, we're going to authenticate but we're not going to share the data." Right? Some of the publishers actually view programmatic as almost like the programmatic industrial complex, right? That's almost taken a piece of their business in the last 10, 15, 20 years. Whereas, back in the day, they were selling directly and making all the revenue for themselves, right? And so, some of these publishers are starting to say: You know what? We're not going to play nice with FLOC and Unified ID. And we're going to kind of take some of this back. And what that means in the short term for them, is maybe sacrificing programmatic revenue. But their bet is long-term, maybe some of that money will come back to them direct. Now, that'll probably only be the premium pubs, right? The ones that really feel like they have that leverage and that runway to do something like that. And even so, you know, I'm of the opinion that if certain publishers kind of peel away and do that, that's probably not great for the bigger picture. Even though it might be good for their business. But, you know, let's see what happens. To each business their own >> Yeah. I think the trade-off of monetization and user experience has always been there. Now, more than ever, people want truth. They want trust. And I think the trust factor is huge. And if you're a publisher, you wannna have your audience be instrumental. And I think the big players have sucked out of the audience from the publishers for years. And that's well-documented. People talk about that all the time. I guess the question, it really comes down to is, what alternatives are out there for cookies and which ones do you think will be more successful? Because, I think the consensus is, at least from my reporting and my view, is that the world agrees. Let's make it open. Which one's going to be better? >> Yeah. That's a great question, John. So as I mentioned, right? We have two kinds of work streams here. We've got the walled garden work stream being led by Google and their work around FLOC. And then we've got the open internet, right? Let's say Unified ID 2.0 kind of represents that. I personally don't believe that there is a right answer or an end game here. I don't think that one of them wins over the other, frankly. I think that, you know, first of all, you have those two frameworks. Neither of them are perfect. They're both flawed in their own ways. There are pros and cons to both of them. And so what we're starting to see now, is you have other companies kind of coming in and building on top of both of them as kind of a hybrid solution, right? So they're saying, hey we use, you know, an open ID framework in this way to get down to the user level and use that authenticated data. And that's important, but we don't have all the scale. So now we go to a Google and we go to FLOC to kind of fill the scale. Oh and hey, by the way, we have some of our own special sauce. Right? We have some of our own data. We have some of our own partnerships. We're going to bring that in and layer it on top, right? And so, really where I think things are headed is the right answer, frankly, is not one or the other. It's a little mishmash of both with a little extra, you know, something on top. I think that's what we're starting to see out of a lot of companies in the space. And I think that's frankly, where we're headed. >> What do you think the industry will evolve to, in your opinion? Because, I think this is going to be- You can't ignore the big guys on this Obviously the programmatic you mentioned, also the data's there. But, what do you think the market will evolve to with this conundrum? >> So, I think John, where we're headed, you know, I think right now we're having this existential crisis, right? About identity in this industry. Because our world is being turned upside down. All the mechanisms that we've used for years and years are being thrown out the window and we're being told, "Hey, we're going to have new mechanisms." Right? So cookies are going away. Device IDs are going away. And now we've got to come up with new things. And so, the world is being turned upside down and everything that you read about in the trades and you know, we're here talking about it, right? Everyone's always talking about identity, right? Now, where do I think this is going? If I was to look into my crystal ball, you know, this is how I would kind of play this out. If you think about identity today, right? Forget about all the changes. Just think about it now and maybe a few years before today. Identity, for marketers, in my opinion, has been a little bit of a checkbox activity, right? It's been, Hey, Okay. You know, ad tech company or media company. Do you have an identity solution? Okay. Tell me a little bit more about it. Okay. Sounds good. That sounds good. Now, can we move on and talk about my business and how are you going to drive meaningful outcomes or whatever for my business. And I believe the reason that is, is because identity is a little abstract, right? It's not something that you can actually get meaningful validation against. It's just something that, you know? Yes, you have it. Okay, great. Let's move on, type of thing, right? And so, that's kind of where we've been. Now, all of a sudden, the cookies are going away. The device IDs are going away. And so the world is turning upside down. We're in this crisis of: how are we going to keep doing what we were doing for the last 10 years in the future? So, everyone's talking about it and we're tryna re-engineer the mechanisms. Now, if I was to look into the crystal ball, right? Two, three years from now, where I think we're headed is, not much is going to change. And what I mean by that, John is, I think that marketers will still go to companies and say, "Do you have an ID solution? Okay, tell me more about it. Okay. Let me understand a little bit better. Okay. You do it this way. Sounds good." Now, the ways in which companies are going to do it will be different. Right now it's FLOC and Unified ID and this and that, right? The ways, the mechanisms will be a little bit different. But, the end state. Right? The actual way in which we operate as an industry and the view of the landscape in my opinion, will be very simple or very similar, right? Because marketers will still view it as a, tell me you have an ID solution, make me feel good about it, help me check the box and let's move on and talk about my business and how you're going to solve for my needs. So, I think that's where we're going. That is not by any means to discount this existential moment that we're in. This is a really important moment, where we do have to talk about and figure out what we're going to do in the future. My viewpoint is that the future will actually not look all that different than the present. >> And then I'll say the user base is the audience, their data behind it helps create new experiences, machine learning and AI are going to create those. And if you have the data, you're either sharing it or using it. That's what we're finding. Shiv Gupta, great insights. Dropping some nice gems here. Founder of U of Digital and also the adjunct professor of programmatic advertising at Leavey School of business in Santa Clara University. Professor, thank you for coming and dropping the gems here and insight. Thank you. >> Thanks a lot for having me, John. Really appreciate it. >> Thanks for watching The Cookie Conundrum This is theCUBE host, John Furrier, me. Thanks for watching. (uplifting electronic music)