Google’s Encrypted Signals Program Just Entered Open Beta, And Here’s What You Need To Know About It – AdExchanger

If you havent had lunch yet, dont worry, because heres a healthy serving of acronym soup.

Earlier this month, ESP, not to be confused with PPIDs, entered open beta in GAM, so feel free to rev up your UID2s.

In English: Google is moving forward with its solution, called encrypted signals from publishers (ESP), that allows publishers to share encrypted first-party signals, including Unified ID 2.0 identifiers, with buy-side platforms of their choosing via Ad Manager.

Google first announced the planned creation of ESP in March of last year just a week after David Temkin, Googles director of product management for ads privacy and trust, stated in a company blog post that it would not support email-based identifiers (such as UID2) in its own ad products after third-party cookies are phased out in Chrome.

ESP, which was in closed beta testing for roughly a year, represents a long-term investment for us, Deepti Bhatnagar, director of product management for Google Ad Manager, told AdExchanger.

The Trade Desk and Mediavine were both early testers during the ESP beta.

Its a very complex undertaking, Bhatnagar said. Well just continue to build and improve this solution and make sure it works for our partners.

But what exactly is ESP, how is it different from Googles PPID (publisher-provided identifier), is it just a work-around for passing email-based IDs and can it be a viable alternative to third-party cookie-based targeting?

ESP vs. PPID

Encrypted signals from publishers and publisher-provided identifiers are flip sides of the same coin. Both exist to help publishers monetize programmatic inventory using their first-party data.

But because of Googles stance on email-based IDs, it needs two different mechanisms for publishers to share first-party data with buyers: one for Googles ad buying tools (PPID) and another for third-party bidders (ESP).

PPID refresher

PPIDs are akin to publisher-specific first-party cookies, usually tied to a log-in, that publishers can use for frequency capping, audience segmentation, targeting and other ad-serving-related activities. But Google also allows publishers to share PPIDs through Ad Manager with Googles programmatic demand, which helps scale the publishers first-party data.

The PPIDs are anonymized so audiences cant be identified across other sites and apps. But the data can be aggregated in Google Ads and DV360, which gives publishers the ability to scale the usefulness of their first-party data.

But publishers dont just work with Google, and they have other signals they may want to trade on, like Unified ID 2.0, which Google wont pass through its buying systems. And thats where ESP comes in.

ESP explained

The best way to think about ESP is as a pipe that publishers can use to share encrypted first-party signals through Google Ad Manager with direct, authorized buyers and Open Bidders. Its a way to facilitate an exchange between publishers and their non-Google demand partners.

A publisher can encrypt and share practically any first-party data signal as an ESP, including demographic data, contextual information, device ID, IP address, behavior data, interest data or any one of the industrys many alternative identifiers, such as UID2 or LiveRamps Ramp ID. A seller-defined audience, as per the IAB Tech Labs new spec, could also theoretically be passed as an ESP after being encrypted.

Publishers could even pass a PPID as an encrypted signal, they just cant turn identifiers that Google doesnt support into a PPID to use in Googles ad systems. (The TL;DR on that: A UID cant be a PPID for Google demand, but a PPID can be an ESP for non-Google buyers.)

The fact is, although Google says it wont trade on email-based identifiers, once the data is encrypted as an ESP, Google doesnt know what it is and therefore will allow the ID to be traded on its exchange through private marketplace deals, open auctions, private auctions and preferred deals.

Meaning, Google is OK with advertisers transacting on email-based IDs, such as UID2, just not through its own systems. The Trade Desk double checked.

Weve conferred with Google and made sure this is something weve told them that its UID thats being transferred, said Kanishk Prasad, a senior product manager at The Trade Desk. And they said, Yep.

Before any data enters GAM for use as an ESP, it must be encrypted, and its the publishers responsibility to comply with any and all privacy requirements to ensure the data is collected with consent and follow Googles own Ad Manager policies.

We are just providing a technical means for the publisher to share this data with third-party, non-Google buyers, Bhatnagar said. We dont see the data or know whats in it.

Work-around?

But one might wonder why Google is providing a technical means to share email-based identifiers, like UID2, considering the colossal industry-wide freak-out Google provoked last year after declaring that PII graphs based on peoples email addresses wont fly from a privacy perspective.

In short, are PPID and ESP just work-arounds for Googles own planned deprecation of third-party cookies in Chrome?

Not exactly, said Eric Hochberger, CEO and co-founder of Mediavine.

It comes down to this: When Google is the buyer or DV360, theyre not interested in ESP and theyre not interested in these email identifiers thats why PPID exists, he said. They want a more privacy-centric way of bidding that will pass their sniff test all the way through, which is why PPID is more limited.

The competition question

But that begs another question: Is the PPID actually more limited than ESP, or does using the PPID in Google Ad Manager give Google any sort of leg up over third-party bidders?

In its recent agreement with the UKs Competition and Markets Authority earlier this year, Google pledged not to self-preference its own advertising services and restrict the sharing of data within its ecosystem to ensure it doesnt gain an advantage over competitors when third-party cookies are removed.

In Hochbergers view, though, encrypted signals are more powerful than PPID because its whatever the publisher and buyer want to make it.

We can pass whatever data we want in a secure way in the auction, he said. It just has a lot more flexibility.

And more flexibility for publishers is the point, Googles Bhatnagar said.

[ESP] is a way for us to give them control over what they can share and with whom they can share, she said.

Publishers crave control because they often dont feel like they have any, Prasad said.

They dont want to put anything out there because they have no idea whats going to happen to it or who is going to use it, he said. But what Google does and this is something UID2 does, as well is give publishers more granular control over where their data is going.

And (potentially) the ability to make more money.

Although its still too early to prove whether the presence of a PPID or an encrypted signal raises bid rates for publishers, Google seems optimistic. We believe encrypted signals will be another tool to help publishers monetize their inventory in a way that best fits their business goals, Bhatnagar said.

There are early signs, though, that encrypted signals do help raise prices for publishers in cases where there are no cookie-based IDs available.

In cases when its able to pass signals like UID2 as an ESP, Mediavine said its seen increases of more than 117% in eCPMs for otherwise non-addressable inventory.

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Google's Encrypted Signals Program Just Entered Open Beta, And Here's What You Need To Know About It - AdExchanger