In May 2018, as the European Union’s landmark privacy law, the General Data Protection Regulation, went into effect, the main Dutch public broadcaster set in motion a grand experiment. The leadership at Nederlandse Publieke Omroep—essentially the BBC of the Netherlands—interpreted the law strictly, deciding that visitors to any of its websites would now be prompted to opt in or out of cookies, the tracking technology that enables personalized ads based on someone’s browsing history. And, unlike with most companies, who assume that anyone who skips past a privacy notice is OK with tracking, any NPO visitor who clicked past the obtrusive consent screen without making a choice would be opted out by default.
The results weren’t terribly surprising: 90 percent of users opted out.
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Here is where the ad tech industry would have predicted calamity. A study performed by Google last year, for example, concluded that disabling cookies reduced publisher revenue by more than 50 percent. (Research by an independent team of economists, however, pegged the cookie premium at only 4 percent. Needless to say, there were methodological differences.) If the Google study was right, then NPO should have been heading for financial disaster. The opposite turned out to be true. Instead, the company found that ads served to users who opted out of cookies were bringing in as much or more money as ads served to users who opted in. The results were so strong that as of January 2020, NPO simply got rid of advertising cookies altogether. And rather than decline, its digital revenue is dramatically up, even after the economic shock of the coronavirus pandemic.
This makes NPO a particularly powerful entrant into a long-running debate over the value of targeted advertising. Ad tech companies, a category dominated by Google and Facebook but which teems with other players, argue that microtargeting is better for everyone: users like “relevant” ads, advertisers like being able to reach potential customers more precisely, and publishers get paid more for ads with a higher click rate. A growing body of evidence, however, calls each of these premises into question. The significance of the debate goes far beyond internet privacy, implicating the viability of journalism and, by extension, the health of democracy.
Most of the ads that appear next to online content are sold through an automated system known as programmatic advertising. Advertisers don’t choose the site or app where their ads will run; rather, they bid to show their ads to users who fit certain profiles based on their browsing history. NPO’s mass cookie opt-out meant that option was suddenly unavailable for 90 percent of its visitors.
Like many publishers, NPO relied on Google Ad Manager to sell its ad space. But now it needed an alternative platform that didn’t track users, an option Google doesn’t offer. The job of creating one fell to NPO’s advertising sales house, Ster. It only took a weekend to get started.
“We were having a chat on a Thursday,” recalls Tom van Bentheim, who at the time was Ster’s head of programmatic advertising and is now its manager of digital strategy, operations, and technology. “And we were back in the office on Monday, and [our developer] said, ‘OK, guys, I have a new custom ad server that can serve nonpersonalized ads.’”
The new server was crude, and it could only be operated by the developer who built it, meaning it couldn’t work at scale. But over the next month it allowed Ster to prove an important point: Major advertisers were still willing to buy ads that weren’t targeted based on user behavior. “I think in the first month we made 100,000 euros,” said van Bentheim. “And we were like, oh my God, this is something—we have to make it scalable.” So Ster contracted with a Dutch company, Ortec, to build a new ad server for NPO. Migrating over took a year.
Like Google’s product, the new system is automated. When a user visits an NPO page, a signal automatically goes out to advertisers inviting them to bid to show that user their ad. But there’s a crucial difference: With Google and most other ad server
