The Pitfalls of Identity

Identity has been the hype word around the industry this year more than ever. With the change in the digital landscape, third-party cookies going away, changes to IOS and therefore IDFAs, marketeers and publishers are looking for alternative solutions that will allow them to reach their audiences in an addressable way.

There are a number of existing and emerging Identity providers, reassuring the industry that this is not the end of addressability, that marketeers will still be able to reach their audiences and that publishers will find a way to sustain their revenue.

And, even though we are hopeful and we have already discussed the benefits of Identity solutions, we want to ensure you are armed with all the relevant information. To provide a full picture of the opportunities, this article will look at the other side of the coin. What are the pitfalls? When do these solutions fall short?

Scale

Let's start with the most obvious question. Would Identity solutions be able to offer the scale that the industry is used to? The answer is - if these solutions are truly future-proof, the scale is incomparable to the current cookie-based scale. Simply put, the average person has hundreds of cookies associated with them. Apart from that, deterministic identity solutions are associated with consented consumers agreeing to give up their personal information in exchange for value. Now is the time for advertisers and publishers to ask themselves - what value am I able to provide to consumers? For brands, the most straightforward value proposition is offering discounts and limited offers in exchange for an email address. For publishers, it needs to be truly relevant and compelling content. An informed choice, even though it might be more valuable, will never scale as much as third-party cookies have scaled.

On the positive side, by changing targeting strategies, knowing that you are reaching the right person deterministically can help marketers reach their goals in a more effective way. A clear example here is retargeting - being able to find the person you want to communicate with again with a 100% certainty (deterministic) instead of probably finding that person via third-party cookies (probabilistic) means a more effective spend and less waste in terms of impressions. This applies to use cases like suppression as well - why would you target the people who are already your clients if you want to get new clients?

Privacy and Security

Privacy and security (or lack thereof) are the key drivers for the changes we are seeing in the industry today.

Any new solution should operate in a privacy-compliant and secure manner. That must be the baseline. Any Identity provider should be able to uphold the rights of the consumer in terms of opt-in/opt-out, or the needs of the brand and publisher in terms of securing their data. If they can't, the solution is one that will inevitably disappear in the long term.

Transparency

With a multitude of Identity providers emerging, marketeers are tasked with understanding how they work and what they actually do. The reality is that not all solutions are fully transparent in the way they operate and how they get the job done and, if they are, they are too technical for marketeers to understand let alone end consumers. 

While transparency is key for consumers, if the industry doesn't find a simple and transparent way to explain how identity solutions operate, ultimately any non-transparent solution will end up going the way of third-party cookies.

Operational changes

The promise of most identity solutions is that they will work just as easily as third-party cookie workflows. The reality is that operationally processes may differ. One example here might be a simple clicks measurement exercise. The industry is used to using pixels and cookies to measure clicks, however you can't really measure clicks with cookies on a cookieless inventory.

Another example is the way frequency capping takes place. Usually this is done by the DSP based on a DSP cookie. If, however, the DSP is trying to apply or measure frequency capping on a campaign running a cookieless inventory, a DSP cookie won't cut it. There are two options here - either the DSP needs to be able to natively support and act on the specific identity solution used in this campaign, or frequency capping should take place at the SSP level, when the SSP is able to understand and act on that specific identifier. This will still get the job done, but it turns the process on its head.

There is a lot of testing and adjustment involved. At the end of the day marketeers will have to build new operational processes, and develop new best practices as well as adapt how they optimise on their KPIs.

This exercise is demanding on resources, and an inevitable part of the change we are experiencing.

Evaluation and measurement

As marketeers we expect to test and compare identity solutions and choose the best one for our needs. In reality, it's difficult to evaluate new solutions based on old metrics - how do you measure the effectiveness of a cookieless solution using pixels and cookies? 

The other difficulty comes from the fact that some of the solutions are deterministic, while others are probabilistic and therefore achieving different goals. Deterministic solutions take you straight to the person you'd like to reach, while probabilistic ones give you more scale.

Some of the use cases where identity solutions are aiming to preserve post third-party cookies are Audience segmentation and activation, Measurement and attribution cross device, Audience insights, Retargeting and Suppression.

At the end of the day, we see marketeers deploying a combination of these solutions, each of which will help them achieve a specific set of KPIs in order to manage successful marketing campaigns.

Bring the industry together

The promise of Cross media Identity solutions is just that - bring an identity cross media, cross device and focus the marketing efforts on the person, instead of on the cookie, IDFA or other ID.

With 3rd party cookies going away and device IDs on IOS changing, we see a window of opportunity for the industry to widely focus on connected ID solutions. Having said that, we as an industry are still struggling to bring CTV, Audio, OOH and more to this reality. Even though a lot of these solutions can technically work on all devices and bring back all these devices to a single identity, there is no pressure on the aforementioned technologies to actually adopt them and enable these use cases, as they have their own fragmented environments that work for them. In conclusion, Identity solutions come with their own challenges and pitfalls. Nevertheless, if they are built in a way that takes into account consumer privacy, transparency and security, they can provide something that third-party cookies never could -  true people-based marketing outcomes.