The future of identity and addressability is people-based IDs
by Travis Clinger, SVP, head of addressability and ecosystem at LiveRamp
While the advertising ecosystem is accustomed to change, the past 10 months have created plenty of uncertainty among brands, agencies and publishers. For a sustainable future, brands and publishers need to establish and communicate their value exchanges effectively so consumers are aware they are sharing their data in exchange for personalized content, services and experiences.
In return for individuals’ trust, brands and publishers can customize engagements at every touchpoint in a meaningful way. If successful, effective value exchanges fuel authentications, which then fuel increased addressability and positive business outcomes, including revenue.
Today, publishers and brands are under increased pressure to utilize their resources as efficiently as possible. Brands need to ensure every impression they buy is measurable and accountable. Publishers must think strategically about making their inventory as desirable and addressable as possible. So how do both sides move forward?
Trust and authentications go hand-in-hand
Authentication is the conduit to growth because it enables publishers to connect their inventory to advertisers’ target audiences with precision. It simultaneously increases CPMs and boosts consumer trust. Publishers that are quick to adopt an authentication strategy will gain a competitive advantage. Authentication on even 5–10 percent of traffic is enough to boost the bottom line.
“Publishers must get creative about how they’re compelling users to sign in and provide authentication,” said Chris Pirrone, general manager at USA Today Sports Media Group. “Traditional methods like paywalls and newsletter sign-ups are just a start, but pubs must also ideate new ways to engage their audiences and elicit user registrations. We are seeing registration traction through offerings like vertically-focused content, downloadable sports calendars, schedules, reminders and community forums.”
And, Pirrone added: “Innovative digital products that drive authentication will help increase direct advertiser interest, but these products will also be delivering on a metric that is arguably just as important: providing value to readers. If publishers aren’t already ideating and implementing authentication strategies unique to their business and audiences, they need to be. The sustainability of their business depends on it.”
While authentication strategies are a critical first step to being able to architect a new digital ecosystem, the identity infrastructure that supports them is of equal, if not greater, importance.
“The advertising industry faces certain upheaval ahead of a future without traditional identifiers,” said Jeremy Hlavacek, head of revenue at IBM Watson Advertising. “The time for change is now, and the digital ecosystem must look for privacy-forward solutions to establish new forms of identity that go beyond the cookie to preserve the future of the open web. As walled gardens continue to remain strong, it’s critically important to harness the predictive, self-learning power of AI.”
Cross-device and cross-format, people-based IDs work best
As the industry accelerates innovation to match the pace of change, there has been increased debate over the efficacy of third-party cookie alternatives, which include fingerprinting, hashed emails, universal IDs and encrypted identifiers. However, they’re not all created equal. For example, an encrypted people-based identifier is the only one that may work across devices and formats, allowing advertisers to reach their critical audiences and be entirely measurable, neutral and interoperable — while putting consumer privacy at the center.
Here’s how it works: Encrypted identifiers move into an anonymous or pseudo-anonymous space quickly. So if sensitive offline identifiers are used as input, an encoded identifier is immediately put through a multi-step hashing process to move it to a meaningless string on the server side, meaning it’s not fully visible to any participants. Then, that totally useless ID can be encrypted with a key and turned into a secure, encoded digital customer identity that can be sent to other trusted parties.
Brands like Fitbit are already seeing the advantages of better targeting when buying on people-based identifiers. In a test to reach their high-value audiences, Fitbit measured success by comparing key metrics when transacting on a people-based ID versus third-party cookies. Transacting on people-based identifiers doubled ROAS, decreased cost-per-page-view by 34 percent and increased average order value by 13 percent. Buying on people-based identifiers will enable brands to ensure continuity once cookies are gone, and achieve better business outcomes immediately.
“Third-party cookies were inherently flawed to begin with and have overwhelmed and confused consumers,” added Amanda Martin, vice president of Enterprise Partnerships at Goodway Group. “Now we have an opportunity to right-side the ship and regain their trust. People-based identifiers are one such mechanism to accomplish this, and what’s more, not only do they honor the Internet value exchange and uphold transparency, but they perform better, which is a compelling argument for any brand looking to optimize media spend.”
For brands, the time to test and implement is now
As the holidays approach, it’s essential for brands to start testing and learning now to increase reach, accurately model and craft long-term measurement strategies without relying on cookies.
“Brands who begin testing now will have an immeasurable advantage. Not only will they be more prepared for 2022, but they will have access to cookieless impressions now (i.e., on Firefox and Safari), which most brands are not bidding on today,” said Liane Nadeau, senior vice president and head of Investments and Precision Media at Digitas North America.
Now is not the time to be reactionary. There is urgency for constituencies across the ecosystem to create a clear path forward and focus on delivering better customer experiences. Marketers and publishers need to learn, optimize and repeat, spearheading authentication strategies — and implementing people-based tools — that help them hit their core KPIs and flexibly pivot to a new, trusted ecosystem.