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Shaping the Future of Identity Shaping the Future of Identity A guide for buyers and sellers navigating a new path to programmatic advertising 2 | Shaping the Future of Identity Introduction | 3 Introduction For a long time, third‑party cookies and device identifiers have been the foundation of people‑based marketing, enabling granular targeting and precise measurement on cross‑site, cross‑channel advertising campaigns. While cross‑site identifiers While navigating the are effective for marketers transition is challenging, looking to justify ad spend, the deprecation of third‑party they are often less appealing cookies has encouraged to consumers who are collaboration among concerned about exposure advertisers, publishers and of their personal data on the adtech providers around internet. With this in mind, the world to uncover new regulatory and browser solutions that see the policy changes, including the digital advertising industry deprecation of third‑party return to a consumer‑first cookies and device identifiers, approach and set the entire are happening for the ecosystem up for success. benefit of the consumer, to give them more control With this guide, we aim to over how and with whom explain the challenges the their information is shared. industry is facing, understand the approaches buyers As a result, marketers need and sellers can take, and to adjust buying strategies to outline considerations for ensure their programmatic all market participants as advertising investments they prepare for a future remain effective and efficient, without third‑party cookies reaching customers across and device identifiers. screens in a non‑intrusive and privacy‑safe way. On the other hand, publishers need alternative monetization strategies to continue to maximize the value of their inventory. 4 | Shaping the Future of Identity What is Happening and Why Should You Care? | 5 What is Happening and Why Should You Care? Historically third‑party cookies and device identifiers have been the backbone of people‑based marketing, playing a Digital identifiers include: critical role in the success of buyers and sellers. In the adtech industry, digital identifiers are used to recognize individual Third‑party cookie IDs users or groups of people within a household. 1 (cross‑domain) In recent years the Simultaneously, web browsers First‑party cookie IDs industry has recognized are making changes to their 2 (domain‑specific) growing concerns over cross‑site tracking policies, online consumer privacy, rolling out technological Mobile ad IDs (IDFAs & implementing new regulations changes and restrictions 3 Google advertising IDs) and policies that, while on third‑party cookies. complex, provide additional Google Chrome, which and necessary layers of represents about 63% of the protection for consumers. online advertising market, General Data Protection is expected to deprecate Regulation (GDPR) in Europe third‑party cookies by 2022, has drawn consumer’s effectively removing the attention to the value of primary currency for user their data and their right identification in web‑based 80% to protect how it is being advertising transactions of transactions collected and used. and challenging the value use third‑party of data marketplaces. cookies today1 Similar regulations like the California Consumer Privacy Mobile software updates Act (CCPA) in the US and are also taking steps to the General Data Protection protect consumers. Apple’s Law (LGPD) in Brazil signify iOS 14.5 update would restrict a global shift in this direction. access to IDFAs, limiting user These regulations can identification capabilities on require companies to ask mobile apps. While positive 64% for consent to sell or process for consumers, such updates of consumers personal data, and consumers make addressability and are concerned are broadly opting out or targeting more complex, by how companies electing not to be tracked. permanently impacting the use their private dynamics of digital advertising. information online2 1 Xandr’s platform 2 Global Web Index 6 | Shaping the Future of Identity What is Happening and Why Should You Care? | 7 The impact on the industry The deprecation of third‑party cookies has major implications for the entire advertising ecosystem. ADVERTISERS TECHNOLOGY PROVIDERS CONSUMERS Advertisers rely heavily on identifiers, both › CPA Optimization — DSPs Identifiers fuel the value exchange that enables online and offline, to reach their audiences, Fewer conversions attributed leads to higher DSPs, or demand‑side platforms, will find publishers to generate free, premium content manage creative messaging (what ad and CPAs and impacts ability to optimize to the it more difficult to deliver 1:1 addressable for consumers, in exchange for exposure to how often), and to measure the effectiveness metric. ads at scale across publishers, and relevant advertising. A disruption in that value of their advertising campaigns. need a consistent, accurate solution for exchange will cause an increase in paywalls, › Behavioural Targeting — measurement. They will need to double sign‑in requests and subscriptions for content. The impact for advertisers: Limited ability to segment users based on down on optimization algorithms that drive In addition, consumers may experience their web browsing history. outcomes, or risk providing less efficient less relevant ads, leading to increased › Retargeting — Without a unique ID, buying strategies for advertisers. frustrations with the advertising model. marketers cannot re‑identify a user who abandoned a site without purchasing. PUBLISHERS SSPs/Exchanges It will become more challenging for SSPs, › Frequency Capping — Publishers rely on both first and third‑party or supply‑side platforms, and exchanges to Frequency management may rely on identifiers to generate 1:1 addressable demand generate addressable demand as matching publisher first‑party cookies, with limited so they can help advertisers deliver relevant users across publisher inventory to advertiser ability to restrict ad exposure to a user messaging at a premium price. They are audiences will become increasingly limited. across different websites. at risk of seeing a decline in ad revenue This could lead to decreased publisher as addressable reach becomes limited. monetization opportunities and reduced › Conversion Attribution — revenue per thousand impressions (RPMs). Diminished ability to precisely tie conversion events to prior ad exposure. Fewer conversions are precisely attributable to the same investment. 8 | Shaping the Future of Identity What is Happening and Why Should You Care? | 9 The importance of an open and The demise of third‑party A major implication would free internet in a post‑cookie world cookies means the value come in the form of quality What is a The open internet represents the vast exchange for the open internet journalism, which is at risk walled garden? ecosystem of websites, apps, games, and is at risk as walled gardens, given such changes could A walled garden is a video streaming platforms that supply which have their own log‑in overtake users’ ability to closed ecosystem in a majority of the content consumed user solutions in place, have access premium content which all operations for free outside of walled gardens. the potential to control an online for free. To support scale are controlled by the even greater share of ad for advertisers, optimized ecosystem operator As we know, the open internet is spend. If advertisers shift demand for publishers, and keeping all data and powered by advertising and supported budgets entirely into walled increased content choices for technology to itself. by the value exchange between: gardens, publishers operating consumers, the industry as a In adtech, a walled on the open internet will begin whole will the need to prioritize garden provides its › Consumers — users are seeing to feel increased pressure as the sustainability of the customers with the targeted ads in exchange for they look to maintain current open internet. audience, technology, free, premium content. revenue streams, either and inventory but in the form of advertising doesn’t allow them to › Content owners — publishers spend or user subscriptions. export any data. That receive revenue to create means that no data premium content. Consumers Brands goes outside of that platform and can’t be › Brands — brands reach THE used in the exchange desired audiences. VALUE between third‑parties. EXCHANGE Content Owners 10 | Shaping the Future of Identity Understanding Alternative Approaches to Identity | 11 Understanding Alternative Approaches to Identity Today, precise user identification provides the ability to recognize a single consumer and target PUBLISHER PUBLISHER Publisher IDs are valuable for and track their browsing journey. In the future, PROVIDED IDs PROVIDED IDs the purposes of frequency mechanisms for reaching that consumer and capping across a publisher’s measuring success will have to evolve. A successful INDUSTRY Publisher IDs are identifiers properties, and facilitating strategy will require a mix of approaches including IDs assigned to users who are publisher‑provided audiences, those that facilitate 1:1 addressability, modelled known to that publisher. often sold through deals. solutions, browser and app‑backed frameworks, CLEAN ROOM They could be first‑party For buyers, they are able and private marketplaces (PMPs). In this section, TECHNOLOGIES cookies and domain‑specific, to reach audiences on we elaborate on different emerging solutions. or consistent across sites
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