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Changes to Cookies, Ad Ids, and Regulations Take Aim at Tracking IDENTITY 2020 Changes to Cookies, Ad IDs, and Regulations Take Aim at Tracking Addressable advertising is the default in the digital display world—and it relies on being able to identify users in order to serve them the right message at the right time. This eMarketer Report explains three significant disruptions developing this year in how marketers identify and target users in digital environments and discusses tactical and strategic approaches for the future. presented by Dear eMarketer Reader, eMarketer is pleased to make this report, Identity 2020: Changes to Cookies, Ad IDs, and Regulations Take Aim at Tracking, available to our readers. This report is a great example of eMarketer data and insights, including analysis of three significant disruptions developing this year in how marketers identify and target users in digital environments, as well as tactical and strategic approaches for the future. We invite you to learn more about eMarketer’s approach to research and why we are considered the industry standard by the world’s leading brands, media companies and agencies. We thank you for your interest in our report and Verizon Media for making it possible to offer it to you today. Best Regards, Nancy Taffera-Santos Nancy Taffera-Santos SVP, Media Solutions & Strategy, eMarketer eMarketer, Inc. www.emarketer.com 11 Times Square, Floor 14 [email protected] New York, NY 10036 IDENTITY 2020: CHANGES TO COOKIES, AD IDS, AND REGULATIONS TAKE AIM AT TRACKING Addressable advertising is the default in the digital display world—and it relies on being able to identify users in order to serve them the right message at the right time. But the identifiers that marketers and their partners use to do this are coming under threat as platforms and regulators work to improve data privacy and protection practices for consumers. What are the major disruptions this year to digital How Will the Change in Support for Third-Party advertisers’ identity practices? Audience Cookies Affect the Use of Data for Data Professionals in North America? At the beginning of the year, Chrome announced it was % of respondents, May 2020 killing the third-party tracking cookie. Halfway through the year, Apple announced it was essentially doing the same Increase spending/emphasis on use of first-party data 60.4% to its Identifier for Advertisers (IDFA), a device-specific ad Increase interest in third-party identity resolution solutions ID. And that’s on top of the California Consumer Privacy 37.7% Act (CCPA) going into effect and requiring marketers to let Engage with third-party industry groups to build identity California residents opt out of having their data sold. resolution solutions 35.9% How are marketers and their partners responding to Increase efforts to build second-party data relationships identity challenges? 35.9% Increase focus on developing custom/in-house identity They’re going to have to do so both tactically and resolution solutions strategically. Many are looking to ways to “replace 35.9% the cookie”—which could be a doomed proposition Increase spending/emphasis on contextual advertising if consumers don’t want to consent to being tracked 34.0% and targeted by advertisers. More far-reaching changes Increase testing/investment in new solutions include moves toward other forms of measurement and 32.1% attribution, like panels. Source: Winterberry Group, "The State of Data 2020" in partnership with Interactive Advertising Bureau (IAB), July 22, 2020 How important is identity for advertisers today? 257477 www.eMarketer.com Very. US advertisers spent billions last year on data KEY STAT: The industry is definitely heading toward activation solutions and are investing across a range of a cookieless future, but fewer than one-third of data tools that all rely (at least in theory) on being able to tell professionals in North America were actively testing and who a user is across devices and platforms. Research investing in new solutions as of May, per Winterberry suggests many are spending more than 20% of their Group and the Interactive Advertising Bureau (IAB). marketing budgets on identity solutions. WHAT’S IN THIS REPORT? This report explains three CONTENTS significant disruptions developing this year in how marketers identify and target users in digital 2 Identity 2020: Changes to Cookies, Ad IDs, and Regulations environments and discusses tactical and strategic Take Aim at Tracking approaches for the future. 3 Marketers Make Big Efforts to Identify Audiences 6 Identity Crisis 2020 10 Identifying a Path Forward 16 Key Takeaways 17 eMarketer Interviews 18 Editorial and Production Contributors IDENTITY 2020: CHANGES TO COOKIES, AD IDS, AND REGULATIONS TAKE AIM AT TRACKING Presented by ©2020 EMARKETER INC. ALL RIGHTS RESERVED 3 MARKETERS MAKE BIG EFFORTS ■ About one-third (34.0%) said the decline of cookies and the change in availability of third-party data were among TO IDENTIFY AUDIENCES the obstacles and functional challenges that would occupy their attention and resources in 2020. About Over the past decade, marketers have widely adopted one in five (18.9%) also cited government and data addressable advertising to target audiences interested privacy regulations. in their messages. That means they need to be able ■ More than two in five (42.0%) said identity to find—that is, identify—users of various devices, so resolution/cross-channel identification was a first-party they can make use of information about those users data use case that would occupy their time, attention, to send the right message to the right person at the and resources this year. Many of the other first-party right time. That identification process has long been data use cases marketers had in mind rely in turn on a challenge, as marketers and their partners have had cross-channel identification and tracking (at least, as normally practiced today). to contend with a growing set of connected devices that were never set up to share a universal identifier. Which First-Party Data Use Cases Do Data But industry developments in 2020 are set to make it Professionals in North America Expect Will Occupy even more difficult. Their Time, Attention, and Resources During 2020? % of respondents, May 2020 Predictive modeling/segmentation A Note on Terms 53.4% The identity of a user is all of the information about that Identity resolution/cross-channel identification user, bundled together into a profile. 42.0% Identity is a distinct concept from identifiers—such as Cross-channel measurement and attribution cookies, hashed email addresses, website logins, device 38.6% IDs like the IDFA and similar identifiers in connected TV General audience analytics (CTV) apps, and so on. 36.4% Advanced TV audience buying Identity resolution is the process of connecting those 33.0% identifiers when they refer to the same person and putting Programmatic media buying for established formats together all the data associated with them. Identity 31.8% resolution is made possible by identity graphs. Optimization (e.g., yield, channel, site, placement) 29.5% In the research for Winterberry Group and the IAB’s Cross-channel retargeting “State of Data 2020” report, conducted in May, they 28.4% asked several questions about what issues would be top Source: Winterberry Group, "The State of Data 2020" in partnership with of mind for respondents this year: Interactive Advertising Bureau (IAB), July 22, 2020 257476 www.eMarketer.com ■ About one-third (34.0%) of data professionals surveyed in North America said compliance with data regulation Marketers are spending significant amounts of money on would be taking up their attention this year, and three their identity problems. Research published in July 2020 in 10 (30.2%) said they would be working on the by Winterberry Group and IAB found that US marketers development of a custom identity resolution solution. spent $7.8 billion on audience data activation solutions last About a quarter (26.4%) were spending time on year. That was up from $7.2 billion in 2018 and $6.2 billion cross-device identity capabilities, and the same share in 2017. said they were looking at the development of an industry-standard ID resolution solution. IDENTITY 2020: CHANGES TO COOKIES, AD IDS, AND REGULATIONS TAKE AIM AT TRACKING Presented by ©2020 EMARKETER INC. ALL RIGHTS RESERVED 4 US Audience Data Activation Solutions and These budgets are going to a variety of services and Third-Party Audience Data Spending, by Channel solutions. The Merkle research found that at least half of and Data Type, 2019 US respondents were planning to invest in each of five billions customer-identity-related areas in 2020, including data management platforms (DMPs), identity resolution and identity graphs, and databases or data lakes. Audience Channel data activation Third-party Terrestrial $6.1 solutions audience Digital $5.1 Investments Specific to Identifying Customers that $7.8 data Senior- and Executive-Level Marketers Worldwide Will Advanced TV $0.7 $11.9 Make, by Region, Nov 2019 Data type % of respondents in each group Demographic/firmographic/ $4.4 Asia- Europe, US Total psychographic/attitudinal Pacific Middle East Total spending= & Africa $19.7 billion Transactional $2.9 Advanced analytics—segmentation, 65% 64% 69% 66% Behavioral (excluding $2.8 modeling, customer analysis purchase/transactional) Location-based/environmental $1.8 Consumer data—better consumer 57% 68% 63% 63% understanding and basis for targeting Source: Winterberry Group, "The State of Data 2020" in partnership with and/or analytics Interactive Advertising Bureau (IAB), July 22, 2020 Data management platforms for digital 55% 60% 59% 58% 257474 www.eMarketer.com identity management and activation Customer data platforms for digital 57% 62% 43% 54% According to November 2019 research from performance identity management and activation agency Merkle, about half (49%) of US and UK marketers Identity resolution/graph—mastering 55% 50% 53% 53% persistent identity of customers and/ reported spending more than 20% of their budget on or consumer population and for identity solutions.
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