The Need for New Identity Solutions is an Opportunity
Despite repeated delays, as the deprecation of third-party cookies by Google has been pushed back to 2024, it’s important to keep in mind that third-party identifiers have in fact been undermined and weakened for years. While they can be part of an effective larger approach, continuing to rely exclusively upon them – even before they’re fully phased out by Google – is a strategic misstep.
Third-Party Identifiers Are Already Weakened
While Google’s plans for deprecation are unquestionably significant, they’re just the latest and most notable milestone in a pattern that has been taking place over years that undermines the efficacy of third-party identifiers. As users have developed greater concerns around data privacy, policies have begun to reflect and address those concerns. We now see increased transparency into how companies use personal data, and more options to control and limit this on the user end.
In the EU, the General Data Protection Regulation (GDPR) was passed in 2016, taking effect in 2018. Within the US, California passed the California Consumer Privacy Act (CCPA) in 2018, taking effect in 2020. While no federal act has yet been passed, two additional states have introduced their own legislation. Virginia passed the Consumer Data Privacy Act in March 2021, and Colorado followed suit with the Colorado Privacy Act in July 2021.
What may be most significant is the fact that almost two-thirds of American adults support the government doing more to regulate privacy on the internet. As US advertisers navigate this patchwork regulation that varies from state to state, Congress has attempted to regulate digital advertising at the federal level with two bills already introduced in 2022.
The Terms-of-service Labeling, Design, and Readability (TLDR) Act, should it pass, requires websites to provide a summary statement with any prompt that requires a user to agree to terms of service. That statement would be a more easily read outline explaining what personal data would be collected, and how it would be used.
The Banning Surveillance Advertising Act would prohibit any behavioral targeting practices that could conceivably be personally linked to individual consumers. While this is considered unlikely to pass, it is reflective of the growing public sentiment that data privacy must be protected.
Regardless of the US government passing any data privacy legislation, users are still taking action to protect their personal data on their own. As of June 2021, the US had the lowest percentage of adults consenting to all cookies when they are prompted by a website, thus rejecting the third-party tools that are commonly employed in digital advertising.
There are Many Potential Identity Solutions
As third-party identifiers have been undermined over time, a wide array of identity solutions have entered the marketplace. The landscape has quickly become overwhelming, as various publishers and platforms have worked to introduce their own identity platforms. Many of these will not survive long-term, but it’s equally unlikely that one solution will be the undisputed “winner.”
Some industry perspectives consider universal authenticated identifiers to be ideal, such as The Trade Desk’s solution, Unified ID 2.0, or LiveRamp’s Authenticated Traffic Solution. That’s because a universal identifier such as these can provide advertisers with data which consumers have explicitly consented to share. But the fact that users must specifically opt in to these solutions also introduces a great deal of doubt as to how extensive consumer participation will be.
Another means of targeting is contextual, which is newly empowered with machine learning and AI-driven solutions that can quickly and accurately analyze content to place ads in desired contexts. Advertisers can effectively make selections based on attributes like tone, subject matter, keywords, and site categorization to place their ads where they’re most relevant and most likely to find an interested audience – or to avoid placing them alongside content with which they’d rather not be affiliated.
Behavioral targeting certainly will still exist, but it will be predominantly enabled by owned data – whether that’s the advertiser’s zero-party and first-party data, or second-party data such as that accessible via publishers and walled garden environments. You can read more about various types of data in our recent blog post.
The truth is, of course, that no matter which specific solutions persist, advertisers will certainly be best served by taking a multifaceted approach. By layering these solutions, campaigns will be able to perform better in an increasingly complex ecosystem. At AUDIENCEX, we are currently working with multiple approaches to provide the best performance outcomes for our partners. At the same time, we are constantly working to stay ahead of the continuous shifts in the landscape.
The Time to Test is Now
All advertisers with the resources and ability to do so should be taking advantage of the current uncertainty in the landscape. There is unprecedented innovation taking place as a result of these changes, which presents a rare opportunity to learn from the many different approaches that are currently being developed and introduced. We all must remain agile and open to exploring these many options, learning not only which are most effective individually, but which can be most effectively leveraged in conjunction with one another for the most thorough and scalable solutions.
This can be a costly undertaking for small or midsize advertisers, both in terms of budget and time. As mentioned, AUDIENCEX is currently utilizing multiple approaches and remaining agile to new developments. One of the advantages that we can provide, particularly to our midmarket partners, is our ongoing exploration of the landscape and these emerging solutions. It can be challenging to utilize and test the efficacy of multiple identity solutions, but our access and resources enable us to leverage these tools on behalf of our partners. That enables us all to learn from these efforts and adapt, using the data we gather to optimize campaigns and plan more effectively for the future.
Regardless of Google’s timeline for deprecation, it is time to explore better, more effective solutions that truly impact performance. If you’d like to learn more about the solutions we’re exploring and how we can help you move forward in this ever-shifting landscape, please feel free to reach out to us. Our strategists would be happy to answer your questions and help you explore options that can help you solve for uncertainty in identity.