A guide to the strange new world of identity resolution
What are the strengths and weaknesses of different data providers?
Effective marketing depends on knowing who you’re marketing to. In the digital world that’s becoming harder than ever as third-party cookies are phased out. Speaking at The MarTech Conference, Integrated AdTech CEO Ken Zachmann walked listeners through the challenges and opportunities of identity resolution in this new environment.
“Cookies have been what we’ve really focused on to do everything that we do as marketers,” Zachmann said. “This big change that’s happening, and not to be dramatic, but we’re calling it the cookie apocalypse.”
Here’s some cookie apocalypse numbers: Chrome accounts for more than 50% of all browser usage. So, when third-party cookies are gobbled off Google’s browser, that’s a loss of 50+% of that information. That’s on top of the 30+% lost when Safari and Firefox killed cookies. You can understand the eschatological reference.
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Life after cookies
There are still many ways to gather information, of course. However, they all come with their own identity resolution drawbacks.
- Personally Identifiable Information data providers (PII): These are companies like LiveRamp or Acxiom or Experian Marketing Services who take PII information – first name, last name, email – and build profiles of individuals and households. “The challenges that they’re going to face when they build out these identities is scale,” said Zachmann. “As increased iOS limitations come on, as increased consent management from different states are released, they’re going to have to really work very diligently to make sure that they’re maintaining proper consent to manage these different PII standpoints.” There are also issues about interoperability, he added. These providers like to keep their data to themselves and have companies use their stacks for activation and measurement.
- Probabilistic data providers: They make probable assumptions about what a group of intenders or users or consumers are going to be doing. They use a subset of seed data, one-to-one level data about someone. That could be an email from a place they’ve registered, then the provider will add data from other places where that email address has been used, like e-commerce, news, etc. This lets them build a pretty good demographic picture of this person, without knowing who they are. From there the provider will use this small seed set of data and blow it out using look-alike modeling or analytics. “It can be very effective as far as getting more scale,” said Zachmann, “but the accuracy gets decreased and oftentimes we’re paying for users who may or may not be interested in the offer we have on the table.”
- Authenticated hashed email (HEM) data providers: They take regular email addresses and encoding them using a cryptographic hashing function. This creates an obfuscated string of characters, or hash, to represent the email. This creates an identifier that doesn’t share restricted information and can then be used as a single unified identity used for tracking across channels and devices. relate to either household propensities, intent, behaviors, contextual reading behaviors. “The problem with these hashed emails is that they only have about a 20% to 40% reach,” said Zachmann. “Because they’re hashed and because hashed email really can’t be either denominized or shared … you kind of have to stay in their world or in their sandbox.”
- Data Management Platform (DMP) data providers: These are companies like Oracle or Lotame and others that build backbones of data. They use their own first- and second-party data and assign a proprietary ID to them. “Tricky part about DMP’s is that while they have large scale they don’t often have the ability to have their ID interoperable between other platforms,” said Zachmann. “Like moving the ID to say the trade desk where you want to activate your ads or moving it to a measurement partner that you already use. Oftentimes those ID’s right now don’t talk together and it’s really difficult to do addressability and measurement when the DMP’s ID is more insulated.”
- App data providers: They collect information about where and when their app users engage in content and make purchases. And they’re able to stitch that data to a household IP, which gives them yet more data. They are in the midst of their own “APPocalypse.” Apple now requires them to get users’ consent for collecting data. Although Google is dragging its feet on the issue, they are moving in that direction and already require apps to disclose what is being collected and why. “I think right now the opt in rates across the US is only about 24% of iOS users who are opting in to be targeted on their device,” said Zachmann.
- CTV: A lot of the people who cut the cord with cable TV are using connected TV devices like Roku and Fire TV Stick. Those devices have IDs and the companies combine that with your IP address and first party data to create the information they sell. “They have a known measurement stack and are becoming a bigger part of the pie,” said Zachmann. They can be part of marketers’ data mix, but not all of it, he added.
Identity resolution is not only critical to marketing success but is essential for compliance with consumer privacy laws such as CCPA and GDPR. Explore the platforms essential to identity resolution in the latest edition of this MarTech Intelligence Report.
There may be a solution
The best currently available solution is also one of the hottest new buzzwords: Clean rooms.
These use privacy-enhancing technology which lets data owners (including brands and publishers) share customer first-party data in a privacy-compliant way. This makes it possible for first-party data for the same person, from different sources, to be combined even while they remain anonymous.
Read next: Why we care about data clean rooms
“They’re really … shaking up the identity landscape because they’re providing this system where you can go in, put in your data [and] they’re going to take care of it for me,” said Zachmann. “They’re going to cleanse it, make sure all the opt outs are removed, make sure everything is done, and all the consent management profiles are maintained.” They’re a good way to deal with both interoperability and privacy issues, he added.
Identity resolution platforms: A snapshot
What it is. Identity resolution is the science of connecting the growing volume of consumer identifiers to one individual as he or she interacts across channels and devices.
What the tools do. Identity resolution technology connects those identifiers to one individual. It draws this valuable data from the various channels and devices customers interact with, such as connected speakers, home management solutions, smart TVs, and wearable devices. It’s an important tool as the number of devices connected to IP networks is expected to climb to more than three times the global population by 2023, according to the Cisco Annual Internet Report.
Why it’s hot now. More people expect relevant brand experiences across each stage of their buying journeys. One-size-fits-all marketing doesn’t work; buyers know what information sellers should have and how they should use it. Also, inaccurate targeting wastes campaign spending and fails to generate results.
This is why investment in identity resolution programs is growing among brand marketers. These technologies also ensure their activities stay in line with privacy regulations.
Why we care. The most successful digital marketing strategies rely on knowing your potential customer. Knowing what they’re interested in, what they’ve purchased before — even what demographic group they belong to — is essential.