“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Nancy Marzouk, CEO and founder of MediaWallah
Here’s a quick survey for you marketers. As of today, are you up and running with a third-party cookie alternative? Are you using it for targeted advertising right now?
If you answered No, you’re not alone. In talking to advertisers and publishers, I repeatedly come across the industry’s open secret: for all the highly promising “cookieless” solutions available –including consented IDs – few marketers are using those solutions in the bidstream.
With only eight months until the “Cookiepocalypse” of 2022, we need to address that elephant in the room. What’s causing marketers’ hesitation, and what’s the path to adopting third-party data alternatives, ASAP?
The core problem comes down to one word: addressability. Historically, cookies and other third-party identifiers have served dual addressability functions, helping marketers reach audiences, while helping coordinate customer profiles across outlets.
But challenges from the publisher side make it harder to use first-party IDs in quite the same way, creating addressability hurdles across walled gardens, premium outlets, and the long tail alike. For first-party identifiers to become true third-party data alternatives, we need to solve for these challenges first:
By refusing consented IDs on Google sites, Google made it known that it can’t be relied upon to join the industry-backed cookieless solutions. Expect the same stance from Facebook, the telco-based providers like Verizon Media, and any new emerging walled gardens. Simply put, brands shouldn’t depend on new consented identifier frameworks to reach audiences “over the wall.” This limitation is a challenge not only for addressing on the walled gardens themselves, but also for following users from one walled garden to the next, and on the open web as well.
Many premium outlets are optimistic about consented IDs, but also concerned about the potential data leakage from exposing sensitive data to the ecosystem. The most security-cautious enterprise publishers are proceeding with care. The fact that many consented IDs are derived IDs – encrypted versions of actual PII – raises the risk factor still more.
While The Washington Post’s adoption of Unified ID 2.0 shows many premium sites will join the consented ID pool, many other premium brands will not, and will likely follow the lead of NBCU with its own ID and clean room solutions. The end result limits the addressability any given consented IDs can provide, and creates more first-party IDs for marketers to manage.
The Long Tail
Amongst all the advertising outlets, consented IDs make the most sense for the mid- to long-tail publishers. Indeed, The Trade Desk CEO Jeff Green has spoken of UID and the Single Sign On (SSO) initiative as specifically beneficial to the long tail. But the long tail poses its own addressability challenges.
Consented IDs require log-ins and consent—but many visitors will be hesitant to share consent with long-tail sites they’re less familiar with. SSO proposes to address this problem, but SSO itself faces stiff competition.
Facebook, Google and Apple have their own single sign on solutions. Given the choice, most users will choose to sign in via the Big Three over the little-known SSO. As a result of these sign-in challenges, the long tail may have far fewer consented IDs to offer than advertisers need.
Given the challenges, brands must find a new path toward first-party addressability—using the following four-pronged approach:
- Brands must recognize the walled gardens for the independent universe they are, and work with evolving walled-garden targeting formats like FLoC.
- For the long tail, brands should cast a wide net across consented IDs—including Trade Desk’s UID 2.0, Neustar’s Fabrick, LiveRamp’s IDL, Merkle’s Mercury ID, and more.
- Given enterprise publishers’ concerns about consented IDs, brands should look to secure private marketplaces, including data clean rooms, for premium sites.
- To manage across all the identifiers and outlet tiers, marketers will need to stitch a single view of the customer—making an identity resolution strategy a must in the “cookieless” world.
To capture the promise of the “cookieless” alternatives, brands need to face their limitations. Marketers should do so now, while there’s still time to address the elephant in the room.