Why Amazon, Facebook Are In Hot Pursuit Of Digital Identity

It all comes down to who owns the digital identity and the addressability that follows.

Late this spring when Amazon launched the Login with Amazon service, it gave access to 200 million-plus active Amazon users to app developers and site owners.

“Login with Amazon is the latest offering in an array of services that make Amazon the most complete, end-to-end ecosystem for developers building, monetizing and marketing their apps and games,” the company said at the time of launch. And evidently, their commerce components, as well. Woot and Zappos.com, both Amazon.com-owned retail domains, unsurprisingly, saw measurable gain right off the bat when integrating Login with Amazon.

Forty percent of new Zappos.com customers opted to sign-in with their Amazon account while new Woot customers had the highest rate of order conversion when using Login with Amazon over other social logins onsite. As Amazon puts in a statement, on the consumer side, it “reduces sign-in friction” and “drives higher order engagement and order conversion.”

On the business side, “because your site or app now recognizes these consumers, you can personalize the experience… it’s fast and simple to integrate Login with Amazon and to add other Amazon services for Payments and Product Ads and there are plenty of exciting features coming soon.”

Because of Amazon’s wide array of Web services, payments and shipping capabilities, it’s feasible to see how tapping additional sales transaction data from third-party retail sites would help the company build out an even broader dataset that’s attractive to advertisers.

But, the question is, “To what extent would Amazon have control of log-in data?” if, hypothetically, a user opted to shop as a “guest” or using pre-stored login details onsite. (Note: 40% of new customers to Zappos went with their Amazon login. There were no details on preexisting customers.)

On the social side, consumers, for some time now, have been able to log in to sites and apps with their Facebook identity through a set of APIs powered by Facebook Connect. Now, news is emerging of Facebook’s foray into payments with the Facebook ID acting as the intermediate “simplifier” for mobile purchases.

Rather than asking users to populate billing information in a mobile transaction, which could be stymied by things like screen size, Facebook would prompt that shopper to grant permissions to use previously stored login info with their Facebook ID and then the payment processor would facilitate the actual transaction, according to TechCrunch.

“I’m not sure what Facebook is planning to do yet,” observed Sucharita Mulpuru, VP & Principal Analyst at Forrester Research. “It doesn’t sound like they’re a merchant of record, in which case I’m not sure they’ll even see transaction data. And if they don’t see that transaction data, I’m not sure what’s really in it for them other than to habituate shoppers to using their FB login more. More data on transactions is a good thing, but this seems like a difficult way to procure that information.”

Where Facebook may bank on this one is by demonstrating, through added layers to transaction data, how it helped facilitate a mobile retail sale, the next step to justifying commerce ad-targeting efforts.

As reported by AllThingsD last week, flash sale shopping site JackThreads is now piloting the payment apparatus with Facebook. A spokeswoman for Thrillist, JackThreads’ parent company, told AdExchanger the company “is not commenting on our partnership with Facebook at this time.”

“There’s a battle for identity and one of the fronts of the war is the social login,” commented Ray Wang, principal analyst and CEO of Constellation Research. “Identity unlocks transaction data, digital exhaust and behavior.  [Companies like] Amazon and Facebook would love a unique ID to use for ad targeting and prediction.”

Social logins will be the personal identifier of the future, said Josh March, cofounder & CEO of enterprise social media management platform Conversocial, which counts JackThreads as a customer. “We have customers, some that are billion-dollar retailers, who are literally trying to piece together customer information from over a decade to try and get a single view of the customer,” he said. “They’ve all got five different email addresses and have all been to different stores…[using] the social graph to connect their IDs [would be the] holy grail to match up customer data.”

As for the race to singularize cross-platform digital identity, though March said consumers, at large, may trust Amazon more than Facebook from a personal information perspective, from a retailer’s standpoint, “they might not want to be giving their data to Amazon…in some ways, looking long-term, it may be in retailers’ best interest to give Amazon a small cut of the transaction, though, because it gives Amazon some vested interest in keeping them alive and not competing with them.”

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1 Comment

  1. The great news for Publishers is they too can compete here…while they might not have perpetual log in’s such as Amazon, Facebook etc…They have a database of email addresses that serve the same purpose…unlocking identity, demographic data, offline transactional data etc…The email address is the de facto identity standard of the web. That’s why Facebook & Amazon require them to set up an account.

    As the shift to mobile continues, it’s imperative for Publishers to focus on email collection. Because it will set them up to offer their advertisers cross channel, cross device opportunities and the ability to know exactly who they are targeting. In mobile addressability is key, Facebook and Amazon certainly know that…