Fragmentation, meet consolidation.
On Tuesday, alternative identity platform ID5 acquired TrueData, an identity resolution provider that connects people and households to their digital devices. This is ID5’s first acquisition since the company was founded in 2017.
Mathieu Roche, ID5’s CEO and co-founder, declined to share terms, but said he expects the company to get a 30% to 40% incremental bump in revenue as a result of the deal, which closed last week.
Earlier this year, ID5 raised a small round, between $5 million and $6 million, to help fund the transaction.
ID5 bought TrueData mainly to tackle what Roche calls the “massive fragmentation” of digital identity, which is a problem on the user side and the provider side.
Individuals constantly switch between devices, apps, browsers, platforms and locations, creating scattered signals, while identity providers have siloed or partial solutions, with no single system offering a complete, unified view.
In short, a mess.
“It’s overdue for a consolidated identity vendor to emerge, because the industry needs a better way to recognize people and make advertising work more effectively,” Roche told AdExchanger. “The industry needs more of a one-stop-shop mindset.”
Adaptable, composable
ID5 unsurprisingly sees itself as filling that role.
To address the fragmentation issue, ID5 is enhancing its identity graph – according to Roche, TrueData and ID5 can recognize roughly 1.5 billion users across 665 million households – and investing in machine learning technology that adapts to evolving digital signals and environments.
“We need a dynamic framework that basically creates a level of abstraction over technical and regulatory changes,” Roche said. “That way, whoever uses our graph and the ID has a stable foundation to build their business, while we take care of the complexity and the changes underneath.”
ID5 calls this approach “adaptive identity,” and TrueData takes a similar tack, which it refers to as “composable identity,” said TrueData President and COO Jon Durkee, who will now serve as ID5’s chief revenue officer.
“Composable identity is the idea that our identity framework should fit into whatever ecosystem our customers need and make it adaptable and easy for them to use,” Durkee said.
Universal connector
In practical terms, ID5 will combine its cross-device ID system and graph with TrueData’s identity graph and online and offline data assets, including retail transaction information, IP addresses, connected TV identifiers, hashed emails, mobile IDs and other probabilistic IDs.
The fact that ID5 has its own graph and its own ID is a big part of its selling point, Roche said.
“Other players may have a graph, but they don’t have a unique ID, and vice versa,” he said. “But if the ID is part of the graph, it gives you more ways to use the ID, because it’s connected to more sources.”
The other differentiator, Roche said, is that ID5 has nothing to do with transacting on either media or data, which is the case with a lot of other identity providers.
“That puts us in the position of being like a universal connector,” he said. “The challenge with interoperability is that, if you compete with each other, it’s difficult to truly build those bridges, but we don’t compete with any of the other identity guys.”
Eye on the US
Going forward, TrueData will operate under the ID5 brand, with plans to merge capabilities across the commercial, partnership and product fronts by the end of the year.
The majority of TrueData employees, roughly 20 people, are coming aboard at ID5, bringing the combined company’s headcount to 80 employees. In addition to Durkee, TrueData CEO Scott Conine is joining ID5 as a strategic advisor.
While ID5 started in Europe, its footprint in the US is responsible for more than half of its revenue. But only 20% of its employees are US-based. TrueData, which is headquartered in Los Angeles, will expand ID5’s US presence and help scale its identity graph in the American market.
Although the immediate plan is to focus squarely on the integration, Roche said, ID5 is “keeping our eyes open for other potential opportunities.”
“But let me recover from this first,” he quipped.
‘How many times can you kill a corpse?’
Speaking of recovering, Roche minced no words regarding the anticlimactic end of Google’s Privacy Sandbox a few weeks ago.
“I mean, how many times can you kill a corpse, right?” he said. “I think it was dead already.”
At first, Google’s now-abandoned third-party cookie deprecation plans catalyzed the industry’s push for cookieless solutions, but repeated delays dampened the urgency.
Along the way, ad tech companies dedicated a heck of a lot of time, engineering resources and strategic attention to the Sandbox APIs that they could have devoted to building broader identity solutions.
Drama aside, though, solving for cookies should never have been the endgame.
“Everyone was so fixated on cookies, forgetting that people spend only a third of their time on the web,” Roche said. “It was a massive distraction from the real challenge of identity.”
