Why IP Addresses Aren’t Going Away Any Time Soon (Yes, You Heard Me)

On TV & Video” is a column exploring opportunities and challenges in advanced TV and video. 

Today’s column is by Andre Swanston, SVP, media and entertainment vertical, TransUnion

Over the past few years, amid the reeling following cookie deprecation announcements from Apple and Google, I’ve heard industry pundits sound the alarm over the viability of IP addresses as an actionable identifier.

But when it comes to streaming media advertising and monetization, which is largely underpinned by IPs, there’s still more good news than bad. 

Household-level devices like smart TVs, streaming media players, smart speakers and gaming consoles are the Bifröst to connected media audiences. Many of these devices lack unique identifiers, or their identifiers aren’t persistent, meaning one device emits different IDs across each streaming application used. This alone makes IP addresses the lifeline to engaging connected households at scale across an increasingly fragmented ecosystem. In fact, IPs are still the most widely used identifier to activate audience-targeted advertising across connected TV (CTV), smart speakers and gaming consoles in the US today.

Nevertheless, to be successful in streaming media, the key for advertisers, publishers and technology platforms is to balance today’s capabilities with building adaptability for the long term. Here’s how.

Don’t be overly charmed by alternatives 

Many will claim email addresses can be used to establish identity across connected media. But email is an individual identifier, whereas most streaming media consumption happens on devices that are shared across multiple people in a household.

Plus, most free, ad-supported streaming content is not accessed by logged-in, registered users, meaning publishers or ad tech platforms never could reconcile against an email address. 

Publishers that keep their free content behind an email registration gate see higher acquisition costs and rates of users opening the app without streaming content. 

Don’t assume the end of IP is near

Some recognize that server-side ad insertion – a process that masks IPs in the supply chain in aggregate – is already reducing the viability of IP addresses. But leading identity-resolution providers can identify server-side IPs and bypass the masking process to get the IPs of domiciles to the streaming publisher through direct integrations.

All in all, though the currency of identity is changing in many cookie-based environments like display media and mobile advertising, there’s no immediate threat of a major identity shift in streaming media. 

Most recently, Apple announced its release of a paid service featuring an opt-in VPN feature. To date, this service is only available on Safari, limiting its impact on mobile and desktop users. With features that only come through a paid service (iCloud+) and require an additional opt-in, cost implications would be difficult to support at scale.

Similarly, in an effort to help bolster privacy controls, Google Analytics shared it would no longer store IP addresses. But even this change bears no weight on connected media advertising activation. Google’s advertising products have not allowed for direct IP address targeting for years.

Know what you’re up against 

In the streaming landscape, we’ve seen little more than noise around IP deprecation. From a technical standpoint, a browser can turn off cookies with relative ease. IPs are much more deeply embedded in the way the Internet functions. IPs can’t be unplugged in any way like cookies.

It’s possible to mask IPs through a VPN, which means rerouting internet traffic through servers such that the IP becomes associated with the company doing the masking rather than the customer. But if you take streaming television as your example, where as much as 70% of viewing happens on the big screen, then it’s critical to note VPNs simply aren’t commonly used by consumers. Many major streaming applications actually block content access to devices behind a VPN to comply with territorial and other contractual content distribution rights. 

For advertisers, using location data from other sources just isn’t effective. I’ve been on the receiving end of many poorly targeted local ads after traveling: My connected TV was correctly associated with my mobile phone, which was still being associated with my travel destination. So, I received local car dealership ads from an auto group in Florida at my home in Connecticut. That wouldn’t happen with IP-based geofencing.

Could connected TV VPNs eventually be set up by the device manufacturer? Sure, but it’s not a realistic threat right now. In addition to astronomical infrastructure costs, the move would come with significant antitrust scrutiny and major privacy and technical implications.

IP address is the rising star of better consumer experiences

Looking at other intersections of advertising and technology, such as digital media ad tech, there’s often a struggle to convincingly draw a line between the value of advertising and the free flow of information.

As ad-supported streaming subscription and free, ad-supported services grow in popularity with consumers, one could argue that this value exchange is even clearer in environments like connected television and streaming audio.

Identity resolution strategies will continue to evolve

With this in mind, the future of connected identity will not require an either/or approach – abandoning IP for some far-off alternative – but rather a “yes, and” strategy that considers how to view identity across a fragmented landscape of many devices, applications and identity signals.

Identity signals like user agent strings and even email addresses will continue to be important. But as they’re not supported consistently by devices or streaming applications, IP addresses will continue to provide much-needed context to create a holistic view of the connected household.

All signs point to the IP address sticking around for the time being. After all, the alarm bells signaling the demise of cookies have been ringing for a decade.  

What’s gone are the days of being dependent on any single channel or identifier. Understanding people, households and devices at scale and over time now requires deep coverage across a range of identity keys: people-based identifiers like name and address, household-based IPs, device signals, proprietary IDs and more.

The enterprises that prevail through this revolution are those capable of sourcing a variety of reliable signals.

Follow TransUnion (@TransUnion) and AdExchanger (@adexchanger) on Twitter.

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