Addressability in 2021: Re-Framing an Identity Infrastructure Without Cookies

by Grace Dillon on 25th Jan 2021 in News

Following LiveRamp's Christian Carlsson's appearance on ExchangeWire’s latest episode of TraderTalk TV, Zara Erismann (pictured below), MD Publisher, Europe at LiveRamp, writes about how authenticated traffic solutions leverage identity to help advertisers' reach their audiences.

Against a backdrop of global turmoil, the advertising industry, too, is undergoing disruption.

Regulations like GDPR and CCPA, limits to device identifiers, the deprecation of third-party cookies, and Google’s removal of DCM logs all add up to a re-imagining of a two-decade old digital ad targeting stack. But, whilst these changes can seem de-stabilising, there is also a growing realisation that what lies on the horizon is, in fact, a new dawn for the Industry.

Trust, transparency and privacy are the driving forces for modern marketers and publishers. The emerging new identity infrastructure will enable both the industry demands of 2021 and the capabilities marketers dreamed of long ago.

The reality is that third-party cookies have always been an imperfect solution. Rates for matching advertiser CRM to cookies have been traditionally low, especially since multiple syncs are required across platforms, making it difficult to reach audiences with precision. On top of mistrust caused by the industry’s failure to communicate how they really work, third-party cookies also pose genuine privacy risks because tracking user consent across each of their devices is challenging due to cookies’ short lifespan.

The future of identity

Solving these challenges requires a people-based approach, rather than a device-based one. Solutions that recognise people, rather than their devices, as cookies do, help power fully addressable advertising across screens. The identity stack now coming into view is welcome and overdue. But what does it really look like?

User authentication is the key enabler. Data supplied by audiences in a publisher or marketer value exchange is opted-in, engaged, accurate and immediately actionable. Furthermore, it is the glue that binds together a user’s many device-specific sessions into a single profile. Moreover, publishers own their relationships with the consumers and should have full control of how their data is used.

All this doesn’t just help the industry to replace the technologies that are being lost - real, people-based identity allows us to rebuild better, giving privacy control back to the consumer, offering higher yields to struggling publishers and boosting what has been diminishing effectiveness, all without reliance on third-party cookies.

That is why solutions for enabling authenticated traffic have become hot. But how do they act on identity?

Under the hood

Out of an existing identifier like an email address, phone number or social login, the new identity platforms create a digital identifier, which grows to accommodate many other actionable fields.

In a consented and protected value exchange, such identifiers are emerging as the key to leveraging audience identity. But not everyone should have access to that key. Solutions like LiveRamp’s Authenticated Traffic Solution encrypt users’ sensitive personal data via LiveRamp’s pseudonymous, people-based identifier, so that personal data does not enter the bidstream. And those identifiers are encrypted in secure containers called “envelopes” that are indecipherable except to the parties permitted to handle them. From here, “Sidecar” technology allows an SSP to decode the identity envelopes into demand-side, platform-specific encoded LiveRamp identifiers and supply-side identifiers for private marketplace deals that can be used to match an impression to marketer audiences.. Effectively, platforms running Sidecar are able to share and translate platform-encoded user identity to link demand and supply sources together.

When you are transacting on people-based identity, trust matters. The more safeguards or controls - like triple-hashing and double-encryption - the better. To most of us, all this may sound like impossibly complicated maths, but it is all in pursuit of some very simple aims - prioritising privacy-first, people-based identity in the bidstream, whilst overcoming declining cookie effectiveness.

Publishers’ new revenue stream

Zara Erismann, MD publisher Europe, LiveRamp

These setups will benefit all sides of the industry. On the supply side, publishers will have the technology to make their authenticated consumer relationships actionable using these encrypted identifiers. If the identified user allows, the infrastructure will check for an authentication event like an email sign-up, login instance, or paywall threshold trigger being met. SSPs can then enable bidding against demand sources by taking encrypted identifiers from publishers and encoding them for DSPs. The net gain is the creation of addressable audiences that can be made available via open exchange or private marketplace deals.

People-based identity also unlocks people-based revenue - something that has historically been difficult for publishers other than the walled gardens, whose services span devices using a single personal account, to attain. By using a people-based identifier tied to login events and authentications, publishers of any size are able to better understand their readers and audiences. With those insights, their inventory becomes more attractive to brands and advertisers, as it powers improved targeting and measurement, among other things.

Advertisers’ effectiveness upgrade

Whilst the transition may be bumpy, buyers will benefit from enhanced accuracy and higher audience engagement.

By eliminating the need to sync against cookies, people-based identity solutions allow advertisers to reach their intended audience when that same person authenticates on a publisher’s site.

In this new ecosystem, measurement will be more powerful than ever. Previously, all measurement data sources - for example, DSP ad exposure logs, clickthrough logs, brands’ own purchase data - had to be tied to third-party cookies. This made accurate measurement pretty hard because a single person could be represented by multiple cookies, whilst cookies are not even used on channels like mobile apps and connected TV. When people-based measurement is prioritised, however, every impression across all channels becomes measurable and understanding performance at the individual level is possible.

Audiences’ enhanced control

When running off a people-based, Authenticated Identity Infrastructure, consent becomes easier to honour because it is expressed once and persists across the user device journey and regardless of location. This doesn’t just make it easier for advertisers and publishers to engage with users - it also makes opting out easier for users. A solution with a single point of opt-out gives individuals more control than one which may require the deletion of numerous related cookies.

Forward to the future

In the next couple of years, authenticated data is going to grow in importance, becoming the gateway to more efficient, privacy-first, higher-performing advertising.

Authenticated data is the most valuable kind of data. New solutions promise to hand back control to publishers who have felt disconnected from their audiences, and will promote greater user control through clear permission mechanisms. In an enhanced relationship, everybody wins.

The current turmoil may be unsettling for many, but every disruption carries the opportunity for a reset. The reboot of ad identity promises not only an end to the current period of change, but also promises the kind of future the industry should have always aspired towards.

I think that’s something everyone can identify with.