Taking on a new identity

How to build customer relationships online without third-party cookies

With new regulations enforcing a significant technical and mindset change, Sherif Guindy, SVP, Head of Data Strategy, EMEA and Matt McIntyre, VP, Head of Programmatic, EMEA at Essence explain why the future runs on not only data but also trust.

Identity as we know it online is changing and in some corners of advertising this appears to have caused great panic. It’s no surprise - the industry has been investing in coping mechanisms around cookies for years, but new changes are forcing us to fundamentally alter our approach to first party data as the cornerstone for customer relationships. It will be a significant technical and mindset change, but one that highlights that the future runs on not only data but also trust.

While some in the industry appear to be feeling a sense of panic, it’s important to remember that advertising has a long history in innovation and complex product development, which has enabled it to build up strong data science and engineering capabilities to help navigate these complex new challenges. Now is the time for assessing the risk/reward trade-offs and transitioning to testing different identity and sandbox methods.

So, what should brands be doing now and in the future?

Fundamentally, the most impacted feature is Identity, which powered the targeting, delivery, and measurement platforms. Hence why we are witnessing an increase of ID/identity solutions, which all provide opportunities now and in the future. The solutions being developed can simply be split into four main types: Publisher IDs, Universal IDs, Walled Garden IDs, and Privacy Sandbox (all described in more detail below*). However, before you make your selection, there are some important steps to consider as no single solution will work for all brands:

Establish a position on consumer privacy

It's one thing to abide by the laws and regulations and another to have a clear set of values and policies in place with regards to consumer privacy and communication.

Assess the potential business impact

Setting your company values as the North Star, start assessing the potential business impact of new product changes such as cookie redaction and Apple’s App Tracking Transparency (ATT) for the business. Quantify it by calculating the potential reduction in sales and profit due to higher costs for third party audiences, against higher churn rates due to low first party data collection and deployment.

Re-engineer your martech solutions

Focus on first party data collection, organisation and deployment strategies. It may include reinvesting in new first-party web analytics platforms if you haven’t already and data onboarding and matching partners to establish new ways of modelling.

Identify key publishers to align with

Publishers will be key partners in a privacy enabled yet personalised world. Contextual comms will take on a greater level of importance (again), so identify key publishers to align your brand with now, and begin to engage them in close partnerships.

Embrace data science

For some in the industry, there is a feeling that the soon to come privacy changes will lead to a loss of measurement capability. The truth is the industry became complacent and too comfortable with platforms running their measurement and attribution for them. Marketers now have an opportunity to get closer to their data and embrace data science, which will ultimately bridge the gap in understanding cross channel effectiveness. In a world where adding, counting and linking data is no longer enough to make sense of it, we all need to aspire to achieve a higher degree of analytical competency and comfort.

Ultimately, the world is moving to a more customer-centric approach, and while it will be disruptive at first, the changes will eventually lead to better conversations with people in a more engaging and sustainable ecosystem. So embrace the change, start setting yourself up for success and more importantly, don’t panic!

*The four main types of ID/identity solutions

Publisher IDs

After years of building logged in readerships online, publishers are taking full control of their own ‘authenticated audiences’ using first party cookies, or something that performs the same function. Large publishers with scale, a comprehensive understanding of their audience, and the ability to activate against it are well positioned to help marketers identify potential consumers and will do well in a post-cookie landscape through direct buys, on a guaranteed or PMP basis.

Universal IDs

Universal IDs are technically elegant solutions that take hashed email identifiers from multiple publishers to build a common universal identifier, which can be used in much the same way as third party cookies are today. Some providers also model IDs probabilistically with users that provide consent, but have not provided an email to be matched on.

These solutions aim to make it as easy as possible for marketers and publishers to continue operating in very similar ways as we do today, but with even better identification and portability of audiences. Although many ad buying partners (not including Google)will support them, concern around consumer privacy will need to be evaluated by marketers looking to implement the various Universal ID solutions.

Walled garden IDs

Globally scaled and consumer facing platforms are able to harness their own logged-in relationship with consumers throughout their own media ecosystems. Walled garden IDs are going to remain a powerful tool in the future, as much for their scale and inventory as for their strong addressability. They also have the opportunity to provide consumers with direct control of their data, which we should all continue to monitor. However, Marketers do need to consider the lack of interoperability of the walled garden IDs and understand that this will create more holistic investment challenges regarding managing frequency and measurement..

Privacy Sandbox (technically not an ID solution)

Google’s Chrome team introduced a set of proposals for privacy-preserving APIs and tools that replace the need for user-level identifiers across a range of specific use cases. This includes retargeting (FLEDGE), interest targeting (FLoC) and conversion tracking.

The sandbox proposals offer the opportunity to remove user-level identification almost entirely and still retain the addressability to empower marketers across the open web. While it has been largely driven by Google to date, it will be available to use by any tech partner and potentially across other browsers as well. Unfortunately, the sandbox is still at proposal stage for most of the tools, so there are still many discussions and amendments to make before we know for certain how the industry will be able to use them and any considerations or risks that may arise.

The opinions expressed here are those of the authors and were submitted in accordance with the IPA terms and conditions regarding the uploading and contribution of content to the IPA newsletters, IPA website, or other IPA media, and should not be interpreted as representing the opinion of the IPA.

Last updated 01 May 2024