Plans are coming together—as the third-party tracking cookie nears its final days, the search for privacy-friendly alternatives for targeting audiences and measuring campaigns is ramping up, with many publishers already embracing solutions.
One of the most promising is identity, enabling a plane where brands and publishers can sync up their audience data without data leakage or any of the other side effects of third-party cookies.
But as publishers are integrating identity partners, there’s a gnawing voice in the back of their heads: “Are brands going to incorporate third-party identity solutions too?”
Because they ultimately hold the purse strings, buyers have always determined the rules of digital transactions—that’s basically how the third-party cookie became such a force in the first place. But while cookies were ubiquitous (to an almost deleterious extent), identity solutions need to be interoperable, with both publisher and advertiser in agreement.
This puts publishers in a rough spot—they know they need to integrate cookie alternatives before the cookie fades, but they’re not sure which ones their core advertisers are going to leverage. But some digging revealed that advertisers want to collaborate with publishers on the tools that will shape the market going forward—and they seem to want publishers to make the first moves.
Scale Brings Things to Life
Holding companies have long foreseen the cookie’s demise and made moves to develop proprietary ID solutions and data depots. Omnicom launched its Omni database of profiles back in 2018, while IPG acquired marketing database Acxiom the same year and has been building interesting products such as an integration with SpotX enabling marketers to sync data on the sell side of that video SSP. The Dentsu Advertising Network (of which Amnet is a part) leans on its Merkle division, which leverages advertiser first-party data, publisher data, and other signals to build proprietary IDs.
At the same time, there is a recognition marketers will need third-party partners such as identity solutions to reach the scale advertisers desire, and leverage increasingly commonplace buying tools like frequency capping and people-based metrics.
For marketers and agencies already scrutinizing identity solutions, they are skeptical and complain about a lack of specifications and technical details. But those concerns likely exist because identity solutions haven’t reached the scale where they can be judged on performance.
“I think we all came to a realization that the reach we thought we had is actually much smaller and we’ll need to adjust investments accordingly,” explains Oleg Korenfeld, an ad tech consultant and agency veteran. ”From a marketer’s point of view, it will be interesting to see how identity providers build out their scale to test against first-party advertiser data and other post-cookie solutions.”
Right now, there’s a lack of confidence in the scale these identity solutions will offer marketers, especially those used to what the walled gardens offer. While the cookie is still alive and well, layering on additional identity signals is seen as merely a net benefit for buyers.
But that’s more a “plumbing” issue rather than a strategic play for the cookieless world, and buyers are leaning on well-traveled onboarding solutions. Truth is, many marketers and agencies are unaware there are multiple identity solutions alive and kicking in the bidstream.
Come next year, as we get closer to the proposed cookie cutoff of 2022—though Google executives have suggested the timeline is not firm—the buy side hunt for cookie alternatives will heat up and among the chief concerns will be scalability.
“The concerns that we are having right now can be thought of as two-fold: movement towards a solution and then scale of publisher inventory,” says Lisa Arnold, Amnet Group Senior Director of Trading Strategy. “While we do see the use of publisher data as a potential avenue, scale within publishers is a concern, so we want to keep our eyes on publisher consortiums where they are choosing to group their sites together for more scale.”
For the buyers we chatted with, the threshold seems to be 50% of their typical media mix. As one put it to us, “identity solutions need to have something like half of the comScore 100 under their belt.”
But the buy side seems to recognize there will not be a single, grand champion identity solution. Identity will achieve the scale it needs to through overlapping solutions, thereby meaning publishers will likely need to incorporate more than one.
In that regard, the Trade Desk is building out Unified ID 2.0, an open-source solution that replaces version 1.0’s reliance on third-party cookies with encrypted email addresses from opted-in consumers, following the IAB’s Project Rearc guidelines. The ID solutions will create a co-op so users won’t have to login to every site they visit. Also, since it’s open-source, it can be used by anyone in the advertising ecosystem and not just those using the Trade Desk.
“Buyers look for scaled solutions, therefore publishers should seek to align with each other, especially the top comScore publishers, to ensure they are integrating the solutions with the highest likelihood of scaling their solution,” says Amanda Martin. “Buyers will expect publishers to integrate the top identity solutions, likely to be between three and five solutions, and with scale buyers will follow. “
The Stuff of Nightmares
Google has been adamant that it does not want to drop support for third-party cookies without offering sufficient tools to support digital advertising—particularly programmatic. Enter the Privacy Sandbox, a series of privacy-forward browser API proposals that will enable advertising tracking and measurement, but shift campaign decision-making away from DSPs and DMPs and to the browser. There have been many concerns about how advertisers will manage and optimize their campaigns with any of these solutions being proposed in the sandbox.
The recently formed Partnership for Responsible Addressable Media, which includes major advertising trade associations, brands, agencies and publishers, banded together to facilitate alignment on privacy-forward industry initiatives recently announced by operating systems and browsers—and to ensure addressability standards that preserve privacy, provide a consistent and effective framework for advertisers, and enrich the consumer experience.
For many buyers, the nightmare scenario is that the Privacy Sandbox becomes the only way to measure media in the future or that there is no scalable solution at all. Indeed, a return to last-touch attribution due to a dearth of data is a great fear for many on the buy side when it comes to the cookieless world.
On the sell side, though, the main fear is buyers running to the comfort of walled gardens and their proprietary identity ecosystems. Right now the walled gardens garner 80% of digital ad spend because they can offer marketers the kind of scale, ROI, and depth of consumer understanding they want alongside precision targeting.
Buyer over-reliance on walled gardens limits publisher control in programmatic and ultimately stifles the competition and bid density needed to drive up CPMs. However, our buy side sources only see an initial lurch to the walled gardens once the cookie is phased out.
“Out of the gate, buyers who are still very confused about the nuances will go with the safe bet,” Korenfeld notes. “It will be up to the rest of the ecosystem to prove that they can provide the scale while not creating a lot of operational confusion managing many platforms that are not well connected to one another.
“There’s no higher priority than getting identity right,” says Lotame CEO Andy Monfried. “Without privacy-friendly and legally compliant identity management, marketers can’t accurately understand, find, target and message their customers at scale. They’ll simply spend where they can do those things with confidence — here’s where the opportunity is ripe for publishers to seize.”
Arnold added that she doubts the demise of the third-party cookie will change Amnet’s preferred mix of buying through walled gardens and the open exchange to meet client objectives and performance goals.
“While there may be a slight uptick towards walled gardens in the short term, we, of course would like to pressure-test solutions that work outside of those walled gardens before moving forward,” she says. “We foresee that the use of publisher data, contextual, and other solutions will help us continue to access inventory outside of the walled gardens—keeping the share of spend between walled and open relatively the same in the long term.”
That represents a real opportunity for publishers… And means they cannot wait for the buy side to decide their preferred identity partners before diving in. The buy side’s hesitation actually becomes an opportunity for publishers to both collaborate with their advertising partners and lead the conversation on identity.
First off, publishers are reporting that many advertisers are moving spend into private marketplaces because of the flexibility and paucity of spend guarantees. This could be a great proving ground for advertisers to see the power of your chosen identity solution(s), particularly if a CPM is locked in. Look at the match rates!
Next, identity succeeds with scale. Premium publishers should be aligning with one another to pick three to five highly viable identity solutions that all will incorporate. Smaller publishers would seriously benefit from joining up with such alliances. Fortunately, many identity solutions actually partner with each other in order to enrich profiles, so this only amplifies the potential for scale. Meanwhile, large media houses have chosen to mimic the walled gardens and they’re building fortresses of their own.
“Addressability won’t be successful without scale, scale is achieved with collaboration,” Martin says. “As a buyer, I would love to see a publisher-led identity solution with scale behind its probability for success.”
You know your premium publisher peers are getting involved with identity—part of the key to its success, and a new dawn for the open ecosystem, will be teaming up to drive best identity practices in the industry. And believe it or not, it seems to be what the buy side wants—for publishers to make the first moves in selecting the identity partners that will fuel digital advertising tomorrow.