Identity is important but it’s not the cure-all solution

The push for consumer privacy is changing the advertising ecosystem. Every announcement and update creates another hurdle for publishers and advertisers. One of the most pressing concerns is around identity and whether using it for advertising is privacy compliant. Google recently shared that it will not build alternate identifiers to track individuals as they browse across the web and does not believe that user identity-based ad tracking is sustainable. Which leaves confusion about how advertising will evolve.

Identity is not going to disappear completely. In fact, identity is critical for publishers and brands to understand their users, deliver tailored content, newsletters and promotional materials. Critically, this data can also be used to match data from publishers and advertisers to find relevant audiences, as long as this is done in a privacy-safe way. But identity-based tracking across different sites needs to stop. The question is, how can we develop solutions that still allow publishers to monetize their data and advertisers to target relevant audiences?

To get an analyst point of view, we invited featured guest Tina Moffett, Principal Analyst, B2C Marketing at Forrester, to present new research at a Make Possible event. She reviewed the future of identity in digital advertising — and discussed how publishers and advertisers can turn the identity challenge into an opportunity. 

Moffett then joined a panel with Mike Nuzzo, VP, Head of Data and Audience Intelligence, Hearst and Trace Rutland, Digital Hub Director, Ocean Spray to share views and advice as both brands and publishers prepare for what’s to come. Here are a few highlights from the session.  

Think about data deprecation beyond the third-party cookie

We are in the era of data deprecation, defined by Forrester as the reduction of available data that marketers and advertisers use to build relevant data-driven marketing strategies. Data deprecation extends well beyond the removal of third-party cookies from Chome, according to Tina Moffett at Forrester. It’s about privacy laws, privacy-safe browsers, mobile ad ID restrictions, ad-blockers and the walled gardens of consumer data, held by Amazon, Facebook and Google. 

As a first step, publishers and advertisers need to be aware of all the factors and forces driving changes and overcome challenges by partnering with other first-party data owners. “In the face of data deprecation and identity challenges, [marketers] will need ethically sourced consumer insights data to fuel programs,” said Moffett. She advised marketers to “share audience insights and create opportunities directly with publishers.”  

Identity itself is not going away, according to Mike Nuzzo at Hearst. He said: “Data is still being used to target, it’s just going to be done differently. It’s no longer going to be third-party cookies for one-to-one targeting, it’s going to a device or browser, and aggregated into a cohort.”   

Where there are concerns, there are also opportunities for advertisers and publishers to partner

Data depreciation creates major challenges around using customer data for marketing campaigns at scale. Brands and publishers have reacted to this by focusing on collecting more authenticated data. While this data is valuable, it’s not sufficient, according to Forrester. 

Moffett said: “Brands and publishers should focus on partnering across the entire spectrum of authenticated and non-authenticated audience insights, to ensure scale. There needs to be alternative solutions for your targeting measurement and overall marketing strategy.” 

The need to understand audiences, in a privacy-compliant way, surfaces an opportunity for direct relationships between the buy- and sell-side. But what does that look like? “In the past, I would have described it as a threesome between the advertisers, agency and publisher,” said Trace Rutland at Ocean Spray Cranberries. 

But with brands taking more media work in-house, Rutland said she’s encouraged her team to build those direct relationships because “they’ve become more important.” And not just with the publisher but “the auxiliaries in terms of tech partners that facilitate data collection and programmatic buying,” said Rutland. “It’s a natural progression, said Nuzzo. “When you think about regulatory issues that are arising and where data actually lives and being a data controller versus the service provider.”   

Identity is not the cure-all solution

Forrester believes that it’s important to identify an appropriate strategy based on the type of relationship a customer wants, the value they’re getting, and the transparency and trust that is cultivated. Moffett advised advertisers to build various approaches, both authenticated and unauthenticated, but warned that while “authenticated is a big opportunity, the reality is it’s a small piece of the universe.” 

Moffett has seen a major shift that publishers are taking, where they are focused on building audience-based targeting solutions. She said: “We at Forrester believe that identity is not the cure-all solution across every single point in the lifecycle. There’s an opportunity to do contextual targeting, cohort-based targeting, as well — it’s important to start testing those different targeting mechanisms.”  

Mike Nuzzo said publisher cohorts are “eliminating the dissemination of unique identifiers and other information that could be passed in the bidstream to third-party data providers.” But wants to ensure the industry understands that “we are still using data to make decisions.” He said: “We have to test intelligently.” In 6-12 months from now, Nuzzo wants to be in a position where the industry doesn’t have to stipulate and “will have some results to say, this is what did happen.” Trace Rutland is cautiously optimistic about cohorts, the brand is not in the position to test just yet but hopes to be in 3-6 months. 

It may be difficult to make decisions during periods of change — as seen during this pandemic — but the shift towards protecting user-privacy by regulators and browsers isn’t a debate, it’s essential. While motivations differ, privacy will be a priority. As Moffett said: “Trust starts with privacy standards within your own house, not relying on third parties’ privacy standards or their decisions in the name of privacy as a way for you to manage it.”   

The full session and panel discussion is available on-demand here.