This is quite an irony. Post-Pandemic, as brands are having to figure out how to sell their products directly to consumers, we are debating the future of identity.
Disney, whose theme park and cruise business have been devastated by COVID, recently announced that they are closing 20% of their Disney stores, choosing instead to invest in shopDisney -- their eCommerce site. Many don’t think of Disney as retail, but Disney Parks produce about $6 billion in merchandise and food sales. So, it's no surprise that Disney is trying to replace that with digital merchandise sales via eCommerce. Anyone who has taken their kids to Disneyland knows this: we often end up spending a lot on Disney branded merchandise while at the park. Now, we get to do it from a couch.
Around the same time, Google announced that they will no longer provide any 1:1 identity mechanism to their advertisers to replace third-party cookies. When Google announced over a year ago that they would get rid of third-party cookies, it was not clear whether they would replace it with a new mechanism or at least get behind industry initiatives like Unified ID. Now they finally have made a decision.
Success in digital marketing, including eCommerce marketing, requires brands to get much better at advertising specific products that a consumer seeks or is likely to buy, along with any pricing or offer information specific to that product.
This behooves the brand to personalize their advertising, email, and even website experience based on knowing who the individual consumer is and identifying the consumer at the individual level. The battle for consumer attention will be fought with data and identity. Yet, identity has become an embattled core technology with an uncertain future.
While many in the industry are lamenting or even fighting the loss of the third-party cookie, its demise—in fact—may be timely. The industry has needed, for some time, a much more robust identity mechanism based on consented, secure, and universally integrated identity.
Google’s bowing out of continuing to support third-party cookies as an identity mechanism seems inevitable and yet not entirely surprising. What is surprising, however, is their declaration to provide no alternate mechanism except for FLoCs. Google’s FLoC is not really an identity solution – it is (by design for privacy reasons) an even less accurate mechanism meant for targeting broad swathes of consumers. It is not the 1:1 personalization that eCommerce requires.
With Google bowing out of 1:1 identification (outside of their walled garden), that leaves the industry with only two options for 1:1 identity:
1.Identity products/initiatives like Unified ID and LiveRamp Authenticated Traffic Solution (ATS), which rely on consented hashed emails or PII (Personally Identifiable Information) to maintain consumer identity
2.First-party cookie-based identifiers (IDs) like Jivox IQiD and similar first-party domain-based identity systems used by many marketing software platforms. These anonymous IDs and systems reside within the brand’s domain and are tied to consented first-party data about the consumer and owned by the brand.
LiveRamp ATS uses anonymized PII (typically email) with consumers’ consent to allow publishers and brands to market to them in a personalized manner. LiveRamp, therefore, is very handy especially for Direct-to-Consumer marketers who have significant amounts of first-party data. Since the data is associated with PII (such as email, phone number, address), LiveRamp’s identity technology enables brands to continue to leverage this data even after third-party cookies go away. The technology also enables the consumer to be identified across platforms using LiveRamp Sidecar, a technology enabling publishers or other media platforms who also have access to consented PII to identify the consumer as being the same person.
Unified ID (no longer owned by The Trade Desk but managed by Prebid.org, an independent entity) is a key protocol that helps tie together identity across various platforms in the ecosystem. It enables the various tech platforms in the ecosystem to obtain an anonymous ID by presenting a hashed email address (with prior consumer consent of course).
This ID then becomes the way various parts of the ecosystem can connect and identify the consumer. What is elegant about this approach is that each party in the ecosystem, in order to identify the consumer, also needs to have direct consumer consent with his/her email address provided to the publisher or brand. This again ensures that only consented data can be used for personalization.
These are just a few of the many identity mechanisms that are likely to become available to brands as soon as marketers prepare for a world without third-party cookies. The question becomes: why do we need so many identity mechanisms?
While the answer is somewhat complex, here is a simple version: every identity mechanism must comply with privacy regulations and consumer consent. Privacy regulations control how a consumer's data is collected and with whom it can be shared while consumer consent is required for all data collection by brands and publishers.
This, of course, means that brands need to have their own identity mechanisms in their domain. Identity solutions like LiveRamp, Jivox IQiD, IDs from Adobe and various Customer Data Platforms (CDP) like Segment and Lytics fall into this category. It also means that data aggregators such as publishers and third-party data platforms such as DMPs and DSPs also need to have their own identity solutions. Both brands and publishers will need to get consent from consumers before they can collect and use the data.
Identity & Google's FLoC
A discussion on identity would not be complete without explaining the role of Google’s Federated Learning of Cohorts (FloC).
What is Google's FLoC and what are the pros and cons of Cohorts vs 1P data personalization? What does the future hold for all of these identity mechanisms?
Jivox published an ebook with insights based on industry research, interviews with standards bodies, collaboration with an ecosystem of brands, publishers, and data partners to develop an open-source ID framework, Unified ID 2.0. Read the ebook to help you make decisions about choosing the right identity model.