Third-party cookies are problematic when it comes to privacy and removing them is a positive evolution for the ad tech industry. But, the advantage of being very loose with user data is that it gave everyone an equal level of access. The replacements on offer may not be so democratic.
One of the leading alternative solutions for advertising in a post-cookie world are Universal Identity solutions or shared IDs. By encrypting user data on a first-party cookie, publishers and advertisers are able to target relevant ads without accessing identifiable personal information. Universal ID solutions use a single, anonymous unified ID per individual that groups of publishers and their programmatic ad partners can use.
The only problem? There are so many potential Universal ID solutions, with different ad partners that the online economy is now splintering into separate factions that all claim to have the universal solution.
Let's recap how universal IDs work
Using a Universal ID, a user visits a publisher's site and gives their consent for ad targeting via the CMP. This consent info is stored in a first-party cookie and passed to the ID provider's API. At this point, we don't have an actual ID, just permission to create an ID for that user. The information collected may include device info such as IP address, unique device identifiers, and the latitude and longitude of the device when you view a website. But, it will not include information that can be used to identify individuals in the "real world", such as name, address, phone number, email address, or government identifier.
Publishers retrieve the encrypted ID from the provider, store it on a first-party cookie and pass it to their demand partners via an on-page configuration. Bid adapters in header bidding technology such as Prebid then listen to the ID and send it to their RTB demand partners to match impressions.
Basically, 'soft signals' about the user are collected on the first-party cookie, provided by the publisher. These can be matched by ID5 and then used to serve relevant ads.
Shared IDs can also use 'hard signals' like when users provide personal information like an e-mail address to subscribe to a newsletter. This information can be encrypted and hashed before being passed along the adtech chain and used as a unique identifier by brands to serve targeted ads.
'Login alliances' have emerged to facilitate the collection of declared identifiers across publishers. By providing a shared login solution for consumers across websites, these initiatives improve the user experience while facilitating the collection of declared identifiers by publishers.
Secured, shared IDs can then be used across publishers and throughout the supply chain for accurate targeting, frequency capping, and campaign measurement without third-party cookies.
Sounds good. What's the problem?
The possibility is that the industry will fail to settle on the best Universal ID to use. Without a single source across the entire industry, these solutions become anything but universal. In order to match users, it requires enough publishers to sign up to the network to have enough volume to match users.
Furthermore, each alternative provider would only work with a unique handful of advertising and technology partners, creating pockets of exclusivity and patchy crossovers. This would mean publishers would have to subscribe to multiple ID providers or limit their advertising potential to the network of one ID provider.
Expect to see many sections like this on universal ID provider pages:
For universal IDs to be a viable alternative to third-party cookies, it would take a community of like-minded companies, to collaborate to give everyone access to a global network.
Fortunately, there are such communities forming, such as Inside, a partnership program that creates an ecosystem of technology companies supporting ID5's Universal ID as a cookieless alternative to the third-party cookie.
There's also DigiTrust, ID5, and Ad Consortium. They're working on the creation of one (anonymous) unified ID, per individual, that publishers and their programmatic ad partners can use to serve and target ads.
But an inherent problem with initiatives like these is that its members are often competitors. Disagreements over complicated issues like governance, payment structure, and trust may prevent them from agreeing on a single standard.
Ad tracking also relies on cooperation from the browsers. These solutions propose signing up publishers into a giant first-party network. Realistically, Apple and or Google could alter their web browsers or mobile operating systems to block these identification methods at any time. And, let's be clear - those who would lose least from the failure of these networks would be walled-gardens with first-party data such as Google or Apple.
For this reason, many believe that these ID solutions are guilty of short-termism. The long-term future of digital advertising and marketing may never rely on individual identifiers but rather done in a privacy-friendly way where individuals are not identified.
We are currently at the point where every stage of the advertising supply chain is evaluating different identity solutions to discover the best fit for their own customers and goals.