Why Identity Solutions are Critical for Audience Targeting in a Cookieless World?

Identity is an essential tool for digital marketers and advertisers as third-party cookies are soon to be phased out. Using this technology allows for a more thorough understanding of your audience and more effective advertising, especially now.

According to our February 2021 global survey report “Beyond the Cookie: The Future of Advertising for Marketers & Publishers,” marketers’ number one concern with their own first-party data is accuracy after consumer habits and lifestyles shifted so greatly due to COVID-19. Overall, identity leads to a better understanding of your audience through their interests, preferences, and attitudes across all channels, platforms and devices. This understanding allows digital marketers and advertisers to cater advertisements to a person's interests and lifestyle to create successful and meaningful promotional touchpoints while respecting consumer privacy. 

Why Identity Matters for Marketers & Advertisers 

Most digital marketers are prepared to find an alternative solution to replace the phase-out of third-party cookies. Our survey report shows that over 51% of marketers are actively searching for an identity marketing partner. Without a solution when third-party cookies phase out, marketers will lose the ability to continue to find success with addressability, measurement, personalization, optimization, and frequency management. 

4 Ways the Industry is Responding to Third-Party Cookie Replacement

Although using third-party cookies to learn about your audience’s interests is familiar to digital marketers, this approach is not sustainable in today’s privacy-conscious world. Digital marketers need a new common language that makes audience targeting relevant and responsible.

There are a handful of solutions that have come to market in the last several months, identity solutions being the most popular. Identity solutions provide new technologically advanced strategies to better serve advertisements to consumers while respecting privacy. They deliver reach and accuracy across devices, domains, browsers, and other platforms. Additionally, identity solutions protect people's privacy and this respect for privacy is setting a new standard in creating a resilient future for digital advertising.

Digital marketers can use a variety of different approaches to improving their audience-based strategies at different stages of the funnel. Let’s dive into four approaches to the phaseout of third-party cookies:

  1. Contextual: This approach is a tried-and-trusted marketing method to hook people at the top of the sales funnel. It involves targeting a consumer-based only on the page they are visiting. However, this form of marketing can be expensive and less precise. In our recent global study, over 65% of marketers believe that contextual targeting alone is not a sufficient replacement for audience targeting.
  2. Federated Learning of Cohorts (Google FLoC): Also meant for the top of the sales funnel, this method of gathering consumer identity data is more accurate than any cookie. Algorithms create an anonymous group of profiles based on a common interest. Despite the increased accuracy of this method, user privacy is more questionable than other approaches, as well as limiting your targeting to inside a walled garden. There are more questions than answers at this point around composition, accuracy, and measurement since this approach is within Google’s black box. 
  3. Non-authenticated identity (probabilistic): This form of identity uses technology to assign a cluster of devices and browser signals to an ID that can be moved via established pipes into activation channels. These publicly available signals can include IP address, timestamp, or browser user agent. Probabilistic is data minimized so no email, home address or phone number are required. Marketers can expect more precise targeting across devices and domains, and the ability to frequency management, critical when courting new customers. 
  4. Authenticated identity (deterministic): This method involves precise targeting of a consumer through authentication — most often email — to reach people at the bottom of the funnel. It provides easy data tracking but requires the consumer to opt-in for some form of value exchange. Ultimately, this form of data collection is less scalable as only a small amount of users will register or login with sites/apps (estimated at only 20% by 2022)

These solutions each have pros and cons, which is why the most effective approach to the phaseout of third-party cookies is using a combination of the above. In the same global study, 3 in 5 marketers believe a portfolio approach provides a richer customer view without compromising user privacy. 

Why Identity Is Beneficial for Marketers & Agencies

Identity solutions provide many advantages for digital marketers. Successful advertising and identity go hand in hand, as digital marketers can benefit from understanding customers in many ways:

  • Maintaining Addressability: without a solution for the deprecation of third-party cookies, maintaining addressability of your target audience becomes almost impossible. Using an identity solution, you’ll be able to reach your key consumers across devices, browsers, and platforms.
  • Developing a consumer profile: identity, especially with an enriched identity solution, allows marketers to develop an enhanced profile of consumers across all channels, profiles and devices, which results in more targeted, relevant and privacy-compliant advertising. 
  • Imposing frequency caps: Constantly sending the same message with repetitive content is ineffective and can also be frustrating for consumers. With identity, marketers can control ad frequency and impose caps. 
  • Enabling campaign success: Targeting a consumer, with personalized messaging, from their first exposure through their conversion and future purchases is a great way to enable campaign success. With identity, you’re able to personalize, measure, and optimize your campaigns across devices and channels to ensure campaign success.

Try Our Cookieless Identity Solution

As the third-party cookie deadline approaches, finding and testing an identity marketing solution, or solutions, now is increasingly important for digital marketers. At Lotame, we have the first cookieless identity solution for the open web. Panorama ID is a global people-based, privacy-compliant identity solution for the open web. Our enriched ID is built from multiple inputs, and is interoperable and accessible globally across domains, devices and platforms. Learn more about our Panamora ID and sign up for our Identity Connection newsletter to stay ahead of the trends.

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