The digital identity landscape in the cookieless world

In the early digital years, internet users’ browsing was an isolated event as websites had no technique for discovering whether the user was simply browsing, or they had returned to the site several times & shown interest in a product. The first internet cookies were developed by Lou Montulli a Netscape employee in 1994 to make sure that the website has some memories and it can remember users who have visited them earlier. Netscape’s idea was not to track users across the web but just to make sure that websites are not treating their users as strangers when they are coming back. Technology isn’t good or evil in and of itself, it is all about how people choose to use it & that’s what happened with internet cookies. Within few years ad tech companies learned ways to hack cookies & follow people around the internet which created the system of cookie-based ad targeting. There are essentially two types of cookies – first-party and third-party. First-party cookies are stored by the website & allow website owners to accumulate analytics data, remember preferred settings, and execute tasks that provide a good user experience. Third-party cookies are stored by external domains visited & used to track users for advertising across sites. While Safari and Firefox, which have blocked third-party cookies since 2013, chrome said that by 2022 it will be phased out third-party cookies.

The digital industry is already getting prepared for a cookie-less future by creating an identifier that is meaningfully

better than the third-party cookies. Below are some of identifier which are already available & getting utilized at scale.

Privacy Sandbox: – Google is pitching this as an alternative to third-party cookies & launched Federationlearning of the cohort (FLoc) & Fledge as some of the solutions to privacy safe targeting & measurement. Floc as an alternative of tracking users via cookie & will run on the different browser including chrome own by google and analyzes user’s online behavior. Using this browser history, Chrome monitors your browsing activity and places you in a “cohort” of other users with similar tastes and habits. In other words, rather than letting third-party websites track your browsing activity with third-party cookies, the browser itself will track your browsing activity and report the websites with a recommendation of what type of advertising you might be interested in. Google says that FLoC will allow personalized ads without the collection of data by assigning each browser an anonymized ID and then adding that ID into a large group where only the overall patterns are accessible to the Adtech ecosystem, the idea is that your privacy will remain intact while advertisers still get eyeballs. There are widespread challenges & many browsers are opting out of it. Firefox & Safari web browsers have already announced that they will not use FLoc. Fledge which earlier known as turtledove is the Privacy Sandbox offer that aims to replicate retargeting without cookies, in a similar way to FLoC by building intent-based groups whose identity is kept private within the browser. Fledge will create a brand-specific cohort of users that can be shown a specific ad in the form of retargeting.

Unified ID 2.0: – This solution is developed by Trade desk but its open source & noncommercial. It willwork by utilizing a single sign-on to capture a user’s email address and permission once they visit a publisher’s page that supports UID 2.0. The single sign-on element means that a user only needs to consent once to receive targeted advertising across all publishers. A person’s UID 2.0 contains zero information about who they are in the real world. Rather, a person’s UID 2.0 is a string of numbers and letters that cannot be reverse engineered to an email address or any other form of identification. The UID 2.0 system also has no central storage of the mapping of UID 2.0’s to emails. Adtech industry is pretty much sold to this idea and major publishers and Adtech players are testing this solution. Nielsen a media measurement company, is making Unified ID 2.0 a core element of their upgraded measurement portfolio. UID 2.0 will also better communicate value exchange with consumers in a way that never happened with cookies. One of the challenges with unified ID 2.0 is scale because google has announced

that it will not support it will be difficult for small and medium-sized publishers to convince their visitors to authenticate with email & explaining the value exchange of free content.

First party data: – Growing number of new tighter privacy regulations & killing third party cookies aremaking companies rethink their data strategies & realized that first part data is lynchpin of their data driven marketing strategy. It’s a customer information that companies/publishers can collect from them both online and offline sources, such as the company’s website, app, CRM, SMS, Email, social media, Event , store visit or surveys. Technological advances, such as a customer data platform (CDP), allow to merge those kinds of data dispersed across various channels & put comprehensive data sets at fingertips. First-party data holds promise for ad monetization at large scale as well therefore, digitally mature publishers like TOI & Web18 are doubling down on efforts to responsibly collect and deploy first-party data with launch of products like ETPro or Moneycontrol Pro. The value exchange here is very clear you get an exclusive content once you opt for “Pro” . Telcom companies like airtel & JIO have jumped into advertising business as they have large first party opt-in audience base. First-party data is cheaper than buying data from a third party. It may require more time and effort to collect, process and eventually apply it, but it is well worth it.

Walled garden platforms: – A walled garden is a closed network in which all operations go through andstay in that ecosystem including data. Major companies in the world operate as walled gardens which termed as GAFA (google, amazon, Facebook & Apple). All this platform together accounts of more than 70-75% of total digital spends. Walled garden platforms will be largest beneficiaries once third-party cookies are phased out because of their business model & able to provide services like cross device tracking & data accuracy because users log in to their account across multiple devices, it is easy to identify the same user wherever they may be accessing content. Most of walled garden platforms have their own services included in all the most profitable value chains of users like payments, data, video, music, e-comm, content and so on. Walled garden platforms operate with full Martech stacks which makes them more competitive than other Adtech solutions. Working with walled gardens for campaign attribution & using features like Google’s tags and Facebook’s pixel give advertisers control of their first-party data as well as the third-party data they provide but walled garden Platforms are also under no compulsion to give advertiser full access to their audience data if they don’t want to.

Data clean room: – Data clean rooms are locations where large companies likes of GAFA (s Google, AmazonFacebook or Apple) store aggregated advertising data rather than customer level data. Data clean rooms typically offer more data and data fields than general. While Google ADH is gaining momentum & available for advertiser, Facebook and Amazon are both testing data clean room concepts. Advertisers like Unilever

P&G already building data clean room of their own first party and walled garden platforms to assign effectiveness and attribution. One of the challenges with data clean room is, it is a platform specific like ADH is only for google and can’t be combined with other data Clean rooms. Advertiser that advertises across multiple platforms will find this restricting since they cannot join the data to build a full user journey.

Apple PCM: – Private click measurement (PCM) launched by apple in 2019 is an alternative to third partycookies which is active in Safari browser and from iOS 14.5 . PCM achieves this balance by sending attribution reports with limited data in a dedicated Private Browsing mode without any cookies, delaying

reports randomly between 24 and 48 hours to disassociate events in time, and handling data on-device.To implement PCM Apple limits the reporting to the campaign level only in IOS 14.5, i.e. this conversion action is attributed back to the campaign ID that pushed the click. With limited data, the availability of remarketing audiences is expected to drop significantly & it will also make dynamic ads reach far less users than previously. With launch of ATT(App transparency tracking ) Apple will close stream of data that app developers, measurement companies, and advertisers have used to link users’ behavior across apps and mobile websites. There will be no user mapping possible.

Cookieless Signals: – Leverage probabilistic data like location and device modeled or married with carrier data to build new targeting strategies. One of the cookieless signals can be contextual advertising. Advanced contextual targeting analyses text, audio, video, and imagery to create contextual targeting segments which are then matched to particular advertiser requirements, so that advertising appears in a relevant and appropriate environment.

In summary Future of digital advertising will be bright as cookies were never a stable foundation & brands and publishers should think about what can be achieved when consumer privacy and user experience are prioritized to deliver relevant advertising over cookies.

About the author:

Prashant Nandan, Associate Vice President, Dentsu Aegis Network