No One Solution Will Dominate the Cambrian Explosion of Digital Identifiers
Over a year has passed since Google announced its plans to deprecate third-party cookies in its Chrome browser. With that, another item was added to an already-growing list of technical constraints that will make digital advertising on the open web harder.
As the industry remains undecided on what will serve as the de facto replacement for the third-party cookie’s use cases, uncertainty has emerged across the martech space. Companies are struggling to determine exactly how they’ll track, understand, and target users going forward.
Over the past year, many solutions have emerged as a means to fill the niche left behind by the third-party cookie – and while not all solutions in this space take the form of newly minted digital identifiers, the population of upstart cookieless IDs continues to grow in size, features, and wide-ranging industry support. This raises the question of just how we’ll identify the ultimate cookieless ID.
Repercussions from the deprecation of cookies
Akin to the advertising industry’s own Cambrian explosion, each of these emergent identifiers finds itself on one side of a transformative ecosystem event, specially equipped to survive and thrive for a narrower set of use cases and stakeholders than its generally accessible antecedent.
For those unfamiliar with the geological event that dates back to over 500 million years ago, the Cambrian Explosion was a watershed moment in Earth’s history wherein most of the major lifeforms we recognize today first entered our planet’s geological record. Prior to the Cambrian Explosion, almost all life on Earth was relatively simplistic (i.e., single-celled organisms and colonies of such entities). The sheer diversity introduced and perpetuated by what many believe to be radical environmental changes resulted in an explosion of life that is as complex and varied as we know it today. What was rising oxygen levels and massive glaciations for planet Earth will be third-party cookie deprecation, IDFA opt-in, and governmental regulation for the digital advertising industry.
The complex and specialized lifeforms resulting from Earth’s Cambrian explosion are similar to the twenty-plus cookieless identifiers entering the market as a reaction to Google’s deprecation announcement. And much like the Cambrian explosion, this diversity will be here to stay.
The specialized features and serviceable market of each identifier will allow them to survive and thrive, even in the face of overlap across common stakeholders and industry rivals. Such variety in choice will allow publishers and advertisers to remain in partnership with their existing identity providers, smoothing over many formerly anticipated gaps with regard to advertising campaign effectiveness, monetization, and gross operational continuity.
No single identifier will oust its peers as the heir apparent to the deprecated third-party cookie. Rather, these cookieless identifiers will co-exist in the broader advertising ecosystem. However, such diversity will breed even greater industry fragmentation.
Challenges to come
Publishers, advertisers, and platforms will be forced to weigh the strengths and weaknesses of each of these next-generation identifiers before investing their resources to integrate them into their ad tech stacks. While certain solutions may prove to be compelling for reasons rooted in reliability (i.e., identifiers generated from authenticated traffic and/or hashed email addresses), drawbacks such as reduced scale and limited reach may require that industry players also look towards leveraging identifiers that originate from probabilistic models.
One must consider each emergent solution’s feature set as it relates to common industry use cases. Which next-generation identifier will provide the best bang for the buck when it comes to targeting? Will it work across anonymous website visitors? Can it help to more accurately measure those visitors’ path to purchase? If not, is there a world in which using multiple solutions is an option? It will not be surprising if all martech players use more than one of these cookieless identifiers in their ad tech stacks.
Further fragmentation will be inherent in the technologies that these solutions are built upon. Identity resolution service providers will need to associate disparate signals for consumers and end-users across a vast array of digital properties and platforms. Without the third-party cookie space serving as a common and invariant fabric, these service providers will need to leverage browser storage mechanisms that are partitioned per publisher (i.e., local storage and the first-party cookie space) and other siloed constructs (i.e., IDFA vs. IDFV, per customer encryption, etc.) that will add significant complexity to their solutions and operational workloads.
Greater demand to associate and resolve end-user identities across digital platforms will only continue to exacerbate the fragmentation problem in our ecosystem. While the solutions poised to address the deprecation of the third-party cookie will target web browsers as their operating environment, the need to stitch together consumer identity and behaviors across their laptop, mobile devices, and connected TVs, in true cross-device fashion, will only grow in importance to marketers worldwide.
For some, radical change will be required to evolve their product offering to address the constraints imposed on them by the highly volatile and dynamic ecosystem in which they operate. Those with the requisite resources, be it brain power in the form of knowledge and experience, healthy and mutually beneficial commercial relationships, and/or vast computational and storage capabilities, will be best positioned to separate themselves from the rest of the pack once these ecosystem changes finally actualize.
Jeff Olchovy is CTO at Tapad.