Identity is Table Stakes, But There’s More Than One Table

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I’m old enough to remember the precursors to the identity hype cycle when identity-based marketing was just one of several approaches to finding and keeping customers. 

But now, as third-party cookies fade away and privacy laws ramp up, identity is central to this new age. Since first-party cookies and login-based user targeting have now become key marketing elements, and new platforms are continuing to evolve and emerge, all marketers should be identifying people across multiple platforms — not just tracking various click patterns.

The exact nature of this new marketing landscape hasn’t yet settled. Among other factors, there isn’t yet a sweeping national privacy law in the U.S., and more than one privacy-compliant successor may eventually replace fading third-party cookies. Not to mention the rise of CTV amid the pandemic and how it has jostled TV ad measurement conversations. 

The effects of the pandemic on marketing and selling are still reverberating. For instance, a McKinsey survey found an average of 20% growth in fully-digital users — those people who engaged with brands exclusively online. This 2020 to 2021 data point shows that the way people are researching and shopping has been forever changed by the pandemic.

Amid this landscape, marketers can assess what lessons have been learned so far about identity, using those indicators to plot the best course forward.

Omnichannel Marketing Needs Identity

As customers increasingly rely on digital communication, and as digital communication channels continue to proliferate, marketers recognize the need to target people across platforms. Users reside in a multi-dimensional landscape, part of which remains in the physical world, and any effort to treat them simply as clickstreams in one environment will limit marketing effectiveness — and potentially annoy consumers with repetition.

By employing identity data, markets can tailor their communications to the specific needs of customers and would-be customers, frequency-capped and optimized for effectiveness, cross-promoted to groups of users with similar profiles, and, occasionally, matched to actual purchases for more effective attribution.

In other words, identity-based marketing is no longer a nice-to-have. It’s table stakes.

Identity’s Big Challenge: Walled Gardens

While the goal of identity is one profile per user, it’s important to remember there are different kinds of “tables.”

Establishing a person’s profile, and then matching it to interactions across the open Web is difficult enough. But walled gardens — logged-in environments like Google’s services, Facebook, Amazon and others — have their own identity structures.

And walled gardens are a massive part of the landscape. According to statistics portal Statista, walled gardens account for an astounding 77% of global digital ad revenue. 

Inside those environments, identity functions according to the walled gardens’ rules. As a result, identity-based marketing is actually an archipelago of identities, where the marketer’s goal is to continually match one identity with another.

Connected TV Is a Walled Garden

Propelled by stay-at-home viewing during the pandemic, nearly 84% of total U.S. households now have a connected TV (CTV) — either an Internet-connected smart TV or an external box such as Roku. Although cable TV subscriptions are declining, approximately 42% of U.S households still have cable TV.

This means that television, once a spray-and-pray advertising environment where program context was king, is rapidly taking on the characteristics of walled gardens. Subscribers to cable and streaming services are, essentially, logged-in users, so targeting and attribution for connected TV is more related to Facebook than to a broadcast TV station or a website with unlogged visitors.

But there is not one walled garden type for CTV or cable, since there are a variety of configurations based on TV maker, cable system, streaming service or connected TV box — each with its own flavor of identity.

As the conversations about big data for TV measurement swirl, the post-set top measurement model depends on sound identity strategies more than ever. And the ones looking for measurement answers may need to take a page from the identity evolution playbook. The critical elements at stake are the importance of interoperability and collaborating partners, all with a commitment to privacy.

The bottom line: the more identity profiles a brand can utilize, the better its ability to operate across emerging environments. 

Once upon a time, identity-based marketing was a nice-to-have. Now, it’s essential for operating in this new world of constantly emerging and evolving platforms, no third-party cookies, changing measurement models, and a continually tightening set of privacy rules.

Cory Davis, VP of Media & MAdTech, Verisk Marketing Solutions.