Universal ID Solutions and the Cookieless Future

As Google overhauls Chrome to tighten privacy practices, third-party cookies are going away — and advertisers are left to figure out the best way to move forward.

There is no one-size-fits-all solution. Respecting privacy is critical, but relevant, quality advertising requires consumer information. How do advertisers find the balance? One of the emerging third-party cookie alternatives is Universal ID.

What is Universal ID?

Universal ID is a single identifier that is created by an independent ad-tech company to provide approved partners across the supply chain with a shared identity. The major difference between third-party cookies and this is matching methods; where the former uses probabilistic, the latter uses deterministic.

Here’s how this works in practice. Email addresses, as just one example, are considered Personally Identifiable Information (PII), which means they can’t be freely traded between ad technology companies without user consent. Universal ID technology, however, can pass email addresses through an algorithm that converts them into a readable 32-digital long string of numbers, ultimately creating a hashed email address that users have opted into and providing a unique identifier. Anytime the consumer goes to a website or uses an app that requires that email for login, their identification is shared across a network of publishers that use Universal ID who can then use the information to target the individual with relevant ads.

Although Universal ID solutions are relatively new, there are three main types on the market:

  • First-Party Data-Based solutions utilize user information across a variety of sources, including third-party cookies, first-party CRMs, and offline.
  • Proprietary ID solutions will aggregate cookie information, meaning that browsers blocking cookies will render this option obsolete. However, it simplifies cookie-syncing so that less user identity information is lost in translation.
  • Industry ID solutions are independently owned or operated by investment companies. They rely on simplified cookie-syncing programs that incorporate useful lifespan expiration dates.

Pros and Cons of Universal ID

There are, like with anything, pros and cons that come with Universal ID.

The pros are many. Universal ID offers advertisers a cross-device tracking solution, whereas cookies operate only within one at a time. They also don’t rely on third-party software syncing cookie information from one platform to another, creating a more seamless user experience while eliminating the issue of data loss from third-party cookies.

Universal ID also eliminates duplicated information, as it matches users at a nearly 100% rate. This means more accurate sample sizes and precise match rates between user interests, too. And beyond that, Universal ID solutions can be created using first-party cookies from offline sources and CRMs, meaning advertisers no longer need to rely on any third-party sources or data at all.

As for the drawbacks, they’re mostly conceptual since the solution is so new. Some worry about scalability. Cross-publisher divides create another potential issue, as publishers, technology partners (DSPs, SSPs) and data providers will all have to work together in order for Universal ID to work. Likewise, many wonder how Universal ID will interact with other solutions like first-party data, location data, and contextual targeting.

Universal ID Case Studies

Let’s look at a few helpful case studies to see how these solutions work in practice.

The Trade Desk (TTD), one of the industry’s largest DSPs, has released its proprietary “Unified ID” solution with the goal of growing to a 100% match and boosting advertisers’ ROI alongside publishers’ programmatic revenue. It creates a simplified version of cookie-syncing but doesn’t entirely replace third-party cookies — yet. TTD is working on an updated version — Unified ID 2.0 — to address that concern. With this version, a user will log into a Unified ID 2.0-integrated website using their email, which enables the solution to hash that email address and create an encrypted ID token that acts as an ad request. A subsequent bid request is then created and can be used by ad tech vendors for targeting, frequency capping, and attribution.

Another organization, LiveRamp, uses Universal ID solutions, too. The company’s Authenticated Traffic Solutions (ATS) allows publishers to match consented user data with a RampID — a single anonymous profile — in real-time and then use it for targeting. The technology takes in and consolidates data from a number of sources, including mobile devices, CTV devices, and cookies to ultimately create an identity graph.

What to Know As Universal ID Becomes More Universal

As you move away from third-party cookies and consider adopting a Universal ID solution, here are a few things to remember:

  1. Stay curious. First and foremost, keep an open mind. Stay informed and research-focused but open to possibilities to ensure that you intentionally consider each solution and select the one that’s right for your organization.
  2. Allocate a testing budget. Ideally, 5% – 10% of your budget should go toward identifying the right Universal ID solution. Devoting the proper time and resources to this important technology gives you a strong foundation for the (rapidly approaching) cookieless future.
  3. Have a strong digital advertising partner. As the industry continues to change and alternatives to third-party cookies continuously present themselves, rely on strategic partners to help you stay informed and thrive amidst all the changes.

Third-party cookies may be on their way out, but Universal ID gives advertisers a way to stay confident even in all the changes. To learn more about the cookieless future and Universal ID, get in touch today.

The Cookieless Future Is Inching Closer — Here’s What That Means for Advertisers

Digital advertisers won’t have to say goodbye to third-party cookies today or tomorrow, but that time will eventually come. The writing has been on the wall since early 2020, when Google first announced its intentions to phase out third-party trackers on Chrome browsers. After several delays, the company reiterated its commitment to the move this past spring, which is now set to take place in the latter half of 2023.

While Google’s phaseout of third-party cookies has been positioned as an attempt to meet growing consumer privacy concerns, its plans have created new issues for regulators, competitors, the digital advertising industry, and everyone else with a stake in the web’s evolution. The search giant has explicitly stated that it wouldn’t be “building alternate identifiers to track” individual web browsers, but it has proposed a new ad targeting standard that it claims will lead to similar results. Dubbed the “Federated Learning of Cohorts” (FLoC), this technology uses an algorithm to group browsers together based on overlapping browsing histories — providing an ostensibly more private consumer experience while still allowing for targeted ad delivery.

The only problem with FLoC? Virtually no one else is on board with it. Detractors say the technology could introduce a host of new problems that are just as pernicious as those it’s intended to solve. Regulators in the U.S. and Europe will also have questions, as will privacy-conscious Chrome users who realize they’re unwittingly involved in FLoC testing.

Regardless of whether Google’s proposal ultimately gains mass adoption or fizzles out, the use of third-party cookies for advertising is nearing its end — most browsers already block them. But given Chrome’s sizable lead in terms of overall browser market share, Google’s decision to further postpone the inevitable is significant for advertisers, who now have a little more time to prepare for a cookieless future.

Cookieless Advertising Is Already Possible

There are numerous cookieless alternatives for ad targeting — and cookieless identity and measurement solutions — immediately accessible to advertisers. They include inherently cookieless channels like Connected TV/OTT, streaming audio and podcasts, and content-based and contextual targeting solutions that let advertisers reach audiences engaging with highly relevant or intent-driven content.

We’ll likely see an uptick in testing and adoption of these alternatives in the coming months, along with a continued shift in the way advertisers use performance marketing. Historically viewed as an approach for driving hard sales, a growing number of brands across all categories are now deploying performance marketing tactics to build their pool of valuable first-party data. These brands incentivize audiences (usually in the top half of the marketing funnel) to trade their contact information in exchange for newsletter subscriptions, content downloads, exclusive promotions, or other offerings. This approach offers opportunities to build credibility and trust with prospects well before purchasing decisions.

As advertisers continue to search for ways to fill the void soon to be created by Google’s phaseout of third-party cookies, here are three principles they should keep in mind:

The best is yet to come for data-driven advertising.

Brands are sitting atop mountains of customer data, and most have yet to tap into it. As digital transformation accelerates across sectors, more companies will have the capabilities needed to do so, which means a new era of advertising is just around the corner. Third-party cookies have never been the proverbial “golden ticket” to consumer hearts and wallets, but it’s out there — advertisers just need to find it.

Personalization is still possible (and critical).

Consumers still want personalized experiences, and the brands that deliver them consistently through the responsible use of data will be rewarded with increased loyalty and engagement. As advertisers gradually turn their focus — and budgets — to inherently cookieless environments like OTT and streaming audio, many will realize that these largely untapped channels present incredible opportunities to reach target audiences in a highly personalized environment. The sooner advertisers incorporate these channels into their campaigns, the sooner they can leave cookies behind for good.

Metrics and KPIs will continue to evolve.

Many advertisers make the mistake of measuring campaign performance against indicators that don’t align with their chosen tactics or predefined objectives. This can lead to optimizations that aren’t improvements, reporting that’s not insightful, and brand messaging that’s confusing rather than compelling.

As technology enables new ways of reaching consumers, advertisers will have to adjust the strategies they use to gauge the effectiveness of their efforts. Investing in flexible analytics and measurement solutions can help, but a focus on workforce development should also be fruitful. Of course, optimal results are never guaranteed. But if you don’t have the tools and expertise needed to properly define success, they’ll be that much harder to achieve

At Digilant, we’re committed to keeping our clients informed on how best to prepare for the cookieless future. Stay up to date with all the latest changes and announcements on our future of third-party cookies content hub here.

Want to learn more about how you can navigate a cookieless future and future-proof your media investments? Contact us today.

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