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:
- 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.
- 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.
- 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.