Data & Technology

Digital identity in a post-cookie world, which focuses on privacy

For years the only way for marketers to gain access to information about Internet users were cookies, invented in 1994. Initially designed primarily to track and remember the Internet browsing process, these cookies have over time become the most important part of building a user’s online identity and the basic unit of the digital advertising ecosystem.

Increasing consumer awareness of their privacy and the complexity of the Internet specifics, the creation of several e-identities by users, changing their behavior and needs in cyberspace hampers publishers and marketers from collecting data about their and potential customers making it difficult to establish a strong relationship and build a sustainable competitive advantage.

As user behavior and content consumption changes online, more privacy regulations are gradually being introduced and default browser settings are being changed making it impossible to track users in the long run. On top of this, there has been a steady phase-out of 3rd party data cookies for the past few years, which started with Firefox, Safari and continues with Chrome’s decision to withdraw support by 2022.

Considering that Google Chrome has close to 70% market share of web browsers worldwide this is quite a blow to digital advertising and will make the current third party cookie system untenable. Instead of cookies, Google plans to introduce a range of new solutions that mostly do what cookies did, but will make the web a less annoying and invasive environment than today’s web ecosystem.

Inevitably, all this leads to problems in consumer tracking, difficulties in ad targeting, optimization, measurement and attribution. Advertisers and media owners will need to put more effort into recognizing and understanding new ways to identify audiences, look for new touch points with them through new channels and technology solutions.

Why do we need to identify user identities?

Publishers and advertisers use personalization to make ads more relevant to the consumer. The irony is that many online users switch sources during and at the end of the purchase path.

For example, a user may learn about an advertiser’s product on a website (via a display or video ad). Then, while visiting another company’s app, he sees an ad for the same brand. Finally, the user goes to the brand’s website to purchase the product. As a result, identifying and understanding the user in such a fragmented purchase path becomes a problem for both publishers and marketers. A similar problem that leads to inaccurate attribution arises when a user changes devices and thus IP addresses change.

In such a multi-channel environment, precise ad targeting becomes increasingly difficult. In addition, there is a problem with devices such as Smart TV, which do not have unique identifiers, and the divergent data reduce the effectiveness of the campaign.

This leads us to the point where, in addition to changing the way ads are identified and targeted online, there is a growing need for new technologies, platforms that aggregate and manage user data, and solutions that identify the identity of the same user across different channels, locations and devices.

The need for changes in defining user identities

As we enter a new era of consumer data control and the prospect, or rather fear, of losing the ability to accurately target ads and at the same time reducing the effectiveness of digital, for many companies maintaining a direct relationship with their customers will become critical to their future success. Many brands will prioritize aggregating their own data on users visiting their sites, using their apps, and determining their identity.

Using the user information taken away will allow brands to personalize the consumer experience and use that data to communicate additional products or services and to model the user profile to present them with more products they may be interested in. Once a solid proprietary data strategy is established, customer engagement can be enhanced by linking that data to data collected by other brands.

The use of their cookies on their own domain will also be helpful in determining user identity while balancing personalization and user privacy. This method of data collection does not require the consumer to identify themselves with personal information and only assigns an anonymous identifier in order to create customized ads and content.

Another way that brands use to identify users is through a login process that will identify customers across multiple devices and channels through the various sites and apps they log into.
 This method requires the user to personally identify themselves, but it allows different companies to use this personal data to track consumers across the sites they are logged into.

Advertisers creating their own data will be crucial for both brands and media owners to compete with. The accuracy of information will become a top priority, and scale will be achieved through partnerships between other brands or between brands and media owners and advertising agencies. Unfortunately, this will require robust internal privacy arrangements and investments in technologies that manage user identities.

Only larger brands will afford these types of moves and implement new in-house identity solutions. Companies that find such moves unprofitable will hand the management of the increasingly complex media planning and buying process, requiring more expertise, to media agencies.