Slide from Trade Desk presidentation (source: AdWeek)
A competitive war is underway among titans of the ad-tech industry — and at least one scrappy startup — over who will emerge in control as the era of third-party cookie matching is squelched by tough European and U.S.-based privacy regulation.
The goal is to create a universal identity infrastructure for the web to compete with the first-party data ecosystems build by Facebook, Google and Amazon. Each of those “platforms” have billions of user email addresses and the ability to track and analyze user activity across wide swaths of the web.
The battleground — who will control the “first-party domain” for the purpose of synchronizing user data for ad targeting. The goal is to present marketers — advertisers — with a quality source of user demographics competitive with the terabytes of first-party data and email addresses stored by the Facebook, Google and Amazon platforms.
“Google and Facebook have an insatiable need for data because the data they use to then sell advertising,” Toni Bush, a top lobbyist for News Corp., said during a Capitol Hill panel discussion organized June 3 by the News Media Alliance, the newspaper lobbying organization seeking an antitrust exemption to collectively bargain with the platforms. “We’re always at a disadvantage because of the amount of data they collect,” she said.
If one of the four options gets to scale, the programmatic ad industry would become dependent on having access to a first-party domain system whose non-publisher, ad-tech industry stockholders or member owners could profit by being in a dominant control position of the web’s emerging identity infrastructure.
NO PUBLISHER-LEAD EQUIVALENT?
So far, there is no equivalent effort led by publishers, and no effort within the ad-tech industry to move away from targeting individuals in the direction of a contextual advertising approach that would benefit publishers. However, the Local Media Consortium is working with ITEGA, which is a public-benefit, 501(c)3 nonprofit corporation with no owners.
“The ad tech ecosystem is a tangled mess of identity data,” Albert Wang, a product marketing manager at SpotX wrote in a Feb. 14 blog post. “The struggle to accurately track users while respecting privacy has been the white whale of the industry for years.”
A goal of the ad-tech competitors is to eliminate the load-time delays resulting from dozens of unrelated, third-party “cookie syncs” when a user goes to a page with ad views on it, to eliminate the matching “sync chain”.
Without a widely adopted universal solution in place, industry players continue to drop their own unique cookies on users to enhance ad targeting and scale business, says Wang. “As the identity webs of users become increasingly entangled, more and more of the ecosystem has come around to the idea of adopting a universal ID.”
A fifth option is based on the assumption that GDPR and CCPA regulations will gradually make it impossible to obtain necessary user consent to drop “third-party” cookies on browser — at the same time browsers like Safari and Firefox block most such implementations.
“Without third-party cookies to connect data and audience-based buying, targeting becomes challenging and will strictly move to contextual-based buying without a historical consumer view,” suggests Manny Puentes, founder/CEO of Rebel Ai, a Louiseville, Colo., startup that is marketing the idea of a user taxonomy. ” Instead of approaching the problem from a universal cookie angle, an independent trade group like the IAB should step in and create a standardized consumer taxonomy that will allow for identity- and interest-based targeting while still maintaining user privacy.”
The four ad-tech initiatives seeking to control identity matching are:
- LiveRamp’s IdentityLink for real-time bidding, what it calls a “people-based identifier.” Index Exchange is also participating in “Open Ad-ID”, which depends up on a cookie issued in a domain controlled by LiveRamp, a subsidiary of Axciom — the largest U.S. aggregator of consumer purchasing and demographic data. Says LiveRamp: “We are proud to be the first and only identity resolution provider to make our people-based identity solution available on advertising inventory through the Advertising ID Consortium, and we’ve gone one step further by making it accessible to each and every buy-side platform.”
- The Trade Desk’s Unified Open ID. (adsrvr.org) Trade Desk says collaborators on its “unified ID” system are aiming to take on the Google, Facebook and Amazon “walled gardens.” Partners include Lotame, OpenX, Oracle, PubMatic, Rubicon, ShareThrough, Sonobi, SpotX, Throtle and YieldOne, as well as IndexExchange. Trade Desk is the biggest demand-side platform outside of Google. Also working with TradeDesk is TrustX, the nonprofit quality ad-exchanged that is controlled by major publishers through Digital Content Next.
- The IAB Tech Lab’s DigiTrust ID. (digitru.st) IAB says its Digitrust effort will be neutral and will not collect, store, share, use buy or sell “consumer behaviorial data or personal information and won’t buy or sell advertising. MediaMath is working with IAB-DigiTrust. The DigiTrust technology solution creates an anonymous user token, designed to be propagated by and between its members in lieu of billions of proprietary tokens and trackers on Web pages daily. IAB is a trade association whose assets are owned and controlled by its members.
- A two-year-old, for profit company has entered the fray in Europe with another centralized ID syncronization service. The London-based company, ID5, raised $1.23 million in March of 2018 from venture capitalists and said July 10 it has launched “ID5 Universal ID” which id called “the first centralized cookie-matching platform for the advertising industry.” In a white paper, it calls user identification the foundation of programmatic advertising. ID5 says its charts users IDs from more than 35 platforms including Adform, AppNexus, Avocet, Bidswitch, Dailymotion, Eyeota, Improve Digital, Platform161, Purch (now part of Future Publishing), Semasio, ShareThis, Smart, Tapad, and Weborama
The first three are part of the Advertising ID Consortium, Inc., a non-stock Delaware corporation whose members control its assets. It’s board of directors is all from ad-tech companies, including Index Exchange, LiveRamp and The Trade Desk. It says 30 platforms are participating and are using the domain http://adnxs.com. AppNexus was part of the consortium until it was purchased by AT&T, and then dropped out. DigiTrust integrates with the consortium.
This week, authoritative ad-tech consultant and observer Ratko Vidakovic, in his “AdProfs” newsletter summarized Ronan Shields’ reporting at AdWeek. Shields wrote that The Trade Desk is pushing its “Unified ID Solution”, quoting anonymous sources as saying if smaller-tier ad exchanges don’t use it, they will be cut out of any ad bidding “effectively relegating rival target offerings below its own.”
WHAT IS AT STAKE
One of the simplest visual explanations of why identity management is important for the current system of targetted “programmatic” advertising is this video prepared by ID5 and presented on its website. Just over one year after its launch, ID5 says it reaches one billion devices per month in Europe and provides matching capabilities with more than 35 ad tech platforms.
A longer video has IndexExchange VP of product Mike O’Sullivan walking through a white-board summary of an idea to created a “hashed email” as a universal ID to cross-site link user data. Sullivan discusses:
- The demise of the third-party cookie, following restrictions by Apple, Safari, et al.
- How identity can still work post-ITP, whilst still respecting the user.
- How IndexExchange’s solution, which uses a hashed version of the user’s email address, works with LiveRamp’s IndentityLink to create a first-party, anonymised user identifier.
- How SSOs, including publisher-specific freewalls, will be used to introduce addressability.