“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Paul Turner, chief commercial officer at Adbrain.
The ability to specifically identify audiences online has proven to be a lucrative and effective prize for advertisers, publishers and the tech layer alike. The ability to truly know an audience is the basis on which publishers can command a premium for their readers and serves as the foundation for Facebook’s successful advertising business.
Increasingly, the ability to accurately identify and understand a specific audience is the new currency among ad tech vendors, as this allows for innovative applications and, most notably, the ability to construct a single customer view across devices. You can now think of audiences as a relatively anonymized segment of people, whereas identity is the type of user-level understanding you come to expect from CRM systems or Facebook, to some degree.
So far, this quest to understand identity has been confined to the ad tech ecosystem, where the understanding of identity typically exists as a set of proprietary IDs that aren’t shared with marketers. This begs the question: Can an advertiser ever know its audience, or will the identity of audiences become an increasingly guarded asset controlled by technologists?
The Boiling Point
Advertisers are coming to the realization that a fragmented and anonymized view of their audiences across disparate media channels just isn’t cutting it. There’s an appetite for increasingly sophisticated advertising solutions, such as cross-device attribution, that are only made possible by unique identifiers, whether that be the proprietary IDs inside Facebook or universal device IDs embedded in smartphone and tablet devices, including Apple’s IDFA and Google’s Advertising ID.
For example, in the case of a media campaign, it’s likely that a vendor will use proprietary technology to optimize for performance. But once the campaign has concluded, the identity-related data is stripped, effectively removing the marketer’s ability to know more than has been shared.
It’s not just advertisers who are hungry to know more about their audiences. The wider ad tech ecosystem is also reacting to this opportunity. We’re seeing exchanges assigning proprietary user-level IDs, publishers creating their own unique audience segments and the demand side championing cross-device tactics that depend on identity-related data to work.
Up until now, identity has been a valuable asset so long as it remains a scarce and largely secretive affair. The logged-in user data controlled by the likes of Facebook, Google and Twitter reveals tension between keeping identity walled off and sharing enough information to appease both marketers and partners.
Treating identity-related data as a secret is prudent on two fronts. It’s a means of ensuring that consumer privacy is respected, and it is also an effective business strategy. Identity solutions are the not-so-secret sauce that has allowed Facebook’s mobile advertising business to take off. With the proliferation of cross-device applications, identity-centric technology will remain at the core of ad tech and mar tech innovations.
Managing identity-related data is not a winner-takes-all endeavor, but the stakes are high, and competing interests have led to tension between what is taken and shared.
Ultimately, this trend will force the market to answer the big question: Do I really know my audience? If not, who does?