“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 Tom Manvydas, vice president of advertising strategy and solutions at Experian Marketing Services.
The proliferation of connected electronics has spurred new interest in device-recognition technologies even though they have been in use since the 1990s.
As we enter the “Internet of Things” era, device recognition will significantly impact the ad tech ecosystem. Many network advertising technologies are becoming obsolete as cookie blocking grows and the Internet becomes more mobile and device-centric.
Device recognition will be yet another technology challenge for marketers but has the potential to overcome many key tracking, measurement and privacy issues with which data-driven marketers have struggled. By leveraging device recognition technologies, marketers can protect their investments in Web 2.0 ad tech, like multitouch attribution, and improve their overall digital marketing programs.
Device Recognition Vs. Cookies
Device recognition attempts to assign uniqueness to connected devices. By focusing on the device, you are able to “bridge” between browsers and apps, desktop to mobile and across OS platforms like iOS and Android. Device-recognition IDs function like desktop cookies for devices but with four important differences:
1. Coverage: Device-recognition methods are largely immune from cookie limitations. About half of mobile engagements on the Web do not involve cookies, while third-party blocking impacts up to 40% of desktop engagements.
2. Persistency: Device-recognition IDs can be more persistent and less fragmented than most desktop cookies. For example, Apple’s UDID or Android ID are permanent, and network node IDs like MAC addresses are near-permanent. Proxy IDs such as IDFA are persistent but can be updated by the device owner or ID provider.
3. Uniqueness: Devices are unique and cookies are fragmented. The digital media industry incurs substantial overhead cost and loss of efficiency when dealing with fragmented profiles and obsolete data caused by cookie churn. However, device-recognition methods are limited in their ability to recognize multiple profiles on shared devices.
4. Universality: Device-recognition technologies are universal and generally work across devices and networks. However, interoperability issues across device operating systems, such as iOS and Android, can limit the universal concept.
There are many types of device-recognition technologies but two basic approaches to device recognition: deterministic and probabilistic, each with their pros and cons.
Deterministic Approach: Accurate And Persistent But Complicated
Deterministic device recognition primarily uses the collection of various IDs. While the mobile developer is familiar with the variety of IDs, it’s important that marketers become better-versed in this area. Examples include hardware IDs (including serial numbers), software-based device IDs (such as Apple’s UDID or the Android ID), digital data packet postal codes or proxy IDs (such as MAC addresses for WiFi or Bluetooth, IDFA for both iOS and Android and open-source IDs).
Deterministic methods improve the accuracy of tracking, targeting and measurement over current cookie-based methods. They can improve the ability to more persistently manage consumer opt-outs. But the proliferation of device types limits the universality of deterministic device recognition. Without uniform standards across platforms, marketers need to account for multiple ID types. Also, deterministic device-recognition methods are not well developed for desktop marketing applications. The lack of interoperability across deterministic device IDs makes execution too complicated.
Deterministic device IDs were meant for well-intentioned uses, such as tracking the carrier billing for a device. However, they present privacy and data rights challenges, leading to blocking or limited access by companies that control IDs.
Probabilistic Device Recognition: A ‘Goldilocks’ Solution
Probabilistic device recognition may be the ideal solution for a connected world that does not rely on cookies nor wants to use overly intrusive deterministic device recognition. Probabilistic device recognition is not a replacement for deterministic IDs. Instead, it complements their function and provides coverage when they are not available.
The probabilistic approach is based on a statistical probability of uniqueness for any single device profile. This approach creates a unique profile based on a large number of common parameters, such as screen resolution, device type and operating system. This process can uniquely identify a device profile with 60% to 90% accuracy, compared to 20% to 85% accuracy for cookie-based identification methods.
Probabilistic IDs are more persistent than cookies with better coverage, but less persistent than deterministic device IDs. The natural evolution of the device takes place over time and prevents persistent identification.
Probabilistic device recognition can be universal and is not impacted by interoperability issues across platforms — the technology used to generate a probabilistic ID on one network can be the same technology on another network. Unlike some deterministic device recognition approaches, there is no device fingerprinting. Probabilistic device recognition accurately identifies profiles in aggregate, rather than a single device.
That’s the inherent beauty of probabilistic device recognition: It can generate more accurate targeting results than cookie-based methods without explicitly identifying single devices. This is more than good enough for most marketers and significantly better than what’s available today.
Another benefit is the absence of any residue on the device — no cookie files, flash files or hidden markers. Probabilistic methods can work on devices that block third-party cookies or connect to the Web without using any cookies.
For example, you might have a hard-to-reach but valuable audience segment. Probabilistic device recognition could effectively increase your reach on this segment by 40% to 50% and increase the overall targeting accuracy by two times. Let’s say the actual population for this segment is 100,000 members. The typical cookie-based approach might reach 28,000 members but the typical probabilistic device-recognition approach could reach 65,000 members.
A Decline In Hardware Entropy
If you take a close look at the emitted data from today’s devices, it is not easy to analyze it for device identification. That’s because the data footprint of one device looks a lot like another. Device recognition augmentation methods can address this, such as device usage profiles, geo location clustering, cross-device/screen analytics or ID linkage for first-party data owners.
In the short term, device-recognition technologies, particularly probabilistic methods, can greatly improve today’s digital marketing programs. Marketers should become fluent in their use cases and benefits.
If 2013 was the year of mobile, I think we’ll see a surge in marketing applications based on device-recognition technologies in 2014.