Identity Should Be A Commodity

The Sell Sider” is a column written by the sell side of the digital media community.

Today's column is written by Chip Schenck, senior vice president of data and programmatic solutions at Meredith Corp.

Identity is the foundation of addressable marketing, and yet it’s being treated as a precious resource. This is because digital identity information is artificially scarce, controlled by just a handful of companies.

It’s held by platforms with permanently large, logged-in user bases, including Google, Facebook and Yahoo, which use deterministic methodologies to ascertain identity, and by identity graph ad tech companies such as Tapad and Drawbridge, which use probabilistic methodologies.

In both cases, it’s tightly held and the result is that marketers treat it as a prized asset – often to their campaigns’ detriment.

Because identity rests in the hands of only a few platforms, marketers are beholden to using those platforms’ data to enrich their view of users. With limited budgets, marketers tend to make media spending commitments that prioritize these platforms. These advertisers’ decisions are more about managing overall costs and campaign fluidity than about optimizing campaigns for actual ROI.

Imagine a typical campaign that spans Google, an exchange and premium publishers through direct buys. The way advertisers buy today requires them to rely on Google’s performance data then estimate performance on every other channel in the campaign with proxy measurements – a real headache. If identify were commoditized, either by using a common solution or by having the platform lend or license its identity to all participants within the campaign, the advertiser’s efforts could be placed on analyzing and optimizing, not on estimating.

Even more troubling, user data from walled gardens may not always be the strongest data available, third-party or not, to drive ROI. The industry is erroneously treating identity as synonymous with data or data enrichment. Identity is just one part of the equation, the “who” – basic, static and limited in value on its own. Identity does help marketers make apples-to-apples media decisions, answering questions like, “How much does it cost to reach this person on Safari desktop vs. on Android mobile?”

But by fixating on identity, marketers are forgoing the rest of data enrichment’s value – the how, what, where and, most important, why behind each consumer action.

Marketers must understand the context surrounding each moment to drive the best performance. For example, just knowing I’m reaching a 34-year-old woman doesn’t tell me very much; 34-year-old women can be vastly different in their life stages, habits and brand preferences. Data enrichment in its true form drives better outcomes for users and advertisers – more relevant media that takes into account what the publisher knows about the user, namely, where a user has been before this page, what the user habitually does in this particular situation and what the user in the market for.

This kind of data is much richer – and more directly tied to campaign success – than merely “who” the user is.

The status quo, in which walled gardens hoard their identity data, is bad for marketers, who get short-changed on data enrichment. Getting to a world where contextual and audience data is precious and identity is a commodity isn’t a pipe dream. There are two straightforward ways the industry can get there.

The first is having platforms and large publishers act as platforms, licensing out their identity data and data enrichment solutions to other publishers. This creates a new revenue stream and ultimately encourages competition by letting premium publishers be judged on an apples-to-apples basis against the walled gardens’ own inventory.

The second option is better: an open standard for identity. With an open standard, all publishers, large or small, can plug their unique data and insights about a user into an identity graph, bringing the full value of their data to bear on each impression. Of course, we would need to ensure any open standard complies with privacy requirements and consumer opt-in for identities, but this model would make every impression more relevant, driving better performance for marketers and better experiences for users.

Follow Meredith Corp. (@MeredithCorp) and AdExchanger (@adexchanger) on Twitter.

 

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