Among the myriad issues driving change and innovation in the media and marketing ecosystem, no topic is as fraught — and as misunderstood – as identity-driven marketing. Heralded as the Holy Grail solution driving digital adoption for more than 25 years, the practice of tailoring messaging at the individual level has launched a thousand startups, and fueled the rise of platform giants like Facebook, Google, and Amazon. For marketers, such targeting has meant getting more relevant ads in front of the right people at the right time and in the right place, driving more sales at lower advertising costs.
But personalized marketing also has driven an increasingly vocal backlash against the now widespread practice of tracking individuals across websites, mobile apps, and even offline activities like grocery store purchases. Dozens of privacy-related policy proposals are now circulating across state, local and national legislative bodies, all of which compete with an already confusing regulatory patchwork in Europe, California, and beyond. Add to this technological responses — Apple and Google both have restricted identity markers like mobile IDs and cookies across their platforms — it’s no wonder that marketers are left wondering what’s next.
To understand identity-based marketing, we assembled three experts to explain its power and perils in more detail. Anneka Gupta is the President of LiveRamp, an industry-leading identity and data connectivity platform. Debora Tomlin is the former chief marketing officer of NortonLifeLock, a cybersecurity software firm. And Terence Kawaja is the founder and CEO of LUMA Partners, an investment banking firm focused on digital media and marketing.
What is “identity-based marketing” – and can it thrive outside of “walled gardens”?
Anneka Gupta: While walled gardens have historically excelled at targeting people vs. devices, most walled gardens operate within the confines of one touchpoint with a consumer. True omnichannel people-based marketing is only possible when you connect the mosaic of walled gardens together with the open internet to touch people wherever they are consuming content or spending time. We define people-based marketing as the ability to target and engage with an individual on a one-to-one basis, across channels. As the world evolves, brands, publishers, and technology companies must harness their data to optimize customer experiences.
Debora Tomlin: To me, it’s the combination of two things: 1) Leveraging data to create and identify segments that may want or need your product/service and 2) Creating an emotional connection with your product to something that matters to that audience. It’s more than performance marketing — more like connection marketing. Brand marketing is having a resurgence of importance right now.
Terence Kawaja: The walled gardens have demonstrated the efficacy of marketing in a closed-loop environment where identity is known and attribution is easily calculable. Identity-based marketing fo
r the open web requires a level of identity standardization and common workflow to allow for audience-based media buying in a privacy compliant manner. The challenge is how to collect and sync identities in a manner that protects consumer privacy and complies with recently enhanced privacy legislation (GDPR and CCPA). The de facto standard identifier, the cookie, is going away, and Apple is making identity capture a challenge going forward. These regulatory and technology changes will highlight the importance of using first-party identities. An infrastructure will be required that federates these identities between and among advertisers and publishers.
How does identity-based marketing compete – and cooperate – with these walled gardens? Will one standard emerge?
Kawaja: The walled gardens will be formidable competitors due to their scale and logged-in user base that gives them deterministic (known) identity. Ideally a new, post-cookie standard will be developed that can work across the open web AND the walled gardens to allow advertisers to manage and optimize their campaigns and consumers to enjoy a better experience. Currently, numerous companies and consortia are proposing identity standards. The IAB is working on an identity framework (Project REARC) though it is not certain which standard will prevail.
Gupta: In order for people-based marketing solutions to co-exist with walled gardens they must be radically neutral, omnichannel, privacy-first and people-based. Marketers need technology to find their users, deliver relevant and timely messages, and measure the effectiveness of the interaction across each of these experiences. The emerging technology solutions bring together identity providers (like LiveRamp), walled gardens, ad tech, publishers, and marketers to create solutions that operate effectively together.
If we don’t create the standards, big tech companies will do it for us. The time is now for us to develop the standards, engage with regulators, engage with walled gardens and build a more equitable future.
Tomlin: I would love to see brands be able to achieve their goals outside of the walled gardens, but in the near future, we will need to cooperate with them. There is just so much audience there that it makes sense to continue to leverage them but just not rely solely upon them. Marketers should be leveraging a good chunk of dollars to test new solutions right now. I think at some point a standard will emerge but not for a while as it’s still too fragmented.
How will marketers and media companies compete in a world without cookies?
Tomlin: Performance marketing has to be re-thought to include value, brand and connection marketing. Without cookies, we will rely on having authentications, requiring the exchange of value between a consumer and a brand. So, authenticated traffic solutions are an important tool. I also like the idea of partnering with like brands and leveraging their platforms and customer bases – the long held strategy of second-party marketing (where two first parties partner) works if synergistic brands can safely share consented data.
Gupta: The future of advertising is built on trust. For too long marketers and media companies have allowed Facebook, Google, and other tech companies to be the “third wheel” in their relationship with customers. If brands and media companies want to stay competitive, they have to create enough value for their customers to command a direct relationship where the customer gives the company direct permission to use data to personalize experiences, where the customer will return over and over again to read content and buy products, where the customer sees value in the relationship they have with the brand.
Kawaja: The loss of identifiers has highlighted the imperative for both marketers and publishers to focus on increasing their first-party data strategies, ideally to capture known user data such as email, phone numbers, etc. By doing so, they not only create a more stable ID for advertising, but also enable other marketing channels such as email, SMS, and even physical mail.
How is connected TV changing the advertising landscape?
Tomlin: It has definitely impacted it and marketers are testing heavily into this space as viewership is there, accelerated due to COVID. I don’t see traditional channels going away, but connected TV has a big place in the mix — it can be a much more targeted medium than broadcast. It reminds of me how we all tested into digital and then moved marketing dollars there but traditional channels (broadcast) never completely went away. It all depends what you are looking to do with your brand: build general awareness, generate leads, or drive demand.
Gupta: Traditional TV advertising has driven ROI for generations, but it’s been harder to measure and target versus its digital counterparts. Connected TVs, ad supported streaming services, and waves of new technology in the TV and video space change the game. Suddenly there are ways to spend money in TV and measure direct outcomes. Suddenly marketers can target particular people and households with specific messaging and still reach audiences at scale. On top of that, advanced TV doesn’t rely on cookies, making advanced TV buying strategies “future proof.”
Kawaja: Connected TV represents an expansion of the addressable media universe. Many television consumers are switching from legacy broadcast, cable and satellite-delivered TV (linear) to streaming distribution. This is having several impacts. First, it represents a shift in significant ad spend from the $70 billion US linear channel to ad-based video on demand. Second, this media is fully digitally addressable so it makes a large amount of inventory available for audience-based media buys that can now be coordinated with digital campaigns. Third, the direct nature of the publisher relationship with the consumer changes how the publisher markets to the consumer by disintermediating the legacy distribution companies. Finally, the shift will likely reduce ad load. Not all streaming TV consumption is ad-supported. Some viewing will take place in ad-free or ad-reduced subscription environments.
From an identity perspective, the growth of connected TV increases the need for household-based identity graphs. These are graphs that link device graphs for individuals with their household. This enables marketers to target individuals across their personal devices (phones, laptops) and their home TV, or to target members of a household on their individual devices. These graphs are also important for measurement, such as to determine if an ad viewed on a household TV drove an action offline.
What privacy barriers to people-based marketing do you anticipate will emerge next?
Kawaja: The most substantial barrier to people-based marketing is the federation and scaling of consumer consent. Privacy legislation requires that consumers consent to data sharing with every counterparty in the supply chain, placing arduous restrictions and disclosure requirements. Several firms are working on technologies that accomplish this in ways that don’t export the consumer data, thereby complying with privacy laws. If privacy advocates further inhibit any of this necessary coordination, it will kill off the internet’s most ubiquitous and vibrant monetization business model.
Gupta: We have to stop thinking of privacy as a barrier. People should be able to choose what data is collected about them and how that data is used. Companies have to show customers that they handle data safely and securely and that they are delivering real value to the customer in exchange for collecting data. Let’s design for consent and permissions first. Let’s design for measurability, quality, and interoperability. If we all commit to doing that, we will make it across the bumps and potholes in the road and build a trusted ecosystem that serves all constituents better.
Tomlin: Brands and companies are increasingly global, so we are navigating many privacy issues, resulting in already high complexity. I think more complexity is to come with potential regulation, in addition to companies expanding their markets globally. While it seems like consumers will give their data if they feel there is a fair exchange of value, if we see additional fallout in social media or a big data breach, that sentiment may change.