First Party Identity Data & Privacy Data

There’s a bright future in personalization – and it’s not about identity

By Megan Saunders, Senior vice-president of global marketing and growth

December 21, 2022 | 8 min read

The deprecation of device-level identifiers is no reason to lose faith in the power of personalized marketing – especially considering how many avenues to personalization exist today, argues Emodo’s Megan Saunders.

Personalization

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For years, we’ve been hearing discussions throughout the digital industry that conflate identity and personalization. Perhaps that’s why digital marketers have leaned on ID-dependent approaches like audience targeting and retargeting.

Remember people-based marketing? In the mid-2010s, it was supposed to be the ultimate example of identity as personalization. People-based marketing was championed as the way forward to ease reliance on cookies and instead rely on persistent identifiers – logins, notably – to target consumers across devices. But repeating that idea doesn’t change the fact that identity and personalization are not the same thing.

It’s high time to do away with the false equivalence of personalization and identity and to turn attention away from identity altogether. This shift of focus is long overdue, but it’s crucial for marketers now, as the availability of identifiers has gone from a flood to a drought. As a result, on iOS, desperate marketers spend three times as much on a piece of inventory when it has an ID attached. Before Apple launched its AppTrackingTransparency (ATT) policy last year, ID-enabled inventory accounted for around 65-70% of iOS inventory. But within just a couple weeks after the ATT crackdown, the share of ID-enabled and ID-less inventory flipped. Today, it’s down to only 24%, according to data from Omnicom.

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In the last two years, the industry has spilled untold thousands of words trying to explain how we can replace traditional IDs with alternative IDs and first-party data. But these tactics won’t solve the problem of ID loss: they depend on the user explicitly opting into sharing information. And users just aren’t doing that in large numbers. Bill Michels, in an IABwebinar conducted while he was leading product for The Trade Desk, estimated UID 2.0, the most prominent alternative ID, will only ever garner around 20% scale. Omnicom says today we’re only at 7% – hardly enough to move the needle.

The industry has devoted a lot of attention to first-party data strategy – which is great for a business that has enough first-party data to effectively scale campaigns. Most do not. Since ATT went into effect, we’ve seen a whole wave of direct-to-consumer (DTC) brands – whose businesses had been sustainable because they were able to track consumers across sites and social platforms via third-party data – experiencing swift and strong negative effects on their marketing. Poshmark adjusted its revenue forecast downward just months into ATT’s existence and its market cap plummeted, for example; DTCs that had leaned heavily on social scrambled to re-allocate spend. This should be a warning sign for any brand that doesn’t have large, scalable volumes of first-party data to fall back on without IDs.

But really, the industry has been overstating the importance of identity in personalization. The new solution is not identity, but non-identity – personalization without requiring IDs. There are four steps involved in reaching that goal:

1. Predictive metrics that measure the creative, rather than the action

As it stands, many of the most common KPIs on which marketers depend on a double opt-in from the consumer – on the site or app where the ad is served and wherever their action was tracked. This is true for online conversion, offline conversion, brand lift, attribution and even reach. Unless you’re a retail media network, your business simply won’t have the opted-in cross-site and cross-platform data to consistently track consumers through the full cycle, from first ad exposure to purchase. Instead, begin by focusing on attention metrics, rather than the connections you make with the consumer later in the cycle. Eye-tracking is one exciting emerging method of measuring attention.

2. Smarter creative, using personalization powered by AI rather than by identity

The digital industry really needs to push for more innovation in creative. The industry has long rested on the assumption that the typical SSP is a ’dumb pipe,’ and the real intelligence lies on the DSP side. But, marketers need to turn that thinking around and to expect more from an SSP. For instance, SSPs can impact performance beyond IDs when they’re enabled by sophisticated AI to personalize creative in real-time.

3. Stop thinking of probabilistic as a dirty word

While data loss and privacy regulations have shone a bright spotlight on deterministic methods over the last couple of years, probabilistic methods have matured and are due for a revisit – in part because of advances in AI. But the word has a negative connotation in our industry from the days before AI was so accessible and powerful, and when IDs were reliably available at scale. Those days are over.

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4. Immersive creative personalization, powered by the consumer

Marketers today are putting in great effort to decide how to personalize creative for the consumer, but they need to let consumers decide for themselves, or self-personalize. And they can – consumers are giving marketers these insights from AR interactions. In 2021, 80.4 million people in the US used AR, according to eMarketer, which forecasts that number will shoot past 100 million by 2024. Worldwide, there are over a billion AR-enabled mobile devices in 2022. AR is scalable, affordable and available – and the insights it delivers about consumer behavior will only become deeper through wider adoption.

Marketers can’t lose faith in the power of personalization just because they’re losing opt-out IDs. There are plenty of readily available and powerful tools to personalize even without them. Let’s not stay hung up on the past, when the present is already providing the industry with the tools necessary to personalize in the future.

Megan Saunders is senior vice-president of global marketing and growth at Emodo.

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