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Founded: 2007


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Getting beyond the identity crisis

September 28, 2021

Byline: Anudit Vikram

There is a big difference between a full pardon and a stay of execution.

The latter is what our digital advertising ecosystem received from Google on 24th June this year, when they announced a delay in cookie depreciation from Q4 '22 to the end of 2023. When it comes to moving digital marketing beyond its reliance on the third-party cookie, there is no denying its inevitability. So, I’m surprised to hear so many marketers expressing relief at being given this “grace period” instead of doubling down and maximizing the opportunity ahead of us.

If we are being true to ourselves, we will admit that, as an industry, we are not fully ready to manage our businesses in a world without the third-party cookie. But — and this is important — we did have options that were on the table, and there was the frantic rush to decide what was viable, tenable, scalable. What we have now is the opportunity to test these options more thoroughly while taking comfort in the fact that the systems we have used for years are still there to validate against (or default to if needed).

As a solution-agnostic platform, MediaMath has been rigorously exploring all the options that have proliferated in recent years, and I’m here to tell you that the innovation shows no sign of slowing down.

Third-party cookies were never that sweet to begin with

The cookie was invented to account for the statelessness of the HTTP transaction. Its purpose was to make sure that items put in online shopping carts didn’t just vanish, and that daily visits to the New York Times didn’t require a daily log-in. But like most innovations, it was eventually employed for less constructive purposes. So while the world is waking up to the fact that the consumer cares about privacy, it’s also facing the fact that the free Internet pretty much owes its existence to the third-party cookie.

But here’s the thing: in reality, the third-party cookie has had addressability issues for years. Roughly 25% of the web consists of Safari and Firefox traffic, which has already restricted third-party cookies. Marketers and infrastructure providers have generally neglected behavioral targeting in this space because third-party cookies were not effective. For targeting options such as contextual that did exist in these third-party cookie-restricted browsers, measurement was either completely absent or broken.

The solution to overcoming the absence of the third-party cookie was to target authenticated users. The ID solutions that do exist are very effective at onboarding data and reaching users in places in which they are logged-in or otherwise authenticated. However, today they are limited in their ability to find users at scale. Forecasts suggest that marketers should expect only about 30% of their current addressability when depending on authenticated users vs. third-party cookies. As a result, publisher CPMs are depressed in Safari and Firefox at roughly one-third of the cost of a Chrome impression. Solving for this requires new identity solutions and the re-piping of the ecosystem to deploy, ingest and enable these solutions.

The “Parrable” in our identity journey

None of us are in this alone. At MediaMath, we have chosen to remain agnostic to the solutions presented, enabling them all on our platform to give our customers the choice to use what works best for them. Our promise to the ecosystem is to bring you along for the journey and be transparent with what we find in our own discovery process.

In this context, I am excited to speak about the newest addition to the MediaMath identity stack, Parrable. Parrable started to build its ID solution several years ago to address the Safari third-party cookie challenges, and it’s delivering on that promise today. The system is designed to be an independent, privacy-first identity solution to level the playing field in the digital ecosystem as the walled gardens continue to fortify their positions. Its founder and CEO, Carla Holtze, anticipated consumer backlash to the data collected alongside personally identifiable information by the walled gardens, and intentionally chose to create a solution that did not use authentication data, employ browser fingerprinting or collect any user data.

Early market adoption of the Parrable solution was accelerated by Firefox restricting third-party cookies and then again by Chrome’s announcement on their deprecation. Prior to Parrable, there was no identity solution that identified unauthenticated users at scale in browsers that restricted third-party cookies. However, as Parrable launched with MediaMath and on several SSPs, it has demonstrated a 50x lift in addressability in third-party cookie-restricted browsers like Safari and Firefox. It is also showing a 5x lift in addressability in Chrome. What this means is that marketers using Parrable can now double the reach of their proven targeted advertising campaigns.

I am excited about the work the Parable and MediaMath teams are doing to scale out the solution. As we already covered, this extra year of planning and testing is actually the perfect time to capitalize on an opportunity today. Marketers can intelligently leverage their existing identity graph with a rigorous exploration of emerging and existing solutions. If brands do not work with any ID solution, authenticated or not, addressability will be reduced to below 10%. We encourage brands to explore the ID solutions that are now available.

The time for testing and learning is now

In MediaMath’s identity journey, we will continue to take an agnostic approach. This will include working with a broad array of established and emerging providers, learning what works and what doesn’t through optimized testing and embracing the fact that there is no one set standard to adopt at this point in time. Technology will always evolve in order to keep up with human ingenuity. But no matter what the life expectancy of the third-party cookie turns out to be, we are committed to dedicating this time to investment, discovery and driving new solutions today.

We are encouraging everyone in the ecosystem to do the same. An identity stack is the 401k of digital advertising. Brands can continue to invest the regular amount or use this Google-provided grace period to max out their contribution with a wealth of discovery. The future belongs to those who choose the latter.