Metaverse and NFTs aside, digital identity was one of the hottest topics of 2021 (think cookies, IDFA, FLoC, data clean rooms, and so on), and its importance is only going to grow in 2022 and beyond, as many identity initiatives move past the testing phase and different strategies start to take shape.
So, why is it important? The concept of identity is ubiquitous in advertising, touching virtually every aspect of the value chain from targeting through to post-campaign attribution. While some may associate digital identity with personally identifiable information and tracking of individual users across their digital journeys, it’s actually very rare and typically restricted by privacy regulations and/or digital platform policies.
In fact, it may be helpful to think of the role of digital identity in advertising as allowing advertisers to tell one user apart from another in a privacy-compliant way. In most countries, privacy compliance means doing this without touching any private user information, and there are multiple ways to achieve that – for example, by utilising anonymised unique device or user IDs, user location, or by grouping users by cohorts based on their traits, interests or behaviours.
What’s changing and why does it matter?
When it comes to identity, adland seems to be going through a perfect storm. We’re seeing a general trend towards stricter privacy and identity protection with multiple forces at play, such as legislative changes, an increasingly privacy-conscious consumer base, major platforms changing their privacy policies, evolving media owner strategies and the emergence of new identity solutions.
Taking all these forces together, it is clear we’re heading towards a very different regime for digital identity, where it is no longer seen as a commodity and is highly safeguarded and valued by all parties.
From consumers’ perspective, identification will have to be ‘earned’ through meaningful value exchange and trusted relationships – for example, watching a great new TV drama on a free streaming service in exchange for my registration data and relevant targeted ads. Similarly, in advertising, identification will have to be ‘earned’ through close partnerships between publishers and advertising partners, while ensuring data privacy and identity are protected.
The problem is that no one is quite sure what the future of digital identity will look like. As a result, the whole industry is going through a significant period of change involving experimentation and iterative learning.
What do these changes mean for addressable TV?
It’s important to note that TV is inherently different from other media. Loved by both audiences and advertisers, it’s increasingly consumed on connected devices, allowing for more relevant ‘addressable’ advertising experiences, bringing the best of TV and digital together.
Some may argue that the changes in digital identity aren’t impacting the addressable TV space – for example, cookies are not used as identifiers on connected TVs. Hence, their deprecation shouldn’t have any material impact. There is some truth in this, however it ignores the broader context of all the compounding changes in digital identity mentioned above. While changes in cookie policies may not directly impact addressable TV advertising, we can confidently say we’re moving towards stricter privacy and identity protection across the whole advertising marketplace, including addressable TV.
What could the future of identity in addressable TV look like?
The outlook below, which continues to evolve, is based on Finecast’s collective experience in TV, discussions with clients (of which there are a lot, globally), and partnerships with major broadcasters and ad tech vendors.
Further experimentation and fragmentation in identity strategies
We’re already seeing growing fragmentation in broadcaster strategies, as each one seems to be taking a slightly different path regarding the partners they work with (eg data-matching or data clean room vendors) and the depth and types of data that they are happy to share with advertisers, agencies and technology vendors. For example, some are taking a more cautious approach and limiting access to IP addresses or device IDs, which creates challenges for anyone reliant on them for identity.
There are also a range of vendors and intermediaries developing and experimenting with different identity solutions and frameworks, and it is very likely to be a few years before we end up with a handful of large-scale competing solutions. So, when we look across the whole TV marketplace, it may seem that things may get a bit more complicated before they get easier.
There is strong a sense in the market that many industry participants are racing to ‘stock up’ on first-party data. Many brands are actively testing techniques to get closer to their customers and, naturally, their data. And some major broadcasters and publishers have already become the primary source for registered and consented user information that can be used for targeting in a privacy-compliant way.
While it won’t work for everyone, we can be fairly certain that first-party data will be core to the future of identity in addressable TV. However, it’s only one piece of the puzzle. What’s still missing is the connective tissue: solutions, mechanisms or frameworks that allow us to leverage first-party data at scale in a secure and privacy-compliant way. Addressable TV advertisers who are just starting to work with first-party data often report common challenges relating to low data match rates, limited accuracy and small scale.
At Finecast, we believe that trusted, value-driven partnerships will be key to combatting fragmentation and embracing first-party data, as advertisers seek advice and help in ‘uncomplicating’ the increasingly complex web of identity in addressable TV.
Advertisers will be prioritising partners that can deliver:
- Scale across the whole addressable TV marketplace in a secure and privacy-compliant way
- Total TV planning and implementation in the context of a total media plan
- Interoperability and flexibility to work with various identity solutions and frameworks
- Unique data assets and data enrichment capabilities
- A clear value advantage
Digital identity will continue to be a hot topic on the advertising industry’s newsfeeds, and addressable TV won’t be isolated from it.
Donatas Nemura is senior director of product solutions at Finecast.