(NB. There’s a glossary of terms at the bottom of this post for explanations of some of the technical terms marked with *).
The digital advertising industry is undergoing a huge shift. Identifiers like cookies* and mobile device IDs, once the nucleus of the ad tech ecosystem, are on the way out.
The big question is, what’s going to replace them?
It’s a question that’s still in flux as the industry grapples with the new post-cookie world (we have a go at answering it in full here), but part of the answer is certain to involve authenticated data.
What is authentic data?
Essentially, authenticated data is when a consumer has logged into a website or platform, explicitly verifying their identity (usually via an email address) and providing their consent so advertisers and publishers can build an idea of their actions within that ecosystem.
Authenticated data is very powerful. The identifier in question is usually based off of an email address, making the tracking very persistent compared to cookies – which go out of date very rapidly. This means the data connected to that identifier is very high quality, making it easier for advertisers to understand a user’s behavior and the effectiveness of their campaigns over a much longer period of time.
But there are downsides to authenticated data, too. Because it requires a user to log in and consent to their data being used, it’s not as easy to obtain as cookies. This means that scaling campaigns might be trickier. Also, it makes each website or platform where a user logs in its own mini walled garden – in other words, a user might log in to eBay and also log in to the Wall Street Journal, but unless you have a way of joining those two data sources together, you might waste money targeting the same user twice. Equally, unless a consumer logs in to the publisher site to see an ad, and then the brand site when they go on to buy the product, user-level attribution becomes a thing of the past.
How does authenticated data work in programmatic?
Let’s say you’re looking to advertise with a publisher like eBay. Rather than targeting via cookies, you’re now bidding on users who are logged into the site. For each user who logs in, eBay knows the user behavior associated with each email address. The platform then sends a hashed, encrypted ID based on that email address to a DSP specializing in authenticated IDs like UID2* or LiveRamp RampID*.
These DSPs collect hashed (ie anonymous) data from a whole range of platforms and publishers that require logins (eBay, Amazon, Wall Street Journal and so on) so you can build a picture of a user’s behavior across the web and work out the value of targeting them, but without actually getting any personally identifying information on that user.
In this way, authenticated data can replicate the effect of cookies, but with much higher levels of user privacy.
However, this example also shows the drawback of authenticated data. Not only does it require far greater levels of user consent, it also means the DSPs need to all have adoption from publishers across the web. While that’s going to be relatively easy for premium publishers, it’s going to be harder for smaller sites and more niche environments, potentially affecting the reach and scale of authenticated data.
What does the future look like?
There’s no doubt at all that authenticated data will form part of the post-cookies landscape. How big a part will depend on various factors such as publisher adoption of ID resolution platforms and the extent to which authenticated IDs are addressable in environments like Google.
Right now, all the signs look positive for authenticated data, so marketers need to be experimenting and testing things out with it right now so they’re fully prepped for the world beyond cookies.
We’ve run some test campaigns with LiveRamp, a leader in the authenticated data space, and the results have been very encouraging. In a campaign using authenticated data, we were able to deliver 67% higher reach, with a 9% reduction in CPM, compared to a cookies- only campaign. These lower CPMs are almost because fewer brands are buying using the authenticated DSPs, so savvy brands should act now when testing is low-risk and inexpensive, rather than when such strategies have become fully normalized.
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Glossary
UID: Unique Identification Number. In digital advertising, a random number is assigned to a user so you can gain insights, target campaigns and measure effectiveness, without knowing any personal details.
Liveramp Ramp ID – is a front-runner in this area, with over 200m user IDs available to be connected to other datasets. With ID resolution partners, you can combine the identity graph data with your own first-party data, essentially offering the best of both the first-party and third-party worlds.
Cookies – Little bits of data stored in your browser that allow consumers to be tracked around the web – to remember where they’ve been and what they’ve looked at. Soon to be a thing of the past.
DSP – Demand-side platform. A tech platform where advertisers can bid for and buy digital ad inventory.
Identity – The overarching term for the technologies and techniques advertisers use to differentiate between people on the internet so they can understand and target them more effectively.
Programmatic advertising- Programmatic advertising is the automated buying and selling of online advertising. Targeting tactics are used to segment audiences using data so that advertisers only pay for ads delivered to the right people at the right time, and depend less on the “spray and pray” method of digital advertising.
