2 Major Issues We’re Ignoring When It Comes to Identity Resolution

Is ID Resolution on the Brink of Being the Next In-Vogue Digital Technology?

Is identity resolution on the brink of being the next in-vogue digital technology?

It’s beginning to seem that way. Once a niche topic, only on the radar of the savviest programmatic ad buyers, the broader industry has taken notice of a common denominator between industry heavyweights such as Google, Facebook and Amazon — the ability to accurately identify users at scale in real-time.

This awareness comes at a time of increased focus on and regulation of consumer data usage and privacy, and the combination of those forces has resulted in a plethora of think pieces exploring challenges and use cases.

But surprisingly, there seem to be two critical pieces of the conversation that have gone largely ignored and unaddressed.

First, in the quest to form the best individual-to-identifier connections, very little time has been spent answering the question, “Is there a better ID than the usual suspects?”

Second, with the AdTech space leading much of the exploration and development of identity resolution, the technology has been almost exclusively been deployed for the purposes of improving acquisition. But evidence suggests there could be a much larger opportunity when it’s applied to MarTech stacks to improve conversion, as well.

Let’s explore both of those subjects in greater detail:

1. There’s Been a Shocking Lack of Focus on Device Resolution

As we discuss it today, identity resolution consists of two main parts:

  • Choosing a persistent but privacy-safe ID to serve as your anchor
  • Then accurately associating that anchor to an individual and their devices

Until now, advertisers and technology companies have spent a majority of their time and effort focusing on optimizing the latter. But the lack of progress and innovation on the former (choosing an ID) is why we mostly have unreliable anchors today. And the truth is: without a good anchor, the rest falls apart.

Of late, cookies have been the most prevalent, but they are prone to attrition. MAIDs are accurate but limited to native apps. Every option seems to have a trade off.

Without that reliable anchor, brands can’t identify site visitors in a number of situations including when:

  • They aren’t logged in
  • There was no present identifier (1st-party cookie)
  • They are browsing in a cookie-challenged environment
  • Their cookies expire

Before companies can truly activate personalized marketing, they will need to define that anchor—and that means identifying the browsing device behind the browsing person. This is especially true in recent years, as the viability of third-party cookies is increasingly reduced by browser and regulatory restrictions.

The key here is investing in device resolution with a stable, compliant browser-level identifier that will be able to maintain the linkages you have for each individual. This provides the advantages of MAIDs, within a web environment, without the limitations of cookies.

Failing to do so means that every dollar invested in person-based identification will be spent multiple times over as cookies are lost. In fact, according to the Interactive Advertising Bureau (IAB), more than 40% of ad spend is wasted on inaccurate or incomplete targeting.

Device resolution can solve for that waste. It also gives brands the ability to fully realize the power of programs like view-through attribution and the stitching together of other identifiers like MAIDs, email addresses, CTV and more.

And, for other industries, the benefits can extend even further:

2. There Are Powerful Applications of Identity Resolution Outside AdTech

By necessity, advertising has always focused on customer acquisition, i.e. getting in front of relevant people while also maximizing reach. So, by nature, the AdTech space has spent the last 2 decades trying to solve identity through this specific lens.

But identity resolution has powerful applications outside of just the AdTech space, specifically when it comes to conversion—the driving nucleus of the MarTech industry. So why is it that while every authority in the advertising space has been discussing and honing their identification capabilities for years, MarTech falls woefully behind?

With the recent rise in popularity of tools like CDPs, it’s clear that marketers are beginning to realize that, in order to reach the level of personalization they crave, they need much richer customer data and more complete views of their customers.

They still haven’t been able to unlock that potential, however, because the limited scale at which they can connect their data to actual users is holding them back. Some MarTech tools on the market do claim to include “identity features/capabilities,” but most use a combination of cookie identification tech and AdTech-optimized 3rd party partners, resulting in poor persistence, accuracy and scale.

But true identity resolution has massive implications on the entire customer experience and how brands activate their customer data outside basic ad targeting. It can solve many of the problems that marketers have been facing for years in terms of user experience, attribution and personalized messaging.

Let’s look at abandonment email scale as just one use case, where deterministic identity resolution is used to bridge the gap between contacts in a retailer’s CRM and the visitors browsing on their website.

The performance benefits are staggering. When Clarks increased their identification rate to 32% of site traffic, they saw a 13x lift in cart abandonment reach, driving 5.5x more revenue from their email channel.

Acting as the bridge between robust consumer profiles and execution tools, identity’s impact can cascade across the marketing stack to enable cross-device personalization, scaled on-site data collection and more. Identity makes it possible to activate automation at scale, acting as a force multiplier on an excellent customer experience which allows it to drive increasing revenue impact.

The future of performance, not just in AdTech, but in MarTech and beyond, is identity resolution. And it’s time that MarTech providers and their customers realize it.

 

This article was originally published in MarTech Series. Feature image credit: MarTech Series. 

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AJ Nelson

AJ Nelson is the Head of Growth and Strategic Initiatives at BounceX and is responsible for working with the corporate strategy team to leverage BounceX’s current products and discover new products to bring to both existing and emerging markets. Over the last decade, AJ has worked with executive-level marketers representing Fortune 500 brands, as well as startups of all shapes and sizes. He received his BS in political science from the University of Ottawa.