How the Ad Industry Tackled Identity in 2021

Re-architecting the ad-buying process around more privacy-forward measures for targeting and measurement now that cookies—the industry workhorse—are on the chopping block was never going to be smooth sailing. As all parties from the buy and sell-side, with their various motives and business models, coalesce around a few solutions to commit to test, complications are natural. This year there have been high and low points in the industry’s identity quest. But with each twist, we’re ending the year with no clear path forward, yet, but perhaps that’s ok. In any case, we’re all much better primed for uncertainty. Here are the peaks and valleys in the bid to replace to features of third-party cookies from the year that was. Experts Speculate Whether a Hefty Antitrust Fine Against Amazon in Italy Will Reach the US Google’s falter Extending the deadline for cookie decline in Chrome to 2023 back in March took some of the frenetic energy out of the industry’s scramble to test alternatives. But that collective sigh of relief didn't last long. Publishers have been honing their non-cookie strategies for some time, but concerns linger about how the eventual loss of cookies will hit bottom lines. While most agree third-party cookies are flawed, it’s hard to kick the crack. Marketers are all at different stages with their data education. Momentum has been lost by some, who remain wedded to third-party cookies and slower to test alternatives. And in the background, all has been silent for some time on the most mature proposal from Privacy Sandbox, federated learning of cohorts, an alternative to individual-user targeting replaced by grouping peoples’ online identity. Hurdles in Europe stalled testing, and little progress has been publicly made. Here’s the latest from the Chrome team on its updated timelines for testing proposals. But antitrust fears are real, and in January the U.K. competition and markets authority agreed with Google to oversee the process so that Google doesn’t wind up creating a more dominant position for itself. Next year: Google’s unfair advantage will spur concerns for publishers and more legislative heat. Divestiture of parts of its ad-tech stack could be on the cards (but due to antitrust cases in how it manages ad auctions). IDs and egos After the deadline extension announcement, publishers drew lines against which identifiers they stood by, spurring The New York Times to declare Unified ID 2.0 wasn’t in its wheelhouse, and the Guardian to shun FLoCs. In general, the deadline extension has given publishers more breathing room to figure out their own tools and products rather than rely on ad-tech vendors. The big identity-shaped question mark in 2022, ideally, will thrust more brands to work closer with publisher partners to make the most of both parties’ real, quality data. With over a hundred different audience identifiers out there, brands will need a patchwork approach. Non-subscription publishers without reams of logged-in audiences, or who want to keep selling ads on the open exchange, will need to be interoperable with a few key ones in order to get any kind of decent audience scale to interest marketers. “For the sake of consumer privacy, there shouldn’t be global public identifiers, and the web browser shouldn’t have an obfuscated tracking mechanism either,” said Vlad Stesin, co-founder and chief product officer of data solutions platform Optable. The firm operates secure data cleanroom technology, so it’s natural it views the future to aim for is decentralization, where no identity company or browser prevents publishers from monetizing their content. And from the conversations I’ve been having, more publishers see the appeal in data-bunker-like solutions. Next year: More testing of identity solutions with data cleanroom technology taking up a bigger role. Apple bites Facebook The disappearance of Apple’s mobile identifiers, IDFAs, when Apple updated its privacy policy in April to introduce Apple’s App Tracking Transparency (ATT) framework, has stung both brands and platforms. Facebook’s repeated swipes at Apple for thwarting the livelihoods of small businesses were ultimately in vain. Marketers have been spurred to reassess the ROI on their iOS audiences, now the true value of conversion on Facebook and others is being tested. In September, Facebook estimated that, in aggregate, it had been underreporting iOS web conversions by approximately 15%. As a result, Facebook and Snap reported lower-than-expected ad revenues in their earnings, since measuring ROI and conversions has gotten less accurate. Facebook missed analyst projections of $29.57 billion, netting $29.01 billion for the third quarter of 2021, so that might seem a little trifling. Either way, Facebook is making adjustments to how it measures and reports campaigns, which if we’re honest, have always been a little shaky, if not allegedly illicit. Next year: More marketers reduce their reliance on Facebook as new (and old) measuring methods, including marketing mix modeling, take the stage.

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Cookie Quest: How the Ad Industry Tackled Identity in 2021

At least we're all used to a base-line level of uncertainty

Lucinda Southern

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Lucinda Southern