The Future of Advertising Hinges on Understanding Identity

Data needs context

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 The word identity comes from the Latin word ident, meaning repeatedly, or again and again. The concept of identity is critically important in advertising. How can we aspire to provide relevant, meaningful messaging if we don’t fully understand who we’re speaking to? We’ve hardly begun to solve the problem. How much of who you are is made up of your behavior, action and media consumption in the digital world versus the physical one? More than we think, but not enough. The way we measure identity now severely lacks in accuracy and robustness. The future of identity lies in digitizing the physical world, and the context in which we collect data about identity needs to become transparent.

Illustration: Dale Edwin Murray

In a world where objects are all interconnected, the advantage to the consumer is clear. Imagine that after continual usage, your fridge begins to understand what foods you consume and when. It then can make sure you have a full stock of the products you like. At the same time, these interconnected fridges are able to tell broader organizations what kind of local demand exists for certain produce, making sure the right deliveries are scheduled accordingly.

With access to this data, advertisers are now opened up to a new world of information, able to better define their target audiences and deliver more relevant messaging to the right people. Context is critical here. Data collected passively as a result of some other consumer activity may be OK to bridge the gap of identity, but it does not help satisfy the powerful consumer choice and privilege required to make use of such data. Will consumers understand that better identity data equals higher-quality messaging to them throughout their lives? Context will allow us to exchange value better and build deeper networks in physical world data collection.

To some, this paints a scary picture. Where is the boundary between what kinds of information can be collected publicly and what remains private? We need better systems to understand and provide access to individuals’ identity by service and by object.

And with multiple log-ins, accounts and bits and pieces of information stored across a myriad of websites, can we really have a universal identity?

There are clearly two leaders in this space: Facebook and Google. Facebook has the advantage of deliberately designing infrastructure around identity. Google, on the other hand, is morphing its legacy system around email addresses and anonymous user names into one that focuses around actual identity. And while consolidating identity is not as critical as interoperability, I expect there to be eventual consolidation as the value exchange grows significantly and as different behaviors become relatable under a common identity.

The ability to know and target audiences will come down to incorporating a nearly infinite pool of physical world data that can start a new path of innovation in advertising technology.

This shift’s impact on the way consumers and brands perceive the importance of advertising will forever be altered. How do we get the right message to the right user to maximize the value to the consumer? In doing so, we can minimize waste and theoretically deliver a much more accurate and compelling experience. A clear value exchange to the consumer will be important for ads to move from the creepy factor to the wow factor.

The Internet of Things phenomenon is in the early days of posing the question: Can we, or should we, bring the intelligence and efficiency of the Internet to everyday objects? Is there enough consumer value to justify constructing this identity based on an understanding of people’s physical lives?

I believe we have the first set of stepping stones to answer that question. Consider Facebook’s open graph protocols, which are primed to serve as railways, bringing large-scale and highly accurate identity to the everyday interactions consumers have while letting us determine what makes who you are.

It’ll be nice to finally really meet you.

Nikhil Sethi (@nsethi) is CEO and co-founder of Adaptly.