Ad Targeting’s Center of Gravity Is Shifting

LiveRamp wants to go from industry leader to critical infrastructure. Its rivals see a chance to dethrone it

LiveRamp logo
If no alternative to the third-party cookie is found, it would leave a $32-billion void by 2025. LiveRamp

In the months since Google sounded the death knell for the third-party cookie, the worst-case scenario has grown ever more clear: If no alternative is found, it would leave a $32-billion void by 2025, a knockout blow to independent ad tech and a coup for Amazon, Facebook and Google.

To take on Big Tech’s data empires in a post-cookie world, LiveRamp, the biggest player in open web ad targeting, wants to stitch together ad tech’s fragmented infrastructure. Critics say it is amassing an empire of its own. But the cookie’s imminent demise isn’t just an opportunity for LiveRamp. Even as it tries to become ad tech’s critical infrastructure, its rivals see a chance to outflank it.

From industry leader to neutral infrastructure

LiveRamp sees this so-called “identity crisis” as an opportunity to become the industry’s neutral infrastructure with its IdentityLink and Authenticated Traffic Solution offerings, Travis Clinger, LiveRamp’s svp of addressability and ecosystem, told Adweek.

“Let’s build an infrastructure that enables people-based identity—that doesn’t rely on the third-party cookie but is also not a universal ID—to connect this ecosystem,” Clinger said. “We’ve also integrated with our competitors, with other people-based IDs out there.”

LiveRamp’s push, now that Google joins other browsers in disabling third-party cookies, comes as some warn the ad-targeting space is at risk of falling apart. “Right now, we have factions of the ecosystem breaking into silos to build solutions,” said Krystal Olivieri, svp of global data strategy and partnerships at GroupM. She said a fragmented network of “identity gardens” would ultimately hurt consumers and marketers’ ability to reach them.

LiveRamp’s message seems to be resonating with marketers. It reported its first profitable quarter as a stand-alone entity Monday, even as the novel coronavirus pandemic negatively impacted its peers such as Criteo and The Trade Desk.

LiveRamp earns 24% of its revenue in the global identity-resolution market, according to LP Information, a market research firm. Yet the firm’s outsize influence far exceeds its market share, especially among larger marketers, said Ana Milicevic and Maja Milicevic, sisters and principals at ad-tech consultancy Sparrow Advisers.

“Within certain segments, they’re often the only solution in serious consideration,” said Ana Milicevic, who added, “All roads eventually lead to LiveRamp.”

LiveRamp’s ‘walled garden’?

LiveRamp’s rivals are wary of its claim it just offers infrastructure and liken the company’s product suite to the “walled gardens” of Facebook or Google.

LiveRamp has tried to force the industry to adopt its Authenticated Traffic Solution, said Moira McKenna, vp of business development at Throtle, a LiveRamp competitor that boasts a more flexible pricing model. “I say ‘force’ because they have been very heavy-handed,” McKenna said.

McKenna argued LiveRamp’s offerings require it to sit between advertisers and publishers, giving the firm sway over any transaction on its rails. The fear is that LiveRamp will eventually begin charging a toll for its role as a middleman, she said.

The Milicevics see it differently. “They’re not forcing anyone like a gun to your head. But they are very aggressively rolling out things that are making it very hard to compete with them from a technology perspective,” said Ana Milicevic, who praised LiveRamp’s team and customer service. 

Moreover, the Milicevics see Throtle’s criticism of LiveRamp as fundamental to its value proposition. They argue that given LiveRamp’s dominance with big marketers, Throtle focused on mid-market advertisers that gripe about LiveRamp being less responsive to their concerns while still charging top dollar.

Ethan Wu is an intern on Adweek’s media team. He is also a rising senior studying economics at Cornell University.