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.

Clinger disputed that the company is building a walled garden and noted that it offers SSPs, DSPs and publishers free, perpetual access to its platform. “LiveRamp does not have an interest in maintaining heavy-handed control over the use of our platform” as long as data ethics are upheld, she said.

The competition

The Milicevics carve the ad-targeting industry into five segments. First is the LiveRamp product suite—the industry’s center of gravity. The rest of the industry competes with LiveRamp by catering to four niches: specific verticals, regions, devices and customer sizes.

For example, mobile-focused players like Kochava are stepping in to replace mobile advertising IDs, where LiveRamp is less dominant. LiveIntent, which recently linked products with Kochava, claims greater pricing flexibility and first-party data control than LiveRamp. Signal touts its superior speed. Clickagy founder and CEO Harry Maugans told Adweek his firm’s cookieless Privacy Clusters solution reaches all websites across different devices. By contrast, “LiveRamp’s approach only works when a visitor is authenticated on a website,” he said. “That’s a very small percent of the internet.”

LiveRamp’s limited foothold in Europe has made way for firms like Berlin-based Zeotap to take root under the EU’s strict privacy regime. Its European niche means cutthroat competition with the American ad-targeting titan is not necessary. As Zeotap founder and CPO Projjol Banerjea told Adweek previously, the future of ad targeting will include a few larger ID products, like Zeotap’s recently announced ID+, coexisting with LiveRamp.

One question is what will come of The Trade Desk’s recently announced Unified ID 2.0 with previous efforts to create collaborative IDs, like the IAB’s ill-fated DigiTrust, having fallen through.

LiveRamp’s competitors see advantages in banding together. InfoSum recently partnered with Throtle to challenge LiveRamp head-on, and the partnership is betting big on a decentralized ID solution as a contrast to LiveRamp.

Clinger claimed LiveRamp is, in fact, a decentralized solution, or as he put it, “an infrastructure that connects decentralized cores of identity together.”

InfoSum CEO Nicholas Halstead countered that this was a “complete lie.” Although LiveRamp does create a separate “ID space” for each publisher, he argued, these data sets are collated at the company—meaning its system is ultimately centralized.

“LiveRamp connects many identities in a decentralized manner,” Clinger said. “This can be done without any calls to LiveRamp, reinforcing the decentralized nature of our infrastructure.”

Meanwhile, LiveRamp CEO Scott Howe spoke with financial analysts after its latest earnings call of the company’s ambitions to be “interoperable” with alternative ID offerings like The Trade Desk’s Unified ID 2.0 or those offered by Big Tech players such as Amazon, Facebook or Google. “We work with everyone and anyone who’s ethical in this space,” he said.

But centralized or decentralized—there is no “clear winner,” said Ana Milicevic.

“We’re all on the losing side here because we’re missing communicating all of this to actual users who are not participating in this conversation,” she said.

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