A Map or a Matrix? Identity Management Is More Complex By the Day

A newly published white paper on how advertisers and brands can recognize unique customers across marketing platforms underscores just how tough this important job is for data-driven marketers.

As technologists and policymakers weigh in themselves on the data universe – often without understanding the full ramifications of what they do (or worse, knowing so but proceeding anyway) – data flows on the Internet and on mobile platforms are being dammed, diverted, denuded, and divided.

In my opinion, these developments are not decidedly good for advertising – which relies on such data to deliver relevance in messaging, as well as attribution and measurement. There is a troubling anti-competition mood in the air. It needs to be reckoned with.

Consider these recent developments:

  • Last week, the European Court of Justice rendered a decision that overturned “Privacy Shield” – the safe harbor program that upward of 5,000 companies rely upon to move data securely between the European Union and the United States. Perhaps we can blame U.S. government surveillance practices made known by Edward Snowden, but the impact will undermine hugely practical, beneficial, and benign uses of data – including for such laudable aims as identity management, and associated advertising and marketing uses.
  • Apple announced it will mandate an “opt-in” for mobile identification data used for advertising and marketing beginning with iOS 14. Apple may report this is about privacy, but it is also a business decision to keep Apple user data from other large digital companies. How can effective cross-app advertising survive (and be measured) when opt-in rates are tiny? What about the long-tail and diversity of content that such advertising finances?
  • Google’s announcement that it plans to cease third-party cookies – as Safari and Mozilla have already done – in two years’ time (six months and ticking) is another erosion on data monetization used for advertising. At least Google is making a full-on attempt to work with industry stakeholders (Privacy Sandbox) to replace cookies with something else yet to be formulated. All the same, ad tech is getting nervous.
  • California’s Attorney General – in promulgating regulation in conjunction with the enforcement of the California Consumer Privacy Act (in itself an upset of a uniform national market for data flows, and an undermining of interstate commerce) – came forth with a new obligation that is absent from the law, but asked for by privacy advocates: Companies will be required to honor a browser’s global default signals for data collection used for advertising, potentially interfering with a consumer’s own choice in the matter. It’s the Do Not Track debate all over again, with a decision by fiat.

These external realities for identity are only part of the complexity. Mind you, I haven’t even explored here the volume, variety, and velocity of data that make data collection, integration, analysis, and application by advertisers both vital and difficult to do. As consumers engage with brands on a seemingly ever-widening number of media channels and data platforms, there’s nothing simple about it. No wonder Scott Brinker’s Mar Tech artwork is becoming more and more an exercise in pointillism.

Searching for a Post-Cookie Blueprint

So it is in this flurry (or fury) of policy developments that the Winterberry Group issued its most recent paper, “Identity Outlook 2020: The Evolution of Identity in a Privacy-First, Post-Cookie World.”

Its authors take a more positive view of recent trends – reflecting perhaps a resolve that the private sector will seize the moment:

“We believe that regulation and cookie deprecation are a positive for the future health and next stage of growth for the advertising and marketing industry as they are appropriate catalysts for change in an increasingly privacy-aware consumer environment,” write authors Bruce Biegel, Charles Ping, and Michael Harrison, all of whom are with the Winterberry Group.

The researchers report five emerging identity management processes, each with its own regulatory risk. Brands may pursue any one or combination of these methodologies:

  • “A proprietary ID based on authenticated first-party data where the brand or media owner has established a unique ID for use on their owned properties and for matching with partners either directly or through privacy safe environments (e.g.: Facebook, Google, Amazon).
  • “A common ID based on a first-party data match to a PII- [personally identifiable information] based reference data set in order to enable scale across media providers while maintaining high levels of accuracy.
  • “A common ID based on a first-party data match to a third-party, PII-based reference data set in order to enable scale across media providers while maintaining high levels of accuracy; leverages a deterministic approach, with probabilistic matching to increase reach.
  • “A second-party data environment based on clean environments with anonymous ID linking to allow privacy safe data partnerships to be created.
  • “A household ID based on IP address and geographic match.”

The authors offer a chart that highlights some of the regulatory risks with each approach.

“As a result of the diversity of requirements across the three ecosystems (personalization, programmatic and ATV [advanced television]) the conclusion that Winterberry Group draws from the market is that multiple identity solutions will be required and continue to evolve in parallel. To achieve the goals of consumer engagement and customer acquisition marketers will seek to apply a blend of approaches based on the availability of privacy-compliant identifiers and the suitability of the approach for specific channels and touchpoints.”

A blend of approaches? Looks like I’ll need a navigator as well as the map. As one of the six key takeaways, the report authors write:

“Talent gaps, not tech gaps: One of the issues holding the market back is the lack of focus in the brand/agency model that is dedicated to understanding the variety of privacy-compliant identity options. We expect that the increased market complexity in identity will require Chief Data Officers to expand their roles and place themselves at the center of efforts to reduce the media silos that separate paid, earned and owned use cases. The development of talent that overlaps marketing/advertising strategy, data/data science and data privacy will be more critical in the post-cookie, privacy-regulated market than ever before.”

There’s much more in the research to explore than one blog post – so do your data prowess a favor and download the full report here.

And let’s keep the competition concerns open and continuing. There’s more at stake here than simply a broken customer identity or the receipt of an irrelevant ad.

Programmatic Advertising Is Running Amok

Having spent many years in the direct marketing business, I’m usually amused by examples of target marketing gone awry. My personal favorite happened when I was on Amazon purchasing a cell phone bracket for my bicycle.

Target stock imageHaving spent many years in the direct marketing business, I’m usually amused by examples of target marketing gone awry. My personal favorite happened when I was on Amazon purchasing a cell phone bracket for my bicycle. Amazon’s algorithm generated this suggestion:

Amazon wants Chuck to be a pirateNow I don’t know how frequently the pirate boots and the tri-corner hat are bought together with the cell phone mount, but I have to say that the combination was tempting for a few minutes.

The fact remains that direct marketing is not perfect. Many years ago, I made a donation to my alma mater, Rutgers College. The student on the phone asked if I wanted to designate my gift to a particular part of the University, and when I said, “No,” he said, “Well I’m in the Glee Club and we could sure use the money. Will you designate to the Glee Club?”

“Sure,” I said.

For decades now, I’ve been getting mail addressed, “Dear Glee Club Alumnus.” One day, I will attend a Glee Club reunion, certain that many people will remember my contribution to the tenor section.

While these harmless examples of imprecision are humorous, there’s nothing funny about the current exodus of major advertisers from the Google ad network and YouTube. Programmatic ad placement is a boon to target marketing, but like most direct marketing, it’s not perfect.

Major advertisers are in a tizzy over how to control where their ads appear … and the Google ad network is scrambling to get control over placement, as they should be. Advertisers need to protect their brands from appearing in an environment that can harm them.

Just a few examples: Ads for IHOP, Cinnamon Toast Crunch, “The Lego Batman Movie,” “Chips” and others have recently popped up among nude videos from everyday users or X-rated posts from porn-star influencers. Ad Age 3/6/17

A Nordstrom ad for Beyonce’s Ivy Park clothing line appeared on Breitbart next to this headline: NYTimes 3/26/17

Chuck's take on Nordstrom appearing on BreitbartHere’s a great attempt at an explanation for this juxtaposition:

“What we do is, we match ads and the content, but because we source the ads from everywhere, every once in a while somebody gets underneath the algorithm and they put in something that doesn’t match.  We’ve had to tighten our policies and actually increase our manual review time and so I think we’re going to be okay,” Schmidt told the FOX Business Network’s Maria Bartiromo. Fox News 3/23/17

Appearing next to hate speech is particularly problematic for brands:

Google-displayed ads for Macy’s and the genetics company 23andMe appeared on the website My Posting Career, which describes itself as a “white privilege zone,” next to a notice saying the site would offer a referral bonus for each member related to Adolf Hitler. Washington Post 3/24/17

The Wall Street Journal reported Coca-Cola, PepsiCo Inc., Wal-Mart Stores Inc. and Dish Network Corp. suspended spending on all Google advertising, except targeted search ads. Starbucks Corp. and General Motors Co. said they were pulling their ads from YouTube. FX Networks, part of 21st Century Fox Inc., said it was suspending all advertising spending on Google, including search ads and YouTube … Wal-Mart said: “The content with which we are being associated is appalling and completely against our company values.”
Ads for Coca-Cola, Starbucks, Toyota Motor Corp., Dish Network, Berkshire Hathaway Inc.’s Geico unit and Google’s own YouTube Red subscription service appeared on racist videos with the slur “n–” in the title. Wall Street Journal 3/24/17

And as difficult as it is for the ad networks to control, brands have their own challenges trying to protect themselves from undesirable placements. Different departments running different campaigns with different agencies cause ads to appear on corporate blacklisted sites. BMW of North America has encountered that issue because its marketing plan does not extend to dealerships. While the company does not buy ads on Breitbart, Phil DiIanni, a spokesman, noted that “dealerships are independent businesses and decide for themselves on their local advertising.” NYTimes 3/26/17

Clearly our technology’s ability to target has outstripped our ability to control it. And while it remains to be seen what controls will be put in place, it’s likely that, as always, target marketing won’t be perfect.