By Tal Chalozin, CTO and Co-Founder at Innovid

It’s 2022. Imagine you’re a small publisher and a consumer visits your website. While you’re thrilled to get traffic, without cookies, you know much less about them than you did before. How can you convince advertisers to buy your inventory if you can’t provide holistic insight on the audience viewing it? A similar problem presents itself for CTV advertisers today. How can they ensure they aren’t just reaching the same consumer with the same creative 10 times in a row?

Digital advertising is going through an identity crisis. Google isn’t doing the industry any favors either. After announcing the end of third-party cookies in Chrome, Google followed up earlier this month with the news that they will not build alternate identifiers to track individuals as they browse across the web, nor will they use them in their products. While it may sound like Google is pulling back the power of targeted advertising, it’s much more complicated than that.

As the subsequent industry and stock market reactions demonstrated, we are facing an emergency. Without a sense of identity, advertisers lose their ability to accurately map the reach, frequency and relevance of their messages, while publishers lose the ability to understand their audiences. Most importantly, they lose the ability to measure ROI.

With that in mind, here’s a closer look at the basics of identity and how to approach resolution.

How does online identity work?

Despite all the focus on the loss of third-party cookies, they’re just one small piece of how an online identity is mapped -- device IDs, IP addresses and logins are some of the other pieces to the puzzle. For future proof identity resolution, marketers must be able to match on all manner of identifiers, not just one. That’s where the identity graph comes in.

The identity graph is a matching table that links a user, device or household to all the devices they use, generating a single ID. Whether using deterministic data or probabilistic data, identity graphs can ensure the same user, device or household isn’t counted repeatedly. As with most things, each type of graph has its trade-offs. User-level can appear creepy to consumers, and, unfortunately, device-level presents the issue of device sharing. Google said they are moving from 1:1 targeting to cohorts, essentially aggregating multiple people with similar behaviors. But, you can only do cohorts if you have access to the firehose of information which means only companies who force logins like Google can do this.

When is identity used?

The better question is when isn’t identity used? When planning, identity is used to forecast ROI through audience reach and frequency, as well as look-alike modeling. Once live, it drives everything from audience targeting, retargeting, sequencing, creative messaging optimization and frequency capping, as well as consent management. Post-campaign, identity is critical to analyzing performance.

When looking for an identity partner, marketers should look for one that provides a unified pre, mid and post-campaign ID, or integrates with other solutions to create a full-funnel view. Some are opting for several partners. According to Lotame, over 60% of marketers and publishers believe the future of advertising relies on multiple, interoperable ID solutions working together. The key word being interoperable. If you have different partners in different channels, it may result in a lack of data alignment, as each ID solution will have its own footprint of known users, devices or households.

How do you balance privacy and performance?

Without a sense of identity, it’s tough for marketers to judge their performance. But at the same time, global legislation is mandating a respectful approach to privacy. Therefore, we must shift from tracking by default to privacy by default. Thus, a new player has entered the ad tech chat: consent management platforms. These companies are rising in popularity to help advertisers tackle privacy, and some are even combined with identity management offerings. Ideally, marketers should look for identity solutions that tackle both at once, rather than in silos.

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So now that we understand identity, what’s next?  Identity players like The Trade Desk believe that Google’s move is a good thing for the open web. It remains to be seen what Google will allow within its ecosystem, but in the meantime, we need to work together to find a path forward that works for everyone, across digital channels and mediums. That is the future of digital advertising. To learn even more about identity, you can check out our new cheat sheet! Download your copy of Decoding Digital Identity here.