What are the Best Practices for Using Alternative IDs?

By Kacey Perinelli – Admonsters

As the industry moves away from the use of third-party tracking cookies, there are several solutions taking shape to help target users while keeping their information secure. One of those solutions is alt IDs, which tend to befuddle even the most seasoned players.

Big changes are happening in the ad tech industry. The rollout of Google Privacy Sandbox has been contentious at best, what with the CMA’s various concerns, the Movement for an Open Web calling out the Sandbox for failing to serve as a third-party cookie replacement, and the IAB’s report citing the industry’s lack of readiness due to implementation challenges driven by limitations in achieving key advertising objectives.

Even without the raising of all these red flags, the advertising ecosystem must still find other ways to target consumers in a privacy-safe way. There will be no one solution, and to be successful at capturing users going forward, publishers will need to use a mix of solutions, including alternative IDs (alt IDs).

Adaptation to privacy regulations will be crucial to the industry’s success going forward. In the days of third-party cookies running amok, publishers could receive optimal functionality without actively participating in the back end. Now the dynamics are changing, presenting publishers with an infrastructure challenge.

The good news is that alt IDs replicate a seamless experience for all parties in the ecosystem and offer the industry one common language to rely on.

The problem? We are all using different alt IDs.

What Does it Mean to be Alt ID Agnostic?
As of the last time we counted, there are as many as 100 different alt ID solutions available, so how can a publisher choose which to use? Many aren’t choosing at all or are choosing them all by throwing their hat into every available bucket – this is what we mean by alt-ID agnostic.

“At lockr, we view this as publishers entering this new era and not knowing who to turn to,” shares Keith Petri, Founder and CEO of lockr. Investing in each different alt ID requires data, he says, and the demand side hasn’t picked a clear winner and likely won’t. “As a result of this, the next four quarters for integrations for publishers looks like a LUMAscape of ID solutions,” he says.

The biggest problem, according to Petri, is that the plethora of alt ID options leads to a paradox of choice, where people either become unable to make any choice at all, or they decide to invest in many alt IDs, which leads to bid stuffing and increases data leakage.

There are solutions to help mitigate this problem, such as lockr’s Alternative Identity Manager (AIM), a self-service identity solution that allows publishers to test identity solutions, Customer Data Platforms (CDPs), and clean rooms simultaneously.

With AIM you can test alt IDs in real time, toggling each one on or off to see the results each alt ID is getting for consent, registration, or number of IDs created. This can help publishers see how each alt ID is working.

Ray Kingman, CEO and founder of Semcasting says the most important thing right now in trying to solve the alt ID problem is not to recreate the cookie problem.

He notes that alt IDs don’t identify a person by any information that pinpoints who they are, they simply communicate that a user is unique, which protects user privacy. “You don’t want a universal ID that is specific to one user that is redistributed to third parties, that is what created the problem in the first place,” Kingman adds.

The goal, according to Kingman, should be to ensure we are being good stewards of our customers and the data that has been entrusted to us. Semcasting does this by being alt ID agnostic differently – its data and identity solutions are designed to be able to accept almost any ID.

“The issue with being alt ID agnostic is that it bifurcates the industry so the open internet is no longer open. Our solution to that was to be a meta ID, meaning it doesn’t matter what you throw at us.”

Being Alt ID Agnostic is Detrimental to Publishers
Publishers are being inundated with multiple alt ID choices and many are finding it hard to navigate which alt IDs are the best for their business. Conflicting feedback from advertisers coupled with the lack of available metrics about what is working makes it difficult to decide which IDs to prioritize.

Additionally, says Petri, “The prevalence of players claiming to be ‘identity agnostic’ has further complicated matters, leaving publishers without clear guidance on how to navigate the evolving landscape of digital advertising. As a result, publishers risk missing out on revenue opportunities and facing operational inefficiencies due to the lack of alignment with advertiser preferences and the inability to accurately measure advertising impact.”

There are too many hurdles preventing publishers from being able to dip their toes into the alt ID space rather than fully committing to a course of action. According to Petri, these include:

1. Initial integration requires full commitment: Publishers can’t test alt IDs incrementally; they must invest upfront in integration without the luxury of a lighter test integration.
   
2. Difficulty in measuring impact: Without the removal of third-party cookies and the ability to replicate bid requests with different alt IDs, assessing effectiveness is next to impossible.
   
3. Time constraints and competing priorities: Publishers struggle to evaluate and integrate alt IDs within limited timeframes, exacerbated by delays in cookie deprecation and competing priorities.
   
4. Risk of signaling inferiority: Adopting multiple alt IDs suggests that each serves unique needs, preventing the signaling of one as inferior, but complicating the integration process.

Forging a Path Forward in a Cookieless World
Looking to the future, solutions that prioritize first-party data will almost certainly win the day. Change is difficult for anyone, but it is important to remember ad tech thrives with change. The trap is in trying to make the new solutions behave the same as the old.

Keeping in mind the tendency to lean into new ways that replicate legacy programs, Petri shares, “Privacy Sandbox, despite facing skepticism, presents an opportunity to embrace a new, less defined approach, fostering a more user-focused internet while acknowledging its constraints and potential for innovation.”

The past included a sea of universal IDs that weren’t universal at all, but were created as exclusive spaces for the big players to use, Kingman says.

Going forward, he notes, “Instead of building these walled gardens that do nothing but bifurcate the industry into those who have and those who have not, we need to make the ID space fluid.

Keeping it fluid makes it unable to be abused in a lot of ways because as you’re tracking somebody the fear is that your IDs get redistributed in a manner that you don’t intend on but can’t control. It becomes open season for those with less stringent regulatory compliance requirements.”

We must build trust and relationships with users via transparency, says Petri, and focus on authenticated users because consent-based data is usable data. “Publishers should communicate clearly with readers about the benefits of authentication, fostering trust and enabling sustainable revenue models. By embracing strategic and creative approaches to authentication, publishers can navigate the evolving landscape successfully and unlock new growth opportunities,” he shares.

Using first-party data ensures you are reaching more users, adds Kingman. In terms of numbers, he notes third-party data may reach 30% of your subscribers, but first-party data reaches more like 80% thanks to the additional touchpoints it provides.

Leading the Charge: What are the Next Steps?
Petri notes publishers have a pivotal role to play in the effective implementation of alt IDs. In addition to building trust, they also need to collaborate with alt ID providers to communicate audience data to ensure continued efficiency in audience targeting.

“Publishers also have an opportunity to address the historical data leakage caused by third-party cookies. Implementing strategies such as utilizing Customer Data Platforms (CDPs) to curate audience-driven buys or leveraging industry-leading data clean rooms for direct matches with advertiser audiences can help mitigate these risks and foster stronger, more secure partnerships throughout the ecosystem,” Petri says.

On the buy side, Kingman says the industry should do what it does best – test. Rather than get stuck in a solution that doesn’t work to its full potential, testing can ensure you know what kind of results to expect. He predicts the solution will likely include using more than one ID.

View the original article in Admonsters.