Ad Tech Needs A Shared ID Solution ASAP

The result is that only 15% of marketers say they can consistently recognize audiences across channels, even as they spend almost $900 million this year on services and solutions to the problem, according to a recent Association of National Advertisers report.

Yes, identity is a problem that is much easier to admire than to solve. But the time to solve it is now.

What’s going on

There have been two major industrywide efforts to organize identity: DigiTrust and the Advertising ID Consortium (AIC). Last June, they decided to cooperate, but the combined effort is in a state of transition complicated by some recent M&A.

DigiTrust spun out of and then back into the IAB’s Tech Lab. By design, it’s a partial solution aimed at streamlining the cumbersome engine of pixel or cookie syncing by using a single, first-party token that can be decrypted by members. It estimates that 75% of third-party requests in browsers are just syncs, and still the average demand-side platform (DSP) recognizes only 60% of bid requests.

Last November, the alliance announced a few dozen members, with twice as many tech platforms as publishers, who joined for free. Reportedly, it focused on publishers after it found the platforms too distracted and difficult to coordinate.

The AIC is a more heroic effort led by AppNexus, LiveRamp and Index Exchange. It also offers a universal token that started on AppNexus’ domain, but after resistance to a single-player solution it was extended to include The Trade Desk’s Unified Open ID and an independent third option, now IAB/DigiTrust.

Including LiveRamp got the AIC closer to people-based but deeper into politics. A universal token does not link devices to other devices, nor does it link them to people. LiveRamp could provide cross-device links, which are needed to compete with the gardens. It did this through LiveRamp’s Open IdentityLink ID.

Using Open IdentityLink is optional, according to the consortium’s governance description, but if a publisher opts in it would have to give some of its own matches back to LiveRamp. The same is true for DSPs and supply-side platforms (SSPs) that opt in.

This give-to-get requirement complicates the math for who benefits more. All the players in the consortium, except the IAB, are for-profit. Many of them compete with one another. Giving LiveRamp such a prominent role drove some early participants away.

Now there’s the entrance of AT&T via its acquisition of AppNexus. AppNexus is the consortium’s dominant partner, has the widest reach and provides the infrastructure. While AT&T would certainly benefit from a universal ID to compete with Facebook and Google, its agenda is unknown.

It’s easy for an outsider to tell vested interests they should all just get along, but they should.

Regarding a universal ID, Jeff Green, CEO of The Trade Desk, said: “This is really just an issue of math. This isn’t an area where people create proprietary advantage.”

Advantage comes later in the chain – with the attributes and insights you can attach to the ID, what you know about the person, and how and when you talk to them. The ID itself, with all proper controls, is a basic commodity that could be more like a public service.

Getting to heck, yes

Of course, the AIC is not the only path forward. Its participants are free to join other groups if they’d like. There are other platforms with scaled IDs and other cross-device solutions.

As The Goodway Group’s Jay Friedman said recently, the marketing clouds have much to offer here. Oracle and Adobe, say, could join hands for a minute and settle on a common framework. Both have proprietary IDs, cross-device solutions and experience building complex opt-in data co-ops for marketers.

Or another large platform could take the lead, provide infrastructure, develop a compelling story and convince everyone it wasn’t out to profit (alone) on the deal. The major DSPs and SSPs have partnerships with publishers and other platforms already that give them a jump. The same is true of some of the ad holding companies.

Yet another potential solution is one you saw coming miles ago: blockchain. Decentralized by design, it would seem to run around all the who-owns-this rumpus. Its distributed infrastructure lessens reliance on any single platform to host, and consumers could have more explicit control over how (and if) their ID is used.

But a blockchain-based ID has problems. For one, it doesn’t exist yet, whereas the AIC is up and running. Participants would still have to agree to its value, scope, logistics, a governance framework and so on. And there is legitimate debate whether the blockchain is even useful in this context.

Multilateral agreements among powerful parties are always colorful, contentious and crude. If none of these efforts work out, business won’t stop, but it will get grimmer.

As Truman-era Secretary of State Dean Acheson said once, a successful negotiation “assumes parties more anxious to agree than to disagree.” We’re certainly getting more anxious.

Follow Martin Kihn (@martykihn) and AdExchanger (@adexchanger) on Twitter.

This post was syndicated from Ad Exchanger.