Consumer data and identity resolution are essential to marketing efforts. Having access to audience data helps marketers more accurately serve messages to in-market consumers and tailor their campaign messaging for maximum effectiveness. It also helps them measure outcomes, identifying which channels or campaigns moved the needle with consumers. 

And the implications of identity resolution go beyond just measurement. Ideally, a more targeted campaign leads to more personalized recommendations, simplifying the customer journey and improving the customer experience.  

The ways that marketers collect and access that data are changing. The 2024 deprecation of third-party cookies and increasing statewide privacy laws are limiting their access to data. That is creating a need for marketers to explore privacy-preserving ad measurement tactics and privacy-safe identity solutions, like universal IDs, seller-defined audiences, or data clean rooms. 

But not every digital channel is the same when it comes to data and measurement. Marketers must understand the identifiers and measurement methods used across each channel and find a way to stitch them together for a more robust picture of their audience. 

This guide explores the facets of identity resolution; how it impacts marketing performance; and what measurement looks like across digital channels, including display, out-of-home (OOH), retail media, and podcasting. It also outlines the emerging identity solutions that marketers can begin experimenting with to prepare for cookies going away. 

types of identity solutions for marketers
A chart showing the types of identity solutions marketing professionals worldwide consider the most viable solution with the deprecation of third-party cookies, August 2023. (Subscribers only)

What identity resolution is and how marketers measure advertising

Customer data enables advertisers to target their campaigns at the right audience and measure how those campaigns performed. 

Currently, there’s no shortage of customer data available to marketers, which can be collected and stored by a customer data platform to form a single customer profile. Available data sources include: 

  • Demographic (gender, age, marital status, profession, location, income)
  • Behavioral (website and app visits, email opens, social engagement, foot traffic)
  • Attitudinal (survey data, Net Promoter Score, social listening data, customer service data)
  • Transactional (transaction frequency, average spend per transaction, spend across demographics or geographies)
  • Digital identifiers like an IP address or a device ID

Third-party cookies store a great deal of this data, which marketers can use to target consumers through behavioral targeting. But as the industry prepares for third-party signal loss in 2024, marketers need to experiment with other types of data collection and targeting approaches.

This requires marketers to invest in identity resolution, which is the process of connecting disparate sources of consumer data together to create a single identifier for an individual. 

The effect of privacy legislation on identity resolution 

In 2022, the Interactive Advertising Bureau (IAB) sounded the alarm on looming privacy regulations, warning that the ad industry wasn’t prepared to deal with its impact.

As individual state laws are passed, they change how businesses can collect and use consumer data, which may make it more difficult for advertisers to use that data for targeting purposes. 

There were five state privacy laws enacted in 2023: 

  • The California Privacy Rights Act, effective January 1, expands upon certain aspects of the California Consumer Privacy Act, which gives consumers more control over the personal information businesses collect. 
  • The Virginia Consumer Data Protection Act, effective January 1, gives consumers the right to access their personal data and request that it be deleted by businesses. It also requires companies to conduct data protection assessments relating to personal data for targeted advertising, processing, and selling purposes. 
  • The Colorado Privacy Act, effective July 1, provides state residents with the right to opt out of targeted advertising, the sale of their personal data, and certain types of profiling. It also requires that businesses obtain consent to collect personal data.
  • The Connecticut Data Privacy Act, effective July 1, gives residents certain rights over their personal data and establishes responsibilities and privacy protection standards for data controllers.
  • The Utah Consumer Privacy Act, effective December 31, gives consumers the right to access, delete, or obtain a copy of the personal data a company may have on them, as well as opt out of the sale of personal data for targeted advertising purposes. 

Five more will go into effect in 2024, including those in Washington, Oregon, Texas, Florida, and Montana.

A federal privacy law could be on the horizon, but until that happens, states are left to do the heavy lifting themselves, creating a patchwork of individual state laws that may be confusing to both consumers and advertisers alike.

How identity resolution and measurement is changing across channels 

Each digital channel is facing its own set of challenges when it comes to identity resolution and management. Apple’s AppTrackingTransparency framework shook up digital display advertising for a few years, and now the deprecation of third-party cookies has advertisers scrambling again. A lack of standardization could stunt the growth of retail media, while digital out-of-home (DOOH) needs a technical boost to be compatible with other channels. And for podcast measurement to move forward, it must move beyond legacy technologies. 

Digital display is caught between the past and the future

Lack of measurement standards threatens retail media growth

While retail media is one of the fastest-growing ad channels we track, measurement challenges could jeopardize its future.

  • The IAB and Media Rating Council released a set of guidelines in September 2023 that aim to help the industry achieve comprehensive standardization, enabling the retail media channel to continue to grow. 
  • Agencies and ad tech vendors are also launching tools and solutions to help advertisers navigate the headache of executing and optimizing strategies across retail media platforms, per EMARKETER’s Ad Measurement Trends H2 2023 report. 
  • For example, in August 2023, global media agency UM launched Shoptimizer, a “first-of-its-kind” retail media budget allocation and optimization tool. This tool is part of IPG Mediabrands’ Unified Retail Media Solution, a dedicated business unit that helps brands manage their investment performance across all retail media networks.

DOOH measurement is catching up

Having solved for the exposure piece of OOH measurement, advertisers’ next big hurdle is making OOH metrics compatible with other digital channels, per EMARKETER’s Ad Measurement Trends H2 2023 report. 

  • Programmatic will account for 26.7% of US DOOH ad spending in 2024, according to EMARKETER’s December 2023 forecast. 
  • While technical standards have evolved to facilitate tracing alongside other digital media, there’s still no methodological standardization for omnichannel measurement. 

Podcast measurement is struggling to break free of legacy tech

Over two-thirds (66.9%) of the US population will listen to digital audio in 2024, including podcasts, per an EMARKETER August 2023 forecast. But between 2021 and 2025, digital audio ad spending will remain essentially flat at about 2% of total media spending, according to EMARKETER’s Ad Measurement Trends H2 2023 report.

forms of measuring digital campaign effectiveness
A chart showing which alternative forms of measuring digital campaign effectiveness that companies are currently using or considering adopting, according to marketing professionals worldwide, July 2023. (Subscribers only)

Deterministic versus probabilistic matching

Consumer data points like first and last name, address, email, date of birth, and phone number are considered deterministic, data that is known to be true and accurate because it is supplied directly or is personally identifiable. Probabilistic data includes information like a user’s device, IP address, or pageviews, which are compiled to draw conclusions about a user’s behavior. 

Platforms where users provide their address and phone number, like Facebook or Google applications, can deterministically match users easily and enable them to use a single ID to access their service across different devices. Because of this, deterministic matching is highly accurate.

Probabilistic matching is a less accurate way to stitch together a user’s identity, though it can use pieces of deterministic data. This type of matching uses algorithms to determine the probability that multiple data sets represent one individual. 

The emergence of post-cookie identity solutions 

While a single data source alone can help marketers better understand consumers, the true power lies in being able to stitch multiple sources together to create a more robust and complete picture. To do that data governance, marketers must have one or more identity solutions in place. 

There are a variety of solutions coming to the forefront to help marketers solve for identity, ranging from universal IDs that can help anonymize and group consumer data to technical solutions like data clean rooms, which allow advertisers and their partners to share first-party consumer data securely and in compliance with privacy standards.

Because many of these solutions are still in their early stages, marketers must leave room for trial and error, as well as recognize that no single solution will replace third-party cookies at the current moment. In addition, identity solutions can be quite costly. In the US alone, marketers spent $10.4 billion on identity solutions and services in 2023, according to February 2023 Winterberry Group data. These solutions also require the appropriate expertise and skills to apply them correctly. 

 A chart showing US identity solutions and services spending, in dollars, 2018 to 2023.

Still, marketers shouldn’t delay getting their identity resolution plan together. More privacy laws are on their way and the clock is ticking on cookies going away. The marketers who start figuring out their identity strategy now will be ahead of the game in a post-cookie world.  

Here are some of the latest identity solutions available to marketers and what to keep in mind while implementing them.

Cohort-based solutions

Cohort-based solutions use anonymized groups of consumers—grouped based on interests, affinities, online behaviors, personas, etc.—to create targeted ads and messaging. These solutions give marketers the ability to better target consumers without relying on third-party cookies while giving users the ability to control the types of data being shared with advertisers.

  • Google has been experimenting with cohort-based solutions for a few years. The company first tested its Federated Learning of Cohorts (FLoC) in 2021 as an alternative to third-party cookies. Then in early 2022, Google proposed its Topics API to replace it.
  • It seems unlikely that Topics will replace the granular insights that cookies provide. There are also concerns about whether the number of topics will be enough to truly provide relevant targeting. In addition, if users opt out of Topics, advertisers won’t gain any additional insights into the consumer journey.
  • Topics is relatively new, so kinks need to be worked out. FLoC raised privacy concerns, but Topics has been a move in the right direction, according to industry experts.

Universal IDs

Universal IDs are a privacy-compliant way for advertisers to keep track of consumer behavior across the internet. They use a unique and persistent data signal (like an email address or a phone number) to create an anonymous identifier, which can be encrypted and shared with advertisers, publishers, and ad tech platforms.

  • There’s a variety of universal ID solutions on the market, but a few solutions have come to the forefront, including: The Trade Desk’s Unified ID 2.0, ID5, Secure Web Addressability Network, LiveRamp’s RampID, and Lotame’s Panorama ID.
  • There’s virtually no data lost in the data-syncing process, unlike with cookies. The Trade Desk claims its universal IDs have a near 100% match rate, so the pairing between user interests and ads is highly accurate.
  • And since partners across the supply chain are working with the same set of data, universal IDs create a more efficient process.
  • Because consumers must opt in to universal IDs, it will be hard for the solution to reach the ubiquity that cookies had. It also requires publishers, ad tech platforms, and advertisers to agree on one solution, which could be difficult given the number of solutions that exist.

Seller-defined audiences

Introduced by the IAB in early 2022, seller-defined audiences (SDAs) is a framework that works with existing media-buying processes and standards to enable publishers to use their first-party data to create audience segments based on a predefined taxonomy.

  • Most publishers have just begun testing SDAs. The IAB is the biggest player in SDAs, but others are entering the field. Many publishers have adopted the IAB’s Taxonomy (which defines more than 1,600 user attributes), but some experts recommend publishers create their own customized taxonomies.
  • Like universal IDs, SDAs provide a standardized method for publishers, advertisers, and ad tech platforms to use to target audiences. It even allows advertisers to use the same audience across multiple publishers, creating a more seamless experience.
  • Niche publishers may not have enough data to create SDAs, and niche advertisers may struggle if taxonomies don’t cover the audiences they are interested in. Because it’s so new, there’s also been less trial and error among publishers and advertisers, creating a lack of proven results or iteration.

Data clean rooms 

Data clean rooms can help bring everything together. The full omnichannel, outcomes-based picture requires secure, privacy-compliant data collaboration, and data clean rooms are quickly becoming the most sought-after solution to that problem.

  • Because data clean rooms are also very new, there’s a lack of universal standards for adoption or implementation. 
  • In February 2023, the IAB took the first step in data clean room standardization by releasing guidance and recommended practices, as well as a framework to support and define interoperable clean room interactions.
publishers currently monetizing traffic from cookie-less environments
 A chart showing how publishers worldwide are currently monetizing or planning to monetize traffic from cookieless environments, August 2023. (Subscribers only)