Fragmentation of IDs and its Impact on Digital Advertising
August 24, 2015
A digital identity is data that uniquely describes a person. This unique identity may not necessarily be traceable to an actual person, yet it helps in providing a very rich experience. Publishers can use this information to show personalized content on their websites and DSPs may use this to show highly personalized creative.
A digital identity is the lifeblood of the advertising ecosystem and it is this identity that helps differentiate an online advertising medium from its mass channel counterparts. Identity is used in all stages of advertising – namely collection, identification, personalization and attribution.
For years, cookies were the main mechanism of user identification on the digital medium. Though it was not the most efficient mechanism, it was highly functional. Cookies are unique to a domain and are also unique to the browser being used. The Advertising ecosystem built its own layers on top of cookies so as to leverage the data in a much more efficient way.
When Apple launched its app store, advertisers started using UDID to track installs. UDID had a problem - It is a unique identifier based on hardware and had no user opt out. In 2011, with the launch of iOS 5, access to UDID was denied by Apple to reduce the privacy concerns. In absence of any identifier, mobile technology companies started building their own identifiers such as OPENUDID and ODIN. In 2012, Apple launched a resettable ID named IDFA which allowed advertisers to use a privacy compliant ID.
Similarly, advertisers have been relying on Android-ID for tracking devices in the Android ecosystem since Android Froyo release. This is a non-resettable ID, which is specific to hardware. Just recently, Google too came up with a new Advertising ID which is resettable and privacy compliant.
Android ID and IDFA, at times, are passed raw and other times hashed by using different algorithms such as md5 and sha1.
Device ID mapping is required not only for targeting and showing relevant content but also to maintain the frequency capping. Since correct attribution is the backbone of digital advertising, fragmentation of device IDs is severely hampering the ability of attribution. Without a reliable identifier, advertising platforms have no way to understand the user’s interaction with the ads.
There are three places where DSPs interact with the user – Data collection, Targeting and Attribution. For a non-retargeting platform, user identity mapping is not important in the first two stages.
Data collection: Interaction happens between advertiser and DSP
Targeting: Interaction happens between SSP and DSP
Attribution: Interaction happens between advertiser and DSP
The advertising industry is moving towards converging of passing raw device IDs in IDFA format for iOS and Google Advertising format for Android. In the meantime, advertisers may choose to use a single identity which binds these multiple identities. There are broadly two ways – probabilistic and deterministic.
Some advertisers have chosen to use probabilistic approach, commonly known as fingerprinting, in which on the basis of different properties such as browser version, device type, country, time zone, language settings, user agent, browser resolution, browser add-ons etc. This might help reach huge scale but it may not be very accurate. Different players claim to achieve accuracy levels from 60-80%.
Other advertisers are using a deterministic approach in which a common identity such as an email ID, phone number or social network IDs are used. This can be used to tie different identities to a single user.
The next level of user identification lies in binding these multiple identities across devices to a single common identity which can then be leveraged for cross device marketing strategies. Given the nascent stage of the industry and the high fragmentation, this is a very challenging problem to solve. At RevX, we are excited about these challenges and the opportunity it provides for marketers.