fbpx
Close UpDigitalEssaysFeaturedInsightsOpinionPeople

Power Essays 2022: Solving the identity crisis – by Epsilon’s Saira Mehdi and Publicis’ Pankaj Pagarani

Despite plenty of talk about life after third-party identifiers, many marketers are still unprepared, say Saira Mehdi, Sales Director, Epsilon, and Pankaj Pagarani, Head of Data Sciences, Publicis Groupe . So what needs to be done?

Saira Mehdi, Sales Director, Epsilon, and Pankaj Pagarani, Head of Data Sciences, Publicis Groupe
Saira Mehdi, Sales Director, Epsilon (Left) and Pankaj Pagarani, Head of Data Sciences, Publicis Groupe

There is a divide among marketers about the impact to business when the market loses third-party identifiers (3PIDs). We can consider this divide as the haves and have nots. Those who ‘have’ will lead the future of business growth as they will be the ones who have invested in building meaningful and personalised consumer experiences driven by 1PID intel.

Are you interested in improving your numbers game? Making content optimised for maximum returns and engagement? Gain insight into measurement and managing metrics through content, data and technology, in a morning of networking and opinions at the next Campaign Breakfast Briefing. Register now.

 

We understand that the industry has been talking about the loss of cookies for what seems like years. We’ve all seen the presentations that use the threat of cookie-less futures to motivate marketers to act. We’ve all read the articles that say the future will be different. And then there were delays. There were legal restrictions. There were countries that rolled out new data laws, on top of the global ones. There has been so much talk. So why are we discussing this again now? Talk is cheap, action is valuable.

54 per cent of marketers are not prepared.

Even after the information overload, the industry was not prepared. It takes a significant amount of work, restructuring and talent to move out of legacy practices. Simply put, it takes direction and action.

What will a world without 3PIDs look like?

That’s the question many marketers are asking themselves in the wake of Google’s decision to do away with third-party cookies (Google Advertising ID; GAID) by 2023 and Apple’s move to make it easier for users to opt out of its Identifier for Advertisers (IDFA). In 2022, Epsilon ran a global study to take the pulse of marketers’ concerns and actions around the loss of 3PIDs. What we found is that most marketing professionals think the loss of 3PIDs will diminish business outcomes and will have a negative impact on consumer experiences (CX).

Across industries, marketing professionals aren’t happy with the current identity crisis or with cookie deprecation. Seven out of 10 marketers believe changes to 3PIDs will hurt digital advertising. 80 per cent say that the two biggest concerns regarding 3PID deprecation are personalisation and performance optimisation, and demonstrating ROI.

Today, looking at five major industries – consumer packaged goods (CPG), financial services, restaurants, retail and travel – we can see that many (40.9 per cent) consider themselves moderately reliant on 3PIDs. Digging further, CPG and restaurants index higher (at 48.1 per cent and 45.1 per cent respectively). Both industries traditionally face problems with collecting and curating 1PIDs, which puts them at a disadvantage to deliver against consumer demand.

What needs to happen?

Maximise collection and activation of first- party data – but make sure tools are built to solve enterprise problems. Value is proven through a connected ecosystem to clean and use data to deliver results. Today, 67.3 per cent of marketers are building a customer data platform (CDP) to deliver on this, while more than 60 per cent of marketers are developing first-party data strategies as well as building out a private identity graph.

The challenge to this will be across industries where first-party is not easily collected, or data privacy creates hard walls. For example, financial services have strong first-party data, however they are also the most reliant on 3PIDs across industries since client privilege and privacy laws prevent them from using their first-party data for paid advertising.

Measure martech investment options to outcomes. Only a quarter of marketers are looking at data clean rooms as an option. Given that 80 per cent of marketers believe that 3PID deprecation will negatively affect performance optimisation and ROI, we need to reconsider prioritisation of ROI contributors and account for data in ROI calculations.

Think twice before trying to build a custom private identity graph. Six out of 10 marketers would like to do just this. However, most brands don’t have the scale and talent to do this in-house.

Look for an identity solution based on publisher integrations. Quality publisher integrations decrease the potential for limited reach in a post-3PID world.

The industry must start increasing focus on customer identity data management, as it will be crucial to navigating a post-cookie landscape, further enabling marketers to win customers’ hearts and retain strong loyalty. Investing in platforms that craft direct relationships with customers through personalised engagement techniques, brands will gain an advantage over their competitors and boost customer lifetime values.

According to the Harvard Business Review, preparing for the decline of 3PIDs is a must. For years, marketers have relied too heavily on 3PIDs to track site visitors, using detailed search preference data to improve user experience, and targeting consumers with personalised experiences. However, with Google and Apple implementing changes, the death of third-party cookies is imminent. The CMO Survey found that 19.8 per cent of companies invested more in traditional advertising (outside of online approaches) as a result.

Marketers who have not invested in building 1PIDs will be forced to rely on traditional advertising segmentation methods that do not feed into advanced data-driven targeting – forcing them backward to favour reach models over experience engagement models.