January 17, 2022

Digital Marketing Education

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The identity depression of 2022—how marketers should prepare

Marketers need to assess their own weaknesses, such as not having enough first-party data, and have a plan in place to address them. They should also be on the lookout for outside catalysts that might introduce new identity challenges. These include new consumer privacy laws and privacy updates from major platforms and publishers. We may see publishers do away with third-party cookie alternatives, such as the IP address, upon which brands have relied for the last few years.

Privacy-centric changes across the digital marketing ecosystem, such as the rollout of Apple’s App Tracking Transparency (ATT) framework and iOS 15 updates, made it more challenging than ever for advertisers to reach customers or measure advertising performance effectively. These changes were announced and took effect relatively quickly, leaving even the most agile marketers scrambling to execute campaigns with the same efficiency and effect. And a growing list of privacy-forward identity alternatives such as IdentityLink Consortium (IDL) and Universal ID 2.0 are adding to the complexity picture. These and others hold a lot of promise, but questions still exist around global usability and regulation.

The rise of retail media networks means that CPGs may now have 15-20 walled gardens they work with where identity is accurate but not shared across platforms. I expect to see this beyond retail as providers in various industries realize they can make money in advertising. As marketers’ identity resources continue to dwindle, they will need to properly arm themselves to face what is likely to be the biggest challenge of the new year.

Embrace new methods of measurement

Many brands will enter 2022 with less first-party data than they would like.

Limited data means the industry is likely to experience another major disruption— the inability to properly measure and attribute digital campaigns. Measurement within platforms has already been impacted. As it continues to change, brands need to take a step back and reassess what they consider ‘good performance’ before stepping into the cookie-less future.

Less identity is rapidly making marketers’ current approach to multi-touch attribution obsolete. This will raise frustrations in the C-suite. For example, five platforms saying they were each responsible for 1,000 sales when the company only made 1,500 total sales will cause CEOs to reexamine their marketing activities and it may also negatively impact platforms, which are each claiming credit.

Rather than seeing this as a challenge, brands should use this as an incentive to get good quickly and focus their efforts on establishing new, innovative methods of measurement—namely media mix modeling.

2022 may also bring a new era of overpromising. The industry is ripe for this and I’ve already seen glimmers. Brands will need to beware with companies promising 90% identity coverage, full uncompromised multi-touch attribution abilities and so on.

Establish multiple identity frameworks

Across the globe, governments are regulating data more than ever and shifting to consumers control over how customer data is used. This year we have seen the European Union’s General Data Protection Regulation have a stronger impact than anticipated. In addition, countries including Canada, Japan, Australia and others are planning new laws around consumer data privacy in 2022. To prepare for the rapidly changing data privacy legislations on the horizon, brands will need to adopt multiple identity frameworks to attach identifiers to consumers without the use of third-party data.

This means marketers will need to embrace these new regulations, focusing on an approach that works alongside rather than against them. For example, brands can lean into a first-party strategy using mechanisms such as SMS opt-ins and surveys to capture customer data through owned channels. They can also use emerging solutions, such as data cleanrooms, to leverage second-party data and inform their targeting approach.

An “identity depression” is a serious challenge. But the good news is that, unlike an economic depression, this one is within a brand’s control. It is possible to prepare and get ahead of the changes taking place.

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