Google twice delayed the demise of the third-party cookie, the means by which all advertisers were able to track and analyze their marketing performance. With the delays, we who operate in a digital world breathed a sigh of relief.
Why?
Because a plausible substitute wasn’t yet available. But as we approach the final crumb before a post-cookie world, there are multiple, viable substitutes now on the market:
- First-party cookies/data
- Contextual targeting
- Mobile ad IDs
- Device fingerprints
- Universal IDs
Google is phasing out third-party cookies by the end of 2024, and many speculate it will be by this September, just six months away. The most promising of the alternatives we’ve seen – beside first-party cookies/data – is Unified ID 2.0 (UID2), which is an open source project that has a consortium of big brands, such as The Trade Desk, Adobe, and others backing its continued innovation. This consortium is hoping UID2 becomes THE standard for digital targeting and metrics that protects our privacy where cookies could not.
UID2 is changing how we target, buy, and measure media with wholesale changes on how we think about distributing marketing messages and reaching audiences. Here’s a quick explanation of how it works.
The Basics of UID2
The Trade Desk defines UID2 as “a pseudonymous identifier that is developed by hashing and salting an email or phone number.” Translation: UID2 uses your encrypted email and/or phone number to track you on all your devices. The encryption (hashing and salting) makes consumers “essentially anonymous” (a close cousin of pseudonymous) while still tracking their browsing, shopping, and buying habits. For those who like a more technical detail, here’s a breakdown of the process:
- A user visits a website, a Smart TV, or a mobile app for the first time. In most cases, the user is asked to opt-in. The tracking company will ask for a value exchange, typically your email and/or phone number, for seeing the content (typically for free).
- If the user agrees, the value exchange happens. Email and phone to the publisher/developer; content to the user.
- The publisher/developer sends the email and/or phone number and privacy settings to a Unified ID 2.0 (UID2) operator. This is when the email and/or phone are hashed and salted. This UID is stored on the user’s browser as a first-party cookie (this type of cookie is not going away; only THIRD-party cookies are being phased out). As you browse, shop, and buy, this UID builds a profile about you, but does so pseudonymously.
- The UID2 operator sends back an encrypted key to the device/app developer. This encrypted key is the anonymous set of data that is used by advertisers for what is known as real-time bidding. Advertisers can target this set of data (UID) by bidding through platforms that offer advertising inventory.
- Once the platform receives a bid request with a UID2 attached, it will decrypt it to uncover the raw UID2 so that it can place a bid. The platform will use decryption keys from the UID2 administrator. Again, this is anonymized data, only used so the platform can see if it matches the profile that the advertiser wants to target.
To make it a little easier to visualize, here’s the basic flow path:
Your email/phone encrypted ← → UID2 operator → your browsing, shopping, buying habits anonymized ← → publisher/developer → advertising platform → advertiser ← → ads targeted to you.
If this is too technical for you, know that there is a lot of data out there about you. The goal of UID2 is to anonymize it so none of your personal identifying information is released to advertisers and the platforms that serve them. As it is today, cookies share a large amount of your personally identifiable information. UID2 will stop that.
The Benefits of UID2
The benefits of UID2 to both consumers and advertisers are fourfold:
- The UID2 follows the user, not the device. Since each user has so many devices, and devices change – users frequently get new phones, new Smart TVs, and new computers – advertisers can track and consolidate the “user” across devices and platforms. This is great for advertisers because there is the promise of targeting “one user” rather than multiple devices with the appearance of multiple users when it’s only a single user. The benefit to the consumer is that there is no personally identifiable information connected to this data. It’s all anonymized.
- Advertisers are spending less on cost per acquisition. One survey identified a 20% savings in cost per acquisition against third-party cookies. Targeting one user versus one user that looks like many has obvious benefits. Since we use devices for different tasks, UID2 allows data to be consolidated. Therefore, since all data is “seen,” the true profile of a user is known rather than separate profiles based on device usage. The only downside to this is when users share devices such as Smart TVs within a household (parents and children). In this case, the profiles might provide mixed, and potentially confusing, data.
- The open source nature of UID2 makes it flexible. It’s constantly innovating and optimizing as anyone can suggest improvements.
- Also, as a feature of open source, it is self-regulating. Everyone has eyes on it and therefore, everyone agrees to abide by its “community rules.” This may be the biggest value to UID2 in that it has the entire globe’s eyes on it, not a select few operating within the confines of a few companies that have self-serving interests.
So now what?!?
The above is a lot of technical jargon to tell you that UID2 is a better option than third-party cookies, and that you don’t need to worry about cookie-geddon. There will be no zombies. There will be multiple ways to target, track, and analyze your marketing initiatives. However, the platforms and options continue to grow, and it’s wise to have a partner who can lead you through a cookie-less world. Innis Maggiore would be excited to be that partner. Contact us today for your digital marketing needs and let’s begin a unified identity (UID).