Advertising Strategies and Lessons

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What Is Digital Identity?

The end of many third-party identifiers and cookies, and the rise of more rigorous privacy standards, has created a need for advertisers to evolve how they reach consumers. And, while first-party data remains the ideal, many advertisers are leveraging a variety of digital identity data to understand, reach and engage targeted audiences.

What Is Digital Identity?

Digital identity is the collection of data that represents a unique person or entity online. Digital identity includes demographic and behavioral information, including tracked online actions. Digital identity can include personally identifiable information (PII), but many digital identities do not include PII and are, instead, considered anonymous. Digital identity exclusive of PII can protect consumer privacy while providing valuable information to understand targeted audiences and individuals. 

Without Cookies, How Can Digital Advertisers Collect Digital Identities?

Cookies used to be the default system of collecting digital identities. In a cookie-less world, there are three primary methodologies to gather digital identities, including:

Cohort Models To Create Digital Identity

Google has, perhaps, the most famous cohort model for tracking digital identities. The Google Federated Learning of Cohorts or FLoC is “a privacy-preserving mechanism for interest-based ad selection.”

Based on browsing history, Google’s FLoC algorithm creates cohorts with shared interests without revealing any private information. The cohorts are then used by advertisers to serve relevant ads to the FLoC audiences.

Cohort data, like Google FLoC data, can be combined with other third-party information to further understand audience preferences. “For example, an adtech platform might learn from an online shoe store that browsers from cohorts 1101 and 1354 seem interested in the store's hiking gear. From other advertisers, the adtech platform learns about other interests of those cohorts,” explains Google. Over time, cohorts can become more and more refined.

Authenticated Digital Identity

Authenticated digital identity relies on PII to identify individuals. Login information, like what’s used for apps or social media accounts, can represent authenticated digital identity. Because authenticated digital identity precisely identifies individuals, authenticated digital identity can be used for precise ad targeting.

Recent updates that require opt ins for tracking, like the Apple iOS 14.5 update for the iPhone and iPad, are reducing access to authenticated digital identity. In fact, only 4% of users are opting in to be tracked.

Non-Authenticated Digital Identity

Non-authenticated digital identity, also called probabilistic data, does not leverage PII to identify individuals. Instead, non-authenticated digital identity pieces together bits of data, like IP addresses, to comprise what probably represents an individual. Probabilistic data can be useful for scale and prospecting

Why Is Digital Identity Important For Digital Advertisers?

Digital identity helps digital advertisers understand, target and engage audiences with high propensity to take action. Digital identity also helps digital advertisers nurture audiences and track campaign performance.

Can Digital Advertising Be Effective Without Digital Identity Data?

Yes, digital advertising can be effective without digital identity. Contextual targeting is a strategy that matches ads to content based on the context of the content. In addition to aligning ads with content in a way that makes sense for the audience viewing the ads, contextual targeting can support brand safety initiatives.

Are You Looking For New Ways To Reach Targeted Audiences?

Digital Media Solutions® (DMS) is a leading technology-enabled, data-driven digital performance advertising solutions provider connecting consumers and advertisers. Contact DMS today to learn how our first-party data asset, proprietary technology and expansive media reach can help you connect with high-intent consumers.

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About the Author

Digital Media Solutions

Digital Media Solutions, Inc. (NYSE: DMS) is a leading provider of technology and digital performance marketing solutions leveraging innovative, performance-driven brand and marketplace solutions to connect consumers and advertisers. DMS proprietary technology solutions, significant proprietary media distribution and data-driven processes help large brands steadily acquire more customers. For more information visit https://digitalmediasolutions.com.

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