Identity resolution – the science of connecting the growing volume of consumer identifiers to one individual as he or she interacts across channels and devices – has become critical to marketing success, as well as essential for compliance with new consumer privacy laws such as the California Consumer Privacy Act (CCPA) and the European Union’s General Data Protection Regulation (GDPR).
Consumer adoption of connected speakers, home management solutions, smart TVs and wearables continues to rise exponentially. The number of devices connected to IP networks is projected to climb to more than three times the global population by 2023, with 3.6 networked devices per capita, according to the Cisco Annual Internet Report, 2018-2023. Consumer share of total connected devices and connections will expand to nearly 75% of the entire market, Cisco predicts, with businesses representing just one quarter of IP devices and connections in 2023.
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At the same time, consumer expectations for relevant, personalized brand interactions across all of their preferred touch points have grown just as quickly. A one-size-fits-all marketing approach doesn’t work, as today’s buyers are smarter about what brands should know about them and where they are in their purchase journeys. Three-quarters of consumers surveyed by Forrester expect brands to know why they are calling or contacting them before they even do.
In this competitive environment, it is essential that brand marketers understand which online devices and offline behaviors belong to a consumer as well as who that consumer is. More than half of marketers surveyed by Winterberry Group say cross-channel audience identification and matching is their highest priority. Every time a consumer interacts with the brand – regardless of channel – a different identifier (also called a key) can be attributed to that individual. These identifiers can include an email, IP or physical address, as well as a mobile phone number, digital tag or cookie.
However, accurately resolving consumer identities has proved challenging for a majority of brand marketers. Forrester found that 71% of brand marketers struggle to maintain an accurate consumer ID over time and through changes. Nearly as many marketers also say that they struggle to understand how much of their addressable audience is active and reachable online. As a result, marketing campaigns continue to suffer from inaccurate targeting and wasted marketing spend.
Identity resolution spend projected to reach $2.6B in 2022
Identity resolution platforms, which create and maintain databases of persistent individual and/or household profiles based on multiple first- , second- and third-party data sources, are becoming important tools to help brand marketers overcome these types of obstacles. U.S. marketers are expected to spend $2.6 billion on identity resolution programs by 2022 – a 188% cumulative increase over four years, according to a Winterberry Group forecast. The growing investment underscores the key role that identity programs play in customer experience and people-based marketing initiatives.
Two-thirds of marketers say their identity resolution strategies have been in place for more than a year, according to Forrester, and many have begun to see strong return on their investments. More complete customer profiles and better data controls and security are the top two benefits of improved identity resolution capabilities.
Yet even as more brands implement identity resolution strategies and technologies, there are still significant challenges to their success. Customer data is scattered throughout the enterprise, often residing in silos that hinder marketers’ ability to develop and nurture relationships. A consumer might use different identifiers to research something on one device (i.e., desktop cookie or login name), call on another (i.e., mobile phone) and then buy something in the store (i.e., loyalty ID or credit card). Each of these identifiers can live in a different department with disparate collection and matching requirements.
Marketers also are losing access to some forms of data, including third-party cookies and location, a result of Google and app developers providing more tools to protect consumer privacy. Location Sciences, a location data verification company, estimates that since September 2019, when iOS 13 was released, tens of millions of iPhone users have blocked numerous mobile apps from tracking their locations when not in use.
In response, identity resolution platform vendors have developed new products, such as Merkle’s Merkury platform, to enable brands to build private identity graphs based on first-party data. Vendors are also creating identity graphs based on second-party data through cooperative data-sharing agreements.
The Neustar Second-Party Marketplace, for example, uses shared first-party data from multiple brands using a common, anonymized identity asset. Participating brands can build, plan, activate and measure custom audience pools to either target or suppress customers across addressable media. The Oracle Data Cloud Cooperative similarly shares person-based referential data contributed by more than 1,500 retail partners, who, in return, receive modeled outputs of lookalike or next-best audiences.
Consumer disinformation, privacy regulations pose challenges
In an effort to further protect their privacy, consumers are increasingly mounting their own personal disinformation campaigns where they intentionally introduce data quality errors such as name typos to undermine an organization’s data linkage efforts. While identity resolution can help marketers stitch the data together to create a complete view of the person, it is not easy. Even when internal organizational silos are broken down, there may be additional issues exporting customer IDs to martech ecosystem partners using their own master IDs within their systems.
The onset of new consumer data privacy regulations also poses significant challenges for marketers wanting to build effective identity programs. More than half of marketers say that government regulation is the biggest challenge to their ability to derive value from their data-driven marketing initiatives, according to research jointly published by Winterberry Group and the Internet Advertising Bureau (IAB) Data Center of Excellence.
Marketers have had to comply with GDPR since May 2018, yet surveys suggest that compliance rates range from just 8-42%. The CCPA went into effect in January 2020, and brands not in compliance risk fines when, for example, Subject Access Requests by consumers fail to deliver all of their related data as required. Virtually all of the identity resolution platform vendors profiled in this report are in compliance with GDPR and have clear policies for consumer consent on how their data is used.
For more on Identity Resolution Platforms, including in-depth profiles of 12 different vendors, download our Martech Intelligence Report today!
Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.
About The Author
Karen Burka, Senior Research Consultant, conducts research and provides analysis for Third Door Media’s Martech Intelligence Reports.
She has worked as a digital marketer and industry analyst for more than 20 years at companies such as Peppers and Rogers Group, Cowles Business Media and Simon & Schuster.
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