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The State
of Digital
Identity
2021
Executive
Summary
The ability to identify users has become
an increasingly vital point of interest for
all industry players in ad tech as we move
closer to the 2022 deadline when third-party
cookies are to be blocked from Chrome.
Identifying users is crucial for delivering
targeted data-driven campaigns.
The announcement of the third-party cookie deprecation
has supercharged the creation of solutions to enable
identification whilst respecting users’ privacy. As a
consequence of their expected departure from all major
browsers, an attention towards identity-related topics
and challenges has increased over the past year and we
have seen the rise of solutions designed to improve user
identification.
Since the 2019 ‘The State of Digital Identity’ survey, ID5
looked to the industry once again to understand how
perspectives on identity in the digital advertising space
have changed and to analyse what challenges are now
most concerning for publishers, brands, agencies and
ad tech platforms in 2021. On top of this, the report also
aims to understand what industry players are doing to
tackle these concerns, and whether they are, or soon will
be, implementing strategies and supporting initiatives
designed to solve the identity crisis.
In some instances, questions have been carried from
the 2019 survey to the 2020 survey in order to analyse
how behaviours and actions have changed over the year
in response to industry developments. Thus, results are
compared throughout the report.
Results confirm that user identification is a growing
priority for programmatic players, with 82% of
respondents ranking the ability to identify users as very
important for their business. This level of importance
is especially apparent for publishers, who reported an
average of 4.56 out of 5 (with 5 being ‘very important’)
when asked about identity in 2020; this illustrates a 10%
increase from 2019’s result of 4.13.
There is a clear correlation between the rise in importance
of identity to publishers and the drop in CPMs. In
2020, 88% of publisher respondents reported a CPM
reduction between 10-60% where third-party cookies
aren’t available. For 38% of these publishers with CPM
reductions, the drop is between 30-60%. These results
portray how vital identifiable users are to publishers, as
opposed to anonymous users.
It’s not only publishers that are feeling the negative effects
of the identity crisis. Both brands and agency respondents
reported that poor user identification has created issues
with their advertising practices.
	 Some of the most notable of
	 these include:
	  
“Reconciling data from different sources”
and “retargeting users who visit their
websites or client websites”, both
received a huge 81% of the votes
each from brand/agency respondents,
marking these two practices as the most
disrupted
	  
‘Accessing third-party data’ received
63% of the votes from brand/agency
respondents, marking this practice as
the third most disrupted
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
Almost all of the respondents in both 2019 (95%) and
2020 (96%) agreed that the ability to efficiently identify
users is a big advantage for the Walled Gardens, and one
of the reasons behind their dominance in the digital advertising
space. On top of this, 100% of publishers agreed that they
feel threatened by the Walled Gardens and only 17% of ad
tech platforms feel no threat at all.
In the last year we have seen the proliferation of solutions
designed to replace some of the capabilities of third-party
cookies. Some of these solutions, such as the Google Privacy
Sandbox, aim at grouping users into cohorts to avoid user-level
data distribution to avoid privacy concerns and scrutiny from
the regulators. Cohort-based solutions provide technology
platforms with APIs to collect aggregated data about user
profiles and campaign performance.
We asked respondents whether they believe cohort
approaches offer the same level of efficiency and differentiation
that we are used to with user-level identification. 72% of
respondents say that cohort solutions won’t match up in
every capacity, and 22% believe that they won’t offer the
same level of efficiency and differentiation as user-level
identification whatsoever.
These findings explain the growth in support for universal
identity initiatives over the past year. In 2019, only 13% of
respondents were already involved with one or more
initiatives, and 37% were at the evaluation stage.
On the other hand, in 2020, 43% reported already being
involved with one or more solutions, and an additional
43% were at the evaluation stage.
One approach of linking IDs across domains is through the use
of hard signals (i.e. hashed email addresses or phone numbers)
which requires the user to be authenticated. This approach offers
a high level of accuracy, but could be lacking in scale for publishers
who don’t have a large amount of authenticated users. 2020
results show that nearly 70% of publisher respondents
only have between 10-30% logged-in users.
Product strategies are being implemented by publishers
to increase the number of logged-in users, putting them in
a position where they are able to better understand their
audience and provide them with greater services and content.
2020 results confirm that 69% of publisher respondents have
indeed implemented such strategies.
Today, the industry is faced with a whole host of differing
identity solutions, but what are the most important things to
look out for? The 2020 survey respondents ranked incremental
revenue or reach as the most important characteristic that
an identity solution should have, followed by footprint and
adoption.
The above summary is but a snippet of the current advertising
landscape. To gain a more comprehensive and accurate
understanding of the state of digital identity, we invite you to
read the full report below, as we take a deeper look into the
findings collected from the survey.
100%
17%
ONLY
of publishers feel
threatened by the
Walled Gardens
of ad tech platforms
feel no threat from
Walled Gardens
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
Methodology
ID5 analysed the answers of 133
participants who took part in the State
of Digital Identity survey throughout
November 2020.
The sample consisted of technology providers (43%), online
publishers (22%), advertisers and media agencies (24%) and
other (11%).
The survey was sent via email to ID5’s
database contacts and was further promoted
through ID5’s social media channels and a
LinkedIn advertising campaign.
The aim of the survey was to measure the
awareness of digital identity in the programmatic
industry, to understand if increasing user
identification capabilities is a
priority for programmatic
players and to gain insights
on the adoption of unique
ID solutions. To achieve
these aims, the 2020 survey
results are compared alongside
the 2019 results in some instances, to
analyse how industry-wide behaviours and
actions had developed over time.
133
participants
43% 22%
24%
11%
Technology
Providers
Media
Agencies
Other
Online
Publishers
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
Digital Identity:
Industry overview
Identity is continually growing as a priority across the digital
advertising industry, especially over the past year. This growth is
due to increased recognition around the need for a privacy-first
infrastructure that continually complies with privacy regulations,
allowing all industry players to thrive as we move towards the cookie-
less future and beyond.
Taking immediate action on identity and assessing third-party
cookie alternatives now is a vital step to take for all industry players
operating in the Open Web. Publishers
currently rely on third-party cookies to
better monetise their inventory, while
brands leverage them to control the
distribution of their marketing messages
and measure their results, to name just
a few examples. The importance
of identity is apparent across
all respondent types:
publisher, ad tech
platforms, brands and
agencies.
The ability to efficiently identify users is a big advantage for digital advertising
players and is one of the reasons why the Walled Gardens attract the majority
of media budgets and dominate the industry.
Importance of user identification
82%of respondents
ranked identifying users as very
important for their business.
Publishers in particular reported
an average of 4.56 out of 5 (with 5
being ‘very important’)
0.00
Publishers Ad Tech Brands /
Agencies
Other Average
1.00
2.00
3.00
4.00
5.00
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
96%of respondents
agreed that identifying users
is a big advantage for the
Walled Gardens
83%of publishers reported
to ‘strongly agree’ that the ability to
identify users is a big advantage for
Walled Gardens, such as Facebook
and Google
WALLED GARDENS USER IDENTIFICATION ADVANTAGE
This dominance in identifying users makes the
Walled Gardens threatening, most notably for
publishers and ad tech platforms.
WALLED GARDENS USER IDENTIFICATION ADVANTAGE
AGREE – 21%
NEITHER – 3%
DISAGREE – 1%
STRONGLY AGREE – 75%
STRONGLY AGREE – 83%
AGREE – 11%
NEITHER – 6%
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
83%of industry
respondents feel threatened by the
Walled Gardens in some way
100%of publishers
say they feel threatened by the
Walled Gardens
YES, IT’S A
BIG THREAT
– 72%
IT’S A MODERATE
THREAT – 28%
YES, IT’S A
BIG THREAT
– 48%
NO, IT’S NOT A
THREAT – 17%
IT’S A MODERATE
THREAT – 35%
THREAT FROM WALLED GARDENS
THREAT FROM WALLED GARDENS
Some ad tech platforms felt no threat from the
Walled Gardens whatsoever, but the vast majority
reported either a big or moderate threat.
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
Only 17%of ad tech
platforms feel no threat, meaning
that 83% of them do
Brand and agency respondents reported
‘reconciling data from different sources’
and ‘retargeting users who visit their
websites or client websites’ as the most
disrupted practices both at 81%
YES, IT’S A BIG
THREAT – 57%
NO, IT’S NOT
A THREAT –
17%
IT’S A MODERATE
THREAT – 26%
THREAT FROM WALLED GARDENS
BRANDS AND AGENCY DISRUPTED ADVERTISING PRACTICES
To compete against tech giants and guarantee a
future-proof transition into a cookie-less world,
identity alternatives are paramount. Poor user
identification is responsible for a variety of
problems across the industry.
Both Safari and Firefox browsers have already blocked third-party
cookies, the looming 2022 Chrome deadline is edging ever closer,
and the reality of longstanding issues associated with third-party
cookies (i.e. privacy, page latency, publisher control, consumer
transparency) are becoming increasingly apparent. Who should,
therefore, be responsible for solving this identity crisis?
Retargeting users
who visit my site /
my clients’ site
Reconciling data
from different
sources
Accessing
3rd party
data
Executing a PMP
(Private Marketplace
campaign)
Other
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
69%of publisher
respondents felt that it should
be an industry-led initiative
43%of respondents reported
already being involved with one or
more solutions, and 43% were at the
evaluation stage
RESPONSIBILITY FOR SOLVING THE IDENTITY CRISIS INDUSTRY PLAYERS INVOLVEMENT WITH SHARED IDENTITY SOLUTIONS
Some companies have started building universal
user IDs as alternative solutions. A large percentage
of respondents are already involved with these
solutions, or are assessing their options, which
deviates considerably from results collected in 2019.
When looking specifically at DSP responses, it is
suggested that they are taking the process of testing
and adoption seriously. DSP respondents were asked
whether they are currently listening, or planning on
listening, to one or more universal user IDs.
I THINK IT SHOULD
BE PUBLISHERS’
RESPONSIBILITY
– 13%
OTHER – 12%
I THINK SUPPLY-
SIDE PARTNERS
SHOULD BE
RESPONSIBLE –
6%
I THINK IT SHOULD
BE AN INDUSTRY-
LED INITIATIVE
(E.G. IAB TECHLAB
OR PREBID) –
69%
0.00%
Yes, we are already
involved with one or
more of those
initiatives
We are currently
evaluating one or
more solutions
We will consider
a solution in the
next 6 months
We do not plan
to consider a
solution in the
next 6 months
10.00%
2020
20.00%
30.00%
40.00%
50.00%
2019
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
67%of DSP
respondents reported that they
are either listening or planning
on listening to one or more
universal user IDs
63%of SSP respondents
reported that they had been
asked for this integration by
publishers
DSPS LISTENING TO UNIVERSAL USER ID SOLUTIONS SSP UNIVERSAL ID INTEGRATION REQUESTS BY PUBLISHERS
When looking specifically at the results provided
by SSPs alone, the value proposition of universal
ID solutions to the wider industry is becoming
increasingly apparent. SSP respondents were
questioned as to whether they had been asked by
publishers to integrate with one or more universal ID
solutions.
As well as user-level identification solutions, a number of
cohort-based initiatives are being brought to the table.
Examples of cohort solutions include Google’s Privacy
Sandbox initiative. We asked respondents whether they
believed cohorts offered the same level of efficiency and
differentiation as user-level identification.
YES, PUBLISHERS HAVE
ASKED US TO INTEGRATE
WITH ONE OR MORE
UNIVERSAL USER ID
SOLUTIONS – 63%
YES, WE ARE LISTENING
TO ONE OR MORE
UNIVERSAL USER IDS
OR PLAN TO IN THE
FUTURE – 67%
NO, WE ARE NOT
LISTENING TO ANY UNI-
VERSAL USER IDS AND
DO NOT PLAN TO – 33%
NO, PUBLISHERS
HAVE NOT ASKED US
TO INTEGRATE WITH
ANY UNIVERSAL
USER ID SOLUTIONS
– 37%
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
72%of
respondents say that
cohort initiatives won’t
allow for the same
level of efficiency and
differentiation as user-level
identification in
some instances, and
22%believe that
they won’t match up
whatsoever
DO COHORT SOLUTIONS
MATCH UP TO USER-LEVEL
IDENTIFICATION?
With this overhaul of new
identity solutions hitting
the market, it’s important
to consider what industry
players are looking for when
choosing who to partner with.
ID5 asked all participants what
they consider to be the most
important characteristics of
potential identity solutions.
Respondents reported ‘incremental
revenue or reach’ as the most
important, closely followed by
‘footprint’ and ‘adoption’
IDENTITY SOLUTION CHARACTERISTICS
When thinking specifically about publishers, it is clear that
a drop in CPMs is a contributing factor to the ranking of
identity as a top priority. Publisher respondents were asked
to report the rate of CPM reduction they had experienced in
browsers where third-party cookies aren’t available.
0
Incremental
revenue or
reach
Footprint Adoption
A
V
E
R
A
G
E
Neutrality Client
requests
1
2
3
4
5
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
I THINK THAT COHORT
INITIATIVES OFFER A
VIABLE ALTERNATIVE
TO USER-LEVEL
IDENTIFICATION IN SOME
DIGITAL ADVERTISING
SCENARIOS, BUT NOT
FOR EVERYTHING – 72%
NO, I DON’T THINK
THAT COHORT
INITIATIVES OFFER A
VIABLE ALTERNATIVE
TO USER LEVEL
IDENTIFICATION –
22%
YES, I THINK THAT COHORT
INITIATIVES OFFER A VIABLE
ALTERNATIVE TO USER-LEVEL
IDENTIFICATION IN ALL DIGITAL
ADVERTISING SCENARIOS – 6%
88%
of publisher respondents
reported a CPM reduction
between 10 – 60%
38%
of these saw a
reduction of
30 – 60%
70%
of publisher respondents
reported having 30% or
less logged in users
44%
reporting less
than 10%
CPM REDUCTION FOR PUBLISHERS PUBLISHER ACCESS TO LOGGED-IN USERS
One of the methods used to identify users and link their IDs across domains
are based on the collections of signals such as hashed email addresses.
Publishers collect those signals through authenticating users via a log-in.
However, not all publishers are able to command a log-in, meaning that
even though this approach offers high accuracy, it doesn’t seem to offer
enough scale to benefit the publisher majority.
Although publishers have been developing product strategies to increase
the amount of authenticated users, the low amount of logged-in users
highlights the need for a more comprehensive approach to identification
that takes into account other signals to benefit all publishers.
NO, WE HAVE NOT
EXPERIENCED ANY
REDUCTION – 6%
OTHER – 6%
BETWEEN 60% AND 90% – 12%
BETWEEN 30% AND 60% – 19%
BETWEEN 10% AND 30% – 25%
LESS THAN 10% – 44%
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
YES, WE HAVE
EXPERIENCED A 30%
- 60% REDUCTION IN
CPMS – 50%
YES, WE HAVE
EXPERIENCED A 10%
- 30% REDUCTION
IN CPMS – 38%
69%of publisher
respondents reported
having implemented product
strategies to increase the
amount of authenticated users
72%of brand and agency
respondents reported that they
would consider this a cost of
media, much like cross-device
graphs or onboarding is today
PUBLISHERS IMPLEMENTING PRODUCT STRATEGIES RESPONSIBILITY FOR UID COSTS
As the entire industry moves forward towards a
future where third-party cookies will be a thing of the
past, there will undoubtedly be costs involved with
the building and implementation of identification
alternatives, but who should be accountable for
these added costs?
YES, WE HAVE, OR
SOON WILL BE,
IMPLEMENTING A
PRODUCT STRATEGY
TO GET MORE
LOGGED-IN USERS
– 69%
I WOULD CONSIDER
THIS PART OF THE
COST OF MEDIA,
LIKE CROSS-DE-
VICE GRAPHS OR
ONBOARDING IS
TODAY – 72%
NO, WE HAVE NOT
IMPLEMENTED
ANY PRODUCT
STRATEGIES TO GET
MORE LOGGED-IN
USERS, AND DO NOT
PLAN TO – 31%
MY PLATFORMS
SHOULD COVER THE
COST AS PART OF THEIR
INFRASTRUCTURE –
28%
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
Conclusion
The State of Digital Identity 2020 survey results clearly
illustrate the growing importance of identity across
the entire digital advertising industry.
This statement is especially apparent for publisher
respondents. 2020 results found a 10% increase in
the number of publishers ranking identity as a top
priority when compared with 2019 results. A catalyst
for this increase can be assumed to lie with the large
CPM drop in browsers where third-party cookies are
not available. This increase is also apparent through
the rate of SSP’s being asked by publishers to
integrate universal ID solutions in particular, with 63%
reporting having received these very requests.
As the industry heads towards a future where third-
party cookies are to be blocked in all major browsers,
addressing issues such as these is vital for publishers
over the coming months. 69% of publishers said that
they believe solving the identity crisis should be an
industry-led initiative. Thus, it is undoubtedly a time
for all programmatic players to come together in
tackling identity to create a more efficient and future-
proof infrastructure for all.
Whilst identity grows in value, so do the qualities that
industry players look for in potential solutions they
want to work with. Currently, footprint and adoption
rate are amongst the top characteristics of universal
user ID solutions that are being sought out.
Despite the collection of hard signals through
authenticated users being a highly accurate
alternative approach to the departure of third-
party cookies, results suggest that it does not offer
enough scale. Almost 70% of publisher respondents
reported having 30% or less logged-in users, and 44%
have less than 10%. Therefore, it is crucial to offer
publishers the ability to leverage other signals that
they can collect.
The adoption of universal ID solutions is on the rise,
with 43% of industry respondents reporting that they
are already involved with universal ID solutions, and
with another 43% in the evaluation stage. Results
suggest that industry players are seeing value in
universal alternatives that are accessible to everyone.
It is clear that considerable progress has been made
in recent months, and that 2021 is going to be a
pivotal year for adopting and testing. Establishing
what solutions deliver the best results is crucial to
the development of a successful identity strategy in
preparation for the cookieless future
The adoption of
universal ID solutions is
on the rise, with 43% of
industry respondents
reporting that they are
already involved with
universal ID solutions,
and with another 43% in
the evaluation stage.
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
About ID5
ID5 was created to improve online advertising for consumers,
media owners and advertisers, with the ultimate goal to help
publishers grow sustainable revenue.
ID5 provides the advertising ecosystem with a transparent,
scalable and privacy-compliant identity infrastructure. Its
solutions improve user recognition and match rates and
provide a stable, consented and encrypted user ID to replace
third-party cookies and MAIDs. This enables publishers to
better monetise their audiences, advertisers to run effective
and measurable campaigns, and platforms to maximise the
value of data and inventory for their customers.
Created in 2017 by seasoned ad tech professionals, ID5
services clients globally.
For more information about ID5 and its solutions,
please visit: www.id5.io
Get in touch today to learn more about
ID5’s innovative solutions.
ID5 Technology Ltd.
199 Bishopsgate, London EC2M 3TY
contact@id5.io

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ID5 - the state of digital identity - 2021

  • 2. Executive Summary The ability to identify users has become an increasingly vital point of interest for all industry players in ad tech as we move closer to the 2022 deadline when third-party cookies are to be blocked from Chrome. Identifying users is crucial for delivering targeted data-driven campaigns. The announcement of the third-party cookie deprecation has supercharged the creation of solutions to enable identification whilst respecting users’ privacy. As a consequence of their expected departure from all major browsers, an attention towards identity-related topics and challenges has increased over the past year and we have seen the rise of solutions designed to improve user identification. Since the 2019 ‘The State of Digital Identity’ survey, ID5 looked to the industry once again to understand how perspectives on identity in the digital advertising space have changed and to analyse what challenges are now most concerning for publishers, brands, agencies and ad tech platforms in 2021. On top of this, the report also aims to understand what industry players are doing to tackle these concerns, and whether they are, or soon will be, implementing strategies and supporting initiatives designed to solve the identity crisis. In some instances, questions have been carried from the 2019 survey to the 2020 survey in order to analyse how behaviours and actions have changed over the year in response to industry developments. Thus, results are compared throughout the report. Results confirm that user identification is a growing priority for programmatic players, with 82% of respondents ranking the ability to identify users as very important for their business. This level of importance is especially apparent for publishers, who reported an average of 4.56 out of 5 (with 5 being ‘very important’) when asked about identity in 2020; this illustrates a 10% increase from 2019’s result of 4.13. There is a clear correlation between the rise in importance of identity to publishers and the drop in CPMs. In 2020, 88% of publisher respondents reported a CPM reduction between 10-60% where third-party cookies aren’t available. For 38% of these publishers with CPM reductions, the drop is between 30-60%. These results portray how vital identifiable users are to publishers, as opposed to anonymous users. It’s not only publishers that are feeling the negative effects of the identity crisis. Both brands and agency respondents reported that poor user identification has created issues with their advertising practices. Some of the most notable of these include:  “Reconciling data from different sources” and “retargeting users who visit their websites or client websites”, both received a huge 81% of the votes each from brand/agency respondents, marking these two practices as the most disrupted  ‘Accessing third-party data’ received 63% of the votes from brand/agency respondents, marking this practice as the third most disrupted I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 3. Almost all of the respondents in both 2019 (95%) and 2020 (96%) agreed that the ability to efficiently identify users is a big advantage for the Walled Gardens, and one of the reasons behind their dominance in the digital advertising space. On top of this, 100% of publishers agreed that they feel threatened by the Walled Gardens and only 17% of ad tech platforms feel no threat at all. In the last year we have seen the proliferation of solutions designed to replace some of the capabilities of third-party cookies. Some of these solutions, such as the Google Privacy Sandbox, aim at grouping users into cohorts to avoid user-level data distribution to avoid privacy concerns and scrutiny from the regulators. Cohort-based solutions provide technology platforms with APIs to collect aggregated data about user profiles and campaign performance. We asked respondents whether they believe cohort approaches offer the same level of efficiency and differentiation that we are used to with user-level identification. 72% of respondents say that cohort solutions won’t match up in every capacity, and 22% believe that they won’t offer the same level of efficiency and differentiation as user-level identification whatsoever. These findings explain the growth in support for universal identity initiatives over the past year. In 2019, only 13% of respondents were already involved with one or more initiatives, and 37% were at the evaluation stage. On the other hand, in 2020, 43% reported already being involved with one or more solutions, and an additional 43% were at the evaluation stage. One approach of linking IDs across domains is through the use of hard signals (i.e. hashed email addresses or phone numbers) which requires the user to be authenticated. This approach offers a high level of accuracy, but could be lacking in scale for publishers who don’t have a large amount of authenticated users. 2020 results show that nearly 70% of publisher respondents only have between 10-30% logged-in users. Product strategies are being implemented by publishers to increase the number of logged-in users, putting them in a position where they are able to better understand their audience and provide them with greater services and content. 2020 results confirm that 69% of publisher respondents have indeed implemented such strategies. Today, the industry is faced with a whole host of differing identity solutions, but what are the most important things to look out for? The 2020 survey respondents ranked incremental revenue or reach as the most important characteristic that an identity solution should have, followed by footprint and adoption. The above summary is but a snippet of the current advertising landscape. To gain a more comprehensive and accurate understanding of the state of digital identity, we invite you to read the full report below, as we take a deeper look into the findings collected from the survey. 100% 17% ONLY of publishers feel threatened by the Walled Gardens of ad tech platforms feel no threat from Walled Gardens I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 4. Methodology ID5 analysed the answers of 133 participants who took part in the State of Digital Identity survey throughout November 2020. The sample consisted of technology providers (43%), online publishers (22%), advertisers and media agencies (24%) and other (11%). The survey was sent via email to ID5’s database contacts and was further promoted through ID5’s social media channels and a LinkedIn advertising campaign. The aim of the survey was to measure the awareness of digital identity in the programmatic industry, to understand if increasing user identification capabilities is a priority for programmatic players and to gain insights on the adoption of unique ID solutions. To achieve these aims, the 2020 survey results are compared alongside the 2019 results in some instances, to analyse how industry-wide behaviours and actions had developed over time. 133 participants 43% 22% 24% 11% Technology Providers Media Agencies Other Online Publishers I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 5. Digital Identity: Industry overview Identity is continually growing as a priority across the digital advertising industry, especially over the past year. This growth is due to increased recognition around the need for a privacy-first infrastructure that continually complies with privacy regulations, allowing all industry players to thrive as we move towards the cookie- less future and beyond. Taking immediate action on identity and assessing third-party cookie alternatives now is a vital step to take for all industry players operating in the Open Web. Publishers currently rely on third-party cookies to better monetise their inventory, while brands leverage them to control the distribution of their marketing messages and measure their results, to name just a few examples. The importance of identity is apparent across all respondent types: publisher, ad tech platforms, brands and agencies. The ability to efficiently identify users is a big advantage for digital advertising players and is one of the reasons why the Walled Gardens attract the majority of media budgets and dominate the industry. Importance of user identification 82%of respondents ranked identifying users as very important for their business. Publishers in particular reported an average of 4.56 out of 5 (with 5 being ‘very important’) 0.00 Publishers Ad Tech Brands / Agencies Other Average 1.00 2.00 3.00 4.00 5.00 I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 6. 96%of respondents agreed that identifying users is a big advantage for the Walled Gardens 83%of publishers reported to ‘strongly agree’ that the ability to identify users is a big advantage for Walled Gardens, such as Facebook and Google WALLED GARDENS USER IDENTIFICATION ADVANTAGE This dominance in identifying users makes the Walled Gardens threatening, most notably for publishers and ad tech platforms. WALLED GARDENS USER IDENTIFICATION ADVANTAGE AGREE – 21% NEITHER – 3% DISAGREE – 1% STRONGLY AGREE – 75% STRONGLY AGREE – 83% AGREE – 11% NEITHER – 6% I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 7. 83%of industry respondents feel threatened by the Walled Gardens in some way 100%of publishers say they feel threatened by the Walled Gardens YES, IT’S A BIG THREAT – 72% IT’S A MODERATE THREAT – 28% YES, IT’S A BIG THREAT – 48% NO, IT’S NOT A THREAT – 17% IT’S A MODERATE THREAT – 35% THREAT FROM WALLED GARDENS THREAT FROM WALLED GARDENS Some ad tech platforms felt no threat from the Walled Gardens whatsoever, but the vast majority reported either a big or moderate threat. I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 8. Only 17%of ad tech platforms feel no threat, meaning that 83% of them do Brand and agency respondents reported ‘reconciling data from different sources’ and ‘retargeting users who visit their websites or client websites’ as the most disrupted practices both at 81% YES, IT’S A BIG THREAT – 57% NO, IT’S NOT A THREAT – 17% IT’S A MODERATE THREAT – 26% THREAT FROM WALLED GARDENS BRANDS AND AGENCY DISRUPTED ADVERTISING PRACTICES To compete against tech giants and guarantee a future-proof transition into a cookie-less world, identity alternatives are paramount. Poor user identification is responsible for a variety of problems across the industry. Both Safari and Firefox browsers have already blocked third-party cookies, the looming 2022 Chrome deadline is edging ever closer, and the reality of longstanding issues associated with third-party cookies (i.e. privacy, page latency, publisher control, consumer transparency) are becoming increasingly apparent. Who should, therefore, be responsible for solving this identity crisis? Retargeting users who visit my site / my clients’ site Reconciling data from different sources Accessing 3rd party data Executing a PMP (Private Marketplace campaign) Other I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 9. 69%of publisher respondents felt that it should be an industry-led initiative 43%of respondents reported already being involved with one or more solutions, and 43% were at the evaluation stage RESPONSIBILITY FOR SOLVING THE IDENTITY CRISIS INDUSTRY PLAYERS INVOLVEMENT WITH SHARED IDENTITY SOLUTIONS Some companies have started building universal user IDs as alternative solutions. A large percentage of respondents are already involved with these solutions, or are assessing their options, which deviates considerably from results collected in 2019. When looking specifically at DSP responses, it is suggested that they are taking the process of testing and adoption seriously. DSP respondents were asked whether they are currently listening, or planning on listening, to one or more universal user IDs. I THINK IT SHOULD BE PUBLISHERS’ RESPONSIBILITY – 13% OTHER – 12% I THINK SUPPLY- SIDE PARTNERS SHOULD BE RESPONSIBLE – 6% I THINK IT SHOULD BE AN INDUSTRY- LED INITIATIVE (E.G. IAB TECHLAB OR PREBID) – 69% 0.00% Yes, we are already involved with one or more of those initiatives We are currently evaluating one or more solutions We will consider a solution in the next 6 months We do not plan to consider a solution in the next 6 months 10.00% 2020 20.00% 30.00% 40.00% 50.00% 2019 I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 10. 67%of DSP respondents reported that they are either listening or planning on listening to one or more universal user IDs 63%of SSP respondents reported that they had been asked for this integration by publishers DSPS LISTENING TO UNIVERSAL USER ID SOLUTIONS SSP UNIVERSAL ID INTEGRATION REQUESTS BY PUBLISHERS When looking specifically at the results provided by SSPs alone, the value proposition of universal ID solutions to the wider industry is becoming increasingly apparent. SSP respondents were questioned as to whether they had been asked by publishers to integrate with one or more universal ID solutions. As well as user-level identification solutions, a number of cohort-based initiatives are being brought to the table. Examples of cohort solutions include Google’s Privacy Sandbox initiative. We asked respondents whether they believed cohorts offered the same level of efficiency and differentiation as user-level identification. YES, PUBLISHERS HAVE ASKED US TO INTEGRATE WITH ONE OR MORE UNIVERSAL USER ID SOLUTIONS – 63% YES, WE ARE LISTENING TO ONE OR MORE UNIVERSAL USER IDS OR PLAN TO IN THE FUTURE – 67% NO, WE ARE NOT LISTENING TO ANY UNI- VERSAL USER IDS AND DO NOT PLAN TO – 33% NO, PUBLISHERS HAVE NOT ASKED US TO INTEGRATE WITH ANY UNIVERSAL USER ID SOLUTIONS – 37% I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 11. 72%of respondents say that cohort initiatives won’t allow for the same level of efficiency and differentiation as user-level identification in some instances, and 22%believe that they won’t match up whatsoever DO COHORT SOLUTIONS MATCH UP TO USER-LEVEL IDENTIFICATION? With this overhaul of new identity solutions hitting the market, it’s important to consider what industry players are looking for when choosing who to partner with. ID5 asked all participants what they consider to be the most important characteristics of potential identity solutions. Respondents reported ‘incremental revenue or reach’ as the most important, closely followed by ‘footprint’ and ‘adoption’ IDENTITY SOLUTION CHARACTERISTICS When thinking specifically about publishers, it is clear that a drop in CPMs is a contributing factor to the ranking of identity as a top priority. Publisher respondents were asked to report the rate of CPM reduction they had experienced in browsers where third-party cookies aren’t available. 0 Incremental revenue or reach Footprint Adoption A V E R A G E Neutrality Client requests 1 2 3 4 5 I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1 I THINK THAT COHORT INITIATIVES OFFER A VIABLE ALTERNATIVE TO USER-LEVEL IDENTIFICATION IN SOME DIGITAL ADVERTISING SCENARIOS, BUT NOT FOR EVERYTHING – 72% NO, I DON’T THINK THAT COHORT INITIATIVES OFFER A VIABLE ALTERNATIVE TO USER LEVEL IDENTIFICATION – 22% YES, I THINK THAT COHORT INITIATIVES OFFER A VIABLE ALTERNATIVE TO USER-LEVEL IDENTIFICATION IN ALL DIGITAL ADVERTISING SCENARIOS – 6%
  • 12. 88% of publisher respondents reported a CPM reduction between 10 – 60% 38% of these saw a reduction of 30 – 60% 70% of publisher respondents reported having 30% or less logged in users 44% reporting less than 10% CPM REDUCTION FOR PUBLISHERS PUBLISHER ACCESS TO LOGGED-IN USERS One of the methods used to identify users and link their IDs across domains are based on the collections of signals such as hashed email addresses. Publishers collect those signals through authenticating users via a log-in. However, not all publishers are able to command a log-in, meaning that even though this approach offers high accuracy, it doesn’t seem to offer enough scale to benefit the publisher majority. Although publishers have been developing product strategies to increase the amount of authenticated users, the low amount of logged-in users highlights the need for a more comprehensive approach to identification that takes into account other signals to benefit all publishers. NO, WE HAVE NOT EXPERIENCED ANY REDUCTION – 6% OTHER – 6% BETWEEN 60% AND 90% – 12% BETWEEN 30% AND 60% – 19% BETWEEN 10% AND 30% – 25% LESS THAN 10% – 44% I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1 YES, WE HAVE EXPERIENCED A 30% - 60% REDUCTION IN CPMS – 50% YES, WE HAVE EXPERIENCED A 10% - 30% REDUCTION IN CPMS – 38%
  • 13. 69%of publisher respondents reported having implemented product strategies to increase the amount of authenticated users 72%of brand and agency respondents reported that they would consider this a cost of media, much like cross-device graphs or onboarding is today PUBLISHERS IMPLEMENTING PRODUCT STRATEGIES RESPONSIBILITY FOR UID COSTS As the entire industry moves forward towards a future where third-party cookies will be a thing of the past, there will undoubtedly be costs involved with the building and implementation of identification alternatives, but who should be accountable for these added costs? YES, WE HAVE, OR SOON WILL BE, IMPLEMENTING A PRODUCT STRATEGY TO GET MORE LOGGED-IN USERS – 69% I WOULD CONSIDER THIS PART OF THE COST OF MEDIA, LIKE CROSS-DE- VICE GRAPHS OR ONBOARDING IS TODAY – 72% NO, WE HAVE NOT IMPLEMENTED ANY PRODUCT STRATEGIES TO GET MORE LOGGED-IN USERS, AND DO NOT PLAN TO – 31% MY PLATFORMS SHOULD COVER THE COST AS PART OF THEIR INFRASTRUCTURE – 28% I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 14. Conclusion The State of Digital Identity 2020 survey results clearly illustrate the growing importance of identity across the entire digital advertising industry. This statement is especially apparent for publisher respondents. 2020 results found a 10% increase in the number of publishers ranking identity as a top priority when compared with 2019 results. A catalyst for this increase can be assumed to lie with the large CPM drop in browsers where third-party cookies are not available. This increase is also apparent through the rate of SSP’s being asked by publishers to integrate universal ID solutions in particular, with 63% reporting having received these very requests. As the industry heads towards a future where third- party cookies are to be blocked in all major browsers, addressing issues such as these is vital for publishers over the coming months. 69% of publishers said that they believe solving the identity crisis should be an industry-led initiative. Thus, it is undoubtedly a time for all programmatic players to come together in tackling identity to create a more efficient and future- proof infrastructure for all. Whilst identity grows in value, so do the qualities that industry players look for in potential solutions they want to work with. Currently, footprint and adoption rate are amongst the top characteristics of universal user ID solutions that are being sought out. Despite the collection of hard signals through authenticated users being a highly accurate alternative approach to the departure of third- party cookies, results suggest that it does not offer enough scale. Almost 70% of publisher respondents reported having 30% or less logged-in users, and 44% have less than 10%. Therefore, it is crucial to offer publishers the ability to leverage other signals that they can collect. The adoption of universal ID solutions is on the rise, with 43% of industry respondents reporting that they are already involved with universal ID solutions, and with another 43% in the evaluation stage. Results suggest that industry players are seeing value in universal alternatives that are accessible to everyone. It is clear that considerable progress has been made in recent months, and that 2021 is going to be a pivotal year for adopting and testing. Establishing what solutions deliver the best results is crucial to the development of a successful identity strategy in preparation for the cookieless future The adoption of universal ID solutions is on the rise, with 43% of industry respondents reporting that they are already involved with universal ID solutions, and with another 43% in the evaluation stage. I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1
  • 15. I D 5 | T H E S T A T E O F D I G I T A L I D E N T I T Y R E P O R T | 2 0 2 1 About ID5 ID5 was created to improve online advertising for consumers, media owners and advertisers, with the ultimate goal to help publishers grow sustainable revenue. ID5 provides the advertising ecosystem with a transparent, scalable and privacy-compliant identity infrastructure. Its solutions improve user recognition and match rates and provide a stable, consented and encrypted user ID to replace third-party cookies and MAIDs. This enables publishers to better monetise their audiences, advertisers to run effective and measurable campaigns, and platforms to maximise the value of data and inventory for their customers. Created in 2017 by seasoned ad tech professionals, ID5 services clients globally. For more information about ID5 and its solutions, please visit: www.id5.io Get in touch today to learn more about ID5’s innovative solutions.
  • 16. ID5 Technology Ltd. 199 Bishopsgate, London EC2M 3TY contact@id5.io