The State of Digital Identity: reviewing developments in 2022

The third edition of 'The State of Digital Identity' report provides valuable insight into today's identity landscape, including how successful testing has been for different parties, which solutions are coming out on top, and what is holding some companies back from acting on cookieless.

As we near the end of 2022, it’s safe to say (in the usual fashion of the digital media industry) that this has been a year of significant change. We have seen Google push back its third-party cookie deprecation deadline again, the ramping up of privacy regulations, and the most effective identity alternatives start to rise above the rest. With it being over a year since The State of Digital Identity 2021, we wanted to understand how the developments of 2022 are affecting the industry today, and how businesses are progressing in their preparations for the cookieless world. We turned to the industry once again to learn about the journeys publishers, advertisers, and adtech platforms are experiencing as they develop their identity strategies.

Today, approximately 30% of global traffic is unaddressable because of cookieless browsers such as Safari and Firefox. Additionally, a further 20% cannot be reached due to match-rate issues between platforms and users refusing cookies on publisher websites. As a result, brands around the world are missing out on reaching valuable audiences and are restricted to competing for the same, limited audiences in Chrome. Don’t just take our word for it - 69% of advertiser respondents want to be able to reach cookieless audiences today, and 87% believe that they are missing out on the opportunity of reaching them.

So, what is the rest of the industry doing to support this? The adoption of alternative identity solutions is on the rise industry-wide. 63% of respondents report having adopted one solution or more. In particular, DSPs and SSPs are very much ahead with 81% of DSPs and 79% of SSPs having done so. This is indeed promising, but there is still a long way to go in migrating an entire industry to a new way of working. What is holding us back? For those respondents who have not adopted any solutions, 57% of them claim this is because it is still unclear how these alternatives work. This is closely followed by ‘choice overload’ - many companies think there are too many options and don’t know where to start. Clearly, there is still room for further education and information sharing to be done.

Despite this, the vast majority of the industry is well underway with testing the value of various solutions. 50% of respondents have already conducted tests, and a further 35% are currently testing or are in the planning stage. Data platforms have been testing more than any other group, with 71% having already run one or more tests.

So, we know that everyone is testing alternative solutions in order to make the most of the cookieless present and ensure they remain ahead of the curve in preparing for a world without traditional identifiers. But how satisfied have businesses been with these tests? 75% of respondents report being satisfied with their results. This success in testing across the industry provides hope that we are coming close to determining the solutions that have proven themselves as industry standards. When asked which type of solutions it is believed are viable and scalable enough to replace third-party cookies, first-party universal identifiers came out on top with 38% of respondents opting for these solutions.

When thinking about first-party universal identifiers, we asked respondents which methodology used to generate and reconcile ad ID across websites they believe provides the best alternative. A mixture of deterministic and probabilistic takes the top spot with 54% of respondents choosing this option.

Clearly, relying on deterministic alone, as many have previously suggested, is not feasible for the industry. This becomes apparent when looking at publishers’ responses. When asked about the size of their authenticated traffic, 59% reported having less than 10% of users logged in. Relying on deterministic methods with such a small percentage of logged-in traffic is also unattainable for advertisers, who can only reach a small portion of their audience.

At this stage, we as an industry have come a long way. So much so that for those who do not yet have a plan in place, 49% of them claim that they will have a cookieless strategy in place by the end of the year. On top of this, the other 29% of respondents claim they will have finalised their strategy by this time next year. These numbers are positive, and prove that many companies are taking the future of identity seriously in 2022.

Click here to download the full report.