Will Unified ID 2.0 rule the post-cookie world?

Marketers are exploring a number of cookie alternatives, including Unified ID 2.0, the latest contender. We took a look at the solution that's been gaining traction with publishers and advertisers.

The era of third-party cookies is coming to an end. Though Google has extended its deadline for deprecating the code snippets that allow for online behavior tracking until 2023, the clock is still ticking for advertisers and publishers to find a replacement.

The challenge has spawned a number of cookie alternatives, including Unified ID 2.0, the latest contender. We took a look at the solution that's been gaining traction with publishers and advertisers.

What is Unified ID 2.0?

Unified ID 2.0 is a new open-source framework for establishing identity online. Developed initially by The Trade Desk, one of the web's largest DSPs, Unified ID 2.0 is a single sign-on solution that allows users to voluntarily share their web browsing data across the UID 2.0 network. Advertisers can tap into this behavioral data for cross-site targeting and attribution the same way they do with third-party cookies today. In exchange, users get access to content and greater transparency and more control over their data.

Once users are logged in, the UID 2.0 framework creates an identifier that is hashed and encrypted. While advertisers can tap into this data to learn more about individual browsing habits, they can't connect any of this data back to individual users or link it to personally identifiable information. As a result, advertisers can continue to personalize site content and target consumers with ads based on their browsing history and behavior, but those consumers remain anonymous.

Who's in control of UID 2.0?

The UID 2.0 effort is open source which means that any vendor willing to work within The Trade Desk's framework can transact on UID 2.0 data. Multiple vendors will have a role to play in supporting various aspects of the solution, from providing credentials to users, to furnishing API keys to advertisers, and distributing decryption keys for DSPs. However, no one entity will have total control over the entire UID 2.0 ecosystem, marking a departure from the current cookie-based foundation of digital advertising which is dominated by browsers including Google, which has the largest user base.

While UID 2.0 does shift some power away from the dominant platforms to a larger ecosystem of vendors, it also puts some of that power back in the hands of consumers. Users who don't want to share their data can choose not to use the unified ID single sign-on. Whether UID 2.0 can attract enough consumers to make its data attractive to advertisers remains to be seen, though the framework has recently been gaining more support from the industry.

What are the pros?

Unified ID 2.0 looks to give marketers the best of both worlds by delivering the same sort of cross-site targeting data that many digital advertising programs rely on, while simultaneously addressing the specific concerns of consumers and privacy advocates. Allowing consumers to opt-in or out shields the solution from the criticisms that have dogged third-party cookies which often operate without consumers' knowledge.

If adopted, the framework will give advertisers a reliable source of cross-site data to track consumer behavior, make and test hypotheses, and deliver behavior and audience-targeted campaigns. It will also distribute some of the power, and dollars, associated with these efforts more evenly across a wider array of vendors and publishers and shift power away from major platforms which have historically dominated the space.

What are the cons?

To work, the Unified ID framework depends on a significant number of consumers opting in so that it can deliver data and results comparable to the existing cookie-based scheme. Users will have to be persuaded to use the UID 2.0 single sign-on to access content across the sites they visit which may require some value exchange. Publishers may need to make some content accessible only to those who are logged-in or provide other incentives for users to participate.

While advertisers will be pleased that they can deliver the same types of targeted experiences they've grown used to in the era of behavioral targeting, consumers might feel differently. In a recent study published by eMarketer 54% of consumers described the personalized and targeted experiences as “creepy.” While the mechanics for delivering behavior and audience-targeted ads may change under the UID 2.0 framework it remains to be seen if consumers will change their view of the end result.

What's next for UID 2.0?

While UID 2.0 is gaining some traction with vendors, publishers, and digital marketers, it's not yet clear if it will become the post-cookie solution of choice. With the clock running down on cookies, savvy marketers would be wise not to bank on UID 2.0 becoming the norm. The delay granted by Google will provide time to explore cookie alternatives fully, but that time is not unlimited. While the future of UID 2.0 and other alternative solutions remains uncertain, investing in solutions like contextual targeting, which are unlikely to face massive technological upheaval and disruption in the coming years, may be a stronger bet.

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