The Consumer Identity Crisis
In Hindu mythology, Ravana, the great scholar, and demon king has ten heads, symbolizing his various powers and knowledge. The heads were indestructible with the ability to morph and regrow. In their battle, Rama, the warrior god, thus must go below Ravana’s heads and aim the arrow at his solitary heart to slay him for good.
In modern times, the consumer is a bit like Ravana, not in terms of his evil designs but his multiple identities. Research states that an average consumer in the US today is connected to 3.64 devices. With the proliferation of a host of new age devices like smart speakers, wearables, connected homes, and automobiles etc., it is projected that she could be connected to as many as 20 devices in not so distant future. Like it did for Rama, this poses a clear challenge for today’s marketer – how to navigate through the maze of these devices to identify and recognize THE consumer so she can be singular, consistently and contextually engaged across her addressable touchpoints.
Industry research suggests that only a small fraction of consumer businesses can currently accurately identify their audience – hence the advent and rapid rise of Identity management solutions that help businesses resolve the identity of their audience into individual consumer identities and profiles. The size of the Identity solutions market is estimated to grow from $900 Mn currently to over $2.6 Bn by 2022, outpacing overall marketing investments growth A recent Winterberry research survey indicates that about 50% of consumer businesses have intensified focus and plan to increase investments on Identity solutions. While segmentation and targeting on paid media remain the predominant use cases for consumer brands, cross-device and channel personalization plus measurement and attribution are expected to become areas of focus in near future.
Identity Solutions: The past, present, and future
At its core, an identity resolution solution’s job is to continuously gather audience activity data from a disparate set of data sources, platforms and services to derive a cohesive, omnichannel identity and profile of each individual audience member. However, the approach has been largely siloed so far with marketing channel specific identity platforms and strategies. CRM databases as custodians of first-party customer and contact information have been the mainstream identity platforms for direct marketing activations, primarily over email or direct mail.
With the growth of digital marketing spends, Data Management Platforms (DMPs) that store digital audience behavior data to primarily support display ad buying use cases have come into prominence. However, their relevance is now questionable with walled gardens like Facebook and Google closing doors on them. The other growing channel of influence has been mobile data platforms to support mobile device & location-based engagement.
To overcome the limitations of a disconnected, multi-channel approach that current Identity solutions like CRM databases or DMPs are constrained with, the focus is shifting to emerging modern solutions like Customer Data Platforms (CDPs), Identity Graphs, and Googles new version of Shopping Insights. These offer a unified, cross-touchpoint and omni-channel approach towards identity resolution and linking, enabling a fully harmonized, single view of the customer to the marketer.
Figure i. Customer identity management is the key to contextual marketing
The Mechanics of Identity Resolution
Identity resolution system’s key job is to continuously collect audience related data from a variety of sources and put it through an ongoing process that resolves, generates and updates this data into discrete consumer profiles, which are then used by the business for various forms of marketing or other activations.
The process comprises of 3 key steps:
- Data Management – Includes ingestion of disparate set of consumer data, both identity, and activity related, followed by processing and storage of this data into organized repositories.
- Identity Resolution – This is a crucial and complex mix of a deterministic and probabilistic process of deriving identifiers, matching, cross-referencing and linking to unique consumer identities followed by a validation mechanism to maximize the accuracy of the resolution process.
- Consumer profile generation – Associates all identifiers, attributes and activities into a harmonized, holistic Identity Graph of the consumer, an individual or a household.
What makes an Effective Identity Management Solution: 5 Mantras
- Ensure the Identity system is fed with data from a wide array of data sources. Not just device activity but also the applications behind to help drill past the device, cookie or pixel and reveal the real people behind them and their behavior.
- As part of data management, ensure meeting consumer privacy rights and compliance requirements of industry norms like GDPR, CCPA etc.
- Identity resolution should include a consistent, rule-based deterministic match process to ensure high accuracy critical to support contextual, personalized engagement in direct marketing use cases
- The deterministic process must be supplemented with machine learning driven probabilistic matching to expand the data set, and meet the requirement of use cases like social media or display ad marketing that expects a wider net but relatively less 1:1 personalization
- The generated consumer profile, in form of an Identity graph, while having the requisite accuracy and timeliness, should go beyond the linkages to identifiers and attributes by including the desired insights to optimally enable marketing activation use cases
