Third-party cookies will likely be deprecated in 2024. To fill the gaps in user identity data, we expect platforms to employ various signed-in models to shore up their ability to accurately address people at scale. This translates to a larger refocus on user identity as a foundation for platforms’ commercial success.
This article is extracted from The Pace of Progress – 2024 Media Trends, dentsu’s 14th annual trends report.
Chasing blind spots with identity-based marketing
Netflix is a good example of a platform doubling down on identity. The platform gives users five profiles per account, so that housemates can log in separately and maintain their own watch lists.
However, many account holders got in the habit of giving access to people outside their households by sharing their log-in credentials. With more than 100 million households reportedly sharing accounts, costing Netflix potential millions of dollars per year in lost revenue, the platform decided to crack down on that habit using information such as IP addresses, device IDs and account activity to determine which devices are part of a household. Following initial testing in Latin America, Netflix has been rolling this restriction across markets such as India, South Africa, and Australia, with in some countries the option for users to pay more, or to cut off their guest users.
Netflix benefits in two ways. First, it earns revenue from users who pay to share their subscription with non-household members and from those who were previously on a household plan but now pay for their own accounts. Second, Netflix expands its user base for its ad-supported plan to capture a larger share of brands’ media budgets.
What will identity-based marketing look like
As platforms refocus on identity, many embrace a freemium model. Snapchat now has more than four million members paying for a premium account, X makes users can pay for a blue checkmark, and Meta offers paid verification on both Facebook and Instagram. Certification benefits for users include early access to new features and better access to support. In addition to the extra revenue from these recurring fees, platforms gain a knowledge that paying users are real people. This could lead to new advertising and brand partnerships opportunities, or potential future revenue as platforms expand into commerce, payments, and financial services.
Certification should also lead to safer environments for users and brands by cutting down on spam and impersonation. For instance, Google’s Gmail has introduced its own process for brands to verify their domain names so that email recipients can see a checkmark against the company’s email address and distinguish it from imposters.
Another application of verification is better age-gating to prevent younger users seeing inappropriate content, with platforms like Instagram testing new ways to verify the age of their users. Tighter age-gating makes it possible for platforms to allow more adult content – TikTok now only allows over 18s to stream live – and to accept advertising for products that are age controlled, for example, alcohol and gambling.
These examples of platforms doubling down on identity must serve as reminders for brands to take concrete steps themselves to improve their first-party data strategy as we enter a year when third-party cookies will likely be deprecated in Google Chrome. Yet, according to research by dentsu Schema, only 55% of organizations globally do have a clear overarching data strategy.
What’s next for digital platforms?
While more social platforms will create premium subscriptions, newcomers to the ad business will strive to know their users better and become more attractive to brands by following the playbook of retail media platforms. Increasingly, the best content and features online will be reserved for signed-in users.
This is the sixth media trend discussed in dentsu’s The Pace of Progress – 2024 Media Trends report.
Taken from: https://www.dentsu.com/blog/filling-the-gaps-in-user-identities-with-first-party-data