Background
In 2024, third-party cookies - which are key for Google and Meta’s ad duopoly - are being deprecated due to privacy, security, and regulatory concerns. This makes it hard for marketing tech platforms to recognize users across websites, reducing ad spend efficiency for brands and ad revenue for publishers. The digital advertising industry is scrambling to meet user targeting needs with a mix of solutions.
Indications are trending that the industry is moving away from targeting individual users, but there is no commonly accepted approach.
- Google’s Privacy Sandbox is a browser-based API that provides functionality for websites without sharing any identifier. These APIs return broad topics a user is interested in for ad targeting, conduct on-device auctions for retargeting, and aggregates attribution.
- Meta + Mozilla’s Interoperable Private Advertising similarly doesn’t share data on individual users. They allow websites to attribute advertising events across multiple devices.
- Apple’s Safari Private Click Measurement is a browser-based API that measures effectiveness of ad campaigns. It does this by generating reports for each conversion event, adding a time delay and limiting information sent, to prevent user identification.
Other solutions do include identifiers:
- Alternative IDs like Prebid’s SharedID or Unified ID 2.0 have not reached feasible scale because users don’t want to share a personal identifier, like their email or phone number, and have no incentive to do so.
- First-party data solutions, like LiveRamp’s ATS, allows a website to contribute user data anonymously with the rest of the industry. This has similar privacy concerns to third party cookies and are at risk of regulation.
Opportunities
Alternative ID based on pseudonymous identifier
Unified ID 2.0 didn’t work because users didn’t want to enter an email or phone number on every website they visited. Our approach is to share a pseudonymous identifier that is owned by a user but not tied to personal information, broadcast this passively to reduce user friction, and provide tokenized incentives to solve a network cold-start problem.
Concerns are that whenever an ID is shared, it will be “fingerprinted” such that bad actors connect your personal identity to these IDs via shadow profiles.
Sharing insights about a user without any identifier
Google’s Privacy Sandbox requires a trusted provider to work. Zero-knowledge proofs could reduce the need for a trusted provider, by providing insights on a user without sharing their data, and proving that the computation was sound.
However, we doubt there is market demand for a trustless system. Privacy Sandbox APIs are public and open source, the code is baked into Chrome, and it is coming from the market leader.
All-in-one advertising API
Publishers will find it difficult to implement various solutions to meet programmatic advertising needs. A brand or ad agency trying to measure a campaign’s effectiveness will need to integrate APIs with Chrome’s Privacy Sandbox, Firefox’s Interoperable Private Advertising, and Safari’s Private Click Measurement to work across different browsers.
There is an opportunity to build an all-in-one API that abstracts the complexity away of working with these APIs. Note, there is no crypto component to this. However, this is likely something that a legacy ad attribution tool is looking to build so I’m exploring what the landscape is today.