2023 State of Digital Identity Report

  • Posted by ajones@id5.io
  • On Oct 31, 2023

ID5, the market-leading identity provider for digital advertising, today released its 2023 State of Digital Identity Report, which provides a comprehensive analysis of the developments made by publishers, advertisers, and ad tech platforms when it comes to the evaluation and adoption of alternative identity resolutions.

This year’s report looks closely at several elements that shed light on how businesses are preparing to navigate the cookieless future going into 2024. The findings present insights into testing success rates, favored alternative solutions, time frames in which players expect to have their cookieless strategies in place, and other identity challenges that extend beyond browsers. 

Nearly four years after Google’s original announcement, the tech giant committed to a gradual approach to deprecating third-party cookies beginning in January 2024. After pushing back this timeline on different occasions, it appears that most industry professionals believe that 2024 will be the year third-party cookies go away for good, with almost 70% of respondents affirming that Google will hold steadfast to their outlined path. 

“The debate is no longer about whether Google will or will not deprecate third-party cookies, but rather how prepared organizations will be once they are gone,”  said Mathieu Roche, CEO and co-founder, of ID5. “Organizations that used 2023 to solidify cookieless addressability strategies will fare better in 2024 than those that have not. Organizations that have not are likely to face revenue loss once the phased deprecation begins,” 

After receiving additional insight into Google’s timeline and Privacy Sandbox development, the industry leveraged this information to prepare their cookieless approach.  According to ID5’s survey, a resounding 72% of respondents have adopted one or more identity solutions, with a further 20% planning to adopt an alternative in the coming months. Notably, advertiser adoption or planned adoption has increased significantly, with 74% of advertisers adopting one or more alternatives. This is a remarkable increase from 2022, when only 32% of advertisers had implemented a cookieless alternative. 

“2022 was a year of education, but this year’s report confirms that 2023 was the year publishers and advertisers took action, “ said Roche. “Not only have the majority of respondents taken tangible steps to prepare for 2024, but through testing, they’ve also been able to look behind the curtain at what the cookieless future will look like. This has given them the assurance they need to enter this next phase with confidence.” 

By surveying 197 respondents globally, the report found that first-party universal identifiers are believed to be the most viable and scalable solution to replace third-party cookies, with 25% of respondents identifying them as the primary alternative. Most publishers said they rely on a combination of deterministic and probabilistic identifiers to support audience monetization. Amongst all the options available, first-party universal IDs and publisher user IDs are still the preferred solutions for audience monetization. 

The report also found that identity challenges extend beyond cookies and browser level advertising, but emerging channels like CTV, mobile, and gaming are the next frontier when it comes to addressability.  Although CTV viewing rates have steadily increased over the past years, advertisers have not yet unlocked its full potential. Survey respondents confirmed these growing pains as well, with 53% believing that the current identification system in CTV environments is inefficient. “Through the survey findings, we wanted to understand how the entire advertising ecosystem is preparing for the transition away from third-party cookies. What we found was the industry has seized this challenge as an opportunity to build a more effective and privacy-conscious approach to addressability,” said Roche. “These learnings and innovations will extend far beyond browsers and have already spilled over into newer channels such as CTV, mobile, and gaming. This is a trend we expect to see grow in 2024.”