Audience Identity Efforts Stymied by the Duopoly? You’re Not Alone.

August 22, 2018

US companies are poised to significantly upgrade their spending on identity solutions in the coming years as they seek to better identify their audience members, according to a report from the ANA [download page] conducted by the Winterberry Group. But they’ll have to overcome a persistent challenge: walled gardens.

Currently just 15% of the marketers surveyed for the report say they’re able to identify their audience members extremely well, with great consistency and accuracy. Instead, two-thirds are only partially succeeding in their efforts, and about 1 in 8 aren’t able to identify their audience members very well, if at all.

The study reveals that marketers are facing several challenges that are hindering their efforts to identify addressable audiences. For example, around 1 in 5 cited problems such as the inability to access first-party data due to internal silos (20.4%) and lack of quality and/or scale from third-party data (20.8%).

However the biggest hindrance is the challenge of extracting audience data from walled gardens, such as Facebook, Google and Amazon. (Amazon is starting to put a dent in the duopoly and seems to be viewed as an opportunity rather than threat, but is still far from being there.)

This isn’t the first piece of research to demonstrate frustration with walled gardens. A recent study from Nielsen found just 1 in 4 CMOs rating their level of trust in the analytics and measurement outputs from the walled gardens as “high” (21%) or “very high” (3%). Brands are also expressing reservations selling through marketplaces as a result of the problems with audience and customer insights. And in a 2016 study, 77% of North American people-based advertisers were concerned about not receiving user-level data from the walled gardens, for uses like attribution.

The ANA report does note that “the market is responding with solutions to the walled garden conundrum – notably in the form of new ID consortiums and other cooperative solutions that enable brands and publishers to pool insights so as to enable a rich view of ‘non-walled garden’ interactions.” These may not reach the same level of insights that are considered ideal, but could offer “reliable standalone identify solutions.”

ROI Proof Would Help, Too

There are two other – potentially related – key challenges to audience identity that are roiling marketers. Those are lack of clarity around potential ROI, and lack of investment and/or support from senior management, each cited by around one-quarter of respondents. One would imagine that clarity around ROI would spur greater support from senior management…

In fact, documentation on the ROI of identity efforts is cited as the top resource that would helpful to marketers in deriving value from their identity solutions.

Either way, with respondents looking to develop more audience insights for segmentation and targeting and email personalization, spending is forecast to grow. Almost half (47%) of those surveyed indicated that they will invest more on marketing-related identity solutions in the forthcoming 12 months.

The full report can be downloaded here.

About the Data: The results are based on a June 2018 survey of 400 advertisers, marketers, fundraisers, publishers, technology developers and marketing service providers primarily located in North America.

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