Post-cookie era in the event sphere: Is UID 2.0 the way out?

Hazel Siu Mar 18, 2022

As consumers worldwide are getting more concerned about data privacy, what do brands, advertisers, and event organizers need to do to balance privacy and precise ad placement?

There is a rising demand from consumers around the world for data privacy and autonomy. Just when our online footprint is getting easily traceable, users are preferring to leave without a trace. A case in point is Apple's move to a more restrictive Identifier for Advertisers (IDFA) in iOS14. Moreover, during the iPhone iOS 14.5 update in April 2021, 96% of the users voiced their reluctance to be tracked across apps, keeping a tighter rein on their privacy. 

All over the globe, there’s been a wave of new regional/national/continental data privacy regulations since May 2018 in the hope of making our online experiences safer and more secure. Regulations such as the European Union's General Data Protection Regulation (GDPR), the States’ California Consumer Privacy Act (CCPA), South Africa’s Protection of personal information (POPI) as well as the new amendments of Hong Kong’s Personal Data (Privacy) Ordinance (Cap. 486) (PDPO)...coupled with the privacy-sensitive market conditions, online companies are strengthening their measures to safeguard user privacy, forming a major and unstoppable trend that has revolutionized the digital ad industry. We are now marching into the post-cookie era. What’s next? 

What is a cookie?

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A cookie is a piece of data that often contains a unique identification code that can possibly track your browsing pattern at a particular site. When you browse the web, the website owner can trace your web browsing behavior (e.g., which page you looked at and for how long, what links you clicked, whether you placed an order to pay, etc.) so that the website owner can know who you are. This is a "first-party cookie". You don't even have to log in to your account on the website account-the website owner can already identify you as the same person visiting the site on different occasions. In gist, first-party cookies are created and stored directly by the website (or domain) you visit, with a view to collect analytics data for the website/domain owners for an optimal user experience.

There is another type of cookie called "third-party cookie", which is created by companies outside the website that the user visits, such as advertising companies. These cookies are usually used for online-advertising purposes and placed on a website through a script or a tag, which can be accessed on any website that loads the third-party server’s code. Third-party cookies enable advertisers to collect user browsing information and then use it to further target advertising more precisely with more relevant content, whilst these websites receive part of the advertising fees to continue their basic operation, providing content or services. That being said, Apple Safari, Firefox, and Google Chrome are now restricting the use of third-party cookies in browsers.

In the wake of the aforementioned privacy regulations around the world, third-party cookies which are used to track the footprints of internet users will soon be retired. After search engine behemoth Google’s announcement that its Chrome browser, which has a market share of over 60%, will eliminate support for third-party cookie tracking likely in late 2023, many advertising companies are now looking for new alternatives. The Trade Desk (TTD)'s Unified ID 2.0 will become one of the industry's new open-source standards.

What is Unified ID (UID) 2.0?

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UID 2.0 is a new industry standard promoted by TTD to replace cookies as a way to identify users. The difference with a cookie is that the user enters the site using either an email or a phone number to unify the authorization of the advertising platform (plus the information you fill in is anonymous and encrypted that cannot be reverse-engineered to be parsed). 

If you indicate that you are willing to authorize the platform to track your web usage in order to access free content, the platform will create a universal ID to avoid frequent authorizations on different platforms which can be recorded by any website or platform that supports UID 2.0 (and UID 2.0 allows users to log in, monitor, and adjust their personal data usage).

In other words, as long as you use the same email or phone number for login on different platforms, advertisers can know your cross-platform behavior data and deliver more relevant ads to you across media. To expand the scope of UID 2.0 application and to encourage the industry to work together to take care of both privacy and accurate ad delivery after third-party cookies have receded, Prebid.org, a non-profit organization, was given control to operate the technical infrastructure of UID 2.0 independently and to monitor the use of the technology impartially, driving the future of consumer identity and privacy protection on the Open Internet.

Most of the advertising ecosystem, including listed companies Magnite, Pubmatic, LiveRamp, Nielson, etc., as well as publishers such as FuboTV and Washington Post, have joined the UID 2.0 community. It is likely that UID 2.0 will be the largest unified identity system outside of Google and Facebook.

Benefits of UID 2.0 

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1. Encrypted ID, privacy upgraded again

After encryption, UID 2.0 significantly ensures user privacy, and advertisers need to obtain the decryption key from the administrator before they can use the data, which also eliminates the possibility of data abuse, and can be said to be an upgraded version of cookies.

2. Transparent information and user control

UID2.0 provides a unified portal platform for users to view and control their own data at any time.

3. Cross-device identification

Based on the design of email/phone number authorization, it is more convenient for cross-device identification without the need for other data mapping.

4. Open-source, compatible, and independent third-party monitoring

To gain the industry’s trust and to avoid becoming a private tool for competition, TTD has given control to non-profit organizations and open source technology provider Prebid.org, which is monitored by Interactive Advertising Bureau (IAB). Currently, UID 2.0 has also received support from many industry partners, including advertiser giant Criteo, data research authority Nielsen, among others.

Concerns about UID 2.0

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1. Opposition from Google

For example, Google, which is trying to develop its own "Privacy Sandbox" technology, issued a statement in March 2021, saying that it would not support any alternative solution in an attempt to identify individual users, which is tantamount to indirectly rejecting the UID 2.0 proposal. This doesn’t come as a surprise, after all, Google has a strong first-party cookie database, naturally, there is no need to adopt UID 2.0. In response to Google's statement, the IAB said it was "disappointed that Google did not work more closely with the industry prior to announcing its latest plans".

2. UID 2.0 is bound to be banned under the greater demand for privacy

Although UID 2.0 has made every effort to improve anonymity and encryption, if society as a whole continues to demand higher levels of information privacy amid ad tracking, not to mention governments’ tighten up of relevant regulations, some worry that UID 2.0 will ultimately follow in the footsteps of third-party cookies and doomed to be "banned".

Conclusion

Despite these questions, UID 2.0 is still in full swing, providing a novel solution for the digital advertising industry and finding a balanced way for publishers, advertisers, and users to coexist, which deserves closer attention of digital advertisers and event organizers, and the like. Get in touch with EventX to learn more about the nuanced balance between privacy and advertising of your upcoming events! 

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