Brands Struggle To Move Past Legacy Approaches To Identity Resolution
Today’s consumers have more choices and are better informed than ever before — which makes marketing more challenging. As consumers become more sophisticated, they’re less swayed by traditional marketing methods. As a result, marketers go to great lengths to uncover additional data sources to add to their understanding of their customers and create meaningful interactions. But as the number of data sources increases, so too does the potential for conflicting data to introduce inaccuracies while resolving identity. A vital capability for making the most out of this understanding lies in identity resolution, which Forrester defines as:
The process of integrating customer identifiers across available touchpoints and devices with behavior, transaction, and contextual information into a cohesive and addressable consumer profile for marketing analysis, orchestration, and delivery.1
Identity resolution supports a wide range of activities that support marketing, including targeting, measurement, and personalization for both known and unknown audiences. Creating a cohesive, dynamic understanding of a customer from these activities allows brands to more accurately target and understand each customer — an important but not always easy feat. In a recent survey of 175 customer data and analytics decision makers, we found that brands are prioritizing many data, analytics, and customer-related objectives over the next year. These include an increased use in data and analytics, driving customer centricity, improved personalization and content marketing capabilities, and better alignment of brand promise to customer experience. However, none of these objectives would be fruitful without a solid identity resolution foundation.
Most organizations are fully aware of this fact; more than half of
all respondents believe identity resolution capabilities are critically important to their brands’ ability to deliver on their prioritized initiatives (see Figure 1).
How are companies resolving customer identity today? Our study found:
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Use of customer identifiers varies.
While options like internal identifiers (91%) and email (86%) are nearly ubiquitous, brands use device ID (34%) and IP address (26%) far less commonly. The sheer volume of channels available for customer engagement compounds this wealth and complexity of identifier data. Brands need to find a way to identify and track their customers everywhere they interact, whether it’s websites, social, mobile, addressable TV, or any other device or touchpoint where consumers engage with brands. And they need to do it in a privacy-safe way, correctly managing consent along each customer’s journey.
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Legacy approaches to identity resolution still reign.
Traditionally, brands have two choices when it comes to the methods they use to resolve identity: 1) probabilistic — that which makes inferences based on all of the signals about consumers’ web behaviors and interactions — and 2) deterministic — data, like an email address that is associated with a cookie or mobile ad ID, that shows there is an explicit link between identifiers. The majority of brands (61%) are using both of these methods, but independently of one another and for different scenarios. Just 15% of respondents’ brands employ a hybrid approach that uses both deterministic and probabilistic data in tandem.
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Brands cobble together a patchwork of identity solutions.
There is no single solution that addresses all use cases today. Rather, 76% of respondents’ organizations draw on both vendor and in- house capabilities to manage identity resolution. And these vendor solutions run the gamut as well. Everything from CRM platforms and data management platforms to ID graph providers and onboarders figure into how brands manage identity resolution today.
The mere fact that these solutions are legacy systems is not in and of itself a problem. Rather, the issue is that brands are attempting to resolve identity using technology that is not meant to perform that task. For example, identity resolution is not intended to replace any existing database management systems or CRM systems already in place; it is an additive process that looks at the customer journey in its entirety, helping marketers develop a deeper and more accurate understanding of the impact of their marketing over time at the channel, audience, and individual levels. With a single source of truth, B2C enterprises can improve and optimize the output from downstream stakeholders across specific use cases where knowing the identity of a customer is crucial.
CURRENT IDENTITY APPROACHES KEEP BRANDS STAGNANT
Because today’s current approaches to identity resolution pose more questions than answers, brands are left far behind the curve. We found that brands struggle with confidence, applying data, and unlocking advanced use cases, all as a result of their current patchwork approach.
The majority of brands lack confidence in their ability to execute
on identity resolution-based tasks. Just 10% of the respondents we surveyed say they are very confident in their brands’ ability to build a 360-degree view of their customers, yet 77% of these same respondents admit that creating this 360-degree view is either important or very important to the success of their businesses (see Figure 2). Further, only about one-third of respondents are very confident in their brands’ ability to resolve identity across devices, and only 42% are very confident that they can resolve identity across online and offline touchpoints. Brands currently look at identity as a method to build customer profiles to activate specific use cases, rather than building a complete, cohesive view of the customer.
Respondents report a high degree of difficulty tying data generated from a variety of different channels back to customer profiles. While more emerging channels, such as addressable TV, are expected to be most difficult (65%), more common channels like search and display still rank highly in difficulty (58% and 57% respectively). This points to an underlying data usage issue as opposed to brands not being sure how to use these channels.
Finally, we found that brands’ identity resolution use cases tend to focus on basic customer engagement and data management tasks like personalization and data deduplication (see Figure 3). However, in the next 18 to 24 months, brands are prioritizing building a data asset that can be applied more broadly and for omnichannel/longitudinal customer engagement.
If brands want to be able to adequately support these data-heavy future use cases, they will need to dramatically advance their current identity resolution approaches.
