Identity Puzzle in Customer Data Management

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In Hindu mythology, Ravana, the great scholar and demon king, has ten heads, symbolising his various powers and knowledge. The heads were indestructible with the ability to morph and regrow. In their battle, Rama, the warrior god, had go below Ravana’s heads and aim the arrow at his solitary heart to slay Ravana for good.

In modern times, the consumer is a bit like that, not in terms of his evil designs but his multiple identities. Research states that an average consumer in the US today is connected to 3.64 devices. With the proliferation of a host of new-age devices like smart speakers, wearables, connected homes and automobiles etc., it is projected that she could be connected to as many as 20 devices in not so distant future. Like it did for Rama, this poses a definite challenge for today’s marketer – how to navigate through the maze of these devices to identify and recognise the consumer so she can be singularly, consistently, and contextually engaged across her addressable touchpoints.

Industry research suggests that only a small fraction of consumer businesses can currently accurately identify their audience – hence the advent and rapid rise of Identity management solutions that help companies to resolve the identity of their audience into individual consumer identities and profiles. The size of the Identity solutions market is estimated to grow from USD 900 million currently to over USD 2.6 billion by 2022, outpacing overall marketing investments growth

Also Read: Better Data Governance Leads to True Customer-Centric Experiences

A recent Winterberry research survey indicates that about 50 per cent of consumer businesses have intensified focus and plan to increase investments on Identity solutions. While segmentation and targeting on paid media remain the predominant use cases for consumer brands, cross-device and channel personalisation plus measurement and attribution are expected to become areas of focus in the near future.

Identity Solutions: The Past, Present and Future

At its core, an identity resolution solution’s job is to continuously gather audience activity data from a disparate set of data sources, platforms and services to derive a cohesive, omnichannel identity and profile of each individual audience member. However, the approach has been largely siloed so far with marketing channel specific identity platforms and strategies. CRM databases as custodians of the first-party customer and contact information have been the mainstream identity platforms for direct marketing activations, primarily over email or direct mail.

With the growth of digital marketing spend, Data Management Platforms (DMPs) that store digital audience behaviour data to primarily support display ad buying use cases have come into prominence. However, their relevance is now questionable with walled gardens like Facebook and Google closing doors on them. The other growing channel of influence has been mobile data platforms to support mobile device and location-based engagement.

To overcome the limitations of a disconnected, multi-channel approach that current Identity solutions like CRM databases or DMPs are constrained with, the focus is shifting to emerging modern solutions like Customer Data Platforms (CDPs) and Identity Graphs. These offer a unified, cross-touchpoint and omnichannel approach towards identity resolution and linking, enabling a fully harmonised, single view of the customer to the marketer.

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The Mechanics of Identity Resolution

Identity resolution system’s key job is to continuously collect audience related data from a variety of sources and put it through an ongoing process that resolves, generates and updates this data into discrete consumer profiles, which are then used by the business for various forms of marketing or other activations.

The process comprises of 3 key steps:

Data Management – Includes ingestion of disparate set of consumer data, both identity- and activity-related, followed by processing and storage of this data into organised repositories.

Identity Resolution – This is a crucial and complex mix of a deterministic and probabilistic process of deriving identifiers, matching, cross-referencing and linking to unique consumer identities followed by a validation mechanism to maximise the accuracy of the resolution process.

Consumer profile generation – This associates all identifiers, attributes and activities into a harmonised, holistic Identity Graph of the consumer, an individual or a household.

Also Read: CDP or DMP, Who Rules Customer Data Management?

5 Mantras for an Effective Identity Management Solution

• Ensure the Identity system is fed with data from a wide array of data sources. Not just device activity but also the applications behind to help drill past the device, cookie or pixel and reveal the real people behind them and their behaviour.
• As part of data management, ensure meeting consumer privacy rights and compliance requirements of industry norms like GDPR, CCPA etc.
• Identity resolution should include a consistent, rule-based deterministic match process to ensure high accuracy critical to support contextual, personalised engagement in direct marketing use cases
• The deterministic process must be supplemented with machine learning-driven probabilistic matching to expand the data set, and meet the requirement of use cases like social media or display ad marketing that expects a wider net but relatively less 1:1 personalisation
• The generated consumer profile, in the form of an Identity graph, while having the requisite accuracy and timeliness, should go beyond the linkages to identifiers and attributes by including the desired insights to enable marketing activation use cases optimally.