Consumers increasingly desire more personalized and relevant experiences, with research indicating that brands that excel at personalization generate 40% more revenue from these activities than average players. However, understanding what personalization and relevance look like for individuals is challenging as interactions between brands and consumers span a multitude of touchpoints across offline and online channels, devices, and environments. The good news is that identity resolution is alleviating this challenge for brands. This blog post will explore what identity resolution is, how it works, and why it matters for brands everywhere.
What is identity resolution?
Identity resolution is the process of connecting disparate identifiers—such as usernames, product purchases, and first-party cookies—across offline and online channels and devices to create a unified consumer profile. By connecting these identifiers to a single profile, brands gain a clearer understanding of who their customers are, what they are interested in, and what matters to them. Equipped with this information, brands can better understand how to engage consumers throughout their customer journey.
To illustrate how brands without identity resolution technology struggle to understand their customers, consider the following example:
A man sees an ad for a pair of sneakers on his connected TV while getting ready for work. Moments later, while on the bus to work, he visits the brand’s website on his mobile and looks up the sneakers, but doesn’t make a purchase. Once he’s home, he visits the brand’s website directly and purchases the same sneakers along with a hoodie and a pair of joggers.
Without identity resolution, the brand misinterprets a single shopper’s journey as activity from three separate consumers, distorting attribution, inflating reach, and ultimately misguiding future strategy.
How does identity resolution work?
Identity resolution employs two types of identity matching methodologies, or data linkage techniques, to connect identifiers to a single individual: deterministic matching and probabilistic matching. Before understanding how identity resolution works, however, it is critical to first understand these matching methodologies:
- Deterministic Matching links unique and verifiable identifiers to a single individual. These identifiers are usually provided by the individual directly, ensuring accuracy.
- Probabilistic Matching links identifiers to an individual based on behavioral patterns, correlations, and statistical likelihood, rather than exact matches.
Effective identity resolution technology utilizes both deterministic and probabilistic matching to construct the most comprehensive customer profile possible. With these methodologies clearly defined, let’s explore how they work together in the real world.
How deterministic and probabilistic matching make identity resolution possible:
A person visits their nearby hardware store and signs up for their loyalty program. To do so, they provide their full name, home address for shipping items, an email address for account creation, and a phone number. The hardware store then creates a user ID for this customer: ID 1Ab23cD4. These identifiers are all deterministic IDs as they are provided directly by the customer and are unique to the individual.
Then, the same customer visits the hardware store’s website from their laptop but doesn’t log into their account. The website captures this event as an individual using a MacBook on Google Chrome V138 visiting the site from a specific IP address, 000.123.456.0.0, and with an address that's within a 10012 zip code. This session activity is reflective of other anonymous sessions and correlates with previous sessions from customer ID 1Ab23cD4. There is a high statistical probability that the anonymous session is, indeed, customer ID 1Ab23cD4.
With identity resolution technology—and deterministic and probabilistic matching—the hardware store reconciles the anonymous sessions with that of customer ID 1Ab23cD4 into the identity graph, creating an accurate and cohesive view of their customer. The identity graph houses all the identifiers and profiles in one location, updating profiles as the identity resolution technology continues to ingest and reconcile data points.
Why identity resolution matters for brands
With identity resolution, brands can organize data across both offline and online touchpoints and connect it to a single individual in an identity graph. Doing so enables brands to activate their data and derive insights that can lead to more personalized and relevant omnichannel customer experiences, improved ad spend, and better measurement and attribution.
Identity resolution will play a crucial role in future-proofing business success as it enables brands to connect with consumers in cookieless environments. While Google has stated that it is no longer deprecating third-party cookies in Chrome, third-party cookies are experiencing a natural and steady decline, which will lead to their eventual extinction. Having a strong first-party strategy and integrating with robust CDPs and privacy-first tech is essential to immediate growth and long-term success.
Best practices for identity resolution
Whether building in-house identity resolution capabilities or collaborating with technology partners, several key factors must be considered to ensure success. For brands, developing and adhering to data hygiene and standardization practices, as well as consent and compliance policies, is essential for enabling accurate identity resolution through first-party data strategies.
When working with technology partners, brands should inquire about their profile maintenance, privacy-safe technology, integrations, and, of course, their mix of deterministic and probabilistic matching and algorithms in identity resolution.
Transform your marketing
Identity resolution serves as a bridge that connects fragmented interactions, creating a clearer and more comprehensive picture of a customer. With this technology, brands and advertisers can transform their marketing efforts into precise strategies, fueled by data, to build strong consumer connections that drive premium outcomes.