Use of Audience IDs set to rocket to almost two-thirds of online ad spend by 2020

Cross-device audience ID matching will be used in 58% of total UK online ad spend by 2020, compared with 28% in 2016, according to a new report from Yahoo and Enders Analysis. These ‘audience IDs’ are the online identity profiles created from anonymous identifiers in order to recognise and match the same user across different channels, devices or both.

The report, People, not devices: Audience buying in a Cross-Device World, shows that ad spend based on audience IDs will almost triple in the next few years, reaching €7.9 billion by 2020, compared with €2.7 billion in 2016. The trajectory to growth will see this ad spend reach €4.33 billion in 2017, before hitting €6.22 billion in 2018 – a 226% increase from last year.

When the General Data Protection Regulation (GDPR) comes into effect in 2018, growth in the volume of ad spend which uses audience IDs will slow down, as the advertising industry works to ensure compliance with the new regulations. It will, however, continue to grow, as the industry responds and adapts to the new regulatory requirements.

By 2020, the proportion of display ad spend that uses audience IDs will be slightly higher than for paid search, accounting for an estimated 68% of display spend, compared with 55% of paid search. Most of this growth will come from mobile display and mobile search growth.

The report attributes a large portion of future growth to the recognition from advertisers that using audience IDs will give them a better picture of who is seeing their ads across devices, the ability to better understand and manage frequency exposure and more accurate information about total campaign reach. In addition, cross-device ID based advertising allows for improved attribution, as these IDs can be used to attribute purchases and conversions to show concrete ROI for campaigns.

Nigel Clarkson, managing director, Yahoo UK says “This level of insight benefits consumers as well as brands and advertisers as it helps get the right message in front of the right audience, making it a win for all.”