Netflix’s crackdown on password-sharing highlighted a key flaw in relying solely on email-based solutions for identity. With a significant portion of Netflix’s paying audience sharing logins, the company struggled to accurately identify and reach its audience. In response, Netflix employed predictive, probabilistic methods to identify non-paying customers and present them with a low-cost, ad-supported option. This approach helped fuel 5.9 million new subscriptions in Q2.
While email-based solutions have been touted as a way to capture first-party data and make connections across domains, they are not without limitations. Only a small percentage of content on the open web uses an authentication layer, such as a registration gateway or paywall, resulting in a lack of email availability. This makes email an incomplete solution for identity.
Rather than viewing deterministic and probabilistic methods as adversaries, it is crucial to understand that programmatic advertising has always relied on a combination of both. By layering these methods together, advertisers and publishers can achieve addressability, scale, and interoperability more effectively.
Moving forward, it is important to dispel the myth that deterministic data alone is sufficient for identity. Additionally, the idea that probabilistic methods sacrifice accuracy or consumer privacy is fiction. Email data serves as a powerful foundation for identity, but it must be complemented machine learning models and other probabilistic methods to deliver a comprehensive view of the consumer and ensure healthy publisher monetization.
In an industry where multiple identifiers are vying for dominance, embracing both deterministic and probabilistic methods will be crucial for solving addressability and identity challenges. Requiring consumers to disclose their email addresses for access to content fundamentally changes the internet experience and raises questions about the value exchange. Therefore, a balanced approach that combines the strengths of both methods is necessary for a sustainable and effective solution.
Sources:
– Eli Heath, Head of Identity at Lotame
– Netflix earnings report [no URL]
– US consumer password-sharing statistics [no URL]
