User IDs are cookie IDs that help adtech vendors to identify users and serve personalized ads. Every adtech platform has its own ID (name) for the users and it will update information related to that user under the ID.
For instance, a user visiting nypost.com will be exposed to multiple vendors like Google, AppNexus, OpenX, etc. (as the publisher connects to the adtech platforms for selling ad impressions). AppNexus will identify the user with its own name (ID) ‘xyz1’, OpenX will ID the user with ‘1bc3’, etc.
When programmatic auction happens, user IDs from one platform will be synced with another so that they can effectively trade impressions. This process is known as cookie syncing. When cookie syncing happens, not all the cookie IDs will be synced properly. There’ll be losses and the match rate of 40 to 50 percent is considered decent.
To avoid losses, universal user IDs were developed. The idea is simple. Instead of having multiple IDs for the same user, all the platforms can have one universal ID for the user and use the same ID while doing programmatic transactions. Prebid, the most-used header bidding wrapper supports several User IDs that helps you to bypass cookie syncing.
You have to choose the ID provider (who’s responsible for creating and maintaining the common User IDs) and integrate it with your setup.