You’ve seen the headlines. Apple has crippled, or killed, its identifier for advertisers (IDFA), leading to the apocalypse for ad-supported mobile publishing. Is it really the apocalypse? To learn the truth of how this latest change from Apple will affect the mobile ad-tech industry, we first must consider how we got here.
Apple’s privacy journey
Apple started heralding its privacy focus years ago, after a spat of compromising data issues. They developed a feature for iOS called “Limit Ad Tracking” as far back as 2010, which changes the IDFA to zeros for all users, making it useless as a unique identifier and preventing all tracking and targeting. Over time, they’ve made their limit ad tracking feature easier to find, more understandable to end users, and more restrictive on the capabilities for advertisers to use it.
Apple has been gradually moving toward privacy-by-default solutions for years. In the face of many tech-industry privacy scandals, like Cambridge Analytica, and privacy laws, like CCPA and GDPR, it was only a matter of time before Apple stopped allowing deterministic tracking by default using their IDFA. In fact, Apple signaled at last year’s worldwide developer conference that its IDFA could be on the way out in favor of privacy-centric solutions, so their latest announcement is a predictable evolution and shouldn’t come as a surprise, even though it does have far-reaching implications.
What is changing with Apple’s announcement?
With Apple’s latest announcement of iOS 14, the IDFA will be disabled by default and users must actively opt-in to share it with each app, similar to GDPR’s opt-in consent requirements.
“With iOS 14, iPadOS 14, and tvOS 14, you will need to receive the user’s permission through the AppTrackingTransparency framework to track them or access their device’s advertising identifier. Tracking refers to the act of linking user or device data collected from your app with user or device data collected from other companies’ apps, websites, or offline properties for targeted advertising or advertising measurement purposes. Tracking also refers to sharing user or device data with data brokers.” – Apple developer pages
Here’s an example of the opt-in message a user might receive in iOS 14.
Despite evidence that consumers prefer personalized ads and use advertising to discover new products, few will click “allow tracking” when presented with the one-sided messages that Apple suggests using. The oh-so-slight silver lining is two-fold: 1) that the opt-in is app specific, not device-wide, so each publisher will have a chance to communicate with their user and 2) that the smaller text, represented in the screenshot as “your data will be used to deliver personalized ads to you,” is customizable. We encourage publishers to think carefully about the most effective way to communicate the benefits of ad-supported content in this message. Even a small increase in opt-ins could help increase revenue. Still, initial expectations of opt-in rates are quite low, in the 10-20% range.
New iOS releases are adopted very quickly, so we can expect this opt-in requirement to be ubiquitous in the Apple ecosystem shortly after it releases.
What happens when no IDFA is available?
A lack of IDFA on the bulk of ad opportunities will cause a major disruption in the current mobile ad ecosystem. The IDFA is used for ad measurement, attribution, and fraud prevention. Additionally, it is used by DMPs to build their identity graphs for audience targeting and by DSPs to determine the value of an ad opportunity. Finally, it is used for operational tracking, including user experience improvements like frequency capping. Removing the IDFA makes all parties in the ad transaction blind to the device on a given ad request and makes all of these activities impossible in their current form. This is why, in particular, some are predicting the severe decline of ad retargeting and the elimination of mobile-only DSPs.
Apple hasn’t left buyers in need of attribution completely out to dry, however. Using their SKAdNetwork, it is possible for ad networks to get anonymous, privacy-friendly attribution information for activities like app installs. However, it’s not nearly the level of measurement that sophisticated marketers currently expect. Still, it’s a good sign that Apple is considering the needs of mobile publishers and app developers, and could expand the privacy-friendly framework in the future.
What should publishers do now?
The first thing to do is to take a deep breath. Despite an initial expected release date of mid-September 2020, requiring opt-ins has been delayed until “early next year .”
Advertising dollars still exist and buyers need to execute their budgets somewhere. It may take some time for buyers to either adjust to the new norm of limited targeting or to reallocate budgets to Android devices, but that adjustment will take place. Apple devices historically have yielded higher CPMs because their customers are more affluent, but this could change in the face of limited targeting.
The next thing to consider is whether to collect authenticated logins for the use of your service, and then activate that first-party data for tracking. While it may technically be possible, will customers like hearing that you are using their other identifiers (like their email used to login) to track them when they’ve expressly asked you not to track them via the Apple interface? Will Apple permit this behavior? Moving to first-party data collected from other devices via an authenticated login is a possible solution, but is likely not in the spirit of Apple’s privacy protections and each publisher must choose its own stance on this behavior.
Next, Apple has retained the use of its identifier for vendors (IDFV), which app owners can use to measure usage of their own apps. The IAB is mulling a solution by which ad tech vendors can use the IDFV to operationally track users, for instances such as for frequency capping. Apple’s delay is beneficial for this potential solution because it gives the IAB more time to finalize the standard and educate industry participants on how to use it appropriately. More to come here. To enhance the value of the IDFV, we may even see some consolidation of mobile app companies for the express purpose of using the IDFV across a broader swath of properties.
Finally, it may be time to consider a pay or subscription model on Apple devices. The ad dollars can flow to Android and other advertising-friendly services, and the subscription dollars can stay in the Apple ecosystem. You may even be able to incent users to share their data using this method, though you’ll have to be careful to follow CCPA guidelines on service discrimination.
Summary – what we know in the absence of an IDFA
Apple’s move raises a lot of questions and we don’t have all the answers. We do know three things that will change without an IDFA:
- Device-level frequency capping is not possible
- App-level frequency capping will be harder to achieve, especially for DSPs, pending an IAB solution
- Traditional DMP-based audience targeting goes against the spirit of Limit Ad Tracking and publishers must decide whether to honor a user’s selection in-app vs. agreements and opt-ins they receive outside the app
We expect more change when Chrome fully kills cookies and potentially follows Apple’s lead by killing the Android Advertising ID (AAID). Could we be headed back to contextual targeting as the future of in-app monetization? We’re hopeful that as an industry we can come together to determine a consumer-privacy centric solution that enables ad-supported content creation and monetization.
This article was written by Eric Shiffman, director of product marketing at SpotX