Perspectives

What’s the Hubbub?

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What’s the Hubbub?

An overly brief background
Apple, namely Tim Cook, has been talking about the need for transparency around data collected on consumers and to give consumers control over whether they want data collected about them or not. Now, in 2021, Apple has taken action to put this control in iPhone users’ hands with it’s latest 14.5 update. Once consumers have updated their devices to 14.5, a prompt will appear, opening an app whether they want their activities tracked or not (see image below). Apple is stating that apps must receive explicit consent to be able to collect and share any data on the consumer. They are promoting it with educational videos to make sure everyday consumers notice and hear about the changes and why Apple is implementing this.

iPhone data tracking screen

To date, only a percentage of apps have chosen to participate. However, as the year progresses the expectation is most, if not all will be opted in. And Apple has rejected some apps from the App Store for attempting to use alternative identifiers for fingerprinting.

The main reason you should be paying attention
Four letters: IDFA. Or Identifier for Advertisers. If you have an iOS device in your pocket, you have a unique IDFA – for sake of an analogy, think of it as a unique serial number – assigned to you and your specific device. So, up to this point before this new operating system launch, likely unbeknownst to you, your IDFA (anonymous) and all your in-app actions, purchases, taps, likes, etc., have been tracked, profiles have been made about you (anonymously) and sold to other companies.  

The usage of that data allows companies and advertisers to then personalize advertising geared more toward your interests based on all that data across apps, including places like Facebook. Long story short, it is why you see ads for an item you looked at but didn’t buy or a service you researched and suddenly a competitor’s ad shows up.

And this means, as an advertiser, you may have been or currently are using the IDFA data collection method as a means to find and target people with your ads depending on what media vendors and technologies you use. You may now be asking yourself, “oh no, did we do something wrong?” Don’t worry, others are asking the same and the answer is that this is just a shift in our industry that everyone should be thinking about.

So is this really going to change much for how we think about advertising?
If you take a step back, for a long time, especially with the rise of programmatic technologies and the vast amount of data collected across our app and web browsing activities, our industry has talked about reaching the right person at the right time with the right message. One word summarized this at large: Personalization. Or, some people equate this to Retargeting, which merely a form of personalization. Regardless, this has been possible simply because of highly unique data points like the iOS IDFA.

But that stands to change now. While not impossible, the ability to collect data and then advertise in-app on iOS devices will become more difficult. Given that iOS devices make up nearly 50% of the smartphone market – that’s a big number to consider. Initial speculation was that opt-in rates would be low with a broad range: 10-50%. While international opt-in rates are slightly higher and 14.5 updates are still in low numbers, as of this last week, the U.S. opt-in rate is a lot lower around the 4-6% mark. This could fluctuate as more users update their devices over time.

So, yes, it will change how we all do things when it comes to iOS identifiers and delivering and measuring ads across the app ecosystem on those devices.

“So what do I do now?”
Is this a huge deal? If you want to reach the same people across apps and understand frequency and engagement, kind of. If for attribution purposes, you need to know if ads promoting a new app from your brand led to downloads of that app, yes

Here is what you’re likely going to hear more about from your partners:

Overall, our industry is increasingly touting the importance of brands collecting their own first party data to use for marketing purposes. Publishers are capturing data with subscription and paywall models to use for targeting. Similarly, there is a lot of attraction for retailer media network’s first party data that houses purchase data and can be used for media. Now is a good time to make sure, if you haven’t already, to identify your 1st party data strategy and approach, such as using parties like LiveRamp to onboard any first party data for targeting purposes

  • Shifting inventory to Android devices: Google phones aren’t affected by any of this. You’ll still be able to target, measure and optimize the same way across apps on Androids. This only affects iOS
  • More contextual targeting: for iOS devices, as vendors lose the ability to target specific users, more advertising will rely on the context of the placement, such as being in a news app or home-and-garden themed app
  • A new take on location and “moments”: some vendors use the phone’s Accelerometer (the thing in your phone that knows it moves) and other triggers like GPS/IP address/WiFi signals to know where you are at a specific point in time. iOS users are already prompted to allow for “Precise location” tracking and will continue to be opt-in. Any data sharing will now be tied to location + IDFA, thus require multiple consents
  • Shift from deterministic to probabilistic modeling: Said another way, vendors were able to “determine” the ads were delivering to your specific audience based on IDFA whereas now their algorithms and models allow them to “probably” serve ads to your desired audience

Questions to ask of your partners:

  • If your partner doesn’t provide you in-app inventory, they aren’t affected. Move on.
  • If your partner is an app that is authenticated (meaning you have to log in to use the app) ask them if they let data out of their app and share it with outside companies. Some do, some don’t, and what that means for advertisers like you. Apple does not permit data sharing tied to an IDFA if the consumer opts out of tracking, although it’s unclear if and how they enforce this with other identifiers like email
  • For everyone else, remember the old saying – if you don’t pay for the product, you are the product. So, for companies without authentication and who are providing in-app inventory, they will likely have to move to more contextual vs. behavioral/ID-based ad solutions and more modeling

Bottom Line
IDFAs are not the only variable media vendors use when it comes to targeting key audiences. This is not the end of the world to reach people on iOS devices. Other methodologies like those listed above will start to increase; but you can still advertise in-app on iOS. It will be less precise regardless, because less people are giving up their data.

Not addressed within this paper is the affect of attribution or the challenges this will create: being able to attribute specific actions to mobile iOS users such as conversions or app downloads and installs. We highly recommend vetting your attribution / measurement methodology with your analytics teams.

Talk to your media team, agency and vendors. Ask questions about how this is affecting them and how they’re thinking about it. Some may be revisiting the target audience definitions in their recommendation. Some may learn that IDFAs were never used to begin with for some media vendors. Some may look closely at measurement to understand if performance dips in general for mobile based ad campaigns.

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