What’s Going On?

The past few years have been a roller coaster ride for digital advertisers driven by the industry’s increased focus on consumer data privacy. First, there was the introduction of consumer privacy regulations, including GDPR and CCPA. Then came Google’s announcement that third-party cookies would disappear from Chrome browsers completely in 2022. Most recently, Apple’s April release of iOS 14.5 required users to opt-in (as opposed to previously having to opt-out) to the IDFA in order for advertisers to track their data.

These changes created many new hurdles and limitations for digital advertisers, and while the changes towards increased privacy are not entirely novel—nor are they unexpected—marketers are grappling with managing and optimizing campaigns in this new privacy-first era. So what do these new parameters mean exactly? In short, for consumers, this means more transparency, control, and privacy regarding their data. For advertisers, this means less insights and less effective ads, which can lead to less revenue. Let’s take a look at the two biggest disruptors hitting the ad space currently.

 

Everyone’s Favorite C Word: The Death of the Cookie

For 20+ years, advertisers have relied on third-party cookies to track online consumer behavior to both serve relevant advertisements to users and measure the success of online campaigns. However, in recent years, consumers have grown concerned for their privacy and are demanding more transparency from companies regarding how their online information is being collected, stored, and used. Following the removal of third-party cookies, the industry is working to find alternatives for audience targeting, frequency capping, and measurement. Cookies weren’t designed for a multidevice reality and only work on browsers (a big limitation). It’s important to note that there are plenty of other ways to collect user data from alternate sources, as well as data-driven targeting tactics and identifiable information that can be used for retargeting in order to still effectively reach consumers without the use of cookies.

 

Apple of My IDFA: iOS 14.5 Update Impact on Mobile Advertising

While cookies can’t be passed between devices, advertising identifiers on mobile devices allow apps to track users for targeting and advertising purposes. On April 26, the latest Apple iOS 14.5 update became available, requiring apps to ask iPhone users for permission to collect and share their data. Currently, app developers don’t need permission to incorporate targeted ads in their apps. While Apple’s update made it easier for users to control the data they share with advertisers, it made it harder for advertisers to track conversions and optimize paid media campaigns. While Apple pushes through new privacy measures like AppTrackingTransparency (ATT), Google has left its own Ad ID alone (for now).

Consumers seem to be split: 31% of U.S. smartphone owners would allow tracking on all their apps to avoid paying to access them, while 30% wouldn’t allow any app tracking but would prefer to pay a subscription for certain apps. Information can be encouraging, and as many U.S. consumers (70%) express concern over personalized ads, receiving prompts that give clarity over what’s being collected could foster more faith in advertising from uncertain consumers.²

 

The Price of Privacy

Though it’s been over four weeks since Apple’s changes went into effect, the evidence remains mixed. While estimates released from different sources vary (overall and by category), app tracking opt-in rates are expected to be low—though it’s still too early to tell exactly what the impact on attribution and personalization will be. The mobile ad market is worth over $300b and Apple owns about 27% of that, according to Digiday. If almost no one agrees to be tracked under Apple’s new opt-in system, advertisers will be left with very little iPhone, iPad, and Apple TV data to use for ad targeting.

Over half (57%) of all app users on iOS 14+ are still in the ‘Not Determined’ state, meaning they haven’t yet been given the option by the app developer to opt-in or opt-out.³

While mobile app ad budgets may have favored Android in the update’s immediate aftermath, the shift appears to already be losing momentum. This may be partly the result of fewer users upgrading their Apple devices expected, stalling the update’s full impact. Only 14% of global users have upgraded to iOS 14.5 or higher, while only 17% of mobile apps have implemented the ATT framework.⁴ Both figures may be set to explode soon, once Apple begins to actively push the update to its users.

Ad impression costs are down as well. The industry expected a drop when iOS 14.5 was released, but it will most likely be temporary. Alliance partners predict that impression cost will steadily increase as marketers feel more confident with ad performance despite App Tracking Transparency. Ultimately, the death of IDFA does not mean the end of effective advertising on iPhones. It simply means that advertisers will need to shift their ad strategy and reassess methodologies to continue providing relevant ads to users.

 

Industry Response

The removal of third-party cookies and new privacy changes under iOS 14.5 provide an opportunity for industry players to be creative with their approach to audience targeting and measurement. Companies who have already future-proofed their tactics and processes will be best positioned to thrive in the new privacy-focused landscape. Despite the significant demand for identity-based solutions by marketers and the ad industry’s acknowledgment that the space needs a new form of identity resolution, there is no single solution as there is no single identifier that can replace a cookie or an IDFA.

Back in 2019, The Trade Desk introduced Unified ID 1.0, which aimed to eliminate the cookie-syncing process and help buyers and sellers identify audiences effectively. The Trade Desk began building version 2.0, an open-source upgrade that removes third-party cookies from the equation and is interoperable, last year. Additionally, a number of companies, such as LiveRamp, Criteo, LiveIntent, ID5, and Kochava, are building their own identity products.

While cookies and IDFAs have served as the main way to track users, there are alternative ways to reach audiences. Establishing a balance between protecting consumer anonymity, while still allowing advertisers access to data, is a win-win for everyone. With the right innovations, the ad-tech industry and digital marketing will continue to be successful in the post-IDFA world.

 

The Digital Remedy Approach

With 20+ years of experience, we always have and will be ready to adapt to the ever-changing digital landscape. We support and are prepared for on-going industry changes to increase consumer privacy and transparency surrounding data. Digital Remedy continues to work with the most technologically advanced partners (DMPs, DSPs, CDPs, etc.) to best manage digital ad campaigns amidst industry changes and will continue to strategically serve our clients moving forward.

 

Mobile Campaigns

Our strategic partnerships with leading location services providers ensure we avoid any significant impact to the scale and quality of our location-based campaign data. Our targeting and measurement tactics leverage multiple forms of identity and have transitioned beyond MAIDs. Our location partners have been fully prepared for IDFA opt-in enforcement for months and have employed identifiers outside the IDFA, such as hashed-IDs.

Our SDK-based partners are integrated with a number of mobile apps that would enable location services tracking so all it takes to keep a device in the ecosystem is an opt-in to one app on the user’s phone. For example, if the opt-in rate is 10% and a user opts-in to just one of the 10 apps with location services on their phone, we’re not losing anyone in our pool.

 

Targeting Capabilities

Digital Remedy has partnerships with industry-leading technologies for identity resolution and numerous data partners with access to alternative identifiers, including second-party data, and first-party CRM data, to ensure continued targeting scale. We utilize a variety of cookieless targeting solutions and will continue to connect clients with intended audiences—delivering enriched audiences for relevant omnichannel digital advertising. While there are expected drops in targeting device pools, causing some contraction in segment scale, audience-based targeting remains a powerful solution. Our partner audience panel is substantial, with plenty of buffer room and ability to grow despite industry changes.

 

Impact to Attribution

By leveraging leading technologies for identity resolution, we’re ensuring continued attribution capabilities during current industry shifts. Digital Remedy has access to first-party data through our partners, which offer users value in exchange for location sharing. Less than 15% of iOS impressions are matched via MAID—losing 90% of them would only impact attribution feasibility by 1% to 2%. Changes to conversion rate and lift, if any, will be within acceptable ranges. Additionally, we’re able to offer alternative options for measuring campaign success, including brand lift studies.

 

Sources:

  1. Tinuiti, 4/20/21, What is an IDFA (and How Will Apple’s iOS 14 Update Impact Advertisers)?
  2. eMarketer, 5/06/21, US adults who recently updated to iOS 14.5 show openness to apps tracking them
  3. Flurry, 5/20/21, iOS 14 Opt-in Rate: Behind the Numbers
  4. Appsflyer, May 18, 2021, The impact of iOS 14 & ATT on the mobile app economy
  5. Appsumer, 5/17/21, Week 3: Key lessons learnt about SKAdNetwork (SKAN) and App Tracking Transparency (ATT) so far
  6. Simform, 1/05/21, App Usage Statistics 2021 that’ll Surprise You (Updated)

IP Zone: Leverage the relationship between users and the location of their IP addresses in a cookie-free, safe and scalable way.

Behavioral: Combine first party with network analytics and enormous scale to define custom audience channels that are optimized to sites with high brand engagement.

Demographic: Reach the right audience based on demographic characteristics such as age, gender and income.

Mobile Device: Target users by mobile device type (Smartphone, tablet, etc.), carrier and operating system.

Geo-Location: Target your audience residential cluster, proximity to retail locations, campaign level DMAs and more.

Contextual: Place a relevant ad in front of a user who is reading content that contains specific terms.

Buying Power and Quality

Let’s be honest. Your ad ops are limited by your access to only a handful of channels and DSPs. You want more reach and better prices, but don’t want to sacrifice quality in order to achieve those goals. Digital Remedy has access to a vast multitude of channels based on relationships we’ve cultivated over nearly 20 years in business. That means we get the best prices, have personal relationships, and don’t get sent to voicemail when we call.

It also means that we can execute omni-channel ad ops for better prices than an internal team, while ensuring the quality is up to industry standards. On top of access to all sorts of specific audiences we’re able to to leverage first- and third-party data across all your campaigns and pivot across platforms based on results. Any campaign, any budget, any platform, any audience. Digital Remedy backed by AdReady is restriction free ad ops….and what could be better than that?

Resources, Time, and Overhead

When was the last time you enjoyed balancing budgets, reading resumes, dealing with aggressive sales teams, or wasting years of time for small gains in performance. By partnering with Digital Remedy you get the full support of $30m in OPEX including marketing teams, sales teams, and a dedicated 24/7 ad operations team. No hiring new employees for media optimization, business development, or account management. No months of training and on-boarding. No long meetings crafting sales materials. Just your team focused on making deals, and our teams and tech focused on supporting and executing those deals in a tech-enabled, digital ecosystem designed to get the most out of any KPI.

Reporting and Support

How nice would it be to have all of your data and insights in one location. We don’t mean an excel sheet sent out once a week with complicated charts, or an XML file with pages and pages and pages of tables (what is this, 2003?). We mean a fully customizable dashboard reporting in real time, or as real time as possible. You get to decide the how, what, and when of the reporting you’re seeing. And that’s ALL of the how, what, and when’s. If you want to see breakouts of all of the individual campaigns in your system, done. If you want broad scope comparisons of all of the campaigns in the last year, done. If you want to see CTR’s for specific audiences and compare them to CPM for your best performing advertiser but limit the scope to campaigns greater than 30k, done. All of this is at your fingertips with the AdReady Dashboard, all in one place.

Jessica Cortapasso

With more than a decade of experience in human capital management, Jessica Cortapasso serves as VP of Human Resources at Digital Remedy. After graduating from Muhlenberg College, she quickly recognized her passion for people and entered the workforce in Human Resources where she gained expertise in employee relations, designing strategic benefit plans, and the development, implementation, and curation of corporate engagement initiatives for big-name brands and small companies alike. Becoming a member of the Digital Remedy family in 2013 while simultaneously acquiring her Masters Degree in Human Resources Management and Development from New York University, Jessica has steered company culture through significant events ranging from acquisitions and a rebranding, to the development and application of our Core Values that shape our daily business practices. Cortapasso resides in Brooklyn, plays competitive volleyball, and loves spending time with her nieces.

Erez Feld

Responsible for the financial and legal practices of Digital Remedy, Erez brings 22 years of experience in precision financial analysis, growth management practices, strategic acquisition, and investment leadership. A graduate of Hofstra University, Erez began his career modeling for corporate finance, and expanded his accounting prowess in the real estate sector. Erez joined Digital Remedy in 2008 as a senior accountant, and helped to create and build an accounting department that could support the rapid growth of the company and aligned with those needs. Over the past 12 years he has evolved through various positions at the company within the finance discipline, supervising and mentoring additional finance personnel, while growing under the tutelage of Michael Fleischman, former CFO of Digital Remedy. Today, he leads the Finance Department by supporting high-level projects such as acquisitions and restructuring, and is responsible for overseeing all financial assets, establishing financial procedures, controls, and reporting systems.

Michael Fleischman

After a successful career as an accomplished Fortune 500 financial professional leading Corporate Finance and Strategic Planning at Cablevision Systems Corporation and its programming subsidiary Rainbow Media Holdings, Michael currently plays a role in the overall management of Digital Remedy including direct responsibility for all financial-related activities including accounting, financial planning, M&A, legal, insurance, real estate and banking relationships. Michael brings more than 25 years of media experience at Cablevision and Rainbow Media and during his career was instrumental in the launching and managing of a number of cable television networks including 10 Regional Sports Networks across the US, American Movie Classics, Bravo, and the Independent film channel as well as the structuring of corporate partnerships with companies including Liberty Media, NBC, Fox/NewsCorp and MGM. Additionally, he was the finance lead on a number of professional sports team acquisitions including Madison Square Garden, the successful IPO of Cablevision and a tracking stock at Rainbow Media.Michael was involved in the creation and launch of Rainbow Advertising Sales which was one of the Cable Industry’s first Local Advertising Sales Divisions.

2021 Industry Trends Newsletter

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