Jun 2, 2021
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…
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.
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.
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
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.
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.
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.
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.
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.
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.
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