3rd July 2020
The Identifier for Advertisers (IDFA) is Apple’s way to identify each iOS device allowing developers and advertisers to link specific ad impressions to app and browser actions. With the launch of iOS14, Apple will introduce the App Tracking Transparency framework, which will provide users with the explicit option to disable IDFA tracking before each app install. The changes were announced at last week’s Apple Worldwide Developers Conference.
Previously IDFA was the default and users could not disable sharing IDFA, although they could request no ad tracking. Whilst Android has designed a similar solution in Google Advertising ID (GAID), Windows devices do not have a comparable tracking mechanism. With iOS14, if the user opts to limit tracking it removes the ability for that device and/or app to recognize the IDFA and track the user. Apple will also give the user new tools to help them understand the data used by apps to track them, the data collected about them and the permissions that can be enabled/disabled. Lastly, Apple is simultaneously revising its app measurement API, SKAdNetwork, which would improve app attribution capabilities.
Taken together, this further weakens the proposition of 3rd party measurement providers and positions Apple to provide a preferred end-to-end solution around app install campaigns. Advertisers can continue to track users through measurement partners like Kochava, Appsflyer and Adjust, as a third party is needed to validate and connect all sources of data - even if less data points are available for analysis. Advertisers and measurement partners could try other ways of tracking device ID, like system fingerprinting or apps inventory but these may be considered unacceptable or illegal in some jurisdictions and more importantly, they’d clearly defy the consumer’s request not to be tracked. Therefore tracking is likely to move towards more aggregated results rather than individual journeys, following a trend set by Google which stopped sharing of data on individual click-streams following the introduction of the GDPR.
The main casualty is potentially mobile re-targeting. Aggregate measurement of media impact is still valuable and accurate to make marketing decisions, so advertisers will still know what touchpoint, tactic or copy works best but they won’t be able to retarget a particular user from their own first party data - unless the user has willingly provided their contact information through another direct means. Together, these changes could have a significant impact for advertisers over time, with the size of impact dependent on the percentage of Apple users who will opt out of tracking - estimates range from 20% to nearly all - and whether (or when) Alphabet’s Android will follow suit.
If all users decided to end tracking there would be a clear loser: companies whose business relies solely or mainly on acquiring, maintaining or dealing with such data. However, overall the industry at large will adapt and we could likely expect a few trends including: 1) Taller and stronger walls around walled gardens that own their own ability to connect users, apps and site visits without a need for a device ID (i.e. those who own a “graph” like Alphabet, Facebook, Tencent, Wechat and in a different way Amazon) 2) Measurement partners having to adjust quickly leading to severe disruption and 3) Brands finding their advertising still brings results, even if they cannot track and re-target who exactly clicked on which ad but a decrease in the statistical accuracy of the estimated impact on specific user profiles as the % of users who opt to limit tracking increases.
There is only long-term risk if there is un-even competition. If no player can track consumers’ online behaviour the advertising industry will adjust and we’re likely to see stable budget levels and small changes on average ROIs. That said, this could be a game-changing move that other leading tech companies may follow. Should this happen, there will be changes in how to measure media impact, as well as limitations in consumer insights, behavioural targeting of audiences and re-targeting. The speed and extent of change will depend on consumer reaction and adoption by competitors. With ITP coming first, followed by the deprecation of 3P cookies in Chrome announced in January and now the IDFA move, the industry is focused on giving more control to users over their data and privacy - the data river used by advertisers is becoming more of a stream.