How iOS14 and IDFA opt-in will change the Advertising and Marketing technology landscape

Apple has always been a proponent of tighter privacy. I remember watching a video of late Steve Jobs where he categorically mentioned that if you want access to a certain data on the phone, you need to ask the user twice. (i will embed that video in this post). However, in the last few years, Apple has been taking the fight around user privacy as part of its product design and management philosophy. The latest blow on this account is the opt-in announcement for IDFA from Apple.

The Takeaway

In iOS 14, IDFA will no longer be available without a double-opt in by the user.

In iOS 14, both a publisher and destination app will be required to receive permission from the user to track them in order to read the IDFA, making it an exclusively opt-in feature.

IDFA is not going anywhere, an App will require exclusive permission to be able to access IDFA.

What exactly is an IDFA?

IDFA is an acronym that stands for “Identifier for Advertisers” and is an identifier that is assigned to an Apple device, by Apple. Because its a unique identifier within the Apple ecosystem and is shared across apps on your phone, IDFA allows your device (and therefore you) to be tracked on the internet. IDFA was first introduced in iOS6 and has been around since then. As an end user up till this point (i.e. with iOS13), IDFA can be set to be shared only with a few apps, it can be reset by click of a button. It is automatically reseted whenever the device is erased and reseted.

How does Mobile Advertising industry use IDFA?

For an ad to be effective, there are a few things it should have.

• Product : What are you selling through the ad?
• Audience — Who is the Customer? (and how can we reach this user?)
• Messaging — The choice of words, fonts, placement of text, images, audio, video etc that can help the product become a hero product in the eyes of the audience.

If your ad is personalized to a certain user behavior, or its about the last product the user checked out on your site (such ads are generally called retargeting ads, because they are “re-targeting” you as a user to come back to the site) then you need to find the right audience on the internet. Every user on the internet has some deterministic or probabilistic identifier attached to them, these identifiers help ad networks reach out to these users with the right ads. IDFA for iOS and GAID for Android (GAID is let’s say for the sake of simplicity, equivalent of IDFA in the Android world) are these identifiers for the mobile advertising and marketing ecosystem. Now, depending on the use-case at hand, you can either “include” or “exclude” users. To understand this, let’s say you are a game developer and you have the set of users who have already installed your app, you would ideally not want these set of users to see your ad. For such cases, the exclusion list you provide to the ad network should have IDFA’s (and GAID for Android) of your existing active user base.

So in a nutshell, if i have to write out, i will say IDFA (and GAID and all the other probabilistic identifiers companies have) help with the following:

• Personalized ads based on what you are reading, which apps you are accessing, which products you are checking out / buying. — If the ad network or the advertiser is dependent only on the IDFA, then behavioral targeting will be very very tough.
• Measurement – once an ad is trafficked on the publisher side (publisher is the one who shows the ad), it needs to be tracked upto the final conversion. IDFA is the binding piece that is the bread and butter for measurement companies (like Adjust, Appsflyer, Branch.io etc). So questions like — ” hey, which all IDFA’s saw the ad as part of this campaign + ad set combination and converted on thursday” will be hard to answer when IDFA stops flowing through and there is no other identifier at play.

Getting ready for iOS14 – What to Expect?

• All users who wish to share their IDFA with an app, will need to opt-in. A lot of uncertainty exists on opt-in rates, but within the advertising and marketing forums there is a sort of consensus growing that these rates will be on the lower end. Bottom line is, with OS14, all apps will need to have opt-in if they wish to get IDFA access. So essentially, both advertiser as well as publisher app will need to have opt-in granted by the user to make the “measurement and tracking flow” work.
• Because the onus of opt-in will be on publishers, so a lot of advertising publishers like game developers are expected to be hit with this change.
• There are also reports of some large clients working with agencies on designing “communication” around opt-in for users, to cajole them to opt-in.
• One thing is certain – this change will hit retargeting networks, the smaller ones for sure.
• Without IDFA, a marketer will not know how the users reacted to their campaign at an individual level. Aggregate stats wont be impacted.
• Will this impact Google too (the largest ad network) — Well, there are no good answers to this, but from what we already know from various posts and discussions; Google since many months now, has a probabilistic model in place, and they are the most prepared. Google’s inherent interest is in killing the GAID as that will leave other networks extremely vulnerable and my bet is that with IDFA going away, its just a matter of time that we will see GAID also getting deprecated and then cleaned out.
• The thing with Data is that those who already hoard a ton of it, only get stronger when restrictions of any type come in. Therefore, my reasoning suggests that Facebook and Google who hoard tons of user data will get even stronger post IDFA.
• For the measurement side of the world, there are two approaches that are clear right now.One direction is which apple prefers, the SKAdnetwork library that Apple has built does aggregate level conversion reporting. This is what apple wants measurements to be based on. However, with this you cannot tell which user came because of which campaign. The other path is to figure out a way to do user level optimisation while staying compliant with Apple’s policies. One thing is clear to me, that Apple does not want to inhibit measurement for advertising. Apple’s goal is to inhibit personalized advertising for users who have not opted in for it. So there is a chance that in future we will see something which is similar to the google referrer id.

So the measurement world is going to move to some Probabilistic mechanism?

Thing is that whenever you take something that is Deterministic like an IDFA (or a GAID) and start to shift to proababilistic approach, it always brings a lot of challenges. It also allows companies to make claims that “their proababilistic method is better than others”.

How should Advertisers prepare for IDFA less world in iOS 14?

Well, a lot of details are not around still, but one thing that every advertiser should do is an IDFA audit. Understand how exposed you as an advertiser are to IDFA. If a lot of your internal systems depend on it, you could face a lot of heat in the coming months.