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Digital Essays 2020: RIP IDFA, by Chain Reaction’s Saif Jarad

What the death of Identifiers for Advertisers means for the advertising and publishing industries.

By Saif Jarad, managing director, Chain Reaction

Apple CEO Tim Cook has thrown a spanner in the works of advertisers and publishers who track their customers’ online behaviour with IDFAs (or Identifiers for Advertisers). During the “WWDC 2020” last June, Apple announced that iOS 14 would ask app users to opt-in if they want to be identified to advertisers, rather than being opted in automatically. Unsurprisingly, the news has been greeted unfavourably by the advertising and publishing industry.

With the upcoming changes to iOS 14, apps that want to use an IDFA will trigger a consent message saying: “[App] would like permission to track you across apps and websites owned by other companies. Your data will be used to deliver personalised ads to you.”

So, how big will the impact of the change be for advertisers and publishers, and what can they do to prepare?

What exactly is an IDFA?

I like to call it “the Apple version of a cookie”. An IDFA is an ad identifier embedded into every iOS device. With an IDFA, publishers and advertisers are able to track which mobile apps an iOS user installs and uses and the exact source the installation came from. IDFA associated data not only helps to properly attribute conversions but also collects data that will be used to boost and optimise future campaigns.

In short, it’s the foundation of the advertising industry for iOS apps.

Why is Apple doing this?

Remember the Cambridge Analytica scandal? Well, that scandal and other big data-breach incidents have caused Apple’s CEO, Tim Cook, to criticise Facebook and other competitors that base their business model on harvesting personal information for advertising, in the strongest possible terms. In fact, he went so far as to equate their data privacy policies to “surveillance”.

Apple’s crackdown on user tracking has been some time in the making. A few years ago, the company made it possible for users to opt-out of IDFAs by introducing limited ad tracked (LAT).

Similarly, Apple has been at the forefront of restricting the use of cookies in its Safari browser, with the launch of intelligent tracking prevention (ITP) 1.0, in 2017 and, of late, ITP 2.3, which prevents most traditional methods of tracking users.

So, what’s the impact on the industry?

I expect this opt-in requirement to be ubiquitous within the Apple ecosystem shortly after the opt-ins become mandatory, which is expected to be early next year. The initial impact on brands and agencies would be:

Device-level frequency capping wouldn’t be possible.

Traditional retargeting is going to cease to exist since most retargeting is happening on the proliferation
of IDFA.

Mobile attribution is going to be very difficult unless mobile measurement partners (MMPs) come up with innovative solutions to such a challenge.

Agencies and brands may need to rely more on first-party data they collect from their own apps or their clients’ apps.

Although Android mobile devices account for more than 70 per cent of the GCC market, here at Chain Reaction we manage more advertising spend targeting iOS devices than we do for Android devices.

This, of course, varies by client and by market. For instance, our overall clients’ mobile spend is about 55 per cent on iOS devices versus 45 per cent on Android devices.

This is mainly due to iOS users being more valuable to brands as they are more affluent compared with Android users. Therefore, it’s impossible to advertise without targeting iOS users. At the same time, initial expectations of opt-in rates are low and don’t exceed 20 per cent and with the latest iOS releases being adopted very quickly worldwide.

Any good news?

Well, meet the SKAdNetwork. For the past few years, Apple has been developing a “privacy-friendly” mobile attribution system for advertisers called SKAdNetwork, which is actually a way to track installs, conversions and attribution without device ID or personal information.

The SKAdNetwork is not going to provide advertisers with the amount of valuable and granular data they are used to getting from using IDFAs, but it’s still a good method for brands and agencies to understand the effectiveness of their advertising campaigns, even though it’s a high-level data insight.

More good news is that new challenges always create opportunities, and this is often the case in our industry. Some of the most famous ad tech and MMP companies have thrived when they have provided solutions to challenges the online advertising industry began to face.

With new changes, there’ll be winners and losers, as always. As marketers, it’s our job to adapt to new challenges, technologies, regulations, and consumer trends. I also believe we have been, as an industry, very adaptive to new changes. And if the Covid-19 pandemic shake-up has taught us one lesson, it would be how we as humans can adapt our lives and the ways we do business to overcome obstacles and keep moving forward, putting one digital foot in front of the other.

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