Advertisers must adapt to a more complex data ecosystem, no matter what happens to IDFAs
Over the past couple of months, Apple has kept the mobile advertising industry on tenterhooks over the company’s plans for its Identifiers for Advertisers (IDFAs). These are the IDs that allow app publishers to track user data for targeted advertising and have until now been hidden away in the depths of Apple’s settings.
Apple had originally planned to make IDFAs strictly opt-in from this month. This would have meant that users would have needed to explicitly give their consent for their IDFAs to be used every time they downloaded a new app. The ad industry was up in arms at this news, fearing that the move would spell the end of targeted advertising on IOS (the consensus was that, given the choice, most people would opt out of ad tracking).
Since then, Apple has rowed back a little and is delaying its planned changes. Encouragingly, it’s also meeting with ad industry bodies such as IAB. With any luck, there will be an accommodation with the ad industry, and concerns over the imminent death of targeted advertising will prove overblown.
A world without IDFA data
Even if we look at a worst-case scenario, however, things aren’t so bad. If Apple were to push ahead with its original plans and, as feared, 90% of iPhone users opt-out of IDFA tracking, that would not spell the end of targeted advertising on iPhones.
The adtech industry is highly innovative and adaptable and a new identifier would emerge to take up the slack. There are already large numbers of potential alternative IDs in development including offerings from The Trade Desk, Liveramp, Zeotap and ID5. If IDFA data dries up (and even if it doesn't, for that matter) these emerging IDs will provide advertisers new data sources to fuel ad targeting.
It's also likely that publishers will innovate so that they can continue to monetise tracking data. They could do this either by publishing apps that are capable of persuading consumers to opt-in for IDFA tracking, or they could simply introduce logins and collect identifiers that way. Either way, the ad industry will still be able to access consented data for targeting.
Stats-based applications and contextual targeting
In our doomsday scenario, IDFA will also still have a role to play. Even if only 10% of iPhone owners consent to in-app IDFA tracking, that’s still a huge number of people – certainly enough for advertising applications that are based on statistical models. For these applications the volume of data is less important than its accuracy. High-quality IDFAs for 10% of iPhone users would be enough, for example, for robust offline attribution to understand and optimise the effectiveness of drive-to-store campaigns.
Alongside all this, it’s also likely that the way in which advertisers target audiences will evolve and move away from the identifier-based approach that’s dominated until now. One strong contender is contextual targeting. This is where the context of an app is targeted, rather than the user.
For example, a sports shoe brand could channel its ads to apps dedicated to jogging by marking the appropriate App Category ID in the bid request. Ads can also be targeted to location context. A luxury watch brand, for instance, could target phones located in areas where property values are high by using the latitude and longitude of phones, enriched in real-time – something that is GDPR-compliant and independent of Mobile Advertising IDs.
Targeting by context may even prove equally effective as ID-based targeting as advertisers can be almost entirely certain they're reaching the right people and at a time and situation where they will be receptive to brand messages.
Navigating new complexities
The Apple IDFA story will continue to run, and there will no doubt be a few more twists and turns. However, the ad industry shouldn’t get hung up on what's happening with this one source of data. It has been incredibly important in the past, but looking ahead IDFAs are only going to be one more data source in a much more complex and rich data ecosystem.
The challenge for advertisers now is to understand which data sources will be most useful in reaching target audiences and how best they can access this data and utilise it in their campaigns. In the mobile advertising system that's emerging, the availability (or not) of a single data source will be less important than who you partner with to extract the most value from a multitude of data sources.
Tom Laband is chief executive officer and co-founder of Adsquare.