What to expect now that the IDFA tsunami is upon us
3 things to look for when Apple makes its IDFA changes
3 things to look for when Apple makes its IDFA changes
After a series of fits and starts, Apple’s long-awaited IDFA changes now seem (finally) to be upon us. In the early days after the announcement, there was a fair amount of panic particularly among brands and tech companies grappling with the implications of these unilateral changes to the market. In response, Apple paused implementation in the Fall of 2020 which allowed for some much-needed reflection and a chance to adapt. While it’s safe to say that not everyone has since come around to Apple’s decision, more and more in the mobile ecosystem are seeing this moment as an opportunity to spur the industry forward. Here are three things to look for when the rollout begins.
May the Smartest Network Win
One of the more positive unintended consequences of Apple’s IDFA decision is that it will have a leveling effect across the mobile landscape. When brands assess partners in a post-IDFA world it will be based purely upon merit. They’ll be looking at who has the best audience data, who’s delivering the best KPIs, and who’s doing it the fastest. It’s clear that behemoths like Facebook may have a hard time adjusting out of the gates which is why this represents a rare opportunity for adjacent networks. The smartest networks will necessarily win out. For technology companies in the space, Apple’s own SKAdnetwork won’t offer much help in this coming race. The required opt-in for IDFA-sharing will cause a dramatic reduction in the # of device IDs visible within the mobile ad bid stream in the immediate weeks post-implementation. What happens after that, though, is less clear. We know that everyone will have to integrate SKAdnetwork to some degree because it’s the only way to gain access to at least some level of information. The question companies will have to ask themselves is: How do we utilize the data we do have to work within the new framework while using contextual targeting to make campaigns work? That’s the big question and those that answer it best will be the big winners.
The Changing eCPM Landscape
Ads are not going away. This may be the single, biggest misnomer for consumers about the coming IDFA change. Eliminating opt-in and the IDFA doesn’t mean ads will suddenly become less prevalent, rather, they’ll simply become more random. This will have a major impact on eCPMs. Over the last few years, eCPMs have been inflated by the user acquisition market. In the short term, eCPMs will go down after IDFA availability decreases and traditionally low bidding brand campaigns looking for eyeballs (i.e Coca Cola, McDonald’s, etc.) fill in the gap. Contextual signals such as app, the subcategory of the app, and the last time a similar ad was clicked, will effectively be forced to become new ad models and this will have a deleterious effect on eCPMs, as well. Messaging will be vital with opt-in and, over time, eCPM should recover. In the meantime, though, the immediate aftereffect will simply be a broader array of ads. They’ll just be significantly less targeted. Get ready for more Viagra and Cialis ads on your iPhone!
What about Google?
As Apple is not the only game in town it will be interesting to see how the rest of the market reacts to these changes, particularly Google. There’s one camp that says Google follows suit (like they usually do) in 12 months or less. There are already signs this will be the case as last week they announced that they won’t be developing new ways to follow individual users across the internet after phasing out existing ad-tracking technology from the Chrome browser. Yet, Google might also view this as an opportunity to establish Android or Google Play as the go-to user acquisition platform. Apple has always made it clear they want subscriptions to drive commerce and transactions on their platform whereas Google has always been much more of a media company - as opposed to a product or device-driven one. Marketing is in Google’s DNA and search is a huge revenue driver for them. Any move towards device ID removal will likely be considerably less drastic than Apple’s decision even if they do ultimately follow suit in some form or another and make further moves to protect user privacy. This is all certainly within the realm of possibility given the inherent problems with monetization for advertisers and publishers. Apple’s changes limit the ability for marketers to invest with confidence. No longer are they able to fully understand the LTV of their users. There are those that argue the advertiser should be the one to determine value versus having that value dictated by the platform and Google may well agree. In that sense, we’re at an inflection point and the direction Google decides to move in will be momentous.