How Apple iOS privacy changes will impact the advertising industry

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By Vibha Singh

2021 is being touted as the year of change, especially for advertisers. Apple rolled out the latest iOS update (14.5) which gave its customers more privacy and allowed them to opt out of ad tracking. This will provide more transparency regarding data collection from iOS apps, as new privacy labels will be displayed on the App Store.

While this new security update is most likely to impact Facebook advertisers the most, it will continue to impact all paid advertising platforms to some degree. To adapt to this new evolution, digital marketers will have to come up with new frameworks, workflows and best practices. Apple’s privacy changes are part of a broader movement to give online consumers more control over how their personal data is used digitally.

Apple Privacy Changes: An Overview

After the general availability of the latest iOS (14.5) is released, all App Store apps will require users’ permission to track them on various third-party apps and websites for advertising and performance measurement purposes. user activity through its application tracking transparency framework. Apple’s fast-track requirement will prohibit companies from collecting and sharing data unless people choose to go. This has limited businesses that use mobile app advertising on iOS devices as well as those that pursue their business goals through their website.

With users opting out of tracking, advertisers’ ability to serve them targeted ads has diminished, dramatically impacting ad campaign performance. Majority of the platforms including Google, Facebook, Twitter etc. will use SKAdNetwork to connect to the platforms using it through S2S integrations while Search Ads in Apple will have its framework. SKAdNetwork is Apple’s privacy-respecting way to attribute clicks and impressions to app installs on apps in the Apple Store. It shares conversion data with advertisers without revealing any device or user level data. It attaches attribution parameters to the ad click. So, when the app is installed by a user for the first time, it will send an installation notification to the ad network or MMP, including the campaign ID and other relevant information.

As a result, advertising networks such as Facebook and Google will obtain less information about User Application activity through advertisements after installation.

Impact on advertisers

For businesses running their ads on Facebook, Google, and Instagram, these changes are likely to have a huge impact. Here are the main areas where advertisers are concerned:

Advertising targeting

Many types of targeting (including retargeting) no longer work for users who have opted out of sharing their respective IDFAs. Ad inventory across all platforms was impacted due to limited tracking viability.
Practices that have evolved in recent years such as running on a large audience will no longer be suitable practices in the future. Advertisers will now have to define precise audiences (preferably mutually exclusive and exhaustive) and manual interventions on optimizations would be necessary.

Ad measurement

Mobile Measurement Partners (MMPs) have become ubiquitous in the industry, having built their measurement and fraud detection capabilities on top of the IDFA. Now they’ve moved to SKAdNetwork, which allows conversion data to be pushed back to the campaign level. This, coupled with the probabilistic models they offer, will still not be enough to compensate for the very precise targeting based on the IDFA.

Ad Optimization

This holy grail of performance marketing, ad optimization, will cease to exist in its current avatar. Without IDFA, an ad campaign cannot have frequency throttling, optimization baseline recency, segmentation, behavioral targeting, etc. Additionally, Apple will only pass install-level data at the campaign level. Say goodbye to deterministic optimization on other goals such as purchase, display, repeat purchase, etc. Note that while ad targeting may not be significantly affected on Google and Facebook, optimization most certainly will be. The use of events such as acquisitions will be less. Acquisition as an event must be tracked separately as it is highly personalized.

Award

The whole game of incrementally improving your advertising campaigns hinges on attributing successes and failures to corresponding tactics, media, and/or data. Multi-channel attribution will suffer unless SKAdNetwork adds more functionality. There is a strict limitation in the installation postback. Now, there is only a 24-hour window left on Apple’s side, which means it will be nearly impossible to attribute media conversion after that. Even large platforms with deterministic datasets limit their attribution windows. Now, by default, Facebook limits the attribution window to a 7-day click and a 1-day view, instead of a 28-day click and a 1-day view. This will reduce the number of events recorded by campaigns/ad sets/ads, impacting benchmarks and benchmark learning.

IDFA and its Android counterpart AAID are device identifiers used only in mobile applications. If a user accesses the web through a mobile browser on their Apple device and does not interact with any in-app environment during the session, the advertising they see will still be governed by the existing cookie-based identification. .

Summary

Going forward, with the release of this new update, first-party conversion data from consenting users will be extremely important more than ever. Advertisers should work to create remarketing campaigns and lookalike audiences from data sources like CRM. While this update has the potential to significantly reshape the paid media ecosystem, it will take some time for advertisers to fully understand the extent of this overhaul.

The author is VP, Digital Strategy and Communications, ET Medialabs

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