Leave it to Apple to suddenly drop a tidbit of news that shook an entire industry. The company announced that it would be releasing a numbered update to its mobile iOS software — iOS 14 — which would add some quality-of-life fixes, along with some new and possibly revolutionary features. However, despite a redesigned home screen, messaging app upgrades, and some new bells and whistles, perhaps no new feature has received more press than the hardware maker’s new privacy tools.
The tech world is still reacting to the news, and there’s been widespread speculation about what the new privacy features Apple is building into iOS 14 will mean for advertisers, companies who build apps and connect to ad networks, and for their data gathering capabilities. Some have claimed the sky is falling on the industry — namely, Facebook — while others are in a holding pattern, waiting to see the real impact.
Even so, with the update expected to be released early in the fourth quarter of the year, it’s quickly becoming a reality that the digital advertising game — especially on mobile — will look radically different as we head into 2021. The question is, how do you react and adapt?
What do iOS 14’s new privacy measures actually do?
The core of the iOS 14-related panic comes from a single feature announced by Apple — the ability to deny apps permissions to track users’ data and usage. That means that apps like Facebook (and even those that simply use Facebook’s API in some way) won’t be able to automatically collect data on your app usage and personal information. Instead, you will be able to block any app you like, and you’ll always be notified that an app is trying to track you.
The feature works by making it almost impossible for advertisers to collect iPhone users’ Identifiers for Advertisers (IDFA), which are crucial in ad targeting and placements. Facebook published an open letter in which it claimed that up to half of its ad network business (the part of the company’s Audience Network) would be severely impacted.
However, the move also affects other companies that use IDFA to offer targeted ads and personalized experiences for users, since they use apps as a major source of user data for preferences and activity. While this feature’s release has been pushed back after backlash from several major advertisers, it’s still an inevitability as Google is also looking to incorporate the feature into its Android OS as early as next year. For now, Apple will roll out the feature but let developers choose whether to include it in their apps or not, though the company claims it will make it fully required in the near future.
How will advertisers and app developers be impacted?
At this point, and with so little actually known about the effects of iOS 14’s privacy tools, it’s hard to actually quantify the impact it will have. However, there are some clear indications that while it is undoubtedly a welcome addition for consumers, app developers and advertisers will be facing increasingly uncertain waters.
As we mentioned above, Facebook is looking at a radically different landscape if and when iOS 14’s privacy features are fully implemented. In a blog on its website, the company painted a bleak picture for advertisers on the new iPhone ecosystem: the changes could cut up to 50% of its Audience Network revenues. Moreover, the company claims it will have to stop developing the Audience Network for any iOS 14 device.
However, it also goes beyond major advertisers like Facebook. For many smaller app developers and companies, tracking users’ activity is an important part of monetizing their work and building a revenue stream. For instance, say a small game developer wants to boost its revenues by selling ad space or interstitial ads. The inability to track user preferences means they couldn’t sell such targeted ad space, and might miss out on greater monetization opportunities. Similarly, companies may not be able to monetize the data itself, since it would lack the drill-down advertisers need.
Could external data help fill the IDFA-shaped gap?
The issue for advertisers and developers is that the inability to track IDFA means huge limitations on the data they can gather about users, and thus the effectiveness of their predictive and machine learning (ML) models. For instance, let’s say that the new privacy features have their intended effect and severely impact advertisers’ ability to offer accurate targeting.
This means that on top of the already limited data available in some cases (IDFA tracking has been optionally limited since iOS 10, though that still left attribution data visible), you now can’t capture a user’s journey to clicking an ad. The bigger problem is that advertisers have for so long relied almost exclusively on the IDFA (and its variants and predecessors) that it is difficult to imagine another way to track users’ activities and gain better targeting capabilities.
Even for advertisers who don’t share the specific IDFA, but rather allow targeting through their platform (such as Facebook’s Audience Network), this means they must find a new way to offer a relevant product in the face of a smaller data pool. One alternative is to use external data, essentially replacing the IDFA with a composite view built out of a variety of internal, available data and external sources.
Some advertisers already use external data to supplement their predictive models and targeting, but the disappearance of IDFA (and its variants) means that it could take center stage moving forward. Indeed, without being able to attribute actions to your campaigns, finding new ways to target users and drive real impact requires you to think outside the box.
While it’s hard to replace some attribution data, you could potentially use a variety of sources to build targeting models that are just as effective. Let’s break it down a little bit to see where you could collect data from. Say you’re an advertiser looking to place some campaigns in different apps and mobile sites, but you can’t use IDFA anymore. Where do you turn to?
For starters, you could look at social media and other online interaction data. Let’s say you start going through social media interactions and engagement and realize that the users you’re targeting are all abuzz about a new app or website that is racking up new accounts by the minute. You could also see how well you’re performing by judging the conversations social media users are having about your app, as well as how they’re interacting with you and your brand.
Additionally, you could track web presence scores, and even preferences and habits based on installed user apps. This could help you build models that give you effective targeting based on your users’ preferences and actual app usage. You can take this a step further and even capture the devices being used, as well as things like operating systems and even browser data. Remember, IDFA technically didn’t offer personally identifiable information anyway, so what you’re capturing will still be fair game (by compliance standards), and you may even build a more holistic approach to measuring your campaigns’ efficiency and target your ads much more accurately.
If you wanted to really go crazy, you could build a custom signal that combines a variety of all these sources into a more cohesive score. This can allow you to create better strategies and more intuitive analytics based on a composite score rather than on a mish-mash of different sources.
Even better, if you get really creative, you could use geospatial and demographic data to understand where your users are, their propensity to click on your ads, and your biggest potential success areas. You could include overall economic data, social and financial stability indicators combined with geographic information, and even seasonality trends that could indicate changing preferences and different apps that might be more successful by region, date, and even weather pattern.
It may not be as specific as IDFA-based data, but external data could be a powerful tool to give you a more holistic view of your potential targets, and an intriguing new way to measure success and engagement on your ads and marketing campaigns.
Stop waiting for the hammer to drop, start adapting
Apple might have delayed making its IDFA opt-in system fully mandatory, but the writing has been on the wall for IDFA for several years now. From restricting the data it could collect to now giving developers the ability to make tracking opt-in on their apps, it’s clear that Apple is not interested in going back to the old days, despite advertisers’ protests.
For now, the company is in a holding pattern to give advertiser networks and developers breathing room to adapt to the changes, but it has made it clear that changes are coming. With Google reportedly following suit, it’ll mean that to remain effective and able to target customers properly, advertisers will need to think of smarter ways and tools to help them build targeting models that deliver results. External data may not be a silver bullet, but it can definitely be a vital part of a larger strategy.