6 Perspectives on How Apple's IDFA Will Change In-App Ads

Chris Shuptrine
Chris Shuptrine
6 Perspectives on How Apple's IDFA Will Change In-App Ads

Apple is known for sharing news and updates at its annual Worldwide Developers Conference (WWDC), but this June’s event dropped a bombshell on the mobile advertising industry — and a short timeline to prepare.

Apple announced a change to its Identifier for Advertisers (IDFA), an iOS device ID that's used by advertisers and publishers to track ad spend and deliver personalized advertisements (it’s also often used by data vendors to track and sell users’ data). The IDFA is considered by most privacy laws to be personally identifiable information (PII).

With the rollout of iOS 14 next month, Apple will require app developers to ask permission from users before collecting and using that user’s IDFA for ad personalization. This tracking option was previously available, but far less noticeable, in Apple’s Settings app.

apple idfa tracking request pop-up ios 14

The short timeline for this change has meant a long, busy summer for app publishers and advertisers. As the rollout of iOS 14 approaches, we’ve wondered how mobile ad tech companies will approach this latest challenge. Will they shift their focus to Android — or rely on Apple’s SKAdNetwork to capture limited attribution data if a user opts out of tracking? Will they double down on contextual ad targeting, which doesn't require the IDFA?

For answers, we asked industry leaders for their responses to this big question:

“How do you think the IDFA changes will change in-app advertising?”
Mike Chowla, PubMatic
Mike Chowla is the Senior Director of Product Management at PubMatic, a digital advertising technology company empowering app developers and publishers to maximize their programmatic advertising.

“Apple's IDFA changes will create headwinds for in-app advertising. The impact will depend on what percentage of users agree to allow IDFA access. Most people I've talked to are expecting the opt-in rates to be low.

Low opt-in rates will mean basic use cases like frequency capping won't work across apps and advertisers will lack targeting data. Attribution for app install campaigns will now only be through Apple's SKAdNetwork mechanism. Fraud detection will also become more difficult.

In-app advertising is less reliant on behavioral targeting than web advertising, so the loss of the IDFA is likely to be less severe in percentage terms than the loss of cookies on the web. I'm expecting mobile app publishers will do the following things in response to the IDFA changes:

  • Apps will determine the best time to ask for consent and build messaging into UI explaining why they are asking before triggering the consent dialog, similar to what many apps do when asking for location or other things that already trigger consent dialogs
  • Game apps that have an in-game currency (gems, gold, energy, etc.) are likely to reward with extra currency those users that opt-in
  • More apps will require registration to get access to stable identifiers. Identity players will expand their offerings into in-app
  • Apps will find creative ways of asking for or inferring demographic information that can be used for ad targeting

These responses should lessen the impact of the IDFA changes, but iOS ad revenue will likely be negatively impacted while app developers and advertisers adjust to this new reality.”

Jillian Gora, Wattpad
Jillian Gora is a Product Manager on the Ads team at Wattpad, a global entertainment company and the world’s leading social storytelling platform, where more than 80 million people read and write every month.

“While the IDFA change is sure to result in CPM declines in the short term as publishers lose default access to the IDFA and advertisers adjust their spending to maintain targetability, I think this impact could be relatively short lived.

The reality is that iOS users represent a very valuable market for advertisers and they won’t want to lose this audience. As more and more publishers go through the process of collecting IDFA consent I think the playing field will level out; chances are many of us will attain similar opt-in rates, and the value of the IDFA as a targeting mechanism will decrease, which means other criteria will likely be weighted more heavily when evaluating the quality of our iOS inventory.

Ultimately, this means we will need to find new ways to serve relevant ads to iOS users, and, more broadly, to users across all operating systems / the internet. As anyone who reads the Kevel newsletter knows, the industry buzz is that first-party data will help everyone weather the cookiepocolypse. Publishers who have access to quality first-party data will see this as a viable solution. Will privacy and data-related changes also prompt publishers to double down on their in-app paid models? I’m sure it will for some. But my hunch is that many publishers will still want to provide the option of a free experience.

The upside of the IDFA change is that it’s forcing publishers to clearly and simply disclose the type of data that is being collected. This gives users the information they need to make an informed decision about whether or not access to that content is worth the data they’re giving up in return (or, if they’d rather pay the publisher directly for access to an app that would otherwise be “free”).

I believe that, for important information, there should always be an option for users to gain access without monetary payment. Up until now users who chose not to pay for access have not been able to make an informed decision about the transaction they’re entering; my hope is that changes like these will continue to set the groundwork for a fairer, more transparent internet. I’m excited to see how this all plays out!”

Chris Beck, MediaMath
Chris Beck is experienced in adtech having worked at LiveIntent and Taboola, respectively. With a customer service and product background he now works at MediaMath as a product manager on the Identity team planning for the post-cookie/device ID world.

“Apple's IDFA announcement has rattled the app ecosystem. Users will 1) need to opt-in via an alert message to provide an IDFA, 2) only receive this message once per app and 3) be told apps want to 'track you across apps and websites'. All of these factors combined has everyone hedging their bets on opt-in rates but the consensus is that approximately 5%-20% of iPhone users will opt in — 20% being seen as optimistic. Advertisers and publishers have effectively lost the ability to monetize user data without an anonymous identifier to tie it to.

Unlike Google's recent announcement on the deprecation of the third-party cookie, which has allowed the ecosystem two years to find a replacement, Apple has only given developers all of summer 2020. This will encourage advertisers and publishers to use Identity solutions that already exist to capture their first-party data.

Solutions built for a cookieless world seem to have the mechanisms for a similar 'IDFA-less' world where publisher or advertiser log-ins are used for persistent identification tied to an email address. Currently, open websites tie this to a first-party cookie but the same logged-in data could be used in-app as well.

This process won't be so quick, and in the meantime in-app advertising will utilize Apple's SKAdNetwork for attribution purposes. However, SKAdNetwork only solves for in-app to in-app attribution and doesn't factor in users who switch from in-app to open web and vice versa. This will push the app ecosystem to leverage the logged-in identifiers mentioned above.”

Yaroslav Kholod, Admixer
Yaroslav Kholod is the Director of Programmatic Division at Admixer with over ten years of experience in online advertising. Yaroslav stands at the origins of Admixer, where he has been building publisher-side operations.

“Apparently, iOS app developers will need their own ad server to sell ad spaces to advertisers. While users will have to give consent to the developers, the latter will have the right to manage the user data through the ad server. Yet, the transition to in-house ad servers began even before the emergence of problems with user identification.

We also expect to see the renaissance of contextual targeting, as there’s going to be a large share of “blind users”. An app developer's ad server must be able to collect and segment information about the context of different app sections.

For example, in the case of news apps, the developers can offer advertisers several verticals simultaneously. Therefore, the support of contextual data will become a must-have feature for ad servers.”

Ari Paparo, Beeswax
Ari Paparo is the CEO of Beeswax, a New-York based start-up building the next generation of real-time bidding software.

“IDFA will make all direct response ads on iOS devices less effective, which will reduce prices and demand. This should have some benefit for branding and video campaigns and take away app-install/gaming type ads.

For larger publishers, they may move some of their sales away from ad networks and programmatic channels to direct sold channels, but it is important to realize that direct is a very small proportion of overall ad sales in-app and most app publishers don't have sales forces calling on agencies to sell these kinds of ads.”

Chris Shuptrine, Kevel
Chris has worked in ad tech for over twelve years in a variety of roles — giving him customer support, PM, and marketing perspectives from both the advertiser and publisher sides. He's currently the VP of Marketing at Kevel.

“A major issue here is the need for dual opt-ins to enable personalized ad targeting. Let’s take retargeting, whereby Company ABC takes the IDFAs of their inactive users and retargets them on, say, Facebook, using a Custom Audience built around those IDFAs. In order for this to work under Apple’s new policy, both Company ABC will need opt-in from the user on their app and Facebook would need the same. Using a 30% opt-in rate on both platforms, that could be as low as a 9% match rate if there were no overlapping opt-ins (which there would be of course).

So, you can see how the concern isn’t just the opt-in rates you get.

Moving forward, it’s tempting to say there will be a sudden shift to in-house ad servers, direct-sold campaigns, and contextual targeting. And this will happen. But much of in-app programmatic ad spend is fueled by game developers, who have, for the most part, spent their efforts building not sales teams but tools for optimizing ad exchanges and networks. It’s hard for me to imagine they’ll do a 180 any time soon — especially before we have more data on the impact.

More likely, in the short term, these publishers will get creative. Ad networks may move more toward fingerprinting (arguably a more invasive form of tracking), and game developers will migrate their placements to them. Many developers will also employ dubious tactics for how/when they ask for consent — something we’ve already seen happen with consent management platforms asking for GDPR-compliant consent.

Long-term, though, Apple will crack down on any work-arounds (like they’ve done with Safari’s ITP), and the eventual result will be more direct-sold ads; more ads based around context, intent, and log-in IDs; and then programmatic for backfill.”

UPDATE: In a surprise announcement from Apple on September 3, app developers can now opt-out of the IDFA opt-in feature until ‘early next year’ — allowing us a few more months to cover new revelations and speculations from across the industry.

Chris Shuptrine
Chris Shuptrine

Chris has worked in ad tech for over fourteen years in a variety of roles - giving him customer support, PM, and marketing perspectives from both the advertiser and publisher sides. He's the VP of Marketing at Kevel.