Changes related to Apple’s new iOS 14 and advertising implications
As discussed in our last review on the phasing out of cookies by browsers, the enforcement of the GDPR law in Europe, and the joint actions of a multitude of major digital players (Safari, Firefox and Chrome), have paved the way for the full realization of the right to privacy in the digital age. Consumers have demanded greater protection of personal data, and, progressively, every major player seems to be providing it by restricting advertisers’ access to data.
While the focus was on the changes in third-party data management and the impact of these changes on computer-based web browsers, it was Apple’s turn to be the first operating system to follow suit in restricting access to data on mobile applications. Its new data transparency program, App Tracking Transparency (ATT), will allow users to withdraw permission for mobile application managers to collect and store their browsing data.
With its new program, iOS 14 (iOS 14 on mobile, iPadOS 14 on the tablet and tvOS 14 on Apple TV) is the first operating system to give its users the ability to manage data access, although we can expect to see the rest of the players, including Android and Microsoft, adopting the same type of measures in the near future.
Given the implementation of preventive measures to protect their web data, it is expected that a majority of users will adopt this program, thereby limiting the targeting possibilities, the collection of statistics, and the optimization of results for advertisers and application developers. In fact, it is estimated that over 72% of users will adopt the new operating system, which will enable this setting, making this the most widespread update in its history, according to Apple.
It should also be noted that the highly incentive nature of the dialog box that will be offered to users will most certainly encourage increased adoption.
a. Data collection by IDFA on Apple mobile application
Until now, application developers have been relatively free to use a unique identifier, the IDFA (“ID for Advertisers”), to collect user data. This code is assigned to each device so that it can be identified and its mobile activities recorded within one or more applications. Advertisers use the IDFA code to accurately target audiences or track campaign performance.
Although the update to the new iOS 14 operating system was launched in 2020, it is only as of February 2021 that developers will be required to seek explicit consent from their users to continue using their IDFAs. This request in the form of a dialog box offered at the opening of the app will propose to the user to “continue to provide data for advertising purposes” or to restrict this access.
b. Impact on the advertising ecosystem
The implications of this update are manifold, and mainly affect the following elements:
Re-targeting and dynamic product ads
Retargeting and dynamic product ads (adapting the content of an ad to a specific user) are based on the principle of data management. Thus, the inability to recognize a user after a visit greatly limits this feature.
Performance monitoring and, above all, attribution, are factors that will be greatly affected. This evaluation model is based on the causal link between an advertising impression and a conversion on the client’s site. Thus, it is possible according to this model to define the impact of an advertisement on the user’s behavior.
Tracking ad fraud and advertising quality
These changes will also reduce some access to third-party (“fourth-party”) applications that typically audit advertising impressions for fraud. Making the identification of users more complex, the ATT-led reform could make it easier for malicious industry players to disguise their activities as qualified traffic.
Frequency cap is a very important element made possible by the current IDFA that is likely to be greatly affected. Since it will often be impossible to recognize a user from one visit to the next, it will become impossible to determine whether or not a printout has already been delivered.
Mobile Location Tracking
Crucial to mobile data management, localizing a user will become complex, if not impossible. In fact, the localization of a user requires a unique identifier for retargeting; with this latter function being abolished, this important targeting point, including the cross-device matching (identifying the same user between mobile and desktop computer or connected TV), will also be abolished.
2. ADVERTISING IMPLICATIONS
While these changes currently only affect Apple devices (which held 53% of the Canadian cell phone market share in 2019), the implications remain far-reaching and are twofold: on the one hand, media and application owners, and on the other, marketers.
a. The players involved
Certainly not all players are affected in the same way. Some of the key ones include the following:
Like other mobile applications based on advertising revenue (Snapchat, YouTube [Google], LinkedIn, etc.), Facebook is one of the main players against this update. It should be noted that Facebook is known for the quality of its user data, allowing advertisers to perfect their targeting audiences and refine their performance reports. Since Facebook remains an application that collects its information through a connection, most of the data will continue to be collected, but there will be some pain in terms of off-application (advertiser site) conversion attributions. It should also be noted that the share of mobile ad impressions delivered by Facebook is in the 70% to 80% range.
Depending on the networks and applications that advertisers will use to run campaigns, they will once again find their access to targeting capabilities and performance reporting restricted. Attribution to conversion campaigns is a component that will be largely affected, as well as the construction of extra-application audiences (which until now could be used from one application to another) and the dynamic product ads based on website consultation (for example, retargeting based on product consultation history), which is necessary in a large proportion of e-commerce strategies, among other things.
It goes without saying that users will be able to see many changes, both good and bad. On the one hand, of course, managing their data should satisfy their need for anonymity. On the other hand, some changes in application features, such as content-based personalization, are to be expected. In addition, managing advertising frequency could become an irritant for some users (especially in mobile applications, where full-screen countdown ads can be particularly intrusive).
b. Possible solutions
These changes are the logical continuation of the major changes that have occurred in recent years on web browsers, as discussed in our agency review. It should therefore be remembered that, for about two years now, we have already been navigating in this reality of limited access to data. But with the help of technology and local media partners, we continue finding solutions to navigate through an ever-changing digital ecosystem.
Ultimately, we are focusing on ways to accommodate planning with limited data, the majority of which are detailed here:
The importance of contextualization
In fact, according to our results on several campaigns, using specific audiences (retargeting, lookalike, CRM, and predictive), performance increase is very rarely affected by more than 15%. So the environment in which we deliver the advertising is far more important, in a multitude of scenarios, than the target audience. So let’s take a close look at the visibility of the advertisements, the quality of the website infrastructure, the content, and the editorial line proposed—all crucial qualitative elements in a quality delivery.
Some technologies aim to use other types of data to offer advertisers innovative solutions, which can sometimes compensate in some way for the outdated access to unique identifiers. One example is the Quebec company Contxtful, which, although the technology is not available on Apple mobiles, uses the gyroscope of mobile devices to qualify their impressions at the time of the auction purchase (just before, to be exact), depending on whether the user is deemed receptive or not. One can assume that this type of data access would not be affected in the future, even if Google decided to restrict personal data.
Android and the transferability of findings
As previously mentioned, these new measures currently only affect Apple’s operating system. As a result, the delivery on the other operating systems remains intact and data remains accessible by a unique identifier. This also means that it will remain possible to extend the analysis findings from one platform to another, including findings from Android to Apple devices. For example, if an analysis on Android reveals that a specific environment offers good conversion performance, it will be possible to use this finding by copying it to Apple devices.
Proprietary data management (first-party)
Proprietary data management will become a significant issue; importing customer lists will certainly become a good way to re-target users who would have used the same email address, for example, to log on to another site.
The statistical inference evaluation model (widely used before the advent of the robust data management ecosystem) will be one that will need to take on more importance, unlike the deterministic model.
In short, these advances will indeed have a major impact on the use of data, but this should not be seen as the end of the world. Rather, it is a normal modulation of a constantly changing digital universe and a resumption of the use of one’s personal data. There is every reason to believe that the major players in the advertising industry will be able to play their cards right and find methods to deliver precise targeting, while following and respecting the industry’s new norms and standards of confidentiality.
These changes to our advertising capabilities are in addition to several measures already in place, and, as users are given the ability to restrict advertisers’ access to their data, the advertising ecosystem is tightening, often around—and potentially to the benefit of—the big players. In our forecasts for the year 2021, we also mention this monopolization of data by the big players, which could leave the smaller players in a precarious situation. This is an issue to be monitored over the coming year.
In the immediate future, we are able to review and adapt our digital media strategies according to these advances and adhere to this new reality. It is highly likely that the coming months will be marked by the development of a multitude of technologies and innovations to overcome these new limitations.