In June 2020, Apple announced that in the future, iOS applications must obtain consent from users to track their ads or use the IDFA. The IDFA, abbreviation for “Identity for Advertisers” is utilized in the application environment e.g. to enable personalized and targeted advertising, frequency capping, and measure the effectiveness of campaigns. Mobile app advertising is a huge market, with Apple iOS apps accounting for a significant share. Therefore, a change in this scale will have an impact on the market as a whole.
The changes in the use of IDFA did not come as a surprise in itself, as Apple has publicly and strategically taken a position that privacy must be a user right. Apple has repeatedly taken steps in its product portfolio to allow the iOS device user to opt out of all types of targeting and tracking. In reality, Limited Ad Tracking (LAT) has been a feature of iOS devices for years, but a possible ban must have been made by digging it out of the settings themselves.
Apple gave the market time to prepare for the change for nearly a year, and now with the iOS 14.5 update released in April 2021, the applications have to ask permission to use the IDFA. Consent must be requested before monitoring occurs, either when the application is downloaded or opened, or when certain features of the application are used. Thus, granting or refusing consent is more easily noticeable and available to the user.
In this text, we take an even closer look at what IDFA is and what the situation looks like now that the first experiences have been gained since the update took effect.
What is IDFA?
In general, third-party cookies used for online monitoring have a generally short lifespan: spanning on average from one to thirty days. In contrast, IDFA does not change unless the user changes it in the phone settings.
Prior to the introduction of IDFA, advertisers were able to track iPhone activity using a Unique Device Identifier (UDID). The big advantage that IDFA offers over UDID is the choice for the consumers. The UDID was a permanent device number and its sharing could not be disabled, whereas in the IDFA era, users had the option to restrict the use of the identifier or change the IDFA on a regular basis. IDFAs will also be available in the upcoming privacy update, but only with consent.
User’s choice - IDFA Opt-in
With the iOS 14.5 update iOS applications must obtain consent from users to track their ads or use the IDFA. Consent should be asked through the new AppTrackingTransparency Framework. Permission is sought to link user or device information collected from the application to information collected from other applications, websites or offline sources, for targeted advertising or to measure advertising.
Consent must be requested before monitoring occurs, either when the application is downloaded or opened, or when certain features of the application are used. Underlying the change is Apple wanting the users to understand the apps’ privacy policies before downloading and using the app. Apple announces on the developers' privacy page that publishers are responsible for any third-party scripts on their applications. The publisher should also describe what information the third-party script collects, how the information can be used and whether the information is used to follow the user.
What is in danger, what will die and what will change?
IDFA is important for two reasons:
- IDFA is one of the most accurate ways to measure user interaction between ads and iOS apps.
- It offers a high level of privacy and fully emphasizes the user's own choice.
If IDFA is available and possible to use it is very useful for advertisers. AdTech companies, such as SSPs, DSPs, and ad networks and Mobile Measurement Partners (MMPs), use IDFA to identify users, enabling:
- Ad targeting and re-targeting
- Frequency capping
- Measuring your campaign
- Detection of advertising fraud
Of course, these things will continue to be possible with IDFA, but only if the user gives consent to use data. If iOS users deny access to their information, they will still be shown ads, but they will be based on other methods, such as contextual targeting.
For advertising measurement and attribution, Apple provides advertisers with an alternative option through SKAdNetwork. Apple's SKAdNetwork strives to provide conversion data to advertisers without disclosing user- or device-level information. It’s Apple’s version of a privacy-friendly way to keep track of what has impacted app installation.
What does the situation look like now?
The iOS 14.5 version has been available to download since April 26, 2021. The Alliance of Mobile Marketing Companies (Liftoff, AdColony, Fyber, Chartboost, InMobi, Vungle and Singula) has published the first experiences since the change took effect and will update the information every few weeks. When looking at the market, they have tried to find out e.g. are consumers willing to share their device IDs with app publishers, have marketing efforts on iOS devices decreased or shifted to other channels, and how has the iOS 14.5 upgrade been reflected in marketing costs?
It seems that the implementation of the new update has started exceptionally slowly. Of course, the activity is also affected by whether the user is promised significant changes with the update and this time the changes have not activated a faster update rate. At the moment, it seems that less than 20% have adopted the new update, and roughly less than 20% have agreed that apps can track their activity to identify advertising and measure effectiveness. Of course, more time and experience is needed to draw any conclusions from the figures. There is a significant dispersion in the figures and some have reported that up to 60% would have allowed the use of the data.
There has also not been a very clear change in marketing investments, but the view also varies and the figures vary from one player to another. Some have seen that marketing investments in iOS devices have increased by a few percent, and some have declined. But as a whole, no significant change in this respect has yet been seen at this point. Advertising CPM prices have also seen a slight decline in iOS devices in the short term, but are expected to recover or increase in the future as more people adopt the iOS 14.5 update.
The IDFA changes will certainly cause uncertainty about the future, but so far it appears that the changes in the market have been very limited. In the coming weeks, the number of iOS 14.5 users will certainly increase rapidly, but it doesn’t appear to be IDFA’s biggest concern for the publisher or advertiser so far, but the real impact will only be seen after the new version update becomes more widely in use.
We will follow with interest how the situation develops.