Targeting Without IDFA

The IDFA-how all iPhone users are tracked and targeted with ads-will become opt-in, and the digital mobile marketing industry will need to transform to keep up.

Apple announced this year that in early 2021, user tracking via IDFA (identifier for advertisers) will become explicitly opt-in for users. Unless you’ve been hiding under a rock, this is probably top of mind for you as an app developer, or ad platform.

Since its inception in 2012 the IDFA has been at the core of AdTech innovation around targeting iPhone users with ads, measurement and attribution, and user analytics.

The coveted machine learning models which form the foundation of targeting intelligence in all ad platforms use this unique identifier as one of the core methods to identify a user, and deliver personalized ads.

Where is the problem?

Any iOS app from iOS 14 onwards that natively, or with third-party code, intends to track the user with the IDFA needs to first prompt the user to ask for permission. This prompt is clear: This app would like to track you across apps and websites owned by other companies. Your data will be used to deliver personalized ads to you.

There is no room for ambiguity here, and it is on the user to decide what to do.

Estimates for how many users will choose to opt in to tracking vary wildly, but most experts agree that opt-in users will certainly be the minority, leaving the majority of users untargetable.

Compare this situation to the old world of advertising via post. With IDFA, it would be the equivalent of advertisers and demand platforms knowing which person, based on the name on the mailbox at the door, has reacted to which types of letters so far, what products they have bought, which ad formats are most effective for that individual, and how much money they expect to make. This allowed extremely personalized ads and clear return on ad spend. Now, with iOS14, Apple is removing the names from all mailboxes.

What does this mean for the mobile ads industry? With the IDFA being gone, the ad systems essentially cannot identify the user or device that is requesting an ad. Targeting as we know it cannot work, and publishers and advertisers will need to revert to old targeting methods, such as contextual ads. We’re essentially taking a big step backwards.

In the mailbox example, this is like targeting advertisement based on which street you live, without knowing who lives in the street or their personal likes and dislikes. We can make assumptions about the person based on where they live or the colour of their house, but we can no longer target an individual deterministically

The impact of such a shift will be felt across the board.

Advertisers, seeing a drop in in efficacy of their ad spend will likely shift budget to different channels. Publishers will find themselves accepting lower CPM for users who have opted out of tracking. Users who have opted out will find themselves with a less personalized experience, and while users may not like to be tracked, most users still prefer a personalized experience.

Many approaches to this problem are being discussed in the industry, and most are focused on how to take an elegant step backward to previous methodologies. We will see a returned emphasis on contextual advertising, and more apps prompting users to sign up, to establish their own user identifier.

While these approaches are valid and will become increasingly important over the next years of privacy-focused internet, we believe that this inflection also opens the door to innovation.

How could it be solved?

Adcat is founded on the belief that user privacy and effective mobile advertising can coexist. We are approaching this situation as an opportunity to make the mobile ads industry a better place for users, instead of a problem.

We believe that by placing using privacy at the center of our product, we can build a sustainable and powerful ecosystem for the future of the internet, while still creating incredible value for both sides of the ads marketplace: publishers and advertisers alike.

Our ad targeting platform works by using multiple data signals to build audiences that are interesting for advertisers to target, eg. coffee drinkers in Berlin.

Using on-device learning, each device will self-identify with an existing audience, providing inventory supply to the market, without sharing any personal or trackable information outside of the device. In effect, we can provide granular audience targeting, while protecting the user’s right to privacy, and without tracking them.

With our approach, mail boxes will temporarily be marked with an audience or user segment, just as the postman is walking by. While personal names are removed, the postman can deliver a letter destined for the audience you’re in, but he can’t know who lives there. The people in the house decide which audience they are in, without sharing the fine details to the outside world.

Users who opt-in to be tracked with IDFA can continue to be targeted in the traditional way, or via our audiences too.

This helps everyone:

• Users get to remain private when they wish, avoiding tracking.
• Publishers get to maintain higher CPMs, even when users opt out
• Advertisers get to target the users who are most likely to click and convert

What you can do today

While we are still busy building our product, you can already get started today by reaching out to talk. We are happy to talk to anyone who is impacted by these changes, and by helping us to understand your individual challenges, it will help us to shape our product offering most effectively. You can have your voice heard. To get in touch, write us directly: hello@adcat.ai

If you are affected by the IDFA changes, we’d love to hear from you. We’re currently conducting an impact survey, and plan to share the aggregate results back to the community. Help us by answering a few questions here.

Originally published at https://adcat.ai on November 12, 2020.