Part 1: What the Decline of IDFA Means for Marketers

It’s not ironic that the IDFA stands for “identifier for advertisers.” Apple gave the ad industry this identifier to track end-users throughout the advertising ecosystem. Most folks who have an Apple mobile device (iPhone) didn’t realize what IDFA was, that it came auto opted-in on their device, or that it followed them around wherever they went. It is possible to turn it off and even to reset it, but only a small percentage of people do either.

Sound nefarious? In today’s climate of increased privacy concerns, compliance requirements, and protection regulations, Apple and many others now deem so. With that said, Apple has a solution to propose (more on the SKAdNetwork later). Sparing you further documented history of the IDFA, here’s what’s happening:

• Apple is going to release a new iOS 14.5 version, one that will come with the IDFA automatically turned off
• Apps will need to ask users to opt-in in order to track their behavior, essentially marking the beginning of the end of the IDFA

When is this happening? Any day now.

The move has been bandied for some time. And Apple formally announced its plan on June 22, 2020. Originally Apple said the change would happen in September 2020 with an upcoming iOS 14.X version launch. However, due to the outcry from many companies across the globe not ready for the move, Apple postponed. Many have speculated it would happen this April.

Is this the death of IDFA?

Industry folks are using terminology like “deprecation” or “killing” of the IDFA. But it won’t be completely deprecated or killed, at least not right away. Rather, the iOS 14.5 will render the IDFA to an “off” state and every app downloaded would need the user to opt-in.

So it will still be possible-ish to collect an IDFA and follow that user. However, industry experts estimate less than 10% of users will opt-in to allow IDFA tracking—turning the current tracking scenario on its head.

Up until now, Apple’s IDFA (identifier for advertisers) has allowed companies to track users and match ad clicks to app installs. Apple’s next iOS version will turn off the IDFA and turn the current tracking scenario on its head. 

No doubt, this is a big deal. Up until now, the IDFA has been used for iOS attribution.

The IDFA attribution flow begins with a user clicking on an ad in an app on their iOS device. When the user goes to the Apple App Store, only Apple knows what the user is doing (in industry terms, the user has gone into the “black box”). When the user interacts with the app for the first time, the MMP works to match the IDFA to the original click and make the attribution.

More specifically:

1. When an ad is shown to a user in an iOS app, there is an embedded link behind the ad originated from an ad network, and it has parameters that populate with information to send along with it; the IDFA is one of the parameters.
2. If the user clicks on the ad, the ad network collects the IDFA, and then sends the user to the App Store page of the advertised app, and sends a ping to the MMP with that IDFA, and that info is stored there.
3. After the user downloads the app and then launches it for the first time, the app sends a ping to the MMP which collects the IDFA again, and then matches it to the IDFA of the origin ad link that was clicked (accounting for last-click attribution).

When the iOS 14.5 “deprecates” the IDFA, it will affect mobile advertising in several ways, which is why investing in owning first-party (1P) data has never been more critical to a business.

You can expect the lack of an IDFA will complicate the following:

• Tracking and attribution: Without an IDFA, the advertiser will no longer be able to attribute installs or IAP (in-app purchase events) to where the user originally clicked on the ad, and view-through capability will also be lost. Without this granular data, the advertiser is not able to understand campaign activity and optimize—regressing back to a world where all advertisers claim and charge for an ad-click + app install.
• Programmatic and retargeting: Since the IDFA is the predominant mobile identifier (email and phone numbers are not commonly known), programmatic and retargeting will become much more difficult. Finding and then targeting specific users with ads or messaging at the right touchpoints, i.e. abandoned cart, becomes a guessing game.
• Frequency capping: Following retargeting, if a user’s IDFA is unknown to the advertiser, the number of ads the user has been exposed to will not be known.
• Personalization: This is perhaps one of the more advanced tactics that will be lost. Advertisers will not be able to identify specific users to send them targeted ads. For example, a bicycle company will not be able to send ads for its bike inventory or bicycle trail app to a specific bicycle enthusiast segment.

Some users will still opt-in to the IDFA. But apps will need to ask for permission, and again the numbers will be relatively very low. From Apple’s Developer Documentation:

You must use the AppTrackingTransparency (ATT) framework if your app collects data about end users, and shares it with other companies for purposes of tracking across apps and websites. The AppTrackingTransparency framework presents an app-tracking authorization request to the user, and provides the tracking authorization status.

Many will see it as a marketing best-practice to use the ATT and the data that can be acquired and shared. Testing will need to be done, but this data could still benefit marketing and advertising efforts to a degree.

Moving from 1:1 attribution to an aggregated model—enter Apple’s SKAdNetwork 2.0

Nevertheless, a transformation is going to have to occur in marketing iOS apps. Even walled garden SANs (self-attributing networks) will not be able to use the IDFA for one-to-one attribution (although they still have their own giant ecosystems where they can track users with first-party data).

Within Apple’s ecosystem, advertisers and developers will need to adopt the SKAdNetwork 2.0 (or SKAN) framework. This is Apple’s answer to upholding user privacy while allowing advertisers to track their campaigns, but without disclosing granular, user-level data.

So what should you focus on now if marketing iOS apps are part of your business? We will cover our view and approach in depth after Apple implements this change.

Here are some top priorities to consider immediately:

• Adopt Apple’s ATT and SKAdNetwork 2.0. If you haven’t already, begin implementing and testing Apple’s ATT and SKAdNetwork 2.0. Apple has deemed this is the only alternative for ad tracking.
• In the near term, move funding away from programmatic channels (DSP). Continue to invest in the walled gardens, such as Google and Facebook, given they are likely to be less affected by the change. However, in the long term, consider building your company’s own “walled garden,” i.e. begin to invest in gathering and storing all of your first-party data, in order to remove barriers to customer knowledge and identifiers.
• Revisit contextual content advertising. When ads are contextually related to content, they typically have a positive impact on campaigns. This is being realized more now than in the past as ad delivery and formats have advanced.
• Consider building and enriching your first-party data. This is an important strategy for moving forward without the IDFA, but also as privacy requirements continue to evolve.

The most powerful tool a company can employ to support the growth and management of their first-party data is a Customer Data Platform (CDP). CDPs support the data you have now, and provide a bridge into the future. Only since 2017 have CDPs become a product to note and keep an eye on, but with more privacy restrictions and concerns comes this notion of owning and retaining the majority of your business’s first-party data. Building your own “walled garden” is not a fad, but rather a lasting strategy.

Instead of a nice-to-have, CDPs will be viewed as must-haves with budget allocated. Particularly valuable will be CDPs rooted in managing big data and identity. These are built to support not just advertising use cases, but the more complicated omni-channel personalization use cases that require data, insights, and engagement to work in unison. With the depreciation of the IDFA, companies need to pivot quickly to maintain a high level of relevance with their customers.

We will revisit the impact of Apple’s change to IDFA (and what you can do about it) in Part 2 of this series. In the meantime, to learn more about how Treasure Data Enterprise CDP helps leading brands across every industry, read our customer stories. Or send your questions directly to our CDP experts.