Is it advertising Armageddon?
On April 26, Apple released iOS 14.5, a date that will be remembered as forcing a huge change in mobile marketing. Until iOS 14.5, iPhone users had to turn off the IDFA (identifier for advertisers) feature somewhere in their settings. Now, with the new operating system, users must opt-in to activate IDFA on their iPhones.
When IDFA is not active, advertisers cannot track a user between mobile apps or websites, and this prevents targeted advertising through user-level attribution and testing.
Of course, the change does not mean the end of targeted advertising on iPhones. Marketers can pay for Apple’s new advertising solution, which allows a marketer to promote their product across the entire network, instead of just in response to a search.
Other than this paid solution, they will need to rely on the SKAdNetwork, which makes performance data available at the campaign level (as opposed to the user level), but which is subject to many restrictions.
Nowhere to Run?
According to Apple, changes to the IDFA are a result of increased privacy concerns. It’s a fact that we are now in the age of GDPR, and some corporations have paid giant fines as a result. Actually, Google holds the record with a €50 million penalty issued against them in March 2020.
And speaking of Google, they intend to follow (law) suit with their Federated Learning of Cohorts (FLoC), which is a fancy way of saying that Chrome will soon block third-party cookies by default (more on this later).
So – no user targeting for Apple, and potentially no user targeting for Android. What can marketers do instead?
1. Get Used to It
The first step in adjusting to the new Apple restrictions is to realize that privacy initiatives by FAANG companies are only going to continue. Attempting to find workarounds of upcoming privacy regulations and technologies won’t fly in the long term. Relying on techniques such as server-to-server conversion management and device fingerprinting will only delay entry to the upcoming race of developing ad technologies that function in the post-IDFA world.
Conversely, this is the chance to get ahead of the game. It’s being said that smaller firms, which don’t have the massive existing data resources of the tech giants, will suffer the most from Apple’s move. But being small might be an advantage for companies that can innovate quickly by finding new data sources and better marketing techniques.
2. Try MMM
Ironically, one of the techniques for the new mobile marketing era dates back to the 1950s. Marketing mix models (MMMs) use statistical analysis to find the optimal combination of the four marketing Ps: product, price, place, and promotion.
To check the best mix, marketers examine how variations in the four Ps, over time, affect results; marketers can also experiment with random levels to achieve the same goal. MMM does not require the tracking of individuals, and, aside from the internal analysts dealing with MMM, the marketer doesn’t need to pay anybody to use the data. It might be a sign of the times that Facebook, which has openly declared its opposition to Apple’s move, has released “Robyn,” an MMM instructional guide.
3. Forget Specialized Products
Besides small firms, it looks like another potential victim group of iOS 14.5 will be niche product suppliers. They depend on identifier-based targeting because it is otherwise not possible to connect with the small customer bases that they depend upon. Niche suppliers must either expand their product offering, partner with others to widen their advertising reach, or pay for Apple’s new platform.
4. Be Creative
Without targeting, marketers can’t reach out to customers. So instead, customers will need to reach out to marketers, and the key to this is for marketers to stand out with interesting and unique campaigns. In a way, this is another throwback to pre-digital days, when companies like Nike and Absolut used great campaigns to go from unknowns to market leaders.
A Note On Leveraging LAT Context
Limited ad tracking (LAT) users are those who have opted out of IDFA. Various technology companies are developing ingenious ways to apply contextual advertising concepts to LAT users. This is a form of device fingerprinting (see above), and goes against the idea that it’s smarter to simply accept the new rules. However, it’s also really popular right now. From July 2020 to February 2021, iOS LAT ad spending grew 50%.
The trick for contextual LAT advertising is that, without any written content, marketing technologies need other cues for serving ads. But they do exist, and they include: number of ad impressions viewed and duration of current app use, both of which indicate a behavior pattern; IDFV, an identifier which shows that certain apps are running on the same device; and app-level data, which can determine the type of framework and therefore what app is being used (for example, certain frameworks are used mostly for games).
Stay Tuned
Implementation of iOS 14.5 has been great so far – for Google. As of the date of writing, Google has seen a 21% jump in advertising revenue as marketers seek to counter, at least temporarily, the effect of the new Apple restrictions. Approximately 75% of users are not opting-in to IDFA at the moment.
Is this going to be a long-term trend? There has been a widespread negative reaction to Google’s FLoC by some major development entities, which have built add-ons to block it. They claim that FLoC is a move by Google to increase their stranglehold on the market and is actually a threat to online privacy.
It remains to be seen how Google will react. Perhaps, in light of Google’s ad revenue bump, they might just lose some of their enthusiasm about user privacy concerns (how much is €50 million for them, really?) and pick up a bunch of marketers who now find Apple too bitter for their tastes.
As Published on Air Doctor.
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