iOS 14.5 and the impact to the ad ecosystem

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Apple announced that iOS 14.5 will go live next week with updates that increase user privacy within mobile apps. Apple’s AppTrackingTransparency, or ATT, requires all mobile apps to secure active consent from users in order to allow device tracking for use by advertisers. ATT has been in the works for a while, and it is just the latest of Apple’s frameworks designed to give customers more control of their data. That said, this iteration of ATT will have a significant impact on advertisers, apps, and the wider ad tech ecosystem. Any advertiser using app-based user data will be affected, so it is important to understand what this update really means and the likely impact on media strategies.

Why is everyone talking about iOS 14.5?

Prior to ATT, users were opted into in-app tracking by default. With consumers becoming more concerned about the privacy of their data, this opt-in framework provides users with greater control over their data. As a result, advertisers and app developers expect to see fairly low opt-in rates once iOS14.5 goes live, making many (if not most) app users untrackable via IDFA. Early data from apps offering consumers this choice showed opt-in rates of 20-40%. Based on data from early adopters, mobile measurement company AppsFlyer found that opt-in rates varied by vertical, with lower rates for gaming apps and higher rates for shopping apps. Assuming these rates hold, the decline in trackable devices would be significant.

How will iOS 14.5 affect advertisers?

Fewer devices tracked will limit audience targeting within apps and reduce granularity for attribution metrics such as recency and revenue. This means advertisers will need to adjust performance benchmarks as they map historical results to post-iOS 14.5 results, creating a continuity challenge.

Recognizing advertisers’ concerns about attribution, Apple has introduced the SKAdNetwork, which aggregates data and measures performance entirely through Apple-controlled APIs. Each major player in the app space has responded to Apple’s requirements with its own approach, and the impact for advertisers varies by platform.

Facebook (high impact): Facebook is making sweeping changes to its ad platform to comply with ATT. Its new measurement infrastructure is designed to be compatible with ATT and better position Facebook for ongoing shifts toward increased user privacy. Aggregated Event Measurement (AEM) will support advertisers’ tracking, attribution and measurement needs on Facebook, but advertisers will see significant effects.

In response to the changing ecosystem, Facebook announced it would retire the current Facebook Attribution tool in August 2021. In Facebook’s words: “As we look to retire Facebook Attribution, we are building the next generation of an attribution tool that will provide comprehensive measurement of ads, organic and commerce activities across the Facebook family of apps.”

Read our point of view on the impact of these changes here.

Snapchat (high impact): Snapchat plans to show Apple’s tracking prompt and will fully support the SKAdNetwork alongside its existing privacy-centric attribution solution, Advanced Conversions. 

  • Optimization and targeting: The most significant impact will be reduced retargeting pools for Snap’s Dynamic Ad campaigns, custom audiences and Snap Audience Match. Since the SKAdNetwork is only relevant for iOS, campaigns will need to be OS-specific so that one campaign cannot target both operating systems at once.
  • Measurement: Hourly attribution windows will no longer be available. Attribution windows will be reduced to: 28 day, 7 day, and 1-day swipe (click), and 7 day and 1-day view windows. Additionally, user-level reporting from mobile measurement partners (MMPs) will no longer be available for users who have opted out. 

Google Ads (medium impact): Google will no longer collect the user ID unique to each mobile device (IDFA) on their apps, and it will not show the ATT prompt. Google will support access to the SKAdNetwork to measure performance of app campaigns through their own SDK or other supported SDKs.

  • Tools and Infrastructure: Google will rely more heavily on Google login across O & O inventory for targeting, tracking and attribution. 
  • Optimization and Targeting: First-party data on websites and apps will be less scalable and efficient. Interest-based targeting for app campaigns in YouTube, Discovery and Display will see data loss and performance decline. Overall, reach for iOS app campaigns will drop significantly.
  • Measurement: Modeled conversions will be expanded from just Search to other channels.

Twitter (medium impact): Twitter will roll out the required ATT consent prompt and continue to collect IDFA for those users who opt in to tracking, but it will shift tracking infrastructure to rely more on Twitter Click ID, its unique identifier to track site visits.

  • Tools and Infrastructure: Advertisers must have a 3rd party mobile conversion tracking partner use App Install campaigns and can only access SKAdNetwork through one of the supported mobile measurement partners (MMPs).
  • Optimization and Targeting: The scale of targetable audiences on iOS will decrease, and performance will likely decline.
  • Measurement: Post-engagement and post-view attribution will continue to be available. Twitter reporting will continue to be finalized within 24-48 hours of when impressions are served (real-time data is estimated). App install data will be subject to SKAdNetwork attribution limitations.

Linkedin (low impact): LinkedIn will stop collecting IDFA and continue to rely on logged-in user data and 3rd party cookies for audience matching, targeting and conversion tracking.

  • Optimization and Targeting: Marketers leveraging IDFA for Matched Audiences will see reduced target audience sizes.
  • Measurement: As conversion tracking relies on 3rd party cookies, the impact of removing IDFA will be minimal.

Pinterest (low impact): Pinterest will stop collecting IDFAs and will remove mobile app install ads, a format that is less frequently used among advertisers. 

  • Measurement: Pinterest will not be integrated with SKAdNetwork when iOS 14.5 rolls out. Instead, it recommends using the “Device” breakout for segmentation and reporting. Pinterest is exploring a potential first-party measurement solution.

Understanding the coming changes to these advertising platforms once iOS 14.5 is live is essential to planning. If they haven’t already, advertisers should create adaptation strategies to reduce disruption in their media plans.

iOS 14.5 and the impact to the ad ecosystem

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Apple announced that iOS 14.5 will go live next week with updates that increase user privacy within mobile apps. Apple’s AppTrackingTransparency, or ATT, requires all mobile apps to secure active consent from users in order to allow device tracking for use by advertisers. ATT has been in the works for a while, and it is just the latest of Apple’s frameworks designed to give customers more control of their data. That said, this iteration of ATT will have a significant impact on advertisers, apps, and the wider ad tech ecosystem. Any advertiser using app-based user data will be affected, so it is important to understand what this update really means and the likely impact on media strategies.

Why is everyone talking about iOS 14.5?

Prior to ATT, users were opted into in-app tracking by default. With consumers becoming more concerned about the privacy of their data, this opt-in framework provides users with greater control over their data. As a result, advertisers and app developers expect to see fairly low opt-in rates once iOS14.5 goes live, making many (if not most) app users untrackable via IDFA. Early data from apps offering consumers this choice showed opt-in rates of 20-40%. Based on data from early adopters, mobile measurement company AppsFlyer found that opt-in rates varied by vertical, with lower rates for gaming apps and higher rates for shopping apps. Assuming these rates hold, the decline in trackable devices would be significant.

How will iOS 14.5 affect advertisers?

Fewer devices tracked will limit audience targeting within apps and reduce granularity for attribution metrics such as recency and revenue. This means advertisers will need to adjust performance benchmarks as they map historical results to post-iOS 14.5 results, creating a continuity challenge.

Recognizing advertisers’ concerns about attribution, Apple has introduced the SKAdNetwork, which aggregates data and measures performance entirely through Apple-controlled APIs. Each major player in the app space has responded to Apple’s requirements with its own approach, and the impact for advertisers varies by platform.

Facebook (high impact): Facebook is making sweeping changes to its ad platform to comply with ATT. Its new measurement infrastructure is designed to be compatible with ATT and better position Facebook for ongoing shifts toward increased user privacy. Aggregated Event Measurement (AEM) will support advertisers’ tracking, attribution and measurement needs on Facebook, but advertisers will see significant effects.

In response to the changing ecosystem, Facebook announced it would retire the current Facebook Attribution tool in August 2021. In Facebook’s words: “As we look to retire Facebook Attribution, we are building the next generation of an attribution tool that will provide comprehensive measurement of ads, organic and commerce activities across the Facebook family of apps.”

Read our point of view on the impact of these changes here.

Snapchat (high impact): Snapchat plans to show Apple’s tracking prompt and will fully support the SKAdNetwork alongside its existing privacy-centric attribution solution, Advanced Conversions. 

  • Optimization and targeting: The most significant impact will be reduced retargeting pools for Snap’s Dynamic Ad campaigns, custom audiences and Snap Audience Match. Since the SKAdNetwork is only relevant for iOS, campaigns will need to be OS-specific so that one campaign cannot target both operating systems at once.
  • Measurement: Hourly attribution windows will no longer be available. Attribution windows will be reduced to: 28 day, 7 day, and 1-day swipe (click), and 7 day and 1-day view windows. Additionally, user-level reporting from mobile measurement partners (MMPs) will no longer be available for users who have opted out. 

Google Ads (medium impact): Google will no longer collect the user ID unique to each mobile device (IDFA) on their apps, and it will not show the ATT prompt. Google will support access to the SKAdNetwork to measure performance of app campaigns through their own SDK or other supported SDKs.

  • Tools and Infrastructure: Google will rely more heavily on Google login across O & O inventory for targeting, tracking and attribution. 
  • Optimization and Targeting: First-party data on websites and apps will be less scalable and efficient. Interest-based targeting for app campaigns in YouTube, Discovery and Display will see data loss and performance decline. Overall, reach for iOS app campaigns will drop significantly.
  • Measurement: Modeled conversions will be expanded from just Search to other channels.

Twitter (medium impact): Twitter will roll out the required ATT consent prompt and continue to collect IDFA for those users who opt in to tracking, but it will shift tracking infrastructure to rely more on Twitter Click ID, its unique identifier to track site visits.

  • Tools and Infrastructure: Advertisers must have a 3rd party mobile conversion tracking partner use App Install campaigns and can only access SKAdNetwork through one of the supported mobile measurement partners (MMPs).
  • Optimization and Targeting: The scale of targetable audiences on iOS will decrease, and performance will likely decline.
  • Measurement: Post-engagement and post-view attribution will continue to be available. Twitter reporting will continue to be finalized within 24-48 hours of when impressions are served (real-time data is estimated). App install data will be subject to SKAdNetwork attribution limitations.

Linkedin (low impact): LinkedIn will stop collecting IDFA and continue to rely on logged-in user data and 3rd party cookies for audience matching, targeting and conversion tracking.

  • Optimization and Targeting: Marketers leveraging IDFA for Matched Audiences will see reduced target audience sizes.
  • Measurement: As conversion tracking relies on 3rd party cookies, the impact of removing IDFA will be minimal.

Pinterest (low impact): Pinterest will stop collecting IDFAs and will remove mobile app install ads, a format that is less frequently used among advertisers. 

  • Measurement: Pinterest will not be integrated with SKAdNetwork when iOS 14.5 rolls out. Instead, it recommends using the “Device” breakout for segmentation and reporting. Pinterest is exploring a potential first-party measurement solution.

Understanding the coming changes to these advertising platforms once iOS 14.5 is live is essential to planning. If they haven’t already, advertisers should create adaptation strategies to reduce disruption in their media plans.

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