Is Apple Going to Make the (Advertising) World Better?
Opinions Differ but We Look at the Facts
So, what is going to change? Let’s go back and remember that Apple targeted the online advertising industry with an update that was first introduced in iOs13. At that time, Tim Cook decided it was time to strike again with iOs14 and announced the introduction of explicit IDFA opt-in, essentially giving more power to the user and enhancing their privacy. Since then, the change has been delayed to early 2021 after the backlash from Google and Facebook, but the change is coming no matter what, and it’s now just around the corner.
What is IDFA and explicit opt-in in a single sentence? IDFA is an unique identifier that lets advertisers create groups of users based on their interests and subsequently target them with their ads.
Basically, this will change the advertising landscape, at least for the mobile Apps’ world. Audiences based on users’ navigation history & interests won’t be available anymore — or they won’t be available with the actual data richness and size. Google, Facebook & the programmatic industry rely heavily on this kind of data which is part of why this is such a big deal in the industry, and why so many people have been constantly talking about this topic, which is complex and involves many players.
Is this about privacy? Behind Apple’s move there’s a simple reason, the competition with Google & Facebook. But this is not the only reason, I believe Apple is really trying to innovate the advertising industry by leveraging user privacy, which has been a hot topic for quite some time now.
Is there a limit to this approach? Obviously there’s one: the world of mobile web is way bigger than apps themselves and Apple is unable to change advertising on mobile sites. But wait, there’s more! The most widely used apps are social networks & games: social apps won’t be affected by Apple’s change, since they inherently rely on users’ data (i.e. login + demographic data) for targeting purposes. Games are a whole different world, where advertising is mostly video. I don’t have particularly deep knowledge of the gaming world, but I suppose there won’t be significant changes in that realm.
Some of the side-effects. As already mentioned, the leverage Apple has on the whole mobile ecosystem is limited. But IMHO less targeting won’t mean less ads. I will however speculate that less targeting will reduce the CPMs (known as the cost-per-thousand, a.k.a. the cost advertisers are willing to pay for ads to be displayed), but will results in more ads. “Less Targeting = More Ads” is an equation that could become true very soon.
As I’ve said in another post, Apple’s move could push advertisers towards spending more money on mobile web campaigns, where cookies are still available (at the moment) and targeting will be more effective.
Conclusion. I started writing this post after reading this article on DataArt’s blog. Max Kalmykov’s take is interesting: he says that users are lately more concerned about privacy, Apple will shift the entire ecosystem towards contextual targeting (context-appropriate ads you see will be based on the page/app you’re visiting/using, not on your interests). I’m not sure this will be the situation when IDFA explicit opt-in arrives in a few week. I suppose we will simply see lower CPMs and more ads. Facebook & Google won’t be deeply affected by this change. They rely on login data to target ads. This means that Facebook will be able to target ads like it used to before (inside their own apps). The external audiences (i.e. Facebook Audience Network) probably won’t exist anymore. It’s true however, as Facebook says, that some small app developers will have less options for monetizing their properties.
From an advertiser perspective, we will get used to lower conversion rates very very quickly. This is because less data will be fed into the algorithms. And that’s just the way the mobile tech cookie crumbles.
You might also like:
- Meet the Mobile Masters: Nicole Gallucci, Founder of In good Company | The Mapendo Talks episode 2
- Why iOS 14 & In-app Purchases are Killing In-App Ads
Stay tuned for more!
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