Preparing for Apple’s App Tracking Transparency framework

With iOS 14.5 currently in beta and due for release in the near future, Apple has begun requiring apps to ask for explicit consent to track users (via App Tracking Transparency, or ATT). Apple’s guidance on data privacy makes it clear that the company is taking a hardline stance on the issue of data collection and privacy.

While Facebook is vocally criticising the tech giant’s approach, and there are questions to the motives of both parties, the reality is that this is just another step on the journey we as a society have been taking toward taking back control of our personal data. ATT will impact advertiser efforts on more than 1.6 billion devices globally, and by next year advertisers will face similar issues with over 60% of web users when Google removes support for third-party cookies from Chrome.

Let’s look at how advertisers will be impacted, how they can adapt, and what this means for the industry moving forward.

How will advertisers be impacted?

Historically, advertisers have used Apple’s Identifier for Advertisers (IDFA) – a randomly generated device-level identifier to track user activity across websites and apps. This identifier allows advertisers to trace back a conversion, sale or website/app visit to an iOS device to measure their media effectiveness or retarget media to these devices.

Previously, users would be able to limit ad tracking or reset their IDFA. But as this was hidden within the iOS Settings app, most users have not used the feature (or even been aware that it existed). The new ATT framework means that users need to opt-in to have their IDFA collected and shared on every single app that requests it. Even if a user opts in to tracking on some apps, each app they opt out of is another piece of the measurement puzzle removed for advertisers.

Historically, 30% of users requested to limit ad tracking. It is estimated that as many as 85 to 90% of users will opt out via ATT.

These changes mean device-level data is effectively dead, with the following implications:

  • Traditional conversion and attribution measurement processes will no longer work
  • The ability to run retargeting campaigns will be severely limited when engaging users in an in-app environment
  • Third party audience targeting based off device IDs will be limited even further

Many social platforms and ad networks are beginning to implement SKAdNetwork, an Apple API that uses postbacks to send conversion data back to ad networks and advertisers without sharing user-level information. But the reality remains that the sheer amount of data used to measure and optimise media activity will be limited moving forward.

What can be done to adapt to the changes?

Learn to work with probabilistic measurement

Anonymous data can still be used to indicate which media strategies and creatives are delivering results. Using signals like geography, device model, app versions, and blending these with ad network data like campaign IDs can help to provide a predicted ROI to advertisers.

While no measurement solution will be perfect, developing a shared set of attribution signals and rules will still allow advertisers and media buyers to identify and invest in tactics that will deliver a return.

Regardless of the vertical, find ways to build first-party data

First-party data will become even more important for both measurement and audience targeting as these changes roll out. Many user-based platforms like Facebook have rolled out support for server to server (S2S) measurement, so when a user converts their information is hashed and added to your campaign measurement even if a pixel did not fire.

By having your own set of user data, this can be matched and built on across a variety of ad networks to maintain conversion measurement and audience targeting capabilities.

Advertisers in retail/eCommerce, services, and utilities will be able to implement S2S measurement without disrupting their customer journeys. However advertisers that have historically not required first-party data to conduct their business (e.g. FMCG brands) should begin to find ways to collect their own data. This could be through consumer promotions, loyalty/reward programs, or even a simple email newsletter. While web and app-based conversions may not be crucial to these businesses, having a set of first-party data opens up more doors for effective media targeting if third party audiences are not able to scale like they once did.

The way advertisers target users will have to change – not just in response to ATT but also to prepare for the inevitable demise of the cookie.

Most social platforms and Google have had a head start in this regard, as most of their targeting capability is built off the data of their logged-in users interests and behaviours in their environments. In 2020 we saw substantial shifts with Australian media owners into this space such as Nine, who have unified over 13 million users across their services to bolster their targeting capabilities.

As more Australian media owners build out these capabilities, advertisers should look at how publisher partnerships and programmatic private marketplace deals can supplement their targeting requirements beyond the social platforms.

How can we move forward?

Privacy is a qualified human right. Regardless of the corporate incentives being theorised, we believe these changes to respect user privacy will be positive. Consumers deserve to understand why and how their data is being used, and have a say in what is collected.

While adjusting to ATT will pose its immediate challenges, our industry has constantly innovated and adapted to change over the last century. The digital arms race of the 2010’s was bound to end, and now we must adapt to these changes.

While concerning that the decisions of a private company can have such broad-reaching implications over an entire industry, it reminds us that data privacy needs to be legislated at the federal government level to give our industry one set of rules to follow.

About Prism

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