At the Apple WWDC 2020 conference, Apple announced new privacy features for consumers.
The new iOS 14 changes will arguably “have a bigger and more immediate impact on advertising businesses than Chrome’s ‘cookie apocalypse’ announcement in January,” according to Ari Paparo at AdExchanger.
What exactly are the new protections and how are advertisers preparing for the rollout in September?
We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.
Advertisers say goodbye to IDFA
Apple’s IDFA—Identifier for Advertisers—helps mobile marketers attribute ad spend. When Apple releases iOS 14, consumers will be given the choice to opt-in or out of data tracking.
“We believe tracking should always be transparent and under your control,” said Katie Skinner, a manager for user privacy software at Apple. “Moving forward, App Store policy will require apps to ask before tracking you across apps and websites owned by other companies.”
The opt-in screen will appear like this:
This opt-in feature will be used across all iOS devices, even Apple TVs. While advertisers don’t know what the opt-in rate will be, some are estimating it could be as low as 5%. Without consumer information, it will be difficult to send targeted ads to Apple users.
This change is happening against the backdrop in which advertisers are bracing for a world when Google Chrome drops third-party cookies.
How are advertisers reacting to the announcement?
Many leaders are saying that Apple has killed the IDFA, expecting that most consumers will deny tracking.
“The IDFA is dead,” told CEO of Branch Alex Austin to AdExchanger. “There is no other way to interpret this.” Others simply don’t know what to expect until they have more data.
“It’s very hard for us to extrapolate what [the IDFA changes] will do given that there is no precedent to this,” said Criteo CEO Megan Clarken. The ad targeting technology company predicts that the update will cut their earnings by at least $3 million next quarter.
The Trade Desk is working on an open-form tool—Unified ID 2.0—to help the industry work in a post-cookie world. The tool will give consumers an open ID that replaces cookies and gives controls to consumers, while also facilitating personalized advertising.
While The Trade Desk is leading the charge on the development of this technology, it will be an open-source tool the entire digital industry can help shape.
Where does programmatic stand now?
Programmatic has fared better than most other forms of advertising during the COVID-19 pandemic.
MediaRadar data shows that the number of advertisers running programmatic ads is up 26% since January. In June, spend levels hit their highest point since the beginning of the year. In fact, spend levels in June were down just 3% compared to January.
The types of companies buying programmatic ads shifted in Q2. Most noticeably, we saw travel brands drastically cut spending. Meanwhile, other categories—media, home furnishings, and education/training—increased spending.
Programmatic is highly efficient, and particularly effective for companies that rely on data-driven targeting strategies. With the upcoming challenges, we will monitor the ad tech ecosystem response and how that impacts ad buying across categories.
For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.