So the word is out and everyone knows that Apple is cracking down on it’s own IDFA system with iOS 14. You probably read all about it and there is nothing new I can add from a news standpoint. The 2 cents I can add are on topics nobody talks about except for SOOMLA:
- Impact on Ad LTV / Ad revenue attribution
- Impact on Ad Quality platforms
- Impact on ad-monetization
Obviously no one knows the future so this is just my opinion on things to come.
Who is using IDFA?
So there are 2 type of platforms who rely heavily on IDFA:
- Ad providers – for example:
- Attribution platforms – for example:
4 out of the 5 examples I gave who relay heavily on IDFA also provide some sort of Ad Ltv or Ad Revenue attribution capability. You can safely assume that at the core of their Ad LTV service the identifier is IDFA. This is going to be a problem. Specifically, the attribution providers have 2 big on this front:
- The source for their Ad LTV data is the mediation and the APIs are currently based on IDFA – so that’s a big change they will have to make for sure
- They have bigger problems to address first – much bigger in fact
SOOMLA’s Ad LTV is not IDFA based
SOOMLA’s Ad LTV algorithms and core service doesn’t use IDFA. This inclucdes:
- The fetching of data from ad-networks
- The data collected from the SDK
- The server side algorithms and data processing
- The detection of ad engagement and installs
- The SOOMLA dashboard
- The sending of data for publishers (unless the publisher insisted on using IDFA)
None of these functionalities are based on IDFA so they will be unchanged while IDFA-14 spreads around the world like a pandemic.
IDFA-14 impact on Ad LTV
So to recap, IDFA impact on Ad LTV calculation depends on your provider:
|Ad LTV Provider||SOOMLA||Attribution Provider / MMP||Mediation|
|Impact if iOS 14 rolled out today||Minimal if any||100% failure||100% Failure|
|Likelihood of adjusting quickly||High as this is a priority||Low as it requires collaboration with other parties and is probably a low priority on either side||Low as there are other pressing pre|
IDFA-14 Impact on Ad Quality platforms
Ad Quality has moved to the spotlight last year with rumors of Apple’s intention to crack down on bad ad experiences and greater reliance of the industry on ad based monetization. There are 2 main solutions in the market (SOOMLA + one more). None of these services are relaying on IDFA so nothing really to report here. As someone once said – no news is good news (Supposedly it was King James I of England).
The impact on publishers’ monetization
More then anything, this is the million dollar (or more for some publishers) question on every publisher’s mind. The easy answer is that no one knows for sure.
Here are some opinions I gathered from smart people I follow:
- Programmatic media buying will become less effective
- Advertising on Facebook will reamain as effective while FAN will suffer as it will be harder for FB to transfer data between the two
- Admob will probably lose some dominance from the same reason
- Header bidding likely to lose steam
So I tend to agree with these for the most part. Let’s evolve this and see how this plays out.
Monetization impact – 1st wave – Q4/2020
I can imagine that the first reaction of many advertisers is to slow down spending in the short term as iOS 14 becomes available in September. On the flip side, there might be advertisers who think of this as an opportunity and will double down to gain momentum while others slow down. Most likely the more popular approach will be to slow down especially in light of existing threat of a general economic slow down which makes everyone’s appetite for risks slightly slower than usual.
What this means is that regardless of the ad-tech impact, the prophesy is likely to be self-fulfilled and you can expect 10-20% slow down from performance advertisers in Q4. Fortunately enough, Q4 is the brands season so impact on publishers’ monetization might be quite minimal.
Monetization impact – 2nd wave – H1/2020
This part is harder to predict. My assumptions are as follows:
- Performance advertisers will find affective ways to attribute at least on a campaign / sub-id level but maybe not on a user level
- Impact on programatic and header bidding will be noticeable
- FAN and Admob’s will become less dominant in app monetization
Essentially this acts like a time machine taking us back 18-24 months ago when many publishers were getting paid based on rev-share. These were times in which mediation companies had significant edge not due to data but due to inventory access.
From a publisher perspective the loss of programatic and header bidding is not so meaningful actually. The bigger impact will come from the loss of FAN and Admob super targeted ads. To battle this what will likely happen is that publishers will rollout in September a mechanism that forces users to register:
- IDFA popup first
- If User opted-out, he will be forced to register with phone or email
Facebook and Admob may offer ways to pass these new identifier to their SDK so they can match it with their Database and target ads based on this new method.
It’s possible that some type of games – for example hyper casual will have more trouble getting users to signup so they might suffer more.
I believe that ad monetization will almost inevitably suffer from IDFA-14 situation. It’s not a doomsday scenario but more of a 5-10% impact. Companies who have very small margins stand to lose the most in these situations while others who have built real relationship with their publishers may have less impact and might even gain from having less competition.
The importance of Ad LTV and Ad Quality measurement will likely to stay strong in years to come and dedicated independent providers should not have a problem providing the service to publishers.