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Digital Marketing Acceleration

Opt-In Tracking Spells Trouble for Programmatic Advertising

Upcoming Changes from Apple & Google Will Control How Advertisers Can Track a User's Digital Behavior

This June, Apple shook the advertising world when it announced a move toward opt-in app tracking for users at its Worldwide Developers Conference (WWDC). 

Starting with iOS 14, app developers will have to ask user permission before tracking them across third-party apps and websites. People using iOS devices, including iPhones, iPads and Apple TVs, will need to opt in before apps can use an identifier for advertisers (IDFA) to personalize ads. In 2019, Google made a similar move when it introduced the Web & App Activity setting that lets users restrict companies from storing and using data from their searches, web browsing and other sources.

While the changes from Apple and Google are a win for consumers worried about their privacy, the ability to opt out of tracking will likely be devastating to advertisers and marketers and result in big losses for app developers that rely on ad revenue. 

Let’s take a look at how these changes will impact programmatic advertising and how companies can adapt to ensure their digital marketing doesn’t get derailed.

Why programmatic will suffer

Programmatic display advertising uses algorithms to automate the process of buying and selling targeted ad impressions. Apps and websites sell ad impressions in a marketplace. When an impression is available, the marketplace auctions it off to advertisers who want to show their ad to that specific customer, with the impression going to the highest bidder. This process is entirely automated with targeting and performance indicators pre-programmed, so the whole exchange happens within milliseconds.

While programmatic has been heralded as the future of digital marketing, that’s all about to shift once again. With these changes by Apple, and the earlier changes from Google, this removes the last good features of programmatic display.

That’s because programmatic is powerful only insofar as it can track and follow users around digital spaces. By linking user or device data collected from one app or website with user or device data collected from other companies’ apps or websites, advertisers can understand individuals’ preferences so they can target them when and where they are most likely to engage. 

Unfortunately, when customers opt out of being tracked, this whole strategy falls flat.

What opt-in tracking means for advertisers

iOS 14 will likely be rolled out to customers in September. By the end of 2020, over 50% of Apple devices should have the new operating system. 

While the option to limit ad tracking has always been available in Apple’s privacy settings, it’s now coming to the forefront with just-in-time alerts when an app wants permission to track you. Users will be given two options, to either allow or disallow tracking, making it easier than ever to opt out.

Apple’s new requirements mean that, along with summarizing their privacy info for users and reporting their privacy policies, app developers will need to follow a number of rules around the opt-in requirement. For example, if a user doesn’t allow access, the app will never be able to use the IDFA or “nag” for permission again, unless the app is reinstalled.

It’s unclear how far Apple’s anti-advertising enforcement activities will extend (Apple’s developer site suggests it may go beyond the IDFA opt-in), but one thing is for sure: marketers need to quickly rethink their digital marketing strategy and pivot to more reliable options.

The benefits of partnering with an expert non-programmatic advertising partner

Advertising with a partner that can execute your strategy on native channels is perhaps the most effective way for brands to circumvent the need for ad tracking opt-in. These changes greatly increase the importance of having a single strategic partner, running both top of funnel and direct response advertising on native platforms like Facebook, Instagram and Pinterest, as well as bottom funnel paid search, and connecting the performance.

On a positive note, these changes present a good opportunity for companies to make some overdue changes to their approach. 

At ibex Digital, we’ve long advocated that programmatic advertising is highly inefficient, with placements and clicks for many advertisers being optimized down to the service and CPM level, and not at the direct response or performance level.

With an effective digital marketing partner, companies can ensure they’re getting maximum conversions—and maximum return on investment—from their ad dollars. Learn more about how our digital marketing solutions can help you reshape your digital strategy, protect your revenue, and grow your profits.

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