What Is IDFA?

It’s beginning to feel a lot like a ping pong match (or insert Serena Williams’ ups-and-downs between the US Open and Italian Open here) whenever we start talking about Apple’s upcoming changes to IDFA in our editorial meetings.

Will it be opt-in, or nah? Is it coming out in iOS 14 or at a later date—say, sometime in 2021? What should pubs be doing in preparation for that unfortunate day? Does Apple really care about consumers or do they have something else in mind? Should everyone just adopt SKAdNetwork now and count their losses?

Oh, the questions we ponder about this topic every day are endless. We bet you have loads of questions too.

So we asked Isaac Schechtman, Senior director of Product Strategy at BidSwitch to write up an explainer, going over everything from A-Z on Apple’s IDFA, from its early beginnings (remember it was the IFA then?) to the recent kerfuffle causing Apple to pull back on the tech giant’s plans to make IDFA opt-in only in iOS 14 (which would severely impact publishers’ ability to monetize their apps). Also, what’s next on the horizon in terms of alternatives to IDFA.

What is IDFA?

That might seem a rhetorical question right now—surely after the furor of the past few months, everyone is well-versed in Apple’s ID for Advertisers (IDFA)?

It’s true that most people in the advertising world know more about IDFA than they did six months ago, but the twists and turns of the privacy plot are worth exploring.

Very simply, the IDFA is a randomly-generated code assigned to a device by Apple and used for audience targeting by app developers, as well as to track how well ads perform.

Why is everyone talking about it now?

Apple announced at its virtual Worldwide Developers Conference in June that the rules for using unique identifiers would change to require users to provide consent for their mobile data to be tracked, with this update being introduced with the launch of iOS 14 in mid-September.

Unsurprisingly, major concerns were voiced throughout the industry over the summer, not least at the lack of time to prepare for such a major change.

However, in the first few days of September, rumors started to circulate that, as a result of pressure from the large app developers, the roll-out of these privacy measures would be delayed. Apple subsequently confirmed that it would postpone the changes until 2021.

As advertisers, developers, publishers and ad tech companies breathe a collective sigh of relief (albeit a small one; there is a lot of ground to cover in a short space of time) at the stay of execution, it’s useful to look at the context of the IDFA.

Where does the story start?

Apple has had an on-off relationship with consumer privacy over the years.  Initially, the Unique Device Identifier (UDID) resident on every Apple iOS made it easy for third parties to track the behavior of people using an Apple device. But following the discovery that many App Store apps uploaded personal user information without consent (and a resulting US Congress showdown), a crackdown ensued.

For a while iPhone, iPod Touch and iPad users could go about their daily lives pretty much invisible to advertisers.

And then, with the launch of the iPhone 5 and iOS 6 in September 2012, Apple quietly reintroduced tracking. Switched on by default—users had to proactively turn it off if they didn’t want to be tracked—the IFA (the original acronym for IDFA) once again allowed advertisers to track and target Apple device users.

Like third party cookies on the web, IDFA became the de-facto way to track and target users on mobile devices, particularly for in-app advertising.

Why the pivot back to consumer privacy?

The combination of growing regulation (including the European General Data Protection Regulation, US California Consumer Privacy Act and forthcoming Canadian Personal Information Protection and Electronic Documents Act), users wanting more control and safety and understanding about their data and the right to privacy, saw the tides start to turn.

Apple positioned itself as the brand standing on the side of consumer privacy, increasingly reflecting this message in ads, the most recent of which highlights that the iPhone offers people control over their information and protects their privacy.

In practical terms, this essentially waves goodbye to the IDFA.

What does that actually mean?

Like all of Apple’s operating system updates, users will receive automatic prompts to upgrade to iOS 14.  Before the postponement of the IDFA opt-in, once iOS 14 was installed, the only way that apps could have accessed and used the IDFA was if the user actively chose to be tracked. This gave each app developer just one shot at getting permission; the first time a user opened an app having downloaded iOS 14, they would be asked (via an Apple-controlled dialogue box) if they wanted to allow or deny tracking for advertising purposes.

The only way that IDFA would once again have been available for advertisers was if user consent was provided. If users ignored the message or denied the request, it was game over; the publisher was not allowed to proactively ask for opt-in again. Users deciding to sign-up for tracking at a later date would have needed to navigate the individual app settings to do so.  The current delay allows publishers to explore different soft opt-in prompts (emails that encourage users to agree to IDFA being used).

The consensus of opinion among mobile experts is that people will predominantly choose—perhaps unsurprisingly—not to be tracked.  The most gloomy predictions put opt-in rates as low as 5%, although others claim ranges of between 25 and 60%.

BidSwitch research shows that around 38% of app usage originates from iOS devices. Even with the more optimistic opt-in guestimates, it’s clear that the IDFA changes will have a significant impact on targeted programmatic advertising spend on Apple apps.

If users aren’t tracked, mobile advertising becomes a completely different proposition—campaigns are less effective for advertisers, which reduces the revenue they generate for app developers and publishers.

Overall these restrictions seem likely to drastically reduce the prevalence of the IDFA, minimizing its current use for mobile advertisers and possibly heralding its demise.

How do the changes affect Facebook?

In late August Facebook entered the fray, warning its advertisers about the reduced ability to target and indicating to publishers that the revenue they generate through Facebook Audience Network (FAN) could drop by more than half. Initially, the social media giant said it would stop collecting IDFA on iOS 14 devices, meaning it would not display Apple’s consent message or require apps in FAN to do so, a stance it has since rescinded.

Whether Facebook follows through with its suggestion that it may not offer Audience Network on iOS 14 due to the lack of IDFA severely compromising its effectiveness remains to be seen.

But as industry pundits digested the implications of Facebook’s approach, Apple, in what is regarded in some quarters as a conciliatory move, announced that the changes to IDFA would no longer be included in the initial version of iOS 14.

Why has Apple pulled back?

As noted above, it seems likely that the main reason behind Apple’s delay is pushback from the app developer community which had been given only three month’s warning about the IDFA changes.  These changes would have had a significant impact on the $240+ billion mobile advertising spend most of these developers rely on and also coincide with the busiest ad season of the year.

Extending the deadline until 2021 offers developers more of a cushion in terms of finding alternative means of user targeting and campaign measurement as well as testing various messages for soft opt-ins.  It also gives Apple more time to mature its own SKAdNetwork offering (originally released in March 2018 as part of iOS 11.3 to allow advertisers to determine the effectiveness of their campaigns without infringing on the privacy of Apple users) to make it a more viable alternative to IDFA.

Will there be further delays?

It’s too early to tell whether this will be pushed back further.  As with Google’s third-party cookie announcement, Apple has left the new date for forced IDFA opt-out adoption open to give it freedom to choose when to enact the policy.

But while it is a relief for many in the mobile space, it is important to stress that it is only a postponement, and operators need to put in place the necessary plans under the assumption that Apple will not delay again.

Will Apple slowly make IDFA opt-in and hope that people don’t realize until it’s too late?

Any significant change to one of the foundations of the digital ads ecosystem means that alternatives take time to develop and put in place.

Apple has been banging the privacy drum on behalf of the consumer increasingly loudly for some time now, so it seems unlikely that it has orchestrated this delay to sneak in a change to opt-in. It feels more like a nod to its developer community that sustainable solutions will require more time than originally allotted.

Is SKAdNetwork a realistic alternative to IDFA?

Apple has been pushing the adoption of its SKAdNetwork solution, which will allow for user engagement tracking and signaling such as installs and clicks. It’s currently seeing a lot of traction across the industry, but even implemented at scale, there are limitations that mean it is not a viable replacement on its own.

As referenced above, Apple is likely to develop it further, but at the minute it offers far less information so advertisers will need to contend with fewer key metrics. It is also currently only applicable for app-install campaigns.

What about ‘ID-like’ solutions?

The ad tech industry is also reviewing the use of various tools to run in parallel to SKAdNetwork. These include contextualization (content, user, behavioral), alternative IDs such as those offered by The TradeDesk or LiveRamp, or utilizing supplementary signals found within the bidstream to enable soft fingerprinting (a technique that combines certain attributes of a device to identify it as a unique user), although the latter can be contentious with Apple.

What should key players be doing now?

Whatever the current limitations of SKAdNetwork, it’s clear that it needs to feature heavily in future plans; publishers not already integrated with it should do so now, while advertisers need to prepare for a world in which they have less campaign measurement data.

Buyers (DSPs) that run app install campaigns should be registering for SKAdNetwork IDs (if they haven’t already), and SSPs will need to maintain a table of matched DSP to SKAdNetwork IDs. In the longer term, SSPs will need to build a simple API that will allow ID lookups that associate hashed IDs to SKAdNetwork IDs.

Publishers also need to submit the wording for their consent request message. As this is their one and only opportunity to ask users to opt-in to maintain IDFA usage, it’s worth investing time and resources into communications that will persuade people of the benefits of targeted advertising.