Apple’s introduction of the App Tracking Transparency framework has shaken up the ad tech industry, so how is it responding? Gabby Fernie investigates.
The ad tech business is nothing if not nimble. It has to be, to cope with the constant obstacles it has to negotiate. Often, these come in the form of new regulations, like GDPR (General Data Protection Regulation), introduced in 2018, or the CCPA (California Consumer Privacy Act, which also came into force in 2018.
Lately, however, it’s been big tech itself, rather than the legislators, causing ripples, as Google announced its intention so deprecate the use of third-party tracking cookies in Chrome by 2022, and Apple brought in its App Tracking Transparency framework (ATT) with the launch of iOS 14.5. This requires applications to ask the user’s permission if they want to track their activity across other companies' apps and websites, and has been the cause of much consternation in the industry.
But where some see a problem, others see an opportunity. As Cesar Melo, President, International of VidMob, puts it: "The digital advertising industry is undergoing a process of deep transformation right in front of our eyes. The focus is shifting to ad creative itself as the most decisive factor in campaign performance. Intelligent creative – ad creative built by the integration of first-party data into the creative process – is becoming a fundamental tool in this new era of advertising. The world is just waking up to this phenomenal new opportunity.”
Brian Bowman, CEO of Consumer Acquisition, agrees that creativity is at least part of the solution. He says: "In an effort to recover advertising efficiency, companies have to pivot aggressively to a creative-first solution. There's a restructuring that needs to happen on multiple levels. Firstly, they have to bring in probabilistic machine learning teams to understand how to monetize. Secondly, they have to restructure their market and product team in an effort to recover some efficiency with creative.
“What we're seeing is companies pan out across many platforms, for example TikTok, Snapchat, and ad networks such as Unity and Vungle to try and find efficiency. We're also seeing that ad developers are not submitting their apps, they're taking their time and letting the bugs sit there because they know the moment they submit it they lose all the tracking. It looks like end of June, maybe middle of July where the true impact of IDFA loss will start to be felt."
And Neil Joyce, Founder of the CLV Group, definitely sees the changes as an opportunity, rather than a threat. “Rather than approach these changes with fear and trepidation, mobile marketers should use this opportunity to radically rethink their approach to customer engagement,” he says. “Instead of relying on invasive and ultimately less effective targeting technologies, brands can take back control of their marketing processes and move beyond the ‘group think’ scenario that has fixated on reach and inefficiency, towards looking more closely at the impact of customer conversations and customer experiences on sales conversions.”
This kind of positive thinking is all good and well, but the fact remains that with Apple’s launch of its ATT, advertisers have lost their ability to track a good number of the Apple users they once could, so what alternative solutions are companies coming up with for the post-iOS 14.5 era.
Ogury, a global technology leader in mobile brand advertising, has launched Personified Targeting, a technology for targeting audiences both in-app and on mobile web, without the use of user data, identifiers, or device graphs.
“It’s very much a new proprietary technology that we’ve developed at Ogury” says SVP of Product at Ogury, Antoine Barbier. “The promise is to deliver superior results while 100 per cent respecting user privacy. Personified Targeting is fuelled by a data set which we believe is unique.”
Personified Targeting can be broken down into a few parts. There is contextual and semantic data, which as Barbier points out “many people do”.
However, Ogury says it goes one step further by fuelling this with audience data.
“We’re likely to have been the first ones to have a consent management platform back in the days when there was no GDPR” says Barbier. “Fast forward to today and we don’t keep any user data, but we know about these trends in terms of consumption. We call that mobile journey data – that’s feeding our audience data portion.
“The other part is very mature survey data. So again, we anonymously connect with and survey, users. Anonymously means it’s not tied to a user, it’s tied to an asset – so a website or an app. From there we can build attributes for the assets. The last data piece is self-targeting audience data, which is very much tied to how users are engaging with the ads.
"In fact, we have some ad units which are user choice-driven, such as the video chooser, where we can see which ads the users were interested in interacting with. So, in a nutshell, we are trying to use the best of what is out there, whilst leveraging what we’ve done for the past seven years. All we’ve been doing is trying to find the best data set and the best targeting out there and it is cookieless and ID-less in its mobile application.”
Performance-based marketing tracking company, Swaarm, has come up with a different solution to Apple’s IDFA changes. It has launched an attribution chain methodology called Privacy Enabled Attribution (PEA Chain).
Swaarm’s platform will generate a special token called “PEA Chain” that is passed in the click and can be retrieved in the postback. The token contains all the information needed for an ad network to determine the campaign and traffic source.
Given that the information was supplied for the impression and click, the token also contains all the data for the rest of the networks in the chain to identify their traffic sources. This allows networks that use Swaarm to work with publishers of varied sizes by giving them access to the attribution data that they need to successfully optimize their traffic.
Swaarm says that with the PEA Chain attribution method, it ensures that correct, non-probabilistic attribution can be made throughout the whole network chain, successfully protecting the user’s privacy and guaranteeing fairness and exactness in the attribution process.
“We at Swaarm believe that the power and beauty of the internet consists in its distributed and varied nature, where small publishers and large media conglomerates can thrive and provide valuable content to internet users” says Swaarm CEO, David Frei. “This is why we created the Privacy Enabled Attribution chain method to enable attribution throughout the whole chain without collecting any personal information.”
While the introduction of GDPR shone a light on user privacy and seemingly put the power back into consumers’ hands, some critics point out that information on how user data is used, traded, shared, and sold is typically buried within EULAs (End User Licence Agreements) and privacy policies that hardly anyone takes the time to read.
In this respect, says Matt Voda, CEO of OptiMine, Apple’s IDFA move is revolutionary.
“Apple is creating a privacy nutrition label, distilling all big points around what happens to your data in a single snapshot,” says Voda. “This is revolutionary in consumer privacy initiatives and this is just the beginning – a new level of transparency will translate into other parts of the marketplace.
“Once Apple's labels have caught on as a standard way to communicate privacy, we can expect to see other industries, manufacturers and players to publish their own. Google has already pre-announced their own intentions to do something along the same lines.
“The main point here is that if a brand is reliant on tracking data for things such as marketing performance measurement, they need to come up with future-proof alternatives, because Apple's move in the privacy space is just one step in a much larger consumer data privacy wave that is gaining more traction. There will certainly be other industries and devices that head down this same road, and brands can no longer rely on a set of individual consumer tracking data to tell them what their advertising is worth and how effective it is. Those days of tracking-based measurement are numbered.”
Vericast has responsed to Apple’s move with the launch of Household Connect, a digital solution that connects data to a “digital household” in a manner that it says respects consumer’s privacy choices.
“The team at Vericast is using artificial intelligence and some data science to look at the patterns that they're seeing in various devices,” explains Chief Product Officer, Digital Marketing & Technology Solutions at Vericast, Michelle Engle. “Whether it's mobile devices or desktop, they’re using that data and those patterns to create groupings that represent that digital household and then they tie it back to a physical location i.e the household’s location. We have over 40 years of data that we can tie to that physical address. So, we can associate that data and the characteristics of the people who live in that household to use that to better market to them.
“We can also use it to find their neighbours who are likely to be interested in the same sorts of products, the same sort of cars etc. It’s essentially pattern recognition and using all of the different data points we see around the different devices to create that prediction around the household.
“Our core digital technology, which is probably about 12-15 years old, was all built before this reliance on cookies or reliance on mobile device ID’s. So, for our core and our roots we were able to re-use a lot of that technology around understanding the consumer, what the patterns are and using that to create our own way to identify” says Engle.
The use of socio-demographic data is also being employed by Covatic. A-Type is the company’s new product, which aims to enable publishers and apps to maintain and grow digital revenues while preserving user privacy and meeting tightening industry data standards. A-Type uses Covatic’s on-device processing to allocate groups of users to relevant third-party socio-demographic classifications, such as CACI ACORN or Experian MOSAIC segments, without exposing any form of ID.
This not only creates highly relevant and sellable audiences, says Covatic, but is designed to be GDPR- CCPA- and ATT-compliant, and doesn’t require users to login, which means companies can make their entire user base addressable.
“Regulators and key industry players – particularly Apple and Google – are rightly acting to protect user privacy by blocking excessive online data collection practices. This is great for consumers but presents a huge challenge to the digital ad industry,” says Covatic Chief Product Officer, Daniel Pike. “To date, most responses have focussed on first-party, contextual or cohort-based solutions. Covatic offers a compelling fourth way: insights gained from the ‘real world’ and processed on-device to ensure no personal data is ever shared.”
Criteo, meanwhile, has responded to Apple’s move with the launch of a contextual advertising solution.
“Our Criteo Contextual Targeting solution brings contextual advertising to the next level, by combining real-time contextual signals from publishers with a deep understanding of advertisers’ first-party commerce data" says EMD EMEA of Criteo, Shruthi Chindalur. "This is our big USP. Through this combination, we help marketers uncover the relationship between content and buying behaviours to further drive revenue and accurately measure the impact of their contextual campaigns in cookie-free media."
Criteo’s solution relies on its network of over 5,000 direct, premium publishers and major SSPs (Supply Side Platforms). It analyses the most recent purchases from existing consumers, then uses machine learning to pick up on the publisher URLs and contextual categories that have the highest affinities with these consumers. By indexing every publisher URL across its media network with both contextual and commerce signals, Criteo says it can display personalised product recommendations, without relying on third-party cookies.
“Our technology is vital in helping brands and marketers see the bigger picture” continues Chindalur. “$2.5bn (£1.77bn) in commerce transactions happen every day across our client network, a bigger value than what Amazon generates on its own platform. Furthermore, we understand the need for retailers to gain further insight, particularly as neither Facebook nor Instagram is closely integrated with retailers, meaning the insights they can bring back into the buying experience is more challenging.
“What differentiates us is that we focus on the open internet where the majority of consumer eyeballs are; indeed, over 70 per cent of online shopping happens outside walled gardens. What’s more, our first-party media network accumulates as much identity data as we can outside of our Shopper Graph from our marketers and media owners, meaning we provide a better overall service and can help mitigate the effect of third-party cookie depreciation.”
Many remain sceptical about the true motive behind Apple’s privacy changes but see clear opportunities ahead for consumers and brands.
“Apple is reserving the right for themselves to understand the identity of their users and their actions but removing it for most advertisers,” says Bryan Karas, CEO of Playbook Media. “This gives them a bunch of power to funnel users into their own suite of products, build more advertising ‘solutions’ for developers, and create even greater reliance on the Apple ecosystem. Watch for more mobile app advertising solutions, Apple partnerships in eCommerce, and a push for Apple sign in to allow them to get even more data to power future services.”
He advises companies to focus on creative. “In a world where the systems are not as robust, creative will become all the more important. It is essential for advertisers to invest in diverse, engaging, and product-centric creative to stand out from the crowd within a less targeted audience,” he says.
Creative is indeed the watchword. As Apple and Google play their privacy cards, whatever their real motives for doing so, the ad tech industry is going to have to dig deep into its creative resources to find a way round the obstacles big tech is throwing in its path.