The digital privacy drumbeat got even louder last month when Apple announced significant changes to how advertisers will be able to target ads and evaluate campaign performance on Apple mobile devices.
Apple will roll out iOS 14 later this year — and when it does, apps will no longer have unbridled access to its device's Identifier for Advertising (IDFA), the ID that advertisers use to track user behavior within and between apps. In order for apps — and the advertisers with whom they share users' behavior — to operate with the same level of behavioral insights that they currently enjoy, every Apple device user would have to give every individual app they use explicit permission to be tracked “across apps and websites owned by other companies.” How likely are users to grant that permission? Not likely at all — especially when you consider that over 35% of iOS users in the US already have Apple's “Limit Ad Tracking” function turned on.
Since mobile use now far outpaces desktop use, these IDFA changes could actually have as large an impact on the digital advertising industry as the much anticipated “death of the cookie.” The changes require a massive overhaul of the app economy that developers and mobile data vendors — the Walled Gardens foremost among them — have thrived within. Not only that, brands and advertisers preparing to relinquish cookie data will now also be deprived of valuable insights from mobile apps that they use to deliver and evaluate ad performance.
Retargeting, dynamic creative messaging, audience targeting, mobile location-based targeting and analytics, device graphs for scaling audiences and multi-touch attribution will all be more difficult. For most Apple device users at least.
That's why Apple's announcement sounds to many like a real blow to digital advertising.
Sorry Not Sorry
It must be pretty unnerving for the countless companies across the digital advertising industry with value propositions built on user tracking to see yet another user data wellspring on the verge of running dry. There's still tracking on mobile devices running Google's Android of course, but there is no doubt that fancy targeting and performance-driven insights, based on vast troves of mobile user data, are slowly evaporating into the data privacy ether. But, while there's also no doubt that all those fancy user data-based solutions have generated huge buzz and business programmatic over the years, Apples IDFA change — in tandem with the death of the cookie — doesn't actually pose such a big threat to programmatic advertising's value proposition.
Without question, it's going to hurt some companies operating in the programmatic space. Across the board, whether operating in mobile, web, or both, if you're making your bread on unfettered access to user's personal information, your days on the programmatic earth are numbered. And as much as everyone seems to like having you around, it's unlikely that all those people are going to miss you too terribly when you're gone.
See, programmatic advertising doesn't actually need user data to deliver performance. We know that because our entire business model has been built around delivering high impact campaigns with industry leading performance — without user data.
Putting This into Context
The goal of advertising is to connect with a target audience — and, more than that, to connect without wasted ad spend or deterioration of user experience. Limitless third-party data — a lot of it with questionable utility — and cheap inventory hasn't always been particularly great for pursuing those goals. Indeed, much of the mobile and web data that has been mined in the name of less waste, better performance and more value has, in many ways, produced the opposite. That's because, while user data does offer unique performance insights, user data only hits one pillar of the “right person, time and place” promise of digital advertising. User data-based targeting forsakes the right time and place.
Only through contextual targeting can advertisers ensure that ads are delivered in the right place, at the right time — and, more often than not, to the right person. And Apple's IDFA changes — along with the wider trends toward data privacy — will finally force the industry to embrace contextual. And that makes Apple's announcement last month a win for the long term health of the digital advertising industry.
That also makes it a win for GumGum. For over a decade, we've been cultivating AI systems that develop deep understanding of text, images and video — producing contextual data that drives performance and delivers more premium ad experiences for users. Not only is it the case that ads that are germane to the surrounding environment are less annoying, but they are also far more likely to capture consumers' attention because they are relevant to the users particular interest at that very place and time.
What this boils down to is better campaign performance and efficiency. And that efficiency makes up for any loss of audience scale that inevitably occurs when user data is not in play. There are numerous studies, produced by ourselves and other firms, that show as much. Just check out this recent Forrester TEI, which shows 280% ROAS for our contextual solution.
So, while much of the hand wringing around Apple's IDFA announcement had led to talk of workarounds and searches for data privacy-friendly tracking solutions, our decade-plus experience in developing advanced contextual data has shown us that, even if solutions emerge, the most effective campaigns will be contextual-first. Why? Because effective advertising isn't just about knowing who the consumer is. It's about knowing the consumer's present frame of mind and momentary interest. Contextual data gives you things that IDFAs, cookies, etc simply can't.