June 25, 2021
We’ve been busy monitoring data associated with Apple’s recent iOS14.5 release. While only half (as of 6/15) of iPhone users have updated their phones to iOS 14.5 or higher (a requirement for the opt-in “App Tracking Prompt”), we’ve already noticed substantial changes associated with addressable advertising. In many ways, we’re only in the early innings of a much longer game due to the slow adoption of iOS 14.5+.
Addressable inventory will continue to fall
There are three compounding factors driving down iOS addressability for users on iOS 14.5+:
- Publisher/App Acceptance: Many apps have yet to “prompt users” to opt into AppTracking. The likes of Amazon, iBotta, and thousands of others aren’t launching the prompt when users open the app. This means they have no chance to access IDFA as an identifier. IDFA’s will be useless for enabling addressability to those platforms going forward.
- Limited User Opt-In: Opt-in rates are low for those apps that do prompt for IDFA access. While there is high variation by app category (5%-40% for most), many apps are falling from 80%+ IDFA coverage to less than 30%. As new updates give consumers more transparency and control, these opt-in rates could decline further.
- Dual Opt-In Requirements: Most use-cases require the user to opt-in to the advertising brand AND the app supplying the ad inventory in order for IDFA’s to be used as an identifier. While each individual app could have up to 40% opt-in rates, the overlap between the two apps is likely less than 5% of the original addressable market.
For publishers specifically, what does this decline in addressability mean for you?
- Decreased CPM’s: The value of non-addressable inventory is less than inventory with identifiers attached to the bid request.
- Decreased Inventory Yield: Buyers are less interested in purchasing non-addressable inventory which creates a glut of supply.
Looking back at when safari removed third-party cookies in 2017, ad CPMs fell by ~50% for most publishers. We expect this to be similar for iOS.
Addressability is a pain that must be solved
Time and time again our advertiser clients tell us that the ability to reach their customers digitally is necessary to grow their business and the precision of addressability is key. For publishers, this addressability enables the higher ad CPM’s that create an ad-revenue business model. This exchange is critical to fuel an open and free internet. The direct impact of the iOS 14.5 release marks another inflection point for the industry. One that will require more agility and adaptation.
- Incremental Addressability: Publishers need to partner with industry-leading data providers to improve their first-party addressable market. When the TrueData identity graph is built into supply-side solutions or delivered to publishers, we typically see a 20-30% increase in addressability. We recommend implementing a diverse portfolio of privacy-complaint IDs that offer an interoperable approach to enabling addressability across media channels and devices. Further, privacy-first solutions like TrueData’s that can connect first-party IDs like IDFVs or first-party cookies, to durable people-based IDs like HEMs, UID 2.0, etc. should be particularly favored to support omnichannel addressability in direct IO contexts.
- Future Innovation: The landscape has changed and publishers need to start thinking about revenue monetization and addressability in new ways. While it may not be as straightforward as before these privacy-driven cookie & IDFA changes, forward-thinking publishers will find a way to grow. Our research and development team is already piloting a new product that will directly increase programmatic CPM’s and direct sales for publishers.
By no means is this the last inning of the game and we expect many more changes that will impact revenue monetization efforts for publishers. Apple has already announced iOS15 that will include several privacy related adjustments.What are you doing to embrace these changes? TrueData is here to help embrace certainty and prepare for a more privacy-centric world. Please join our addressability summit on July 21 or schedule a meeting with our team to discuss your specific needs in more detail.
