When Apple announced iOS 14, it outlined a new policy which requires app publishers to seek end user permission to access a user’s IDFA. While estimates on forecasted opt-in rates vary, the result is clear: the IDFA will become scarce. Among the implications for app developers, the most pressing is an expected large drop in advertising revenue. In this post, we’ll discuss how disabling the IDFA leads to a sizable drop in ad revenue.
With the announced opt-in policy on iOS 14, app developers that rely on ad revenue should expect their ad performance and fill rates drop. Today, Ad Networks and Demand Side Platforms use the IDFA to reach target audiences. Going forward, when the IDFA becomes largely unusable, advertisers will no longer know which consumers they’re reaching. As a result, ad spending will drop, leading to lower CPMs and fill for application publishers.
For consumers that permit tracking, the IDFA can continue to be used in ad requests. That said, Flurry expects that the significant majority of consumers will not permit tracking. For all intents and purposes, publishers should consider the IDFA mostly unusable. Without a targeting identifier, advertisers will be forced to bid blind and therefore lower their bid amounts. Advertisers will further bid lower because granular attribution will no longer be possible. We’ll go into more detail about attribution in a future blog post.
In-app advertising suddenly will become a less viable revenue model. In response, publishers will be forced to either preserve IDFAs or pivot to other revenue models.
- In-app purchase and subscriptions: Apps that are ad-supported, or employ a hybrid model, may shift to paid models.
- IDFA maximization: Some publishers may attempt to gate app functionality in order to incentivize opt-in.
We also recommend publishers explore a third approach: Leveraging their first party data for advertisers. Publishers can rebuild ad performance by using their own data to make their audiences more attractive to advertisers, even without an IDFA.
Flurry can help make this happen. Using both the Flurry Analytics and Verizon Ads SDKs, publishers can gain superior fill and performance across a number of ad formats. Together, the Flurry and the Verizon Ads SDKs will package publisher audience profiles in a privacy-friendly way and make them available to advertisers. The more advertisers know about your users, the higher the CPMs and fill you can expect. Most importantly, this solution adheres to Apple’s new guidelines. Only data from your own apps is used, and data from third-party or your own opted-out users is never included.
We are working out the release timing of this capability, which enables publishers to leverage their own data for improved advertising performance. To get early access to this solution, please contact firstname.lastname@example.org.