How Apple's IFA Mobile Identifier Brings Ad Tracking Out Of The Shadows

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“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Paul Gelb, Head of Strategy at MoPub.

Apple's new Identifier for Advertising (IFA or IDFA) was not mentioned during last month's launch events for iOS 6 and iPhone 5. However, its forward thinking, balanced and elegant approach makes it the most significant recent product advancement for advertisers and privacy advocates.

By way of background, the IFA is replacing the Unique Device Identifier (UDID), a permanent unique series of 40 numbers and letters assigned to each iOS device. A UDID has been used to identify a specific device because no two devices have the same string of characters.

The only time Apple addressed the IFA was when spokesperson Natalie Kerris said, "With iOS 6 we introduced a new set of APIs meant to replace the use of the UDID and will soon be banning the use of UDID." The statement revealed what experienced marketers should have known for some time. The UDID was a tracking solution with an approach that was completely right, and an execution that was almost entirely wrong.

The UDID was not created to be an advertising tracking tool, and using it as such was an invention of necessity. The significant difference between cookies and the UDID was the glaring absence of user control. The UDID is like a serial number: it cannot be changed or reset by the user and does not provide a mechanism to opt-out. Over time, enough information about a user can be collected to link UDIDs to potentially personally identifiable information. Thus, users could be at risk if the UDID based profiles are leaked. This can also happen with cookies. However, browsers offer the ability to clear cookies and/or reject third-party cookies.

Unlike the UDID, the IFA is not a single value that is forever tied to the user’s phone. This is important because it provides users with a way to reset their IFA or opt out of targeted advertising. An IFA can be reset automatically when a phone’s settings are cleared. If there are identifiers that get associated with personal information and leaked, a user can get a new IFA to minimize any privacy concerns. Thus, the IFA appears to be a fully privacy-compliant mechanism for powering advertising approaches that have been widely adopted in desktop.

Brand Benefits

Apple’s decision to not only replace the UDID, but also to ban it, provides ample benefits to advertisers, too.

Many premium brand advertisers prefer to minimize uncertainty. Although mobile advertising networks used the UDID for years, it inadequately addressed widely accepted privacy compliance needs, putting the future of mobile tracking in doubt. Uncertainty peaked months before Apple’s statement, when rumors started to circulate about their plan to take a formal stance against UDIDs. The emergence of a privacy compliant solution created and supported by Apple significantly reduced the uncertainty about the future of mobile advertising.

Just being able to identify each unique device, without any information about the user, enables measurement of essential performance metrics. Not only can brand advertisers calculate reach and frequency, but they can also survey users that were served a particular ad to gather additional effectiveness metrics, such as brand recall or intent to purchase.

Similarly, performance marketers can measure conversions without requiring the user to click an ad. Device identification enables the matching of devices that were served an ad with devices that performed a desired action. Conversions are accounted for even if the conversion occurred through a different application during a different user session. Furthermore, application promotion campaigns can be run on a per-installation basis, so the advertiser only pays for downloads instead of impressions or clicks that may not result in an app installation. These campaigns can be executed by matching devices where a user has clicked an ad with devices where a user has downloaded the app.

Those core metrics allow advertisers to evaluate a mobile media opportunity, verify delivery of purchased impressions, and assess performance. Once a device is recognizable, identifier-based profiles can provide detailed information about users that were exposed to an ad and about users that could be served an ad. Analyzing the performance across different user profile segments, ad creative, time, location, and publishers can reveal combinations with the best performance. Advertisers can optimize their performance by targeting similar users, based on their ID profiles, with similar ads in a similar context. Additionally, performance can be improved by retargeting users who have seen an ad before or have demonstrated interests that are aligned with the ad.

Limits of IFA

Many aspects of IFA that could have the largest impact have actually often been overlooked. The opt-out enabled by IFA is a setting called ‘Limit Ad Tracking’. The setting does not completely block ad tracking and it isn’t immediately clear what is being limited. Below the setting is a link to ‘learn more’, which directs users to a paragraph long setting description. The most important component of the IFA is referenced in just one sentence.

“If you choose to limit ad tracking, advertising networks using the Advertising Identifier may no longer gather information to serve you targeted ads.”

Opting out only prohibits gathering information for the purpose of serving targeted ads. It does not ban tracking users or gathering information about users, if it isn’t used to serve a targeted ad. Just the ability to identify each unique device without linking data about the user to the device provides most of the core metrics utilized across all media (traditional and digital). Limited ad tracking neither prevents advertisers from obtaining metrics including reach, frequency and conversions nor prohibits identifying users for brand performance surveys.

A more aggressive interpretation of the “Limit Ad Tracking" option could allow advertisers to gather information about users to create profiles as long as they were not used to target those users with ads. Advertisers could serve ads to limited ad tracking users and then assess the performance using information gathered about the user. If performed well, the advertiser could target users with similar profiles that have not limited ad tracking.

IFA Just The Beginning

Even with adoption of the more aggressive IFA interpretations, it seems that potential costs incurred by users, and thus public relations and legal risk exposure for advertisers, have been limited by IFA. Either opting out or resetting the identifier would prevent or at least minimize damages, even if personally identifiable information is gathered and comprised. Furthermore, reach, frequency, and brand survey metrics have been measured and used for decades. It seems reasonable to include such basic tracking as part of an implicit value exchange for the mobile ad supported content, utilities and services that are ad supported.

However, it is important to note that IFA is not the final version of mobile tracking tools. Changes may be made. For example, it could be easier to for users to reset their IFA and see a list of entities that are tracking their device. Currently users have to reset all of their phone settings to reset their IFA. However, users can remove all cookies from their browser without resetting all of their browser settings. In fact, unlike IFA, the reset setting is right next to the opt-out setting. Moreover, next to those settings is a link to the list of cookies tracking the browser.

Mutually beneficial advances in tracking deserve to be on stage, front and center. Continuing down this progressive path requires ad tracking to come out from the shadows.

Follow Paul Gelb (@paulgelb) and AdExchanger (@adexchanger) on Twitter. 

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