Taking away tracking reduces the power of targeted advertising. What per se sounds as if it were good news for consumers is what marketers and publishers feared most.
If consumers read free articles, those are typically ad-financed. Taking away the power of targeting means the publishers will have a harder time refinancing with advertising. And we might end up with mainly the larger publishers (i.e., Facebook and Google) surviving.
Which is bad for democracy. These moves are happening step-by-step. We strongly support the approach of respecting user privacy. Yet, we do have reservations with regard to what that means for publishers.
What are the consequences if the advertising industry looses tracking options?
Tracking is needed for various purposes: for classifying audiences for targeting and retargeting for performance goals such as optimizing on landings or to optimize for leads. To get them to work, the advertiser needs to be willing to implement tracking tags. If this isn’t possible, campaigns will run unoptimized.
Apple’s announcement has shaken the adsvertising industry
When Apple announced a few weeks ago to have a standardized opt-in confirmation to allow tracking, that news hit many advertisers like a big bucket of iced water on a hot summer day. iOS 14 has not implemented the blocking of IDFA yet, undoubtfully it will come with a bit more time for advertisers to prepare for the changes which we can probably expect to roll-out the latest next year, 2021.
The suspension will give advertising companies a bit more time to find solutions for customized advertisements. Still, will it be possible to get campaign performance results using tracking tags that respect user data privacy?
Let’s take a look at where we are currently standing:
The advertising industry has built revenue streams on cookies as primary means of user identification and tracking for decades. Only briefly did that shift to UDID.
Today, the industry mainly runs on cookies, IDFA, and Android ID. Large companies such as Google, Facebook, Adobe but also plenty of other Martech companies, firmly rely on the above identifiers. The upcoming changes in privacy will risk the big players’ cash cows! Facebook states on their Audience network (tracking) site:
“While it’s difficult to quantify the impact to publishers and developers at this point with so many unknowns, in testing we’ve seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile app ad install campaigns. In reality, the impact on Audience Network on iOS 14 may be much more, so we are working on short-and long-term strategies to support publishers through these changes.”
We don’t have to be visionaries not to see what a standard opt-in would mean in a potential loss in adverting revenue for companies like Facebook:
The loss could be up to 50% (assumingly the single-digit percentage of users who decide to opt-in and allow tracking for better and personalized advertising). Overall, as (3rd) party cookies have been largely banned by default due to privacy reasons (in Safari and Chrome), tracking has become more difficult in Marketing Technology.
With the deprecation of IDFA (and presumably Android ID), the industry will find it harder than ever to provide tracking and attribution; and, consequently, targeting. The already battered industry is struggling to survive iOS14.
Threats can turn into two reaction patterns: denial or battle. Assuming not giving up, let’s take a look at potential solutions.
Find out about solutions to tackle the upcoming changes in the advertising industry in Adello’s Ad.Insider #4 ‘Evolution of the Digital Ads’
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