The Mobile Advertising Ecosystem in the Aftermath of iOS 10

In a digital world ruled by the proliferation of personal screens, it is the end user that makes or breaks a digital business. And for a company focused on user privacy above all else, the new changes on iOS 10 are an epitome of a world ruled by the user’s preferences.

The advertising industry is abuzz with the controversy created by the stricter implementation of the Limit Ad Tracking feature in iOS 10. With iOS 9, Limit Ad Tracking restricted the location and behavioral targeting features on iOS devices, resulting in poorly targeted ads. However, advertisers could still use the IDFA (iOS Advertising Identifier) for attribution and frequency capping. With iOS 10, the new operating system nullifies the IDFA for all devices where the user has opted in for Limit Ad Tracking, thereby enforcing complete anonymity of the user to advertisers. While it is a beacon of user privacy standards, this change will have both a positive and negative impact on the user experience. On the one hand, the user is secure in the knowledge that their privacy is maintained and no one can track their mobile usage behavior. However, on the other hand, it also implies that frequency cap checks and IDFA based attribution methods will all fail for devices where Limit Ad Tracking has been turned on, resulting in a repetitive and context-less ad experience.

Different players in the advertising ecosystem are reacting to this change in various ways. Some have decided to not serve ads on devices with Limit Ad Tracking, upholding the importance of well targeted ads above revenue pressures. Some are taking a stance to continue serving ads on the nullified IDFA accepting the truth of poor targeting as a bitter pill. A few others have put their own identifiers in place to ensure their targeting algorithms remain unaffected. In either case, users who select Limit Ad Tracking will encounter a mobile experience marked with fewer, but contextless ads. As engagement rates and conversions decline, advertisers might decide to reduce their spends on such traffic. This would also imply that users who have gotten into the habit of leveraging rewarded video ads within games/apps may suddenly find themselves bereft of any videos to watch.

So what can advertisers do to prepare for this change?

1. Advertisers need to be aware that this change affects the entire advertising ecosystem and not just one odd advertiser. They need to prepare for some impact on the burn rate of their campaigns. Currently, only about 13-17% of devices have Limit Ad Tracking enabled, but only time will tell if users embrace this feature or ignore it.
2. Advertisers should understand the stance of their partners to assess where they can expect the spend to go down or targeting efficiency to be reduced. They will need to measure the efficacy of your campaigns in light of these changes while allocating ad spends.
3. Transacting on IDFA null traffic makes advertisers vulnerable to fraud, as most of the fraud check mechanisms depend on the IDFA for iOS. Advertisers should prepare for stricter fraud checks or play safe and spend on IDFA traffic only.
4. Advertisers should ensure they are built to the specs of their advertising partners and the ecosystem requirements to avoid any further blockers. Another change which will hit the iOS advertising ecosystem by the end of 2016 is the mandatory compliance for ATS (App Transport Security). All traffic, creatives, attribution links and pixels will need to move to secure HTTPS links by December. Failure to comply would affect advertising spends severely.

If you are concerned about how this impacts your advertising spends and performance on the InMobi Network or the InMobi Exchange, please contact us at efficientbuying@inmobi.com.