Identifier for advertisers (IDFA)

Unless you’ve been living under a rock, you’re well aware of the conversations and controversies surrounding data and privacy legislation. Consumers are demanding more privacy and transparency around any data they are letting advertisers and brands use. Advertisers are panicking that the granular data they rely on to deliver the best user experiences to the right people is at risk. These arguments have come to the fore around the “death of the cookie.” And just as we’re all wrapping our heads around that, Apple throws another wrench into the discussion—IDFA. It’s a little complex and it’s not even as fun to say as “cookie.”

So what is it? Here’s the 101 version.

IDFA PageBanner 1.jpg — **So what exactly is Apple’s IDFA?**

IDFA stands for “Identifier for Advertisers” and was first introduced by Apple in 2012 with the launch of iOS 6. The identifier is a string of letters and numbers unique to each iOS device, which helps notify advertisers when a user has completed an action or interacted with ads within their app. Think of it this way: IDFA is to apps what the cookie is to the web browser.

How does IDFA work?

A user within an app is served an ad with an embedded link. Within that URL link is a parameter that contains the IDFA.
Once the user clicks, the IDFA is passed to the Ad Network and the user is redirected to the App Store.
If the user then downloads the app, the ad network SDK matches the IDFA back to the user. Thus enabling the advertisers to understand who is downloading the app, and ultimately measuring their campaign performance.

Why did Apple adopt IDFA?

Prior to IDFA, Apple allowed app developers to access a user’s Unique Device Identifier (UDID), which is a permanent hardware number that allowed developers to track users across multiple apps for the purposes of ad targeting. The issue with the UDID however, was third-parties began collecting users’ UDIDs and even selling them. The federal government ultimately ruled that this violated a person’s right to privacy, and Apple had to restrict app developers from UDID access.

IDFA was introduced to rectify this issue. The IDFA is a unique string that users can reset or opt out of entirely, but that still enables advertisers to track them and their engagement within apps. By utilizing IDFA, Apple enabled its users to have more control over their data and privacy, and satisfied the standards set by Congress.

IDFA PageBanner 2.jpg — **How does IDFA help advertisers?**

For advertisers, IDFA allows them to measure the efficacy of their ads by tracking users who clicked on an ad or downloaded an app. It aids in optimizing campaigns by enabling:

Ad targeting and retargeting
- Targeting users who are most likely to engage with their ads based on previous behaviors and user actions. For example, if a user left items in their cart and skipped checkout, advertisers can use the device’s IDFA to serve that user ads for the items they abandoned.
Frequency capping
- Limiting the number of times a user is served an ad over a period of time. This prevents unnecessary spend and prevents users from experiencing ad fatigue.
Campaign measurement
- Measuring the number of impressions, clicks, and successful conversions their ads are generating. Advertisers can use this data to optimize campaign performance or choose to reallocate their spend to other channels.
Attribution
- Enabling advertisers to analyze multiple touchpoints leading to a successful conversion. Advertisers use this data to tighten funnels, optimize lead generation, and evaluate where to invest resources.
Ad fraud detection
- Ensuring that their campaign results are user generated and not the result of bots, fraud or clickbait. This ultimately saves their ad spend.

Is IDFA going away?

Kinda sorta.

We mentioned previously that users could opt out of IDFA and ad tracking entirely. Users who want to limit ad tracking by hiding or resetting their IDFA can do so by going into their device Settings. Now Apple is changing the game. Upon the release of iOS 14, when a user first opens an app, they’ll be asked if they want to share their information as part of ad tracking. If they opt-in, IDFA is ready to roll. But what if they don’t?

That’s the problem. It’s highly unlikely that users will opt-in to personalized ads and targeting. In 2020 alone, over 30% of iOS users chose to opt-out of tracking—this is up 216% since 2016 according to analytics provider Singular. So, although IDFA is still technically available, current trends and Apple’s changes with the launch of iOS 14 have essentially rendered IDFA useless.

So advertisers are out of luck?

For app developers, the immediate consequence of the changes coming with iOS 14 is that all apps that have not updated their IDFA opt-out settings will automatically have IDFA tracking turned off. Not a huge bar to meet.

For advertisers, it's a different story. Although Apple has put an alternative in place (Apple’s SKAdNetwork), the attribution that SKAd provides is limited. According to this SKAd primer on AdExchanger, the API will only pass back basic aggregated, anonymized data. There’s no personally identifiable information or device IDs passed. Unless apps begin collecting personal information such as users’ emails or phone numbers to use as identifiers, advertisers will lose the level of granularity previously available, and as such will lose the ability to retarget, personalize and frequency cap.

What can you do to prepare for the changes?

Although Apple has delayed the rollout of iOS 14 and the changes to IDFA, it's important to stay ahead of the curve.

A few steps you can take to prepare:

Connect with Advertising Partners:
- Connect and reach out to any and all advertising technology partners you are working with to ensure they are preparing for the changes coming with iOS 14 and review any changes that they may require you to make on your end.
User Consent Prompt
- You should also focus on the user consent prompt upon opening the app. Work with your design and UX teams to figure out a successful approach to attain high opt-in rates such as:
  - Explaining to users why the app requires access to IDFA (iOS changes)
  - Explaining to users how opting in can benefit the overall user experience
  - Working with UX and design teams to implement notifications and consent forms
  - Working with UX and design teams to customize and design an internal prompt that fits your app
  - Experiment with copy and timing of user opt-in prompts

Bye-bye, cookies. Later, IDFA. This all seems like bad news for advertisers, but these kinds of restrictions and changes often inspire new innovations. Kargo is working now with its partners to create solutions around contextual targeting, article sentiment, site lists and more that could help advertisers keep reaching their audiences without jeopardizing data laws or consumer trust. They could prove so effective, we won’t miss cookies or the IDFA.