During its annual Worldwide Developers Conference (WWDC) in June 2020, Apple released a bunch of changes to its devices and operating systems like it always does.
With the release of iOS/iPadOS 14.3, any new or updated app must include a privacy label, otherwise it won't be allowed on the App Store. This requirement applies not just to third-party apps but to Apple's own programs, such as Apple Music, Apple TV, and Apple Wallet, though built-in apps aren't included.
The goal is to address privacy concerns and questions among users, especially as app developers haven't always explained clearly and precisely what data they collect and how they use it.
But nestled between the shiny UI upgrades and new Memoji stickers were a series of privacy updates to iOS that have more or less eliminated an important element of mobile marketing and ASO and measurement--the Apple IDFA.
In this blog post, we'll take a look at the changes and what they mean for in-app mobile advertising in iOS.
Apple launches its new app privacy labels across all its App Stores
At WWDC 2020, Apple announced several provisions regarding enhanced protection of user privacy, and these updates will be released with the latest iOS 14 this September. ASO World actually recognized this change coming early and began actively preparing strategies to address it a year ago, aiming to help fellow ad tech industry members quickly embrace the new changes and enter a new era.
After the iOS14 update, if a developer wants to get the user's IDFA for ad tracking, they need to get the user's permission in advance, which can happen when the app is opened for the first time, or in specific scenarios, such as when logging into the app with a three-party account.
New requirement puts additional focus on consumer and data privacy
The next time you try to download an app from the App Store onto your iPhone or iPad, you may notice a new App Privacy section that seeks to clue you in on certain details. Specifically, the section tells you how the data from the app might be used to track you as well as how that data will be collected and linked to your identity. This sound like a great benefit to the user, though certain app developers are already balking at the new requirement.
This change is good news for consumers because it means more privacy. It's not the end of the world for performance marketers either; there are still plenty of ways to achieve data-driven user growth.
How Apple's new App Store privacy requirements may affect users and app developers?
Users can decide whether to be tracked or not (the act of authorizing the app to get IDFA), If the user clicks 'Do not authorize tracking', the effect is equivalent to the user going to the settings to turn off the ad tracking (Limit Ad Tracking), so IDFA acquisition is almost impossible. (As an aside: data shows that about 10% of users actively turn off ad tracking in the settings)
The cornerstone of the free app marketplace is the ability to collect and sell data to advertisers. If you're not paying for a product, you -- and your data -- are the product. This privacy feature has the potential to severely weaken the ad targeting business which is bad for advertisers, but good for users.
Facebook, for one, is already fighting back, announcing its Audience Network will not use IDFA information from iOS because it cannot guarantee its value or accuracy. That could hit its revenue by 50%--and there's no telling if some ad agencies could bail on Facebook altogether.
With increased regulations like the GDPR and the CCPA, we've started to see a little more transparency in what information is used to track users. This change blows the door wide open, but are we really turning the corner in data security and privacy? Will Google -- another company that will be impacted by this change -- make the same change to Android phones?
Apple's SKAdNetwork Gets Real: Here comes the new opportunity of mobile marketers
Apple has added a timer. This change means that downloads are not necessarily recorded in real time, presumably as a way to protect user privacy.
Apple has added a mechanism to update download values, which matches some user behavior with downloads after installation and is critical for later campaign optimization.
Apple added support for re-downloading and re-installing.
Apple added sub-application IDs to see which self-application your ads are seen in, which is significant and means advertisers can optimize campaigns from the self-channel level.
Apple has also updated the SKAdNetwork framework for verifying app downloads. We will share more details later, here is a summary of some features.
Apple's SKAdNetwork framework still brings some very positive signals, as these improvements not only mean that Apple is actively listening to app developers, but will also introduce tools to help marketers do more granular operations.
What are the measurement challenges of SKAdNetwork?
Working with the timer
SKAdNetwork's 24-hour timer starts when the function is called on for the first time (usually upon first app launch). Once the timer expires, the conversion value is locked in. The good news is advertisers can delay the locking mechanism of the timer in some cases.
Some advertisers require more than 24 hours of post-install user activity to optimize campaigns. One example might be a gaming app where an advertiser optimizes based on day three revenue.
If an increase in conversion value is triggered by an app open, the timer will be reset for another 24 hours. This way, theoretically, advertisers could continue resetting the timer for up to two months.
There are three trade-offs to consider here:
This will only work if a user relaunches the app daily (within 24 hours of the previous launch).
This method will generate a biased audience, where optimization is based only on the activity of your most engaged users.
This approach delays the postback beyond the usual one to three days and requires an allocation of bits of the conversion value for the extension mechanism. Meaning, instead of using all 64 values for "real values," some of the values are used just to extend the timer.
A timer delay lets you measure events occurring down-funnel (e.g., subscriptions after a 7-day trial). You can delay the timer to start upon event initiation by delaying the first call to the functions.
Delaying the timer prompt ensures measurement of the chosen event, but note that if the user churns before the event occurs, no postbacks will be sent.
Understanding what to measure
The conversion value is a single field of 64 values that must contain every detail of the user's journey. It is a very limited resource and many advertisers are confused about how to utilize it. There isn't a “one size fits all” approach here, and strategy will differ between apps and KPIs.
Bit splitting is used to measure several KPIs in parallel: revenue, engagement, conversion, retention etc. Advertisers can allocate different numbers of bits for each KPI, but it's important to remember that the more bits you split, the less granular the KPI data will be.
With this method, you can define an unlimited number of KPIs and events for each segment. The trade-off is that you won't be able to decode back the value to a specific KPI (such as revenue). It also requires you to be extremely diligent in setting up these 64 segments, ensuring they cover the entire range of app users with no overlap. Each user must only fall into one segment. After all, if a user falls into more than one segment, they'll be added randomly into a segment, and the goal is to make optimized marketing decisions, not random ones.
Server-based solutions for SKAdNetwork enable advertisers to change the conversion value configuration in the cloud, where a command is sent instantaneously to the SDK. This ensures that customer logic is continuously aligned with the desired configurations.
The trade-off? Each configuration change creates a window of time when it's impossible to determine whether incoming postbacks relate to the old configuration or the new one. To get around this limitation, dedicate one of the six bits to indicate if the postback relates to the old configuration or the new one. If you want the flexibility to change strategies frequently, you'll have to compromise on the level of KPI granularity you measure.
From challenge to opportunity
SKAdNetwork presents new challenges to marketers, but it also presents immense opportunity. Getting comfortable with all the bits and bytes of the conversion value, proper planning, testing and validating assumptions will help you create a significant advantage in a highly competitive market.
Is SKAdNetwork the future of mobile app attribution on iOS?
SKAdNetwork could become the de facto way to attribute mobile app installs on Apple devices with the release of iOS 14 in September. Apple's IDFA is the primary identifier used for ad tracking and attribution on iOS. It's hard to imagine users are going to opt in to be tracked for advertising purposes if given the choice. And without the IDFA, SKAdNetwork is looking like the future of mobile app attribution rather than a footnote.