Part 2: Major Ad Exchanges Share Their Perspective on Apple’s Privacy Changes

One of the most significant changes in the mobile advertising industry, the launch of new privacy features in iOS, is about to be carried out by Apple. Although it was previously delayed giving the industry some time to prepare, there are still a lot of questions left on the expected impact of Apple’s new policies and a lot more details to figure out after the changes are implemented. 

We have already brought you the perspective of MMPs, today we continue our series with our ad exchange partners. They share their insights on how they have prepared for App Tracking Transparency and SKAdNetwork as well as predictions on how it will impact the future of ad monetization and programmatic buying.

Question 1: How IDFA deprecation will impact your business and your publishers? 

Chartboost: With Apple's upcoming privacy changes, like the rest of the industry, we will be impacted as marketers evolve their marketing strategies. Last year we started updating our technology to support improved and efficient ways for app publishers to maintain strong ad monetization.

What's important for publishers is that they need to upgrade all of their apps with the latest iOS SDK from ad monetization partners like Chartboost and include the full SKAdNetwork IDs in their apps’ Info.plist. Only then will publishers' inventory be SKAdNetwork compliant for buyers and demand partners to buy and monetize for iOS 14.5+ users.

Marketers have started to test new bidding strategies for LAT and non-LAT traffic, as well as SKAdNetwork compliant traffic. As new buying strategies scale, we recommend publishers to work closely with Chartboost to optimize their waterfall pricing to ensure optimal earnings.

 - Maggie Mesa, SVP Global Supply & Partnerships, Chartboost

Fyber: Since Apple’s announcement in June 2020, eCPMs for LAT traffic have more than doubled. This significant uptick is driven by the steady increase of buyers actively buying LAT impressions and exploring contextual signals, leading to increased competition for this inventory - driving prices up.

With these positive numbers in mind, one thing is certain: when the SKAdNetwork will be fully rolled out, a short term dip will take place as advertisers and buyers adapt to the new infrastructure. We remain optimistic that performance will gradually pick up, as alternative privacy-friendly targeting solutions, like contextual targeting, will step in as an effective way to run successful campaigns - while staying compliant with the new privacy policy. 

- Offer Yehudai, President, Fyber 

InMobi: Based on early inputs from the publishers, we are expecting about 20-30% users will opt in for user tracking and personalized ads. This has different implications for different types of advertisers and campaigns. 

We don’t expect much disruption in overall spend from performance advertisers. While CPMs for Limit Ad Tracking (LAT) traffic will drop, we are expecting advertisers to take advantage of lower CPMs and go for higher user growth since iOS users are generally more valuable than Android users in terms of Lifetime Value (LTV).  

Apple’s SKAdNetwork (SKAN) plays a huge role in driving that sentiment as performance advertisers can continue measuring their campaigns reliably even for LAT traffic. If anything, the uniform attribution rules might make it even easier for advertisers to optimize iOS campaigns across supply sources. 

For branding campaigns, advertisers will lose the ability to run audience targeting campaigns and have view-through attribution and cross-device attribution, and this will have implications on ad spend. However, we are recommending our advertisers use deal IDs set up with contextual targeting options (app categories, device hardware version, etc.) that mimic their audience targeting profiles or are optimized to hit their required KPIs (like viewability, CTR, VCR, etc., which will continue to be measurable across all supply).
 
- Prajwal Barthur, Vice President Of Products, InMobi

MoPub: While we expect that marketers will tread carefully over the next few months as everyone works to understand the new ROAS (return on ad spend) equilibrium, we believe that the ecosystem will find a new balanced place where mobile marketers can continue to deliver profitable marketing campaigns. At the same time, we’re seeing publishers looking to diversify into a broader set of monetization strategies across the spectrum of in-app advertising and in-app purchases. Mobile app publishers have always proven to be a highly innovative group, and I’m confident that they’ll be testing and refining ways to help users understand the value exchange of data.

- Noam Yasour, Managing Director, Global Supply - MoPub (a Twitter company)

Vungle: These changes bring both positive and potential negative impacts to our industry and to the end user. Overall, iOS14 includes stronger regulations of an individual’s personal data usage. For end users, this is important because people are more sensitive about how their personal data is being used and are calling for more transparency. No one will argue that giving users more control and transparency with the way their personal data is used is not positive or important. 

For the Ad Tech industry in general, these changes also bring positive changes. In many ways, the new standards in iOS 14 help to level the playing field with larger industry players such as Google or Facebook. With iOS 14, apps such as Facebook and Google must ask explicitly for the users’ permission to opt-in. This means that the data these larger companies can collect is more in-line with other independent Ad Tech partners. The new changes with iOS 14 also bring better security. Apple’s SKAdnetwork’s data uses cryptography, which means an install can be verified as actually happened without compromising user privacy.

However, these changes also bring challenges to our industry. The SKAdNetwork brings changes to the advertiser’s performance measurement. For example, campaign notifications are sent to the network at least 24 hours after the app is opened for the first time, limiting real-time data. Also, the postbacks to ad networks can include ad campaign IDs, but only 100 values per ad network are available to be mapped, which severely limits advertisers in how they can break down and analyze their data. All this may lead to CPM degradation as advertisers are going to bid less given they have less information on the end user. This in turn leads to less relevant ads to the end user, as ad serving platforms have less information about their behavior and interests and the ad experience is therefore less personalized. Vungle continues to leverage our strength in contextual data to mitigate these challenges.  

- Michael Deignan, Global Head of Platform Partnerships, Vungle

Question 2: Do you expect any changes to supply availability from your publisher partners? Do you expect any changes to the ad monetization model?

Chartboost: Currently, about 60% of total auctions on the Chartboost Exchange are SKAdNetwork eligible traffic. Many of our top publishers are SKAdNetwork compliant, and we're actively working with the rest of our publishers to update iOS SDK and add SKAdNetwork IDs. 

- Maggie Mesa, SVP Global Supply & Partnerships, Chartboost

Fyber: The general availability of supply will not be impacted. What will be impacted is the percentage of that supply that will be deprived of identifiers - and initially, a potential variation in the availability of SKAN-ready inventory.  

Until now, 51% of our publishers have adopted SKAdNetwork IDs for Fyber’s Marketplace in their info.plist. We continue to work closely with our publishers to push for full adoption of SKAdNetwork, and expect full adoption across our publisher base in the coming weeks with the impending rollout. 

We expect publishers to be more open to experimenting with new ad monetization strategies as part of this transition. This may include creating separate setups for LAT and non-LAT inventory - including waterfalls, frequencies, paces, and more. 

The changes in strategy may also impact the type and number of ad placements that publishers implement in their games in an attempt to compensate for any potential impact on ad monetization. 

- Offer Yehudai, President, Fyber 

InMobi: We are not expecting any changes in supply volume, but we will see changes in supply profiles. The most obvious change is that the proportion of LAT traffic will increase from 20% levels before iOS 14.5 release to 70-80%, and this will lead to some loss in ad revenue for publishers. To counter the drop, publishers are looking to increase yield across their traffic in multiple ways. 

For most publishers, their first priority is to optimize their waterfall setup to increase fill rates and CPMs. Some publishers are also looking at moving more of their inventory to header bidding, which is also our recommendation as header bidding supply sees better fill rates and CPMs. Advertisers can expect to see an increased proportion of in-app header bidding supply in the coming months.  

To increase yield, publishers are also exploring adding high CPM ad formats. This will be a good thing for advertisers as this will increase the availability of ad formats like rewarded video, interstitials and playables that score better on campaign KPIs like viewability, engagement and conversions. 

Lastly, publishers will be looking at providing alternative targeting options for advertisers. There are two ideas that seem to have the most promise. One, publishers could use their first-party user data to segment users into groups like “High LTV gamers,” “Users who spend on in-app purchases,” etc., and then make these groups available for advertisers to buy via a direct programmatic deal. Another option is for publishers (especially those with user login information) to integrate with universal ID solutions to enable omnichannel targeting and measurement for advertisers.

- Prajwal Barthur, Vice President Of Products, InMobi

Vungle: For publishers to access the maximum amount of available demand and to maximize their yield, they will need to ensure advertisers using SKAdNetwork — Apple’s potential primary attribution solution — can buy their ad inventory. For publishers, this requires two steps: 

• Updating network SDKs that will support the changes iOS 14.5 brings
• Updating the app info.plist

- Michael Deignan, Global Head of Platform Partnerships, Vungle

There is still so much to learn about Apple’s privacy changes, but to survive in an IDFA-free environment it is important to be adaptable and prepared for all scenarios. Keep an eye on our Insights page so as not to miss the third part of our series where Aarki members will share their perspective on some of the top questions the industry is expecting DSPs to answer.