Section One: Impact of Losing IDFA

 

Impact of Losing IDFA

Over the last seven months, I have spoken to many CEOs, user acquisition, and growth leaders across the mobile app ecosystem. I gathered their perspectives on the impact of losing IDFA on their business and the mobile app/mobile web industries. Their opinions were highly varied. But, it is clear that no one knows for sure what will happen to their business with the IDFA removed. It is universally accepted that the financial impact will not be isolated to a titan battle between Facebook and Apple. But it will cause uncertainty and financial stress across the mobile app and mobile web industries. Especially, during a pandemic and at a time of record unemployment.

Account Restrictions of Apple’s SKAN

The account restrictions of Apple’s SKAN will cause a significant reduction in mobile app and mobile web company’s ability to profitably advertise – with certainty. However, it appears not all market segments or companies will be impacted the same. For example, companies running an eCommerce mobile app using a single agency of record will be less impacted than a game and mobile app advertiser that runs an internal UA team with one or more agencies. SKAN’s negative impact will be driven by a loss of deterministic measurement. Plus, the need to limit the ad account structure to 1 account per app with 9 campaigns and 5 ad sets per campaign. The requirement of a single account restriction will force companies to decide to either keep the iOS 14 account internal or to allow a partner/agency to drive that one account. Obviously, no changes to Android are currently forecast.

Last week, Facebook and Google rolled out recommendations on how to prepare for ATT/IDFA loss. I have summarized my thoughts and recommendations for how to survive and thrive through these highly uncertain times. Also, I include how to best leverage the expertise of agencies. Because they will have a broad view into the rapidly evolving impact of IDFA’s rollout to mitigate risk. Please start your review by reading Apple’s SKAdNetwork article.

Implementation of iOS14 and ATT

The implementation of iOS14 and ATT will cause fluctuations in CMPs, reporting efficiency, audience, deterministic LTV models, and traffic quality. But we are uncertain how quickly things will change. Facebook’s testing has revealed more than a 50% drop in Audience Network revenue which may impact apps that make money via ads. Will CPMs drop as impacted companies and segments pull out of the market?  We believe spending should slow for those more impacted. These companies and segments include remarketing, hyper-casual/IAA monetized apps, and whale hunters (mid-core/hard-core/social casino).

But will other companies step in to keep CPMs high (branding, CPG, etc.)? It is highly unlikely that the bottom will drop out of any platform. Including Facebook, TikTok, Snap, or SDK Networks (Unity, Applovin, Vungle, IronSource). However, it is more likely that erosion will occur over 2-4 months. Because, as the efficiency of lookalike audiences drop and deterministic LTV models get replaced with less efficient probabilistic solutions.

Table of Contents section 2

impact of losing idfa

 

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