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Will User Opt-In for Relevant Ads? We Think Yes.

by | Sep 1, 2020

Who’s taking a bite out of who?  Apple is coming directly after Facebook with its pending operating system change (IOS 14).  Apple is taking on Facebook under the veil of privacy.  But there is more to the story.

Here’s our take:

With the new IOS, Apple requires users to opt-in to third-party data share.  To date, users have had to opt-out.  While this isn’t going to be a long-term worry for companies like January Spring, it is a worry for Facebook.

January Spring uses mobile user data to identify:

  • mobile device ID
  • which mobile apps are in use on the phone
  • location
  • search history
  • device type (Apple, Android, etc.)
  • the human using the device fits with our target audience

January Spring can glean this data from any app on a mobile phone, called the identifier for advertisers (IDFA).  Pew Research has long said that 90% of users keep their location data on.  By turning on that identifier, programmatic buying platforms can identify target audiences and serve them relevant ads.

Smart companies, like Twitter, are getting in front of Apple with in-app messaging like this:

After all, that is the name of the game, personalization.  Apps and sites are going to continue to serve ads as part of their revenue stream.  The question for us as consumers is do you want those ads to be relevant.

Which brings us back to Facebook.

Here’s Facebook’s response to Apple:

“… our ability to deliver targeted ads on iOS 14 will be limited. As a result, some iOS 14 users may not see any ads from Audience Network, while others may still see ads from us, but they’ll be less relevant. Because of advertisers’ reduced ability to accurately target and measure their campaigns, app developers and publishers should expect lower CPMs on Audience Network* and likely other ad networks on iOS…

…in testing, we’ve seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile app ad install campaigns. In reality, the impact to Audience Network on iOS 14 may be much more, so we are working on short-and long-term strategies to support publishers through these changes.”

Facebook ads use multiple systems to deliver personalized ads to people. In Facebook’s testing, where they artificially modified delivery to mimic the new Apple IOS, where they only had a small portion of the mobile apps running relevant ads, then compared personalized to non-personalized, Facebook observed more than a 50% drop in the ad revenue for those apps.

* Facebook’s Audience Network is an advertising product that serves up ads within apps based on a user’s activity elsewhere…think of it as their own programmatic network. January Spring does not buy on this network.

Audience Network is only a small part of the $70 billion in advertising revenue the company rakes in today. So don’t feel too bad for Facebook.

What does this mean?  Simple, if a user opts out of personalized ads, then we (January Spring) won’t bid or serve ads on that user’s mobile apps.  We’ll find others it the target audience to serve ads via mobile apps.

If you are Facebook, you are the most used mobile app out there, so it could severely limit the data Facebook has to serve targeted relevant ads.

Facebook isn’t the only one watching, here’s what the Interactive Ads Bureau (IAB) had to say. Dave Grimaldi, IAB EVP for Public Policy, “Personalized ads are essential to maintaining a vibrant ecosystem, enabling a wide array of developers and publishers to flourish. For many years we have seen evidence of the value that is created by personalized ads, such as Harvard Business School Professor John Deighton’s study published in February 2020, which found personalization contributes billions of dollars to publisher revenue. Facebook’s research is yet another data point that underscores the positive impact of personalization.” This whole issue demonstrates the immense importance of personalized advertising to the advertising ecosystem.

So, let’s bring this back to you, our publishers.  You own and have permission to use your own rich first-party data.  And, you have direct relationships with your readers.  Together, we will continue to build advertising campaigns and marketing strategy, with your audience as our core.

If you have questions or want to discuss this change in the industry in greater detail, reach out. Contact@JanuarySpring.com.