What is IDFA (Identifier for Advertisers) and is IDFA going away?

What is IDFA?

First things first: let’s define exactly what the IDFA is and why its numbered days garnered so much attention. IDFA stands for Identifier for Advertisers. In short, the IDFA tracks user data across apps, like Facebook, and websites in order to provide targeted advertising.

Its technology is similar to a cookie, but even more powerful because it allows for full mobile attribution tracking of individual users from install to usage. IDFA was introduced by Apple back in 2012, and Google came up with a similar solution for Android the following year with GAID, or Google advertising ID.

What is the impact of IDFA and why is it important?

The first and greatest impact of IDFA is attribution. Using IDFA, advertisers measure the efficacy of their ads by tracking which users clicked on an ad or downloaded an app. This data makes it possible to optimize campaigns based on which users converted, and who did not.

IDFA also makes it possible to target and message personalization. Since IDFA is unique to each device, it can be used to serve highly personalized ads based on user characteristics and activities.

IDFA can also be utilized for retargeting, that is, retargeting ads to lapsed users. For instance, Jake added items to his online shopping cart and left the app. Store marketers can create a user segment “Left items in cart” and send Jake’s IDFA to ad networks requesting a retargeting ad about these items to be shown to that specific user segment.

Lastly, there is pacing. Advertisers use frequency capping to limit the number of times a user is shown a particular ad within a time period. They can ask networks to set time parameters to avoid repeated messaging to the same person – identified by IDFA.

What is Apple doing with IDFA?

In April of 2021, Apple announced significant changes to privacy policies as part of its iOS 14.5 update. A new policy called AppTrackingTransparency (ATT) would require brands to ask users for permission to collect and share data through their apps. This seemingly minor change had a massive impact on the advertising industry as we know it. As Apple users began opting out of tracking, advertisers began losing the ability to measure ad effectiveness for a large segment of iphone users. 

Why is this a problem for Google and Facebook?

As the two largest ad platforms in the world, Google and Facebook are very much reliant on advertising revenue, making this ATT implementation very problematic for them.

Since the introduction of  iOS 14.5 and ATT, a large percentage of Apple users have opted-out of app tracking due to their concerns over data privacy, stopping app owners from using IDFA to track user activity and access the corresponding insights. 

To make matters worse, some platforms like Facebook have carried through these consent signals from users declining tracking on the app to also stop tracking these users on the Facebook website. The result is that Facebook lost the ability to track a large segment of their users, causing a significant drop in conversions being reported by Facebook ads manager. Facebook has not been quiet about the fallout from Apple’s restrictions and has stated that ATT will cost the ad platform $13 billion in 2022.

Although Google has publicly acknowledged that there will be a negative revenue impact for app developers, it has stopped short of vocalizing its disapproval. In fact, in February of 2022, Google announced new updates to its own privacy policies including the depreciation of GAID and elimination of cookies.

Unlike Facebook, Google has said it will no longer use IDFA for its campaigns, and therefore won’t need to show the request prompt to users. The company, like many other app developers, will shift to a different Apple measurement tool called SKAdNetwork. The difference between this and IDFA tracking is that advertising is measured on a campaign level, rather than a user level.

Life after IDFA

Apple and Google's privacy moves are just the tip of the iceberg. New regulations and policy changes will continue to restrict data access and force sweeping changes in how advertisers track and measure campaigns. While Facebook has drawn the most attention, every online ad channel is grappling with the fallout from new policies and increasing privacy-driven limitations.

There are many companies and industry organizations working to land an alternative/unified identity resolution option that maintains privacy requirements while allowing platforms to continue user-level tracking. However, marketers cannot afford to wait until the industry finds a way to sort itself out. 

The truth is, if these channels were performing well before iOS 14.5 then they are likely still providing value now - and there is a way to measure it. 

Independent incrementality experiments from Measured can provide insight into media outcomes at channel, campaign, and ad set levels – on any platform. By measuring the true incremental contribution of media, anchored on source-of-truth transaction data provided by the brand, marketers can make informed decisions about budget allocation with no user tracking required.

Book a demo today or contact us to learn how Measured can help reconcile marketing expenses and sales data.