Beginning with the launch of Apple’s iOS 14.5 in late April, the number of ad opportunities that will include targetable device IDs will decline sharply. Estimates for the loss of scale vary, but we generally expect opt-in rates for user tracking on apps and sites to be on the low side of these estimates, perhaps 20-30%. Addressable programmatic scale could decrease by more than 25% in just a matter of weeks.1 As iOS adoption increases and Google’s changes take effect, we could start to see a dwindling minority of programmatic inventory that includes the device IDs required for traditional targeting and deterministic match-based measurement.
How will the deprecation of device IDs and cookies affect scale?
We believe the deprecation of Ad IDs and cookies will reduce the scale of ID-addressable inventory by >25% very quickly, and ultimately >50%. You can’t continue targeting only devices that have IDs without significantly reducing your reach and efficiency.
What types of solutions and providers are affected by ID deprecation?
These changes affect all players, including walled gardens, open web programmatic platforms, publishers and marketers. Even walled gardens will see a lower rate of opt-in on network inventory and on sites & apps where conversions are taking place, that will likely impact their ability to measure and thus monetize inventory.
What is the industry doing about it?
Much of the industry is focused on replicating the third party cookie and IDFA with solutions like UID 2.0. There are multiple solutions of this type offered or proposed by different publishers, vendors and organizations. Keep in mind that all of these alternative identity structures are by definition opt-in. There will always be a substantially lower percentage of user opt-in than the years-old opt-out model. As a result, there will always be a significantly smaller amount of programmatic inventory that’s addressable and measurable.
Can advertisers minimize the issue by relying more heavily on first-party / deterministic data?
Even if marketers’ or platforms’ deterministic databases remain sizable, that user data isn’t actionable for advertising if the users don’t opt into tracking on the app or site they’re visiting. Heavy investments in first-party data will produce diminishing returns as a growing portion of those devices become unmatchable in the bidstream.
Will the reduction of addressable inventory impact inventory pricing?
Yes. We believe so. The sharp decline in addressable inventory comes as many marketers are ramping up their ad spend, post-COVID. Basic supply and demand economics suggest that prices for addressable inventory will increase substantially.
How is Emodo addressing ID deprecation?
There is no single solution that can address the changes scale, effectiveness and cost, so Emodo is taking a “portfolio” approach. By developing and supporting a comprehensive suite of solutions, we ensure that our clients continue to enjoy the scale and efficiency of digital media to which they’re accustomed. Also, by offering and supporting a variety of solutions, we enable our clients to use this moment of change to innovate and execute with confidence.
What are Emodo’s solutions?
Emodo’s portfolio includes four key solutions:
- Support for Select Alternative Identity Structures:Emodo will support the alternative ID solutions that earn wide industry adoption and meaningful scale. We’ll announce our support for specific alternative ID solutions beginning in May 2021.
- Redefined Contextual Targeting:Examples include geography, weather, publisher and category, inventory source, device OS version, device movement data, and more. We’d be happy to help you define and execute a strategy that leverages modern contextual targeting at scale.
- Predictive Audiences:We’re leveraging our exceptional data and years of machine learning experience to predict audience attributes for non-ID inventory. Emodo Predictive Audiences will drive scale at an efficient cost-adjusted value. Emodo Predictive Audiences are available, beginning in mid May, 2021.
- Immersive Consumer Experiences:Tap into the power of 5G by running Augmented Reality and other forms of immersive groundbreaking creative. These creative formats have proven to drive great engagement and lower funnel metrics across inventory types. Neither engagement metrics nor 5G targeting rely on device IDs. 5G targeting and many immersive advertising solutions are available from Emodo today.