Mobile Marketing Cutting Edge – Part 1: Privacy Protection in App Advertising – Exchangewire.com

“User privacy protection” in the digital advertising market has been treated as an increasingly big topic in recent years. Web advertising in particular is often talked about in the context of banning third-party cookies, but mobile app advertising is a little different.

In this privacy-focused trend, companies that support app marketing like us, AppsFlyer, have evolved their solutions. In particular, we have been focusing on responding to the recent requirement of AppTrackingTransparency (ATT) from iOS14.5. We have also started offering a data clean room solution called “AppsFlyer Privacy Cloud” in anticipation of the future privacy-focused app advertising market.

In this article, we will consider how privacy protection has been handled in mobile apps so far, and where the app advertising market will head in the future.

(Sponsored by AppsFlyer)

User privacy protection so far with iOS

Since smartphones are used closely in daily life, it can be said that mobile app marketing and the issue of user privacy have continued to be inextricably linked.

The iPhone appeared in 2007, and the iPhone 3G was released in Japan the following year. The spread of smartphones has progressed gradually.
Until around 2011, the Unique Device Identifier (UDID), which is an identification code unique to the device, and the MAC address were mainly used for apps to identify users.
However, these identifiers are immutable for users. As long as the terminal is used, the user’s behavior pattern will be uniquely grasped, and it has become a problem due to privacy concerns.

To address this issue, starting with iOS6 in 2012, Apple provided a device ID for advertising called Identifier For Advertisers (IDFA). IDFA could also be reset or disabled via iOS settings. In 2013, apps that access UDIDs were banned from being released to the AppStore, and in 2014, MAC addresses were similarly banned from being used by apps to identify users.

Due to this background, IDFA, which is a device ID that takes user privacy into consideration, has become popular and widely used in app marketing.

iOS and the trend toward user privacy

The GDPR, which came into effect in 2018, stipulates the so-called “right to be forgotten”, which allows users to request that their data be presented or erased, and businesses must respond to those requests.
This contributed to the trend towards user privacy and sparked the idea that individuals should be guaranteed control over their personal data.

In this trend, services with many users such as Twitter, Facebook SNS, and Google search emphasize the protection of their users’ privacy, and do not inadvertently spread user-level information including device IDs. I’ve come to take care of it.
For example, starting in 2019, Twitter has provided users with a setting to turn off the linking of advertising data. If a user has made this setting, ad exposure results on the Twitter app will no longer be data-linked to advertisers as user-level information, including device ID. Based on similar considerations, by early 2020, Google will not provide user-level data to advertisers regarding app advertising performance within its search service on iOS, and Facebook will uniformly not provide advertisers with regard to view-through advertising performance. Did.

Advanced use of device IDs in app ads

From a slightly different point of view, the figure below shows how device IDs have come to be used in app marketing.

Device ID app retargeting example

This is what happens here.

1. Suppose a user installs a shopping app (App A), looks at various products, but does not make a purchase.
2. The business of App A decides that this user is a prospective customer, and considers hitting a targeted advertisement to remind this user of the product he was browsing and make him purchase it.
3. Therefore, the operator of App A passes the terminal ID and the information of the product seen to the ad network as an advertiser. This ad network will serve a targeted ad for app A as an in-app ad when this user opens another app B.

Device IDs span various operators without the user being aware of it. Furthermore, if the user restarts the app or purchases a product as intended by the advertisement, the device ID and the user’s behavior are linked to the ad network for the purpose of optimizing the advertisement. Sometimes it is done.

In the app advertising market, device IDs have come to be used as the center of marketing. Convenience for businesses such as advertisers and ad networks has been pursued.

Appearance of iOS14 and ATT

Along with the expansion of the use of such terminal IDs, there is an aspect that the terminal ID, which was supposed to be a mechanism that considered user privacy, has become something that neglects user privacy.

Yes, the IDFA can be reset or disabled, but very few users know about it. Although there is room for debate as to whether or not device IDs, which do not directly identify individuals, should be regarded as so-called “personal information,” they are still data at the individual level. For most end-users, their device IDs and behavioral patterns are recorded and passed on to various business operators without their knowledge. This should be uncomfortable for many users.

Therefore, the concept of ATT framework was introduced in iOS14 announced in 2020. This means that each app needs explicit user permission to access the IDFA. From iOS14.5 released in 2021, the use of ATT is mandatory.

This popup may still be confusing and a bit creepy for many users. There should be quite a few users who do not allow it.
The ATT permission rate varies considerably depending on the application, but is generally considered to be 40% or less.

The App Ad Market Has Been Chaotic

The inability to obtain a device ID for most users has had a major impact, especially on targeted advertising. In addition, it has become difficult to measure the results of app advertising, and there is also the aspect that cost effectiveness is declining.

In this article, we have focused on iOS, which has a particularly high penetration rate in Japan. Although Android is slightly behind, it basically follows this trend of privacy enhancement.
We have announced that we will abolish the Google Advertizing ID (GAID), which is a device ID for advertising for Android, by 2024. Along with this, we expect to provide a new mechanism called Privacy Sandbox.

For Apple, which provides the iPhone, its OS, and the app store, the selling point is that its platform considers user privacy. Google, whose main business is advertising, will need to further strengthen user privacy in order to compete with Apple.
For services such as Twitter and Facebook that have many users, protecting the privacy of those users is becoming a trend.

The situation is also complicated for advertisers who are app businesses. Generally speaking, protecting the privacy of users of their own services is also an important issue, and even if that is not the case, appropriate privacy protection measures are necessary so that apps are not banned from the store. In order to continue the business as a business while dealing with the growing privacy protection standards of the industry, it is necessary to properly measure the advertising performance and improve the cost effectiveness of advertising.

Today, for all stakeholders in the app advertising market, it’s becoming a chaotic situation where the old way of doing things doesn’t work.
Advertisers, advertising businesses represented by ad networks, and marketing support tool providers such as AppsFlyer are collaborating to find a way to obtain the insights necessary for marketing without infringing on user privacy. We believe that