In this specially contributed piece, AppMagic CEO and Founder Max Samorukov considers what AppLovin’s purchase of Adjust means as Apple’s looming IDFA changes are set to complicate the world of mobile ad targeting and tracking.
What’s Going On?
In summer 2020, Apple announced its new ATT (App Tracking Transparency) policy that seriously restricts mobile apps’ access to IDFAs (unique user IDs with the iOS) unless the user purposefully grants the app access to her IDFA.
Given the way the permission interface is designed, industry professionals expect hardly more than 20% of users to allow apps to track them.
As a result, performance marketing becomes nearly impossible. How come? Well, now the most an ad network can learn about you as a user before exposing you to any ads is the context, i.e. what app you are currently using. Yet there is very little to no information about your solvency or habits. Which, at the end of the day, makes ROAS-optimised campaigns nearly impossible.
Industry’s outright shock reaction made Apple delay their introduction of user anonymization by six months. During this time, hundreds of seminars, round tables, and articles were dedicated to “How to live in the post-IDFA world”. People learned how to use SKAdNetwork conversion values, and how to do custom data mapping with these values. Yet the fact is that performance marketing still remains a nearly impossible feat.
However, AppLovin did something notable. On February 3, the company announced its acquisition of Adjust, one of the leading mobile measurement partners. MMPs are attribution solutions primarily designed to link two events: a user viewing and clicking an ad, and said user installing and running the advertised app. MMPs’ additional functions allow them to track behaviour and payment activity in the app, and use that data to come up with ROI estimates for advertised apps. Still, Apple’s ATT policy will significantly hinder MMPs’ ability to calculate ROI. So why did AppLovin buy Adjust at that very time?
What Does It Mean?
Apart from the IDFA, iOS has another identifier called IDFV (Identifier For Vendor). This identifier remains the same across applications by one developer but varies between different developers. It’s designed to allow app developers to identify users between sessions and across different apps by the same developer.
In the post-IDFA world, any ad network or MMP will be technically able to map user’s IDFVs across multiple apps to assemble a real user’s profile and to produce a partial workaround for Apple’s ATT policy. To perform such mapping, we simply need to make an assumption that IDFV1 and IDFV2 belong to the same user—for example, by matching their IP addresses.
Sure, matching IP addresses do not guarantee that IDFV1 and IDVF2 belong to the same real user. But if we record this match several times, and, say, identify the same IDFV pairs for different IP addresses, we can treat it as more or less solid proof that it is indeed the same user. Given that user’s IDFVs are the same across all the apps by a single publisher, the job of mapping IDFVs and tracking real users starts looking less complicated than the original scare might have suggested.
From this perspective, the deal between AppLovin and Adjust looks very telling. As an ad network, AppLovin cannot track users’ payment activity until the mobile app they are using has the AppLovin’s SDK installed and the purchase tracking in its settings is set ON. But AppLovin (as a conglomerate of companies) can do much more in this field as an MMP, which is exactly what Adjust is.
In other words, acquiring Adjust allows AppLovin to track users’ activity (including payments) in a totally undetectable way, making it the main power in the iOS realm that has retained its ability to run performance marketing campaigns.
We’d like to emphasise that what we are describing is simply an option, and AppLovin may or may not choose to use it. On the other hand, if there is an option to gain a so-called “unfair advantage” and get away with it, why wouldn’t a business do just that? And why would AppLovin spend a billion dollars on Adjust right now?
It’s also important to point out that those 20% of users or less who will grant developers access to their IDFAs still provide conventional networks and SANs (Self-Attributed Networks) a limited opportunity to run performance marketing campaigns.
Well, AppLovin will hardly be able to leverage this newly acquired superpower explicitly as an ad network. But AppLovin is also a conglomerate of mobile gaming studios. They have their own studios, and they have been investing in many, too (see more on that here). From this point of view, even using that superpower only to the advantage of AppLovin’s affiliated studios will pay off handsomely.
Anyways, we are excited to see what’s gonna happen next. Big manoeuvres by big guys have never been this powerful!
This piece was originally published on the AppMagic blog. For more insight from AppMagic – and to check out their mobile market intelligence tool – head over to the AppMagic website.