“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Todd Wooten, founder and president at VRTCAL.
Soon, Apple will remove the device ID from mobile app ad requests. Google’s Android platform will follow suit. For many in the mobile advertising space, the shift toward a privacy-centric model feels like the sky is falling. In reality, it’s a big opportunity.
Even with today’s relatively relaxed policies, many mobile applications send as little as 50% of their ad requests with device IDs to programmatic advertisers, as consumers switch off tracking themselves.
Inevitably, we’ll soon be looking at a much smaller percentage of ad requests with IDs in the future. Liberally, I’d estimate that roughly 30% of mobile app ad requests will come with device IDs.
While our industry has put enormous effort into developing identity solutions for ad targeting within that 30% group, what about the remaining 70% of mobile app ad requests without device IDs? Is that simply remnant inventory? Should we just forget about it?
Absolutely not. That 70% has a lot of value for advertisers, regardless of what happens with new privacy laws and antitrust litigation. But in order to tap the value of that inventory, we have to look in the right places.
Content is king, and in the mobile space, the content is the app. But app is a broad term. Some apps are games. Others deliver news. Still others are video platforms. But regardless of the type of media the app delivers, the app is content.
Historically, advertisers might not own the content, but they dominate the mobile space because their spend lets them control third-party targeting data that segments audiences. That process deprecates the relationship between content makers (apps) and consumers.
But privacy regulations and the antitrust lawsuits promises to turn that model on its head. In the new model, app developers will be the kings of the mobile space because they’ll control the highly valuable targeting data associated with the 70% of inventory that doesn’t have device IDs.
App developers will have this control because this data is only available at the mobile application level. In fact, that data doesn’t contain any private or personal information. There are three types of data app developers and advertisers can leverage.
First-party targeting data
When someone downloads an app, they provide information about themselves. That information ranges from a few details to a lot of data. But let’s focus on the minimum details, which typically doesn’t touch on privacy. Some apps collect demographic data, interests and purchase intent. Consider an exercise app. Users typically enter demographic information (age, gender, etc.), but they’re also likely to share their interests (running, walking, strength training, etc.). Shoe brands, fitness clothing brands, and health food brands could all leverage this information for in-app ads.
Contextual data
Context can range from moods that are associated with moments when the app is in use, to content type, to specific situations. Consider fitness advertisers again. Targeting mood could mean sending a message of congratulations when a user achieves a new race time. Alternatively, an advertiser might send a message of encouragement when a user’s race time is off pace. The contexts are nearly endless because app developers can build in a multitude of contexts depending on their specific apps.
Device data
Device data, which includes information like a device’s accelerometer, magnetic field, gyroscope and pressure among others, isn’t the same as the device ID. But that device data is still incredibly valuable.
Consider the exercise example once again. By combining first-party data and contextual data with device data the advertiser has the ability to target highly desirable cohorts without touching any private information. For example, a campaign could target male runners, 18-35, who have just achieved their fitness goal, in 90+ degree weather. Sounds like a Gatorade ad, right? And as an added benefit, leveraging device data can guarantee that the ad only runs when the device is in a position for the user to see it.
Is this kind of targeting possible today?
There’s nothing complicated about this kind of advertising. What we’re talking about is the ability of app developers (content owners) to create anonymous moments for advertisers through the use of standard cohorts.
The IAB is currently reviewing an adoption of standardized taxonomy —an important step toward scaling this ad model, and all of this is being done with privacy and brand safety top of mind. Once the proposed taxonomy improvements are adopted, app developers and advertisers will be able to transact because the RTB pipes are already in place.
But just because you can do something doesn’t mean you will. Advertisers follow ROI—they always have, and they always will. But first, app developers must see the opportunity in order to create it. Right now, the focus is on the 30% of the market that’s about to get a lot more complicated and crowded. The sooner app developers take a step back and look at the bigger picture, the sooner they’ll see the opportunity standing in front of them.
Follow VRTCAL (@vrtcal) and AdExchanger (@adexchanger) on Twitter.