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04-29-2013, 12:51 PM #1
iOS Mobile Ad Revenues Projected to Increase as IFAs Replace UDIDs
Apple’s decision to address privacy concerns about the collection of personalized data supposedly gives the company a head-start in the mobile ad race according to marketeer Gregory Kennedy.
For those of you unfamiliar with the matter, every iOS device sold has a unique ID code known as the UDID (Unique Device Identifier). Many app developers used this 40-character code to identify you for various purposes, some of them perfectly legitimate, such as storing push notification settings and logging usage statistics. The whole controversy behind UDIDs as when the data was shared with advertisers. For example, if an advertiser knows that you’ve installed several airline apps, a couple of hotel apps, and some business apps, the aggregated data might allow it to profile you as someone who travels frequently for business. The privacy concerns behind UDIDs was heightened when 12 million were leaked, an initial false report suggesting they were in the possession of the FBI.
Apple responded to the situation by announced that it would start rejecting new and updated apps that accessed the UDID on May 1st, replacing it with IFA (an ID For Advertisers). Kennedy had the following to say regarding the matter:
The good news is this legal gray area will be cleared up on May 1. In response to critics of UDID, Apple has created a legally compliant alternative called, simply enough, IFA, or ID for Advertisers that is built directly into iOS 6. Crucially it also allows users to opt out of any advertising tracking method by changing a setting at the device level. This solution means that starting next month, anyone advertising on the iOS platform will be legally compliant. The device level solution also puts iOS somewhat ahead of the PC web, where legal compliance with ad tracking has to be handled on a site-by-site basis and is currently a messy struggle with no system-level opt out.
iOS revenues will skyrocket in 2013. With the legal issues around UDID cleared up, a lot of the friction that was holding back large advertising budgets will be reduced. Additionally, the 14 percent decline in PC sales in the first quarter of 2013 confirms that consumers are quickly moving to mobile. Despite having a smaller overall mobile market share, Apple’s iOS dominates both mobile ad traffic and mobile revenue; a recent study shows overall that iOS accounts for 44.5 and 49 percent respectively, versus Android’s 31 and 26.7 percent shares. And so with the continued shift away from PCs, marketers will flock even more to iOS, where they can best reach an affluent demographic.
Source: Gigacom (blog) via 9to5Mac