Mobile Ad Networks Scramble To Save Biz
Velti Mobclix Exchange, MdotM, Jumptap, InMobi and other mobile ad networks are collaborating on developing a strategy to track impressions and target advertisements on devices running Apple iOS 5. This occurred after Apple issued an update to iOS documentation -- identifying a change in policy for using unique device identifier, or UDID, in iOS devices, such as iPhones and iPads.
Apple plans to phase out the ability for marketers and application builders to link actions taken by more than one application to a unique identifier. The singular 160-bit number gathers several characteristics about applications, devices and how they are used. Not having that identifier restricts ad networks from tracking the same person across multiple applications, counting impressions, and creating a consumer profile to retarget ads.
The change puts mobile advertising growth at risk. eMarketer estimates the mobile ad market will surpass $2.5 billion by 2014. Although it's not clear what percentage is attributable to iOS, IDC forecasts 182.7 billion annual mobile app downloads by 2015.
Advertisers relying on mobile ad networks to serve up ads that prompt consumers to download an application might have a rude awakening if the industry does not prepare for the change. Many depend on these networks to post ads that prompt the download. The UDID identifies the clicks generating the installation of the app on the consumer's device.
Velti Mobclix Exchange SVP Krishna Subramanian, who co-founded Mobclix, said mobile ad networks have been in discussions to find a workaround. Leveraging the Mac address could become one solution. It does not identify phone numbers, names or email addresses, but does provide the tracking and the targeting information. While the Mac address allows ad networks to collect information, he said it protects personally identifiable information.
Subramanian said cookie and finger printing would become alternative methods through third-party companies. The challenge for networks then becomes having the technology to read the cookies. While it helps to solve the problem around creating profiles, it doesn't help to track conversions and downloads from the iTunes app store.
"To solve that you'll need help from Apple," he said. "Apple could put a pixel on the apps store Web page allowing ad networks to piggyback on the pixel to track conversions."
The UDID change does not affect Apple because tracking downloads through iTunes does not require the company to use the UDID.
No matter the solution, Niyogi said mobile ad networks will need to use another "seriously inferior way" of tracking ads such as impressions, clicks and app installs. For now the group has no solutions, "but we're deep in discussions to figure it out." UDIDs are widely used at mobile ad networks, so this introduces a "serious change," he said. "We're hopeful either Apple diverts depreciation or the industry comes up with a workaround that solves the problem."