Facebook responded Friday to changes in Apple’s iOS 14 operating system that will affect how publishers and developers collect and use the Identifier for Advertisers (IDFA).
The social network announced that its Audience Network exclusively will use bidding to fill ads in iOS apps starting in the second quarter of 2021.
It has been Facebook’s goal to support developers and publishers through a bidding-only system since it began testing it in 2017.
The idea is to improve performance of the network and the outcome for developers and publishers as Apple rolls out the upcoming iOS 14 updates that will affect their ability to collect IDFA data.
“Bidding can help publishers ensure they are getting the best price for every impression -- even as networks adapt to improve performance -- and will help reduce costly time spent managing waterfalls,” Facebook said. “Upcoming versions of iOS 14 are likely to create a two-tier system for developers -- higher valued impressions and averaged out, less predictable lower value impressions.”
Compared with a bidding method of buying ads, waterfall ad buying refers to the traditional programmatic method of ad buying.
Facebook estimates it will see advertisers transact 50% of revenue through bidding before the end of 2020.
In a recent Facebook report, The New Era in Ad Monetization: How App Bidding is Transforming Businesses, the company has seen businesses experience up to a 27% increase in average revenue per daily active user (ARPDAU). In its publishers report, data suggests it can reduce time spent on ad operations by up to 50% as a result of moving from waterfall ad buying to bidding.
The post also points to a report from analyst firm IDC -- The Current State of Header Bidding and In-App Bidding -- where Karsten Weide, vice president of advertising, writes: “Bidding helps democratize the auction process, allowing publishers to work with more marketers, in terms of both total number and variety of sources. The model also allows publishers to increase their inventory revenue yield and fill rates.”
Facebook, for now, will continue to support waterfall ad buying and bidding for Android apps, but the company recommends migrating to bidding to take advantage of operational efficiencies.