How Apple's 'Passkey' Changes The Future Of Mobile Advertising

Discussions about privacy and third-party cookies picked up last week with the launch of Apple’s iPhone 14, but not much has been said about how its authentication technology Passkey will change mobile advertising and marketing.

The technology is aimed at the ability to log in to apps and websites or create new accounts without having to create, memorize, or store a password. 

“Passkey is arguably one of the most interesting features coming to iOS 16,” Katie Madding, chief product officer of analytics platform Adjust says, characterizing Passkey as a potential game-changer for mobile apps.

“The intent is to replace passwords with an easier and more secure solution for authentication," she says. "There has been chatter in the industry for years about what a ‘passwordless’ future could entail, and it will likely give us a look at the new normal.”

The passkey is made up of a cryptographic key pair and replaces traditional passwords and is synced across iCloud’s Keychain. It has the potential to increase security.

Google and Microsoft are also moving to passkeys. Google's FIDO (Fast IDentity Online) authentication standard defines a fast and secure authentication for users to access websites and apps.

As CPO, Madding leads Adjust’s global product vision and development and the company’s product roadmap, driving a team of creative thinkers.She says marketers and brands know that passwords can often serve as a barrier to entry to engage with an app or complete a purchase.

With the barrier largely removed, brands and marketers will have more seamless, privacy-centric ways to connect with their end users and will likely see an increase in engagement and sales as a result. 

Following Apple’s Far Out event last week, Data & Programmatic Insider (D&PI) caught up with Madding to ask about her thoughts on the news and how changes to Apple’s products will affect app and mobile advertising and marketing. The following are excepts to the email exchange.

Data & Programmatic Insider:  Following Apple’s Far Out event, what do marketers need to pay attention to most? Did anything surprise you?

Madding: Increased display size, improved Retina display, and beefed-up processors across Apple devices will further raise expectations and opportunities for marketers to deliver even more sophisticated, dynamic, and compelling visuals and ad formats.

Similarly, marketers should start thinking about creative ways to leverage new features like the Always-On display.

D&PI:  Apple is putting data privacy center stage -- allowing users to determine who has access to what, and when. These shifts, however, have made mobile marketing and attribution more complex.
What do marketers need to know?

Madding: Apple continues to spearhead the industry-wide privacy movement, and we’re here for it. Since the release of iOS 14.5 in April 2021, the key challenge for mobile marketers working on iOS is that the IDFA is no longer accessible for users who don’t opt-in via the AppTrackingTransparency (ATT) framework.

What this means is that advertisers can no longer target and measure users in the way that they could before, or the way they can for Android and ATT opted-in users. This has significantly complicated marketing on iOS and means that working with SKAdNetwork for attribution is essential for success on the platform.

D&PI: With updates to SKAdNetwork API on the horizon, what are the implications for app marketers?

Madding: Increasing privacy across the ad ecosystem means embracing SKAdNetwork as it becomes the gold standard of measurement on iOS.

Apple recently announced new features to come with SKAdNetwork 4.0 that will allow marketers significantly more measurement capabilities and more insight into campaign performance analytics while maintaining privacy for users.

Marketers who have yet to do so also need to kickstart their efforts on aggregating first-party data.

Even with anonymized user IDs, there is immense value in segmenting audiences, such as high- and low-value users, and utilizing predictive analytics to drive campaign testing and targeting.

D&PI:  Can mobile marketers still run successful, insight-driven campaigns on iOS?

Madding:  Simply put, yes. Marketers should not fear the new changes but rather embrace them and take the time to adjust their strategies accordingly.

At its Worldwide Developers Conference in June, Apple announced that SKAdNetwork 4.0 would come with several measurement-minded changes, including a shakeup to post back windows.

It could soon be the case that the 24-hour window won’t be the only time frame in which developers can work to build conversion values — something that would drastically improve the attribution capacity of verticals where key events usually take place later in the user journey.

Understanding the implications of SKAdNetwork, optimizing the use of its features, and keeping up with its changes is a field of its own that will require an expert UA professional mastering the art of understanding audiences, and leveraging insights from a mix of aggregated and device-level data.

D&PI:  What are some anticipated challenges to look out for and how marketers can overcome them?

Madding:  One of the greatest challenges marketers will face long-term will be getting their end users to opt-in. It's imperative that marketers double down on their efforts and think less about one-time transactions and more about fostering a trusting, long-term relationship.

Transparency will be key. Be explicit in what data you are collecting, how you intend to use it, and even if your end-users ultimately choose to not opt-in, how are you going to value the relationship regardless?

We recommend a twofold approach to advertising on iOS, post-IDFA. The higher the opt-in rate, the bigger your pool of consented, device-level data that can be used exactly how it was used before.

Increases of even a few percentage points can provide a huge increase in the insights needed to succeed. The data can also help to make up the basis of the second step, which is building your conversion value strategy.

Conversion value configurations specific to your app’s business model and KPIs will provide insight into how users are interacting with your app even if a user has requested not to be tracked.

Leveraging data from both sources is also what will drive powerful predictive analytics and insights, which will ultimately transform how UA managers analyze their data.

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