FBX was the first mass market example of real time bidding’s applications beyond banner ads, and its closure is a signal of the growing power of walled gardens in the face of an open advertising ecosystem. But most publishers aren’t Facebook, and they are eagerly adopting the programmatic selling of native ad units.
While watching an interview with “Selma” director Ava DuVernay, I opened my phone and visited imdb.com to learn more about her career. At the bottom of the page, I saw an ad promoting Amazon’s new streaming video service, Amazon Prime Instant Video. The ad had a clear call to action and was positioned next to highly relevant content. There’s nothing obviously wrong with the ad unless you know that I’m already an Amazon Prime member and already have the Prime Instant Video app installed on my phone. Why would Amazon waste their money promoting a product that I’ve already purchased?
It turns out that iOS makes it very difficult for advertisers like Amazon to make smart targeting decisions when delivering ads in a mobile web browser. The issue stems from two different tracking mechanisms that coexist on iOS devices.
- Native iOS apps have access to a mobile device ID (called IDFA, or “ID for Advertising”) that is consistent across all installed apps.
- Websites that are loaded through a browser cannot access the device’s IDFA, but instead access cookies that operate very similarly to desktop browser cookies.
When I installed Amazon’s Prime Instant Video app, Amazon’s marketing database recorded my iPhone’s IDFA (let’s call this 1234). But when IMDB sold a banner ad within my browser, Amazon’s bidder was passed a cookie ID (let’s call this 6789). To Amazon, cookie ID 6789 is a brand new prospect, not an existing customer. Amazon purchased the 320x50 ad slot and wasted an otherwise productive 16,000 pixels.
The cookie vs. device ID issue is problematic for both for targeting and attribution. Ads like Amazon’s are poorly targeted, resulted in wasted ad spend. In other cases, advertisers miss opportunities to engage warm leads, resulting in poor publisher monetization. And when an impression served in an app drives a conversion on the web, its impact is often not measurable, reducing the perceived effectiveness of mobile advertising.
Start ups like Tapad and Drawbridge are leveraging probabilistic modeling to link multiple IDs, and scaled platforms like Google and Facebook are well positioned to use login data to provide more robust ID matching products. But we are still in the early innings of people-based marketing, and until the industry embraces a consistent ID linking solution, the mobile ad economy will suffer.