Apple's decision to ask user permission for ad tracking in iOS 14 will effectively cripple advertising personalization relying on a device IDFA for all iPhone users. If Google's recent decision to remove cookies by 2022 are any indication of where the wind is blowing, it would not be surprising for them to follow Apple with implementing a similar opt-in feature for their own mobile advertising identifier on Android, AAID. The winds of change are blowing across the industry and many are scrambling for answers.
Effective and privacy compliant audience targeting relies on a user resettable and consistent identifier like Apple's IDFA and Android's AAID, and Connected TV manufacturers have been quietly implementing their own versions for years now. Unlike Apple, who stake their company ethos on privacy, TV and streaming media device manufactures like Roku and Amazon Fire have directly tied the success of their business on increasing advertising revenue.
Roku launched the Roku Advertising Framework years ago, using their incredible household penetration and market share as leverage to force apps monetizing with video advertising into an inventory split. See section 4.3. "Roku’s Share of Advertising Inventory" on the Roku distribution agreement that requires publishers to fork over 30% of their advertising inventory to Roku where "Roku retains 100% of revenue from this inventory (but is under no obligation to fill it)". This was a heavy handed but brilliant move by Roku that shifted their company narrative from a hardware company to a platform company and led their stock price to soar:
So it is obvious that Roku has hitched their wagon to advertising, and Amazon was quick to follow suit. Amazon implemented their own 30% inventory split in 2018, capitalizing on the savvy business play implemented by Roku. Combined, these two companies represent around 70% of the streaming media player market with Roku reporting 43 million active users in their Q2 2020 earnings report.
In a world soon to be starved for advertising identifiers, Roku's RIDA (Roku ID for Advertising) and Amazon Fire's AFAI (Amazon Fire's "Advertising ID") are not likely to be going anywhere. Both of these advertising identifiers are made available to publishers and marketers to deliver personalized advertisements while maintaining user privacy (anonymous) and control (resettable). Roku even points out that RIDA was modeled based on IDFA:
"The Roku ID for Advertising is a device identifier available to Roku publishers for development and marketing purposes. It is designed to generally follow the guidelines established for the IDFA (Identifier for Advertising) used on other platforms…It is the ID that Roku offers to its publishers to enable frequency capping and targeted advertising on the Roku platform."
If advertisers can no longer reliably use their precious data to target consumers on mobile, then why not turn their attention back to the living room? Roku and Amazon offer reliable advertising identifiers that publishers and advertisers can use to facilitate advanced audience targeting and frequency capping.
DMPs such as Salesforce Audience Studio and Adobe Audience Manager, have added support for OTT identifiers like RIDA and AFAI – signaling that there is an uptake in interest in audience based buying. As DMPs add support, publishers can start collecting and sharing data to create demographic (age, gender, income) or interest based (content viewing habits) segments that advertisers can attach to their campaign targeting. Advertising like this will be all but impossible on mobile after Apple kills the IDFA.
LiveRamp's cross device graph, Identity Link, uses connected TV IDs as one of many input sources to tie our digital lives together in a nice package presented to advertisers. Cross device solutions like LiveRamp's can tie offline data like purchase behavior and link that back to our CTV device identifiers using connective signals like IP address. Once the mobile IDFA is gone, and desktop cookies soon after, advertisers will pay a premium to conduct this type of advanced audience targeting on the CTV big screen.
TV manufacturers are also positioned to capitalize on the success demonstrated by Roku. Late to the party, but ready to flex it's lead in TV sales market share, Samsung has added its own TIFA, Tizen Identifier For Advertising (Tizen is the OS Samsung TVs run on), to the mix. This move by Samsung may usher in an advertising arms race in preinstalled connected TV software attempting to mimic Roku's advertising inventory split success. It would not be surprising to start to see similar advertising identifiers from TV market share runner ups, LG and Vizio, start to creep their way onto SSPs, DSPs and DMPs in the near future.
The conflict of interest present with Apple's IDFA will never exist for Roku, Amazon, Samsung and other TV manufacturers. These companies are beginning to realize that their profits are capped on hardware, but advertising presents an incremental revenue stream that could eventually represent the majority of their revenue.
If profit is predicated on facilitating advertiser targeting needs on CTV, then expect this segment of digital advertising to continue to grow as a premier destination for advanced audience-based targeting. CTV is already known for commanding much higher CPMs than mobile and desktop, but expect these rates to grow even more if the living room is the only place left for advertisers to reach the audiences they desire.