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Study: Apple's Device ID Change Could Hurt Ad Revenues for App Developers

Company urged to find alternative
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Since the news last month that Apple had started rejecting mobile applications that access UDIDs (unique device identification numbers), the mobile ad world has been racing to come up with an alternative. And, according to ad serving platform MoPub, the industry needs a substitution fast, because without one, app developers could start to see ad revenues tumble.

In a report released today, the company said that mobile ad inventory without UDID data draws 24 percent less revenue than inventory with it.

To establish the value of the two kinds of mobile ad impressions, MoPub said it compiled three months' worth of data from its real-time bidding exchange. When examining publisher inventory sent to advertisers, it found that inventory with UDID data earned an average eCPM of $0.76 versus an average eCPM of $0.58 for inventory without UDID data. 

"A lot of our publishers are going to see a decline in revenue" in the absence of a device ID to track conversions, said Elaine Szu, MoPub's director of marketing.

Apps like those for The Economist or other publications that also draw revenue from print and online platforms won't be harmed as badly, she said. But mobile games, which rely solely on mobile ad revenue, could be particularly threatened. Beyond that, MoPub maintains, ad networks could also a see a decline in ad performance and, ultimately, damage to their own bottom lines. 

In the past few weeks, various industry players have come forward with alternatives to the UDID, including device fingerprinting, HTML5 cookie tracking, MAC (Media Access Control) addresses and open source approaches.

Proponents of the different substitutions say their techniques effectively track mobile activity, which could mean app developers and ad networks could protect their bottom lines.

But MoPub argues that those efforts, which are backed by various camps in the industry, aren't enough. Some could raise similar privacy concerns as the UDID and others may not maximize the mobile environment. Of the lot, Szu said, OpenUDID, an open-source project advocated by marketing company Appsfire and adopted by MoPub as a short-term solution, is the most promising. But she acknowledged that it's still just the best of the worst.

"In our view, the current alternatives are really insufficient," she said. "[The solution] really needs to come from Apple itself."

MoPub's argument is that the mobile tracking issue is an ecosystem-wide problem and therefore needs a widely adopted ecosystem-wide solution. Apple has not publicly commented on the matter but Szu said her company believes the industry needs to place pressure on Apple and, longer term, on Google to devise an alternative that would let publishers and advertisers track conversions while respecting users' right to opt out.

"Our view is that they have the best vantage point to address the issue with a solution that's the least controversial and [would have] the quickest turnaround," she said.