How to overcome the iOS 14 impacts on customer experience Executive Summary

Earlier this year, Apple announced new data and privacy changes that will have substantive business implications for any organization that advertises or operates on mobile. With these changes, Apple’s identifier for advertisers (IDFA – a physical device ID that powers much of today’s mobile advertising) essentially becomes an opt-in feature.

Although the updates were originally set to launch 1. Providing value in exchange for customer data and with iOS 14 in September 2020, they were pushed handling that data responsibly will give brands an back to 2021. Brands need to take action now to avoid edge in winning and keeping consumer trust. significant business impact in the new year: 2. Brands must update their data activation strategy to account for changes to the ad-tracking landscape. 3. Finding new measurement and reporting strategies will be essential to evaluating return on marketing investment once users must opt-in to IDFA.

2 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE What’s changing as part of iOS 14

Fortunately, with the changes delayed until early next year, marketers have more time to prepare. [1] They need to take action. Marketing partners like Facebook are also proactively taking steps to help their partners prepare for the changes while reducing unnecessary disruption, ensuring consumer needs continue to be met.

The user experience changes introduced in iOS 14 reflect Now that Apple’s identifier for advertisers (IDFA) will evolving consumer attitudes about privacy and data be opt-in for every app, brands will no longer be use. Recognizing that consumers want more control, able to rely on this tool to determine if individual Apple is giving them the ability to opt-in to both ad consumers clicked on an advertisement in an app. tracking and sharing their identities when they first open Brands will need to find alternative methods to gather websites and apps in iOS. Those decisions will give users precise information on which channels are working. much more control over how their data is collected and used. Against this backdrop, brands must move toward These sweeping changes to user privacy and data use providing more value to consumers who are less inclined will ultimately impact business functions that manage to share their data. Prioritizing responsible data usage return on marketing investment – from marketing and transparency will provide a competitive edge. organizations to finance and even procurement.

3 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE The Imperatives for Advertising Without IDFA

1 Differentiate your brand with responsible data handling One way to increase a brand’s first-party data is by incentivizing and a value exchange customers to share their data through “value exchange” strategies. Many consumers are reluctant to opt-in to sharing their data because For marketers, data handling is a competitive differentiator. Brands of permission fatigue: They share their data, only to find it is used in that maintain transparency and strict data governance and share ways that make them uncomfortable. In Accenture Interactive’s 2019 initiatives around managing customer data with key stakeholders See People Not Patterns survey of 8,000 consumers, 51% percent said build more trust with the brands and companies they’re engaging invasive ads were on the rise and 71% said a brand had communicated with. This will become even more important as the data landscape in a way that was too personal. But at the same time, 93% of consumers evolves. Increasing a brand’s first-party data and entering into agree that it’s important that every interaction they have with a brand is strategic data alliances are two key strategies. excellent. [2] To deliver excellent experiences, brands need to be relevant and understand their consumers – something that’s difficult to do without enough data.

Accenture’s 2019 Pulse survey results showed that of the 8,000 51% 71% 93% consumers surveyed…

of consumers think of consumers say a brand of consumers agree that invasive ads are on has communicated in a way it’s important that every the rise [2] that was too personal [2] interaction they have with a brand is excellent [2]

4 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE Brands will need to find ways to build and retain consumer trust and confidence as consumers demand increased transparency, privacy and control [3] over how their data is used. They will also need to take into account a shift in customer expectations related to data and privacy and update their strategies on how data is collected, managed and activated.

Key considerations:

Lean into your value exchange Make data governance a top priority Loyalty, rewards and subscriptions strategy – Reduce permission fatigue – Ensure the data collected and stored – Identify ways to collect customer- and build consumer confidence has proper user consent and can be level information while being with strategic opt-in messaging and appropriately leveraged for media transparent and offering value. Loyalty incentives for customers to share their execution purposes. and subscription programs are going to data with your brand. be increasingly important, but they will not be adopted unless the customers can recognize the value exchange.

5 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE 2 Reimagine your data strategy

With the ad-tracking landscape in the midst of unprecedented transformation, marketers should rethink both their ad-targeting and data strategies. Marketers need to reach the right customers, at the right time, with the right message to achieve conversions and ultimately measure ROAS (return on ad spend). The iOS 14 updates, combined with preceding privacy regulations (GDPR, CCPA, ITP, APPI, LGPD, etc.) and the forthcoming cookie-less future, [4] have a compounding impact on marketers. The decline of third-party cookies, which are used for audience-based ad tracking, is looming, and companies must prepare for a cookie-less future.

On top of this, brands will have to adapt to the App Tracking Transparency framework arriving with iOS 14. Under this framework, users will need to grant permission for:

• Their user/device data to be leveraged for ad targeting • Ad tracking by third-party analytics software development kits (also known as SDKs), the mobile equivalent of cookies • Sharing data with data brokers

Companies that want to understand how their ads are performing and target consumers effectively must rethink their ad-tracking and first-party data acquisition strategies. Many current methods will be harder to use as consumers transition to iOS 14. For instance, a brand will not be able to send push notifications to specific consumer segments unless those consumers have opted into receiving them.

6 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE The table below tactically highlights how app-based segments (such as targeting “fitness enthusiasts” based on apps downloaded) for targeting could be at risk.

Pre-iOS14 Ad Targeting Post-iOS 14 Ad Targeting

Behavioral and Audience Based Mobile Targeting: Targeting Contextual Mobile Targeting: Targeting will be based only on data look-a-like audiences with in-app advertising and cross-site provided by end content providers suggesting details about the advertising based on a defined set of attributes intended audience vs. the actual audience

In-App: Push notifications to customer segments focused on In-App: Based on in-app session behavior, contextual targeting exclusive offers on products and services of relevance (push notifications) can be activated with explicit user opt-in to IDFA tracking Retargeting:

• Paid Social: Retargeting this segment with exclusive offers Retargeting: and events If a user opt-outs of tracking, brands cannot share any consumer data with third parties for site or app ad targeting purposes. Brands must • Paid Search: Bidding on keywords that align with top attributes relay on opted-in first-party data for ad targeting to facilitate of a segment retargeting on user specific identifiers • Display: Creating an audience based on a segment for display campaign retargeting in-app and across-third party sites Standard Reporting: Refreshed audience segments will need to be applied to standard reports for analysis given the fact that historical Standard Reporting: Applying an audience segment across reports segment data (e.g. pre-iOS 14) will not be permissible for targeted to deepen analysis of customer journey and critical business metrics advertising, storage, or use

Suppression: The removal of certain audience targets based Suppression: When a user opts-out, suppression targets can no behavior indicating that the group should not, for any number of longer be used to prevent ads from being served to the wrong reasons, be considered the target for an ad or campaign audience based on previous or current behavior

7 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE Users are demanding greater privacy and transparency, but they still expect personalized experiences. [2] Meanwhile mobile brands and predominately ad-supported businesses rely heavily on digital advertising to drive revenue.

Key considerations to help marketers pivot their data strategies:

Focus on strategic alliances with innovative data products Integrate your first-party data server-side for resilient – Consider clean rooms, which provide advertisers privacy- targeting – Marketing partners will be able to facilitate safe access to data with events tied to various user IDs, for ID retargeting by leveraging any number of user-specific management. For example: Google Ads Data Hub, Facebook (versus device-specific) identifiers to target individuals: Advanced Analytics, Adobe Experience Platform, Amazon email addresses, phone numbers, etc. Marketing Cloud, LiveRamp Safe Haven, etc.

8 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE 3 Rethink measurement and reporting

For marketers, IDFA is currently the key method for mobile attribution that protects consumer privacy while still allowing for data to be extrapolated. For instance, brands can use in-app events to track acquired channel or behavioral data. [5]

Mobile attribution lets marketers identify the best-performing channels and determine future marketing budget allocations. It equips marketing teams with the necessary insights to evaluate the effectiveness of their advertising campaigns, budgets and target audiences. For instance, brands can measure the success of mobile advertising, such as app-install campaigns, across social channels including Instagram, Snapchat or Facebook. That will change when Apple makes IDFA an opt-in for every app and, in doing so, greatly reduces its effectiveness. Without IDFA, attribution will happen through Apple’s SKAdNetwork [6] framework, which intentionally aggregates campaign-level insights.

While advertisers will have a sense of which cohorts are performing, they won’t have enough granular information to easily price impressions.

9 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE Key considerations for attribution and reporting updates:

Find alternatives to Create new integrated Reset goals and Increase your identity resolution ecosystems for sales reporting – Given that development resources – Brands that use IDFA for – Through the creation of log-level data ingestions will – The SKAdNetwork data stitching, such as integrated experiences not populate IDFA for most will require additional combining impressions where content, ads and user interactions (clicks, development resources and app events, must native commerce exist on events, impressions), brands to configure and maintain begin to explore alternate a singular platform (e.g., will have to pull existing manual implementations. solutions (e.g., graph Instagram and Instagram reporting to understand the data) that include web Checkout), brands can current composition of iOS and app activity. create a closed-loop users and how IDFA is being ecosystem that will used in their organizations. boost the attribution and Forecast the expected optimization of sales. change in performance based on opt-in rates.

10 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE Moving Forward Prepare for an ecosystem transformation by taking these next steps.

Take stock of how new Get tactical and be Understand development affect proactive limitations your brand

• Set up a meeting with key mobile marketers • Acknowledge that perceived ROI for mobile • Apple has not prescribed any limitations on to acknowledge the changes. Where campaigns will be different when the IDFA how to communicate the value exchange applicable, use an industry expert to changes take effect. Advertisers may see a that comes with opting into providing data provide a point of view. decrease in audience size as people update to users, which gives brands the chance to be creative. • Begin building a strategy to mitigate their devices, depending on the proportion these changes, including enhancing the of iOS users in their Mobile App Custom • Advertisers should connect with their Apple first-party data strategy, building stronger Audiences. representatives to review the new policies value exchanges, quantifying impact, and • Continue to steer away from reliance on and take the necessary steps towards designing/implementing new tools to third-party cookies for advertising and use compliance. address these changes. server-side tools (e.g., Tealium EventStream) • Brands can leverage the terms and that leverage first-party customer data for conditions in social media apps to ask a targeting, optimizing and measuring ad user to show ads and share their IDFA to campaigns. fully use the app. • Lean on experts to better understand the App Tracking Transparency framework to create custom solutions. [7]

11 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE Reimagine Data Strategy with a Trusted Partner

While these topics of value exchange, media execution, and attribution are daunting among multiple competing priorities, there is no doubt that the privacy-centric functionality within iOS 14 will gain traction and momentum globally in the coming months. Accenture Interactive can help brands leverage platforms, skills, tools, creativity, technology, systems, and services to create the best experiences for their customers as they work to provide greater value exchange for customer data, focus on responsible data handling, update their data strategy, and find new measurement and reporting strategies to reflect the significant changes this update will bring.

12 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE Get in touch to learn more about how to transform your organization for iOS 14 and a cookie-less future. We are here to help your business navigate the changes ahead.

Rebecca Lee About Accenture: Managing Director, Accenture Interactive Accenture is a global professional services company [email protected] with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer Strategy and Ankit Mehta Consulting, Interactive, Technology and Operations services—all powered by the world’s largest network Personalization & Marketing Analytics Lead, of Advanced Technology and Intelligent Operations Accenture Interactive centers. Our 506,000 people deliver on the promise [email protected] of technology and human ingenuity every day, serving clients in more than 120 countries. We embrace the power of change to create value and shared success Catherine Lansing for our clients, people, shareholders, partners and Personalization & Marketing Analytics Expert, Accenture communities. Visit us at www.accenture.com. Interactive [email protected] About Accenture Interactive Accenture Interactive is reimagining business through experience. We drive sustainable growth by creating meaningful experiences that live at the intersection of purpose and innovation. By connecting deep human and business insights with the possibilities of technology, we design, build, communicate and run experiences that make lives easier, more productive and rewarding. Accenture Interactive is ranked the world’s largest digital agency by Ad Age and has been named a Most Innovative Company by Fast Company. To learn more, follow us @AccentureACTIVE and visit www. accentureinteractive.com.

13 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE 13 HOW TO OVERCOME THE iOS14 IMPACTS TO CUSTOMER EXPERIENCE Sources: Disclaimer: 1. https://www.macrumors.com/roundup/ios-14/ This document has been published for information and illustrative purposes only and is not intended to serve 2. Accenture: See People Not Patterns - https:// as advice of any nature whatsoever. The information www.accenture.com/_acnmedia/PDF-110/ contained herein and the references made in this Accenture-See-People-Not-Patterns.pdf document is in good faith, neither Accenture nor any 3. https://developer.apple.com/news/?id=hx9s63c5 of its directors, agents or employees give any warranty 4. https://www.adexchanger.com/data-driven- of accuracy (whether express or implied) nor accepts thinking/how-to-own-data-and-measure- any liability as a result of reliance upon the information performance-in-a-cookie-less-world/ including (but not limited) content advice, statement or opinion contained in this document. This document 5. https://www.singular.net/blog/limit-ad-tracking- also contains certain information available in the public privacy-checkup-in-2020/ domain, created and maintained by private and public 6. https://developer.apple.com/documentation/ organizations. Accenture does not control or guarantee storekit/skadnetwork the accuracy, relevance, timelines or completeness of such information. 7. https://developer.apple.com/app-store/user- privacy-and-data-use/ This document constitutes a view as on the date of publication and is subject to change. Accenture does not warrant or solicit any kind of act or omission based on this document.

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