Rise of the ADID
Optimizing ad tech in a digitally disruptive market
According to Darwinian evolutionary theory, it’s neither the strongest nor the smartest that survive and thrive but those who are most able to adapt to change. This theory is especially pertinent when considered from the perspective of the advertising industry.
Understanding digital presence and usage
In just the past 10 years, internet accessibility has proliferated on a global scale. As depicted below, four GCC countries now rank among the top 5 in terms of worldwide internet penetration.
When there is disruption in the market, new entrants emerge and existing participants have to join the race to adapt. In the process, some come out as leaders while others are forced to close shop. This is best mirrored by the rise of Netflix alongside the demise of Blockbuster; while the former e-platform revolutionized traditional TV viewing, the latter movie-rental service failed to keep up with the times and innovate effectively.
The seismic shift toward digital consumption has certainly transformed advertising spend, with major budgets now allocated for digital channels. Of particular note was a watershed moment in 2018, as internet advertising eclipsed $100bn in revenue, doubling from a $50bn base in 2014.
There is ongoing disruption within the digital advertising landscape itself, presenting both challenges and opportunities for market participants. For example, the past decade has seen the widespread adoption of mobile internet penetration, which currently accounts for over 52% of all internet traffic versus 43% for desktop and laptop (Statcounter 2018).
It’s not a surprise to learn that mobile internet advertising revenue accounts for 65% of all advertising revenue and continues its fast-paced growth.
An analysis of the share of digital minutes shows a heavy lean toward mobile; it accounts for 71% in the US and is as high as 91% in Indonesia.
The primary share of user minutes is within mobile apps — the top 50 international mobile apps account for up to 90% of time spent on mobile devices.
Where the users go, so do the advertising dollars and in-app spend now dominates the category, versus mobile web.
Where ad tech comes in
Unlike desktop and mobile, which both utilize a variation of cookies, in-app targeting leverages Advertising ID (ADID), specifically Google Advertising ID (GAID) and Apple’s Identifier for Advertising (IDFA).
By design, ADIDs are a lot more stable than cookies; the latter are increasingly blocked, user declined, deleted or short-lived within browsers (especially mobile web cookies).
In-app targeting is also highly suited toward video advertising and has emerged as the preferred engagement channel for many brands.
Most interestingly, the rise of ADID has opened up a host of new avenues for brands and advertisers by allowing — for the first time — an understanding of a user’s interaction within the physical world.
This Insights article was created by James Berry, Head of Client Partnerships at IQ data
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