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Marketers face confusion over growing mobile tracking options

With reports suggesting that Apple has begun phasing out the use of a key mobile tracking tool sooner rather than later, marketers are trying to figure how this impacts them and which of the growing number of workarounds ? if any ? they should embrace.

UDIDs ? a unique identifier that is used to identify and target mobile phone owners ? are the de facto standard for tracking mobile actions and are widely used. However, several applications have reportedly been rejected recently by Apple because of how they use UDIDs, causing marketers and advertisers to consider alternatives and hope they do not see any decrease in performance as a result.

?There are multiple solutions out there and it will take a little bit of time to figure out which will be the new standard,? said Wes Biggs, chief technology officer at Adfonic, London.

?If this is done poorly, it has the potential to slow down mobile marketing,? he said. ?We will see a little bit of uncertainty filter into the marketplace and marketers be slightly more cautious as a result.

?Ultimately, marketers want the assurance that there are well-evolved standards and standards that are sanctioned by the industry as a whole. Even though there may be some pain in the immediate term, it will make it a much more brand-space ultimately.?

Apple did not respond to a request for comment by the press deadline.

Short-term impact
Apple first said last summer that it would begin eliminating the use of UDIDs with iOS 5.0 and will eventually stop using them altogether. However, the industry had not moved forward in any meaningful way to come up with alternatives until the reports started coming out about the app rejections.

Now suddenly, there are numerous alternatives, making it a challenge for marketers to know which one to embrace.

In the short term, the biggest impact is likely to be felt by performance-driven apps and marketers that are running campaigns where the goal is conversions in terms of app downloads in the Apple App Store.

?If solutions do not come into play, there will be a huge drop in performance,? said Krishna Subramanian, chief marketing officer of Velti, San Francisco. ?Cost per action, cost per install ? many of these campaigns will take a huge hit because there is no tracking for those conversions and optimizing towards anything.?

?However, as long as solutions are adopted by publishers and networks, there will be no change.

The reason why Apple would want to eliminate the use of UDIDs is because of the widespread concern from privacy advocates and regulators about the ability to link unique identifiers to individual users and make this information available to third parties.

Apple likely wants to limit its risk around the collection and use of consumer data by app developers by phasing out UDIDs.

However, ad networks and publishers are reportedly beginning to work with some of the alternatives and seeing no loss in revenue or capabilities as a result.

Market confusion
?There is definitely confusion in the market over this issue,? said Craig Palli, vice president of business development at Fiksu Inc., Boston. ?If you are a very large brand, you are hearing about this fragmentation [in UDID alternatives] and are wondering about what next steps to take.

?The right thing for a marketer to do is to support all of these alternatives and keep using UDID because right now everyone is jumping onto a different solution. By supporting all of them, this will allow you to work with more traffic sources.

Velti recently joined with Jumptap, RadiumOne, Adfonic and others to form the Open Device Identification Number Working Group focused on developing an alternative secure anonymous device identifier for the mobile advertising industry.

MAC Address is one of the possible alternatives to UDIDs. However, it is very similar in that it is also a unique identifier specific to each device.

The similarity between UDIDs and MAC Address suggest that many of the same privacy concerns that have been raised about UDIDs also pertain to MAC Address.

Another alternative is digital finger printing, which does not use a unique or persistent identifier but is also not 100 percent accurate in terms of being able to identify a user, limiting its appeal to marketers.

Still another option is Open UDID, which provides marketing attribution but has some privacy concerns because the customer ID is stored in such a way that it could be identified by other apps.

There are also HTML5 first-party cookies, which are 100 percent accurate for marketing attribution purposes. They also address privacy concerns because they are not tied to a specific device and are not accessible by other apps.

The downside is that when a consumer downloads an app for the first time, HTML5 first-party cookies force the launch of an extra screen for a split second before coming back to the app, which might be a concern for some brands.

The HTML5 first-party cookies are slightly different than the cookies available for desktop but not so much as to make any meaningful difference for marketers.

UDIDs still an option
Marketers should also consider continuing to work with UDIDs as apps using this information continue to be approved by Apple, per Fiksu?s Mr. Palli.

In order to insure that an app will get approved, marketers should consider updating their privacy policy to specifically state that the UDID is used for attribution. They might also want to consider putting in a disclaimer that comes up the first time an app is launched that explains how UDIDs are used as well as put a link in the App Store to the privacy policy so users can read it before they download the app.

Ultimately, the changes are likely to be good for the mobile industry by insuring that standards are in place that are useful to marketers while meeting the privacy concerns of consumers.

?Everyone is taking a really active stance on pushing forward with alternatives. In the long-term, it is a healthy thing that this is being forced to happen in a collaborative way rather than a kneejerk reaction,? Adfonic?s Mr. Biggs said.

?If we can move from the early stages of the industry and more into an area where there is a lot of standardization around measurement techniques, that is where the dollars can take off in the space,? he said.