• by Steve Smith  @popeyesm, April 26, 2012

As Apple begins rejecting apps that use its UDID data for tagging and tracking usage, developers and ad networks are scrambling for alternative solutions. This common method of identifying a user for ad management, app metrics and tracking purposes appears to be running afoul of unclear policy changes at Apple.

The ad industry is facing the prospect of having to operate within the iOS ecosystem without this reliable way of targeting users and understanding app behaviors. According to ad server MoPub, the absence of UDID will also affect publisher bottom lines and targeting capabilities. In its recent analysis of billions of ad impressions running through the MoPub system, apps that did not access UDI data for iOS devices had a 24% lower price per impression.

UDID data is used by advertisers, especially in real-time bidding exchanges, to determine ad effectiveness in converting exposure to action. Within MoPub’s real-time bidding marketplace, publisher inventory that sent UDIDs had an average eCPM of 0.76 cents, while ads inventory without UDID had an average eCPM of 0.58. The survey was done across a three-month period.

MoPub’s figures suggest that without UDID widely used in iOS apps, ad effectiveness and pricing will decline. “Here we see a direct correlation between the money paid for an ad and the ability to track an ad,” says MoPub CEO Jim Payne of the data. “It’s clear that Apple needs to address this issue with an appropriate alternative, because the damage to a publisher’s bottom line will likely be material if UDID data actually disappears.”

As of now it is still unclear whether Apple intends to eliminate the use of UDIDs in apps or not. But it appears to be weaning the developers from reliance on the tracking technique, forcing them to scurry to alternatives. As Fiksu VP of Client Services and Business Development Craig Palli recently covered in depth at TechCrunch, the field is already fragmenting across many alternative methods, from HTML cookies to an OpenUDID project to MAC address tracking.

Ad networks appear to be supporting multiple methods in order to hedge their bets. Many are also hopeful that Apple itself will address the problem with a better solution that allows third-party ad serving and tracking without compromising user privacy.