Why so many advertisers on Apple’s iOS are still tracking with UDID

Even the best-laid plans to protect user privacy require a bit more patience to come to fruition. As part of the release of iOS 6, Apple took a big step for user privacy: it rolled out a new system for advertisers on its platform that replaced the use of unique device identifiers. The move was hailed for its intention to give users more control over their personal information, while at the same time allowing publishers to better target ads. But almost three months after the introduction of Apple’s new Identifier for Advertisers, the transition is slow-going: according to one estimate, at least 90 percent of advertisers, ad networks and publishers on iOS are still using UDIDs to track user behavior and target ads.

It took serious privacy concerns to get Apple(s AAPL) to move away from UDIDs, which were supposed to be anonymous: Researchers showed that it was possible to identify an iOS user by their unique ID with just a bit of additional information. A Wall Street Journal investigation in 2010 first brought public attention to the fact that dozens of apps they tested were sharing personal information with these companies, like age, gender and location. That kind of information could be connected with UDIDs to identify and track specific users’ behavior.

The Identifier for Advertisers, or IFA, is a new set of APIs rolled out quietly in September specifically for advertisers. Unlike a UDID, an IFA is not a number that is forever associated with a particular device — users can choose to reset it, or opt out altogether. Still, since September, the new identifier is not being adopted very quickly, according to Craig Palli, vice president of business development at mobile app marketing company Fiksu.

“What we see is currently less than 10 percent of the traffic is supporting IFA,” he told me in an interview last week. The traffic he’s referring to is from hundreds of thousands of app publishers’ data his company has access to. While usage rates around 10 percent are pretty small, he believes that over the next few months there will be a rapid shift coming, especially after the beginning of the year. He is forecasting that IFA use “will achieve a critical mass in the second half of Q1 or first half of Q2” 2013. By that time, it will have been about 16 months since Apple first announced it would crack down on publishers and advertisers’ usage of UDID to track users.

What’s taking so long

There are three big reasons the IFA transition has yet to take hold in meaningful numbers. One of them is Apple’s fault — an egregious bug in the system — BUT one is simply a function of bad timing, and the other relates to the sheer effort needed to steer a very large industry toward a new practice.

Many publishers, advertisers and ad networks were all set to adopt IFA. But when Apple rolled out the change in iOS 6, there was a big problem: a bug that rendered everyone’s IFA as a string of zeroes.

“It killed the whole purpose of IFA,” said Michael Oiknine, CEO of Apsalar, a mobile behavior tracking platform.

That meant companies like Apsalar and its clients had no way to measure app user behavior or the effectiveness of in-app ads. If a company tried to use Apple’s new system, it would have had a big gap in its usage statistics in trying to track users that upgraded to iOS 6, said Oiknine. In other words, moving to IFA would have been a big setback.

Bad time for a big switch

The bug is fixed now. But for many publishers, timing the transition to occur in the fall was not ideal. Making the transition from UDID to the new identifier takes time, and a lot of companies don’t want to try to make the switch around a time when a lot of people are getting new mobile devices and starting to use different apps, many for the first time. There were over 6 million iOS and Android device activations on Christmas Day alone last year. Advertisers and publishers want to get to know their new users and start showing them ads from the start.

“The industry could’ve moved a little faster if this were released in a Q1 time period and not up against a critical holiday time period,” said Palli.

But even without the timing aspect, the reality is that getting any industry to adopt a new standard quickly is always a challenge.

UDID remains the standard, Palli said — but there’s also digital fingerprinting, and first-party HTML cookies being used instead of IFA. However, he’s positive the industry is going to embrace Apple’s new solution.

“There is definitive contemplation that there be an industry transition period between UDID and IFA,” so it’s not a huge surprise it’s taking so long. It’ll happen, said Palli. “I think that the industry is highly interested and motivated to get there.”