Apple Is Changing How Digital Ads Work. Are Advertisers Prepared?
The rollout of Apple’s new privacy settings is upending the rules of digital advertising on the iOS platform. By limiting advertisers’ ability to track user behavior, Apple is forcing them to adapt to a new paradigm — and fast. As other tech companies may soon follow suit, this disruption is an opportunity for advertisers to prepare for the coming era. They should embrace new privacy preserving approaches; know that privacy workarounds are a short-term strategy at best; transition away from user-centric models; invest in better understanding their audience; and use ad creativity as a way of differentiating themselves from rivals.
Apple is turning the privacy settings of its mobile ecosystem upside down. When it releases its app tracking transparency (ATT) framework with iOS 14.5 on April 26, it will shut off a stream of data that app developers, measurement companies, and advertisers have used to link users’ behavior across apps and mobile websites — a move that could reshape the digital advertising industry. With the update, the “identifier for advertisers” (IDFA), which has been activated by default on Apple devices and provides access to user-level data to app publishers, will be switched off and users will need to grant apps explicit permission to access it. With in-app prompts asking users, “Allow [app name] to track your activity across other companies’ apps and websites?” opt-in rates will likely be low.
We anticipate that Apple’s ATT initiative will deliver a major blow to targeted advertising, which is crucial to the business models of publishers of online content such as Facebook, Google, and many news outlets. But while large digital content providers will feel the effects of ATT, the large proprietary datasets they’ve amassed may protect them in the long term. Smaller companies, such as e-commerce operations that rely on targeted advertising to reach customers, and mobile measurement providers, which collect and organize app data, will likely find it harder going — a point Facebook has tried to bring home in a campaign responding to Apple’s policy changes.
