With iOS 14.5 release, Apple’s App Tracking Transparency is finally out. The advertising industry is taking a significant hit, giving users the choice to reject apps to track their activity.
Apple’s move is a revolutionary step in data privacy. But it turns out to be marketers’ biggest nightmare with no way to track their data whatsoever. According to rumors, the $110 billion industry would receive a 60% cut.
Let us understand what Apple’s new ad policy is and how it is disrupting the advertising industry.
Apple’s Ad Tracking Transparency Policy
As a part of App Tracking Transparency (ATT), Apple will now need apps to get a user’s permission to track their activities for targeted advertising purposes with iOS 14.5, iPadOS 14.5, and tvOS 14.5.
Here is Apple’s official statement on the same:
Make sure your apps are ready for iOS 14.5, iPadOS 14.5, and tvOS 14.5. With the upcoming public release, all apps must use the AppTrackingTransparency framework to request the user’s permission to track them or to access their device’s advertising identifier. Unless you receive permission from the user to enable tracking, the device’s advertising identifier value will be all zeros, and you may not track them.
As a reminder, collecting device and usage data with the intent of deriving a unique representation of a user, or fingerprinting, continues to be a violation of the Apple Developer Program License Agreement.
What is this behavior Apple?
Apple believes that privacy is a fundamental human right, and it is its moral duty to protect that at any cost. Thus, iOS 14.5 gives more control and transparency over the data and its use.
Over 70% of iOS users currently share their IDFA (Identifiers for Advertisers); after the update, an ongoing analysis suggests that most users are leaving app tracking disabled ever since the feature’s release on 26th April 2021.
Users get a popup notification that permits users to allow or block the tracking for each app. This is similar to the iOS 13 notification update for the location, as shown below.
When I read the news first, I couldn’t have been more amazed. The consumer part in me was happy, but the marketer in me was worried about the future of digital advertising with Apple devices.
It is a no-brainer that data privacy and Apple have always gone hand in hand. Be it the infamous Apple vs. Facebook feud, or Apple updating its privacy policies after the iOS 14 release or introducing the privacy labels.
Apple’s ATT move has gotten the analysts thinking of Apple’s motive. Is it purely data privacy, or is Apple not being supportive of digital advertisement? It seems like the feud reached Tim Cook, for he addressed this issue directly in his interview with the Toronto Star.
He emphasized that Apple is not against digital advertising and believes that users should have transparency and control over their data if they are being tracked for advertising purposes.
According to him,
“We’re not against digital advertising. I think digital advertising will thrive in any situation because more and more time is spent online, less and less is spent on linear TV. And digital advertising will do well in any situation. The question is, do we allow the building of this detailed profile to exist without your consent?”
Cook reiterated that Data Privacy is a fundamental human right, and the world is yet to experience it. Cook has high hopes from the world, eventually catching up to Apple’s ideals.
How is Apple iOS 14.5 ATT update impacting advertising?
The customers have been asking for data privacy for years now; their prayers have been heard. To give this a broader perspective, data collecting platforms such as Facebook and Instagram are facing a big challenge.
Let’s talk about Facebook and Instagram
ATT is another attack on Facebook as it heavily depends on ad revenues for which user data is essential. The most vociferous opponent of ATT, Facebook had been urging its audience even before the update was released to allow tracking for its apps, but it has now gone a step ahead to say that if the users want to keep the app free of charge, they must enable tracking in iOS 14.5.
Technology researcher Ashkan Soltani noticed popups on both Facebook and Instagram after the public release of iOS 14.5.
The company calls them ‘Educational Screens,’ a message that is a justification of Facebook tracking data to keep the platforms free of cost.
In this popup message, Facebook explains that with the implementation of iOS 14.5, developers need permission to track some data to improve their ads. The popup also mentions three ways that users are benefitted from this collection:
- More personalized ads.
- Keeping Instagram/Facebook free of cost.
- Supporting small businesses that rely on ads.
Does this mean Zuckerberg will start rolling out a paid version of Facebook sometime soon?
The answer to this question lies in the future, but the current situation is surely against Apple’s Human Interference guidelines as they are offering incentives to users to enable tracking.
You may see the prompts in the coming weeks, as the social media giant has just started rolling out the popups, and it may take some time to show up on your device.
Does this mean you cannot see ads?
iPhone users always had this option to disable personalized ads with their iPhone.This policy affects the amount of tracking control that the apps have over you.
Imagine you have a secretary moving 24/7 with you, noting down every activity you do from recording to work-out time to things you Google. Now he shares this data with all your friends and family and exposes you. You wouldn’t want that to happen now, would you?
If you wouldn’t be comfortable with a real person hounding you all the time, how can you allow your apps to do the same with you? This is what Apple has stopped with the policy. No secretary, no data mining without your permission, therefore no unwanted advertisements.
To see the hindsight, you may now be targeted with random ads based on guesses. These long-shot ads won’t help either party, as you will get to see random (as against personalized) ads, which will kill the companies’ conversion ratio.
How does ATT affect me?
If you are a marketer
With no relevant data in your hand, you may not be able to tap into your potential clients. In that case, you end up showing random ads to users with reduced conversions.
Ad targeting: Retargeting ads will become extinct due to a lack of insights into what the potential customer is looking to buy.
Ads measurement: Ads being showcased based on pure luck will increase advertising costs and significantly impact ROI. When you don’t have specific user behavior data, you will likely target a broader group, thus, increasing your ad spends.
Reduced conversions: Let me explain this with an example. When you go to a Zara store to buy clothes, you are likely to get confused about what suits you the best with the number of available options. You know you want to buy something, but not sure what. In our case, the clothes are your ads, and the person walking in is your customer.
Off-site behavior: How many times have you seen an advertisement moment after discussing a product with your friends? This is quite a common occurrence. With ATT lock on, you won’t be receiving those ads anymore because the apps will no longer have access to intriguing conversations.
If you are a customer:
Data Privacy: If you choose to opt-in, apps cannot track your activities on your device. So, do anything you please!
Generic ads: If your potential client does not have any details of your product, they will bug you with everything they have. This is why you may never see a relevant ad. Thus, you end up missing some great products.
If you are a developer:
Loss in revenue: With reduced ad conversions, you are likely to see a drop in your commission-based revenues as well.
How to survive the update?
Companies are researching the possible diversions to this big market. While Facebook claimed that the impact of iOS 14.5 would be manageable, it remains to see how.
Here is what you as a small business can try:
- Shift to Android.
- Offer in-app purchases.
- Keep your app paid.
These do have their pros and cons but can prove to be options generating some income rather than closing the doors for IDFA on the whole. Of course, if Apple vs. Epic witnesses an expected turn, then things can go either way.
The data privacy revolution is a long way to go
I agree that the targeted ads can be a little annoying at times; they often provide us with information that we like. As exciting as the updated policy is, Apple’s ATT is undoubtedly not our knight in shining armor yet.
I see this step as an attack on the mobile ad-tech industry than protecting data privacy. It would be interesting to see how this industry is ready to fight back.
What are your views? Let me know in the comment section below.
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An entrepreneur by heart, I am obsessed with the world of Apple. I survive on Apple products and their updates. Over the last five years, I have been writing all kinds of content that are remotely connected to Apple and sharing across digital platforms. When not writing, you will find me on the court playing basketball or in my room playing the sitar.