“It affects the end users and app owners, both as advertisers and as publishers,” says Barak Witkowski, VP core product at AppsFlyer. The changes affect how marketing is measured and how users are targeted, he says. “This is about the option to see full-funnel from things that happen before the app install, and after the app install.”
The changes could also shake the foundations on which ad tech is built. “Yes, ad tech funds publishing, but the question is, ad tech has always taken a really big chunk in the middle,” the publishing executive says. “If you break the ability to measure, does the money really flow away from publishers, or do buyers find a new way to buy, in-app and on the open web?”
Further complicating the relationships between publishers and ad tech is the App Tracking Transparency’s consent mechanism. If a user taps “Ask App not to Track,” iOS not only unlinks information that the app generates from a user’s IDFA, it tells the app owner not to track the user or share that user's information. This opens up a potential pitfall for publishers, who could be on the hook for ad tech companies that use data provided to publishers.
Larger publishers with robust sets of first-party data say the possible loss of revenue from Apple’s changes is not concerning, since the bulk of advertising revenue isn’t through the iOS app. “This is a piece of our pie, but not the biggest piece of our pie,” says Julia Beizer, global head of digital at Bloomberg Media. Instead, she says smaller publishers without first-party data will be most at risk as the changes cut off valuable streams of data on users. “[The changes] are here to stay. We should be excited about these changes. But we also have to serve our business,” says Beizer.
Some publishers see Apple as an increasingly uneasy bedfellow, with rumors swirling about the tech giant’s possible move into personalized advertising. “Because Apple sold cell phones and their hardware was where they made most of their money, [personalized advertising] was not something they were going to exploit,” the publishing executive says. “It looks as though Apple is going to make these privacy changes and then delve deeper into personalized advertising.”
While Apple undeniably benefits from the privacy-focused sheen the move gives off, Schmitt says there are other potential gains for the tech giant, particularly from hedging against having its own services marginalized. By clamping down on alternative ad identifiers, Apple forces developers to rely on the IDFA for advertising strategies. Schmitt also points out that restricting user data also prevents developers from working “around” the iOS App Store.
“App developers using IDFA were able to use that rich user data to determine whether they were using the apps, how often, whether it was because of something they saw, whatever,” says Schmitt. Advertisers could then use this information to encourage installs of other apps. “[Apple’s App Store] became a checkout counter, and that’s not what Apple wants.”
Fending off marginalization can also help pave the road for Apple’s next move into advertising. Apple is reportedly planning to add a second advertising slot in its App Store search page, the Financial Times reported on Thursday.
Publishers say the changes will force them to create a new iOS specific strategy. “It’s the applications that are heavily reliant on open exchange programmatic that are going to be the most negatively impacted,” the publishing executive says. “Most news publications have a very very loyal audience who is very very engaged, but they tend to be small, and so they tend to not monetize very well with open-exchange programmatic.”
While publishers agree that there is a separate iOS strategy needed, industry watchers say the most significant shifts in strategy will come in the next quarter because of the time it takes for a user’s operating system to be updated, then for the user to eventually open the app and be confronted with the pop-up. Once publishers receive enough responses to the prompt, they can then make a decision on how the app—and the publisher’s overall strategy—can be adjusted, says Beizer.
The industry’s reaction is critical, since it could foreshadow the industry’s reaction to the loss of another, more popular and more consequential advertising identifier. “It’s exactly the same thing as getting rid of cookies,” says the unnamed executive.