Ad tech runs for cover from Apple's privacy drop
Apple CEO Tim Cook has set a deadline for new iPhone data-collecting rules—changes that have Ad Tech companies bracing for a profound shift in the way they collect consumer data.
The iPhone maker plans to roll out more aggressive privacy measures in its iOS 14 update. Tech companies and advertisers are expected to be the hardest hit as the changes limit the amount of data apps can obtain about their users.
The changes, which Apple says are coming in “early spring,” will introduce a mandatory pop-up prompt asking for user permission before an app can track users across different apps and websites. Apple announced the changes last year but delayed the rollout after pushback from developers. The new privacy controls will affect Apple’s Identifier for Advertisers (IDFA), which assigns a unique number to a user's mobile device. An app must obtain explicit permission from users through a popup for app publishers to use the IDFA to track them across different apps and websites, or to share that information with third parties.
The fight is no surprise to some. “Most organizations haven’t experienced a seismic shift in the way an industry works,” says Nii Ahene, chief strategy officer at Tinuiti, an online ad performance and marketing agency. The changes have been a long time coming, and were telegraphed early and often, Ahene says. “This is immensely frustrating for me since we’ve been talking about this since July.”
Apple’s move was praised by privacy-minded corners of the tech industry. “By putting it at the point of use, it gives you control on how to handle data,” says Kaili Lambe, senior US campaigner at Mozilla. “I think this is one of the first times the user is given control, and it’s on by default,” says Lambe. “It’s setting the standard for how users should have control over the data—it should be easy to use, easy to understand, and not complex to research.”
Some companies are trying to make the best of the situation. Ajit Thupil, chief product officer at Tapad, says some app developers are testing language for the prompt to see what wording will convince users of the benefits of accepting the changes. “If you are not prepared, and you use language that does not give you the best shot of people signing up, then you run into issues,” said Thupil.
But for other parts of the tech industry, the move led to confusion and pushback. Oren Kaniel, CEO and co-founder of AppsFlyer, says the changes and lack of clarity on the rollout’s timing have led to confusion among app developers, who “don’t know what to expect” from Apple. “There needs to be more collaboration with Apple and app developers,” he says.
Kaniel also warns the new restrictions could oversimplify user privacy. “Choices are really important for consumers, but you now only have two choices: either you tell the apps don’t track me and do nothing with my data, or you tell the app to take my data, sell it, and do whatever they want,” says Kaniel. He says a middle ground can be found by educating consumers about privacy, what it means for their data, and providing a spectrum of choices.
Some tech companies say the change will prevent them from reaching core audiences. In documents filed ahead of an IPO offering, dating app Bumble said “app users’ opt-in rate to grant IDFA access will ultimately be approximately 0 to 20%. As a consequence, the ability of advertisers to accurately target and measure their advertising campaigns at the user level may become significantly limited and app developers may experience increased cost per registration.”
Facebook prepared to take its long-simmering public campaign against the changes to a new level. Earlier today, The Information reported that Facebook is preparing to file an antitrust lawsuit against Apple, alleging Apple is forcing app developers to comply with App Store rules that its own apps are exempt from.
A Facebook company spokesperson declined to comment on the potential suit, but added, “As we have said repeatedly, we believe Apple is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of app developers and small businesses.”
At the Computers, Privacy and Data Protection conference in Brussels today, Apple CEO Tim Cook defended the changes, saying “Technology does not need vast troves of personal data, stitched together across dozens of websites and apps, in order to succeed. Advertising existed and thrived for decades without it.”
The battles being fought now may shape advertising strategy for years to come. “The next decade is gonna be marked by a focus on privacy by design,” says Ahene. “Whether you’re CMO or CFO, switching your thinking to realizing what worked in the last decade may not work in the next, that’s huge.”