Apple Has Finally Implemented Its Privacy Overhaul, Here's What You Need to Know

Apple’s long-awaited privacy overhaul iOS 14.5 is here, and will drastically impact the $105 billion U.S. mobile-ad industry. The release sees the debut of Apple’s App Tracking Transparency (ATT) framework, which requires developers to ask iPhone users for permission to track their internet usage. Experts predict a marked reduction in the availability of Apple’s mobile ad ID, the IDFA, a key signal used to serve targeted in-app ads. Opt-in rates are expected to vary. A preliminary study from AppsFlyer estimates opt-in rates of 32%. Utility apps are expected to see rates of up to 45%, but gaming apps are forecasted to experience lower opt-in rates near low-20%. All of this means advertisers will need to reassess if their spend on iOS devices delivers a return on investment. Below is how each tier of the industry will have to adjust to iOS 14.5. Platforms The internet's biggest names such as Facebook and Google are widely seen as omnipotent, but Apple's iOS 14.5 will impact them as well. Sparrow Advisers cofounder Ana Milicevic says advertisers may use the reduced availability of IDFAs in the Facebook ecosystem to reassess their spend on the social network. Facebook's pending iOS woes are well-documented, with Mobile Dev Memo's Eric Seufert predicting it will experience a 7% revenue hit in Q2 as a result. Meanwhile, Google is also exposed, especially on YouTube, where it essentially claims credit for any conversion that was preceded by an opportunity to view an ad. "Similar to Facebook, we may quickly see that either platform's true contribution to conversions is, in fact, less significant than what it looked like when all events could be tied back to IDFAs," adds Milicevic. Advertisers Brand-led ad campaigns have grown ever more reliant on mobile to reach younger audiences. Media buyers recommend that advertisers prepare for the reduction in iOS audience insights by preserving any data signals they can. Large holding groups are preparing by investing in their own first-party data sources. Meanwhile, brands themselves are expected to work more closely with media owners to better match their first-party data. "Many media buyers are taking a data-neutral approach and building their own ID, as opposed to relying on a third-party," one brand-side source told Adweek. "Meanwhile, you have others taking a siloed approach, and optimizing each channel as best they can without paying much attention to granular attribution." Media owners ATT isn’t an immediate death knell for media owners, though it’s likely to cause headaches. For instance, open market CPMs on iOS devices are generally expected to drop by 50% once the update is in effect. News publishers are less exposed, since many have both reliable web and in-app traffic, and have a diversified ad revenue stream of both direct and programmatic sales. Some app developers and publishers are expected to pull their iOS inventory from the open market entirely, or at least rely more heavily on the direct business of programmatic guaranteed deals. MMPs and ad networks When IDFAs aren’t present, measurement must be done at an aggregate level through Apple’s attribution framework, SKAdNetwork. Some mobile measurement platforms (MMP) have attempted hacks to counter this, but Apple has quickly shut them down. Hence, experts advise simply embracing Apple’s guidelines. Branch, an MMP, advises advertisers to enable SKAdNetwork and ensure their ad network partners are also compliant with Apple’s changes, as the iPhone maker will hold them equally responsible for their partners' policies. Meanwhile, Apple has propped up SKAdNetwork as an alternative way to measure in-app ad performance. It's not a perfect IDFA replacement, said Denis Litvinov, cofounder and chief information officer of app developer FunCorp, explaining that it will allow for short-term decision making on ad buying and traffic monetization. Apple itself These changes come as Apple looks to expand its own advertising business. Over the last year, the iPhone maker has quietly been extending its Search Ads business beyond the App Store and into its other properties such as Apple News. Meanwhile, the Financial Times recently reported that Apple plans to add another ad slot in the “suggested” section of the App Store's search page. Apple’s Privacy Fortress Signals the End for Ad-Tech Patchwork Solutions

The Future of Identity

Apple Has Finally Implemented Its Privacy Overhaul, Here's What You Need to Know

How Apple's iOS 14.5 update will disrupt the mobile advertising sector

Andrew Blustein

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Andrew Blustein