How Apple iOS privacy changes will impact the advertising industry

July 29, 2021 8:00 AM

Apple’s privacy changes are a part of a greater movement to give online consumers more control over how their personal data is used digitally

With users opting out of tracking, opportunities for advertisers to serve them with targeted ads have come downWith users opting out of tracking, opportunities for advertisers to serve them with targeted ads have come down

By Vibha Singh

The year 2021 is touted to be the year of change, especially for advertisers. Apple has rolled out the latest update to iOS (14.5) that has given its customers more privacy and enabled them to opt out of ad tracking. This will provide more transparency with regard to iOS app data collection as new privacy labels will be put up on the App Store.

Though this new security update is more likely to affect Facebook advertisers the maximum, yet it will go on to have an impact on all the paid ad platforms to a certain extent. To adapt to this new development, digital marketers will have to come up with new benchmarks, workflows and best practices. Apple’s privacy changes are a part of a greater movement to give online consumers more control over how their personal data is used digitally.

Apple’s Privacy Changes: An overview

After the release of general availability of the latest iOS (14.5), all the apps in the App Store will require permission from the users to track them across different apps and websites owned by third parties for the purposes of advertising and measurement of user activity via its App Tracking Transparency framework. The prompt requirement by Apple will forbid the collection and sharing of data by businesses unless people opt to go for it. This has put limitations on those businesses using advertising for mobile apps on iOS devices as well as those that drive their business goals through their website.

With users opting out of tracking, opportunities for advertisers to serve them with targeted ads have come down, leaving a drastic impact on the performance of ad campaigns. Majority of platforms, including Google, Facebook, Twitter, etc., will be using SKAdNetwork for connecting with platforms by using it via S2S integrations, while Search Ads in Apple will have its framework. SKAdNetwork is Apple’s privacy-friendly way of attributing clicks and impressions to app installs on the apps in Apple Store. It shares conversion data with the advertisers without revealing any device-level or user-level data. It attaches attribution parameters upon the ad click. So, when the app is installed by a user for the first time, it will send an install post-back notification to the ad network or MMP, including the campaign ID and other relevant information.

As a result, ad networks like Facebook and Google will gain less insights into the user app-activity via ads subsequent to installation

Impact on advertisers

For businesses running their ads on Facebook, Google, and Instagram, there will be a huge impact that these changes will likely bring about. Here are the major areas where the advertisers are affected:

Ad Targeting

Many targeting types (including re-targeting) no longer works for users that have opted out of sharing their respective IDFAs. Ad inventory on all platforms has got impacted due to limited tracking viability.
The practices which have evolved over the last few years such as running on a broad audience will no longer be suitable practice going forward. Advertisers will now need to define precise audiences (preferably mutually exclusive and exhaustive) and manual interventions on optimisations would be required.

Ad Measurement

Mobile Measurement Partners (MMPs) have become ubiquitous in the industry, having built their measurement and fraud-detection capabilities on top of IDFA. Now they have moved to SKAdNetwork, which allows for conversion data to be passed back at the campaign level. This, coupled with whatever probabilistic models they come up with, will still not be enough to compensate for the highly precise IDFA based targeting.

Ad Optimisation

That holy grail of performance marketing, ad optimisation, will cease to exist in its current avatar. In the absence of IDFA, an ad campaign cannot have frequency capping, optimisation basis recency, segmentation, behavioural targeting, and more. Also, Apple will pass only install level data at the campaign level. Say goodbye to deterministic optimization on other goals like purchase, view-through, repeat purchase, and so on. Note that while ad targeting may not get affected significantly on Google and Facebook, optimisation most certainly will. There will be lower usage of events such as acquisitions. Acquisition as an event needs to be tracked separately being highly customised.

Attribution

The entire game of progressively making your ad campaigns better depends on attributing the successes and failures to corresponding tactics, media, and/or data. Multi-channel attribution will suffer unless SKAdNetwork adds more functionality. There is a stark limitation in the install post-back. Now there is only a 24-hour window from Apple’s side, meaning attributing to converting media after that will be well-nigh impossible. Even large platforms with deterministic datasets are limiting their attribution windows. Now by default, Facebook is limiting the attribution window to a 7-day click and a 1-day view, instead of a 28-day click and a 1-day view. This will reduce the number of events recorded by campaigns/ad sets/ads, impacting the benchmarks and their learning.

IDFA and its Android counterpart AAID are device identifiers used in mobile apps only. If a user accesses the web via a mobile browser on their Apple device and does not interact with any in-app environment in the session, the advertising they see will still be governed by existing cookie-based identification.

Summing Up

Going forward, with the release of this new update, first-party conversion data from users consenting will be extremely important now more than ever. Advertisers need to work on creating remarketing campaigns and lookalike audiences from data sources such as CRM. Though this update carries the potential to reshape the paid media ecosystem significantly, it will take some time for advertisers to understand entirely the extent of that reshaping.

The author is VP, digital strategy and communications, ET Medialabs

Read Also: Dell emerges as India’s most desired brand: TRA Research

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