Since Apple made headlines in 2016 for refusing to assist the FBI in unlocking an iPhone 5C owned by a terrorist involved in a mass shooting in San Bernadino, the Cupertino company has earned the reputation for being the gold standard of personal device privacy.
Introducing Apple App Tracking Transparency
In April of this year, Apple introduced iOS 14.5, which, among other things, installed a new feature called App Tracking Transparency. Many apps collect user information to use internally or to sell to third parties. How App Tracking Transparency works is that when an app wants to track the user’s information, their phone prompts the user with a notice and asks them if they will allow their information to be shared. Many users, of course, will enable the apps to track their data, and many apps will certainly make data tracking a requirement for using the app, but users will no longer have to manually opt out of data tracking — if that’s even a choice.
Who Stands to Lose from This Update?
Unsurprisingly, two of the most outspoken opponents to this new feature are Facebook and Google — both companies rely heavily on data tracking to monetize their products.
Companies tracking the purchases and preferences of individuals is not a new concept, and it predates the advent of both the cellphone and the internet. But since the technical advances in these closely-related industries have exploded, data tracking has become more or less automatic.
Google, which also produces its own smartphones and operating system (Android) that competes with the iPhone, introduced a new security dashboard with the Pixel 6. The Android 12 system update has various security improvements but does not warn users about data tracking. Google has repeatedly stated that it does not sell user data — which it gathers from your internet searches, Chrome usage, Maps, etc. — to third parties. Google claims that the data they collect assists them in better anticipating what customers are seeking. That does not, however, prevent third parties from obtaining data through phone apps, and Android phones will not warn users of third-party data tracking.
Facebook uses member data to target its users with specific ads. This is known as direct response advertising. Because there are close to a billion iPhones in use worldwide, Facebook stands to lose a substantial portion of its ad revenue as more users opt to stop sharing their private data. In fact, in October, Facebook warned that their ad revenue would be down and pointed to iOS devices as the cause.
How Is Amazon Reacting?
Industry analysts suggest that Amazon may be largely unaffected by this upgrade because the online retailer already has a vast trove of user information through their own data collection processes. Individuals search for Amazon products in the Amazon app. Consequently, they are less reliant on Apple user data revenue.
How Agency Partners are Responding
Although iOS 14.5 may make advertising in specific mediums more challenging for marketers, direct response advertising is not the only way to garner conversions.
Successful internet and social media marketing firms tend to prefer multi-tiered approaches that spread client resources across several different campaigns.
Contact us to learn more about accessing clients who use the opt-out for tracking.