Since 2018 when the Facebook Cambridge Analytica data privacy scandal emerged, the ad industry has taken a new turn. Under the pressure of GDPR, data privacy has become a core focus for all advertisers, publishers, agencies and tech companies such as Google, Facebook, Amazon, and Apple.
During its latest Worldwide Developers Conference (WWDC), Apple provoked a lot of reaction with its new privacy announcement for the upcoming iOS 14 operating system. In particular, for its “identifier for advertising” (IDFA), giving iOS 14 users more transparency and control over data that concerns advertising activities.
When launched – roll-out is usually tied in with the autumn iPhone launches – iOS 14 will ask users to specifically opt-in to the availability of IDFA to any party, for any purpose of each app they install. This will imply that publishers will be required to provide a summary of their privacy practice, presented to users in a pop-up. Users will then have the choice between enabling or disabling any app developer stated in the pop-up.
This will create critical changes to the business and consumer user experience, but we remain unsure of the final impacts as Apple did not share information with, or consult, ad industry experts when designing this new feature.
What are the expected impacts on the industry?
The level of impact will depend on the rate of consumer opt-in to use IDFA, as such IDs are an integral part of business activities that the ad industry relies on. This includes ad targeting, frequency cap, measurement, attribution, audience segmentation, and geo-location data activity.
According to IAB Tech Lab, “any advertising ID removal materially affects all stages of the digital marketing life-cycle, and the entire business model for publishers, resulting in an average 52% decrease in advertising revenue”. The challenge is now in the hand of the app developers to motivate the users to opt-in to the IDFA feature.
Beyond the industry, we also believe such a change will have an impact on the user experience. Instead of working towards the industry standards that provide good baseline data protection (in the like of Google and Microsoft), Apple chooses to give the full choice to the user which in the long run may create data privacy consent fatigue.
We hope to hear more from Apple. In the meantime, we are talking to our core partners such as Google and Facebook to understand what the repercussions will be. Apple’s collaboration with operating system providers will be key in developing privacy and data protection standards.
Facebook has already announced that they will not collect IDFA on their own apps on iOS 14 devices and will not adopt Apple’s prompt. They believe their approach provides the most certainty and stability for our partners. They may revisit this decision as Apple offers more guidance. (More information on their blog can be found here).
Whilst we will wait for more information to draw more conclusions, we expect a different effect at the market level. In the UK, Apple’s iOS 14 currently holds a 49% market share.
For more information on the digital services we offer click here.