Explainer: Apple IDFA app privacy changes

  • Apple is set to roll out a privacy-focused update next year that will require developers to seek permission from users before tracking them, and some industry insiders are preparing for a March date.
  • Advertisers and adtech companies are scrambling to prepare for the change by testing contextual ad targeting, among other things.
  • But analysts predict the change could wipe out $40 billion in mobile app advertising spend. 
  • Visit Business Insider’s homepage for more stories.

Apple threw a wrench into the mobile-app ad industry in June when it announced a major privacy update that will require app developers to get permission from iPhone users to track them, and the rumor swirling is that Apple — after postponing the launch date in September — is preparing for a March rollout, multiple sources told Business Insider.

The industry assumption is that most users will opt out from being tracked — which will prevent mobile advertisers, developers, adtech companies from accessing Apple’s Identifier for Advertisers (known as the IDFA) in order to target users with ads and measure the effectiveness of those campaigns.

Analysts from Arete Research estimated the change could wipe out $40 billion in mobile app ad spending, affecting companies ranging from tech giants including Facebook, Snap and Twitter to game developers and publishers.

Some companies and organizations, including Facebook, are loudly complaining about the potential fallout and saying Apple isn’t applying the same strict privacy standards to its own apps and services.

But the clock is ticking: As of December 8, Apple is requiring app developers to provide information for a privacy “nutrition label” about how their app collects and shares user data with third-parties. 

Here’s what you need to know.

Some are preparing for a March date

Apple hasn’t set an official date beyond indicating the changes, known as its new AppTrackingTransparency framework, will come “early next year.” 

However, the rumor circulating in the mobile advertising and developer community is the change will come in March to coincide with the release of iOS version 14.4 (the current version is 14.2.) Those people said Apple hadn’t confirmed this with them directly.

Apple didn’t respond to requests for comment.

Arete Research estimated in July that as many as 80% of users will opt out of being targeted, which has big ramifications for those who make money off mobile ads.

App developers could make less money if they have less data about how valuable their audience is to advertisers. Plus if they’re found in violation of Apple’s terms & conditions, they could be booted from the App Store.

Advertisers could get less information about whether their ads are working. In a September survey of 171 marketers conducted by mobile measurement company AppsFlyer and the Mobile Marketing Association, 74% of respondents said they expect the changes to negatively affect their ability to target audiences on iOS.

And adtech middleman could get less data to prove their value to either side. 

Facebook said in August that Apple’s move could reduce ad revenue for third-party publishers on its Audience Network by as much as 50% and that it could be forced to shut the service down on iOS. (Facebook didn’t say how it got to the 50% figure.)  

Companies are preparing for the changeover

Apple has sought to provide more clarity over what its definition of “tracking” can be applied to, including the practice of sharing other identifiers — such as a list of emails — with other companies. 

Meantime, mobile measurement companies have been looking at using Apple’s SKAdnetwork measurement platform, which provides basic details about which campaigns resulted in ad installs.

And while app publishers will try to find more ways to get people to create accounts that give the apps direct access to their data, ad buyers and their adtech partners are experimenting with contextual targeting methods to run ad campaigns.

Ad buyers used to shy away from buying traffic that didn’t have the IDFA attached, but they’re coming around to it, which will drive up ad rates, said Offer Yehudai, president of app monetization platform Fyber.

In June, traffic with the IDFA attached would fetch five times that of traffic without the identifier, he said. But the gap is already closing, he said, with IDFA-zero traffic reaching around 45 cents or 50 cents on the dollar in some cases.

Groups are fighting Apple’s move

In October, a group of French advertising associations filed a complaint with the French Autorité de la Concurrence (ADLC) competition authority in hopes of forcing Apple to delay the rollout again. They argue that Apple is not imposing the same condition on its own services and that the pop-up box permission box developers are required to use is not compliant with the European Union’s General Data Protection Regulation and ePrivacy Directive. 

Meanwhile, German and Spanish authorities are considering complaints from the privacy not-for-profit organization NOYB arguing that users should be asked for consent as to whether they are assigned an IDFA or not when they first install their phones, as per Article 5(3) of the EU ePrivacy Directive.

Apple has sought to make privacy and user control its point of difference, especially compared to other tech giants that derive the majority of their revenue from personalized advertising. It has said that its practices comply with European law, that its rules apply equally to all developers including itself, and that it has received support from regulators and privacy advocates for its new feature. 

But the writing’s on the wall with targeting

Ultimately, the entire online ad ecosystem is veering away from longstanding methods of tracking. Google has said it would remove support for third-party tracking cookies in its Chrome browser by 2022. Many in the mobile ad industry predict Google’s version of the IDFA, Android’s Advertising Identifier, is destined for the scrap heap, too. Plus, companies need to prepare for a patchwork of global privacy regulations.

“People who latch onto the past are going to struggle,” said Aaron McKee, chief technology officer at location data technology company Blis.

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