Implications of the IDFA policy changes in iOS 14
Every iOS device comes with an ‘Identifier for Advertising’ (IDFA) that allows developers and marketers to track activity for advertising purposes. It may be used by advertisers to run remarketing campaigns and record purchasing or downloading conversions. It is the company’s alternative to the widely known cookies.
The IDFA has two key features:
It can be reset by the user at any time.
Users can opt out of all remarketing by enabling a device setting called "Limit Ad Tracking" (LAT), which restricts advertisers from using the IDFA for behavioral advertising.
In September 2020, Apple rolled out its current mobile operating system iOS 14 which is set to bring in several restrictions on the IDFA. Release is presently expected in early this year. These changes include preventing apps from using the IDFA without obtaining each user’s explicit consent for targeting. These were in accordance with Apple’s current policy of giving additional focus to customer privacy.
While some may argue that these changes are ground-breaking and are beneficial to the end-customer, the various stakeholders in the online tech world are not too pleased. Experts expect more than two-thirds of users will block tracking when they see a pop-up appear within their apps.
As per an article published by CNBC, analysts have said that Facebook and Snap have the highest potential headwind due to the IDFA changes, followed by Twitter and Pinterest. Google and Amazon are expected to have the lowest relative exposure. Expectedly, Facebook has led the resistance against Apple’s changes, taking out a series of newspaper advertisements in December 2020 which accused Apple of denying developers of as much as half of their ad revenues by removing personalization. In its testing, Facebook said that some users running iOS 14 either see no ads delivered through its Audience Network program or see ads that are less relevant.
As per another article published by the Financial Times, given Apple’s sheer power because of its unilateral control of the App Store (which in itself is a $500 billion market), only a limited number of other developers are willing to risk a public spat against them. Under such adversities, some developers are, in despair, considering using new and more intrusive forms of tracking, even if users deny their apps permission to use IDFA. These include using techniques like device fingerprinting which works by comparing a combination of a device’s hardware and software properties, configurations such as internet connections, battery or language settings, and patterns of usage. Another way to track consumers between apps is if they use the same email address to sign up for various services and games. “Hashed emails”, whereby addresses are turned into a string of letters and numbers, allow companies to share user details without directly handing over an individual’s email address to their associates. While these methods are banned under the App Store policies, they are hard to detect, so there is a possibility that numerous developers may resort to such means.
Only time will tell what the exact monetary implications of Apple’s policy changes will be. It is however abundantly clear that all current apps on the App Store will have to be innovative in order to be able to monetise user data effectively without violating any of its rules.
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