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Explainer: The new Apple ad tracking policy

Explainer: The new Apple ad tracking policy

A new feature is being introduced to Apple iOS devices that will allow users to block their personal activity data from being collected by any app installed on these devices.

Social media players like Facebook are very concerned that such a change will dent their massive revenues that are derived from obtaining, storing, analysing, and monetising such data.

WHAT IS APPLE DOING?

Apple is introducing a unique device identifier on every iPhone and iPad, called the IDFA (Identifier For Advertisers). Companies that sell mobile ads, including Facebook, use this IDFA to both target ads and estimate their effectiveness. IDFA can be paired with other tracking technology, which follows users around the web, to learn even more about their behaviours.

With the release of iOS 14.5, this new app tracking transparency feature will be the default setting. It will force app developers to explicitly ask for permission from users to users to turn this feature off.

WHY IS APPLE DOING THIS?

Apple has limited interest in its customers' data because its business model is derived from devices and in-app purchases, not advertising.

Apple co-founder the late Steve Jobs said "Privacy means people know what they're signing up for, in plain English and repeatedly... ask them, ask them every time," he said.

Since the days of Steve Jobs, Apple has always been customer privacy focussed. More recently, current Apple CEO Tim Cook said: "If a business is built on misleading users, on data exploitation, on choices that are no choices at all, it does not deserve our praise. It deserves reform."

Apple is baking privacy into its systems. Its browser Safari already blocks third-party cookies by default, and last year Apple forced app providers in iOS to spell out in the App Store listings what data they collect.

WHY IS FACEBOOK DISPLEASED?

Facebook has warned that the app update could cut the money earned through its ad network by half, hitting small businesses the hardest. And it argues that sharing data with advertisers is key to giving users "better experiences".

It also says that Apple is being hypocritical because it will force businesses to turn to subscriptions and other in-app payments for revenue, from which Apple takes a cut.

As is often the case when under pressure, Facebook has gone on a PR offensive. It took out adverts in national newspapers in December, featuring small businesses talking about how they only survived the pandemic thanks to targeted ads.

In its latest blog, Facebook appeared to accept the changes and promised "new advertiser experiences and measurement protocols". It admitted that the ways digital advertisers collect and use information needed to "evolve" to one that will rely on "less data".

HOW DOES THIS IMPACT THE CONSUMER?

In recent years, governments and regulators have become increasingly concerned about just how complex, intrusive, and opaque, and intrusive consumer data collection and analytics have become, evidenced by the Cambridge Analytica scandal (https://www.theguardian.com/news/2018/mar/17/cambridge-analytica-facebook-influence-us-election) and similar. Governments and regulators around the world are now beginning to implement policies that will severely curtail the inappropriate collection of consumer data.

  • The average app includes six third-party trackers that are there solely to collect and share your online data, according to a report commissioned by Apple.
  • Some apps request access to far more data than is required to operate their service. TikTok, for instance, is being sued by England's former children's commissioner for collecting excessive amounts of users data.
  • The UK's Information Commissioner's Office is investigating programmatic real-time bidding leading to the daily automatic placement of billions of targeted online adverts on web pages and mobile apps.
  • Any data broker is estimated to have data on in excess of 700 million consumers, according to research consultants Cracked Labs

WHAT ABOUT THE DIGITAL ADVERTISERS WHO INDIRECTLY FUND MUCH CONTENT?

These and similar changes have been on the cards for some time. Max Kalmykov has written that advertisers need to "prepare for the next, privacy-focused era of digital advertising". This may include contextual ads, such as fashion-related ads appearing only on websites about fashion rather than randomly following people across the web. Ad placements on podcasts or with influencers would be another non-intrusive way of advertising, he suggested.

Meanwhile, Apple says that it supports the ad industry, and has introduced new free tools that let advertisers know how successful a campaign has been, without revealing individual users' identities.

ARE THERE OTHER WAYS OF TRACKING PEOPLE?

If you don't have a unique number attached to your device, it doesn't mean that you can't be tracked.

Device fingerprinting combines certain attributes of a device - such as the operating system it uses, the type and version of web browser and the device's IP address to identify it uniquely. It is an imperfect art, but one that is gaining traction in the advertising world and one that Infomo embraces.

Google’s Federated Learning of Cohorts (FLoC) promotes a model of tracking people usage in a privacy-friendly way. This model is supported by the Interactive Advertising Bureau (IAB) who are currently undertaking trials https://www.exchangewire.com/blog/2021/03/31/google-begins-floc-testing-iab-releases-buy-side-tech-specs-for-comment/. In effect, a browser enabled with FLoC would collect information about browsing habits and assign users to a group, or flock, with similar browsing histories. Each will share an ID that will indicate their interests to advertisers.

CONCLUSION

The global advertising industry, whether traditional offline media (tv, radio, print, ooh, etc.) or digital online media (web/app) is dependent upon targeting potential audiences. There is acceptance, often unwilling, that things must change. With an industry dominated by goliaths, who will always consider their interests first, we can expect an extended period of disruption and dissension amongst the stakeholders across the estimated USD650 billion annual global advertising market.

With thanks to Apple, BBC, Cracked Labs, Medium, Statista, Verge.


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