In a world where digital advertising has become a cornerstone for businesses trying to reach their consumers, Apple has thrown a curveball with its latest privacy changes in iOS14. For years, advertisers have benefited from third-party data collection that allows them to target users based on their browsing patterns, buying habits, and personal preferences. But with Apple’s recent updates, this approach is now facing a major disruption that will affect the way advertisers operate.
At the core of Apple’s changes is App Tracking Transparency (ATT), a new feature rolled out with iOS14 that requires apps to ask permission to track users across other apps and websites. Once an app is downloaded or updated on a device with iOS14, the user will automatically see a pop-up asking if they want to allow tracking. For users who say ‘Ask App Not to Track,’ third-party marketers can no longer access their Identifier for Advertisers (IDFA). Essentially, this drastically limits third-party apps’ ability to collect user data for targeted advertising.
Impact on Online Advertising Landscape
The impact of this shift in privacy settings has been profound on online advertising. While large companies can rely on first-party data or other means to target their audience, smaller firms, typically more reliant on third-party data, are affected the most. The changes have also affected platforms like Facebook and Google, which use third-party data for personalized advertising. As more users opt-out of tracking, the effectiveness of personalized ads has reduced, leading to higher advertising costs and reduced Return on Ad Spend (ROAS).
How Advertisers Should Respond
Advertisers must adapt to these changes and shift to alternative strategies. The shift to Contextual Advertising, where ads are displayed based on the content the user is currently viewing rather than their past behavior, may become the new norm. Businesses can also focus on their own website and app analytics for first-party data to shape their marketing strategies. In addition, exploring collaborations with influencers for native advertising could be another alternative approach.
Apple’s changes to its privacy settings are set to disrupt the traditional ways of online advertising. While this presents a challenge for current practitioners reliant on third-party data, it also offers an opportunity to explore and innovate new advertising approaches. In the setting of this disruption, adaptation and agility have become more important than ever for businesses looking to engage effectively with their audience in the digital space.