Apple’s ATT and its impact on Privacy

Organisations are doing everything under their power to improve the rising user demands for more privacy, transparency and control in regard to their digital lives.

With the launch of iOS 14.5, Apple stood true to its promise which it made at WWDC (Apple’s annual Worldwide Developers Conference) last summer, giving more control to iPad and iPhone users over how their data is tracked and collected by app developers. With the new update comes bundled an AdTech-disrupting feature called App Tracking Transparency that has transformed the way advertisement technology operated before.

App Tracking Transparency (ATT for short) is the new privacy shield. It requires applications to ask permission from iOS, iPadOS and tvOS users for tracking their activities across other companies’ apps and websites. ATT appears as a pop-up notification, guiding users into the app’s purpose of tracking them across other companies. Opt-in to app tracking whereas generates ad and content relevance, opt-out circumvents the incredible threat of hyper-targeting and profiling.

This framework, to a greater extent, drags the unwarranted cross-site tracking competence closer to users’ court, giving more influence over how their information is collected and used off-app. Apple’s ATT is a continuation of Steve Jobs’ privacy legacy, who once while addressing the 2010 Wall Street Journal D8 conference, explained how Apple wraps its head around data privacy with a more conservative view compared to its Silicon Valley neighbours.

App tracking–before and after ATT

Identifier for Advertisers (IDFA), a unique iOS device identifier that enables marketers and advertisers to track users as they move between apps, is used by marketers to target adverts to specific iOS users at scale and measure the performance of ads.

IDFA, which has existed since iOS 10, comes as an opt-in by default. It is controlled with a ‘Limited Ad Tracking’ (LAT) feature which Apple put in place to let users opt-out of having their IDFA tracked.

In iOS 14.5, the LAT feature comes enabled by default, which means users now have to opt-in to IDFA tracking on an app-by-app basis. Given the user doesn’t consent to an app’s tracking request, IDFA in such a case ceases to exist.

LAT addresses privacy from the consumer side. In contrast, the ATT framework tackles privacy from the marketer side. The combined effect of ATT and LAT potentially diminishes the efficiency of advertisers’ targeting and ad personalisation campaigns.

In Android, Google Advertising Identifier (GAID) is used for identifying devices. Apple’s ATT has no impact on GAID. As of the writing of this article, Google has been reported to recently writing an email to Android app developers, announcing the advent of iOS-esque privacy update in Android 12 onwards operating system.

Interpretation of ATT “Tracking”

One of the biggest struggles on the ATT compliance front is making sense of Apple’s framing of what constitutes “Tracking”.

Apple defines “tracking” both as sharing user or device data with data brokers and as linking user or device data with data collected by 3rd party apps, websites or offline properties for targeted advertising or advertising measurement purposes.

With Apple’s ATT framework the company is pushing the AdTech industry from an opt out model to an opt in model. Among many other implications, consumers are about to get many more notifications than they did before and face many more decision points about how their data is handled.

Apps, meanwhile, will likely find it harder to gain consumers’ consent than under the opt-out method of the past given individuals’ status quo bias.

Though the above definition sounds straightforward enough, professionals see the definition as problematic on various levels for the consumers. The language around “Tracking” is causing distress to the consumer in the sense the word “Tracking” comes as somewhere scary despite being used for all good intent and purposes.

Invasion of Facebook advertising by Apple’s ATT

Apple’s framework did not come critic-proof, Facebook being diametrically opposite of Apple’s stance on privacy. Criticising Apple’s ATT, Facebook called it harmful for small businesses who rely on Facebook advertising to promote their products and services. Facebook argued that Apple’s ATT positions it as a third party and repels users from seeing ads based on their past online activity.

Before ATT came into effect, Facebook advertising extensively relied upon third-party data to tailor-made personalised content pertinent to their target audience. Facebook is a company that feeds on user’s data, relies on it and has been able to build a huge digital advertising platform.  Given users the option of opt-out of tracking, ads placed by Facebook advertisers on the Audience Network will not reach the iOS 14.5 user segment, which will result in the decrease of audience size and thus, resulting in  Facebook’s ads revenue shrunken.

Facebook can still track users through its platforms–Instagram, Facebook Messenger, WhatsApp, GIPHY–but it can no longer track user information across external applications if users deny so. Along with narrower data sets and reduced capability of optimisation, ATT has far-reaching impacts on Facebook’s conversion tools like Facebook pixel.

For larger publishers of online content such as Google and Facebook, the effect will not be quickly visible, as the decade-long proprietary databases amassed by them is enough to rescue them for now. Smaller companies, though, that depend on targeted advertising to reach customers, will find Apple’s new approach to privacy a clear problem–a point that Facebook raised altruistically. 

We understand that the biggest impact will be on the SMEs who rely heavily on creating the revenue models based on mobile tracking and serving the user with the right kind of advertisement as per their browsing history or as per the user behaviour. 

Impact of ATT on digital marketing

There are various factors that account for paradigm shifts in ad networks, like government regulations, laws and policies; OS they run on, such as Apple’s iOS 14.5; ad network owners, like Facebook and Google; browsers such as Google and Safari. This time it is the effect of Apple’s operating system’s that’s resounding across digital advertising space.

Uncertainty of AdTech success swings on consumers’ will to accept or refuse the tracking request. Most statistics predict revenue generation from ads to drop to as low as 10%, which also looms over $640 billion projected global digital marketing size by 2027.

Apple’s ATT will stop a stream off a data that app developers, measurement companies, and advertisers have used to link users’ behaviour across apps and mobile websites, a very important move that will re-shape the digital advertising industry.

The diminished precision of user identity, prompted by ATT, reduces the effectiveness of advertising measurement. A low opt-in rate deals a blow to targeted algorithms whose success hinges upon performance metrics extracted from ads’ insights and conversions.

In order to aid Advertisers in navigating the limitation in data availability introduced by ATT, Apple is offering a measurement solution that is called, SKAd Network (SKAN).  SKAN service makes the performance data available at the campaign level and solves the issue to some extent: it provides the advertisers with insights but deprives them of conversions. What has changed with ATT in AdTech is that advertising in SKAd Network is measured on a campaign level, rather than a user level. Unlike Facebook, Google has switched to SK Ad Network and, therefore, it won’t need to show the request notification to users.

SKAN falls within the domain of Differential Privacy, it’s an approach to marketing measurement that uses statistical methods to make it impossible to infer any individual’s behaviour while still allowing linking of behaviour across different digital properties.  Differential Privacy is likely become more prevalent in times to come. 

Amid Apple’s enforcement of stringent ATT rules, advertisers are moving away from iOS and towards Android, ensuing a steep shift in ad prices–going down for those directed at iPhones and iPads and up for those targeted at Android devices. Android ad prices have gone up by as much as 30%.

According to a new Wall Street Journal report, for the lack of data, the ad spending that has targeted iOS is also now much less targeted to specific demographics.

“Digital advertisers say that they have lost access to much of the granular data that added to the effectiveness of mobile ads on iOS devices and justified their spendings. Since ATT took effect, ad-buyers have deployed their iOS ad spending in a much less targeted way compared to old-way possible.”

Source: https://www.wsj.com/articles/after-apple-tightens-tracking-rules-advertisers-shift-spending-toward-android-devices-11625477401?mod=rss_Technology

Privacy strengthened for Mobile users with ATT

As more and more people become conscious about data privacy, the opportunity for app developers to track users’ activities across apps will shrink and, inevitably, so too will the $189 billion as per 2019, mobile advertising industry’s competence to convert personal data into revenue.

However, at the same time, the mobile advertising industry globally is expected to surpass USD $220 billion by 2022.

Source :Mobile ad spend worldwide 2007-2022 | Statista

Consumers who objected to being tracked online took Apple’s release of iOS 14.5 at the end of April earnestly. According to the latest data from analytics firm Flurry, only 6 out of 100 users in the US–and 15 out of 100 users worldwide–have so far chosen to stick by opt-in choice after updating their devices to iOS 14.5.

Source: https://www.flurry.com/blog/ios-14-5-opt-in-rate-att-restricted-app-tracking-transparency-worldwide-us-daily-latest-update/

Stats presented by StatCounter represent 48.15% of iOS users worldwide–and 54.34% in the US–have so far (June 2021) upgraded their devices to iOS 14.5 and beyond, which is only a warning sign for advertisers to brace themselves for the market scenario forward–expectedly more turbulent and privacy-oriented.

Source: https://gs.statcounter.com/ios-version-market-share/mobile-tablet/worldwide

Conclusion

Apple is a brand that has taken both the public and strategic stance that Privacy is a fundamental right.  Both its business plan and products follow “Privacy by Design” principle fully giving rise to a trustworthy eco-system for its users that offer Privacy and Trust as an inherently embedded in their products.

We can understand the commitment of Apple on building trust and privacy from the following statement:

“We design Apple products to protect your privacy and give you control over your information.  It’s not always easy.  But that’s the kind of innovation we believe in.”

As the privacy landscape is rapidly evolving globally and newer regulations and legal frameworks are getting enacted by countries to safeguard their data and create an environment of trust for their citizens or residents, Apple is in the forefront for ensuring trust and privacy.

As a result of above, intrusive marketing is close to becoming obsolete, third-party cookies and mobile identifiers are being uprooted. In dearth of a better way to deliver advertising, users never know whose hands their personal information might end up in and for what purpose. For dilution of such a dire need, Apple’s ATT is a major step forward in ensuring the transparency and privacy to its users.

With the rollout of ATT framework, Apple is re-imagining and reshaping the role of advertisers even with its own eco-systems.  This move will allow the company to tightly control user’s app experiences and content curation.  It will also allow Apple to push its own targeting advertisement to users.  It will establish Apple as a leader in privacy and it will help in strengthening its brand in the global market.

Apple, being true to its claim of ensuring transparency, privacy and building trust for its users, has released an excellent document depicting the journey of data that it travels. 

Kindly read “A day in the life of your Data” released by Apple at A Day in the Life of Your Data (apple.com).

We at Data Secure(www.datasecure.ind.in can help you to understand Privacy and Trust while dealing with data and provide Privacy Training and Awareness sessions to improve upon the knowledge of Privacy what you already know.

For any demo/presentation of solutions on Data Privacy and Privacy Management as per EU GDPR, CCPA or Draft India PDPB 2019 and Secure Email transmission, kindly write to us at info@datasecure.ind.in.

For downloading the various Global Privacy Laws kindly visit the Resources page in DATA SECURE – Privacy Automation Solution

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