How Apple’s IDFA/ATT Change Will Affect App Publishers
Apple’s pending privacy changes have been buzzing for months. Apple announced last year that it would introduce a new App Tracking Transparency (ATT) feature that will let users know when companies want to track them across apps and websites and give them the option to opt-out of being tracked. In other words, tracking via the Identifier for Advertisers device on iPhones, or the IDFA, will be opt-in.
This will reduce the amount of personal user data that’s collected and prevent app publishers from understanding user behavior. Essentially, by making the IDFA opt-in, Apple will prevent platforms from tracking users and targeting ads to them as effectively as before. It’s expected that this will result in poorer ad campaign performance and higher costs for advertisers.
Apple also said it will require app developers to self-report the kinds of permissions that their apps request. This in itself poses potential problems, such as the ability for platforms to exploit and incorrectly report the data collected.
The IDFA trade-off
For users, the promise is to improve transparency, allowing users to know what kind of data is required to use the app. Recently, we’ve seen the rise of an ‘era of distrust,’ where users are more and more wary of the intentions of major corporations. Apple is right to try to make changes that regenerate that trust.
However, how data is collected and used outside of an app is often misleading to end users. When users see a notification that an app is collecting personal data, typically it’s the social platforms and ad networks (like Facebook) that are using this data to create user profiles and track users to target ads. The app publishers themselves don’t have access to the data. Apple’s ambiguous messaging leads users to believe that the app is collecting and using their data, when in fact, app publishers have no access to their data.
This news is causing great upheaval in the mobile app advertising ecosystem. For the past 10 years, app publishers have relied on IDFA to efficiently market their products on platforms like Facebook. Removing this key tool makes cost-prohibitive user acquisition budgets even more unattainable for small businesses.
As you can imagine, the backlash was large and loud as platforms, ad networks, and app publishers alike voiced their concerns over being unprepared for such drastic changes in 2020. As a result, Apple delayed the implementation of ATT and IDFA changes until March 2021.
While there’s been a lot of focus on how this impacts ad tracking on the larger platforms and networks, like Facebook and Google advertising, there are concerning implications for app publishers. The changes could affect the shape of the App Store and startups in particular.
How ATT Could Change the App Store Landscape
When Apple begins to enforce its ATT feature, users will be able to see which apps are tracking them and revoke or grant permissions as desired.
What people haven’t been talking about is how this feature could change user behavior even more widely — perhaps even going so far as to drive uninstalls. Could these changes impact which apps users decide to download entirely, thus reshaping the App Store? We think so.
Today, a wide variety of user data can be collected based on user permissions, such as accessing a user’s age and gender, contacts, location, calendar, ad network, email, and wallet for payments. Even more sensitive data can be collected both with and without user permission, such as recorded audio, phone call logs and SMS messages, and IP addresses, which can be used by the social platforms and ad networks to create a profile about the user.
The App Store is dominated by genres that collect this information: from Games and Entertainment to Business and Productivity, Lifestyle and Health to Travel and Food, Finance and Shopping, Education and News. Clario reported on which apps collect the most personal data about users, and per their report, Facebook collects the most data at 70% of personal data collected. Some other surprising apps to see in this list include Nike, Ikea, Amtrak, McDonald’s, and Facetune.
As more transparency around data collection (whether true or misleading) becomes available to users, confidence could be rattled in apps they download. And app developers would feel the impact on ad performance from the social platforms and ad networks that rely entirely on leveraging user data to target ads effectively. In just a few short months, the top apps and genres in the App Store could swing in the direction of those that rely on and collect less data. Clearly, it’s an area of concern to watch over in the coming months.
How ATT Will Affect Startup App Publishers
With IDFA changes, Apple has essentially pushed the reset button on app marketing for iOS. To date, IDFA has powered iOS app marketing, including: user tracking, marketing measurement, attribution, ad targeting, ad monetization, programmatic advertising (DSPs, Exchanges, SSPs), device graphs, retargeting, and audiences.
We know the top ad platforms are preparing for the new world with less IDFA tracking — one with partial IDFA views, fingerprinting, SKAdNetwork, deeplinks, Android, and more. Facebook came out strong with their concerns, and also published a series of updates to app marketers and developers on how to structure their campaigns for these changes.
But whom this change really hurts are the startup and SMB app publishers across genres from gaming and entertainment to ecommerce, finance, productivity, and more. It will be much harder for the SMBs to advertise if confidence in effectively measuring the results is gone. App publishers are going to have to reinvent and reeducate how they buy media and measure the efficacy of media spend.
What Needs to Happen Now, Before ATT Goes into Effect
Apple is right to want users to have more transparency, but the current strategy they’ve presented with ATT and IDFA does not accomplish that. In fact, it actually helps bigger, more established companies by turning users off to newcomers — when really they should be wary of the social platforms, like Facebook, Google, Instagram, Snap, TikTok, and more.
Apple should change course and stop hurting small businesses that create the lifeblood of variety and creativity that make up the App Store. If Apple doesn’t change course, we’re in for a possibly very humbling year for SMB app publishers and an App Store that advantages the largest publishers with the biggest wallets.
Ross Krasner is CEO/Cofounder of Ryu Games.