Apple’s iOS 14.5 Release: What Are the Implications for Online Advertising?


Touted as Apple’s biggest privacy update yet, industry experts caution that iOS 14.5 is poised to completely disrupt how apps track behavior. In this article, we explore the main implications of Apple’s most recent update, looking at the introduction of ATT, and exploring the benefits and disadvantages for both online advertisers and iOS users.

From now on, iOS users will have to opt-in for advertisers to gather personal data.

Companies use personal data in various ways. From the morning run logged on your Fitbit, to your purchasing habits on Amazon, each of us produces thousands of snippets of information throughout the course of our daily lives. Some of them can be very valuable to companies, particularly in terms of enabling businesses to fine-tune their digital marketing campaigns.

Targeted advertising allows companies to reach a select consumer group, helping them to reach “warm” leads, primed to make a purchase.

One of the key advantages of targeted marketing campaigns is cost efficiency. Targeted advertising enables marketers to home in on a target demographic, bypassing the rest of the population and avoiding individuals with no need or desire for the company’s products. Data about potential clients is simple to access, with social media platforms like Instagram, Twitter, and Facebook making it easy for marketers to reach their target demographic.

Major Apple iOS updates are typically released every autumn.

Annual updates adding headline features are usually followed by smaller, subsequent fixes, making minor improvements and eradicating bugs and flaws.

The iOS 14.5 update is something entirely different.

This much delayed revision to iOS programming will introduce new controls, curtailing the ability of apps to track unwitting and unwilling iOS users. For the first time, iPhone users will have to opt-in for apps to track their activity online.

Experts warn that the advertising industry faces a day of reckoning regarding its past abuses of personal data. Given that Facebook Ads generated more than $84 billion in revenue in 2020 alone, the social networking platform is particularly unhappy about Apple’s most-recent system update.

After the update, iOS users will choose between “Ask App not to Track” and “Allow.”

The latter option could potentially have a devastating impact on Facebook, and other companies that rely heavily on CPM revenue. When announcing the update on April 20, 2021, Apple acknowledged that the update would significantly affect digital marketers relying on iOS to help them track and target consumers.

The impact for online advertisers.

iOS 14.5 will enforce an AppTracking and Transparency (ATT) prompt in the App Store. Apps that do not incorporate the prompt will simply be blocked from the platform.

An Identifier for Advertisers (IDFA) is assigned to every iOS user, consisting of a unique string of numbers assigned to each iPhone that provides advertisers with data about the user. The IDFA shares personal information, enabling advertisers to deliver personalized advertising, in addition to conferring tracking and attribution capabilities.

Released in 2013, Apple’s IDFA works in a similar way to Google’s Advertising ID, which has been incorporated in Android phones since 2014. Both identifiers enable advertisers to track downloads, clicks, and purchasers within mobile apps. This data can be leveraged by advertisers to produced personalized ads within apps, returning relevant, targeted advertisements to produce clicks and ultimately drive sales.

Released on April 26, 2021, industry insiders predict that following mass adoption of iOS 14.5, the percentage of iPhone users sharing their IDFAs within apps will plummet from 70 percent to just 10 percent. Merkle Corporate Chief Strategy Officer John Lee cautions that if, as expected, the majority of consumers opt out of IDFA tracking on apps, this will depreciate the ability of advertisers to target and track at an individual level.

Hugo Loriot, a partner at the data consulting firm Fifty-Five explains that the new framework will not only have consequences for online advertisers, but could significantly affect how apps are developed in the first place. According to Loriot, Apple’s new privacy framework will make it virtually impossible for mobile apps to attribute installs or app events to add exposure.

In the wake of Apple’s announcement regarding the introduction of ATT, many developers set about rebuilding their apps in the hope of circumnavigating some of the new policies, Experts warn that Apple is having none of it, rejecting numerous attempted updates. The overwhelming message to developers is rebuild as you see fit, but don’t even think about trying to bypass the tech giant’s new ATT policies.

iOS 14.5 effectively turns off ad tracking identifiers by default.

The move follows a wider market trend towards privacy-enhancing technology. Civil liberties groups have praised the move by Apple, with Digital Content Next CEO Jason Clint praising the changes as the most significant improvement in digital privacy in the internet’s history, although, for digital marketers, the full impact of the iOS 14.5 update has yet to be seen.

For example, Apple products represent less than 50 percent of the market. According to Bloomberg, Google is investigating the development of an alternative privacy feature; however, the company has an interest in balancing the needs of consumers against the desires of advertising partners. So it may be a while before Android users have access to anti-tracking tools as robust as those recently introduced by Apple.

%d bloggers like this: