Apple vs AdTech: The History, Impact, and Criticism of Apple’s Privacy Changes

AdTech Industry, Data & Privacy

Apple vs AdTech: The History, Impact, and Criticism of Apple’s Privacy Changes

Published on March 24, 2021, Updated on June 23, 2021 by

Over the past few years, Apple has made a number of changes to its devices, web browser (Safari), and operating systems to increase user privacy.

In this blog post, I’ll aim to tell the history of Apple’s various privacy changes, explain what they mean for programmatic advertising, and look at some of the criticism that Apple has faced as a result of its changes.

A Brief History of Apple’s Privacy Changes

Apple’s first privacy move can be traced back to 2015 when it introduced Content Blockers in iOS 9, allowing users to install third-party apps that can block certain types of content in Safari, such as ads, tracking scripts, and other elements that can cause a page to load slowly.

The next big move came in June 2017 when Apple announced that it will be releasing a new privacy feature called Intelligent Tracking Prevention (ITP).

ITP is designed to prevent cross-site tracking, a practice that underpins many programmatic advertising and digital marketing processes (more on that in the next section).

ITP was officially launched in September 2017 with the release of Safari 12 and iOS 11.
Since then, Webkit (the web browser engine that powers Safari) has released many updates to ITP.

Each update has strengthened the privacy settings and either limited or removed workarounds created by companies to continue identification and cross-site tracking.

In June 2020, we saw Apple make yet another privacy move by announcing changes to its IDFA in the upcoming release of iOS 14.

Essentially, if app developers want to collect an iOS user’s IDFA and pass it to their AdTech partners (ad networks, SSPs, MMPs, etc.), then they’ll first have to ask users for consent to do so.

Although most of Apple’s privacy changes were added to the release of iOS 14, back in September 2020, Apple announced that the changes to its IDFA would be delayed until early 2021.

These changes were rolled out with the release of iOS 14.5, iPadOS 14.5, and tvOS 14.5 on April 26, 2021.

According to Ivan Fedorov, New Business Director at Admixer:

“The upcoming update will drastically affect the techniques used for user segmentation and retention. While advertisers usually have structured user bases, best practices of re-engaging users and optimizing campaigns, the changes to IDFA will render most of the void. As a result, it will be virtually impossible to retarget a large portion of users.”

In June 2021, Apple announced that more privacy changes will be introduced with the upcoming release of iOS 15, as well as iPadOS 15, macOS Monterey, and watchOS 8. 

The changes include new privacy features to iCloud+ subscriptions including Private Relay, Mail Privacy Protection, and Hide My Mail. The update will also include changes to Intelligent Tracking Prevention and SKAdNetwork, as well as a new App Privacy Report. 

The Impact on AdTech and Programmatic Advertising

All of these privacy changes are designed to do one thing: Prevent companies (mainly AdTech and MarTech companies) from being able to identify individuals across different websites and apps (i.e. prevent cross-site tracking).

For advertisers, agencies, tech companies, and publishers, these privacy changes mean carrying out the following key programmatic advertising processes is limited or impossible in some situations:

  • Audience targeting (e.g. reaching audiences created in a DMP via DSPs).
  • Retargeting.
  • Frequency capping.
  • Measurement and attribution.
  • Ad fraud.

As you can see, these processes are crucial for the effectiveness of programmatic advertising campaigns, which is why Apple’s privacy changes are so severe.

Even Apple Has Its Critics

Apple’s strong stance and action on strengthening user privacy has attracted a lot of praise, particularly among consumers and privacy advocates.

But there are some who have criticized Apple’s privacy changes for a number of reasons.

When Apple first announced it would be introducing its ITP feature, six advertising trade groups, including the IAB and 4As, penned an open letter to Apple stating that its approach to increasing user privacy was “opaque and arbitrary.”

They claimed that Apple’s privacy changes are bad for consumer choice and bad for ad-supported online content and services.
 
Another Apple critic is the European Center for Digital Rights (commonly known as noyb) that recently filed complaints against Apple’s changes to its IDFA.

The group’s complaint acknowledges Apple’s recent plans to restrict access to its IDFA but states that Apple will still collect IDFAs.

…the initial storage of the IDFA and Apple’s use of it will still be done without the users’ consent and therefore in breach of EU law. It is unclear when and if these changes will be implemented by the company.” — noyb.

While most people in the programmatic advertising and AdTech worlds would say that Apple’s changes to IDFA are harsh enough, nyob says that Apple should go even further:

The IDFA should not only be restricted, but permanently deleted.” — nyob.
And then there’s Facebook.

In December 2020, Facebook ran a series of print ads in the WSJ, NYT, and Washington Post saying that Apple’s changes to the IDFA will ultimately hurt small businesses.

While that’s somewhat true, the changes to the IDFA will negatively impact Facebook and the Facebook Audience Network (FAN), which is an ad network that allows advertisers to show ads to both Facebook and non-Facebook users across different apps.

So really, Apple’s changes to its IDFA will hurt Facebook, which in turn will hurt its clients (i.e. advertisers, publishers, and app developers).

Analysis from Eric Seufert states that Facebook could see a 7% revenue drop in Q2 2021 because of Apple’s changes to its IDFA.

Final Thoughts

Apple hasn’t really paid any attention to the criticism it has faced as it believes that privacy is a fundamental human right.

It must be said, however, that increasing user privacy does make Apple’s walled garden bigger.

Apple’s changes to IDFA could even increase its revenue gained from in-app purchases via its App Store as some app developers may choose to start charging for their apps if the ad-funded free version no longer makes financial sense. As a result, Apple will receive a share of the app purchase. 

But one thing is for sure: don’t expect Apple to take its foot off the pedal.

In fact, you can expect to see even stricter privacy settings across Apple devices, Safari, and operating systems as it continues its privacy crusade.

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