In 2020, Apple announced implementation of their App Tracking Transparency (ATT) prompt planned for early 2021. Meaning, they are requiring developers to display a message which allows users to opt into ad tracking for each app they download, providing consumers with choice around how their data is collected and used. But are they? Let's unpack the impact of this change for consumers and Facebook advertisers.
Do you enjoy free apps?
If the answer is yes, and you own an Apple device, then you should be concerned. The foundation of the freemium app economy is built on the execution of targeted, personalized advertising. Relevant advertising based on consumers’ behavioral histories and tastes is the means by which freemium apps aggregate large audiences and monetizes the app without charging the user. Absent personalized advertising, the freemium app economy will evaporate, and the App Store will look much as it did at launch in 2008, when apps came with price tags per download.
At least your data will be safe...
Assuming it was in danger to begin with. The ATT prompt doesn't help a consumer to understand what they give up if they opt out of tracking, or really what “tracking” means. Is this app developer watching me from my window? Can this app developer read my emails?
If Apple wants to provide consumers with real choice around how their data is collected and used, it should explain why their data is collected and used, and for what purpose. Would most consumers opt into ad tracking via the ATT prompt if they knew that doing so provided for their favorite mobile apps to be made available for free?
Apple wants beef with Facebook
Mark Z's platform relies heavily on aggregate customer data to provide advertisers with the hyper-targeting they've grown accustomed to in order to drive efficient campaign performance. The ATT is a direct hit for Facebook, prompting the platform to release a statement saying, "The policy and the limits it places on advertising will harm the growth of businesses and the free internet. We believe that free, ad-supported businesses have been essential to the growth and vitality of the internet, and that personalized ads and user privacy can coexist. We support proactive privacy measures and data transparency, but we don’t agree with Apple’s policy changes."
High-level Impact to Advertisers Apple’s policy will prohibit certain data collection and sharing unless people opt into tracking on iOS 14 devices via the prompt. As more people opt out of tracking on iOS 14 devices, ads personalization and performance reporting will be limited for both app and web conversion events. Specifically, these changes will limit your ability to:
Effectively deliver ads to people based on their engagement with your business
Measure and report on conversions from certain customers
Ensure your ads are delivered to the most relevant audiences at the right frequency
Accurately attribute app installs to people using iOS 14 and later
Predict and optimize cost per action over time and efficiently allocate budgets
As usual, the little guy loses again Apple’s policy will make it much harder for small businesses to reach their target audience, which will limit their growth and their ability to compete with big companies. Studies show that when running ads on the Facebook family of apps to drive sales on their websites, small businesses saw a cut of over 60% of their sales, on average, for every dollar they spent when they weren’t able to use their own data to find customers on Facebook.
Facebook won't give up Although they disagree with Apple’s approach and solution, Facebook will comply with the prompt requirement. If they don’t, they'll be blocked from the App Store, which would only further harm the businesses and users that rely on their services. Additional details on changes, plus guidance around new ad features and measurement solutions can be found here.
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Source: Facebook and Eric Benjamin Seufert