As you likely know, the recent launch of iOS 14.5 dropped the gauntlet on mobile data collection. That includes more in-app notifications to explicate data tracking, and to offer opt-outs. This is part of Apple’s broader privacy reform that most notably puts greater restrictions on the erstwhile-pervasive IDFA.
Like similar moves we’ve examined in the past — such as iOS 13 location-tracking notifications — this transparency could drastically reduce the level of in-app user tracking that’s possible. That tracking includes several things including your web history, app use, and location behavior.
The latter is obviously where local media and commerce come into the picture. App publishers, ad networks and brands/marketers have enjoyed more than a decade of in-app user tracking to inform ad targeting and attribution. That’s been gradually stepped back over time and now takes a big jump back.
Troubling Signs.
The big question is the degree to which users will take the invitation to opt-out of IDFA tracking. With more persistent and active notifications when they open apps, they may be more inclined to opt-out. Though there’s some evidence to the contrary, it stands to reason that a meaningful level of consumers will do so.
So we’ve been keeping our eyes and ears open for any proof points for consumer opt in/out behavior in the wake of iOS 14.5’s launch. The first such data just passed our desks from Flurry. The app analytics firm reports that only six percent of mobile users who have been asked to opt in to IDFA tracking have done so.
Though it’s early in the lifecycle of Apple’s new privacy restrictions, six percent is clearly alarming to the world of mobile publishers and ad tech. This is considerably lower than the 40+ percent range of IDFA tracking opt-ins previously estimated by some proponents of the mobile advertising world.
So what does this mean for mobile publishers, advertisers and ad-tech companies? They’ll have to find clever ways to target ads and content within these parameters. Beyond Apple’s moves, Google is likewise turning things upside down through deprecating the third-party browser cookie, pushing its Floc construct instead.
Context is King
One outcome of all of the above — beyond iOS 14.5 updates in particular — is industry consolidation. We’ve seen this play out in the location intelligence sector over the past two years. With growing restrictions on data collection, companies are compelled to join forces, pool resources and grow data sources through M&A.
We could see that trend migrate to the broader ad-tech world. If so, expect consolidation to follow in the coming months. We could also see an overall culling of the herd as escalating restrictions sink some ad-tech companies that don’t survive the storm. In all of these scenarios, industry shakeout is the outcome.
Speaking of survival — and going back to the earlier point about finding clever ways to target ads — we’ll see new approaches develop such as Google’s Flocs. We could also see a revival of older methods that are privacy-safe under the current restrictions. For example, contextual ad targeting is primed for a comeback.
Contextual targeting was prominent in early days of the web before the smartphone and browser cookie created a runaway train of behavioral targeting. It’s safe these days, as the content is being targeted versus the user. This means that innovation in contextual targeting could spark the next era of ad tech.
We’ll keep watching for more evidence and report back.
