The Fiksu Blog

How an expanded privacy setting in iOS 10 will impact the mobile advertising industry

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Earlier this week, Apple revealed a major update to their “Limit Ad Tracking” setting in the forthcoming iOS 10. This update will give iPhone users greater control over their “Identifier for Advertising” (IDFA), specifically as it relates to what is shared with advertisers.

In its current form (iOS 9 and earlier versions), when turned on, Limit Ad Tracking sends developers and advertisers the user’s IDFA and a flag indicating that the user does not want ads targeted based on their locations or behaviors. However, and this is an important distinction, under Apple’s Developer Terms, IDFAs are still accessible to advertisers for purposes of “frequency capping, attribution, conversion events, estimating the number of unique users, advertising fraud detection, and debugging.” While the setting does limit advertisers’ ability to act on users’ data, these exceptions are critical since most mobile advertisers are paid based upon this type of ad-level attribution.

When iOS 10 rolls out later this year, Apple will completely change what is shared with advertisers once Limit Ad Tracking is activated. Instead of sending advertisers a user’s IDFA and a flag, advertisers will now be returned a new value of “00000000-0000-0000-0000-000000000000,” effectively anonymizing all activity from users with that setting enabled.

This is a big change for all parts of the mobile industry, including mobile users, publishers, and advertisers.

iOS Limit Ad Tracking

Mobile users

Today’s mobile users are increasingly concerned about their privacy and the extent to which their personal information is shared and used by third parties. It’s also apparent from the popularity of ad blockers that many people are dissatisfied with their mobile ad experience. Yet the changes to Limit Ad Tracking won’t improve that experience.

Users tend to conflate privacy and ads, and many may assume that this setting is an “Apple made” ad blocker. But this is incorrect. Instead of reducing the number of ads a user is shown, it will result in generic and poorly targeted ads — say promoting a concert at a venue located across the country. It also removes advertisers’ ability to limit the number of times an ad is shown to a particular user, so users may find themselves seeing the same ads again and again.

After a time, some users may understand that blocking their IDFA is the root of their unsatisfactory experience. However, just as many may place blame on advertisers and the general mobile industry, never understanding how their choice to limit tracking contributed to the experience. True privacy hawks will welcome the added element but are also likely to already be employing other, more effective measures to guard their identity from third parties, like ad blockers and VPNs.

Advertisers

According to Fiksu DSP’s data, as of July 2016, only 14% of iOS users had turned on Limit Ad Tracking. Regardless of whether Apple’s changes increase or decrease useage of Limit Ad Tracking, advertisers cannot absorb this loss of data even at the current levels.

For advertisers trying to improve the performance of their ads, not having attribution data will hinder their ability to optimize based on user behavior. Likewise, without the ability to attribute clicks, publishers will have a hard time getting paid on the results of the ads they display. And in the end, it’s likely that advertisers will start coming up with their own technologies for tracking and attribution, thus sending the industry back to the pre-IDFA situation.

Take away

Since Apple created IDFAs in 2012, they’ve become the industry standard for attribution and targeting, so it’s curious that they’re minimizing the value of their own creation.

It’s clear that Apple wants to make Limit Ad Tracking a much more significant privacy setting. Whether this is due to the sunsetting of the company’s iAd business, or other ulterior motives (Facebook), remains to be seen. We’ll be closely monitoring how much attention Apple gives to the update and whether it gains in popularity once iOS 10 is live.

However, what remains true is that people respond best to ads most closely aligned with their interests. Delivering the right message to the right people is a critical function of your mobile DSP. Our dataset, which includes 90% of iOS users in the US, allows our clients to do just this.

If you need help getting in front of the right people on mobile, we can help.

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