How will iOS 14 affect your app marketing and why is Apple doing it?

The Apple announcement to revamp its forth-coming OS into a less intrusive ecosystem has created a fuss in the whole online advertising environment that forecasts to upend the whole ad industry status quo.

What´s going on in simple terms is a clash of clans in the ad tech business seeing Apple prying their competitive advantage to decrease its rivals market-share and single-handedly slash a portion of the existing framework that falls under its umbrella through an outwardly gleam of a user-first and privacy shrouded new policy.

The Cupertino powerhouse has in fact kindly invited all their marketing stakeholders to transition their API into a successive experience called SKAdNetwork as, from the iOS 14 rollout onwards (expected in early 2021), they will migrate into a new framework called ATT (AppTrackingTransparency) that requires all their users adopting this operating system to opt-in for ad tracking when they install a new app.

Along with the GDPR regulation that came into force in the EU in 2018, this is announced to be the biggest thing in terms of users data protection in quite a bit, at least for Apple consumers.

The order of things as of today is that — unless the user changes its device settings proactively — all the marketing players (Facebook, Google as the major ones but also many others) deliberately assign a unique code to each device called IDFA upon a user opening an app installed after clicking or viewing of an ad from their network of placements. While these identifiers are anonymous and encrypted they help them measure whether their ads have generated a subscription, where they have shown and to what type of consumer has been exposed to it using granular data to enhance both the experience of the users and advertisers outcomes.

Does Apple gain itself anything with that? No, or rather, not as much as the others.

Today around 70% of iOS devices have an IDFA assigned but when this new update will come into force — according to optimistic estimates — it is expected to drop to 15% as, similar to the GPR, iOS 14 is requiring marketing developers to mandatorily show a pop-up warning to all users, asking them to agree with the tracking of their identifiers to which most of them will gladly deny, crippling the capabilities that these external platforms have to track users ads behaviours anonymously.

While this is not a paramount blocker for all ads appearing within Facebook or Google owned platforms (as they hold many other deterministic identifiers to track users such as emails, profile ID, cookies etc), such transformation will fiercely hit programmatic players (Irounsource, Criteo etc), attribution MMPs (Appsflyer, Adjust etc) that do not collect more other information but also the Google DV 360 and especially the Facebook Audience Network (the big network that Facebook shares with millions of external publishers out of its native ecosystem). They all will need to sort out their way-to-go about that.

The impact is said to have such an effect that Facebook released an official statement announcing that:

1. The Audience Network will become so ineffective that it will be entirely shut off for all iOS-14 devices and gradually throughout the years for all forth-coming iOS devices following suit.
2. FB won’t be pulling anymore IDFAs for any of their placements (which as said it’s not a big deal).

Data protection and online privacy is a serious business that involves us all and we all agree to be long way off but while this can be read as a long-waited regulation on iOS users personal privacy, it is worth mentioning that poor personalization and attribution ads features offering negative users experiences are expected to hugely rise, while, under this silo approach, those platforms, including Apple, are unlikely to know less about what we’ve searched, where we’ve been and what we do like. (It is also worth remembering that most of the internet platforms we use everyday for both personal and professional purposes are majorly at no cost and this is thanks to advertising, namely effective advertising, that allows them not to monetize directly on users and improve their products continually).

Apple owns its business and it’s in the position to do whatever reckons right, though not opening a table of discussion with the whole industry looked like a pondered non-inclusive business plan. The my-way-or-the-highway approach has been a quite common framework at Apple in the last decade whatsoever.

On top of that, external publishers, mostly falling under the SMBs sphere, will be as impacted as Facebook Audience Network without the diversification opportunity that at Menlo Park they have, likely causing a massive decrease in their revenue reducing the whole programmatic ad economy to an oligarchy of few powerful players. Untargeted and untailored ads are indeed as of today just a waste of money and small publishers will be the ones to majorly bear the brunt of this adjustment.

Apple furthermore, that had more than once previously agreed with the current modus operandi being far-away from a privacy breach, is indeed not being affected by this change as the new framework will only apply for those trying to move data across platforms, and being Apple proprietary of their own devices, their own OS, App store and DSP does not need to move data anywhere. It is hence elementary why iOS 14 is much more of a war declaration towards Facebook than what it is towards Google that will still leverage its BI from Android, Google Play Store, their channels and its infinite network of the Google internet of things. From Apple, in simple words, they won’t need to show any opt-in pop-up to their users regarding ads tracking or ads personalization but stick with the current policy that includes that preference option lost somewhere within the device settings even for iOS 14.

The Cupertino bigwigs have consistently reaffirmed that their main effort is not driven by the purpose of limiting IDFA-sharing with stakeholders but by just making users aware that they are sharing their data. Despite this, rather than a privacy-first standpoint initiative, it looks more like a strategic move to show Facebook the competitive power Tim Cook´s band holds as a business asset and fight back the duopoly in the app marketing industry. With this, Apple seems poised to willingly push the whole ad ecosystem into a more standardized area where in any case they will undergo minimal loss but fairly reduce the gap vs their competitors. ASA is indeed an Apple restricted ecosystem and small, yes growing, but still a small fish in the advertising industry and won’t lose any or too much of market share by following future universal regulations in the ads industry that may slip out of their hands.

Thus far, the relationships between those colossus (Facebook, Google Apple etc) have always been governed by a sort of bon-ton and mutual consent, at the end of the day Apple monetizes 15% to 30% standard commission for all in-app purchases happening on their App store and if a great vehicle to drive that cash was called Facebook, they did not feel like throwing a spanner in the works just yet. The reaction (kind of a retort?) of Facebook shutting off Audience Network out right is hence not great news for the iOS App store profits either. But so, will even Apple undergo a revenue loss out of this? It is possible, especially in the short term. Will it be as big as Facebook´s? Surely not!

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According to what we can read the biggest limitations that migrating to the SKAdNetwork will bring are as of today as follows (these can be subject to change until the exact date and further indications are released).

• Deprecation of deferred deep-linking (the capability to access a specific page of an app for users who haven’t installed the app yet but will be redirected to that specific section upon the installation), Custom audience exclusions (a low blow for remarketing campaigns) and negative filterings.
• In-app conversions will not be provided in real time but in batches with a latency of 24–76 hours without a date stamp parameter.
• Apple will return click-through conversion windows of 30 or 60 days only. The 1d, 7d and 28d look-back windows will be deprecated. View-through attribution will also be deprecated.
• SKA will deprecate demographic breakdowns, such as age or gender of the users.
• Post-install events will only be provided at campaign level and not at ad set or ad level. Facebook creative strategy is then hypothesised to move into a more dynamic and automated organization for app install campaigns.
• In light of all of those it is likely that specific bidding types oriented towards revenue such as ROAS and ROI bidding will be highly impacted and probably no longer available on Facebook and Google. They both have recommended using a new Ad Account for campaigns targeting iOS 14.