Apple the master plumber. Apple iOS 14 tightens the ad pipes. Or changes it?

Having access to water is key to life. Building a pipe that controls how much access people have to water is super profitable.

On Monday Wall Street Journal reported that Apple released details of the iOS 14.5! It includes nice updates to familiar apps (i.e., Siri) and one controversial feature. This feature gives you, the iPhone user, the choice of whether you want apps to track your activity. That's great! It's called App tracking transparency (ATT) feature. Apple is tightening its pipe, to give people more power! Well...let's see.

It requires apps that want to track your activity and share it with other apps to ask your permission first. For context, Apple phones have a unique long string of characters that come with every phone, called an IDFA (Identifier for Advertisers). Does that mean once you brought the Apple product, you become the product? Google has something similar called AdID (Android Identifier). So, if you tell the app you do not want to be tracked, Apple will no longer share your IDFA. Additionally, the app will no longer track your other activities such as the other apps you have downloaded, search history and purchase history, recent locations and more. Pause. iPhone users, did you know you were sending out all of this data in the first place? Can you say SPECTRE? See visual aid of the current process below.

Exhibit: General process of mobile ads process

Anyway, this negatively affects app developers, the advertisers, and users. The app developers are able to make their product free or very cheap to iPhone users by making revenue off of the personalized ads that display while you are using the app. Less incentive to create free apps. Advertisers can no longer send you personalized ads, which means lower conversion rates for them (i.e., a lower chance that the user will click on the advertisement to buy the product). Advertisers may end up sending fertility drugs to a man who is using FanDuel (unless he was looking for the drugs...a new world).

So, with iOS 14.5, advertisers will have to wait three (3) whole days before they get insight into the performance of their advertisements. Additionally, they will only receive aggregate information (i.e., total users who took a specific action on the app, not individualized usage behavior).

However, (and that's a BIG HOWEVER), if advertisers use Apple's ad space platform. If you, the advertiser, use THEIR platform for ads then you have almost real time access to ad performance metrics. You also get more specific user behavior (I am not sure how specific). So, Apple isn’t tightening the pipe, it is just changing it?

At the end, is it about privacy, or a strategic move for Apple to take more of the $400 Billion global digital-ad industry. Let’s put this in perspective, Facebook has makes about $80 Billion in revenue in this space versus Apple’s $2 Billion.

Power to the people! Hmmm...Power just switching hands!

#tenorisk, #technology, #strategy, #privacy

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