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The Big Permission Battle
16 May 2021
Apple’s decision to demand an opt-in for third-party tracking in the mobile space is now a clear and present reality with the release of iOS 14.5 at the end of last month. As of this week only 5% of U.S. users have consented to being tracked by their apps (in Europe the number is around 13%). So it seems to be quite an uphill battle for digital product owners and advertisers that are relying heavily on Apple’s Identifier for Advertiser (IDFA) to track users for targeting and advertising purposes based on third-party data.
With iOS 14.5, all apps must now ask for specific permission if they wish to track their users across other apps and sites. Tracking that is typically done in order to personalise advertising and measure its effect. But given the opportunity to reject being stalked and especially being stalked by online ads, most users are grabbing that opportunity with a vengeance.
Facebook - being the world’s most used app with 3 billion users - has responded to Apple’s latest privacy move as a declaration of war, and claims that Apple’s play for opt-in when it comes to personal data is detrimental to small businesses that are advertising on Facebook. According to their own data, an average small business owner stands to lose 60% of its sales on each dollar spent on ads without the option to personalise these ads.
It is always interesting to witness the kind of “spin” that the tech giants are trying to promote to the public. Now, Apple has always sought to own the user experience on its various platforms and devices so perhaps it’s not such a big surprise that they have chosen to limit third-party tracking further.
However, it’s also a highly competitive and smart move to position itself as The Privacy Guardian in contrast to Facebook that certainly has had its share of controversies over the use - and leaks - of personal data.
It’s a very effective move because truth be told, it’s probably not very costly for Apple to take this position. Apple is still a device- and content distribution-driven business compared with the other tech giants like Facebook and Google who are vastly more dependent on advertising and the data feeding it. However, one consequence of Apple’s new opt-in rule could potentially mean that more mobile advertising will move to Android-devices from iOS-devices. Precisely how much is too early to tell.
OK, The Big Boys are fighting. What does that have to do with me?
As the owner of a business app that doesn’t contain ads, you might think that the demand for active user opt-in doesn’t really affect you as you’re still perfectly able to collect your own 1st party tracking data of user behaviour. But this demand isn’t something that only mobile advertisers should be concerned with .
First of all because many business app owners are probably also advertisers in mobile apps like Facebook and Instagram and the app is obviously part of a larger ecosystem. So retargeting and personalisation across this ecosystem will in general just be made more difficult if the trend continues and the overwhelming majority of users are opting-out. As a user you don’t even have to do it app by app but can just go to settings and toggle "Allow Apps to Request to Track" off.
Secondly, no matter if you still want to aim for the opt-in or just want to make sure that your users stick with your app, then your retention and win-back strategies should be revisited and probably strengthened. Digital product retention will be absolutely critical in the general shift to your own 1st party data in optimising the experience and performance just like we see on web-based platforms with cookies quickly becoming a thing of the past.
Win-back could also prove more difficult if the shift to iOS 14.5 will make more users choose not to download the next app update as any update is also a moment of truth where users will decide if they want to maintain or reduce the number of apps on their device. In this instance, a well-thought-out push-strategy could prove valuable.
But most of all, the reason why everyone should care about the new pop-ups for permission is that the release of iOS 14.5 is heralding a new paradigm. A paradigm where personal data is something that any brand must first and foremost deserve by delivering a great experience. For some time - and not just in the mobile space - mediocre experiences and product offerings have been far too common because they could be compensated for by the heavy use of retargeting based on tracking data across the whole ecosystem.
Going forward, that kind of mediocrity can’t just be outweighed by a hailstorm of personalised ads originating from third-party tracking across iOS apps and websites. That’s why Apple’s privacy limitations may prove to be a blessing in disguise if they motivate digital product owners to create an even more appealing and value-added experience from their own data. This is still by far the best strategy to keep your users on board.