What Apple’s New Update Means For App Developers and Advertisers

A couple of weeks ago, we discussed the changes that small- and medium-sized business owners could expect with the rollout of Apple’s iOS 14.To briefly summarize: “According to the Apple developer site, the policy change is an effort to keep apps available in the App Store ‘held to a high standard for privacy, security, and content.’ To do so, Apple will force app developers to list all data that their apps will be collecting and force users to “opt-in” to data tracking. While that may only appear to be an issue for app developers, it will take a serious toll on everyone who uses Facebook, or any other social media platform, for their digital advertising needs.”

We focused on the impact that the update would have on Facebook advertisers, but app developers face similar struggles. In the latest update, Apple nuked the IDFA or identifier for advertisers. This tool allows apps to precisely target and track user actions, which advertisers can then use to assess, categorize, and remarket to consumers.

How IDFA Works

Just as our browsers have cookies, devices have IDFAs.Tinuiti more precisely defines this technology as“…. a unique identifier for mobile devices [that] is used to target and measure the effectiveness of advertising on a user level across mobile devices.” When a customer does a particular action, like installing an app advertised within another app or clicking an app shown in a browser window, it aggregates that data to share with developers and marketers. Because the information is aggregated, no personal identification data is shared.

This tool is invaluable for advertisers, as it allows them to build a device-based profile that marketers can use to market more effectively to their audience. Based on information like what kinds of apps are installed, what types of advertisements are being interacted with, and location trends, consumers can be more precisely targeted with ads that fit their lifestyles.

Apple isn’t the only platform that has this technology in hand, though. Because apps have never used cookies functionally, Google’s Play Store apps come with a similar device identifier called the GAID, or Google Advertising ID. As of now, neither Android nor Google has made any mention of eliminating the use of GAIDs on their devices.

How iOS 14 Changes the IDFA

Technically, IDFAs aren’t entirely eliminated from the iOS ecosystem, but that doesn’t mean Apple’s new policy will not put a significant crimp in the marketing funnel. Users are now asked directly to opt-in to tracking permissions when they download the update. Previously, IDFA tracking was the standard setting, and users had to opt-out.

This isn’t the first time that Apple has limited IDFA abilities. In the iOS 13 update, users were given the option to “limit ad tracking” in their device settings, which led to a 30% loss of devices sharing data. Predictions currently stand that the number of will plummet even further, from 70% of devices opting-ins to a mere 10-15%.

To be clear, Apple does allow each app to prompt the opt-in pop-up and some choice as to when the dialog appears. As long as users are given the option before tracking begins, the timing can be customized, allowing developers a chance to explain the benefits of opting-in.

How Your App Will Be Affected

According to Digiday the mobile advertising market is worth more than $200 billion, with Apple holding a 26.7% share of the global mobile operating system market. That means big trouble for one of the few ad tech arenas that is still attracting multi-million dollar investments.

Digiday goes on to note that complete removal of the IFDA would lead to total chaos.

Specifically, they note, “Many iOS app developers rely on the ad-supported model, and removing the IDFA could massively disrupt their monetization and hamper their new-user download marketing strategies if Apple doesn’t come up with a suitable alternative. They’d likely need to shift to encouraging users to share data in another form, such as through a login.”

One alternative plan that Apple has discussed is a network API that would send a notification to an advertiser every time a conversion occurs, but that wouldn’t include any of the device-specific information that allows marketers to build user profiles.

Only time will tell which triggers iOS 14 will pull by the end of the year. As stated earlier, Google hasn’t shown any signs of shifting their GAID models, which might put more pressure on the Apple App Store to work out a different direction. No matter what, we can expect some big changes to come down the road, so preparing now is going to be your best bet for staying afloat.

Next Steps for App Developers

While Apple is still figuring out how they’re going to approach the IDFA opt-in situation, it’s a great time for app developers to align themselves with digital marketing and web development experts. NATIV3 has the know-how to help you get a strategy in place to ensure your long-term success, no matter what changes come with iOS 14 or any future updates. With flexibility and creativity, app advertisers can persevere through this power play by Apple and continue to reach customers with personalized, relevant marketing.