The next update to iOS could significantly impact targeted advertising on free apps.
The next update to iOS has created friction between Apple and advertising giants like Facebook which rely on targeted ads for revenue.
The next update to iOS, initially announced last summer, will force app developers to explicitly seek permission to access the phone’s unique identifier known as the IDFA. This update is expected early in spring and is expected to significantly impact the effectiveness of targeted mobile ads. In order to tailor mobile ads to smartphone users, app developers and other industry players typically access this unique identifier on devices. However once this new rollout takes effect, a prompt will begin showing up for users, seeking their permission to give access to their IDFA. It is expected that roughly half of users may respond negatively or refuse access via this prompt.
The effectiveness of targeted advertising relies heavily on access to personal identifiers like Apple users’ IDFA.
Targeted advertising relies heavily on access to significant amounts of personal data, determining who is most likely to be affected by a particular message, and also how and when to deliver the message for maximum impact. For this reason, in order for targeted ads to be truly effective, access to data through Apple users’ IDFA is key and this update from Apple will no doubt, significantly impact targeted advertising.
Facebook argues that these changes will be of dire consequence to small businesses which depend on targeted advertising on free apps like theirs.
One industry leader which generates much of its revenue through advertising has spoken up about the anticipated update. In a recent blog post, Facebook has expressed that they disagree with Apple’s approach, complaining that Apple provides no context on the benefits of having targeted ads, and suggesting that Apple’s new prompt implies that there is a trade off between personalized advertising and privacy. Facebook argues that the two are not mutually exclusive, and that they can and do provide both.
Facebook urges that these changes will significantly impact the income of small business owners who rely on targeted ads via free apps to reach the customers most likely to convert into revenue for their businesses. Facebook intends to show Apple’s prompt asking for consent, but to also include their own prompt providing context on the benefits available to users through targeted advertising.
Some industry leaders are opting to give up access to certain data, eliminating the need to seek consent.
Google has also spoken up about the change and how they plan to navigate affairs taking this change into account. The company plans to cease from using any data that falls under Apple’s AppTrackingTransparency framework for iOS apps, which will exempt them from needing to show this prompt. Google is essentially forgoing access to a significant amount of personal data, to avoid needing to seek consent.
How do data protection laws and this era of consent affect targeted advertising?
The GDPR defines consent as “any freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her”. The GDPR clearly states and requires that consent must be unambiguous and made by a statement of clear affirmative action.
Data protection laws like the GDPR and CCPA are designed to empower consumers, giving them more control over their personal information. The GDPR in particular operates by an “opt-in” model of consent, as clarified in its definition of the term, meaning that it cannot be assumed that a user has given their consent, simply by them not opting out. Users must clearly and unambiguously opt in and companies cannot assume that a user has given consent unless they have been asked, and in the right way, resulting in a clear affirmative response. From Apple’s perspective, this update does fall in line with the GDPR, seeking clear unambiguous consent from users to share a unique identifier such as their IDFA. “The philosophy behind it is similar to that of cookie consents for websites, only in the world of IoS apps,” comments Dr Bostjan Makarovic, Aphaia’s Managing Partner. However, there is no doubt that this update will affect the current model of advertising, and not just companies like Facebook which generate much of their income through their ability to provide targeted ads to users on their free platforms, but also much smaller businesses seeking their targeted advertising audience through the social network giant.
Does your company have all of the mandated safeguards in place to ensure compliance with the GDPR and Data Protection Act 2018 in handling customer data? Aphaia provides both GDPR and Data Protection Act 2018 consultancy services, including data protection impact assessments, and Data Protection Officer outsourcing. We can help your company get on track towards full compliance.
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