A new suite of privacy features in iOS 14 are helping media and digital publishers brace for and brace for a dramatic drop in ad revenue.
Among other privacy-related features, Apple’s new iOS 14 update will make device identifiers – essential for ad personalization – opt-in for users on an app-by-app basis.
Many digital publishers are now worried that the small change could result in a significant drop in income for iPhone users, according to the Wall Street Journal.
The update is for Identifier for Advertisers (IDFA), a random identifying tag that Apple assigns to users’ devices. It allows advertisers to collect aggregate data without revealing the identity of a user. And, in iOS 14, apps will need to explicitly ask users for permission to track them on other apps and websites.
“When every publisher is fighting for every advertising penny, it can’t come at a worse time,” Daily Mail editor Martin Clarke told The Journal. Clarke refers to the existing impacts felt by the publishing industry during the coronavirus pandemic.
The prompt that users will see in iOS 14.
The pop-up prompt that publishers worried about appears when a user opens an app for the first time after installing iOS 14. It makes it clear that an app wants to track them “on apps and websites owned by the company. ‘other companies’, then asks if a user wants to allow tracking or not.
“You almost scare the consumer by saying, Wait a minute. Am I comfortable with this?” Said Mark Wagman, Managing Director of MediaLink. Clarke said the prompt “almost seems to be aggressively aimed at getting users to unsubscribe.”
Sheri Bachstein, head of consumer activities at Weather.com, publisher of Weather.com, estimates that the price advertisers are willing to pay could drop as much as 40% because of the change. This is because advertisers are generally willing to pay more for ads tailored to user interests and behavior.
The impact may not be felt the same way by all publishers. Insider Inc. editor Peter Spande said the privacy feature was not “deadly” for large publications, but for small publishers “it could be really unsettling.” Additionally, the change is likely to be felt more by outlets that have a large audience of iPhone users, as well as those that rely on automated or “programmatic” ad sales.
On the other hand, Jonah Peretti, CEO of BuzzFeed, said that over time the industry will adapt. “There are tradeoffs for publishers. More direct contextual advertising in the long run, but in the short run it could reduce spending for some programmatic advertisers,” he told the WSJ
Apple’s privacy features come at a tense time between the Cupertino tech giant and publishers. Earlier in August, a coalition of news editors like the New York Times and the Wall Street Journal began pushing back Apple’s 30% commission on in-app purchases.
Ad-dependent technology platforms, such as Facebook, have also warned partners about the feature and its likely impact on ad revenue.
Apple says privacy mechanisms don’t block tracking. According to the company, the features simply increase transparency and give users more control over which platforms can follow them.