Consumers are becoming more skeptical about efforts to track their virtual activities. As a result, governments continue to pass laws and regulations dealing with how organizations can gather, store, and use personal consumer data. In line with these new efforts, Apple recently introduced App Tracking Transparency (ATT) with the launch of iOS 14.5. Estelle Laziuk, an analyst with Flurry Analytics, explains, “Until now, apps have been able to rely on Apple’s Identifier for Advertiser (IDFA) to track users for targeting and advertising purposes. With the launch of iOS 14.5, mobile apps now have to ask users who have upgraded to iOS 14.5 for permission to gather tracking data. With opt-in rates expected to be low, this change is expected to create challenges for personalized advertising and attribution, impacting the $189 billion mobile advertising industry worldwide.”[1] Stephanie Cuthbertson, Director of Product Management for Apps, Video & Display at Google, views the Apple move as an example of how the world of targeted advertising is changing. She notes, “Digital app marketing is rapidly evolving, reshaped by rising user-privacy expectations and significant regulatory updates. Global ecosystem shifts — including Apple’s rollout of its new App Tracking Transparency policy — limit how consumer data is collected and used for advertising. These changes are a continuation of industrywide trends to give people more transparency and control over their online data and interactions with advertisers.”[2]

Apple’s ATT Impact

Craig Federighi, Apple’s Senior Vice President of software engineering, told tech journalist Joanna Stern (@JoannaStern), “We really just want to give users a choice. These devices are so intimately a part of our lives and contain so much of what we’re thinking and where we’ve been and who we’ve been with that users deserve and need control of that information. The abuses can range from creepy to dangerous.”[3] If you are wondering whether the new ATT capability is having an impact, Tim Hardwick (@waxeditorial), an editor at MacRumors, reports, “An early look at an ongoing analysis of Apple’s App Tracking Transparency suggests that the vast majority of iPhone users are leaving app tracking disabled since the feature went live on April 26 with the release of iOS 14.5. According to the latest data from analytics firm Flurry, just 4% of iPhone‌ users in the U.S. have actively chosen to opt into app tracking after updating their device to iOS 14.5. The data is based on a sampling of 2.5 million daily mobile active users. When looking at users worldwide who allow app tracking, the figure rises to 12% of users in a 5.3 million user sample size.”[4]

Those low opt-in numbers have some companies panicked. Journalist Sami Fathi (@SamiFathi_) reports, “As a way to convince users to enable tracking across other apps and websites, Facebook is deploying the tactic of telling users that they must enable tracking as part of the App Tracking Transparency framework in iOS 14.5 if they want to help keep Facebook and Instagram ‘free of charge.’ … A significant portion of Facebook’s business model relies on selling ads across its apps and services.”[5] Data privacy expert Kaiser Fung (@junkcharts) perceives refusal of service unless data collection is permitted as a form of corporate blackmail. He writes, “Website operators don’t really want to ban any user so as to inflate their user counts (‘eyeballs’).”[6] Like Facebook, many organizations are going to have to reevaluate their data collection processes.

Future Data Collection and Targeted Marketing

Jocelyn Toonders (@JocelynToonders), Head of partnerships at Mention Me, notes that brands who have relied heavily on IDFA for learning about more about potential consumers “suddenly face falling returns.”[7] She adds, “To overcome this and continue reaching target customers, marketers must adapt – fast. … Instead of relying on paid social, marketers should focus on diversifying their marketing strategy across channels that drive customer engagement and create long-term relationships. In the short-term, this will help to recover falling customer acquisition numbers. In the long-term, it will put your customers back at the center of your marketing strategy.” In the near-term, she believes marketers must attract, rather than target, consumers. She explains, “Content marketing, for example, can help to plug immediate gaps. Your business website, social media and media activity are now key touchpoints for addressing customer pain points directly. Overseeing marketing content that is consistent, fits your target customers’ profile and can be served in the right places is a great starting point.” She’s not alone in that assessment. Cory Treffiletti (@ctreff), a Senior Vice President of Marketing at FIS, asserts, “Content is king. Contextual targeting is going to make the comeback it has been threatening to for years.”[8]

Most marketing experts believe that, in the future, companies will rely much more heavily on first-party data. Cuthbertson explains, “Building stronger relationships with new and existing users of your app should be a centerpiece of your privacy-first growth strategy. First-party user data — data that companies collect directly from their customers with consent — is an important source of observable interactions that can help you understand your customers’ journeys, from tapping on an ad to taking an action in your app.” The difficult hurdle will be getting consumers to opt-in. Cuthbertson insists organizations will have to demonstrate tangible value in exchange for personal data. She writes, “Communicate the value that you’re giving users in return for their data — whether it’s providing a promo code for an email address, access to exclusive items, customized recommendations, or a simpler checkout process. … Strengthening first-party relationships and developing strong infrastructure to facilitate the process could mean modifying your onboarding and transaction flows, creating loyalty programs, or even adopting new features, such as in-app chat.”

Concluding Thoughts

Companies need data. Data is the lifeblood of the Digital Age. Cuthbertson concludes, “Engaging directly with your app users can help you build trust with your customers. Provide easy, intuitive ways for people to share information about themselves, and demonstrate that you will use this information to make their app experience more personalized and helpful.” If you are a consumer, Stern observes, “This is a choice about who you think deserves your personal information, and how targeted you want the marketing in your feeds to be.” Companies that earn consumer trust will be the winners in this new environment. Toonders concludes, “Change is often unsettling, but iOS 14.5 is an opportunity to put customers back at the heart of your marketing strategy. Brands that seize it can look forward to higher customer engagement and acquisition that drives greater, more sustainable ROI.”

Footnotes
[1] Estelle Laziuk, “Daily iOS 14.5 Opt-in Rate,” Flurry Analytics Blog, 29 April 2021.
[2] Stephanie Cuthbertson, “3 ways to plan for performance and privacy in iOS app marketing,” Think with Google, 1 April 2021.
[3] Joanna Stern, “iOS 14.5: A Guide to Apple’s New App-Tracking Controls,” The Wall Street Journal, 26 April 2021.
[4] Tim Hardwick, “Analytics Suggest 96% of Users Leave App Tracking Disabled in iOS 14.5,” MacRumors, 7 May 2021.
[5] Sami Fathi, “Facebook and Instagram Ask Users to Enable App Tracking in Order to Keep Services ‘Free of Charge’,” MacRumors, 2 May 2021.
[6] Kaiser Fung, “7 Principles of Responsible Data Collection,” Big Data, Plainly Spoken, 7 March 2018.
[7] Jocelyn Toonders, “How to adapt your marketing strategy to Apple’s tracking changes,” The Drum, 5 May 2021.
[8] Cory Treffiletti, “A Cookie By Any Other Name Is Still A Cookie — Even If It’s An Apple,” Media Insider, 28 April 2021.