iOS 14 Will Change Mobile Advertising

What does this mean to your business?

In June Apple announced its latest operating system upgrade – iOS 14.  The upgrade will roll out this fall and is one of the most comprehensive in Apple’s history.  iOS 14 includes significant changes to the home screen, enhanced functionality, digital car keys, updated privacy protection, and much more.

In terms of privacy protection, the new upgrade will require app developers to obtain the users’ permission before tracking their devices. Tracking devices digitally is enabled by anonymous device identifiers.  Identifiers for advertisers using Apple’s operating system are known as IDFA’s and are alphanumeric codes used within the applications run on all Apple digital devices.  The IDFA’s are used by advertisers to track the effectiveness of their campaigns.

Apple’s action may cause Facebook and Google to travel down similar paths in the name of consumer privacy protection.  While these businesses are justifiably concerned with consumer privacy, they are also the largest recipients of the $80 billion per year spent on mobile advertising.  Therefore, this change is certain to fuel the ongoing debate between the privacy advocates and the business executives responsible for the livelihoods of their enterprises.

Shifting the mobile marketing landscape

Today, mobile advertising identifiers – IDFA’s – are automatically collected by publishers in exchange for the free use of their services.  And today many publishers provide consumers with the ability to opt-out of their digital tracking capabilities. 

Here is an illustration. . . when consumers download Pandora, Pandora receives the device’s mobile identifier.  The consumer enjoys free music in exchange for ads delivered on Pandora’s platform.  The music is not free.  It’s actually paid for by the advertisers who use the IDFA’s to track the efficacy of their spending on Pandora.  If consumers want to listen to music without ads, then they pay a monthly fee to Pandora. 

Beginning this Fall, Apple will mandate users of their iOS 14 platform opt-in by providing consent for mobile tracking during the app’s downloading process.  If consumers do not opt-in when the app is downloaded, the IDFA code will be disabled and the device will not be trackable by the advertisers. 

This iOS 14 feature carries a real risk to an $80 billion market, and no one foresees this matter ‘passing quietly into the night.’  It’s simple – if advertisers are unable to track the efficacy of their campaigns, then they will not pay to advertise and $80 billion in ad revenue goes away.  If advertisers do not pay, then the free services will stop, or the consumers will be forced to pay.

What does this mean to our business?

Audience Acuity is not a digital advertiser.  We enable businesses to identify and contextually engage audiences across all channels and devices, in a privacy-compliant manner, at scale with our Super Identity Graph.  To do this, we connect devices to people by resolving their identities with a mandate on privacy compliance.   Our Super Identity Graph contains mobile address IDs tied to hashed email addresses.  By ingesting mobile addresses paired to email addresses consumers provide their consent to the device tracking to receive complementary digital content.

While iOS 14 will impact the velocity of device tracking over time, we believe the publishers will adjust by only providing free content in exchange for tracking consent and a valid email address – and this is favorable to our client’s position. 

Today there are a growing number of places where publishers are capturing consumer data – beyond the App Store downloading process.  Americans use their mobile phones to check-in at airlines, hotels, sporting events, coffee shops, grocery stores, etc. . . And consumers have already demonstrated their willingness to exchange tracking consent for these free services.

terms and conditions I0S14

In Closing

Ultimately this is a high-stakes debate between the privacy advocates and the business executives charged with delivering tangible results.  The debate is often contentious, but not new.  40 years ago, direct mail was under a similar microscope.  Then the discussion moved to the voice channel.  20 years ago email emerged as a viable communications medium and the focus shifted there.  Now mobile phones are the primary means of communication.  So, it reasons that the debate will shift to the digital communications ecosystem.

There is much at stake.  In the final analysis, privacy interests and commercial interests must co-exist in a healthy, free-market economy.  Over time pendulum of this debate has swung from one side to the other. Eventually, it has always settled near the center – to accommodate the interests of both sides.  We have every reason to believe this will continue.