Apple’s privacy efforts are dismantling the digital ad industry

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For years, Apple has expressed its belief that privacy is a basic human right. In 2020, its decision to decrease ad tracking on iPhone sparked a debate among executives about how far the company will go to stop this lawsuit.

Mobile developers, advertising companies, and data brokers have been using digital advertising to track user behavior for quite some time. Craig Federighi, Apple’s chief software officer, oversaw a team of engineers seeking to untrack ads. His team was strongly opposed to this tool while some colleagues were less so. This includes Eddy Cue, Apple’s head of services and advertising, and Philip Schiller, then Apple’s chief marketing officer, who ran its App Store. Both worried about a drop in App Store revenue if they objected too strongly to the ad tracker.

An article from Information digs deeper into the challenges that Apple and its tech counterparts have faced when it comes to digital advertising.

It all started with IDFA

It all started when Erik Neuenschwander, head of the privacy engineering team, came up with the idea for this controversial tracking tool, called Identifier for Advertisers (IDFA). IDFA was supposed to be a harmless way to deliver better targeted ads to users.

As advertising evolved, the IDFA became more pervasive. Some intermediaries have started abusing the IDFA, tracking and monitoring people around the world and even finding their physical location. This was not IDFA’s original idea, as it was intended to provide a better advertising experience for users while benefiting the companies that serve the ads.

Eventually, IDFA could be turned off in a switch in a menu, but that was unfamiliar to many iPhone users. Neuenschwander and his team have made several changes over the years to prevent tracking. Many developers have chosen to ignore and find workarounds for all the improvements made by Apple.

In 2019, Federighi told the privacy team “to do something about the IDFA”. While there were concerns about going too far in eliminating tracking, executives came up with a plan.

The solution, App Tracking Transparency (ATT), forces app developers to ask users if they want their activity tracked online. This popup occurs during the first launch of an application. Activity tracking will not occur if someone unsubscribes. According to Flurry Analyticsonly 26% of users worldwide activate it, with the vast majority deactivating.

Despite its intentions, ATT has hurt companies’ advertising revenue on the App Store. For example, Meta expects a $10 billion drop in revenue this year due to the impact of these privacy changes on their data collection practices.

What about Android?

There were fears that ad spend would shift to Android. However, Google recently announced its own plan to bring additional privacy-enhancing features to Android. Called on Privacy sandboxother private advertising features are coming to its operating system soon.

Challenges aside, Apple continues to keep user privacy at the forefront of its efforts.

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