ESA has been providing updates and guidance on enhanced user privacy issues since Q3 2021. As this is a multi-faceted topic with far reaching impacts on the media ecosystem, expect more updates here throughout 2022 and into 2023.IN APRIL OF 2021, Apple released iOS version 14.5 to the public. This software upgrade brings significant downstream challenges and maneuvers for publishers, social media companies, data aggregators, businesses of all sizes, and the consumer marketing ecosystem.
This iOS upgrade and its successors feature greatly enhanced app-level user privacy controls, allowing users to opt-out of sharing their data and other tracking mechanics. In essence, third party data collected and or resold by app developers has been firewalled to some degree. Early opt-out rates have been reported above 80%, meaning an overwhelming majority of Apple customers have elected to firewall their data, rendering the data flow downstream significantly curtailed. This trend will make iOS customers – a majority of smartphone users in the US – more difficult to target behaviorally via device identifiers.
This document provides a collection of key events, data points, market reactions, and potential strategy adjustments in light of Apple’s enhanced privacy features.
● On April 26, 2021, Apple released iOS v 14.5 to the public. Developers are required to provide users data sharing and tracking opt-outs as app upgrades are published to the App Store.
iOS App Privacy Report
● On June 7, 2021, Apple released iOS v 15 to the public, further separating Apple from the field. New features include enhanced IP masking in its native email and browser apps (Mail and Safari), an App Privacy Report which provides a week’s worth of privacy metrics for the user, and other voice-related security measures. Apple also localized processing for certain functions, allowing users to perform tasks without an internet connection.
● Even before the release of iOS 14.5, Google responded with its own strategy and statements. The company appeared to side with developers on the privacy issue, stating that other phone providers were “bluntly restricting existing technologies used by developers and advertisers.”
● In early 2021, Google announced it would be phasing out third-party cookies in 2022. That timetable has since changed, purportedly to allow more time for privacy standards and developers.
● In June 2021, Google delayed the discontinuation of third-party cookies until late 2023, likely occurring over a window of several months. Google continues to cite a timeline that is: more amenable to advertisers and developers, adheres to consensus building on privacy standards, and allows extra time for developers to update and implement their apps.
● While Google’s Android OS dominates global market share among smartphone users, Apple’s iOS commands 57.8% of the US share. This majority stake makes Apple’s privacy strategy especially impactful here at home.
● On basic privacy measures, Android sends about 20 times more data to Google than iOS sends to Apple.
● Since the release of iOS 14.5 in 2021, Apple’s search revenue has grown 33%.
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Opt-in rate for iOS users (version 14 and subsequent) is hovering at 18% as of February 18, 2022. This means 82% of app-based user tracking is turned off for this population. These opt-in rates have been posted as even smaller for the v14.5 universe, hovering in the 4%-7% range by CNet, ARS Technica and other sources. In short, estimates state that up to 90% or more of data and tracking has been firewalled by users at the app level at different points in time.
● Large technology companies, publishers, and social media giants have been impacted by these changes – most notably Facebook, which relies heavily on mobile device usage. Meta market capitalization has encountered wild swings over the past several months, in most cases shedding value. Meta has projected that Apple’s changes will cost the company $10B this year alone. Facebook collects and uses a disproportionately high volume of user data within its app. While this fact was generally understood to be true, Apple’s recent iOS versions have made this data and tracking disparity much more apparent to the user.
This is a long-tail development that will be playing out for months if not years, as tech firms, businesses, and media companies navigate the issues of user privacy and limited data. Please refer back to this article for updates.
