The iOS 14.5 is going to release in the last week of April 2021 and has certain changes that have surprised many across the globe. In the latest update, Apple is empowering the users to choose if they want to share their data under its App Tracking Transparency policy. This major change is going to affect all the advertising agencies which previously depended on the IFDA data to target a user with customized offers.
The new version of iOS enforces every app to ask the user for his/her choice to share the user data with third parties. If the user rejects sharing, then the advertising agencies will not be able to track the apps/games downloaded and the pattern of in-app purchases. Currently, all your mobile habits are being tracked and analyzed which results in the best and relevant offers being pushed out to you. This is one of the best ways to generate revenue because only relevant and customized information is being shown to the users which has greater chances of purchase.
Why Did Apple Take This Decision?
Apple states that any user’s activities on his/her smartphone come under the personal information of the user and thus it is the user that must give consent to share this data. When Apple conducted polls before launching this major update, the data analyzed projected only 20% to 30% of people who would continue to share their data. This means that iOS app and game developers could face a huge setback in their business as the majority of iOS users would not allow data sharing. And with that in place, advertisers would not be able to collect and analyze data resulting in no customized ads or attractive offers.
Apple’s Craig Federighi stated, “They gather, sell, and hoard as much of personal information as they can.”. He further stated that “The result is a data-industrial complex, where shadowy actors work to infiltrate the most intimate parts of your life and exploit whatever they can find — whether to sell you something, to radicalize your views, or worse.”
How does the advertising process work?
Due to the latest technology within smartphones, an individual receives a personalized ad based on his/her user history. If the user clicks on the ad and takes an appropriate action like downloading the app or purchasing something within the app, then the advertiser gets his share too. This process where predefined actions are determined is called performance advertising. The new update will remove this concept and move back to Brand Advertising which had been being used for many years before performance advertising.
What will be the impact?
The game development firms have expressed major concern over this update. It also has been revealed that this update was earlier planned to be released in September 2020 but was delayed by six months and finally will be rolled out in the last week of April.
Many tech observers claim that these changes are an attempt by Apple to divert the flow of revenue from Google and Facebook towards itself. However, this is just speculation and it would be difficult to assess anything at this point. Anyway, this IDFA policy change has already begun a battle between the tech giants.
Facebook has stated that the loss of this data will result in the revenue of iOS software developers being halved. A post-IFDA alliance has already been formed in February 2021 which includes many mobile marketing firms like Vungle, Singular, Chartboost, Fyber, and InMobi. The numbers that have come out after the meeting are pretty shocking as they are high. The estimated loss to iOS developers would amount up to $15.5 billion an average 40% cut on last year’s revenue.