Apple’s Steps to Tighten User Data Flow Leave Advertisers Anxious
Digital advertisers study the new Apple Inc.
measures they say will limit access to user data, changes industry participants see as an escalation in the tech giant’s crackdown in the name of consumer privacy.
Apple’s changes, unveiled at its developer conference on Monday, threaten to restrict companies’ abilities to track user behavior on the web and collect information about them from third parties such as data brokers. The announcement comes months after Apple’s restrictions on in-app tracking rocked the digital advertising industry, and the changes will be part of a new version of Apple’s operating system this fall.
While the earlier moves only affected apps in Apple’s iOS operating system, the latest changes encompass all forms of web traffic across Apple devices, major advertisers, email marketers, publishers and more. ad technology companies to anticipate broader ramifications.
Apple’s changes mark “a massive step in increasing the garden walls by ensuring that all access to the outside world is mandated by them,” said Tal Chalozin, chief technology officer at advertising technology company Innovid Inc.
Craig Federighi, senior vice president of software engineering at Apple, described the measures Monday as protecting users from data collection practices that many are unaware of. “We believe in protecting your privacy and providing you with transparency and control over your information,” he said at the conference.
By default, Apple will block the transmission of users’ Internet Protocol addresses to websites visited in its Safari browser. Many companies collect a user’s IP address and combine it with other data to “take fingerprints” and recognize repeated visits from a user, often to support personalized advertising. Apple banned fingerprints in Safari for years, but left users’ IP addresses visible. Blocking them will allow Apple to better enforce its ban, depriving fingerprints of a single data point that identifies Safari users.
Safari enjoys a browser market share of around 19% worldwide, according to a March survey by Statista, which places the browser second behind Google’s Chrome.
“IP blocking for trackers is a monumental development that is probably the nail in the coffin of user-centric profiling. Without an IP address to hang on to, tracking companies simply won’t be able to uniquely identify users in a commercially reliable way, ”said Eric Seufert, digital marketing strategist and consultant.
Industry watchers are already wondering if Apple’s change could put pressure on Alphabet Inc.
Google to do the same. A Google spokesperson confirmed that the search giant is considering a similar move to block IP addresses in its Chrome browser.
Apple is also offering increased IP blocking through a paid service that will cover IP addresses on all of a user’s devices. A new premium version of its existing iCloud storage service, called iCloud +, includes a feature called “Private Relay,” which redirects a user’s web traffic through multiple servers to hide the user’s IP address and prevent fingerprints. digital. This product, which will be available all over the world except China, will anonymize Internet traffic as virtual private networks do.
The VPN market is expected to reach $ 31.1 billion in 2021, according to Statista. Businesses often use VPNs, which create a sort of tunnel between a user’s device and the online services they are accessing, to keep connections direct and private. Consumers often use them to view streaming content that is not available in their region of origin.
ICloud users who already pay for additional storage or other features of the service will receive iCloud + at no additional cost, Apple said.
Alex Austin, chief executive of mobile advertising measurement firm Branch Metrics Inc., said “private relay could be much more damaging to the advertising ecosystem” than Apple’s restrictions on apps earlier this year. He warned, however, that some details remain unknown. “If intellectual property were to disappear completely, it would be very difficult for many companies to operate,” he said.
Apple is also tackling email tracking. Most marketing emails contain hidden pixels that can identify when a recipient has opened an email. These trackers also collect information, including user IP addresses, which can tell marketers when and where their messages were opened.
Even with chatbots and social media influencers on the scene, email has remained an essential tool for many businesses to connect with loyal customers, gain new ones, and build brand awareness. Apple’s changes could dull its usefulness, advertising executives said, and some expressed surprise the tech giant has extended its data tracking restrictions to user inboxes.
“It will be much more difficult for brands to know whether their emails are working or not,” said Nii Ahene, chief strategy officer at digital advertising company Tinuiti Inc., who added that he did not consider this. decision as an invasion of privacy. publish. “There are no winners here. The only winner is Apple.
Apple said users enjoy increased transparency and control over how data about their online behavior is used.
Email marketing has also become an essential technique for retailers, PR firms, publishers, and political candidates, among others. Businesses are expected to spend $ 535.6 million on email ads in the United States this year, up 10% from 2020, according to eMarketer.
Publishers have sought new audiences and new sources of revenue through editorial newsletters, with many media companies charging high prices for the advertisements that appear there. Publishers use tracking pixels to collect information such as the number of subscribers who open a newsletter. Advertisers often refer to open rates when negotiating sponsorship deals.
While some public relations officials have said Apple’s new rule will make it harder to show customers that their efforts to gain media coverage have worked, others oppose the use of trackers.
“This is something we have long viewed as bad practice because it only creates suspicion,” said Richard Edelman, managing director of public relations firm Edelman.
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8