The past couple of years have seen significant changes in the digital advertising landscape driven by increasing legislation around data privacy. The industry has already been forced to adapt to the demise of third-party cookies and is shifting focus towards creating customer relationships built authenticated value exchanges centered on consumer trust. Not unexpectedly, Apple, which prides itself on putting data privacy foremost on its agenda, added to the maelstrom of change when it announced its upcoming AppTrackingTransparency (ATT) framework, which will impact how app developers use identifiable data for advertising purposes.
For those not already aware, the new AppTrackingTransparency (ATT) framework is set to arrive as part of the release of iOS 14.5, which is now imminent. ATT requires app publishers to request user’s permission to track them or access their device’s IDFA. This means individuals must actively consent on an app-by-app basis, and it’s important for app developers to note that they will only have one opportunity to secure user consent.
The harsh reality is that, although Apple’s move is very much in line with industry expectations, it is going to have a big effect on app developers’ ability to make money.
Many mobile app developers have built their revenue models around making their app available in Apple’s App Store and these changes are likely to render those models increasingly unstable and unsustainable. With ATT in place, it is generally expected that only around 20-30% of users will grant consent, significantly impacting the ability of advertisers, publishers, and data providers to identify and reach customers, to measure campaign performance, and connect data based on IDFAs. And with the majority of users suddenly unrecognizable, inventory becomes increasingly unaddressable, leading to a decrease in interest and investment from brands.
If advertiser interest does wane, the resources mobile publishers require to reinvest into building new products, improving user experience, and acquiring new users will be reduced. This will ultimately lead to fewer free mobile apps, which in turn could negatively impact consumer experience and reduce industry competition – a vicious circle, which could be catastrophic not only for mobile app publishers but also the consumer. It’s not a position the app market wants to be in – in order to access, maintain and support high-quality content, the sector needs to maintain a competitive business model for all those in the market.
So what can app developers and publishers do to ensure they can continue to monetise their content?
This is not dissimilar to the situation the publishing industry has found itself in with the deprecation of third-party cookies. Publishers needed to find a durable and privacy-forward path to connect with advertisers while also maintaining the respect and trust of the consumer.
The same applies to the mobile app market. Mobile app developers and gaming marketers need addressability at scale to take back control of their relationship with users so they can operate viable business models. Ultimately, consumers win with deeper, direct relationships with the brands and publishers they trust, and better experiences fueled by an app ecosystem based on advertising.
The industry needs a neutral, strategic infrastructure that will enable app publishers to maintain and even scale their business, while still upholding consumer privacy standards, and respecting guidelines set out by device makers and app stores. By looking to the publishing industry and moving to an ecosystem-based on first-party authenticated data with ATT consent, app developers will be able to achieve this and deliver meaningful, relevant, and engaging content to consumers.
As with the publishing sector, these changes should be seen as an opportunity for the industry to come together to develop a sustainable infrastructure, which increases consumer privacy and choice and improves online experiences.