iOS 14 privacy feature delay will help advertisers cope with revenue hit

Posted:
in General Discussion
Investment bank Cowen sees Apple's decision to delay new iOS 14 privacy features as a net positive both for consumers and the relationship between Apple and developers.

Credit: Apple
Credit: Apple


One specific privacy feature coming in Apple's next update requires apps to obtain permission from users to track them across other apps and websites. Apple has since said the feature will go live in early 2021.

In a note to investors seen by AppleInsider, Cowen analyst Krish Sankar said that the move is a "slight positive from a developer relationship standpoint." That's because, although a boon to privacy and consumers, the change is likely to have an effect on developer revenue and possibly overall App Store earnings.

The feature concerns the Identifier for Advertisers (IDFA) tracking tag, which allows apps to collect aggregate data without personally identifiable user information. Allowing users the ability to opt-in to IDFA tracking gives them much more control over their data on iOS.

Apple's decision to require permission to use IDFA has been controversial among advertisers. Facebook, for example, has warned businesses that they could see up to a 50% drop in Audience Network revenue on iOS devices.

"We believe Apple's decision to delay the new IDFA-related feature at the very least helps to maintain the status quo in developer relations but it could also have an unclear impact toApp Store revenues near term," Sankar wrote.

The analyst notes that, without IDFA, advertisers could find it much more difficult to market or sell products to end users. Additionally, it will become harder to serve targeted ads -- which typically garner higher prices.

Although the change is coming despite advertiser protestations, Cowen notes that the three month period between WWDC 2020 and the release of iOS 14 could have been too short a period for developers to update, test, and formulate new advertising technology algorithms.

For example, without IDFA tracking, businesses dependent on targeted advertising will likely need alternative statistical methods or models to match user profiles with products, services, and ads.

"Apple continues to advocate and implement user Privacy policies that we believe aim to enhance the user experience of the iOS platform longer term. While it is unclear if there is any near-term impact to App Store revenues, the decision to balance developer concerns and feedback is also a welcome move to ensure the iOS platform remains attractive for developers over the medium/longer term," Sankar wrote.

Cowen is maintaining its $133 AAPL price target, which is based on a 25x multiple to Apple's core businesses and a 41x multiple on Services.

Comments

  • Reply 1 of 11
    MplsPMplsP Posts: 3,714member
    I have little sympathy for advertisers who covertly spy and steal user information, but the practical matter is the current structure of the internet is built around this model. As long as the 'new advertising technology algorithms' don't involve circumventing privacy I'm ok giving them a little more time. Like a week or two.
    pulseimagesjoerock1234watto_cobra
  • Reply 2 of 11
    For example, without IDFA tracking, businesses dependent on targeted advertising will likely need alternative statistical methods or models to match user profiles with products, services, and ads.

    The only thing delayed implementation does is give advertisers more time to perfect their device fingerprinting algorithms.  Lovejoy wrote a depressing opinion piece over at 9to5.  
    https://9to5mac.com/2020/09/04/ad-industry-tracking/#disqus_thread

    The TLDR version is Facebook's caterwauling might just be theatrics designed to lull the concerned into a false sense of security about iOS 14's app permissions.  Reminds me of the government's "woe is me" tiny violin playing regarding device unlocking.  Me thinks they doth protest too f'n much.
    viclauyycdysamoria
  • Reply 3 of 11
    Rayz2016Rayz2016 Posts: 6,957member
    For example, without IDFA tracking, businesses dependent on targeted advertising will likely need alternative statistical methods or models to match user profiles with products, services, and ads.

    The only thing delayed implementation does is give advertisers more time to perfect their device fingerprinting algorithms.  Lovejoy wrote a depressing opinion piece over at 9to5.  https://9to5mac.com/2020/09/04/ad-industry-tracking/#disqus_thread

    The TLDR version is Facebook's caterwauling might just be theatrics designed to lull the concerned into a false sense of security about iOS 14's app permissions.  Reminds me of the government's "woe is me" tiny violin playing regarding device unlocking.  Me thinks they doth protest too f'n much.

    That's interesting. A couple of people followed up by saying when they tried the same tests as Lovejoy, the test site couldn't uniquely identify them. According to this white paper, Apple is already working on defeating device fingerprinting.

    https://www.apple.com/safari/docs/Safari_White_Paper_Nov_2019.pdf

    Fingerprinting defense
    In addition to blocking cookie-based tracking, Safari works to prevent advertisers and websites from using the unique combination of characteristics of a device to create a “fingerprint” to track the user online. Some of these characteristics include the device and browser configuration and the fonts and plug-ins that have been installed. To combat fingerprinting, Safari presents a simplified version of the system configuration to trackers so more devices look identical, making it harder to single one out. And unlike some other browsers, Safari doesn’t add any custom tracking headers or unique identifiers to web requests. On other browsers, these headers can include things like location, sign-in status, account information, features enabled, and other data that can be used for cross-site tracking.

    But of course, this will only work if you're using Safari.


    watto_cobra
  • Reply 4 of 11
    This is shit.  Only thing I was looking forward to in iOS 14.  
    viclauyyc
  • Reply 5 of 11
    Rayz2016 said:
    For example, without IDFA tracking, businesses dependent on targeted advertising will likely need alternative statistical methods or models to match user profiles with products, services, and ads.

    The only thing delayed implementation does is give advertisers more time to perfect their device fingerprinting algorithms.  Lovejoy wrote a depressing opinion piece over at 9to5.  https://9to5mac.com/2020/09/04/ad-industry-tracking/#disqus_thread

    The TLDR version is Facebook's caterwauling might just be theatrics designed to lull the concerned into a false sense of security about iOS 14's app permissions.  Reminds me of the government's "woe is me" tiny violin playing regarding device unlocking.  Me thinks they doth protest too f'n much.

    That's interesting. A couple of people followed up by saying when they tried the same tests as Lovejoy, the test site couldn't uniquely identify them. According to this white paper, Apple is already working on defeating device fingerprinting.

    https://www.apple.com/safari/docs/Safari_White_Paper_Nov_2019.pdf

    Fingerprinting defense
    In addition to blocking cookie-based tracking, Safari works to prevent advertisers and websites from using the unique combination of characteristics of a device to create a “fingerprint” to track the user online. Some of these characteristics include the device and browser configuration and the fonts and plug-ins that have been installed. To combat fingerprinting, Safari presents a simplified version of the system configuration to trackers so more devices look identical, making it harder to single one out. And unlike some other browsers, Safari doesn’t add any custom tracking headers or unique identifiers to web requests. On other browsers, these headers can include things like location, sign-in status, account information, features enabled, and other data that can be used for cross-site tracking.

    But of course, this will only work if you're using Safari.


    I basically ignored the individual anecdotes for Lovejoy and the comments.  Personal anecdotes are fairly useless as purveyors of factual information imo.  Ben said he could be traced.  Someone else said they couldn't.  ¯\_(ツ)_/¯  The important thing to me is the actual info about the processes.  Apple's countermeasures are a good thing, an important thing, but also a thing that is constantly being counterattacked.  More importantly, you note, it only works if the user accesses the web via Safari.   The additional time allotted before implementation in iOS 14 simply allows advertisers to 1. poke at Safari and 2. further mitigate the effectiveness of the privacy feature once it's live.

    I wonder if AI is going to avail itself of the fingerprinting tech?  This is an ad supported site (like most of the internet sites) that probably won't fare too well if the privacy feature goes live and they have no way around it.  
    dysamoria
  • Reply 6 of 11
    gatorguygatorguy Posts: 23,509member
    Rayz2016 said:
    For example, without IDFA tracking, businesses dependent on targeted advertising will likely need alternative statistical methods or models to match user profiles with products, services, and ads.

    The only thing delayed implementation does is give advertisers more time to perfect their device fingerprinting algorithms.  Lovejoy wrote a depressing opinion piece over at 9to5.  https://9to5mac.com/2020/09/04/ad-industry-tracking/#disqus_thread

    The TLDR version is Facebook's caterwauling might just be theatrics designed to lull the concerned into a false sense of security about iOS 14's app permissions.  Reminds me of the government's "woe is me" tiny violin playing regarding device unlocking.  Me thinks they doth protest too f'n much.

    That's interesting. A couple of people followed up by saying when they tried the same tests as Lovejoy, the test site couldn't uniquely identify them. According to this white paper, Apple is already working on defeating device fingerprinting.

    https://www.apple.com/safari/docs/Safari_White_Paper_Nov_2019.pdf

    Fingerprinting defense
    In addition to blocking cookie-based tracking, Safari works to prevent advertisers and websites from using the unique combination of characteristics of a device to create a “fingerprint” to track the user online. Some of these characteristics include the device and browser configuration and the fonts and plug-ins that have been installed. To combat fingerprinting, Safari presents a simplified version of the system configuration to trackers so more devices look identical, making it harder to single one out. And unlike some other browsers, Safari doesn’t add any custom tracking headers or unique identifiers to web requests. On other browsers, these headers can include things like location, sign-in status, account information, features enabled, and other data that can be used for cross-site tracking.

    But of course, this will only work if you're using Safari.


    I basically ignored the individual anecdotes for Lovejoy and the comments.  Personal anecdotes are fairly useless as purveyors of factual information imo.  Ben said he could be traced.  Someone else said they couldn't.  ¯\_(ツ)_/¯  The important thing to me is the actual info about the processes.  Apple's countermeasures are a good thing, an important thing, but also a thing that is constantly being counterattacked.  More importantly, you note, it only works if the user accesses the web via Safari.   The additional time allotted before implementation in iOS 14 simply allows advertisers to 1. poke at Safari and 2. further mitigate the effectiveness of the privacy feature once it's live.

    I wonder if AI is going to avail itself of the fingerprinting tech?  This is an ad supported site (like most of the internet sites) that probably won't fare too well if the privacy feature goes live and they have no way around it.  
    FWIW Google Chrome is also in the process of blocking enough browser data to make device fingerprinting ineffective,  so Apple and Google are at least in the same chapter even if not on the exact same page yet. 
    https://blog.chromium.org/2020/01/building-more-private-web-path-towards.html
    dysamoria
  • Reply 7 of 11
    Rayz2016 said:
    For example, without IDFA tracking, businesses dependent on targeted advertising will likely need alternative statistical methods or models to match user profiles with products, services, and ads.

    The only thing delayed implementation does is give advertisers more time to perfect their device fingerprinting algorithms.  Lovejoy wrote a depressing opinion piece over at 9to5.  https://9to5mac.com/2020/09/04/ad-industry-tracking/#disqus_thread

    The TLDR version is Facebook's caterwauling might just be theatrics designed to lull the concerned into a false sense of security about iOS 14's app permissions.  Reminds me of the government's "woe is me" tiny violin playing regarding device unlocking.  Me thinks they doth protest too f'n much.

    That's interesting. A couple of people followed up by saying when they tried the same tests as Lovejoy, the test site couldn't uniquely identify them. According to this white paper, Apple is already working on defeating device fingerprinting.

    https://www.apple.com/safari/docs/Safari_White_Paper_Nov_2019.pdf

    Fingerprinting defense
    In addition to blocking cookie-based tracking, Safari works to prevent advertisers and websites from using the unique combination of characteristics of a device to create a “fingerprint” to track the user online. Some of these characteristics include the device and browser configuration and the fonts and plug-ins that have been installed. To combat fingerprinting, Safari presents a simplified version of the system configuration to trackers so more devices look identical, making it harder to single one out. And unlike some other browsers, Safari doesn’t add any custom tracking headers or unique identifiers to web requests. On other browsers, these headers can include things like location, sign-in status, account information, features enabled, and other data that can be used for cross-site tracking.

    But of course, this will only work if you're using Safari.


    I basically ignored the individual anecdotes for Lovejoy and the comments.  Personal anecdotes are fairly useless as purveyors of factual information imo.  Ben said he could be traced.  Someone else said they couldn't.  ¯\_(ツ)_/¯  The important thing to me is the actual info about the processes.  Apple's countermeasures are a good thing, an important thing, but also a thing that is constantly being counterattacked.  More importantly, you note, it only works if the user accesses the web via Safari.   The additional time allotted before implementation in iOS 14 simply allows advertisers to 1. poke at Safari and 2. further mitigate the effectiveness of the privacy feature once it's live.

    I wonder if AI is going to avail itself of the fingerprinting tech?  This is an ad supported site (like most of the internet sites) that probably won't fare too well if the privacy feature goes live and they have no way around it.  
    They could always just make do with normal ads, forgoing tracking. That was the status quo back in the day. (I used to implement DoubleClick ads myself while developing MarketWatch.com)
    watto_cobradysamoria
  • Reply 8 of 11
    I'm undecided on what the impact of this is going to be. Do advertisers particularly care about the targeting of ads? Isn't the end goal for an advertiser to achieve $x sales for $y spent in a given timeframe? My gut feeling is that advertisers are somewhat agnostic about the process details. One thing that came up on LinkedIn the other day was a marketer who wanted to link offline and online identities so that they could better determine the lifetime value of the customer for a business - this sounds like a reasonable goal, but to me the methods required to achieve it are worse than the potential benefit.

    The other parties in this mess are the publishers and the advertising infrastructure companies. I can see advertising becoming less viable as a revenue stream for publishers - if we assume that payment to publishers increased for ads that provided more information about users, then if tracking goes away the price will go down too. Publishers will, I think, need to turn to subscription models to ensure sustainable revenue.

    The advertising infrastructure companies will, I think, make the most noise but suffer the fewest consequences. Some (most?) may have invested heavily in tracking technology based on an estimate of future revenue that will now have to be revised. But the two biggest (Facebook and Google) operate at a scale that enables them to display ads pretty much anywhere they want - and their delivery technology can be streamlined if it doesn't need to perform as many checks before pushing the ad to the requestor, resulting in lower processing costs, fewer bits sent over the wire and presumably higher throughput. So they're going to be just fine.

    For the end users, I think it will be an improvement: pages won't be stuffed quite so full of code (we can only hope) so the speed should improve and the data usage should drop, since the ads are less likely to be relevant to us we will actually pay more attention to them in case we miss something that might be useful, and we can hopefully stop worrying that a search for a medical illness might affect our ability to get insurance twenty years down the track.

    But only time will tell.
  • Reply 9 of 11
    Rayz2016Rayz2016 Posts: 6,957member
    Rayz2016 said:
    For example, without IDFA tracking, businesses dependent on targeted advertising will likely need alternative statistical methods or models to match user profiles with products, services, and ads.

    The only thing delayed implementation does is give advertisers more time to perfect their device fingerprinting algorithms.  Lovejoy wrote a depressing opinion piece over at 9to5.  https://9to5mac.com/2020/09/04/ad-industry-tracking/#disqus_thread

    The TLDR version is Facebook's caterwauling might just be theatrics designed to lull the concerned into a false sense of security about iOS 14's app permissions.  Reminds me of the government's "woe is me" tiny violin playing regarding device unlocking.  Me thinks they doth protest too f'n much.

    That's interesting. A couple of people followed up by saying when they tried the same tests as Lovejoy, the test site couldn't uniquely identify them. According to this white paper, Apple is already working on defeating device fingerprinting.

    https://www.apple.com/safari/docs/Safari_White_Paper_Nov_2019.pdf

    Fingerprinting defense
    In addition to blocking cookie-based tracking, Safari works to prevent advertisers and websites from using the unique combination of characteristics of a device to create a “fingerprint” to track the user online. Some of these characteristics include the device and browser configuration and the fonts and plug-ins that have been installed. To combat fingerprinting, Safari presents a simplified version of the system configuration to trackers so more devices look identical, making it harder to single one out. And unlike some other browsers, Safari doesn’t add any custom tracking headers or unique identifiers to web requests. On other browsers, these headers can include things like location, sign-in status, account information, features enabled, and other data that can be used for cross-site tracking.

    But of course, this will only work if you're using Safari.


    I basically ignored the individual anecdotes for Lovejoy and the comments.  Personal anecdotes are fairly useless as purveyors of factual information imo.  Ben said he could be traced.  Someone else said they couldn't.  ¯\_(ツ)_/¯  The important thing to me is the actual info about the processes.  Apple's countermeasures are a good thing, an important thing, but also a thing that is constantly being counterattacked.  More importantly, you note, it only works if the user accesses the web via Safari.   The additional time allotted before implementation in iOS 14 simply allows advertisers to 1. poke at Safari and 2. further mitigate the effectiveness of the privacy feature once it's live.

    And in this eternal game of leapfrog, Apple will update to mitigate again In a single point . That’s how this works. 
    watto_cobra
  • Reply 10 of 11
    Rayz2016Rayz2016 Posts: 6,957member

    Rayz2016 said:
    For example, without IDFA tracking, businesses dependent on targeted advertising will likely need alternative statistical methods or models to match user profiles with products, services, and ads.

    The only thing delayed implementation does is give advertisers more time to perfect their device fingerprinting algorithms.  Lovejoy wrote a depressing opinion piece over at 9to5.  https://9to5mac.com/2020/09/04/ad-industry-tracking/#disqus_thread

    The TLDR version is Facebook's caterwauling might just be theatrics designed to lull the concerned into a false sense of security about iOS 14's app permissions.  Reminds me of the government's "woe is me" tiny violin playing regarding device unlocking.  Me thinks they doth protest too f'n much.

    That's interesting. A couple of people followed up by saying when they tried the same tests as Lovejoy, the test site couldn't uniquely identify them. According to this white paper, Apple is already working on defeating device fingerprinting.

    https://www.apple.com/safari/docs/Safari_White_Paper_Nov_2019.pdf

    Fingerprinting defense
    In addition to blocking cookie-based tracking, Safari works to prevent advertisers and websites from using the unique combination of characteristics of a device to create a “fingerprint” to track the user online. Some of these characteristics include the device and browser configuration and the fonts and plug-ins that have been installed. To combat fingerprinting, Safari presents a simplified version of the system configuration to trackers so more devices look identical, making it harder to single one out. And unlike some other browsers, Safari doesn’t add any custom tracking headers or unique identifiers to web requests. On other browsers, these headers can include things like location, sign-in status, account information, features enabled, and other data that can be used for cross-site tracking.

    But of course, this will only work if you're using Safari.


    I basically ignored the individual anecdotes for Lovejoy and the comments.  Personal anecdotes are fairly useless as purveyors of factual information imo.  Ben said he could be traced.  Someone else said they couldn't.  ¯\_(ツ)_/¯  The important thing to me is the actual info about the processes.  Apple's countermeasures are a good thing, an important thing, but also a thing that is constantly being counterattacked.  More importantly, you note, it only works if the user accesses the web via Safari.   The additional time allotted before implementation in iOS 14 simply allows advertisers to 1. poke at Safari and 2. further mitigate the effectiveness of the privacy feature once it's live.

    I wonder if AI is going to avail itself of the fingerprinting tech?  This is an ad supported site (like most of the internet sites) that probably won't fare too well if the privacy feature goes live and they have no way around it.  
    They could always just make do with normal ads, forgoing tracking. That was the status quo back in the day. (I used to implement DoubleClick ads myself while developing MarketWatch.com)
    The problem is that tracked ads pay more apparently. The thinking is that if an ad is targeted then the victim is more likely to click on it. I can’t say whether this is true or not because I’ve never met anyone who will admit to clicking on an ad. 

    To be honest, I don’t think folk are annoyed by ads as much as the sheer volume of them on a single page. If it pay so little that sites like AI now use more space for ads than content, and then compound it further by having ads pretending to be content, then the model is clearly broken. 

    I use an ad blocker to make this site, and many others, bearable. Some will refuse to let you in with an ad blocker, and I’m fine with that because it’s becoming increasingly rare to find a site that it’s worth turning it off for. I think I have about four sites that manage to get the balance right. 
    watto_cobra
  • Reply 11 of 11
    dysamoriadysamoria Posts: 3,430member
    I have absolutely ZERO sympathy and ZERO patience for this miserable, abusive, self-important, and self-entitled industry (the advertising industry). Every single difficulty they face in ad-blocking is SELF-INFLICTED.
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