Developers claim that Apple's privacy-first features are 'atomic bomb' for revenue
Apple will give users the ability to opt-out of ad tracking in iOS 14.5, and some developers are concerned this will dramatically impact their revenue and ability to compete.
Underworld Football Manager is one of many games that will miss IDFA
In iOS 14.5 users will be able to opt out of ad tracking when installing a new app. This renders the Identifier for advertisers (IDFA) useless, showing a series of zeroes for any user who opts out of tracking.
Large businesses have bemoaned the update, stating significant revenue losses and damages to advertising as a whole. Facebook, in particular, has been very vocal about how this may affect the company's ability to advertise for small businesses.
Bloomberg talked to Adam Jaffe, the CEO of Tenko Games, to understand how this might affect app developers. Tenko Games is an app development studio responsible for games like "Underworld Football Manager."
Jaffe says he expects to lose roughly 20% of income from iPhone users after the update goes live. The company's 2020 revenue was $3.5 million, and its ability to advertise to specific users aided its growth.
"It's like an atomic bomb," said the Barcelona-based former professional soccer player who's also a consultant for other game studios. "People are going to have to reinvent how they do the job of marketing -- well, not reinvent but go back to where it was 10 years ago."
Advertising companies build complex profiles using the massive amounts of data they collect about customers. These profiles are then targeted by companies like Tenko Games to show products to people who may spend money on them.
If a majority of iPhone users opt-out of tracking, then those profiles become weaker, and advertising becomes more difficult. There is some advantage to be gained by this change, however, since the data won't exist for big companies either. Apple's change may level the advertising playing field by removing the power from companies who have more money for targeted advertising.
Apple's argument for the change is simple. Apple says that "users should have the choice over the data that is being collected about them and how it is used." The privacy-first argument rings true for users, but companies still fear what comes next.
The competitive landscape will become more brutal as companies fall victim to the changes. Rather than relying on advertising metrics like IDFA, Tenko Games might have to use data gathered internally or hike Android advertising to replace lost revenue.
Jaffe's soccer game sees all of its revenue from about 5% of its users. These "whales," as the industry calls them, are likely found via targeted advertising metrics. The IDFA tracker gives developers information like what apps people use and who spends money on them -- which is critical when identifying whales to target.
Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get the latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.
Underworld Football Manager is one of many games that will miss IDFA
In iOS 14.5 users will be able to opt out of ad tracking when installing a new app. This renders the Identifier for advertisers (IDFA) useless, showing a series of zeroes for any user who opts out of tracking.
Large businesses have bemoaned the update, stating significant revenue losses and damages to advertising as a whole. Facebook, in particular, has been very vocal about how this may affect the company's ability to advertise for small businesses.
Bloomberg talked to Adam Jaffe, the CEO of Tenko Games, to understand how this might affect app developers. Tenko Games is an app development studio responsible for games like "Underworld Football Manager."
Jaffe says he expects to lose roughly 20% of income from iPhone users after the update goes live. The company's 2020 revenue was $3.5 million, and its ability to advertise to specific users aided its growth.
"It's like an atomic bomb," said the Barcelona-based former professional soccer player who's also a consultant for other game studios. "People are going to have to reinvent how they do the job of marketing -- well, not reinvent but go back to where it was 10 years ago."
Advertising companies build complex profiles using the massive amounts of data they collect about customers. These profiles are then targeted by companies like Tenko Games to show products to people who may spend money on them.
If a majority of iPhone users opt-out of tracking, then those profiles become weaker, and advertising becomes more difficult. There is some advantage to be gained by this change, however, since the data won't exist for big companies either. Apple's change may level the advertising playing field by removing the power from companies who have more money for targeted advertising.
Apple's argument for the change is simple. Apple says that "users should have the choice over the data that is being collected about them and how it is used." The privacy-first argument rings true for users, but companies still fear what comes next.
The competitive landscape will become more brutal as companies fall victim to the changes. Rather than relying on advertising metrics like IDFA, Tenko Games might have to use data gathered internally or hike Android advertising to replace lost revenue.
Jaffe's soccer game sees all of its revenue from about 5% of its users. These "whales," as the industry calls them, are likely found via targeted advertising metrics. The IDFA tracker gives developers information like what apps people use and who spends money on them -- which is critical when identifying whales to target.
Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get the latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.
Comments
How did compete before they took the easy way out, and being corrupted by the leaches controlling and selling the personal info of the consumers?
I have never used Facebook for advertisement even it was proposed to me as gold mine. Now i know it wont be needed any more. They will reschool some programmers into marketing specialists.
I ask because I am trying to better understand the differences (if any) in pay scales between in-game advertising/YouTubers and pay-per-stream for musicians.
Thanks, K
If these companies want to really compete, they should charge upfront and see if there really is value in their apps rather than offering something for free and adding all the revenue via hidden costs to the consumer. Quite a dishonest way of competing.
Excuse me if I don’t feel any sympathy for Jaffe and his cronies.
It’s unlikely to make much difference (to advertisers) - as the advertising revenue will continue unaffected. The recipients however might change. No doubt, all the players will adjust to take advantage of any change of rules. The lazy may find this adjustment difficult.
because the people began to lock down the doors of their houses and he can’t steal anymore from them.
Why don’t they focus on to make better game/app than send stupid ad to user. All of these companies think the advertiser is more important than the user.
Apps can STILL be loaded to play ads in between every level, they just won’t be ‘targeted’ based on the data they harvest. It doesn’t matter to most people. They either ignore the ad while it plays, or cancel it as soon as the X button appears.