How Apple is disrupting mobile as we know it: IDFA, privacy, and competitive positioning

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iOS 14 is a game-changer in more than a few ones. One of them is definitely privacy.

I’ve been writing a lot about privacy, Apple, and what Apple’s been doing with the IDFA (identifier for advertisers), so I was invited to speak at the Mobile Growth Summit about it. I chatted with Shamanth Rao, founder of Rocketship HQ, about what’s changing, why, what the implications are, and what Google will do as a result, and now I’m including that chat in the TechFirst with John Koetsier podcast.

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Notes for my session

  • A good place to start would be with the basics – why did Apple make this change to have IDFAs be opt-in? 
    • Privacy
      • For privacy’s sake
      • Liability
    • Apple hates ads & adtech
      • I tweeted … what I think Apple thinks …
        • Ads: bad for user experience
        • Adtech: at best negative at worst dangerous
      • Friend with a major app publisher
        • Exactly … top execs told him that
    • Political implications … get into later
    • Monetary reasons … get into later
    • But … biggest by far … privacy
  • What are some of the implications of readily accessible IDFAs? What could someone do with, say, a thumb drive full of IDFAs?
    • 2015 … FBI arrested a Chinese national
    • On a plane … about to take off for China
    • With a thumb drive full of IDFAs
    • Had worked for Machine Zone
    • So … lots of possibilities
      • Commercial motive
        • People who have installed X game
        • Whales
      • Political/social motive
        • People who have installed certain apps
        • Know their political leanings
        • Influence them … ads … apps … etc.
        • Cambridge Analytica scenario
      • Espionage motive
        • People who have installed XYZ apps  … Tinder, Grindr
        • Extort them …
        • Track them … NYT: member of the secret service
  • Privacy aside, what are Apple’s financial and strategic motives behind making this change?
    • Strategic
      • The privacy-focused big tech company
      • Big ad recently
      • Apple’s always been more touchy-feely
      • On the little guy’s side
      • Now it’s a giant corporation
      • “We’re still safe”
    • Financial
      • What’s bad for my enemy is good for me
      • Big tech … Google, Apple, Facebook, Amazon, etc.
      • Two are significantly ad-based
      • Weakening them is good for Apple
  • One dynamic that is important to understand is that Apple makes no money from ad monetized games. How does that inform Apple’s decision – and what might be some of the things that Apple is trying to achieve through this?
    • As you said … Apple makes no money on ad-based mobile monetization
    • Apple makes 15-30% on IAPs and subscriptions
    • Do the math …
    • Don’t think it’s a primary reason … but it’s probably one of them
  • Does Apple’s policy conflict with – or result in confusion when you look at different privacy policies in different parts of the world – say the GDPR in Europe, or CCPA in California? What is the interplay between these different policies?
    • Maybe
    • We’re all affected by GDPR. We’re also all impacted by California’s privacy laws
    • Now we’ve got Apple’s iOS 14 IDFA opt-in
    • You could be asked to opt in 2 or 3 times
    • That’s confusing and annoying
    • More likely to make people do irrational things
      • Like default accepting everything
      • Or like default denying everything
    • Not really a choice anymore …
  • What precipitated the extension of the IDFA opt-in enforcement to early next year? 
    • The ecosystem was not ready
      • Without a healthy ecosystem, Apple suffers
      • And Android wins
    • Also … Facebook opted out
      • No, we’re not asking for IDFAs
      • We’re not playing in Apple’s sandbox
      • We’re using our own tech … own logins … Facebook identifier
      • Using the IDFA ties them to Apple’s rules
      • There are still rules for iOS apps that FB has to follow
      • But I think there’s more wiggle room for what they do by just opting out
      • Let’s be honest … there’s power at play here
      • App developers have to do what Apple says
      • Some can influence Apple … Basecamp
      • But Facebook is a “great power”
      • Apple can’t NOT have Facebook on iPhone
      • That gives Facebook power, and I’m not sure Apple anticipated Facebook just completely opting out
    • SKAdnetwork … time for a few more features? Maybe …
    • Biggest thing: ecosystem not ready
  • Where do you think Google might land with Android with regard to their device identifiers?
    • I think they will be forced to eventually follow
    • And that will be GDPR-influenced as well … where they’ve been accused of not adequately following GDPR
    • Mobile marketers are calling for it … maybe not in USA … but in Europe
    • But … different
      • Apple has an ad network
      • Google IS an ad network
    • They have to build solutions that still work for their ad network
    • I think they’ll do something around differential privacy and group people into 1000 or 5000 person cohorts that can be targeted … 
    • Every marketer wants granular data
    • Almost zero marketers actually use totally granular data
    • There’s an in-between solution
    • And that’ll make the adtech space a much safer one for privacy
  • What might change between now and when the privacy policy will eventually kick in?
    • Possibly a few more SKAdNetwork features
    • Some more preparedness from app publishers
    • Better solutions from MMPs
    • But … some publishers will still be late 🙂
  • What’s the long-term impact to advertising? And to mobile apps?
    • I think the “secular trend” is towards privacy
      • This is the opposite trend that we’ve seen in adtech
      • Which has been to more tracking
    • Advertising started out: no idea what works … what ad works … 
    • Used coupons and codes to learn
    • Digital advertising: tracking and tracing
    • Now … 3rd party cookies going away
    • IDFAs going away
    • GAIDs going away (probably)
    • Have to go back to contextual for targeting
    • Means a flight to quality
      • WSJ audience
      • Only in WSJ
      • Not in Angry Birds
    • And means measuring moves to incrementality and media-mix model and probabilistic models
      • No device ID
      • Spend data
      • App data 
      • Closer to multi-touch attribution … or at least not last-click, which is BS
    • And it means that for apps
      • Flight to quality
      • Monetize on-platform (IAPs, subscriptions)
      • Ads revenue moves to the margins
        • Cheap (gets even cheaper) on hyper-casual
        • Expensive on quality outlets

 

 


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