What are the implications of Apple’s App Tracking Transparency (ATT) privacy feature, which it introduced a little over a year ago, on the iPhone? It is already known that companies whose business model is based almost exclusively on targeted advertising are suffering – Facebook’s parent Meta, for example, has allegedly lost billions of US dollars.
But ATT can also cause smaller (online) companies have to find new waysto reach their customers. The Financial Times reports. According to this, they complain, among other things, about an increase in advertising prices with simultaneous reductions in targeting accuracy.
Apps ask whether tracking is allowed
The implementation of the app tracking transparency, which found its way to the iPhone with iOS 14.5 in April 2021, is actually solved very easily: apps that want to use an advertising ID on the iPhone to target users across multiple programs track, must obtain consent to do so. And apparently only very few users give these – initially the opt-in rate in the USA was only 6 percent.
Numerous SMBs, which previously depended on online advertising to reach new customers, told the Financial Times that they didn’t initially feel Apple’s restrictions, but that this has changed in recent months. Users are more critical and harder to reach due to general inflation. At the same time, prices for online advertising have increased, while their targeting is reduced due to ATT. One entrepreneur said this year was “just brutal”. Her company, which sells handmade shoes from California, says advertising is more expensive with less access to data “and it’s overall less effective than we’re used to.”
Effects also on service providers
Data from 1,300 smaller online e-commerce firms showed that sales fell by around 13 percent in June. Customer acquisition costs have “increased significantly”. Nevertheless, less money went to the Meta subsidiary Facebook. A smaller fashion company said they were previously able to roughly double the revenue impact on their advertising budget. “You put a dollar in and got two dollars back.” That no longer exists today. This also has an impact on service providers: The e-commerce specialist Shopify, for example, is suffering, for example, which recently cut ten percent of its jobs. Meanwhile, Twitter was in the red.
Apple itself seems to benefit the most from ATT. They are working on expanding their in-house advertising service, which relies primarily on search advertising. Users, in turn, feel less pursued by advertisers thanks to the function. Meanwhile, government agencies are also interested in the effects of ATT. Cartel watchdogs in several countries want to check whether Apple prefers its own services and outdoes its competitors in terms of data protection.
