New Tracking Limits
A while back, Apple released iOS 14.5, which introduced the App Tracking Transparency feature. The App Tracking Transparency feature prompts users if they want to be "tracked", which is where data coming from you is sent to a central location, usually for the purposes of targeted advertising. Its live implementation came as a surprise to no one, as Apple was announcing it for a year before it was finally implemented, presumably to give developers time to prepare.
The common narrative is that app tracking transparency is a benefit to consumers whose data will now be harder to collect because of the increased difficulty of tracking on iOS devices based on these new rules. The best argument of proponents of this feature is that people have an inalienable right to privacy, of which the activities of users on their device is not exempted from. They will also point out an entire ecosystem of ad networks--perhaps some of the most egregious of which is Grindr, which is claimed to be sharing data with up to 35 different third parties. Overall, as far as online businesses are concerned, apps whose business model is mostly based on advertising will probably be much less feasible, especially if their medium is mostly on iOS devices.
Since its implementation, most users chose to opt out of being tracked, with a whopping 96% of users choosing no. According to the statistic, the sample is based off of US users. The global number is higher at around 12%; however, it is still a huge loss in terms of possible tracking data.
Examining the implications of new tracking rules and its intentions
Coming from Apple, the intention for this new rule is quite simple, as explained earlier. For years, Apple has been leading the charge in ensuring user privacy, and the general intention is to maximize that privacy, or at least push it up to a high standard. As far back as 2010, Steve Jobs stated that "privacy means people know what they're signing up for.. let them know precisely what they're going to do with you with their data", and this same sentiment was echoed by Tim Cook.
Outside of data privacy, one implication of this on the user's ad experience is that ads will be much less targeted. According to tech experts, the effects could be devastating for sites like Facebook, whose business model is mostly based on data collection.
Skepticism Regarding App Tracking Transparency
There is a large consensus of people who value privacy, and this is reflected in articles related to Apple's new ATT, and the aforementioned opt-in rate earlier. Reports of users' data being leaked does not help this negative perception, like the Cambridge Analytica Scandal. As agreeable as this is, however, it does not tell the whole story.
Here are some reasons why we should be skeptical of app tracking transparency portrayed in a positive light--both from a fundamental concept, and also its implementation by Apple specifically.
- The data-tracking ecosystem that companies use is a separate concept from targeted advertising per se.
As mentioned earlier, it might seem egregious to many that there is so much information that Facebook, et al., can collect on you, just based on something as insignificant as one's browsing patterns and tendencies. The goal of a business is to maximize profit, and companies learning these subtle patterns helped make the data much more valuable, but triggers privacy concerns.
Say what you want about that, but that should not be confused with targeted advertising per se, although they tend to be used together. There is nothing wrong about targeted advertising as a concept if it's not privacy-invasive. In addition, people generally know its benefits. According to an article by Cision, 52% of consumers are aware of at least one benefit of targeted advertising, even in spite of privacy concerns. The same article did say that only 12% of consumers admit to having a positive outlook on targeted advertising, but that consensus will improve over time.
- The reliance of businesses on targeted ads is much more than you think.
Believe it or not, in this digital world that we live in, people's attention is very centralized in social media, messaging apps, and other websites. As far as advertising is concerned, social media and messaging apps are some of the only places to advertise certain things effectively these days, and the only place to invite people to spend their hard-earned money on a product. This feature makes it harder to target certain demographics.
According to a VP of privacy and policy at a data management firm, Facebook wouldn't lose that much revenue, but small businesses "could face major impacts to their revenue", possibly more than 50% in some cases. In that same article, it mentioned that the natural consequence of the ATT prompt will be less conversions, driving up the price for advertising.
- There will be a rise in the number of apps that were previously free... that will no longer be.
We've already seen this happen with Facebook, as Mark Zuckerberg threatened to make Facebook a paid app in iOS devices. However, consensus there is that users will likely choose not to use it, so it remains to be seen whether this will actually happen.
According to BuiltIn, there is a possibility that "fremium" mobile app games could no longer be supported by advertisers, making the free-to-play business model much less feasible. This is significant because the "freemium" business model is the most common revenue model amongst games. In that same article, they mentioned that Unity, a game development engine, could lose as much as $30 million adapting to Apple's new tracking rules.
- Apple doesn't explain what happens if they opt out of tracking, or what "opting out" really means.
Based on all that you have read above, hopefully you have been led to the realization that targeted advertising is in fact, a benefit to the digital world. This article from Mobile Dev Memo explains how Apple failed to explain to users the full implications of its ATT, specifically mentioning the failure to explain how their data is collected, and why.
In addition, Apple should not be seen some saint in regards to their privacy crusade, because your privacy concerns just so happen to align with their self-interest in a more centralized Apple advertising system. According to another article by that site, their deprecation of IDFA (Apple ID for Advertisers) helped 1) grow the Apple Search Ads Network (their own advertising platform), and 2) take back control over what goes to the "Top Charts" column, effectively ceding to Apple some power to algorithmically decide what their app store's most popular apps are.
This has been a pretty long article, but I believe it deserved that, because the consensus amongst the tech world is that Apple should be praised for this privacy crusade, even though a lot of it is undeserved. Although the following saying is quite an exaggeration describing what Apple's motivations are in this case, I believe it applies:
"The road to hell is paved with good intentions".