Apple’s lack of new anti-tracking rules leaves advertisers ‘shocked’

When Apple revealed iOS 16 at its developer conference this week, the marketing world held its breath, expecting the company to take the nuclear option to cut off data coming from iPhones that feeds mobile advertising. Instead, Apple appeared to give the industry a reprieve, for now.

“I am shocked,” said one marketing tech executive, who is familiar with Apple’s ecosystem and spoke on the condition of anonymity. Others were shocked, too. “We were expecting the same announcement,” said Andrew Casale, CEO of Index Exchange, the programmatic ad marketplace.

At Apple’s Worldwide Developer Conference, mobile marketers thought Apple would expand anti-tracking features on iPhones, but the company was more reserved. Advertisers said Apple could be feeling the pressure from companies complaining about its heavy hand; that Apple has gotten shy about its anti-tracking tactics, after companies like Meta slammed its policies as anti-competitive. Even companies that have worked more amicably with Apple, like Snap, have been affected by an inability to help advertisers as effectively as before, and merchants are worried about not being able to grow without a digital line of sight into consumer behavior on iPhones.

Apple could see that its advertising and privacy platform “still isn’t fully baked,” Casale said. And Apple is “responding to pressure.”

Apple is not known for giving much deference to the advertising ecosystem, which is full of developers, publishers, third-party ad tech vendors, and of course, businesses that advertise. “There’s been a lot of collateral damage, where privacy was more expensive than [Apple] thought,” said Rabah Rahil, chief marketing officer at Triple Whale, an e-commerce mobile marketing platform. “It’s one thing to put privacy first when everyone’s rich, but it’s another thing when people are going through really challenging times and economic headwinds.”

Last month, Snap noted that the economy, with inflation and other signs of trouble, could lead to lower ad revenue growth than it anticipated in the second quarter. Apple’s data restrictions were considered one of the factors, too. Rahil works with thousands of small- and medium-size merchants on Shopify, merchants that use mobile app marketing to grow, and he said they have been struggling from Apple’s advertising changes. It’s a theme that has been raised a number of times, with companies like Meta and Google talking about the impact that anti-tracking policies have on small businesses.

Apple has been working on its fixes to the advertising ecosystem to continue sharing information with marketers to help them reach consumers without divulging personal information. At WWDC, one of Apple’s biggest updates was to the SKAdNetwork, which is its platform for sharing limited data from iPhones. One of the changes to SKAdNetwork allows advertisers on websites on Safari web browsers to get data about consumers who then visit apps. “They added web-to-app attribution, which actually is kind of a big deal,” Casale said.

Since 2017, Apple has used WWDC software updates to slowly chip away at the use of cookies and IDs, which have been used to track when consumers view ads and purchase products in apps and on websites. Apple has turned its anti-tracking crusade into a marketing bonanza, pushing back against “surveillance advertising.” Just last month, Apple released its latest commercial spot in the “Privacy. That’s iPhone” campaign, which depicted a setting where data brokers auction an internet user’s personal information.

All the signs pointed to Apple implementing more anti-tracking measures with iOS 16, and announcing the updates at WWDC. Marketers were waiting for Apple to roll out Private Relay, which would have been a significant step. Private Relay is a program that iCloud subscribers can use to surf the web without sharing their IP address—network and device information—with websites when they use Safari. That program was launched last year, and it started to chip away at controversial practice in digital marketing, known as “fingerprinting,” which is when parties in the ad tech ecosystem help advertisers indirectly identify devices when the publisher does not have an identity, like an email or name of a person. Last year Apple implemented the App Tracking Transparency framework, which hides the Identifier for Advertisers, a code associated with a device for the purposes of personalizing ads and services, unless the consumer opts-in.

Apple has made it more difficult for apps and publishers to get direct information on their audiences unless the person logs-in or gives direct permission. And IP addresses have become one of the workarounds marketers use so they can keep measuring their ad campaigns, seeing what ad placements were effective and which audiences are best to target.

“Apple has this challenge, that they rely on the success of the apps that are on their app store,” said another marketing tech executive, who spoke on the condition of anonymity. “If what they’re doing either makes it inconceivably hard to have discovery or grow or hurts their enterprise value, it’s certainly a problem for Apple.”

Most marketers expect that Apple changed how it delivers its anti-tracking notices, but it will still curb data-sharing, and likely soon. Apple could still make options like Private Relay, one of the last vestiges of surreptitious tracking, more available.

“The reason why I think it’s inevitable is Apple’s marketing,” Casale said, pointing to the privacy ads that put Apple on record as firmly committed to stamping out tracking consumers online.