Apple's privacy clampdown: Less precision targeting, more walled gardens

Apple’s war against third-party data could spell the end of precision targeting, a renewed focus on creative quality, the proliferation of walled gardens and a new type of data expertise, according to a host of industry experts.

Earlier this month Apple revealed plans to introduce an anonymised sign-in ID that protects user privacy within apps.

‘Sign In with Apple’ combines the ease of social login options such as ‘Login with Facebook’—by circumventing the need to create a new identity for each website or app—without requiring users to give away data permissions.

While the move appears to be predominantly aimed at preventing Facebook and Google from gathering information on Apple devices, it also has a knock-on effect on advertisers’ ability to track and target online users.

“With confirmation that the new ‘Sign in with Apple’ tool won’t reveal consumers’ personal information, it will become increasingly harder for third parties to provide personalised experiences to customers,” said Tealium senior director of marketing Joseph Suriya.

Apple is even offering the option to generate a random email address for users who don’t want to give away their personal email when signing in, which then forwards to their real inbox.

The move comes as part of a broader privacy push from the world’s most powerful tech companies; giving consumers greater oversight and control over how they are tracked across the internet.

“The reality is that it may soon not only concern Apple devices, but rather start a trend with other giants too,” said Benjamin Pavanetto, head of APAC at Adludio. “Google for example already has an optional sign-in with Google feature which they can make compulsory for publishers to adopt.”

Craig Federighi, Apple’s SVP of software engineering, at Worldwide Developer Conference 2019

The ‘Sign in with Apple’ update was one of a round of privacy features announced for iOS 13, and came one month after Google cracked down on third-party tracking cookies.

With tracking limitations only likely to increase, tactics such as remarketing are going to become more difficult to execute, according to Shane Dewar, VP of media operations APAC at Essence.

“There will also be challenges in managing frequency, segmenting audiences for testing purposes, and of course, tracking conversions,” he added.

The most likely consequence will see advertisers shift focus away from deep intrusive precision targeting into more generic contextual targeting based on first-party audience insights.

“Personalisation of advertising may more closely align with site content rather than user behaviour,” Dewar said.

Pavanetto added: “Data around creative, as opposed to creative around individuals, will become more and more important.”

Upskilling in data analysis

Finding creative ways to use less data more effectively will require advertisers to grow their data analysis expertise.

“Whilst it will be more difficult for advertisers to target, personalise messages, optimise campaigns and measure their success using more traditional methods, there is an opportunity to identify patterns in user behaviour using predictive models to prove campaign success,” Dewar said.

“To do this, advertisers will need to leverage data analytics and machine-learning techniques, and of course, need a workforce with the skills to navigate this new environment,” he added.

Having data experts in place will also aid with cleansing existing and real-time data to prevent against bias, Suriya said.

“This is particularly valuable when using these insights to deliver personalised online marketing and advertising campaigns,” he added.

Proliferation of walled gardens

One further consequence of a shift back to contextual targeting could see the creation of more walled gardens, as the power is put in the hands of media owners with first-party relationships.

“With ‘Sign In with Apple’, publishers will lose their ability to data sync across the programmatic ecosystem,” Pavanetto said. “Consequently the value of their data will reside in their own system, resulting in more walled gardens.”

Suriya suggested media owners should look to capitalise on this opportunity.

“This step towards tighter privacy should not be seen as negative; instead it should encourage organisations to shift their focus to building their own data foundation,” Suriya said.

Emphasis back on quality creative

Additionally, as users become better educated on data-privacy issues and demand more control over how their data is used, the expectation of quality will rise.

“User experience is going to be a key driver in how the industry approaches ad placements on sites, where consumers who agree to exchange privacy for ad exposure are going to look for quality ads relevant to them,” said Dewar.

“I predict a rise of collaborations between publishers and agencies to make more meaningful ads that align with the content users are accessing.”

Pavanetto added that for too long advertisers have "gone down the warren hole of cookies and targeting" at the expense of strong creative, which has the biggest impact on advertising effectiveness.

“This will inevitably change as privacy becomes ever more important, and it is those companies that combine creativity with technology that will win,” he said.

Interestingly, this might mean advertisers looking beyond the social channels "which have gobbled up so much of the mobile ad pot in recent years, but where creativity and innovation in advertising are limited", he added.

As mobile grows, fallout increases

As the second biggest smartphone manufacturer globally, any tracking-related update Apple makes to its services has significant implications on the advertising industry.

While Apple’s iPhone sales fell 17% in the first three months of the year, it still captures 23% of the mobile market globally, second only to Samsung (31%), according to StatCounter’s May statistics.

“Apple still represents a significant market share on mobile, so it would be difficult to ignore them due to tracking limitations,” said Dewar.

This is especially true in Asia, where smartphone penetration is rapidly on the rise. Of the 710 million people expected to subscribe to mobile services for the first time over the next seven years, half will come from the Asia-Pacific region, according to the GSMA 2019 Mobile Economy report.

Furthermore, the bulk of digital advertising growth is predicted to come from ad impressions and clicks on mobile devices this year.

Globally, mobile ad sales are predicted to grow by 24% this year to account for 68% of total digital advertising, while desktop-based ad revenues will shrink by 3% due to declining usage and ad blocking, according to the latest Magna global advertising forecast.

In Asia-Pacific, mobile ad spend is predicted to grow by 26% in 2019, compared to 5% loss for desktop spend.