By Marty Swant

Two years after Apple’s App Tracking Transparency went into effect, the framework is looking more like Schrödinger’s cat than a total poison pill for ad-tech.

It’s no secret and no surprise that Apple’s privacy changes have had a major impact on digital advertising. Since going into effect two years ago this week, ATT has cost social networks billions of dollars in lost ad revenue, given Apple a potentially major advantage for its own ads business, and provided users a way to think differently about their data.

When Apple first introduced ATT in 2021 — a feature of iOS 14.5 and iPadOS 14.5 — it offered users an easier way to opt out of being tracked by apps with added controls for how companies collect, share and use personal information. However, it also exposed weaknesses in seemingly impenetrable giants like Facebook and Google and created an “existential crisis” across an industry heavily reliant on third-party data.

Despite doomsday warnings of how Apple’s changes could cause an implosion of ad-tech, there is still growth. Internet ad revenue grew 10.8% year-over-year to $209.7 billion after growing 35% the year prior, according to the Interactive Advertising Bureau’s 2023 report released earlier this month. Even social media grew at a rate of 14%, according to the annual study, which was conducted with the auditing firm PwC.

“If you were to ask a small business owner if the hype was overblown, they’d say absolutely not,” said IAB President David Cohen. “Is it the doomsday scenario? No. But [it] still inhibits the industry… There’s a pretty big delta between 35% and 10.8%.”

Apple hasn’t gone without facing new scrutiny over ATT. Officials in France are reportedly considering antitrust action related to its app tracking changes, following similar actions taken by German regulators last year. And earlier this week, European Union regulators clarified that Apple’s App Store would be among the 19 tech giants governed under the new Digital Services Act. (For example, the company will be forced to follow the same app tracking transparency rules it’s set for third-party developers.)

Apple’s changes have been a “very bright light” on non-consented data use, said Gartner analyst Eric Schmidt, but declining match rates and weakening retargeting have also highlighted broader issues around measurement.

“Competitively, it was a master stroke by Apple,” Schmidt said. “They put themselves in the driver’s seat. They control the narrative of what happens on an Apple device stays on an Apple device. They put Google on the defensive and control the timing because now they have the narrative and can decide when to make the next tweak, [or] tighten up the next parameter.”

The impact of ATT also continued to be a cloud over corporate earnings, following last year’s slowdown at companies such as Meta, Google and Snap. Others — such as Nextdoor, Spotify, Groupon and Cars.com — have all mentioned the potential challenges in their financial disclosures along with ad-tech companies including The …read more

Source:: Digiday

Author: Aaron