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Apple roiled advertisers in 2021 with privacy changes. Here’s what 10 experts think it’ll do to disrupt the ad industry next.

By February 22, 2022August 18th, 2022Press 8 Min Read
Kochava logo over background illustration
  • Apple’s privacy update last year threw the mobile ad industry into chaos.
  • Industry insiders think Apple has more plans to clamp down on tracking.
  • Insider spoke to 10 experts who predicted 3 privacy and ad updates Apple might announce next.

When Apple announced in 2020 it was introducing a new privacy update that would allow users to opt out of being tracked via its Identifier for Advertisers, some people in the advertising industry thought Android’s AdID would be the next to follow suit shoe to drop.

On Wednesday, Google announced its early-stage preparations for its version of Apple’s privacy update. It set the countdown clock for its support of AdID at “at least two years.” In the meantime, Google said it would work with the industry to develop new privacy-focused adtech alternatives as part of its “Privacy Sandbox” initiative.

Now the ball is back in Apple’s court.

Advertisers, app developers, and the tech vendors that connect then will be closely watching Apple’s annual Worldwide Developer Conference in June for yet more privacy announcements.

“They are still pointing at a north star of stopping pervasive cross-app tracking,” said an adtech veteran who requested anonymity because they were not authorized to speak to the press on behalf of their organization. “You can set your watch by it: They will make an announcement, I’m sure, at WWDC.”

Insider spoke to 10 mobile ad industry experts who speculated on what could materialize at Apple’s summer event. Their predictions varied from Apple turning the privacy screws more tightly to the company making further strides to strengthen its own advertising business.

Apple didn’t immediately respond to a request for comment.

1. Apple could expand its “Private Relay” function

A bugbear held by some members of the mobile ad community is that Apple hasn’t punished companies that are circumventing its rules — in public, anyway.

Apple’s Developer Program License Agreement explicitly outlaws the practice of “fingerprinting” if users have opted out of tracking, for example. Even without access to the IDFA, advertisers and adtech vendors can stitch together other information from a device — such as a user’s IP address, the device’s language setting, or operating system — to probabilistically match which users clicked an ad to download an app. Vendors can also potentially use this fingerprinted information to create unique profiles on users, without their permission.

Rather than kick apps out of the App Store if they are found to be involved in fingerprinting, “it appears as if they are looking to leverage technology as the mechanism of enforcement,” suggested Charles Manning, CEO of mobile analytics firm Kochava.

At last year’s WWDC, Apple introduced Private Relay for its paying iCloud+ subscribers. Private Relay effectively acts like a virtual-private network, masking a user’s IP address and Safari activity as they browse the web. The IP address is largely seen as the most useful signal for device fingerprinting.

Eric Seufert, strategy consultant at Heracles Media and owner of the Mobile Dev Memo blog, predicted Apple would find a way to expand Private Relay to intersect all traffic leaving the iPhone in order to clamp down on fingerprinting.

“It’s the only logical next step if they want to prosecute this — if it wasn’t just a PR campaign,” Seufert said.

Some observers noted it could be costly for Apple to relay so much traffic, but Seufert said Apple could create alternatives such as only additionally funneling adtech-related traffic through a dedicated “SDK runtime” environment.

Amping up Private Relay is an option that wouldn’t just roil advertisers, but potentially telco firms, too. Some carriers including T-Mobile and Sprint in the US have even blocked the IP address function of Private Relay for some customers. Elsewhere, mobile network operators in Europe have implored the European Commission to force Apple to block Private Relay altogether. Telcos have expressed concerns that cutting off access to data will prevent them from being able to operate their networks effectively.

2. Apple could launch its own version of Privacy Sandbox

As Google’s Privacy Sandbox attempts to put its testing of privacy-focused ad tools out in the open, some experts speculated Apple might be doing something similar in private.

Apple already offers a fairly basic ad measurement solution called SKAdNetwork — but many industry insiders are hoping for improvements, such as support for web-to-app conversions.

“Right now, it’s simply too limited for most app marketers to work with effectively, which has driven a lot of the general angst in the ecosystem,” said Alex Bauer, head of product marketing and market strategy at mobile analytics firm Branch.

Madan Bharadwaj, CTO of analytics firm Measured, mused on whether Apple might have bigger plans for ad measurement, similar to the way that Google has posited grouping consumers into “cohorts,” based around topics of interest, rather than being able to identify and target individual users.

Apple could be planning something more ambitious — perhaps even another crack at launching a broader advertising business. A recent job ad description, for example, said the company is “setting new standards for enabling effective advertising while protecting user privacy.”

“They could do something quite elegant that improves on the way the industry works, is privacy focused,  respects people’s time, that they could argue is better than the average and, net-net, benefits everyone in the ecosystem,” said Simon Andrews, founder at mobile agency Addictive.

3. Apple further bolsters its own search ads business

A clear beneficiary of Apple’s privacy update has been Apple’s own advertising business.

Market analyst firm Omida estimated Apple’s advertising revenue grew to $3.5 billion in 2021, up 264%  from 2020, as advertisers shifted their app-advertising spend to its App Store search ads following the privacy rollout. Similarly, Measured said its clients spent 250% more on Apple Search Ads in 2021 versus 2020.

Apple’s Search advertising formats and targeting options are basic — but some advertising experts predicted it would add more bells and whistles as app developers continue to seek efficient ways to find new users and monetize their apps.

Apple’s recent moves to add more ad placements across its own apps and to allow developers to display up to 35 versions of their store fronts in the App Store suggest there could be more similar launches to come, said Itai Cohen, who leads marketing and corporate strategy at mobile software company Digital Turbine.

“Custom product pages are good for the entire ecosystem — you can also take that link and connect to campaigns running programmatically,” said Cohen. “It’s another data point that shows Apple cares more about advertising.”

Still, if Apple’s ad business continues to prosper in a meaningful way at the expense of its rivals, antitrust regulators could begin to pay even closer attention to the company, experts said.