Soon the ATT (App Tracking Transparency) will be rolling out on iPhones. ATT is a system that mandates apps to ask users if they are willing to allow apps to track them across other apps and the web. Looks like all positive, but not exactly.
ATT, as all other recent initiatives around privacy, draws an easy to understand border on what data it is ok to grab silently and what first needs to be asked for. Simply speaking, first-party (the data is sent to the same domain the user is on) data collection is ok, third-party - not ok.
Basically, you can collect in your own database anything you want. But it is considered suspicious to send same data to the database on the server belonging to another company. Looks reasonable, but there are a lot of shades of grey here.
General consensus that huge ad platforms (read Facebook and Google) will suffer most from these changes, because they are all third-party agents here and as a result will loose a lot of valuable customer insights that allow them to be efficient with ad targeting.
End consumer apps have a lot of data about customer engagement, but signals that are most valuable for conversion actions are mostly coming from external sources. Will a user consider to buy your product, download a game, signup for a trial period?
Ad targeting is possible because of this data. Match-3 game developer can show ads about his game to people who love and play this type of games. Ad networks know these things about the users, your favourite app does not.
After ATT it will be harder for advertisers (e-commerce, games, saas services, online education, etc.) to get new clients for the same money. Because there will be less data, less users and as a result the price for acquiring audience will rise.
Big tech will need to look for new revenue sources. And if first-party = good and third-party = bad, it will be logical to gather as much data as they could by themselves - to create products that will generate such data: games, e-commerce, education, etc.
It could lead to even more monopolization and competition with small businesses. Which as result will suffer most. First, it could become harder to reach new audience and secondly they will have a new competitor, Facebook or Google.
What Apple needs from all of this? iOS privacy superiority over Android is certainly a factor, but there is another goal: to return control of app discovery.
Ads are the main source of app installs. So not Apple is affecting which apps will become popular and how the users will use their phones, but Facebook. One can argue that today App Store is an annoying unnecessary layer with a download button.
Apple wants it to be like before when App Store was used for discovery of new apps, when featuring was a tool to influence and direct to what is good for the platform in Apple’s mind. May be, Apple Arcade would be much more popular and bring more revenue if only the discovery process was still in the Apple’s hands?
This post is mostly based on An Interview with Eric Seufert about Apple, Facebook, and Mobile Advertising and Surveillance advertising is a myth. I recommend reading them if you’re interested in the topic, they are much more comprehensive than my short take on the subject.