Back in June of 2020, Apple announced during WWDC that Apps would be required to prompt for consent prior to collecting data for advertising purposes. This was done in phases. The first phase – disclosure occurred in December of 2020. The second (and more critical ) phase was delayed, but finally shipped on April 26th 2021.
Since April, we’ve been seeing the fallout of this requirement play out in across the App Store. Consent rates for data collection are low. Various studies have indicated that somewhere between 5 and 25% of users actually consent to data collection, but phrased another way, that means upwards of 75% actively decline.
The impact to media spend played out quickly across the App Store. In May, Forbes reported that spending on Android was up upwards of 21%, because at least on that platform, you can measure the results. The shift from iOS to Android wasn’t temporary either, as a month later Digiday reported. More money was shifting to Android as iOS media spend decreased.
Facebook was very vocal about these changes, and actively fought Apple in a narrative online and in printed media. However they finally added the consent calls to their own software earlier this year. They additionally issued new guidance on how campaigns had to be ran in this new world.
Following updating their apps, and the broader changes to the App Store at large, they issued a warning in their second quarter earnings call that this would likely negatively affect their ad business.
Facebook followed up the earlier warning on September 22nd, with a blog post that restated the headwinds from the AppStore platform changes, and went on to say they had been underreporting iOS web conversions by roughly 15%. The post went on to say a number of things marketers can do, and some things Facebook was doing to help alleviate the losses being felt by advertisers. In response to the news Facebook’s stock fell by 4%,
Now we’re starting to see the fall out play out in a blog posts like this one and on Twitter threads.
It turns out (likely to the surprise of no one) that if you give people a choice on if they want to be tracked, largely – they decline. This in turn causes a lack of Return on Ad Spend / Conversion Measurement to play out on a platform, which causes marketers to slow spending – even if that spending is effective, because they can’t measure it effectively to know it is effective. For some brands that drive all their traffic through advertising, the loss of traffic likely means a sizable drop in revenue as well.
Advertisers are continuing to shift spend around grasping for a way to stabilize given the loss of one (or more) of the larger ad platforms. Android was good in the short term, but that’s going to start to change as new data policies begin to take hold in October 2021.
In April of 2022, Android will adopt a similar consent mechanic for data collection. So we’ll likely see the same loss of data play out across the Google Play store (albeit likely in a slower timeline due to Android fragmentation). I see no reason to expect Android users will be more likely to consent than iOS users were.
This is going to place advertisers in a very bad position if they are not ready. If Google Play and the AppStore both require consent for data collection – and the odds of getting consent are low, that going to be very rough on some brands, if not a outright death sentence.
Alternatives are scarce. With iOS15, marketers became blind to a large segment of email traffic. Traditional web is in bad shape given Intelligent Tracking Prevention, Enhanced Tracking Protection and so on. This is to say nothing about the pending laws going into effect in California, Colorado and Virginia in 2023.
The data powered advertising / targeting model is in for a rough time. The world is shifting to a consent model, (ala GDPR) one platform or ecosystem at a time. Brands really need to take a step back and figure out their business models and how they will make money from advertising in this new world. This change is notable, because it likely means some business models stop being viable entirely either due to platform requirements or pending regulation.
A lot of companies were caught completely off guard by the impact of AppTracking Transparency on the AppStore. We’re down to just over six months before the same exact thing happens on the Google Play store. If you are in marketing you can not wait. You must be aware of what is coming and prepare before history repeats itself in April of 2022.