Cheat Sheet: Apple has set a date for its privacy push on advertising. Now comes the hard part

It’s a prompt notification for Apple device users to give apps access to the mobile identifier tied to their device so advertising businesses can track them. The prompt reads something like this: “app X would like permission to track you across apps and sites owned by other companies.” The message is followed by two buttons that say either “allow tracking” or “don’t allow tracking.”

What happens if someone refuses to share their data?

If someone decides they don’t want to be tracked, then advertisers can’t serve them targeted ads — whether it’s in-app or the web — irrespective of how that data is gained. This means no trying to concoct alternate identifiers to the IDFA, which can use everything from hashed emails to device fingerprinting. And there’s the kicker for advertisers: usually, there’s a workaround for this sort of issue. Apple, however, has tried to snuff them all out.

Are no workarounds a bad thing?

It is if you’re a business that relies on aggregating user-level data for tracking. If this happens, then targeting and measurement become tricky. In fact, targeting ads is pretty much non-existent in Apple’s eyes, while the measurement of them is blunt at best thanks to the SKADNetwork. This is how attribution for mobile ad campaigns will be done when people opt out of being tracked. Similarly, there’s Private Click Measurement, which is how web events will be attributed for those same people. Essentially, both solutions aggregate advertising data at the level of the campaign, not the user, for one event only.

OK. So blunt tracking means bad news for a lot of companies?

Normally, when someone clicks on an ad, that data and any subsequent actions they take are tracked by the company behind it. This goes away once someone decides not to be tracked. Instead, the company can only attribute one action to the campaign per user and only at the campaign level so any granularly about how that person was influenced by the ad is lost. When this happens, marketers can’t track revenue generated by ad campaigns. And if only one event is attributed to the campaign then it limits what marketers can optimize against — not to mention what they can target against. Naturally, marketers reliant on retargeting and granular targeting are freaking out over the amount of money they miss out on once those prompts start showing up.

Is this why Facebook is freaking out?

Before the arrival of ATT, Facebook had access to an abundance of data on how Apple users behave on sites and in app. Armed with this information, the social network can build detailed profiles of people based on how they behave and what they buy in those environments. The data is then used to serve the person targeted ads. When Apple throttles this data, it will throttle Facebook’s ads business. In fact, Seufert has said it could wipe away as much as 7% of Facebook’s revenue in the second quarter. In many ways, this data is more valuable to Facebook than its own on those same users.

How hard will Apple enforce this?

Expect Apple to take ATT very seriously. It has a lot riding on it. Not only could ATT shore up the company’s attempt to protect the privacy of its customers, which is a staple of its marketing, it could also let it exert its influence over an app store that’s driven by advertising it has limited control over. Apple needs ATT to work as intended and paralyze online advertising. In fact, it has already started quietly enforcing ATT as Adjust discovered recently.

Is ATT ultimately a good thing? 

The hope is that there will be a bit of short-term pain for long-term gain. Something had to be done. The way someone’s data was being sliced and diced by companies behind their backs just wasn’t sustainable. In many ways, the IDFA had to go given how often it was being abused by ad tech vendors and data brokers. It was so bad that Eric Seufert, a media strategist and owner of the Mobile Dev Memo blog, called IDFA the “hydrocarbon of the mobile ad ecosystem.”

Apple’s plan doesn’t seem entirely altruistic…

Exactly. The right way to do build a privacy policy around online advertising would be to preserve the advantages of personalization while simultaneously purging the shady practices around tracking someone. What Apple is proposing, though, suggests the company is more concerned with consolidating its own position in the market, whether its customer proposition on privacy or its control over the app store. Ultimately, Apple wins.

Still, it’s not like Apple is forcing people to opt-out of being tracked… right? 

That’s true. But how many of those people really understand what that choice means for the content they love. After all, digital privacy is a spectrum of tradeoffs, said Michael Zacharski, CEO at Engine Media Exchange. “As an industry, we have not done enough to educate consumers,” he said.

If an app can no longer be free because it can’t make money on personalized ads then it will struggle to exist. And if this happens then it becomes more dependent on the app store, and subsequently Apple for distribution. That’s a lot of nuances to cram into a prompt message.