Recent changes to Apple’s IDFA have thrown a monkey wrench into many marketers’ grand plans. Meanwhile, the most popular browsers are tightening their privacy policies so advertisers can no longer dip their hands into the cookie jar for audience data.

What exactly is going on, and what does it mean for your app? Here’s what you need to know.

How Are Cookies and IDFA Changing?

These two significant changes will affect advertisers’ ability to leverage user data for targeting their online ads.

Third-Party Cookies Are Going Away

You can keep digging into the chocolate chip cookie dough… we don’t judge! But that piece of code that gets dropped on your browser when you visit a website will be gone. Specifically, we’re talking about third-party cookies placed by domains other than the website a user is visiting. These cookies collect information about the user to inform online ad targeting.

Safari has already discontinued the use of third-party cookies in 2018, and Firefox did so in 2019. Since these two browsers only make up around 22% of the market share, the changes didn’t cause much grieve for marketers. But things are going to change dramatically soon. Google, which owns 64.47% of the global browser market share, has announced its plan to phase out third-party cookies. For advertisers, this means the end of retargeting and behavioral ad targeting as we know it.

The Apple Privacy Framework

Apple has added a new feature called App Tracking Transparency (ATT) in iOS 14.5, which was released on April 26, 2021. Simply put, it will prompt users to opt-in before an app can use an Identifier for Advertisers (IDFA) to track their online activities. (In the past, IDFAs were on by default.)

IDFA is a token generated on an Apple device that allows advertisers to collect data about users’ interactions with websites and apps so brands can target their ads and deliver a personalized experience. With ATT, users have the option to allow tracking across third-party apps. If a user doesn’t opt-in, then the device’s operating system will prohibit such tracking. An average app has 6 of these trackers. Making IDFA optional will have a substantial impact on advertisers’ ability to gather user data.

What Do These Privacy Changes Mean For Your App?

The new ATT requires each mobile app to prompt users to accept the use of IDFA. In the short term, developers will need to resubmit their software development kits (SDKs) to Apple. In the long run, ATT will likely change how apps are developed. These considerations should be incorporated into your future product strategy.

When you run ads on Facebook to promote an app, you will have to create an iOS-specific campaign with fewer tracking items. If you’re redirecting the audience to a website, you’ll need to update the tagging framework to only eight or fewer conversion events. The granularity at which users are tracked and the activities reported will be different, thereby impacting your tagging strategies.

While the dust is still settling, we’re seeing an opt-in rate of 11% to 15% in the weeks since iOS 14.5 launched. This low opt-in rate can be troublesome for advertisers because it limits the ability to collect sufficient third-party data from apps to drive accurate decision-making.

Platforms such as Facebook and Google will experience a drop in advertising efficiency since they can no longer leverage user data such as browsing history, interests, and online activities to support targeting. While these platforms can make up for some of the losses with better contextual targeting, advertisers will still feel the impact. Meanwhile, ATT will make it close to impossible to attribute activities (e.g., app installs or app events) to ad exposure — making it challenging to evaluate if you’re spending your marketing budget in the right place.

But you don’t have to be a sitting duck. Here’s how you can proactively adapt to these changes:

• The most popular apps have a 40% higher opt-in rate than the least popular ones. It’s therefore more important than ever to build trust with your audience, deliver a great user experience, and get good ratings for your app, so more users will opt into IDFA tracking.

• Users are more likely to share their data if doing so can add value to their experiences, such as personalized communication and relevant functionalities. Explain these benefits when you request their permission to turn on IDFA.

• Google and Facebook will likely improve their contextual targeting to reduce dependency on IDFA. We can expect new changes to emerge over the coming months, so stay tuned!

• Ad prices may drop due to the reduced efficiency. It’s time to re-evaluate your bidding and targeting strategy to understand the impact. Some brands may take advantage of the lower cost to run more ads to counter the decrease in conversion rates.

• First-party data will become more critical for mobile apps. Addressable advertising will depend on apps having logged-in users, so you should collect email addresses as part of the registration process. Thankfully, this is already a common practice. You may already have it as part of the user journey, or you can add it without introducing significant friction into the user experience.

This Is Just the Beginning…

As public awareness around privacy grows, we can expect to see more regulations concerning how our online data is used.

The General Data Protection Regulation (GDPR), which came into effect in 2018, is the most stringent privacy and security law. It also has a substantial influence on the structure of many emerging and mature data protection frameworks. More recently, the California Consumer Privacy Act (CCPA) and California Public Records Act (CPRA) have brought California more in line with GDPR. Meanwhile, many states have proposed or passed state-level privacy laws. Those that have joined the party include Nevada, Vermont, Maine, New York, Utah, Washington, Oklahoma, and Virginia.

App developers who ignore privacy and data protection in their product strategy will do so at their own peril.

However, staying current with the latest changes on all the operating systems, ad platforms, and privacy laws is easier said than done. The good news is that you’re not on your own. Working with a full-service digital product agency can help ensure that the latest changes and best practices are incorporated into your product strategy so you don’t run into issues at the 11th hour.

Get in touch to see how we can help you navigate the latest changes in data privacy and security for your app.