Apple’s new anti-tracking feature is costing advertisers a fortune

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The iOS 14.5 update that Apple released in April is turning out to be a major headache for advertisers. Aside from introducing more emojis and new Siri voice options, iOS 14.5 saw the introduction of Apple’s App Tracking Transparency framework. The new framework is part of Apple’s ongoing push to strengthen iPhone privacy. The framework gives users more granular control over which apps are allowed to track their behavior across apps and websites.

iOS 14.5 still allows tracking for purposes of serving up ads, but users now have to opt-in. With that said, early reports indicate that upwards of 96% of iOS users are not opting in. As a result, advertisers know less information about users. In turn, advertisers can’t implement targeted ads to the extent they were able to before iOS 14.5 was released.

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Apple’s iPhone privacy push causes advertisers to flee

Apple’s iOS 14.5 update is causing advertisers to flock to Android. Even advertisers who have long prioritized iOS advertising have started rethinking their ad-spend strategy. As The Wall Street Journal noted a few weeks ago, “digital advertisers say they have lost much of the granular data that made mobile ads on iOS devices effective and justified their prices.”

The full extent of iOS 14.5 on mobile advertising is still shaking out, but preliminary reports suggest that ad spend on iOS has dropped by 33% over the last two months. In turn, ad spend on Android has reportedly jumped by nearly 50% during the same time frame. Clearly, Apple’s iPhone privacy push is turning into a nightmare for advertisers.

Some companies are seeing a significant drop in revenue

In an interview with GamesBeat, Brian Bowman of Consumer Acquisition shed some light on how the mobile ad space has adjusted to Apple’s new privacy framework. Not mincing words, Bowman said the situation is something of a “mess.”

Touching on how some companies are seeing a drop in revenue, Bowman notes:

As to what caused the drop in revenue, one, clients that are dependent on lookalike audiences, specifically targeting “whales” as an example, those people with a higher propensity to pay, are the most impacted today. There’s a collapse of VO bidding. The ability to specifically target people who are going to transact is diminished, and will continue to erode as ATT rolls out.

Consequently, companies seeing a lower return on investment will likely shift more of their funds over to the Android side.

Facebook and Apple are at odds

Apple’s iPhone privacy rules are obviously impacting large platforms that rely upon ad dollars, with Facebook being a prime example. The social networking giant, however, believes that Apple’s privacy push is more about profit than looking out for end users.

Late last year, Facebook published a blog post articulating its stance. The company said Apple is simply trying to “force businesses to turn to subscriptions and other in-app payments for revenue.”

Companies try to skirt around Apple’s iPhone privacy

In response to Apple’s tracking rules, some companies like TikTok tried to work around the limitation by employing an advertising framework called device fingerprinting. Apple, however, rejected app updates that included the new tracking method.

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