Apple will shortly flick the “go” switch on iOS 14.5, ushering in a dramatic reduction in the number of iOS devices sharing valuable data with advertisers. Users are increasingly privacy-conscious these days — a trend Apple has recognised and shifted to take advantage.

The change is a long-anticipated update that dramatically shifts the way users will interact with advertisers on iPhones and iPads. Once iOS 14.5 is installed, apps won’t be able to track your online behaviour and share data with advertisers until users give permission — previously, this was the default position and users had to dig into settings in order to opt out of such tracking.

It was Apple, after all, that developed the Identifier For Advertisers (IDFA) in the first place, and embedded it into every iOS device. The IDFA is a unique identifier associated with the device, which collects information about the apps users download, where they go, what web sites they visit, and more. Contrary to popular belief, IDFA does not listen to your conversations and serve ads based on stuff you say — but the data-processing behind it can seem that way.

Making IDFA opt-in rather than opt-out will massively reduce the amount of data available for such analytics, resulting in far less targeted advertising. Some users may, of course, decide that they like having more relevant ads and don’t mind giving up a measure of privacy.

That’s Apple’s whole point with this: it’s the user’s choice.

Facebook, on the other hand, relies very heavily on having masses of data available to target advertising with uncanny accuracy.

When Apple announced iOS 14 at last year’s World Wide Developer Conference (WWDC) including the change to IDFA, Facebook initially responded that it would harm small businesses with limited advertising budgets —they can’t afford scattergun campaigns, and targeted advertising produces better results. In the months following WWDC, Zuckerberg and co had pop-ups appearing when users started the app, praising the remarkably personalised advertising Facebook served up and lamenting that Apple’s strategic shift meant users would get different ads in future.

Threat to Facebook

On an earnings call with analysts last August, Facebook CEO Mark Zuckerberg admitted that the changes to IDFA posed a threat to Facebook’s bottom line. He said he anticipated “high opt-out rates” (by which he meant low opt-in rates) and that “that will have increasing impact through the year as more users adopt iOS 14 and go through those permissions.”

The problem for Facebook is simple: it makes its money by selling ads at a premium on the basis of the incredible targeting it can offer. If the ads can’t be as targeted, they can’t be as expensive.

And while iOS is a smaller share of the mobile device market than Android, it’s dominant at the premium end of the market, where the wealthiest consumers are to be found. Losing the ability to target those customers with pinpoint-honed advertisements must be giving Facebook’s accountants sleepless nights.

Enter the SKAdnetwork

Apple of course recognises the value of its premium customer base to advertisers, and it is after all a capitalist enterprise. It doesn’t want to kill of IDFA entirely, and a huge portion of the ad tech ecosystem presently relies on it, so it won’t — not yet. But the switch to opt-in means it will eventually deprecate as ad networks and developers rely on it less and less. Therefore it has announced SKADnetwork — a replacement for IDFA that serves much the same function, but at a much less granular level. It aggregates usage data that can be passed on to advertisers, but doesn’t allow them to target individual users or devices.

Apple sees it as a privacy-friendly way to enable personalised advertising.

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