After Apple Tightens Tracking Rules, Advertisers Shift Spending to Android Devices

After the tracking change took effect in April, many users of Apple’s iOS operating system have received a high volume of messages from apps requesting permission to track them, requests that most have rejected. Less than 33% of iOS users opt for tracking, according to ad measurement firm Branch Metrics Inc.

As a result, prices for mobile ads targeting iOS users have dropped, while ad prices have risen for advertisers looking to target Android users. Those changes come after many in the digital advertising industry warned that Apple’s changes, which the tech giant framed as part of a broader crackdown on user privacy, would limit advertisers’ access to data about. consumers and harm your business.

Digital advertisers say they have lost much of the granular data that made mobile ads on iOS devices effective and justified their prices. In recent months, ad buyers have deployed their iOS ad spend in much less targeted ways than previously possible, marketers and ad tech companies say. The scarcity of user data to feed Facebook From Inc.

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The suite of powerful ad targeting tools reduces its effectiveness and appeal to some advertisers, ad agencies say.

Apple, for its part, sells ads in only a handful of its own apps and doesn’t take a portion of the ad revenue on third-party iOS apps. While advertisers have changed their spending habits on the ad products of big rivals Apple, Facebook and Google, which are much more reliant on ad revenue, it is not yet clear how the change has affected overall spending at the advertising giants. digital advertising.

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The effects of Apple’s change were slow to show up in marketers’ data after the company enforced its new tracking rules in April. The delay was partly due to users not seeing prompts until they updated their devices to a recent version of Apple’s operating system. As of June 22, more than 70% of iOS devices had been upgraded to a version that requires the tracking notice, according to Branch Metrics, allowing advertisers to begin evaluating impact.

As more information has emerged, advertisers have adjusted their buying strategies. IOS mobile ad spending has fallen by about a third between June 1 and July 1, according to ad measurement firm Tenjin Inc. Spending on Android increased 10% over the same period, Tenjin said.

An Apple spokesman declined to comment.

Digital ad agency Tinuiti Inc. has seen a similar pattern in its clients’ spending, said research director Andy Taylor. When iOS users opted out of tracking, Tinuiti advertisers were unable to bid for them, he said. That shortage of iOS users drove demand (and ad prices) for Android users. About 72.8% of smartphones worldwide use the Android operating system, and about 26.4% use iOS, according to Statcounter.

Tinuiti’s Facebook customers went from 46% year-on-year spending growth for Android users in May to 64% in June. Customer iOS spending experienced a corresponding slowdown, growing from 42% in May to 25% in June. Android ad prices are now 30% higher than ad prices for iOS users, Taylor said. Tinuiti’s clients’ overall spending on Facebook increased; Android users got a bigger share, Taylor said.

Apple’s hardware, software, and services work so harmoniously that it is often called a “walled garden.” The idea is central to the recent antitrust scrutiny and Epic v. Manzana. Joanna Stern from WSJ went to a real fenced garden to explain everything. Photo Illustration: Adele Morgan / EDL

When iOS users choose not to track, it restricts the flow of data that Facebook gets from apps to create user profiles. These profiles allow Facebook advertisers to target their ads efficiently, both for ads in Facebook’s own applications and in third-party applications.

Tinuiti said it saw an even steeper drop in spending from Facebook’s Audience Network tool, which allows advertisers to buy ads in non-Facebook apps using Facebook user data, where Tinuiti customers spend around 1 % of your Facebook budgets.

Advertisers in Tinuiti were targeting approximately 50% of their Audience Network spend to iOS users in early April. At the end of June, they were spending about 20% on iOS users, Taylor said. Advertisers tend to spend more per iOS user, seeing them as more significant spenders than Android users.

Facebook has been one of the most vocal critics of Apple’s new tracker block, warning in August 2020 that the change could lead to it shutting down the Audience Network. Facebook does not disclose the size of the Audience Network business within its nearly $ 70 billion digital ad empire. Ad technology consultancy Jounce Media has estimated that the Audience Network would generate $ 3.4 billion in 2021.

“Third-party data tends to be unreliable and not representative of our business,” said a Facebook spokesperson. “While we expect iOS 14.5 to be a headwind for the rest of the year, the impact on our business will be manageable. Most worrying is the impact on developers and smaller companies that rely on personalized advertising. “

Facebook CEO Mark Zuckerberg said in March that “we may even be in a stronger position” after Apple’s move, especially if it encourages “more companies to do business on our platforms, by making it more difficult for them to basically use their data to find customers who want to use their products outside of our platforms. “

In many foreign countries, the majority of Facebook users are Android users, according to a person familiar with the matter, so Facebook could benefit from higher prices for Android ads.

Many advertisers have also shifted their spending on Facebook owned and operated apps – Instagram and its eponymous social network, which form the core of their business, Taylor said. Spending to reach iOS users on Instagram and Facebook has also dropped since Apple’s move, he said, but less than on third-party apps.

Since the change, Facebook has significantly modified its Audience Network, which has relied heavily on device identifiers. The company told advertisers in an email last week that it was adding the ability to place contextual ads, which consider factors like time of day and app content, as a way to continue serving relevant ads when certain identifiers Are not avaliables.

“Showing contextual ads in addition to personalized ads is part of our efforts to help support publishers” amid Apple’s shift, the email read.

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Write to Patience Haggin in [email protected]

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