Apple Inc.’s launch earlier this month of iOS 11.2, the newest version of its mobile operating system, could seriously impact retailers’ ability to track, collect data on and target, Safari users with ads, warns digital marketing vendor Criteo SA.
The threat comes from technology Apple announced in June that calls “intelligent tracking prevention,” or ITP. The technology puts a significant damper on mobile ad tracking. For example it limits the use of cookies for ad retargeting to 24 hours and it deletes a site’s cookies if a consumer doesn’t visit for 30 days.
The consequences are so dire that Criteo Thursday said that it expects to face a 22% revenue hit in 2018 from the changes, noting: “We are focused on developing an alternative sustainable solution for the long term, built on our best-in-class user privacy standards, aligning the interests of Apple users, publishers and advertisers. This solution is still under development and its effectiveness cannot be assessed at this early stage.”
ITP will likely have repercussions for other advertising technology companies, as well as the retailers that rely on those companies’ tools to reach Safari users on mobile devices, says Rebecca Lieb, a founding partner at research and advisory firm Kaleido Insights.
“What we’re looking at is a classic example of an arms race,” she says. While Apple is placing limits on advertising and data collection on Safari, advertising tech companies are coming up with workaround solutions to mitigate those limits, which then leads Apple to disable those solutions. “This will clearly continue to impact the mobile advertising ecosystem: advertisers, technology providers and of course, users, too,” Lieb says. “Arms races tend to escalate before they dissipate, so I’m sure we haven’t seen the end of this yet.”
The move demonstrates Apple’s ability to significantly impact the advertising landscape, she says. Apple devices have a 14.7% share of the mobile device market worldwide, according to research firm IDC. And 44.9% of U.S. smartphone subscribers 13 and older have an iPhone, according to analytics firm comScore Inc. as of June.
“It’s getting harder to advertise to mobile consumers,” Lieb says, noting that the move will likely hinder merchants’ ability to serve targeted ads, location-based ads and retargeting ads to shoppers on smartphones. In pushing retailers and other advertisers away from “plain old vanilla browser ads,” Apple may ultimately be driving ad dollars to Facebook Inc. and other mobile ad networks that offer in-app advertising options.
The problem is also not limited to consumers who browse on Safari on their iOS device because consumers who use the Chrome browser on their iPhone are actually using Safari with a Chrome skin around it.
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