Ask app not to track? Thanks, I’ll do just that

Apple’s data transparency feature hasn’t hurt social media giants – at least not yet

Facebook has been irritated by Apple’s new privacy policy, but has it dented its ad revenues? Photograph: iStock

So many pop-up messages, so little time. Since late April, iPhone users have encountered a new multiple choice dilemma: after installing Apple’s iOS 14.5 software update, the first time they open an app or download a new one, we’re asked: “Allow (app name) to track your activity across other companies’ apps and websites?”

Even when you have an idea of how the internet economy has worked up to now, the two possible responses to this question – “ask app not to track” or “allow” – can trigger a flicker of alarm as you consider what all these apps have been merrily doing up to this point.

For many, there is no dilemma here at all: no stalking, thank you, and please don’t ask me again.

Indeed, if you would like your answer to be no by default, users can toggle off the “allow apps to request to track” button in the tracking tab under iPhone’s privacy settings and all new app tracking requests will be automatically denied.

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Refusing tracking prevents app developers from using Apple’s Identifier for Advertisers (IDFA) to track us across other companies’ apps and websites, curbing their ability to serve up targeted advertisements for which they can charge advertisers higher rates and also use to persuade more companies to advertise.

The evidence so far is that most of us are making our decisions prompt-by-prompt. Flurry, a mobile analytics firm owned by digital media giant Verizon, suggests only 3 per cent of mobile app users are restricting tracking by default. But the weekly tracking opt-in rate for apps that have displayed the prompt stands at a modest 25 per cent worldwide.

This opt-in rate shows a majority of iPhone users instinctively understand the consequences of tracking and, on balance, dislike them. Ad personalisation can bring us consumerist joy or closer to bankruptcy by tempting us with products we’re probably going to like based on our online behaviour. It can have us scratching our heads at why somebody thought our personal data and internet history made us the perfect customer for organic hemp oil.

And it can also give us the absolute creeps.

Cook’s mission

These new requests for permission are part of Apple’s App Tracking Transparency (ATT) feature. Depending on who you ask, ATT either springs from chief executive Tim Cook’s mission to save us from the excesses of its rivals’ data-tracking obsessions, or, it is a less savoury “privacy-washing” scheme designed to boost Apple’s own power and blunt that of others.

Some people think Apple is genuinely keen to protect our right to data privacy and make the internet a less shady place. Others say it merely wants to annoy Mark Zuckerberg. That both motivations can co-exist doesn't necessarily prevent Apple's self-interest being the top one.

Some say ATT springs from chief executive Tim Cook’s mission to save us from the excesses of its rivals’ data-tracking obsessions. Photograph: Valerie Macon/AFP

In any case, the immediate impact is a loss of at least some valuable information for other companies in the business of selling or buying advertising online. That's why media publishers have united with advertisers and the likes of Facebook to lodge antitrust complaints against Apple in France and Germany. That's also why Facebook has accused Apple of "hurting small businesses and publishers who are already struggling in a pandemic". Who knew it cared?

The social media empire publishes its second quarter earnings on Wednesday after the close of Wall Street trading, and stock analysts will be watching to see if it makes any comment on whether ATT has affected its revenues in any material way.

Like all media companies, Facebook should enjoy a flattering year-on-year comparison: it was in the April-June quarter last year that advertisers were busy responding to the Covid-19 crisis by cancelling campaigns and shrinking marketing budgets.

Bumper earnings reported last week by Snapchat-owner Snap have been seen as a good omen for Facebook’s likely performance. Snap said it was not as affected by Apple’s privacy changes as it had anticipated, one reason being that it was recording higher opt-in rates for tracking than it had seen reported generally across the industry. Snap attributed this in part “to the trust our community has in our products and our business”.

For a company has never made a profit, trust is always nice. Twitter, meanwhile, said the second-quarter impact of ATT was “lower than expected”, but that it was “still too early to assess the long-term impact” of Apple’s iOS 14.5 changes. Assess it, it will though.

Third-party cookies

So where is Google-owner Alphabet, the online ad market leader, in this mobile ecosystem shake-up? The answer is some way behind Apple, not making any sudden movements.

Plans to block third-party cookies on its Chrome web browser have been delayed until 2023 – three years after Apple did the same on Safari – allegedly to “avoid jeopardising the business models of many web publishers which support freely available content”. Google’s own apps have stopped using Apple’s IFDA, but it has yet to show data-tracking transparency prompts to users of Android phones. They’re coming, but not until the end of the year.

Media companies of all sizes have been known to fret about the rise of ad blockers and other clever methods users have of not seeing ads, which is why Twitter likes to refer to daily active users (DAUs) versus “monetisable daily active users” (MDAUs).

Asking all apps not to track doesn’t stop us being shown ads, of course. It just means the ads we see could be less relevant and induce fewer shudders. Social media companies will retain their own considerable first-party data on us. They will continue to know us pretty well. Smaller companies – app developers dependent on ad revenues – might be forced to evolve their business models to embrace in-app charges and subscriptions, while others could make greater efforts to collect more data that they can then control.

But for consumers, there is no real price to be paid for clawing back as much privacy as we can, when we can.