• by Steve Smith , Staff Writer @popeyesm, September 14, 2012

When iPhone users upgrade to the next iteration of the iOS operating system for iPhone and iPad next week, they will get a host of new options for managing their own data with third parties. While the iPhone 5 rollout and iOS outline offered by Apple at its well-hyped event Wednesday covered much of the dazzle around these products, it barely discussed an area that will be of greater concern to marketers: new privacy and data protection.

It takes some digging, but about three tiers down into the Settings menu in iOS 6, next week users will find  an item labeled “Advertising.” Down in here is a toggle to “Limit Ad Tracking.” A near-microscopic text link at the bottom of this screen offers the following explanation:

“Ad Tracking: iOS 6 introduces the Advertising Identifier, a non-permanent, non-personal, device identifier, that advertising networks will use to give you more control over advertiser’s ability to use tracking methods. It you choose to limit ad tracking, advertising networks using the Advertising Identifier may no longer gather information to serve you targeted ads. In the future all advertising networks will be required to use the Advertising Identifier. However, until advertising networks transition to using the advertising Identifier you may still receive targeted ads from other networks.”

Some background is in order. Last year Apple started warning advertisers that it would cut apps off from using the UDID identifier that is specific to every Apple iPhone and iPad. The company’s implementation of this policy was unclear. And it announced this vaguely defined Advertising Identifier when iOS 6 was first announced. Controversy ensued. Some argued that the end of UDID was the end of mobile ad targeting on iOS. Other companies offered workaround solutions. And others got behind an openUDID standard.

But it is still unclear, to me at least, what this identifier is, who controls it, what “temporary” means, and even what it means that the user gets to “limit” ad tracking. Does “limit” mean that some tracking is allowed but not others? Does it mean that third parties cannot track but Apple can? After all, one inherent issue here is that Apple is the maker of an ad network as well as an operating system. Even critics of iAd have praised the network’s user intelligence and ability to target even if the scale may be limited to iOS. But what data will this identifier hold and share? What competitive advantage does Apple get out of all of this?

Whether this new option for users to opt out (kinda, sorta?) from tracking has any effect on the mobile in-app ad ecosystem is anyone’s guess. Also unclear is how Apple will deal with alternative targeting approaches. The statement in iOS suggests that ad networks will be “required” to transition to the Advertising Identifier. I presume that means that alternative targeting methods like OpenUDID will be prohibited.

I reached out to several ad platforms and networks late yesterday for reaction, but I have not had much response yet. Perhaps this is a sign that everyone is trying to figure out what Apple is doing and what some of the terminology here actually means.

Opera, which operates one of the leading ad serving platforms and ad networks on iOS, did get back to me with a statement. EVP of Consumer Media Mahi de Silva says in part, “Apple's introduction of the Advertising Identifier, new to iOS6 -- gives the advertising ecosystem a measured alternative to UDID, which in the past has been abused by third parties to track users without the knowledge or consent of consumers and sometimes even the knowledge or consent of the developer of the application.” Along with the addition of user control, de Silva says “these are both steps in the right direction.” He goes on to say that the needs of advertisers for targeting and functions like frequency capping are legitimate but need to be balanced against privacy controls. “We, at Opera, strongly believe that this balance can be achieved through the use of the Advertising Identifier in combination with anonymous data and privacy neutral methods,” he adds.

This is a story just beginning to unfold. As the mobile ad ecosystem comes to understand what the Advertising Identifier is and what if any other kinds of user profiling will be available on iOS, we will get closer to understanding if this is a big deal or not.

What's interesting is that Apple has not touted privacy as a strong feature of iOS 6. And my guess is that most users will have to struggle to find the toggle that opt-outs... of whatever it is they are opting out of.