Commentary

Apple's Latest Privacy Updates Will Hurt Value Of Ad Inventories

Apple this week announced another group of privacy features that are likely to diminish the value of publishers' advertising inventories as targeting becomes more difficult.

The changes will come with the next version of softwarethat runs devices including the iPhone, the tech giant announced at its weeklong Worldwide Developers Conference.

Apple users will be able to hide their internet address information in the Safari web browser, adding to its default blocking of third-party cookies. Customers who subscribe to its premium iCloud+ service will be able to use a service called Private Relay to prevent companies, including internet service providers, from tracking consumers' activity across the web.
Apple also will prevent publishers and advertisers from seeing if and when their readers open an email in its Mail app. The Hide My Email feature for Mail, Safari and iCloud will let users create unique, random email addresses each time they fill out an online form, such as for a subscription. Emails sent to those addresses will be forwarded to a personal inbox that can remain anonymous.
That change will make it more difficult to use email-based identifiers for audience tracking across websites. However, publishers with paywalls or some other kind of login requirement will be still track when readers visit their websites with the same email or user ID. They also can create profiles based on user activity for ad targeting.
The update is significant because about 47% of the 247 million smartphone users in the U.S. have an iPhone, researcher eMarketer estimated.
It's too early to tell how many users will pay for the premium version of iCloud that has the best privacy controls, which would make it make more difficult for advertisers to target audiences across publisher websites.
Apple's free privacy services have tended to be popular, including its App Tracking Transparency (ATT) feature that was introduced in April. The default setting doesn't share device information, and instead asks customers to consent to online tracking. Only 7% of app users in the U.S. have allowed tracking, according to mobile advertising and analytics firm Flurry.
Despite these challenges, publishers still have an opportunity to form trusting relationships with their readers by respecting their privacy. Publishers also can position themselves to sell contextual-based advertising that's aligned with reader interests.

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