Apple’s ATT Continues to Chomp Down on the Digital Ad Industry
3 Min Read “What we’ve been all about is putting the power with the user. We’re not making the decision, we’re just simply prompting them to be asked if they want to be tracked across apps or not. And, of course, many of them are deciding no,” Apple CEO Tim Cook said on CNBC’s ‘Squawk on the Street’ segment last week. Apple’s privacy updates, which came into effect in April this year, gave users the option to opt out of app tracking on their phones and was one of the biggest headlines to hit the digital ad industry. Of course, we were quick to provide our take on it before its launch, and then forecasted doom and gloom for the tech giants in May. However, that was mere speculation – until earnings reports started trickling through and confirmed its true impact. Data Privacy is the Norm, Not the Exception. As CNBC revealed, the majority (62%) of iPhone users are opting out of app tracking. The results? Facebook, Twitter, YouTube and Snap lost 12% of revenue in the third and fourth quarters (equivalent to $9.9B). Digiday reported that “Snap bore the brunt of those losses as a percentage due to its prevalence on smartphones, while Facebook lost the most in absolute terms because of the size of its mobile business.” Then, there were brands whose app downloads were a part of its bread and butter, like Peloton. Not only has the on-demand fitness brand come short of its annual revenue forecast (missing by as much as $1B), it’s market cap dropped by nearly 40%. Don’t expect mobile privacy policies to be scaled back anytime soon either. Brands may be forced to rethink their business model entirely. “If personal information is no longer the currency that people give for online content and services, something else must take its place,” the New York Times reported. “Media publishers, app makers and e-commerce shops are now exploring different paths to surviving a privacy-conscious internet…many are choosing to make people pay for what they get online by levying subscription fees and other charges instead of using their personal data.” Survival of the Fittest…or Survival of the Savviest Marketers? Peloton lowered its projection for subscribers and profit margins, to account for the higher customer acquisition costs resulting from Apple’s ATT, since paid social has taken the biggest hit out of them all. Similar brands will likely do the same. But, there are alternatives for advertisers to consider that aren’t beholden to these issues – and can actually result in better performance than you had imagined. For example, Adweek reported that “ATT had a minimal impact on The Trade Desk [since] much of the traffic it helps marketers bid on doesn’t cover in-app ads, which is where ATT hits the hardest.” Then, there’s Connected TV (CTV) advertising platforms like MNTN Performance TV, who have mitigated ATT’s impact, since it serves ads directly to Connected TVs and not mobile devices. It avoids all the issues associated with mobile app data tracking, and still delivers strong direct-response ad performance that advertisers are used to getting from paid social channels. It’s a direct hit on performance marketing and branding, served on a high-impact format (the biggest screen in the house) that brands should consider adding to their omnichannel digital strategy. While it’s not impossible for brands to side step data privacy, thinking outside of the box (and beyond the mobile phone and laptop) has its benefits that are built to last into the future. By looking to channels like Connected TV that aren’t beholden to mobile app data tracking, advertisers can still generate solid returns without missing a beat. Sign Up for the Connected TV Report Subscribe to the report Apple, Amazon, NBC and more use to get their CTV news.