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Technology Apple IOS

How iOS 11 is disrupting the Apple cart


By Lisa Lacy, n/a

September 18, 2017 | 10 min read

Apple launched the tenth iteration of its flagship device recently, hoping iPhone X plus accompanying 8-series, will revive stalling sales of what is arguably the most iconic device of the century. However, it is the accompanying software update that has media players up in arms, The Drum probes further.

Apple’s software updates have caused much debate in the media industry as it helps block autoplay ads on macOS High Sierra using Intelligent Tracking Prevention (ITP) tools – a formidable plot development in the adblocking debate.

ITP also works by impeding the ability of website owners and adtech outfits to track users across domains by using machine learning to limit their ability to apply cookies to 24 hours.

How its adblocking function works

Sam Vining, iCrossing, head of data and analytics, explains how the technology works: “The 24-hour exemption period from cookie partitioning is designed to enable scenarios where users may use their log-in information from one domain on another website or service.

“After 30 days (without a subsequent interaction) the cookies will be purged completely from the user’s device. In practice, this means that the cookies advertisers rely on for measurement will be unavailable after 30 days, and cookies for targeting and retargeting in media will be unavailable after 24 hours.”

By way of comparison, Aaron Levy, senior team lead of SEM at digital marketing agency Elite SEM, points out that the standard cookie in Google AdWords is 30 days, and that most bid tools are 90 days.

Safari is a distant second on desktop, but another prospect on mobile

The Safari web browser is a distant second to Google’s Chrome, albeit there is another ticking time bomb the industry will have to deal with in that scenario. However, those with an interest in the ever-blooming mobile media market will have the most to be concerned about, given that in the US alone Safari accounts for over 50% of the mobile web browsing market, according to Statista.

In fact, the looming update caused so much rancor that six advertising trade bodies, including the Association of National Advertisers, the 4A’s and the Internet Advertising Bureau, co-penned an open letter largely Apple’s ITP updates as “heavy-handed” in the aftermath of lat week's announcement.

'Opaque and arbitrary'

Apple iOS11

The trade bodies went on to state that the proposed update risked breaking with the established infrastructure which has thus far helped to build a sustainable media ecosystem online.

“We are deeply concerned about the Safari 11 browser update that Apple plans to release, as it overrides and replaces existing user-controlled cookie preferences with Apple’s own set of opaque and arbitrary standards for cookie handling,” reads the letter.

“This new functionality would create a set of haphazard rules over the use of first-party cookies (i.e. those set by a domain the user has chosen to visit) that block their functionality or purge them from users' browsers without notice or choice.”

The trade bodies went on to urge Apple to reconsider this unilateral measure, adding that “machine-driven cookie choices do not represent user choice; they represent browser-manufacturer choice”, and that such a launch would harm consumers.

Appetite for disruption

However, Apple’s track record for product or service launches is one that is not well known for being considerate of other (more established) players in the ecosystems they are about to infringe upon.

For instance, its insistence on the low pricing of music tracks on iTunes displeased many in the record industry, plus the original iPhone launch completely reversed the historic power dynamic between telecoms operator and handset provider.

And similar to the upcoming launch of iOS 11, Apple’s (albeit failed) iAd experiment caused ripples at media agencies after it asked them for previously unheard of commitments to minimum spend when it comes to new market entrants.

So with Apple promising consumers a much better experience, adtech providers, brands and media owners will have to get smarter about the way they target users, rather than letting cookies do all the work, according to sources consulted by The Drum.

Implications are already being felt

A particularly notable trend since last week’s announcement has been the notable decline in the stock price of publicly-listed adtech company Criteo (see chart below from SeekingAlpha) widely regarded as one of (if not the most) successful adtech companies to have IPO’d.

Although the cause of this fluctuation is open to interpretation, the French outfit did acknowledge the potential revenue impact of iOS 11 during the final quarter of the year during its most recent earnings.

Criteo stock price

Speaking with financial analysts during the earnings announcement in early August, Criteo chief executive Eric Eichmann expressed a degree of uncertainty as to how to deal with the update.

Although he did add that if Apple’s IDFA identifier – the signal used by advertisers within a mobile app environment – could be used to alter Safari settings, then this could prove a welcome resolution to such concerns.

“Now from our perspective, there's a number of ways to store data that do not rely necessarily on cookies being passed to us and so we're examining different possibilities to make sure that we have a continuation of service,” he added.

How will the industry react?

Meanwhile, Elite SEM’s Levy forecasting that Google is likely to start looking at all of the persistent conversion data for 24 hours in iOS and then model it out for what it thinks the rest of the conversion window will look like.

“Basically, it'll start guess-timating how many conversions you get, thereby muddying bidding and we may potentially pay a bit more,” he adds.

In addition, lack of cookies poses an immediate challenge to retargeting and affiliate companies as retargeting is limited with the most common methods after 24 hours, according to Ben Young, chief executive of native ad measurement firm Nudge Analytics.

“Marketers are probably going to see attribution models get interference – the loss of being able to serve ads or mis-attribution because of the blocking of code,” he adds. “The next few months will be challenging for marketers to navigate.”

What of location data?

Paul Gubbins, a consultant with experience in the areas of applying programmatic media buying technologies on mobile devices, believes that the iOS11 update’s limitation on location tracking is likely to hit a lot publishers reliant upon advertising revenue.

This is because many have used location based targeting to improve ad targeting, given the pre-existing limitation of cookies for targeting on mobile devices. Instead, “location has become almost like a proxy for a cookie to drive the value of an [ad] impression up,” he explains.

Although he does add that larger publishers that are able to extract location data via way of a first party cookie could potentially benefit use this insight to improve inventory pricing.

An app-based future?

Nudge Analytics’ Young also goes on to point out that these limitations, plus enhancements to the discovery tools available in the App Store may encourage publishers to encourage their audience to downloads apps, as opposed to access their content via the web.

Developing this point, Eli Chapman, head of connections planning at advertising company R/GA, notes the App Store will also have new metadata, titles and descriptions, which will shift what shows up at the top of App Store searches, which could create opportunities for publishers to rank higher.

For instance, this could also create more of an opportunity for in-app purchases.

“So you can see people buying the next level of a free app right away,” Chapman says. “It could bring more immediate revenue to publishers and should lower barrier [to] see an increase of paid app subscribers.”

In addition, the new promotional text field should allow publishers to make updates without re-submitting their apps, so they can more easily make announcements, like discounts or offers.

Chapman adds these changes also affect log-in, so media owners who have both a website and an app will no longer be able to do single sign-in.

“I don’t know what they will have to do to verify services – that’s being figured out by developer community,” Chapman says. “We’ll find out, certainly…there’s some work everyone will have to do to make things work the way they used to, which is typical when a major iOS update comes.”

The implications for data handling

Young said companies may also start to hold more data in-house and will have to get a lot smarter about identifying consumers online.

At the end of the day, Chapman adds that there’s an opportunity for startups to emerge that help deal with the issue of fragmentation of identities on devices – and perhaps for Amazon, too.

“It certainly strengthens the big walled gardens,” Chapman adds. “Amazon’s ad offering is already extremely compelling. If DSPs [demand-side platforms] and ad networks lose traction and market share due to the iOS 11 changes, Amazon will be waiting with open arms...they’re still able to see who people are across different states because everyone who uses Amazon will continue to use it.”

And, for his part, Levy says he “wouldn't be shocked if Apple gets to work on [its] own analytics platform someday.”

Finally, the absence of autoplay videos in Safari will be bad news for ad networks and DSPs making money on higher CPMs.

“But, in the long run, it should also help the great publishers make more money because their inventory as great branded publishers becomes more valuable and even networks like those that can aggregate the best content,” Chapman adds. “More premium sites will be in demand. It could help the best publishers increase CPM, but it could hurt…those making money off of programmatic.”

Additional reporting by Ronan Shields

Technology Apple IOS

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