By Patience Haggin and Suzanne Vranica
Digital advertisers are studying new Apple Inc. measures that
they fear will limit access to data about users, changes industry
participants see as an escalation of the tech giant's crackdown in
the name of consumer privacy.
Apple's changes, unveiled during its developer conference
Monday, threaten to restrict companies' abilities to track users'
web behavior and gather information on them from third parties such
as data brokers. The announcement comes months after Apple's curbs
on in-app tracking roiled the digital-ad industry, and the changes
will be part of a new version of Apple's operating system this
fall.
While the earlier moves affected only apps within Apple's iOS
operating system, the latest changes encompass all forms of web
traffic on Apple devices, leading advertisers, email marketers,
publishers and ad-tech companies to anticipate broader
ramifications.
Apple's changes mark "a massive step to increase the walls in
the garden by making sure all access to the external world would be
proxy by them," said Tal Chalozin, chief technology officer of
ad-tech company Innovid Inc.
Craig Federighi, Apple senior vice president of software
engineering, described the moves Monday as shielding users against
data-gathering practices that many aren't aware of. "We believe in
protecting your privacy and giving you transparency and control
over your information," he said at the conference.
Apple will by default block users' internet protocol addresses
from being transmitted to websites visited in its Safari browser.
Many companies collect a user's IP address and combine it with
other data to "fingerprint" and recognize a user's repeat visits,
often to support personalized ads. Apple has banned fingerprinting
in Safari for years but left users' IP addresses visible. Blocking
those will let Apple better enforce its ban, depriving
fingerprinters of a unique data point identifying Safari users.
Safari enjoys browser market share of about 19% world-wide,
according to a March survey by Statista, making the browser second
only to Google's Chrome.
"IP blocking for trackers is a monumental development that is
likely the nail in the coffin for user-centric profiling. Without
an IP address to latch onto, tracking companies simply won't be
able to uniquely identify users in a way that is commercially
reliable," said Eric Seufert, a digital-marketing strategist and
consultant.
Industry watchers are already wondering whether Apple's change
could pressure Alphabet Inc.'s Google to take the same step. A
Google spokeswoman confirmed that the search giant has been
considering a similar move to block IP addresses in its Chrome
browser.
Apple is also offering heightened IP blocking through a paid
service that will cover the IP addresses on all of a user's
devices. A new, premium version of its existing iCloud storage
service, called iCloud+, includes features such as "Private Relay."
That product, which will be available everywhere globally except in
China, will anonymize internet traffic much as virtual private
networks do.
The VPN market is expected to reach $31.1 billion in 2021,
according to Statista. Corporations often employ VPNs -- which
create a tunnel of sorts between a user's device and the online
services it accesses -- to keep connections direct and private.
Consumers often use them to view streaming content that isn't
available in their home regions.
Users of iCloud who already pay for extra storage or other
features on the service will receive iCloud+ at no additional cost,
Apple said.
Alex Austin, chief executive of mobile ad-measurement firm
Branch Metrics Inc., said that "Private Relay could be vastly more
damaging to the advertising ecosystem" than Apple's curbs on apps
earlier this year. He cautioned that some details remain unknown,
however. "If IP were to go away entirely, it would be very
challenging for a lot of companies to operate," he said.
Apple is also cracking down on email tracking. Most marketing
emails contain hidden pixels that can identify when a recipient has
opened an email. These trackers also collect information including
users' IP addresses that can tell marketers when and where their
messages were opened.
Even with chatbots and social-media influencers on the scene,
email has remained a core tool for many companies to communicate
with loyal customers, acquire new ones and build brand awareness.
Apple's changes could blunt its usefulness, ad executives said, and
some voiced surprise that the tech giant extended its data-tracking
curbs to users' inboxes.
"It will be a lot tougher for brands to know if their emails are
working or not," said Nii Ahene, chief strategy officer at digital
ad firm Tinuiti Inc., who added that he didn't see the move as
addressing a burning privacy issue. "There are no winners here. The
only winner is Apple."
Apple has said that users benefit by increased transparency and
control over how data on their online behavior is used.
Email marketing has also become a critical technique for
retailers, public-relations firms, publishers and political
candidates, among others. Companies are expected to spend $535.6
million on email ads in the U.S. this year, up 10% from 2020,
according to eMarketer.
Publishers have pursued new audiences and revenue streams
through editorial newsletters, with many media companies commanding
high prices for ads appearing there. Publishers use the tracking
pixels to gather information such as how many subscribers open a
newsletter. Advertisers often refer to open rates in negotiating
sponsorship deals.
While some public-relations executives said Apple's new rule
would make it harder to show clients that their efforts to get
media coverage worked, others oppose using trackers.
"This is something we have long felt is a poor practice since it
only sows distrust," said Richard Edelman, chief executive of
public-relations firm Edelman.
Write to Patience Haggin at patience.haggin@wsj.com and Suzanne
Vranica at suzanne.vranica@wsj.com
(END) Dow Jones Newswires
June 08, 2021 18:20 ET (22:20 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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