What you need to know
- Apple recently made big changes to iOS 14 that make it much harder to track users for advertising.
- A new report says the move could in fact turn out to be a business opportunity for some firms.
- Bloomberg says that "heightened business complexity" fuelled by the changes could work out to the advantage of some.
A new report states that big changes made to iOS 14 could actually prove favorable to some advertising agencies if they can capitalize on the increased complexity of marketing that follows.
Moves by Apple Inc. and Google that make it harder for brands to track billions of consumers are creating a money-making opportunity for advertising companies that were hit hard by the pandemic. Google is phasing out third-party online tracking cookies and Apple is requiring app owners to ask for explicit permission to track users across other companies' apps. The changes make it harder for companies to follow our every move online, so marketers are devising new ways for brands to find out what consumers are doing and pitch products to them.
The report says the changes are an opportunity for companies like WPP, Omnicom, and Publicis Group to "reassert their relevance" stating that some companies, like Caraway Home, are anticipating that changes "will increase the cost of finding new customers on Facebook, and decrease effectiveness of its targeting".
Big companies like Facebook that rely heavily on advertising have touted similar challenges, and on Tuesday Unity said the move could cost the company $30 million. However, as the report notes, there is still an opportunity for some:
"As customer acquisition on Facebook gets more expensive as these changes roll out, this is set up to be one of the most powerful channels going forward," said Josh Knopman, Caraway's director of growth.
The report notes how WPP is creating "a new unit geared to helping clients better use first-party data", with Walgreens Boots Alliance already on board as an early customer.
The report also cites how some companies are responding to changes to cookies introduced by Google, and that all of these measures will "force companies to shift the way they engage with customers". Bloomberg analyst Matthew Bloxham concluded:
"This should be good for ad agencies. The heightened business complexity means their services are in greater demand from clients, and I think most of the agencies are seeing that."
With iOS 14.5 Apple introduced measures that mean users have to opt-in in order to be tracked by third parties for the purposes of advertising. Recent iMore polling suggests only 2% of users plan to accept 'allow', with some stating that they will decide on an app-by-app basis, whilst the vast majority (over 70%) state they will not opt-in.