When Apple announced the much-anticipated update to its iOS 14 operating system, advertisers instantly had a new set of worries. Among the many new features is App Tracking Transparency (ATT), which gives users an easy way to opt out of being tracked across apps.
ATT lets users block the Identifier for Advertisers (IDFA). This means that iOS cloaks personal information and only provides in-app data. The update is a huge step for Apple, as it’s the first big tech company to implement such sweeping privacy changes. So exactly how substantial is the iOS 14 impact on advertising across ad networks?
How Apple’s New Update Will Impact Advertisers
The new iOS14 privacy features are expected to create friction for certain ad networks like Amazon DSP and Facebook’s Audience Network. Losing access to imperative user data such as browsing history, location data, and purchase history will leave many advertisers in the dark moving forward. Because of this, ad networks that heavily rely on third-party data are expressing frustration.
Amazon’s data will most likely become much more rare and valuable for advertisrs as more users choose to implement Apple’s privacy controls.
Apple received backlash from Facebook, which publicly came out with a direct response, launched press releases, and created ads positioning themselves as advocates for small and medium-sized businesses. Facebook cited numerous tests and use cases on how Apple’s privacy update will dramatically reduce the success of advertising on its platform. See Facebook’s full response.
The conversation prompted several brands to seek alternative platforms, with Amazon being one of the most obvious choices. Since Amazon holds a large amount of in-depth consumer data, the platform’s data will most likely become much more rare and valuable for advertisers as more users choose to implement Apple’s privacy controls.
How Will Apple’s Privacy Changes Impact Amazon’s Role in the Ad Ecosystem?
Apple’s changes mean that iPhone and iPad users can easily opt-out from the kind of tracking that helps advertisers target ads and measure their success. While Amazon still has to show the pop-up that asks users if they want to be tracked across other companies’ apps and websites, the change impacts the platform far less than other ad networks. When users are logged into Amazon properties, the ecommerce giant can still track what users are doing in the app. This includes which ads they saw, clicked on, and purchased from, regardless of whether they opt-in or not.
Prior to the Apple privacy update, Amazon’s system of targeted advertising didn’t present much of a threat to Google and Facebook. But Facebook advertisers were heavily impacted by the update, which removes Apple users from its entire digital advertising ecosystem when they choose to opt out. As a result, most of the money flowing out of Facebook advertising is now flowing into Amazon.
To target relevant ads to shoppers currently on its site, Amazon draws on a huge collection of shopper profiles. These ads typically appear above or below product search results, as well as on sidebars.
Amazon’s first-party relationship with consumers allows it to continue to collect shopper activity across various owned properties.
These data-rich ad offerings have attracted many advertisers who see advertising on Amazon as a reliable way to keep gathering crucial data for targeting purposes and measuring performance. Amazon’s first-party relationship with consumers allows it to continue to collect shopper activity across various owned properties. For example, if consumers watch an ad using Prime Video and later on make a purchase, Amazon has the ability to provide advertisers with that information.
Basically, all data is fair game for use in targeting ads to users on Amazon-owned properties. Where some advertisers might run into difficulty is with Amazon ad products that involve off-site tracking, including Amazon Demand-Side Platform (DSP). If Apple iOS users opt out of tracking, then advertisers can no longer serve them an ad on non-Amazon apps via Amazon DSP.
What Does the iOS 14 Update Mean for Amazon Demand-Side Platform?
Amazon Demand-Side Platform still provides advertisers exclusive Amazon first-party data that they can use to reach shoppers at scale, no matter where they are across the web. While this does change things for iOS users across mobile apps, restrictions will not affect any Amazon-owned and operated web traffic or media buys.
Amazon still retains and leverages its first-party data, so the iOS 14 impact on advertisers will not be all-encompassing. In fact, an estimated 8% of Amazon DSP traffic will only be affected. Since iOS upgrades will likely occur gradually, users who continue to use iOS 13 and below can still be served ads in-app. This gives brands time to test and evolve their strategies to succeed.
It’s estimated that only 8% of Amazon DSP traffic will be affected by Apple’s new iOS update.
Navigating Apple’s New Privacy Update
Amazon’s extensive first-party data relationship with consumers is increasingly positioning itself as a reliable solution for advertisers. The ecommerce giant has seen higher ad spend across small businesses after the decline in Facebook ads. While it’s still far too early to say how detrimental the Apple privacy update will be for advertisers, there’s an obvious movement towards Amazon.
Ideoclick is your ecommerce growth partner. Our Amazon experts and proprietary technology, like Ideoclick’s Pulse Advertising, can help get your brand seen this holiday season. How ready are you? Contact us for your free Amazon Brand Analysis.