Here are my thoughts regarding John Koetsier's Aug 7th article in Forbes:
First, I am assuming that the Apple Advertising opt-out setting (shown above) refers to Apple as an ad network and publisher. The verbiage in the screenshot mentions “Apple’s advertising platform” and links to Apple’s Advertising & Privacy page, which refers to ads that are delivered by Apple in Apple-owned properties like “the App Store, Apple News, and Stocks“.
What is personalization?
There is a burning question that must be answered if one is to determine if Apple is giving itself an advantage or not: What does “turning off personalized ads” mean To me, “personalization” means that the advertiser knows precisely who the user is, which requires an IDFA since IDFVs known by the advertiser are invalid in the publisher app. Therefore, by extension, an IDFV alone does not allow “personalization” but does allow the publisher to model each user’s behavior in their own apps, which can be valuable if they are also an ad network.
If the setting disables all device identifiers for purposes of ad serving, Apple is putting themselves at a disadvantage since every other publisher at least has guaranteed access to the IDFV. I doubt Apple is willing to hamstring their ad product in order to prove their privacy chops, so we can probably dismiss that option. In that case, let’s assume the setting disables Apple’s access to the IDFA only. Then, the question becomes, does Apple gain an advantage over competitors if their apps are opt-out while competitors must receive per-app opt-in to access the IDFA?
What are the benefits of IDFAs to ad network-publishers?
In my opinion, the answer is yes now, and potentially much more so in the future. In terms of this analysis, we should consider Apple’s competitors to be ad networks that also act as publishers such as Facebook (who operate their primary app plus Messenger) or ironSource (who owns Supersonic). Those companies must ask consent to access a device's IDFA in each of their apps. Assuming the above is true, Apple would have de facto consent in all of their own apps (App Store, Apple News, and Stocks, for now) unless the user digs deep into their settings and revokes it.
So how does greater access to IDFAs benefit an ad network-publisher like Apple? First and foremost, IDFAs enable a much more robust device graph, which acts as a critical foundation for almost every ad platform with a buy-side including ad networks and DSPs. Linking external performance via MMP post backs to the internal performance data you are already privy to as a publisher creates a far richer model for determining the likely value of each user to each advertiser. Without IDFA access, ad network publishers only see performance data in their own apps.
In addition, common ad network features like frequency capping, suppression lists, and look-alike audience targeting, are either enabled or significantly enhanced by IDFAs instead of IDFVs.
What is Apple’s long term play?
I believe one of the primary reasons for this move by Apple (should my earlier assumptions prove to be correct) is to bolster the value of their identity management product, Sign in with Apple. On June 30, 2020, it became mandatory in all apps that offer any other third party single sign-on (SSO) option such as Facebook or Google. While it isn't being discussed much, I think it's big news since it allows Apple to greatly increase its footprint even into Android and web.
Facebook's value as an advertising platform is largely based on the wealth of data they have on each user tied to a Facebook user ID. That value is only truly realized when those Facebook user IDs can be associated with IDFAs, providing the glue between Facebook's first party data and the mobile advertising world. If Sign In with Apple gains wide adoption as Apple hopes, expect to see advertisers get much more value out of Apple's ad platform. Even though they've promised not to utilize a user's history of sign-ins for advertising, just the list of apps and websites connected to the user's Apple ID alone is extremely valuable to advertisers.
Don't be surprised if Apple's next move is the return of iAd in some form. Adding external publisher traffic to the mix similar to what Facebook Audience Network does for Facebook would certainly allow Apple to multiply the value of their IDFA advantage in combination with a successful identity management product.
