Do Consumers Have A Right To Opt Out Of Advertising?

alanchapell"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Alan Chapell, president at Chapell & Associates.

The arms race between consumers and advertisers goes back as far as I can remember. The battle rages on with the myriad of ad-blocking tools available.

Disabling advertising for ad-supported media is something that many in our industry are increasingly concerned about. The IAB could not be more clear on this point: “Ad blocking is stealing.”

Today, however, there’s a new threat to ad-supported media that might be even more significant than ad blockers.

Apple is making significant changes to its Identifier for Advertising (IDFA) in iOS10. Starting this month, when iOS10 users enact "limit ad tracking," Apple will depreciate the IDFA by returning a series of zeros instead, preventing any entity that relies upon the IDFA from pseudonymously identifying the user. The net effect is Apple is enabling iOS10 users to effectively opt out of advertising.

There’s a whole bunch of ramifications of this decision on the digital advertising marketplace. But before I address those, let’s revisit the issues that Apple was seemingly trying to address when it initially launched IDFA.

Back in 2013, the mobile app marketplace suffered from what I’ll characterize as the Unique Device Identifier (UDID) problem. Cookies didn’t work in the mobile app space. Tracking and attribution identifiers were unreliable, lacking in transparency and didn’t offer privacy choices to consumers. Apple stepped in and offered IDFA, which was hailed as being akin to a mobile app “cookie” offering both tracking and privacy controls. And the mobile app marketplace has flourished in part as a result of Apple offering this tool.

IDFA’s advertising and privacy controls were analogous to those offered by cookies. But Apple’s recent move to depreciate IDFA only serves to highlight a key distinction between cookies and mobile ad identifiers: Cookies are an open-source technology. Any company that wants to can use cookies without paying a toll. Cookies are an imperfect technology, but at least they provide a level of consistency.

Conversely, Apple owns the technology behind IDFA and can therefore impose rules around how IDFA gets used. Now that type of arrangement can also work well – assuming that Apple acts as a benevolent dictator and doesn’t impose rules for the sake of advancing its own business objectives.

Apple’s position regarding advertising isn’t exactly a secret. The company has for a long time been at best indifferent and at worst hostile to the advertising ecosystem. The issues I see with this change is that it breaks legitimate advertising models, forces companies to use more intrusive tracking methods and doesn’t necessarily improve user privacy. Perhaps most importantly, Apple’s move breaks the implicit promise Apple made to the marketplace many years ago that IDFA would support legitimate business models. That seems like a high price to pay.

Apple will undoubtedly claim the high road here. It will argue it is offering privacy choices to consumers. But the net impact of this decision is likely to be larger app store commissions for Apple by pushing apps toward paid models and a greater reliance on the large digital identify arbiters. So let us at least recognize that this might not be an entirely altruistic move.

There’s a number critical issues at stake here. As we move towards an internet-of-things-enabled world, is it a good thing for ad-supported media to be throttled by a small number of companies that can change the terms of any marketplace on a whim?

Is it fair for Apple to offer a platform at the urging of the Federal Trade Commission and then turn around and dramatically change how that platform may be used because that puts it in better position to compete with the other internet giants? Pushing the marketplace toward paid content and away from advertising simultaneously helps Apple and hurts Facebook and Google.

Back to my initial question: Do consumers have a right to opt out from advertising? But let’s be honest here: That’s exactly the functionality Apple is offering here. Enacting "limit ad tracking" in iOS10 also limits the ability of advertisers to understand how many ads are being viewed. I don’t believe there’s much debate about whether advertisers are less likely to pay for ads they can’t measure. In my view, Apple has crossed a line here.

Apple’s move here demonstrates exactly why addressability should not be under the total control of any single entity. Maybe Apple thinks that what it is doing will move the marketplace in a direction that is favorable to its model. It’s my view that the marketplace will recognize this move for what it is.

Follow Alan Chapell (@chapell68) and AdExchanger (@adexchanger) on Twitter.

4 Comments

  1. Bryan Scott

    This is a very interesting article, but I'm confused. How does this "effectively opt-out of advertising" for a user? They will still see ads. Ad tech companies aren't going to stop showing ads to a user if the device IDFA is all zeros. Attribution companies are already using fingerprinting which isn't very accurate. They'll just be forced to use it to attribute more. But it's not more intrusive than what they are doing now. They still collect all that information and it won't be any different.

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  2. Sorry Alan but move by Apple has nothing to do with opting out of ads. The consumer has every right to do that any way they choose by the way... Some do it by simply looking away, others by leaving the site/app and going elsewhere, others fight back the tracking by utilizing the very same tools and tactics the trackers use, technology.

    This is about the removal of a unique tracking ID that has been co-opted by far too many vendors, brokers and data miners for use outside its intended purpose. Its removal doesn't inhibit ads, it simply removes the ability for multiple unknown parties to spy, track and take from the consumer what is legally and rightfully theirs. Their time and their data.

    This moves empowers the consumer to control how his / her time and money is spent.

    Remember the consumer owns their device and pays for their data. Both of which are hijacked by the advertiser to force their message upon the consumer. Usually this is a quid-pro-quo. Watch this ad, get something in return. But we all know that the real problem isn't in the value exchange, it is with the myriad of middle men and data miners who invade the consumer’s privacy for their own financial gain. What value does the consumer get from adding to some mysterious company's data profile on them?

    The thing is that until the advertisers pay for the data and rent the time from the device, consumers have every right to opt out. Consumers understand very well that its an exchange of sorts. Watch this ad, get something you want in return. And publishers can - if they choose, put up pay walls, but unless they are producing something very compelling, very few will pay. So the onus is on them. Not the consumer and certainly not Apple to create compelling content worth of a consumer’s time and money.

    If anything this will reduce the number of parasitic 3rd parties and the overwhelming quantity of crap that masquerades as content. If that is indeed the result, then this is a fantastic move for the ad industry as it will help clear out the junk and lead to more tolerable and respectful environment and a real, actual value exchange between the publisher and the consumer.

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  3. People should absolutely be able to opt out, after all it's us that are inviting web sites into our own spaces (aka our internet connected devices), we don't ask for the advertising, just the content we want.

    If anything we should have to opt IN to receive advertising, under our own terms, using whatever information we wish to supply you with. If that means I don't want to be tracked, or only see ads for cat flaps, then they are the parameters advertisers should abide by.

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