Apple embraced the annual Data Privacy Day (or Data Protection Day) with some gusto this year, as it gears up for the rollout of a new update to its iOS 14 operating system that will give users more control over how apps track their data.

On January 28, the iPhone maker provided some illustrations of how third-party companies track user information across apps and websites.

Its solution from the spring will be to warn users when an app is tracking their data for advertising purposes, and give them the option to block the app from doing so.

Figure 1: Snapped: Snap has issued a warning about Apple's upcoming changes in privacy policy.
(Source: Thought Catalog on Unsplash)

The update affects Apple's identifier for advertisers (IDFA), a unique string of letters and numbers on every Apple device that enables app developers to target mobile ads and measure how effective they are.

Complaints building up

Companies behind these apps, such as Facebook, have already been warning of possible damage to their bottom line.

Enter Snap, the developer of popular photo-messaging app Snapchat.

The company said in its earnings statement for Q4 2020 that the changes could present a "risk" to advertiser demand, although it noted that it was unclear how that could affect business in the long run.

At the same time, Snap expressed some approval of Apple's approach. According to an earnings call transcript, Snap's chief business officer, Jeremi Gorman, said Snap shares Apple's philosophy on protecting users' privacy and is well prepared to guide advertisers through the iOS changes.

"We admire Apple and believe they are trying to do the right thing for customers," Gorman said during the call.

"They're focused on protecting privacy in line with our values and the way that we've built our business from the very beginning."

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Unity Software also said the changes to Apple's IDFA will affect the way mobile game developers get new customers and "how they optimize lifetime customer value."

"Although it's difficult to estimate, our guidance assumes IDFA changes begin in the spring and will reduce our revenue by approximately $30 million, or 3% of revenue, in 2021," the company wrote in its Q4 earnings release.

Facebook has already warned that iOS 14 is likely to have a devastating effect on targeted advertising.

Last year, the social networking and technology giant said Apple's forthcoming update could lead to a drop in its Audience Network advertising platform of over 50%.

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— Anne Morris, contributing editor, special to Light Reading