Apple WWDC 2019: Privacy Initiatives and the iTunes Sunset

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Like many big tech developer conferences, Apple’s WWDC regularly presents opportunities, and curveballs, for advertisers and publishers alike, with this year’s iteration proving no exception. The firm announced that, finally, iTunes is being shut down, with three new platforms rising from its ashes. Furthermore, in the latest attempt to position the company as a ‘privacy as a service’ provider, they announced a privacy-focused single sign-on (SSO) scheme as well as restrictions on location tracking.

ExchangeWire examines what iTunes’ shuttering means for audio advertising, potential implications of imposing their SSO on publishers, and how the privacy initiatives may come back to haunt Apple, following the recent flare-up of anti-competitive momentum from US regulators.

The sun sets on iTunes: Apple refocuses on streaming

iTunes, the media player and device management platform heralding from 2001, which walked hand-in-hand with the iPod and the first iterations of the iPhone, has heard its death knell. At this week’s WWDC, Apple announced it was shuttering the software through its upcoming Mac OS update, to be replaced by three separate apps: Music, Podcasts and TV. General consensus suggests that this decision has been on the cards for a while, with the current iTunes app deemed to be like a certain editor after a large roast dinner: a slow and bloated mess.

Advertisers will be particularly interested in the success of the new Apple Podcast platform, with podcast advertising revenues expected to reach an estimated USD$676.7m (£535m) this year. Moving their services into dedicated streaming platforms also highlights the broad transition from downloaded to streamed media, and opens the door for Apple to consider ad-funded free iterations of each.

John Rosso, President, Market Development at Triton Digital, supports this view. “Amongst other things, the shuttering of iTunes seems to reflect the consumer’s move from downloaded music to streamed music. According to The Infinite Dial, an annual study we produce in conjunction with Edison Research, 169 million Americans now listen to streamed audio on a weekly basis. The rise in consumption of streamed music has been good for the digital audio advertising world, as so much of the listening to the streaming services is ad supported.”

Apple site login: Privacy challenge to Facebook and Google

Following on from the recent buffing-up of ITP on Safari, and a series of television adverts promoting how they are positioning themselves as a privacy-focused brand, Apple has launched a new unified ID platform, ostensibly with the aim of ensuring user privacy. The new service is essentially an alternative to the “continue with Facebook/Google” SSO options which currently populate login screens across the internet, meaning users do not have to remember a username and password for each individual site.

The problem with the current login systems, at least in terms of user privacy, is that they are typically used to track the consumer’s activity across the site for advertising purposes. Apple claims that their platform will not track user activity. Moreover the login system can generate a random and unique email address which forwards to the user’s inbox, thus giving consumers the option to withhold their true email address from the particular site they are accessing.

Though privacy-focused users are likely to be delighted with this SSO platform, the move is likely to draw consternation from publishers, who use email addresses to identify their users and determine which adverts they are likely to interact with. Mobile app owners are also likely to be annoyed with Apple’s tactics aimed at strong-arming them into adding their SSO to their particular app, as they will not be permitted to sell their software on the App Store without the Apple SSO if they already allow Google’s and Facebook’s equivalents. Throwing their weight around in such a manner is also not likely to endear Apple to antitrust regulators…

Where are you? Apple’s triple crackdown on location tracking

Location-based tracking has taken a Ruiz-on-Joshua-esque pummelling on Apple devices at this year’s WWDC, with a triple hit of restrictions in their iOS 13 update. Firstly, if the user has denied the app access to their location, they are shutting the door on tracking their whereabouts via means such as Wi-Fi network, IP address and Bluetooth beacons. Previously apps could use this as a way of circumnavigating the lack of permission. Moreover if an app continues to try to track the user without their consent, Apple will send alerts to the user notifying them, which is likely to cause major PR ramifications for apps which continue tracking users on the sly.

The second restriction Apple is imposing on user tracking is the creation of a ‘just once’ option when an app requests to monitor their location, meaning the app will have to ask each time it requires this information. Giving this granularity between the existing ‘never’ and ‘while using the app’ options is clearly aimed at giving the user an extra element of choice, particularly if they are uncertain whether they will continue to use the app after an initial period.

The final pushback against location tracking is that they will be enforcing location reporting across the App Store, meaning if a company tracks a consumer’s location they will be obliged to note the details of when, and why, they are doing so.

These show Apple is taking the privacy and security fight direct to Facebook and Google’s doors on their customers’ behalf, restricting access to customer data – like age and location – that the duopoly often sell on their advertiser clients.

“While this update will affect targeting some extent, the benefit of enhanced data security outweighs the negatives. As an Apple device user, I wholeheartedly agree with it,” says James Cragg, Managing Director at Tug UK, “The ubiquity of Apple devices in our daily lives means we already put a great deal of trust in Apple to manage our data appropriately. In the wake of the data and security scandals suffered by other platforms – and looming anti-trust action by US legal bodies – this feels like a smart move by Apple to remind customers that they value their security first above all else.”

Why Apple’s privacy play may come back to hurt them, despite clear incentives

The incentive for Apple to be a privacy-focused organisation is two-fold, firstly user privacy is an increasingly popular trend, with the rise of ad blocker software one example of this. This is especially prevalent among their young, millennial audience where their brand has traditionally resonated strongly. Secondly, Apple does not have a strong advertising business, with their estimated USD$500m (£394m) revenue from their search ads business in 2018 representing a drop in the ocean compared to Google’s reported figures of USD$116.3bn (£91.7bn) in the same period. Going all-in on privacy therefore boosts their reputation with an increasing base of privacy-focused users, as well as potentially harming their main rival, a win all round?

Well, no. As mentioned previously, app makers are likely to be miffed at Apple forcibly imposing an email-concealing SSO, which would dramatically reduce their user measurement capabilities. Given the monopolistic nature of the App Store (and Google’s Android equivalent), publishers will not be able to vote with their feet and move to an alternative platform, as no such platform exists.

This in turn feeds into a major problem big tech is facing at the moment, anti-competition regulation. The US Justice Department has reportedly assumed full responsibility for a potential antitrust probe against Apple, as well as Google, and is working in conjunction with the Federal Trade Commission (FTC) to investigate the remaining ‘big four’ members: Facebook and Amazon. While being seen as a shining light in the dark land of privacy violations will certainly endear Apple to users, doing so while manhandling publishers through their dominant market position may prompt calls for severe financial penalties, or even regulatory breakup.