Sabotage or golden opportunity? The bottom line: ITP will make you change

ITP is a small acronym but a big a problem for digital advertisers. Released alongside the iPhone X, Apple signalled its intent to shake up the online ecosystem. Apple was going to diminish the tracking capability of digital advertisers. Welcome to Safari’s latest feature: Intelligent Tracking Prevention (ITP).

To put this into context, in the US alone, digital ad spend will reach $83 billion in 2017 (according to eMarketer’s latest forecast). It’s huge and growing, with display advertising taking a big chunk of that growth. In particular, services such as targeting and re-targeting are crucial to a large segment of the current ad-tech industry. Fear of stalling this growth are very real and the release of ITP by Apple is a massive spanner in the works.

Why are cookies so important to tracking?

Advertisers are up in arms over how ITP will effect the functionality of cookies. The tracking of users around the internet is critical to the inner workings of many advertising networks. Cookies enable an advertiser to build a detailed picture of the browsing history of visitor of a website. This in turn is then used to create an accurate profile, which – using the right ad-tech – helps to target digital ads to the right individuals.

Some of these cookies are “third-party” and can already be blocked by browsers. But most targeting advertisers prefer to use “first-party” cookies. These are uploaded to a user’s browser from a site they visit and updated as they move around the net. Blocking these breaks many other aspects of the internet that users expect to work too. For example, the ability to log into sites using Facebook or Twitter passwords. How some of these changes will affect Safari users remains to be seen. 

What is Intelligent Tracking Prevention (ITP)?

ITP is the name of the new feature that Apple has included in the latest update to Safari, across all its platforms. This new feature limits the ability for website owners and advertising platforms to track across domains via cookies. Websites that load scripts or images from other domains will be classified “using a machine-learning model”. Cookies from these sites will stop working for tracking purposes 24 hours after the user’s first interaction with the cookie.

What’s more, after 30 days (without another interaction) the automatic removal of the cookies from the user’s device takes place. Speaking to the drum, Sam Vining, Head of Data and Analytics at iCrossing, summed it up. “In practice, this means that the cookies advertisers rely on for measurement will be unavailable after 30 days. And cookies for targeting and retargeting in media will be unavailable after 24 hours”. Advertisers using some forms of display advertising, such as re-targeting banners, will have to adapt to these changes.

What does this mean for advertisers? 

The ability to re-target users of Safari – across platforms – beyond 24 hours after their last interaction will be lost. This could lead to a reduction in the scale and effectiveness of remarketing campaigns of users of Safari, with the accuracy of targeting reduced. But new – as yet unrefined – methods could counter this reduction.

The upside is that Safari usage is a relatively small compared to other browsers, like Chrome and IE on desktop. Chrome is still the number one browser across all platforms, with 55% usage globally, compared to Safaris’ 15%. But Safari usage increases to 19% when analysing mobile data, and is a whooping 59% for tablets. Meaning, long term it is worth advertisers adapting to the changes Apple have implemented.

How have some in the industry reacted?

In an open letter to Apple, featured on Ad Age, six trade bodies – including the IAB – argued that ITP breaks established industry standards. “The infrastructure of the modern Internet depends on consistent and generally applicable standards for cookies, so digital companies can innovate to build content, services, and advertising that are personalized for users and remember their visits. Apple’s Safari move breaks those standards and replaces them with an amorphous set of shifting rules that will hurt the user experience and sabotage the economic model for the Internet”.

To the surprise of commentators Apple response was firm; positioning itself on the side of the consumer. “Ad tracking technology has become so pervasive that it is possible for ad tracking companies to recreate the majority of a person’s web browsing history. This information is collected without permission and is used for ad re-targeting, which is how ads follow people around the Internet.”

Talking to Digiday, media industry analyst Rebecca Lieb, hits the nail on the head on Apple and online ads. “Apple’s uniquely positioned to not care,” referring to how the vast majority of Apple’s revenue comes from selling devices, unlike Facebook, Google, and Amazon. “If Apple wants to change how users can be tracked in its browser, there’s really no one in ad land who can stop it”.

The fascinating part of this is how Google and Facebook will react to Apple’s cookie move. Google’s already changed the way they work –  it has a fall-back mechanism that calculates Safari conversions that “should” be there without ITP. Both platforms also interact with users on a daily basis and have users logged in. Meaning it’s easy for them to by-pass ITP! In fact, Apple could end up driving more advertising to Google and Facebook – just what the industry needs!

Google’s in on it too…

Not to be outdone, changes are afoot from Google too – though not immediately, unlike Apple! From 2018 Chrome will restrict intrusive advertising by blocking the sound on autoplay videos. Furthermore, Google is installing ad-blocking inside Chrome. Its ad-blocker will block all advertising on sites that have “unacceptable ads,” according to The Wall Street Journal. This includes ads with pop-ups, auto-playing video, as well as “prestitial” count-down ads that delay the display of content.

Google refers to the ad-blocker as an ad “filter”. It will also apply a list of unacceptable ad types, as provided by the Coalition for Better Ads, an advertising industry trade group. According to Björn Karlström, Product Owner, at Bannerflow: “Google will not follow Apple, but they are implementing important changes. Yet, since Google is making money from ads and data – unlike Apple – their thoughts on privacy are vastly different”. The ad-blocker will launch in 2018. 

General data protection regulation (GDPR) is coming

For those engaged in online advertising there is an even more critical change on the horizon: GDPR. The data a company can hold on any user located in the EU is about to get that much harder to access and hold. With new privacy regulations, and procedures, combined with tough enforcement. GDPR will apply to all companies processing the personal data, of anyone residing in the EU, regardless of the company’s location. Details of the changes are here and will come into play 25th May 2018. Be sure to read the Bannerflow blog, as we will dissect the impact of GDPR on display advertising in greater detail.

Take-away

Rather than “sabotaging” an entire industry for many it’s another change worth negotiating. We’ve seen the previous uproar surrounding the death of Flash, adoption of HTML5, and the culling of unresponsive sites. All of which ended up being positive for users of the web. The quality of advertising formats improved too – including the humble banner ad. Writing for AdExchanger, Alan Chapell writes that ultimately, “ITP will benefit large publishers, social media platforms, and Google”. Some ad networks, and ad-tech suppliers focused on tracking users across devices, look set to be the losers.

For a creative management platform, like Bannerflow, which bridges ad-networks and devices, ITP, Chrome changes, and GDPR, present opportunities. As a company built on disruption, changes that benefit the viewer can only help to improve our industry. While it may be difficult to digest – wanting to produce remarkable ads that convert is unlikely to alter. The bottom line is change is often good.