Good Morning Hello How are You?
Apple is maybe gonna put us out of business sometime this month. I guess that's cool.
[I know I said this newsletter was going to be about mostly nothing with a little bit of composting and gardening, but this has been on my mind for a while. And I figure it’s time to get it off my chest. Plus you can send this post to your boss when you move to the premium, paid version of this newsletter about nothing. Which doesn’t exist. Yet.]
Some time this month - no one will say exactly when - a mid-level manager in an office building in Silicon Valley will flip a switch. When they do, our company may or may not go out of business. Not because of anything we did wrong - indeed, we’ve done nothing wrong. (I know that sounds presumptuous. Read on and decide for yourself). Yet this is not considered anti-competitive behavior. Indeed, most of the anti-monopolists are welcoming it.
You may have heard that Apple is implementing new privacy controls. Among Apple’s new App Tracking Transparency (ATT) controls is the new ability to turn off ad tracking. This isn’t exactly true. The ability to control ad tracking has been in iOS for more than a decade. Since iOS 10, Apple has let users control whether or not their IDFA - their Apple ID for Advertisers - was available to apps such as ours. What’s changing this year is that Apple is changing the process from opt-out to opt-in. And they are doing it at the app level. That is, users will be able to give permission to each app.
(Apple is implementing some other stuff too, including App Privacy nutrition labels. This is a great idea. Love it. Check ours out. Look how clean it is. Nice, low-carb app.)
On paper, this sounds great. Users should have control. I am a big fan of behavioral economics and fan on Richard Thaler’s Nudge. Decision architecture matters. Opt-out is table stakes. Opt-in is honesty. I am down.
Over and over, when we poll our users, their opinion is clear: they do not want to pay for our app. They want it for free, and they are willing to consume advertising to get it for free. We are talking, like, 90% of our users. It’s not even close.
And it seems very safe to say that the change from opt-out to opt-in, combined with the very specific methods Apple is implementing these changes, will result in a very low level of opting in. If that happens, and the ad revenues we receive for non-IDFA traffic stay unchanged, then we could be in very deep trouble.
The solution here is clear. In theory, then, we should be able to do something like this: tell our users: “hey there, we need ads to survive, to stay in business, and to provide you with this app for free. If you want to use this app, tell us it is okay to show you ads.” If they click the button, great. They get ads. If they click no, that’s fine too. No app for them.
But Apple is not letting this happen. Not because of any privacy concerns (well, actually, we don’t know. Apple has not bothered to explain the logic of this decision, so far as I can tell). If you deny an app the use of the camera? That app blocks certain functions from you until you give it permission. Same with location. But with ads? Nope. It has to be all or nothing.
“Ah, but,” you say. “Apple is not saying no ads, they’re saying no ad tracking.” And that is true. Sort of.
For one, there’s a whole host of semantic issues that are glossed over with this scary phrase “ad tracking.”
When our app makes an ad request, we send a very small amount of anonymized data along with it - age (if we have it, we usually don’t), gender (ditto), rough location (city-level), some info about the device and the Apple IDFA - the one that’s been around for ten years, that Apple asked us to use, that can be turned off or reset by any user. That’s it. We send this info out in an auction and a bunch of people bid, one of them wins the auction and we show you their ad. We do not “track” across apps. We don’t pull info in from other places about our users. We don’t send a bunch of data about what a user does in the app.
Now, yes. Each bidder can do what they want with this info. Except in California. And the EU. And, actually, all of America because we implemented California’s privacy laws in entire US, because heaven forbid an actual government make these decisions instead of a single, monolithic company in Silicon Valley. And with the new administration it seems like maybe it’s a safe bet that this could happen? If it does, I’m all for it. I like regulation. Ultra powerful companies acting in a unilateral regulatory capacity? Less so.
(As an aside I am super curious what Apple thinks is supposed to happen in the EU, what with their robust, opt-in based privacy laws? You explicitly opt-in per GDPR, then you explicitly opt-in again to Apple’s ATT. And these cannot be the same opt-ins? This makes sense… how? So gloriously kafaka-esque. )
But yes. Each bidder might be able to take that IDFA, match it against some other database they have, and use that information to make a decision. This is much like when you sign up for a magazine, or a shopper’s card at your local grocery store, except those are done by name and address and can never be reset, and this is done by an anonymous ad ID you can reset at any time. But yes, this could be described as “tracking.” And a user should absolutely know about it. Which is why we already tell them in multiple places and let them very easily opt out within the app, but whatever. We’ll put the semantics aside.
You might say “oh but this only applies to programmatic ads not directly sold you can still run ads” and that is true. We had a nice little direct sales team for a while. But you know what we realized? We’re not quite big enough for most media agencies to bother with. Thusly, small apps that cannot afford or justify a direct sales team are going to feel these changes way more than large ones.
Look. I get it. It feels a little creepy. That’s reasonable! I one-hundred percent believe the user should be allowed to make a choice. I also believe that user should be allowed to make a fully-informed choice, with all of their options on the table. But this is not possible within Apple’s ATT.
It absolutely boggles the mind that Apple - all by itself - has decided that it is wrong for a user to willingly, knowingly pay for functionality with information instead of cash money. That it is wrong for us to say “look this is how our advertising works, this is how you get the app without paying cash money. If you don’t want this app without paying cash money, that’s fine. But if you do, you’re gonna give up some anonymized info unless you don’t want to, then, fine, and you’re gonna give up your IDFA. Click here if you’re cool with that and then you can use the app. And if not, no hard feelings. We’ll go our separate ways.”
Now, would I prefer to live in a world where my business can make enough money to get by without sending anonymized info and IDFA? Well shit yeah. That would be awesome. I would freakin’ love it if I could get reasonable CPMs and all I had to say in my ad auctions “Hey I got a Timehop user here! They’re in America! Who wants to bid!” and I got a $10 CPM or something. That would rule. Is Apple capable of making that world come to fruition? Who the hell knows. Apple doesn’t. But Apple’s gonna go do it anyway, cloaked in profound morality, and just hope things work out the way they envision. And if we go out of business because of it? Well, that’s fine, apparently.
(The fact that we’re taking these profits and pouring them into a publisher-first in-app monetization platform that respects privacy and helps apps get off of the teat of the duopoly is doubly ironic, but that’s not Apple’s problem.)
And to be fair, there is a chance this might all be fine. There’s a chance the whole ad ecosystem will go “oh huh. We didn’t need to do a bunch of ‘ad tracking’ after all. I guess we’ll just keep spending money on in-app ads anyway.” We are a very brand-safe, brand-friendly app (what’s more brand-safe than your own content?). We have high-quality ads. Brands like us. If the whole world collectively shrugs about this and keeps on truckin’, we might make it. But if we make it, it’s 100% despite Apple. They don’t have a crystal ball, and they do not know or care what is going to happen to us.
And, of course, just because people aren’t able to pay for their app with their anonymized info and IDFA… they can pay cash if they want! It is not lost on me that even if my users wanted to pay cash for the app, which they don’t, I would then have to… give Apple a cut. Awesome. I’m sure that’s just a coincidence or an oversight that this feels like bullying us into Apple’s payments system. That is not sarcasm. Apple was a client of mine for nearly a decade. I sold some software to Apple, and made some of the first iADs. I have a lot of friends at Apple. I love Apple. I know they really are not bullying us. But all of this really feels like a coordinated push to get us to move to a paid app, even though our users are adamantly against it, so Apple can get a cut.