| > Apple’s ad business began to boom following changes it made last year to its app tracking policies that made it easier for iPhone users to opt out of being tracked across other apps on their phones. What's the mechanism here? Is it something like this? Before the change: 1. I use say a free (with ads) guitar tuner app. 2. That app usage gets shared with Facebook's app. 3. Facebook now knows I'm probably a guitar player, or at least probably play some instrument that is commonly tuned by the player. 4. Companies who want to reach guitar players buy ads on Facebook. A Facebook ad has a good chance of reaching me. After the change: 1. I use a free (with ads) guitar tuner app, but opt out of cross app tracking. 2. Facebook is less likely to find out I'm a guitar player. This reduces the value of Facebook ads to the companies that want to reach guitar players. 3. They shift some of their ad budget from Facebook ads to ads in guitar tuner apps. |
That's not really the primary mechanism, as far as I know. My understanding of the flow is this:
Before:
1. You browse Facebook. 2. Companies who want to sell a guitar tuner app buy ads targeted to guitar tuner apps. 3. You click on the ad, and you download the app. Both the app and Facebook get an unique ID identifying you (this is called the "ID for Advertisers" or IDFA). 4. You use the app, maybe pay them money. The app is able to directly attribute you giving them money to the ad it ran on Facebook, and Facebook is able to know that you converted on the ad, which is very good signal. 5. The company is able to accurately track its conversions, and Facebook is able to accurately price ads.
After: 1. You browse Facebook (and opt out of cross-app tracking). 2. Companies buy the ad, you click on it, download the app. 3. You no longer get an ID, instead both Facebook and the company get a scrambled ID that they can no longer link. 4. As a result, Facebook can no longer attribute the results of its ads as effectively, leading to less accurate signal and less confidence from advertisers.
From my understanding, one of the ironic things now is that ATT has forced companies like Facebook to collect even more data (see https://twitter.com/modestproposal1/status/15272970860601139...). Because Apple no longer provides this unique ID for Facebook/advertisers to uniquely track conversions, apps/Facebook are forced to rely on much more data collection in order to probabilistically predict conversions.
Much of my knowledge of this area comes from Stratechery - I think this article, particularly the section entitled "And" explains what "cross app tracking" is: https://stratechery.com/2022/data-and-definitions/