Apple threw a wrench into the digital ad industry, and marketers are bracing for impact

· Business Insider

A new software update from John Ternus' Apple has the adtech world in a fluster.

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Apple has its finger on the big red button again.

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The adtech sector was up in arms this week about a new Apple update within iOS 27 with the potential to wreak havoc on web advertising.

Apple's change blocked several major adtech firms from using advertising identifiers across browsers on its devices and, in some cases, also disrupted their ability to serve ads to Apple users on the web.

First reported by AdExchanger, the blocking happened through WebKit, the technology that powers Safari and all other browsers that run on iPhones.

Apple has long held an anti-tracking stance, doubling down on its principle that privacy is "a fundamental human right."

What particularly irked the adtech industry was that Apple didn't just restrict cookies or identifiers this time — it blocked calls to certain adtech domains altogether, in some cases preventing ads from being served at all on the affected browsers unless companies figured out a workaround.

Apple on Monday told The Trade Desk it had made changes in a new iOS beta release. Those changes appear to have untangled The Trade Desk's ad-serving domain from being blocked alongside its advertising identifier, Unified ID 2.0.

That update is only available in beta for now, said Dustin Cha, co-CEO of the adtech company Ad-Shield. That means The Trade Desk's ad-serving domain will remain blocked in practice until iOS 27.2 ships.

"Which would likely put it in the second half of Q4 — in time for the holiday season," Cha said.

Apple also hasn't fixed the broader industry gripe: Identifiers are still on the naughty list, and Apple has shown it's prepared to add companies to that list without prior warning.

The companies that are feeling the hit

The companies set to feel the most pain from the update are those whose businesses rely heavily on alternative identifiers and other post-cookie technologies. The blocked domains included those operated by The Trade Desk, ID5, LiveRamp, Permutive, and Audigent.

The broader impact is on advertisers' ability to identify and reach people across the open web. By blocking the identifiers that many adtech companies use to recognize users across websites, Apple effectively shrinks the pool of people advertisers can target.

That's bad news for publishers, too. If advertisers can identify fewer of their visitors, their ad inventory can become less valuable. That potentially pushes more marketing dollars away from the open web and toward platforms with vast stores of first-party user data. (It just so happens that Apple has a growing ad business, too.)

For CMOs, that means potentially less reach, higher prices to reach the audiences they can still identify, and poorer campaign performance on the web. It can also make it harder to control how often people see an ad and determine whether those ads actually worked.

It's the latest example of how seemingly minor backend changes from Apple can cause tremors across the advertising landscape.

Apple's 2017 Intelligent Tracking Prevention feature, limiting adtech firms' ability to track users across the web with cookies, set off a cat-and-mouse game. The industry responded in part by developing alternative identifiers designed to recognize users without cookies. Apple's latest move strikes directly at those workarounds.

Apple's privacy crackdown has also extended to apps. In 2022, Meta said Apple's App Tracking Transparency change could hit its ad business, causing $10 billion in lost revenue.

Adtech pros say what's particularly concerning about this new move is the uncharacteristic opacity around which companies Apple is blocking, why they've been selected, and how quickly that can change.

"It's getting more and more aggressive," Mathieu Roche, CEO of ID5, told me.

AdExchanger reported on Friday that Apple has created a broader list that can dynamically block potentially hundreds of adtech, martech, and data companies. The way the list is constructed means it can be updated remotely without Apple releasing another version of iOS, the outlet reported. Affected companies may not even know they've been blocked until something stops working.

Tony Katsur, CEO of the IAB's Tech Lab, said that it should be up to governments to police the internet, rather than individual corporations.

"When governments pass laws and regulations in the interest of consumer privacy, it applies them to all, and it's consistent across everyone," Katsur said. "When a corporation like Apple pushes something like this out, it's uneven."

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