Blogs -Advertising Stocks Face New, Major Challenge With Apple’s iOS 14

Advertising Stocks Face New, Major Challenge With Apple’s iOS 14


August 05, 2020

Beth Kindig

Lead Tech Analyst

In my latest Forbes article, I discussed a lesser-known announcement from Apple last month in regards to the required opt-in for the ID for Advertisers (IDFA).

The IDFA is a number tied to the device that allows ad exchanges to track user interactions and behavior. The primary function is very similar to cookies in that it helps ad companies store data profiles and preferences for personalized messaging, regardless of which device you are logged into. In addition to targeting, the IDFA also helps with attribution and measurement.

If you’ve never heard of the IDFA or are not aware that a number is assigned to your iOS device to help track you, it’s because this has been opt-out in the past and been hidden inconspicuously in your Settings. In the upcoming release of iOS 14 in September, Apple will make this an opt-in for every single application. This means a message will appear for every application using a mobile device ID asking for permission.

This new feature will affect companies who offer mobile targeting, such as Google, Facebook, Twitter/MoPub and The Trade Desk. In the interim, it could also affect any applications that use aggressive growth tactics. This list is harder to identify, but Uber and Lyft, for example, are known for spending heavily on user acquisition to drive installs.

Fortunately for mobile ad industry there’s still time. The changes will not take effect until September with most devices running the iOS update by October, so no financial impact will be seen until Q4. However, if brand ad spend remains low from the pandemic, and direct response campaigns will now be blind due to an aggressive move against mobile ad targeting, then investors should expect a significant shift in the ad industry by the latter part of the year.

The changes to the IDFA are being done under a privacy guise, however, it could be an attempt for Apple to reclaim valuable revenue streams from its ecosystem as iPhone penetration is maxed out. How this would work is not evident right now but its unlikely that a $118 billion market in iOS app install spend has gone unnoticed.

Privacy in this age of “data everywhere” is a valiant mission, yet there could be more to Apple’s decision as the company has built a very cash efficient ecosystem with many companies profiting from the $100 billion+ industry of mobile app installs.

There is clear evidence as to the importance of direct response in this quarter’s earnings calls thus far, yet mention of the IDFA has been absent from analyst questions despite being one of the biggest threats the mobile ad industry has ever faced. There is a major disconnect between the first few earnings calls in ad-tech talking up the strength of direct response ads and how people who work daily in the mobile ad industry view the IDFA being deprecated. John Koetsier, a journalist and consultant for Singular who covers this space extensively, believes this is a “huge problem for a massive industry.”

Read the Full Article on Forbes here.

Sign up for Analysis on the Best Tech Stocks

I’m an industry insider who writes free in-depth analysis on public tech companies. In the last 12 months, I predicted Facebook’s Q2 crash, Roku’s meteoric rise, Uber’s IPO flop, Zoom’s IPO success, Google’s revenue miss and more. Be industry-specific. Know more than the broader markets. Sign up now. I look forward to staying connected.

If you are a more serious investor, we have a premium service that offers institutional-level research and entry/exit options. This membership offers a competitive edge in identifying growth opportunities and reducing risk in the tech sector. Learn more here.

More To Explore

Newsletter

Fiverr: Explosive Growth with a Bright Future

Fiverr has climbed 678% this year. In this analysis, we examine if the growth can continue in the short-term and also post-COVID.  Specifically, our research shows that...

November 19, 2020

Roku’s Stock Price: Will There Be Another Pullback?

Roku’s stock price is up by almost 500% over the past two years. Compare this to the S&P 500, which is up less than 25%. That’s 20X more returns than the average stock....

November 15, 2019

Apple is Not a Growth Company Anymore

I grew critical of Apple earlier this year when it became clear the company would decline in revenue year-over-year, yet investors and analysts alike continued to pump ...

November 01, 2019

Why no streaming company will be able to dethrone Netflix

Netflix critics see mountains of debt and bleeding free cash flow. Opportunists see a company with the world’s best track record for beating the odds in disrupting trad...

October 16, 2019

Top Tech Stock News: 7 Things You Missed This Week (11-Oct-2019)

1. Comcast to Restructure NBCUniversal Hierarchy Ahead of Peacock Launch

October 11, 2019

Governments won’t be able to stop Facebook and Google from abusive tracking on smartphones — but Apple could

Another day, another headline saying Alphabet’s Google and Facebook are being investigated for allegedly breaking privacy laws and engaging in anti-trust behavior.

October 04, 2019

Top Tech Stock News: 6 Things You Missed This Week

1. Tesla to Develop A Battery That Can Last for A Million of Miles

September 26, 2019

Why Robotaxis in 2020 Are Impossible and More Truths About Autonomous Vehicles

This last week, we saw Tesla take advantage of the lack of information available on autonomous vehicle technology. Unfortunately, the facts around autonomous vehicles a...

May 03, 2019

Facebook Stock: Too Good to Be True

Facebook has financial statements that Wall Street dreams are made of. Profit margins are at 40 percent, free cash flow outperforms due to low capex, and annual growth ...

February 21, 2019

Holding Nvidia Stock Will Pay Off Due to Two Impenetrable Moats

Tech stocks are getting slammed right now, and Nvidia may be one of Wall Street’s biggest losers in the sell-off that began last month and continued into this week. Nvi...

November 15, 2018

Sign up for Analysis on
the Best Tech Stocks

The I/O Fund specializes in tech growth stocks and offers in-depth research and real-time trade notifications.

We are on social networks


Copyright © 2010 - 2021
Get Free Weekly Analysis on the Best Tech Stocks