After Facebook, Unity Technologies and Snapchat’s parent company Snap have now both warned investors of the potential ramifications of Apple’s privacy change coming this spring.

Apple is tweaking how The Identifier for Advertisers (IDFA) works, which could present “a risk of interruption to demand,” Snap chief financial officer Derek Andersen told investors.

CNBC has the quote:

It is not clear yet what the longer term impact of those changes may be for the topline momentum of our business, and this may not be clear until several months or more after the changes are implemented.

Snap has been working with Apple in preparation for the changes.

The reality is we admire Apple, and we believe that they are trying to do the right thing for their customers. Their focus on protecting privacy is aligned with our values and the way we’ve built our business from the very beginning. Overall, we feel really well prepared for these changes, but changes to this ecosystem are usually disruptive and the outcome is uncertain.

IDFA is a random device identifier assigned by Apple to your device that advertisers are allowed to use for the purpose of tracking users and delivering personalized ads.

A screenshot showing the Apple logo with a lock icon and the word "Privacy" set against an all-black background

Unity Software wrote in its earnings report that the upcoming privacy tweak will affect how mobile game developers “optimize lifetime customer value.” The company is projecting a revenue fall of approximately $30 million in 2021 because of the IDFA changes.

The figure represents three percent of Unity’s revenue.

App Tracking Transparency is about choice

Apple’s upcoming feature is causing quite a stir among the ad industries whose livelihood depends on tracking and serving ads. Facebook has been particularly vocal with its anti-Apple PR campaign, going as far as to accuse the iPhone maker of hurting small businesses.

And all that because Apple wants to give people choice with the new App Tracking Transparency (ATT) privacy initiative. What ATT really boils down to is going from user tracking being an opt-out in the previous iOS versions to becoming an opt-in, on a per-app basis.

With the change, apps will be required to ask permission to access your IDFA through a new privacy prompt. The worry is that too many people may decline permission to be tracked, which un turn is expected to make targeted advertising less effective.

There’s also a switch in Settings to stop all apps from asking to track you.

A screenshot of the Settings app in iOS 14.5 showing the option "Allow Apps to Request to Track" as turned off

The new ATT privacy-protection framework is rolling out with iOS 14.5 around this spring.

Google’s own ATT is coming!

Apple is currently testing ATT, along with a bevy of other new features in iOS and iPadOS 14.5, with its registered developers and public beta testers. Meanwhile, Google may be exploring an alternative to Apple’s App Tracking Transparency feature, but with a “less stringent” approach.

Google’s been working with industry partners to find ways that would let its own iOS apps avoid showing Apple’s ATT permission prompt. Curiously, Google has been dragging its feet with updating its iOS apps with the required App Privacy information on the App Store.