On today's episode, we discuss where we are one year into Apple's AppTrackingTransparency (ATT) update. Who are the biggest winners and losers thus far, is ATT in fact anticompetitive, and how will ATT continue to shape the advertising space? "In Other News," we talk about TikTok adding third party cookies to its pixel and where US display advertising is heading. Tune in to the discussion with our analyst Evelyn Mitchell.

The rollout of AppTrackingTransparency (ATT) in iOS 14.5 effectively deprecated the primary way publishers and advertisers track users on iOS and changed how the mobile ad industry approaches monetization and measurement.

Meta itself said it expects to lose $10 billion in 2022 because of ATT. But while Meta’s profits drop, Apple has benefited greatly from ATT. The change greatly increased the value of first-party data and caused App Store search ad revenue to grow 236% last year to $3.7 billion. “Services” which includes advertising, is now the fastest growing category at the company.

Data management firm Lotame estimates that ATT’s changes could reduce revenues for Twitter, Snap, Meta, and YouTube by a collective $16 billion, showing that the industry still hasn’t found post-ATT solutions that satisfy advertisers. Meta and Snap’s earnings this week also showed signs of a stilted post-ATT recovery.

Social media apps are among the most affected apps by ATT, as social platform usage is predominantly mobile. With iOS 14.5 adoption now at 96% among US social media app users, just 28% of those shown an ATT prompt on any social media app have opted into tracking, per data from mobile measurement partner AppsFlyer as of November 23, 2021.

Meta, Snap, Twitter, and YouTube collectively lost an estimated $9.85 billion in the second half of 2021 because of ATT, according to Lotame data cited by the Financial Times. Meta said it expects to lose another $10 billion in 2022 from the ripple effects of Apple’s privacy reset.

Since Apple’s AppTrackingTransparency (ATT) framework in iOS 14.5 took effect in late April, Facebook has experienced steadily worsening data loss as iOS users have adopted the update.

The early 2021 arrival of Apple’s AppTrackingTransparency (ATT) framework limited the collection of iOS user data, effectively making the personalized advertising that has driven app economies much less cost-effective. Some app developers—particularly those in the gaming category—have banked on consumers’ increased comfort with subscriptions as a result.

In March, just over half of email opens worldwide came from Apple devices using Mail Privacy Protection (MPP), a feature released in September 2021 that prevents email senders from receiving data on Mail app users’ device usage, among other information. About one-third of opens came from webmail, while the remaining slice was split fairly evenly between desktop and mobile.

On April 26, 2021, Apple’s ATT framework went into effect with the rollout of its iOS 14.5 update. Under ATT, all apps distributed through App Store must show a prompt to users requesting them to opt in to allow advertisers to track them across other sites or apps. Users must opt in for their Identifier for Advertisers (IDFA), Apple’s mobile device identifier, to be shared.

Google’s plans to deprecate third-party cookies in Chrome and Apple’s introduction of the AppTrackingTransparency (ATT) framework are just the latest of the major milestones in the slow demise of third-party identifiers. At the end of 2020, we predicted that a US federal privacy law reminiscent of the EU’s General Data Protection Regulation (GDPR) would pass in 2021.

Germany’s probe could be followed by more investigations into ATT that could ultimately result in a change to the policy. Still, a total reversal of ATT probably isn’t in the cards. ATT falls in line with American and European regulators’ recent fervor for data privacy regulations and penalties, so it's unlikely to be fully rolled back.

But with the release of iOS 14.5 in April 2021, Apple began requiring apps to use a framework called AppTrackingTransparency (ATT), which shows users a prompt asking for consent to track them across apps. And far fewer users are willing to say yes when explicitly prompted. ATT affected the vast majority of iOS users.

Consumers aren’t very fond of advertisements on the preeminent social media platforms, and a meaningful solution for post-ATT advertising has yet to be found and raises questions about effectiveness.

Apple’s 2021 privacy updates have advertisers approaching iOS with caution and accelerating their investment in Android. Last May, soon after the changes rolled out, US Meta ad spending rose at about the same pace on both types of devices. By the end of December, growth on iOS had slowed to 3% year over year, while Android’s soared to 101%.

In interviews, mobile advertising leaders reported that some mobile advertising may have shifted to the web as a result of Apple’s rollout of AppTrackingTransparency (ATT) in iOS 14.5. Despite that, we still expect the in-app share of mobile advertising to continue to grow.

If opt-in rates in the wake of Apple’s ATT framework are any indication, only a fraction of the general population may be targetable. In December 2021, among US users of iOS 14 or later versions, 37% opted to be tracked upon being shown the ATT prompt, according to AppsFlyer data. That’s not including those who had turned on Limit Ad Tracking (LAT) prior to iOS 14 and were not shown the prompt at all.

Apple’s AppTrackingTransparency (ATT) framework, which first went into effect in April 2021, bears some responsibility. In February 2022, Meta CFO David Wehner predicted that ATT would cost the company $10 billion in 2022 revenues, as Apple’s program made it harder for advertisers to tell if the ads they’d bought through Facebook led to their desired outcomes.

The trend: Apple’s launch of AppTrackingTransparency (ATT) in iOS 14.5 has started to reshape digital advertising and is affecting mobile app publishers’ and advertisers’ monetization models, budget allocations, and measurement strategies. Our recently published report had the following findings:.