How iOS 11 will hurt developer revenue

With the new release of iOS 11, Apple has made a profound change to its Safari browser that is likely to affect users, advertisers, and, most dramatically, publishers. What’s at stake is a previously dependable source of revenue for content providers: third-party cookies. Browsers generate cookies for each URL a user visits, which, until now, could be spun off into third-party cookies; these function as ad trackers, and make it possible for publishers to target specific market segments. But now newly-created cookies will last just 24 hours, and after 30 days all cookies will expire. Publishers will lose the ability to access data from first-party cookies, and to read any cookies not generated within their own domains. Powerful sites like Facebook and Amazon.com will have smaller publishers at a disadvantage - with most users visiting those sites almost daily, first-party cookies will constantly regenerate. Apple claims this new approach will safeguard the user’s privacy and enhance the user experience. It’s too soon to gauge the true impact on users, but there’s little doubt advertisers will struggle harder to reach the right audiences, and publishers will see key revenue streams disappear.

Xavi Beumala is the Founder and Chief Executive Officer at Marfeel and he is here to explain how iOS 11 will impact developers.

ADM: What are some new updates that iOS 11 will bring to the advertising table?

Beumala: Apple's new iOS 11 will bring a more restrictive ad-tracking policy that will make it far more difficult for advertisers to target their desired audiences and for publishers to optimize their advertising revenues. To explain it simply, once your browser creates a unique cookie for a domain - a first-party cookie - that cookie lasts forever. Today it could be triangulated to a third website, aggregated with cookies from many other sites, and offered to advertisers as a third-party ad tracker. Publishers depend on third-party cookies for the rich data they deliver, which enables them to segment the market and target the right consumers. It is an essential route to revenue and, if properly used, will result in ads that are more relevant to users. Now, with iOS 11, the new cookies will last for no more than 24 hours, and every cookie will expire in 30 days. As a consequence, third-party ad trackers won’t be effective. Which also means that publishers, small and large, might never have an equal chance to collect first-party cookies on their domains.

ADM: How will iOS 11 effect publishers?

Beumala: This change could drastically affect publisher revenue, which depends on these cookies for ad targeting. Not being able to target iOS users means that that revenue is gone forever (unless advertisers opt to pay more for less efficient placements). If they can’t read cookies created outside their own domains, or aggregate third-party domains, or access first-party data, then they will experience a tremendous loss of revenue.

ADM: How will the iOS 11 changes affect the user experience?

Beumala: User privacy will be more protected by these changes, however, they’re also bound to see more irrelevant ads.

ADM: Who will iOS 11 benefit and who will suffer disadvantages?

Beumala: Internet giants like Amazon, Google, and Facebook will have a significant advantage because many users visit these sites every day, and they already own their customer data and can always access it. Publishers will suffer from this since they may never have an equal chance to collect first-party cookies on their domains.

ADM: What other solutions can help publishers recover some of this revenue loss?

Beumala: Publishers should carefully review how monetization evolves over the next few weeks for iOS readers. It is important to review it periodically since the adoption of the new iOS version is quite gradual, and it usually takes weeks. After an evaluation, publishers should adopt different monetization strategies for both iOS and Android and apply them depending on what device the reader is using. An example could be making changes to a publishers header bidding strategy and pick the ad networks that work best with each operating system while maintaining high-quality ads. Or, why not, embrace and experiment with other monetization opportunities that the iOS ecosystem offers, like Apple Pay or Apple News, which seem to be gaining traction.

ADM: Why did Apple make this change and how does it help them?

Beumala: It seems that Apple created this change to protect user privacy. However, it does leave us wondering why they didn’t make the change throughout the entire ecosystem including native apps?

About Xavi Beumala

Xavi's experience as a telecommunications engineer and his extensive knowledge of the digital publishing industry inspired him to found Marfeel, where he serves as the Chief Executive Officer. Beumala's goal in developing Marfeel was to help publishers monetize mobile traffic by leveraging insights of the user experience to maximize visitor engagement and ultimately ad revenue.

Beumala served as a leader in the technology industry prior to founding Marfeel, and founded the company madeinflex.com. Additionally, he was a blogger at rialvalue.com, Editor at Genbeta Dev and held the position of Principal Architect at Adobe Systems. Beumala studied at the Universitat Politecnica de Catalunva in Barcelona, Spain.