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Why the advertising industry is upset with Apple right now

CNBC logo CNBC 9/15/2017 Michelle Castillo

Advertising trade groups are admonishing Apple for adding features to its web browser Safari which will limit the user data companies can see.

The move caused six major advertising trade associations to publish a letter on Thursday arguing against the changes, claiming Apple's move could make online advertising worse and deprive media companies of revenue.

Here's what the advertising industry is worried about.

What Apple is doing

Apple's Safari 11 web browser, which is expected to be released on Sept. 19, includes an "Intelligent Tracking Prevention" feature. It identifies tools that are tracking users, like cookies, and only lets companies digitally follow people for 24 hours after they visited a website.

Apple's move is at least partially a response to increasing public concerns about how much advertisers know about them, and what those advertisers do with that data.

According to anti-ad blocking ad software company PageFair, 615 million devices around the world were using some sort of ad blocker in Dec. 2016. A majority of people surveyed by PageFair also said they would stop going to a website requiring them to turn off their ad blocker.

And while Apple's move provides some protections for user privacy, it also prevents advertisers from targeting specific users — the main attraction of digital advertising — and measuring how well their ads are doing.

Apple's had a mixed relationship with the advertising industry lately. In Oct. 2015 it removed some apps from its App Store which install "root certificates," a security measure that helps ad blocking software follow its users -- a move friendly to the digital ad industry. However, it has also included software on Safari since iOS 9 that blocks ads and pop-ups, among other things.

Why advertisers are angry

Advertising is what pays for most content online. Blocking ads and advertisers hurts media companies, who can't get revenue to pay for articles and other services they provide. Ad blocking reportedly could cost online publishers up to $27 billion by 2020, according to Juniper Research.

There's also concern Apple is placing its own standards on what data can be shared with third-parties instead of letting the users choose.

In addition advertisers argue allowing access to user data allows companies to show ads specifically aligned to user tastes, based on what they spend time online doing. If Safari 11 limits access to user data, companies fear they won't be able to customize ads. Advertising would become less personalized and more random.

"Apple's unilateral and heavy-handed approach is bad for consumer choice and bad for the ad-supported online content and services consumers love," said said the letter the ad industry sent to Apple.

Apple's not alone in this. Google (GOOGL) has announced plans to add ad blocking software to its browser. However Google's "Funding Choices" program will prompt ad blocker users who visit a site that doesn't allow the software to either turn off their ad blocker or pay a pass that removes all advertising content. Ten percent of the pass cost will go to Google, while the rest will go to the publishing company. All eligible companies must have advertising that fit certain ad standards limiting annoying features like pop-up ads, ads that take over the whole web page, and ads that automatically play audio.


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