Apple's Safari update will boost Facebook, Amazon and Google
Apple's forthcoming update to its Safari browser, due for release in September, is set to be good news for Facebook and Amazon, but disastrous for large retargeters and publishers. The iOS 11 update will put a 30-day limit on first-party cookie privileges, leading to a potential 98% reduction in access to first-party cookies for demand-side platforms and leaving publishers with more low-dollar bidders. In contrast, Facebook and Amazon will be able to purchase ad inventory on Safari at lower prices, while Google will benefit in the longer term from ad spend fleeing Safari.
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Today’s column is written by Auren Hoffman, CEO at SafeGraph.

In September, Apple will release new changes to Safari with iOS 11 called “Intelligent Tracking Prevention.” These changes will have large effects on the ad tech industry and create new winners and losers.

In short, the iOS 11 changes will really help the big guys, are neutral to the small guys and significantly hurt the mid-size guys.

A Recap

Today, all Safari browsers essentially block third-party cookies that are dropped by domains other than the domain of the URL to which the user browsed. But the browsers reward first-party cookies with lots of privileges. This has been good for well-known sites, but also for large ad networks that get lots of clicks because a click gets routed through the ad network domain and becomes a first-party cookie.

IOS 11 will change the concept of a “first-party cookie.” The new first-party cookie comes with a ticking clock. In the first 24 hours, the cookie acts exactly like it used to – and can be used for retargeting. So, if you go to jetblue.com and search for a beach vacation, you can be retargeted for that beach vacation for exactly 24 hours. It is just like Jack Bauer racing against the clock before the world explodes.

For the first 30 days, the new first-party cookie lets you login on-site so you don’t have the annoyance of re-entering your password if you go back to the site 15 days later.

If you have not gotten back to the site in 30 days, your first-party cookie expires.

The Losers

Traditional ad networks: Slightly negative impact. Because Safari has not enabled third-party cookies for a long time, many ad networks will not be affected by the iOS change because they were already unable to participate in the Safari economy. They might suffer a bit because this move will likely lower the price of Safari inventory and raise the price of Chrome and Internet Explorer inventory, both of which promote third-party cookies.

Large retargeters and demand-side platforms (DSPs): Very negative impact. This class of third-party ad networks received a lot of clicks, which resulted in first-party cookies for a large percentage of their users. Now the number of first-party cookies they have access to could decline by more than 98% in Safari.

Publishers: Very negative impact. As mentioned, some of the largest high-dollar bidders of Safari inventory, including large retargeters and DSPs, will stop bidding on Safari. The average CPM price for Safari should decline significantly. Publishers, especially higher-end publishers that cater to wealthy iOS users, will be stuck with many low-dollar bidders, less relevant ads and potentially unhappy users who have to see even more annoying ads.

The Winners

Facebook and Amazon: Very positive impact. Not surprisingly, Facebook and Amazon are the big winners in this change. Most of their users come every day or at least every week. And even the mobile users click on links often, which, on Facebook, takes them to a browser. These companies will also be able to buy ad inventory on Safari at lower prices because many of the high-dollar bidders will go away.

Google: An initially negative impact that will be positive in the long term. Google’s long-term gain will have short-term pain. That’s because most of the off-property ads are in the doubleclick.net domain and not google.com. We should expect Google to merge these domains so that everything is under the google.com domain – but that will take time to fully roll out. On the flip side, we should see more ad money flee people using Safari browsers, which means likely a bigger advertiser ecosystem on Android and Chrome.

To recap, the iOS 11 changes really help the big guys, are neutral to the small guys and significantly hurt the mid-size guys.

Follow Auren Hoffman (@auren) and AdExchanger (@adexchanger) on Twitter.