iOS 8’s Planned Location Restrictions: What You Need To Know

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eliportnoy"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Eli Portnoy, president at Thinknear by Telenav.

There’s been a lot of buzz about the announced changes in the upcoming release of iOS 8. Better integration with Mac OS – good. Better use of the fingerprint authentication technology – great. And the use of “random, locally administered MAC addresses” instead of permanent MAC addresses? Well, that one is receiving quite a bit of resistance from the digital marketing community.

Permanent MAC (media access control) addresses have long been the only way for brick-and-mortar establishments to know who is in their stores. So if Starbucks wanted to know who was working from a coffee shop, or Target wanted to keep track of shoppers, they could identify the unique MAC address of each device in the location to find out.

The privacy concerns stemming from this practice are debatable – and fodder for a completely separate discussion – but what matters is that these concerns existed in the first place. Apple has consistently shown that it is privacy-aware, so this move away from MAC should not be surprising. But I’d like to clear up misconceptions I’ve seen circulating about this announcement.

This Isn’t The End Of Location-Based Advertising

When we talk about location-based campaigns, we’re actually talking about two disparate practices. The first is the identification of an individual user and determination of their location. The second is the identification of a location and then the determination of all users present. It’s the difference between observing that John Doe is at McDonald’s and determining the identification of every person at that location. The changes made to iOS 8 will only affect the latter categorization.

Assuming that a user has location services enabled, the first scenario, in which marketers can track the movement and location of a device and use that information to target a user, will be completely unaffected by Apple’s changes. Targeting can continue because the technology that enables this sort of tracking is almost always opt-in, whereas the second type of targeting is done without a user’s explicit knowledge or permission.

Currently, if a person walks into a store with a device that has Wi-Fi turned on, that store can access information about him or her because of their MAC address. The store can log that information, as well as any information collected on every single visit to the store, indefinitely. He or she didn’t have to opt-in. It’s not exactly easy, or sometimes even possible, to opt out.

The change being implemented by Apple is a move toward transparency: The randomly administered MAC addresses mean that a device cannot be identified and tracked. The key difference between the MAC tracking and targeting being conducted now and the beacon technology Apple and some others have introduced is that beacons are explicitly opt-in, making in-store tracking and targeting a lot more like the user-specific targeting mentioned earlier.

This Will Make Cross-Platform Challenging

The biggest downside to the Apple decision to move from permanent to randomly generated MAC addresses – and, in my mind, one of the only downsides – is that it will prove challenging to target a consumer across devices. As things currently stand, if a phone and laptop connect to the same network at the same time on multiple occasions, it soon becomes clear that both belong to the same person. These connections are often linked through traceable MAC addresses.

Though there are other elements that contribute to cross-platform targeting, most prominently through log-ins across multiple devices, the end of MAC addresses will force industry players that have made cross-device relationships their bread and butter to compensate for this loss. It could be through a combination of beacons and other opt-in technology, apps that require user authentication and location validation (so that if the app were installed and played on multiple devices, the connection could be made that way) or other opt-in technologies.

But one thing is certain: As iOS 8 rolls out and becomes widely adopted, it will be critical to find a solution. While these changes are not by any means the end to the location-based industry, once complex user profiles across multiple screens come into play, the change becomes a much bigger deal.

This Isn’t Selfish

In the week since Apple’s announcement, there’s been a lot of conspiracy theory finger pointing, accusing Apple of making this move not for privacy but to force retailers to switch to iBeacon technology. Though Apple certainly stands to benefit from expanded adoption of beacons, I don’t think it is implementing these changes out of selfishness. More likely, it is Apple responding to privacy concerns as it has done in the past.

Apple isn’t ending MAC tracking across all mobile devices – just on its own devices. This move means that it is prioritizing the needs and concerns of its customers, rather than trying to make a sweeping change industrywide.

For the time being at least, MAC addresses will still enable companies to track at least half of the devices being used in any given place. That being said, iPhone users have consistently shown themselves to be bigger spenders than Android or Windows users, so it will behoove brands to at least consider taking Apple’s actions to heart for the longer-term benefits they could reap from doing so.

Follow Eli Portnoy (@eportnoy), Thinknear (@Thinknear) and AdExchanger (@adexchanger) on Twitter.

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