IDFA Policy May Lead to iOS In-App Advertising Market Losing Nearly 20% of Value

The implementation of Apple’s Identifier for Advertisers (IDFA) privacy policy is projected to cause a significant contraction in the iOS in-app advertising market. According to analysis from Omdia, the market is expected to experience a 17% decline in value throughout 2021 as a direct result of restricted user tracking and diminished ad targeting capabilities.

The financial impact of these changes is characterized by a shift in advertising expenditure. Approximately two-thirds of the lost iOS revenue is expected to be redistributed to the Android ecosystem, as the premium typically associated with iOS advertising—which previously saw users spending 4.7 times more on apps than their Android counterparts—is anticipated to drop by nearly 60%. The remaining portion of the shortfall represents revenue that will either be diverted to alternative advertising formats or withheld entirely by marketers struggling to adapt to the new data environment.

While the immediate outlook for 2021 suggests a sharp downturn, the analysis indicates that the market is likely to undergo a period of adjustment. Projections suggest that iOS in-app advertising will recover a substantial portion of its original premium value by 2024. In the interim, the reduced efficacy of iOS ad targeting is expected to drive increased demand and higher pricing for Android-based advertising inventory as companies seek to compensate for the loss of granular user data.