Apple’s iOS 16 offers mixed blessings for marketers

Apple this week unveiled its next generation of software for its devices, including changes that will affect the way marketers interact with consumers on mobile. The tech giant previewed the coming updates to the software for devices including the iPhone at its Worldwide Developers Conference.

There had been speculation that Apple would use the yearly event as an occasion to introduce a wearable device — a headset for viewing augmented reality (AR) imagery. The company for years has touted the promise of AR technology to transform how people interact with their physical surroundings and with each other. Instead, the only hardware on display were new versions of its MacBook laptops powered by its faster M2 chip.

More consequential for marketers are changes to the iPhone’s lock screen, new services for Apple Pay, more privacy restrictions and tweaks to ad breaks in video streams that people co-watch in SharePlay.

Customizable lock screen

Apple’s iOS 16 will give iPhone users more flexibility in adjusting what they see before unlocking their phones. Currently, the iPhone lock screen shows notifications, the time, date and a couple of buttons to quickly access the flashlight or camera.

With the customization features in iOS 16, iPhone users will be able to adjust screen fonts, enable a slideshow of photos and add widgets that are more like the complications for an Apple Watch. In addition, the update offers personalized lock screens for different focus modes, which act like a “do not disturb” setting for apps. These features may create a headache for marketers who send opt-in notifications to iPhone users.

“Historically, brands celebrated when a customer downloaded their app. Then they celebrated when the customer opted in for push notifications,” Julie Ask, principal analyst at Forrester Research, said by email. “Now, unlocking my phone or clicking on a notification is inconvenient. They’ll need to find ways to claw their way closer to the home screen, or now the lock screen.”

Buy now, Apple Pay Later

Amid the exploding popularity of buy-now, pay-later (BNPL) services like Klarna and Affirm, the next version of iOS will offer installment payments in Apple Pay. The company’s Apple Pay Later will divide the cost of a purchase into four equal payments over a six-week period, with no interest or fees. The service will be available wherever Apple Pay is accepted online and in brick-and-mortar stores.

For marketers, Apple’s entry into the BNPL market expands their potential customer base, especially among younger consumers who want the flexibility to make a purchase and pay for it as they receive their paychecks. Offering BNPL to customers has been shown to increase the average ticket size at checkout and to boost conversions, according to studies cited by CNBC.

Consumer privacy protections

Apple this year announced several privacy-related features that will come in iOS 16, but those didn’t include changes to App Tracking Transparency (ATT). The company last year shook up the digital advertising market with the rollout of iOS 14.5, whose ATT feature gives customers more control over data shared with third-party apps. The feature warns iPhone users when apps ask for an identifier that helps marketers to know if their digital ads are reaching target audiences. Apple had delayed the rollout of ATT to give app developers and marketers more time to prepare, but in the absence of other device identifiers, advertising became less efficient on the iPhone.

Justin Sagurton, a privacy engineer at Apple, this week offered an overview of the company’s “privacy pillars” that seek to minimize the data that apps need to function and to offer greater transparency into how apps use data. Apps won’t have access to names that users give to their devices – such as “John’s iPhone” or “Jane’s iPad” – to help protect user privacy. At the same time, new features will help ad networks and advertisers measure performance while still promising to preserve privacy.

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