96 per cent of US iPhone users opt out of app tracking in iOS 14.5

Findings likely to have a major impact on the online advertising industry

Just 4 per cent of iPhone users in the US have agreed to allow apps to track their online activities since the release of Apple's App Tracking Transparency feature in iOS 14.5 update.

That's according to the Verizon-owned analytics firm Flurry that has been tracking the opt-in rate of the new feature using data from nearly 5.3 million devices worldwide.

Flurry says that the opt-in rate for app tracking has consistently been around 4 per cent for users in the US, although it is higher worldwide, with about 12 per cent of users allowing apps to track their activities on the internet.

Last month, Apple announced that it had started rolling out iOS 14.5 and iPadOS 14.5 update, bringing several new features and improvements for iPhone and iPads users. The App Tracking Transparency function in iOS 14.5 requires apps to get the user's permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers.

As part of the new feature, apps that want access to a user's unique ID number must prompt users with the message - "Allow [app] to track your activity across other companies' apps and websites?"

Users have to opt in if they want their online activities to be tracked by the app. If the user declines the request, the app will not be able to access the user ID required to track their online activity.

It is also possible to turn off tracking for all apps, rather than for each one individually. However, uptake of this feature, accessible n the privacy settings, has been much smaller. On average 3 per cent of US iOS users and per cent of internationally have restricted tracking in this way.

Flurry says that its analytics tool is installed in over 1 million mobile applications, and that it collects and processes data from nearly 2 billion devices per month.

Flurry's findings were based on a sample size of 5.3 million daily mobile active users with iOS 14.5 worldwide and 2.5 million such users in the US.

According to analysts, the challenge for the targeted advertising market will be huge if the Flurry's data from the first two weeks end up reflecting a continuing trend, the company said: "With opt-in rates expected to be low, this change is expected to create challenges for personalised advertising and attribution, impacting the $189 billion mobile advertising industry worldwide."

Facebook has been critical of the iOS change since its announcement last year, arguing that it will be devastating for small businesses that rely on targeted ads and that the changes would curb the ability of businesses to reach their customers effectively.

The company has attempted to convince its users that they must allow app tracking in iOS 14.5 if they want to help keep the social media platform "free of charge."

Other platforms, including Twitter and Snapchat, have also said that the change would likely impact their business.