Apple CNAME Changes Mark Latest Challenge Confronting Digital Advertising

Over the past three years, a perfect storm of developments has forced our industry to operationalize several novel and evolving regulatory requirements, as well as adapt to brand new market realities that deviate sharply from the digital advertising status quo of the last decade. In addition to an emerging patchwork of privacy laws in the states, new policy changes from major platforms, such as Google and Apple, are beginning to have significant impacts on the ways brands and their vital service providers conduct business, provide value to the economy, and enrich consumers’ digital experience. These new platform-imposed rules are poised to dramatically alter consumers’ online interactions by limiting the availability of certain types of data in the marketplace, thereby threatening consumers’ ability to access a vibrant digital ecosystem rich with free and low-cost content, news, services, and more.

In January, Google announced its intention to stop supporting third-party cookies in its Chrome browser by 2022. To date, Google continues to work on this initiative as it develops alternatives to third-party technologies through its Privacy Sandbox. In June, six months after Google’s announcement, Apple issued a statement that it would implement technological and policy changes for its release of iOS 14 to restrict how app developers and their partners access and use the platform’s Identifier-for-Advertising (IDFA). Apple stated that it would require app developers, on an app-by-app basis, to obtain user permission (i.e., opt-in consent) for “tracking” in order to access the device’s IDFA. The changes Apple announced in June will begin to come to fruition in future releases.

With less fanfare, Apple changed its policy with respect to the use of canonical name (CNAME) records in the Domain Name System (DNS) in November. CNAME records allow a brand to delegate selected functions to a service provider such that a service provider can perform various core site functions, including setting a cookie on their behalf, utilizing a brand’s subdomain.

For instance, when a consumer navigates to a brand’s website via a browser, CNAME records set by the brand may utilize the subdomain of the brand (i.e., www.serviceprovider.ana.net) allowing the service provider to perform services for the brand. This technique has served as a vital means for brands, working with their service providers, to operate services and personalize the experience of their customers. CNAMES have enabled core site functions, such as analytics, authentication, content acceleration and content management, in addition to advertising.

Of particular importance, the impacts of Apple’s new CNAME record limitations are not reflective of consumer intent or individual preferences; on the contrary, the changes merely stand to limit first parties from deriving important insights that enable them to better serve their customers. Furthermore, this change can actually inhibit a service provider’s ability to respect privacy and consent preferences individuals have made with the various brands with whom they interact.

In iOS 14.2 and Big Sur OS, Apple has restricted brands and their service providers from leveraging CNAME records by limiting the duration of cookies set using CNAME redirection. Apple’s new CNAME policy builds on its ITP 2.1 announcement targeted at first-party interactions, and is yet another example of Apple placing limits on a cookie’s life to merely seven days even with user consent to “tracking,” impacting standard site functionality and a brand’s ability to manage its own consumer experiences. This is particularly pronounced for small and medium businesses who rely on third-party service technologies to help personalize experiences on their sites. 

While the industry was aware that changes would be coming with Apple’s operating system updates this year, the platform provided next to no details on the technological means for effectuating those changes before they went live. This is not the first time Apple has taken unilateral action like this by imposing technical blockages on data flows without much warning and just on the heels of the holiday shopping season when online consumer experiences are more important than ever. 

The platform-level developments initiated by Apple and others have brought into sharp focus the need for an operable solution that allows all entities in the advertising industry to engage with advertising products and services and enrich consumers’ digital experience. For this reason, the ANA recently announced a new partnership with its sister trade associations and companies to organize the business community to speak to these issues. The Partnership for Responsible Addressable Media (PRAM) is a collaborative effort by leading advertising trade associations and companies representing every sector of the global advertising industry to advance and protect critical functionalities like customization and analytics for digital media and advertising, while safeguarding privacy and improving consumer experience. Efforts such as those undertaken by PRAM are intended to help amplify the perspectives of various market players before more sweeping ecosystem changes are made, such as those most recently undertaken by Apple.

If you are interested in learning more about PRAM or if you would like to join the effort to help ensure addressable media technologies can persist, please contact me at djaffe@ana.net for more information.