The iPhone 5 and any phone running iOS 6 not only by default tracks users for advertising purposes, but also makes it difficult to opt out. After Apple told developers to stop tracking users with the UDID system, basically eliminating this privacy breach completely, it has implemented a new targeting system. It's called IFA and is "more effective than ever" multiple mobile advertising executives told Business Insider's Jim Edwards. Apsalar, a mobile advertising company compares it to a "persistent cookie," that gives more accurate user-habits than before. The privacy world says the new system isn't as tricky as the old one, which wouldn't let users opt out at all. But Apple kind of negates that by making it so complicated to turn the tracking off.
The biggest difference between the UDID and IFA is that users can choose to opt out completely and also choose to erase some of the tracking after it has been implemented. Both those processes, however, take many more steps than most people will want to do. To delete the tracker permanently, for example, "users will have to erase their device to remove the ID which is a pretty extreme analog to clearing your cookies from your browser," explains TrustE, a developer blog. The phone has a "limit ad tracking" setting, but it's buried deep within the phone's settings, not under "privacy," as one might expect (image via Business Insider). The default setting has it toggled to "off," which means the phone will track. To change it go to "general" then "about" and then there you will find a little "advertising" widget. (Business Insider has a full visualized walk through of how to do that on their site.)