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According to this appleinsider.com article, Apple has introduced new privacy functionality that can limit ad tracking in iOS 6:

Apple was not happy to see third party developers and ad networks using iOS users' UUID (universally unique device identifiers) to perform sophisticated tracking of individual devices (web cookies, unlike UUIDs, can't track a specific computer, and can be deleted by the user), particularly when they tracked UUIDs down inside Apple's headquarters to spy out new models.

screenshot, courtesy of appleinsider.com

Apple has not publicized this feature much and has set the default state to OFF, and has placed the setting at .

If turned on, how does this feature improve user privacy? Does this setting really prevent advertisers from tracking individual phones/computers? Details have been limited, so I'd appreciate any information that can shed some light about the expected functionality of this privacy feature.

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Feature from screenshot can be seen at Settings > General > About > Advertising –  JW8 Sep 28 '12 at 6:39
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I understand it to be limiting the type of information apps are allowed to track about you. Specifically, they shouldn't store your UUID.

For example, apps could associate your UUID with behaviors you demonstrate in the app and so provide targetted marketing. The idea of behavioral tracking and targeting are discussed on this World Privacy Forum page.

The upshot is that if you enable privacy, apps shouldn't provide tailored (targetted) adverts to you based on what you do in their apps. I'm not sure how it'll be enforced though; perhaps, it prevents access to your UUID, but I'm not sure if that'll be for iAd apps only.

The "Learn More" link at the bottom of your screen gives some explanation in Apple's own words. The non-personal reference I think is about anonymising your UUID (so it can't be traced back to you personally) but in essence its still a UUID.

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I'm sorry I don't have more specific information about the implementation but hopefully this sets the scene somewhat.

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