I think I'm qualified to give you a more detailed answer. I also have apps on the App Store (iOS) and recently researched the whole Google Play privacy policy issue at length - the reason being that I've worked on a (mobile) privacy policy generator for years.
Your issue doesn't seem to be one and Google's email is vague - it says it could be a permissions issue, OR a user data issue.
Ads are among the more intrusive things one can do and certainly warrant a privacy policy by itself, accessing "dangerous" permissions is another one.
Additionally, the fact that Apple let your app through and Google didn't, isn't a hint at everything being ok on the side of the App Store, btw.
What you must do to fix:
1) Add statements about using Admob into your privacy policy
Your use of Admob is subject to the Admob programme policies, which says:
Privacy
You must disclose clearly any data collection, sharing and
usage that takes place on any site, app or other property as a
consequence of your use of any Google advertising service. To comply
with this disclosure obligation with respect to Google’s use of data,
you have the option to display a prominent link to How Google uses
data when you use our partners’ sites or apps.
2) Add statements about your use of any dangerous permissions like the following
CALENDAR
READ_CALENDAR
WRITE_CALENDAR
CAMERA
CAMERA
CONTACTS
READ_CONTACTS
WRITE_CONTACTS
GET_ACCOUNTS
LOCATION
ACCESS_FINE_LOCATION
ACCESS_COARSE_LOCATION
MICROPHONE
RECORD_AUDIO
PHONE
READ_PHONE_STATE
CALL_PHONE
READ_CALL_LOG
WRITE_CALL_LOG
ADD_VOICEMAIL
USE_SIP
PROCESS_OUTGOING_CALLS
SENSORS
BODY_SENSORS
SMS
SEND_SMS
RECEIVE_SMS
READ_SMS
RECEIVE_WAP_PUSH
RECEIVE_MMS
STORAGE
READ_EXTERNAL_STORAGE
WRITE_EXTERNAL_STORAGE
3) What else belongs in your privacy policy (very superficial overview)
Here's some more information that might help you in getting this done well:
- Outline which dangerous/sensitive permissions you request
- Outline any other user data you collect, for instance advertisement services!
- Describe what purpose they serve and use them only for that purpose
- Information about the site/app owner.
- The kind of data being collected and how it is collected.
- The purpose of the data collection (i.e. analytics, email marketing).
- Any third parties that have access to the information and through which means (widgets and integrations).
- The rights of users regarding their data (i.e. the ability to request to see the data, to rectify, erase, or block).
- The process for notifying users and visitors regarding material changes to the privacy policy.
- Effective date of the privacy policy.
To conclude. This isn't an easy job for anyone that isn't a privacy professional. Even for lawyers this takes a lot of reading usually. For this reason I'll link to two posts that go into the nitty gritty details:
I hope this helps :)