I understand that it shows that there is a contraction. This is helpful for understanding for neologism-like contractions, but the contraction of "it is" is so common you just read it the same as its and don't have any problem. I know this because when it's written as "its" in passages (like my notes) I understand it without a hitch and don't even notice it, until I go back through for editing.
This is a problem for many English writers, even those born into the language. The
's suffix is used for two different things, as a contraction for "is", and to denote ownership. So "Fred's" could mean "Fred is", or it could mean "belonging to Fred".
This ambiguity is not too confusing in most contexts, but with "it" it gets a bit weird. So some years back (to my knowledge in the 1950s, but maybe earlier) it became "standard" (ie, approved by "authorities" at Oxford and Cambridge, et al) to render the possessive "it" as "its", and reserve "it's" as the contraction of "it is". This practice has become fairly common, and so the use of "it's" to denote "the thing belonging to it" would now be considered erroneous by most reasonably educated readers.
There are a few other words where this practice is followed, though I'm not sure which ones have achieved the same degree of standardization as with "it".