The way you market to your customers is about to change. Apple and Facebook are fighting over the future of digital marketing right now, and regardless of which one wins, the landscape of this industry will be different.
Apple has consistently raised concerns about online privacy and the lack of transparency in how people’s personal data is used. Facebook’s entire business model is built around monetizing that data through targeted marketing and advertising. The two have been building toward a clash for a while.
Apple CEO Tim Cook is one of the most outspoken proponents of data transparency and has issued several thinly-veiled statements on companies like Facebook in the past. At the 2021 Computers, Privacy and Data Protection conference, Cook made his position clear.
“The fact is that an interconnected ecosystem of companies and data brokers, of purveyors of fake news and peddlers of division, of trackers and hucksters just looking to make a quick buck, is more present in our lives than it has ever been,” Cook said. “And it has never been so clear how it degrades our fundamental right to privacy first, and our social fabric by consequence.”
Apple’s stance isn’t new. Steve Jobs raised concerns back in 2010. Apple has had high-profile spats with law enforcement over encryption keys, siding with privacy advocates and refusing to unlock phones. Despite all that, iOS 14.5’s release is the first major escalation that will affect marketers directly.
Apple’s Fight Against Facebook
iOS patches in 2021 have taken direct aim at companies like Facebook. The most recent patch, iOS 14.5, requires users to sign off on app tracking which was previously automatic. This is the ONLY way that apps can track their users on Apple devices. This could badly hurt companies like Facebook that lean on this data heavily.
IDFA (or “Identifier for Advertisers”) is Apple’s attribution for ad spend which allows campaigns to track users across apps and web pages. Google’s equivalent is GAID, or “Google Advertising ID.” The IDFA and GAID are the way you measure campaigns on iOS or Android devices.
With this change, Apple neutered the IDFA. You can still run campaigns, but it’s now much harder to judge their performance. These two cover the bulk of all mobile devices, but desktop tracking relies on other technologies like third-party cookies (more on that later).
One AppsFlyer survey estimated that 47% of users will opt out of tracking when given the choice. Early numbers indicate it’s going to be much, much higher. 85% of users worldwide opted out after Apple’s patch, with the number rising to 94% of U.S. users.
This is an existential threat to Facebook’s business model. Apple is positioning itself as a privacy advocate. Facebook is taking a different tack. They are focusing on the impact on small business advertising. “This impacts the growth of millions of businesses around the world, including with the upcoming iOS14 changes,” said Facebook head Mark Zuckerberg. “Many small businesses will no longer be able to reach their customers with targeted ads.”
Zuckerberg isn’t wrong. Facebook and its customers have grown to rely on targeted customer data for marketing and advertising. And this back-and-forth is part of a larger move towards transparency in how personal data is used.
Apple and Facebook are the most visible players because of their size, but they’re only the tip of the iceberg. There are larger debates on data transparency brewing. Recent laws like California’s CCPA and the E.U.’s GDPR have already changed the way companies do business, and there’s more coming.
Legislation like the CCPA and GDPR has already made data collection more visible. As people realize how much information they’ve given away, lawmakers and tech companies are being given a mandate to control it. Tracking and monitoring technologies are being curtailed, with third-party cookie tracking next in line.
The Demise of Third-Party Cookies
A third-party cookie is a small identifying file that is put in a browser’s folder to keep track of where they go and serve them personalized content. You’ve probably noticed third-party cookies if you wonder why the same Amazon product you looked at a couple of days ago is following you from site to site: it’s because of a third-party cookie. Third-party cookies serve a similar purpose to platform-specific identifiers like the IDFA and GAID: they allow marketers to track you across multiple websites.
Firefox started working to block third-party cookies in August 2018. Safari blocked them too, and Google announced a phased rollback of support for them on Chrome not long after. The initiative to ban them completely forced changes — Google’s phased rollback is happening as they try to create a more private way to serve personalized ads.
One of the biggest reasons Google is slowly phasing out third-party cookies instead of outright banning them is concern over “fingerprinting” replacing third-party cookies. Device fingerprinting uses the characteristics of your device to develop a digital “fingerprint” of your device that can be tracked across sites without asking any permission — characteristics like operating system, browser version, MAC address and more. It’s a more invasive, subtle tracking technique than cookies, and though cookies can be blocked, fingerprinting can’t.
Device fingerprinting is nearly as unique as a person’s fingerprints (hence the name) and disliked by privacy advocates for that very reason. Google wants to create an alternative to stop fingerprinting from taking over, and most of these companies are also trying to create gentler alternatives to traditional trackers.
Replacing Invasive Tracking
Google’s solution is called FLoC, or “Federated Learning of Cohorts.” FLoC puts users into a larger group of people with similar characteristics (a “cohort”), adding a layer of anonymity.
FLoC is the most visible solution but Google also has a raft of other standards they’re working on. Other browsers are just blocking third-party cookies, and Google wants to get ahead of the curve with the next tracking standard.
Apple’s solution is called SKAdNetwork, an API built to present ads to targeted users while keeping them anonymous. This network is specifically built around their iOS operating system and would work with all Apple mobile devices.
The big tech companies are realizing that privacy is a big deal for users. They’re smart enough to get ahead of the curve.
For years, people have been giving away their personal data without thinking twice about it. That’s changing. The E.U.’s implementation of GDPR was a shot across the bow. The U.S. Senate’s interest in companies like Facebook has opened people’s eyes to the amount of information they’ve given away. And they’re responding.
Where is This Leading?
Advertisers and marketers have spent decades adapting and adjusting to regulation and technology. Increased regulation and pushback from companies like Apple isn’t going to kill off the industry.
It will, however, increase the importance of trust. If your users trust you, they’ll allow you to see into their lives more than you would otherwise. You’ll gain value. When advertising can’t follow people easily from place to place, owned channels become more important.
Marketers will have to put their emphasis on content that draws people in. Build site content that people want. Create an app with lasting value. Serve your email list with regular insights. The push for privacy and data transparency is changing online advertising, but the answer to changing technology is the same it’s always been.
Want to succeed even when you don’t have access to detailed targeting data?
Provide value. Build trust. Focus on people, not just transactions. That’s a strategy that won’t fail no matter what any tech company does. Not sure how to do that? Know that you don’t need to go it alone. We’re in this with you. If you need a little help, just drop us a line, anytime.
Rainmaker Digital Services