App Tracking Transparency
Apple has just released the latest update to their operating software, iOS 14.5. Its biggest feature, aside from getting Face ID to work when wearing a mask, is that it is changing its approach to data collection with websites and apps. Before, users would have to change their preferences manually, often with difficulty, in the settings for each app on their phone. Now, with App Tracking Transparency, Apple requires users to opt-in to data tracking practices.
Value Differentiation
Tim Cook (Apple), Sundar Pichai (Google), Mark Zuckerberg (Facebook), and Jack Dorsey (Twitter) have been summoned, with an increasing frequency, to appear in front of senate committees over the last few years – whether it has been on personal data security or anti-trust regulations.
This new iOS 14.5 update has especially upset Zuckerberg, whose business relies on the income of advertisers and the accuracy and personalization of advertising. But it has been an opportunity for Apple to differentiate itself from other tech companies (that rely on advertising) as one that can focus on a product that is secure for users and will protect personal data.
Apple has recognized that there is a consumer desire for more security around personal information and is acting on that with this latest iteration of their operating system. The upgrade is a value-add to the privacy- and security-conscious consumer.
A Better Internet
We write a lot about personal data collection on the internet. It’s how the web works. As the intersection of our personal lives increasingly becomes digitized, businesses benefit from, and bring opportunities to, users that are online – and all the sweet sweet data that comes with it.
The internet is still young, and we like to look optimistically at the fact that it is becoming increasingly better, faster, more secure and more equitable. Simultaneously, however, information is increasingly becoming more vulnerable; the digitization of a lot of our business and personal information is a big liability for us all.
The General Data Protection Regulation and the California Consumer Rights Act are examples of trying to enforce better consumer data protections: the former with investigatory powers and levying huge fines, the latter with statutory damages and civil penalties through litigation.
Google is preparing for an end to cookies by testing what they call The Federated Learning of Cohorts, a way to deliver personalized ads without the need for tracking individuals with cookies.
Whether better personal data protections will be brought about through market forces or increasing regulations, it’s clear there is an appetite for better improved transparency and data security.
How iOS 14.5 Affects Businesses
Zuckerburg (aka Facebook) has long been arguing that these changes to the iOS data collection policy will make it harder for small businesses to effectively advertise on their platform. This will hurt Facebook’s business model if ads become less targeted and the margins for Facebook ad campaigns become smaller.
Facebook argues that the biggest victims of iOS 14.5 will be the small businesses that were using the access to data personalization as part of their marketing strategy. They even went so far as to take out a full page ad in the New York Times criticizing Apple and making their point in favor of data collection.
An opt-in approach for consumers to allow their data to be collected might actually benefit Facebook, giving them a bigger competitive advantage because of how much first-party proprietary personal information they have on all their users and the trust people have in dealing with their apps.
It’s likely their platform will still be incredibly successful at personalizing ads, meaning that people might move towards their platform to advertise from others that have smaller audiences and a smaller opt-in rate.
Our Thoughts
iOS 14.5 is a great move by Apple. As an Apple customer, it makes me feel as though I have control over how I share my personal data and with whom, however accurate that might be.
It also centralizes Apple’s data collection; they will have the best data on their users, even if they refuse to share it. This should mean better products and personalization as it relates to user and customer experience.
The move also makes them look like a company that cares about privacy and values personal data, and that’s a winning stance to take in this current environment.
Maybe the ads will be less relevant to our wants and needs (if we decide to turn off tracking), but that remains to be seen. If we decide we like the experience with ads and ad-serving platforms better if the ads are relevant, we can turn tracking back on – it just feels good to be in the driver’s seat.
