Apple has been making headlines with its latest iOS 14.5 update, which promises to give users more control over their privacy. The new App Tracking Transparency feature means iOS users will now have to actively grant permission before apps can collect their personal data. According to Apple, the average third-party app contains around six “trackers” designed to collect and transmit personal data to companies users might not even be aware of. This data can be used for marketing or sold in an industry Apple claims is valued at $227 billion per year. According to Apple, users deserve more control over what data can be collected and how it can be used.
But is this update what it claims to be, or is it the kind of lip service we’ve seen before with tech companies? And what does this mean for marketers who rely on this data?
What’s actually Changing?
Many apps track and collect users’ data in the background on their devices. Apps might collect information from a user’s device, activity, and other apps installed on the device without the user being aware. Often this tracking is mentioned in user agreements, but the length and complexity of these agreements make it unlikely that users read and fully understand what they’re agreeing to. Other times, apps gather users’ data covertly.
Personal data such as a user’s age, sex, location, preferences, and habits can be incredibly valuable to advertisers looking for an edge. That’s because it can be used to create highly-targeted, personalized ads. On the one hand, this kind of marketing is extremely effective and can connect consumers with products and services they love. But privacy advocates worry about whether such marketing practices cross ethical lines, as well as other ways this data might be used. Many consumers also feel such marketing is unfair and manipulative, and it’s well-known that companies have tried to use this data to influence consumers’ behavior.
With Apple’s new App Tracking Transparency, apps will not be able to collect data on users unless users consent to that data collection. Apps will use pop-up notifications to request permission to track a user. Users can choose to allow or block such tracking, and they can change their mind about tracking at any point through their settings. When users opt-out of tracking, Apple’s iOS will block the IDFA (Identifier for Advertisers) that power this tracking. In other words, Apple will hide the user’s personal details from apps.
Apple Branding and Consumer Privacy
Security has always been a big part of Apple’s branding. Back in the early 2000s, Apple launched their “Get a Mac” ads touting Macs as cool, hip, and innovative and Windows PCs as functional but boring. One of Apple’s most popular claims in those days was that PCs get malware while Macs don’t (a claim they dropped back in 2012). For many security-conscious consumers, this was a huge selling point for Apple products.
Today, the new threat is loss of privacy, and so Apple is positioning itself as a defender of the people and othering Android the same way it did Windows PCs. The fact that Google is one of the worst violators of personal privacy only works in their favor.
App Tracking Transparency is just one change Apple has made recently as it works to position itself as a leader in consumer privacy. In December, the company added “privacy nutrition labels” for programs in its App Store. These labels clearly state what data each app collects and how it uses that data. It also claimed that “privacy is a fundamental human right” at its Worldwide Developer Conference last June, taking a clear stand against other tech giants like Facebook who are pushing back against emerging legislation designed to protect consumer rights.
Why am I suddenly hearing about Privacy all the time?
Apple is taking one of the most aggressive stances on privacy, but they’re not alone. Not at all.
Everyday users are becoming increasingly aware of how much of their personal data is being gathered by giant corporations. People are starting to make conscious efforts to protect their data by purchasing devices that prioritize privacy, switching to privacy-first browsers, and even petitioning Congress to pass measures similar to the EU’s General Data Protection Regulation (GDPR). Smart companies (like Apple and Moz) are responding to consumer demands by rolling out new tools designed to put privacy control in users’ hands.
But other tech giants like Facebook are fighting hard against these changes. Facebook’s main revenue stream is advertising. Because of the troves of data it collects on users, it’s able to offer some of the most cost-efficient and effective advertising channels in the world. But if data collection dries up, so too will Facebook’s income. The social media behemoth claims that small businesses advertising on their platform will see a cut of over 60% in their sales for every dollar they spend on advertising. (This claim has yet to be proven, and Dipayan Ghosh has made a strong case against it in a recent article on Wired.)
Google, the world’s largest advertising company, is also at risk if consumer privacy laws get passed. Currently, Google is rolling out a series of privacy “changes” they claim strike an ethical middle ground: they will continue to collect the same data from users, but they will strip personal information from the data. They will also sort users into large pools of similar users to increase their anonymity. This way, they can have their cake and eat it, too, and users can stop worrying about privacy.
However, Google isn’t fooling anyone. Congress, the British Parliament, and the EU are all already investigating Google’s new strategy, and many privacy experts insist these changes are changes in name only.
Are these Privacy Changes really about Consumers, or about Apple’s Growing Advertising Business?
Apple’s privacy changes are a win for consumers. If their strategy is successful, consumer demand will pressure other phone manufacturers to consider similar changes on their devices. These changes will pose interesting challenges to phone manufacturers working with the Android operating system, but those who make the change quickly could cash in. Android phones still account for the majority of the smartphone market—a whopping 83.8% of the total market share—partly because many are available at a lower price point than iPhones.
But these privacy changes could be a win for Apple as well. Under these new privacy restrictions, advertisers targeting iPhone users will reap big benefits if they do so using Apple’s ad space instead of third parties. These benefits include receiving real time information about their ads, as well as more data about user behavior, including information about which ads users saw and what keywords were used. In contrast, advertisers using third-party platforms will have to wait three days for insights and will only have access to aggregated information about users. This provides a big advantage to using Apple’s advertising platform.
Apple claims these choices are not about giving themselves a leg up as much as they are about protecting users’ privacy by ensuring third-party platforms adhere to Apple privacy rules. However, the ads that run in their app store and News and Stocks apps brought in around $274.52 billion last year. (For comparison, Facebook earned $84.17 billion in ad revenue during 2020.) Creating extra incentives to draw more users to their platform could dramatically increase that amount in years to come.
How Apple’s Privacy Changes will Impact Digital Marketing
Apple’s update will have a dramatic impact on marketers. For one thing, it will limit the number of Facebook pixels marketers can place on a website to eight, substantially reducing the amount of data marketers can gather. And, of course, users who opt out of data sharing won’t be tracked by pixels at all. With reduced amounts of data, analytics data will become less accurate and ads maybe produce fewer viable leads.
However, there are steps marketers can take to make their efforts more effective. Here are a few to consider:
- Verify your domain for Facebook. Some marketers have already begun receiving notifications from Facebook to verify their domains. This requires uploading a small text file to your domain so Facebook can ensure you own your domain and your advertising information is going to the right place. This will help make your advertising information from Facebook more accurate.
- Enable Facebook’s Conversions API. Conversions API is a tool that allows your website server to communicate directly with Facebook’s server. It works with Facebook pixels by providing additional signals from your website, and it isn’t subject to the same restrictions as trackers. It’s an important way to make your Facebook data more accurate.
- Use your website tracking tools to supplement your data from Facebook. Whether you’re using Google Analytics or one of its competitors, make sure you monitor where visitors are coming from, how they engage with your site, and where they go next. And track ad engagement on other platforms closely. All of this data can give you clues that help make sense of your changing data from Facebook.
- Track Android and iOS users separately. Marly Broudie of Social Media Examiner points out that since Android devices will not be affected by the iOS 14.5 update, you can still gather highly-accurate data on these users. It’s important to continue tracking iOS users as well, but be aware that data on iOS users will be incomplete. Segmenting these users in your data will help you retain a more accurate, complete picture of how your marketing efforts are performing.
- Amp up your direct marketing strategies. Facebook is not the only place where user tracking is changing. As we explained in April, Google is abandoning third-party cookies and many users are taking steps to avoid tracking. The best way to get the data you need on customers is to ask for it in such a way that they want to give it to you. Connecting with users who sign up for your mailing list, register on your site, or enroll in rewards programs is beneficial not just because it gives you great, easy data, but also because it primes you for upselling customers who have already committed to your brand.
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