Written by Shai Alfandary, Managing Director of Paragon.ai
As people continue to spend more time online, privacy concerns are high on everyone’s agendas in newsrooms and conference rooms, as well as in government offices. Some in big tech seemingly remain deaf to the growing frustration, but others are making privacy their top priority. Apple has positioned itself as the leader of the latter’s pack with its latest update, IOS 14, which aims to improve user data privacy. Improvements like Apple’s represent a leap forward for consumers, but advertisers will need to find new ways to collect data to keep ads relevant and personalized.
What’s the update?
There is 1.65 billion Apple devices worldwide and 1.4 billion of them are iPhones, or nearly 80 percent dont have updated their phone to run IOS 14. The update gives users more control and transparency over what parts of their data are shared, changing privacy standards globally. Now, the app will notify users when it wants to track usage on platforms or websites owned by other companies for advertising purposes. Users will also be notified when an app wants to share information with data brokers.
As people become more aware of the privacy of their data, some remain convinced that their technology is actively hijacking personal conversations. Now Apple has added an indicator on the home screen to notify users when the device’s camera or microphone is active. A green dot for the camera and a red or orange dot for the microphone are now displayed in the upper right corner of the screen when either function is in use.
The last app to use either feature will appear at the top of the device, when you pull the widget bar down. Essentially, this update lets users know if a background app is able to access and record conversations without their knowledge.
What shall we do now? Every iPhone and iPad uses unique identifiers, called IDFAs, and companies like Facebook that sell mobile ads can use the identifier to target ads and ensure that the most relevant find the right consumer. With less cross-app and web tracking, targeting is worse, advertisers are not as happy with campaigns and therefore enjoy less profit.
As many turn off their data sharing features, Facebook has started showing its own prompt to explain to users why it wants to track activity. The social media mogul recently claimed that if users choose not to share their personal data, the company will honor that request. However, some might argue that Facebook doesn’t have the best balance sheet privacy concerns and many consumers fear the site will continue to collect data under the radar.
How can advertisers still target their key demographic?
It didn’t take long for rivals to attack the tech hegemon after the announcement, accusing the company of changing privacy features to bolster its own self-interest. Many believe that Apple is looking to gain a greater share of the advertising market because the company can save the majority of data without having to share it with other companies based on new data privacy regulations.
Apple is trying to push these free apps into subscription models. Subscription-free apps rely on cross-platform user data to target the right consumer. As they lose data, it becomes much more difficult to target the right audience. If a business switches to a subscription plan, the consumer will have to pay for the app. When an app becomes a subscription, the company can rely less on ads to support the app, and Apple gets about a 30% reduction, but that number can change.
It’s not just publishers who are concerned about the new privacy settings – small business owners are concerned too. Many of them say they started advertising on Facebook and because of personalization, their business has grown exponentially. So how can advertisers and publishers work together to combat declining in-app tracking?
First, it is imperative that both have multiple data sources. Advertisers need to collect data from a variety of avenues, not just Facebook or Google. Once a business receives data from multiple websites, it will have an easier time tracking different points of interest. Other tech giants, such as Google, are also adding new features to try to help publishers prepare for the backlash from the new iOS update. Google, for example, updated its Google Analytics for Firebase adding new features such as support for SKADNetwork to help advertisers accurately measure the performance of their campaigns.
When using Google Analytics or another Customer Data Platform (CDP), advertisers can configure the system in two different ways. Users can use a “fine-grained” configuration or use their own data storage. If the platform is configured for advertisers’ own storage, it is the “source of truth” that will be a staple for aspiring advertisers in the years to come.
As privacy continues to dominate public discourse on big tech, advertisers and publishers need to adjust their strategies. But this idea of privacy could be viewed as ironically hypocritical, as those same consumers tend to only want personalized ads for them. Most don’t realize that to have these personalized ads, advertisers need consumers’ internet footprints. Another hurdle that advertisers will face is the new iOS update, but over time everyone will have to adapt by finding new ways to collect user data.