Recently, Apple and Google each announced changes that will have the effect of limiting the ability of apps and websites to track users online and through mobile apps. Although the changes have yet to occur, marketers and advertisers need to start paying attention, as each will be heavily impacted by these upcoming changes.
Apple, Identifier for Advertisers, and Privacy Labels
Between Google’s and Apple’s announcements, the digital advertising and marketing industries are reeling, and Apple’s recent shift will impact the entire app experience. “App developers and marketers will need to make changes to focus on first-party data, building a strong and loyal customer base, and creating an experience that’s worth paying (or seeing ads) for,” said Justin Bauer, SVP of products at Amplitude, a product intelligence platform provider.
Essentially, Apple, which considers privacy to be a user’s right, now requires app developers to provide a disclosure as to how the app uses the data it collects from users. The “privacy labels” are broken into three categories: “data used to track you,” “data linked to you,” and “data not linked to you.” Data used to track you indicates that data from the app (personal information, or data collected from the mobile device, such as location data) is linked with other data for the purpose of targeted advertising. Sharing user or device information with brands that sell that data is also considered to be tracking. Data linked to you is any data that can be used to identify you, and includes data collected from using the app or having an account with the brand that created the app, and any data that is collected from the device that the app is installed on that can be used to create an advertising profile. Data not linked to you is defined as certain types of data, such as location data or browsing history, that is not being linked to the user in an identifiable manner.
Additionally, with iOS 14, Apple’s new IDFA (Identifier for Advertisers) rules will take effect, and users will have the ability to block the IDFA identifier at the app level. Not only that, but developers will be required to ask app users for explicit permission to track them across apps and websites using the IDFA. They will also have to provide details about what data is being collected, and who it is going to be shared with.
“Apple is taking positive steps in the name of user privacy with its new IDFA rules and mandated privacy labels, and the downstream effect will be felt not just by advertisers, but also by app developers,” said Bauer. “The move puts pressure on companies to up the ante on digital experiences. We’ll end up seeing that the winners in this new world won’t necessarily be the companies that are best at advertising; they’ll be the companies that deliver the best experiences.”
For those brands that already have a large number of customers that have the brand’s app installed on their iOS device, they will have a big lead over those brands who are just getting their apps on the market. “For example, in an industry like gaming we’ll see that the platforms that already have highly engaged customers will be able to leverage that existing audience to drive cross-share across new apps and games. This rule change will make it even harder for single publishers to grow their initial user base, but if you have an existing user base of highly engaged customers, you can tap into that first-party data and use it to your advantage. I expect we’ll see many more businesses leverage their existing offerings to cross-sell into new ones that they’re launching. On the other hand, businesses that don’t deliver on the product experience or adapt digital optimization will ultimately struggle,” Bauer emphasized.
Apple is likely hoping that advertisers and marketers will begin using its SKADNetwork, which is Apple’s privacy-friendly method of attributing ad impressions and clicks on iOS apps. SKADNetwork is able to share data with advertisers without revealing user-level or device-level data. It’s essentially Apple’s version of Google’s walled garden.
“These changes are going to significantly impact the retail advertising ecosystem. Apple calls this new initiative App Tracking transparency, which as the name implies, provides transparency to the iPhone user on how they are being tracked,” said Rob McGovern, founder of Careerbuilder and now PreciseTarget
Industry experts believe that many app users will opt out of the IDFA, which will heavily impact the ability of advertisers to target those users. “If an iPhone or iPad user opts-out of IDFA, he or she will no longer be a targetable person.” Also affected will be the ability of advertisers to geo-target app users. “Many data sets learn who you are by knowing the physical address of where your phone sleeps at night, and then ties your address to public name and address directories. Clearly, this will degrade the ability to geo-target consumers based on their home address.
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Google Chrome Says Goodbye To Third Party Cookies
Recently Google announced that it will not be replacing third party cookies — which will no longer be supported by its Chrome browser as of 2022 — with another unique identifier that can be used to track users as they browse the web. Instead, Google is promoting the use of an interest-based advertising model called Federated Learning of Cohorts (FLoC). FLoC clusters large groups of people with similar interests so they can be targeted with relevant content and ads.
“Google is portraying their decision to eliminate 3rd party cookies in Chrome as enhancing consumer privacy, in truth, the devil is in the details,” said McGovern. “Google will continue to drop its 1st party cookie, enabling them to track and target you within their walled garden. How big is the garden? It includes search, Gmail, and YouTube, which means their garden is bigger than most farms.”
Although Google has issued statements that said that they are committed to protecting the privacy of users, including eliminating “any technology used for tracking individual people as they browse the web,” clearly that does not include their own properties.
“It's premature to begin thinking that Google has become a pro-consumer privacy company. Aside from continuing to track consumers using their first-party cookie, unlike Apple, they'll continue to track consumer locations on Android. Additionally, when Google says they don't harvest data from Google apps like Gmail, Photos, and Drive, it's notable they don't include Chrome on that list. The Chrome browser continues to be a tool used by Google to harvest consumer data,” suggested McGovern.
It is interesting that although Google is working to reduce the ways consumers are tracked on the web, it has not done anything to stop developers from doing the same thing via Android apps. “It should be noted that Google is not following Apple's lead on curtailing mobile tracking. Users of Android phones will continue to be location tracked, indicating the importance of location data to Google's ad platform,” McGovern said. “Additionally, users of Google Maps and Waze will continue to have their locations tracked. Google's 1st party cookie that's used on all their apps, including Google Maps, is becoming an incredibly potent tracking asset.”
Related Article: Google's FLoC Helps Bring Cookieless Marketing and Privacy Into Focus
Final Thoughts
Apple and Google are making changes to their policies in order to protect the privacy of their respective users, which will have the effect of limiting the ability of advertisers to target users as they browse the web or use mobile apps. Advertisers and marketers would be wise to begin looking into Apple’s SKADNetwork and FLoC as well as focusing on first party data collection going forward.
