Are Apple’s New Tracking Policies the First Step in the Right Direction?

A few months ago, Apple announced that iOS 14 was going to offer users enhanced privacy. Users will be able to stop apps (and advertisers) from tracking them. When a user clicks an ad from the app space and the advertiser wants to track them, users will now have the option to say no.

Facebook has been in meltdown mode over the changes for months. They took out campaigns in many publications. They even changed how advertisers can use their ad program in advance of the changes rolling out.

Apple will release the changes next week. There’s a big question here: is this a step in the right direction? It sure seems like it on the surface, but, like most things, it could end up hurting small brands the most.

Hitting Back at Facebook and Winning the Privacy War

At this point, it’s not new to hear about Facebook, apps, and even our gadgets spying on us. Google reads our email. Facebook tracks us around the web. Amazon’s Alexa is listening in on our every conversation.

Some people are more surprised to learn about the permissions other apps have. AirCanada’s app came under fire for recording mobile screens. TD Canada Trust had similar complaints made about their credit card agreements. It’s likely their app engages in similar data collection and surveillance.

In short, our phones are spying on us. Just about every app you install is collecting more data on you than you might think.

This is a problem, for quite a few reasons. It goes way beyond irritating personalized ads. When an app is eavesdropping on your conversations, your Internet browsing, social media, and more, it’s collecting what could be sensitive data. That could later be hacked out of the company’s database.

It could also be sold. In fact, data often is—many of these apps collect data for that reason. They sell it to advertisers.

Facebook is the best example of that precise thing. Facebook’s ad platform only works because they track you all around the web and on your phone. They have plenty of data both inside and outside the app.

The Cambridge Analytica scandal back in 2016 demonstrates the dangers of this. They used Facebook data to target particular demographics, spreading misinformation and collecting more data.

We’ve seen the power of databases and private contractors. In some of our Canadian elections, parties were able to get the information of people likely to vote against them. They then sent out scam calls, directing these voters to other voting stations or polls that didn’t exist. They didn’t necessarily use Facebook, but it’s not hard to imagine that they could have scrapped this data from the web or another resource.

In the US last year, Kpop fans ruined an entire dataset for a political campaign. They purposefully submitted incorrect information, often on made-up users. The data is then useless. The biggest issue, of course, is that the company was collecting this data in the first place.

There are also concerns about people facing real-life consequences for their online behaviour. What happens if sensitive data gets into the wrong hands? Democracy is seemingly at stake. Real people could get hurt.

There are lots of steps individuals can take to try and keep the data they share to a minimum. But there’s also a big trade-off between privacy and being able to use the Internet. When apps track users, store data, and even sell it, it comes with huge risks.

Facebook Will Lose Revenue

The most immediate outcome here is that Facebook’s ad program is going to suffer. It’s likely that most Apple users will block most apps almost all the time. That’s going to shutter Facebook out of a lot of the places they’re used to following users.

That will result in a lack of data, which will impact how effective their algorithm is. It’s the reason Facebook’s been pitching such a big fit over these changes. They’ve already restricted “conversion” objectives to the advertiser's website.

If you sell products on Amazon or Etsy, then you’re not going to be able to direct people to where they can buy products. Of course, advertisers who run their own online shops will do just fine. Anyone else can’t pick “sales” as their goal.

Running for campaigns for other objectives changes who the algorithm targets, though. So Facebook starts targeting users who aren’t great prospects, and the campaign ends up costing more—without yielding results.

So, there’s going to be a two-fold problem here. One, advertisers aren’t going to be able to use the algorithm the way they want. And two, the algorithm isn’t going to be as good as it was, because there’s so much less data coming in.

Basically: if you thought Facebook ads didn’t work now, just wait until these changes come through. Ads are going to be more expensive and potentially yield worse results.

So, Facebook will lose ad revenue as people turn away from its platform.

In some ways, this feels like a big win. It loosens Facebook’s stranglehold on the marketplace. It gives people some of their online privacy back. And it stops Facebook from gathering quite as much dirt on all of us.

But as much as it’s going to hurt Facebook, it’s also going to hurt the smaller brands that use it to target their audience.

Google Has Yet to Weigh In

This is only on Apple mobile devices. The Android operating system is powered by Google, which also has its hat in the digital ad space. Google has about zero incentive to follow Apple’s lead right now. It would be cutting into its own ad profits.

As a result, advertisers might turn to Google over Facebook. If users leave Google for Apple, though, it may force changes to the Android operating system. Google’s already considering adding something, although it might not be as harsh as Apple’s version.

Small Brands Lose Out Big Time

Smaller brands turned to Facebook because it was relatively cheap and it did a decent job targeting their audience.

This will speed up the squeeze big brands have been putting on the digital media space. They have bigger budgets, so they’ll be able to edge out smaller competitors. They can also afford to run less efficient campaigns.

It doesn’t mean big brands won’t hurt, though. AirCanada and TD were both involved in similar behaviours to Facebook. Apple’s changes will block them as well. That means they can’t get their data through Facebook’s platform. Nor can they get it from their own apps. Even the AI technologies for automated ad buying are going to hurt.

As always, though, this hurts the little guy a lot more than the big brand. The big brand can respond by buying up more ad space, even if it’s not well-targeted. They can also switch their objectives and run campaigns that drive different results.

Facebook also claimed this would hurt small businesses. While they’re not wrong, the social media giant made moves to make those claims more true in advance of the changes rolling out. It was part of their coordinated attempt to get people upset over what Apple was doing so they could try to stop them.

Their efforts didn’t pay off. Apple is still rolling ahead with this, and Facebook is going to reel. The changes they’ve already made to their program only hurt small brands even more.

At the end of the day, it doesn’t really matter if it’s Apple or Facebook themselves. Point of the matter is, once again, small brands are the biggest losers in the war between tech giants.

Does This Hurt Consumers?

In a way, we can also think of this as hurting our customers. It blocks us from them. We’re already struggling on social media; organic reach is pretty much dead in the water. If ads aren’t working either, what are you doing to do?

Some consumers are cheering the changes from Apple. It does protect their privacy more. Some of them have said they find personalized and overly targeted ads “creepy.”

But it’s also going to make it harder for consumers to find alternative brands. They’re going to see Coke and Pepsi and that’s it. So, this also restricts consumer choice in a roundabout way. You can’t choose a product you have no idea exists, even if you are sick of both the Cokes and the Pepsis of the world.

What Can Small Brands Do?

Hopefully, you’ve focused on building relationships with your customers. That includes reaching them on social media and making content that resonates with them. If people love your blog, they’ll come back week after week, ads or no.

It may also mean we need to get a bit more creative. Influencer marketing may get a boost from this, as brands look for new ways to expand their reach. We might want to expand narrowcasting channels, like Discord or Clubhouse. They let us focus on our “superfans” and rewarding them.

Guerilla marketing, over-the-top, and older forms of marketing might make a comeback in our marketing budgets. It’s going to be a rough ride, but it does seem like a good thing, in a lot of ways.

The best thing we can do is make sure we understand our brands—the core of who we are, what we do, why we’re even in business. And then we can focus on delivering those things to our loyal customers. When we do that, our marketing efforts will follow.

So, like always: start with the why!

--Margo

A little more about me. My goal is and always will be to inspire and create conversation!

I am a businessperson who has excelled in driving a competitive edge through marketing, strategy, innovation, building irresistible brands and unlocking the genius that exists. I am writing to inspire or create new consideration. If you have ideas or questions that you would like me to put a pen too, I would be delighted.

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