Earlier this year, Jonathan Taplin made a compelling argument in the New York Times that Google and Facebook have gone well beyond monopoly status and should be broken up by the US government. Well, with the release of the new Apple iPhone 8, Taplin’s argument now takes on even more weight. Mobile advertisers are furious with one of the primary changes that’s built into the debut of iPhone 8. Outwardly, the change isn’t obvious and its hidden nature is exactly what’s causing all the controversy.
The controversy has to do with mobile advertising, specifically what’s called re-targeting ads, which have become one of the standard ways that advertisers sell to consumers. Adroll, one of the most popular online prospecting platforms, explains retargeting like this: “Retargeting converts window-shoppers into buyers. Generally only 2 percent of shoppers convert on the first visit to an online store. Retargeting brings back the other 98 percent. Retargeting works by keeping track of people who visit your site and displaying your retargeting ads to them as they visit other sites online.” It’s the cookies that are attached to a consumer’s account when they are surfing the web which provide the data necessary for re-targeting ads to work.
In what’s been called a PR move, Apple announced that with the iPhone 8, they will be giving consumers more control over the privacy of their browsing data and history. They’ll be doing this by an update to the Safari 11 browser that’s integrated with the iPhone 8. The new macOS feature is called Intelligent Tracking Prevention, or ITP. As Nick Statt explains in an article on The Verge on September 14, “ITP uses machine learning algorithms to identify tracking behavior on the company’s Safari browser, like the presence of persistent cookies from third-party ad networks, and imposes a strict 24-hour time limit on those tracking tools’ lifespans.” The 24-hour time limit is the kicker. For retargeting to work, the cookies need to continue to track where a consumer goes on the web and keep serving up ads. The widespread coverage of this change is being referred to as “cookie blocking” (BetaNews) and “anti tracking” (ZDNet).
This all sounds good for the consumer, yet major industry groups are calling the move by Apple a “unilateral and heavy-handed” decision that greatly affects a business’ ability to target their advertising. On September 14, 2017, the American Association of Advertising Agencies (4A’s), the American Advertising Federation (AAF), the Association of National Advertisers (ANA), the Data & Marketing Association (DMA), the Interactive Advertising Bureau (IAB) and the Network Advertising Initiative (NAI) issued a joint “Open Letter from the Advertising Community” claiming that the latest move by Apple “overrides and replaces existing user-controlled cookie preferences with Apple’s own set of opaque and arbitrary standards for cookie handling.”
These advertising groups see the writing on the wall. This change by Apple could ultimately destroy –
or at least cripple – the digital advertising business as it stands now. Much like Jonathan Taplin, they say that “Facebook and Google already gobble up more than 90 percent of every new ad dollar spent on the web,” and this decision by Apple will make the situation even worse. Taplin reports that currently Google has an 88 percent market share in search advertising and Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77 percent of mobile social traffic. So, this decision doesn’t just have to do with privacy but also with the domination of advertising on mobile devices.
In a response to the Open Letter, Apple points out that Intelligent Tracking Prevention (ITC) “does not block ads or interfere with legitimate tracking on the sites that people actually click on and visit. Cookies for sites that you interact with function as designed, and ads placed by web publishers will appear normally… Apple believes that people have a right to privacy. ITC is a more advanced method for protecting user privacy that detects and eliminates cookies and other data used for cross-site tracking, which means it helps keep a person’s browsing private.”
Thus far, most of the consumer response to Apple’s decision seem to be very positive. Readers appear to have little regard for the advertising companies that specialize in re-targeting ads, and certainly less regard for Google’s and Facebook’s privacy policies. Comments have generally been along these lines:
Casper76 – September 19, 2017
boo hoo poor marketers…
Momin Nz – September 18, 2017
An absolutely amazing move by Apple, these companies are bullies and have no right to track user data plus recreate a pattern from user history and target again and again. I’ve tried getting rid of these tracks but seems impossible. Welcome, Apple’s move to stop these thieves.
Jim Crusan – September 17, 2017
I for one don’t want these advertisers using up my data with all their stupid ads. Much as I hate Apple, more power to them in this case.
Apple’s decision brings the whole issue of data and browsing privacy to the forefront, hopefully inspiring a real dialogue about how to balance a business’s ability to advertising on one hand versus a consumer’s right to privacy on the other. Time will tell what happens. No doubt, it will certainly be interesting to watch to see how advertisers and consumers will respond and adapt.
This post is part of our contributor series. It is written and published independently of TNW.