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Apple Privacy Changes vs. Tech Companies – Who’s Right and What Does It Mean For You?

In Summer 2020, Apple announced that it would be changing its privacy policy and the changes would roll out with iOS 14 in 2021. In short, Apple assigns an IFDA (protected ID) to everyone who uses an Apple device and that is how their behaviors/habits are tracked throughout the internet and on apps. After the privacy changes are put into effect soon, consumers will get a pop-up on every app they have on their Apple device asking them if they want to allow that app to use the IFDA code to track them outside of the app they’re currently in. At that time in 2020, almost no one really understood the scope of what that meant in terms of advertising and how it would be affected. But Facebook and other big tech companies definitely understood the gravity of that change. They spent the following months in talks with Apple to try to figure out a solution to this privacy policy that would be equitable to both parties. After those talks failed, Facebook in particular went on the offensive, taking out full-page print ads and more to denounce these changes and their effects on small business advertising. Other companies have shared their dislike of the change, but Facebook has been by far the most vocal in their dissent. Apple says they’re simply doing what’s right and giving consumers the right to their privacy and letting them decide where to share their info. So, who’s right here? To put it simply, both sides have valid points, but neither are completely altruistic in their stance. Let me explain.

Apple’s Point Of View on Privacy Changes

Apple’s stance is basically that they are making these updates to help consumers protect their privacy. At present, most consumers don’t understand when, how or to what extent their information is being shared with tech companies and their advertisers. By popping up a screen that will force consumers to check “allow” or “ask app not to track” on every app they open on their phone after the change, this does put the consumer back in control of the information they’re choosing to share. Since third-party cookies are also slated to go away later in 2021, Apple felt like this was a good time to make their privacy change as well.

Apple said its customers want more privacy controls built into the iPhone. After years of criticizing the business practices of Facebook, the company has routinely added privacy features to tamp down on the abuses it’s seen on its devices.” (CNBC)

On the surface, this appears to be a simple matter of giving consumers a long-overdue option to share or not. Beyond that, Apple won’t be affected by this change, so for them, this was an easy decision to approve this rollout. People who are on Apple devices have already shared their information with Apple, so they’re in no danger of transparency being lost on their end with their users.

Big Tech’s Point Of View on Privacy Changes

On the other side of this privacy change are big tech companies and the thousands of businesses of all sizes that rely on them for advertising. These changes will affect any company that offers advertising opportunities both on and off their app for businesses, including Amazon, Google, TikTok, Facebook, Instagram, Pinterest, Twitter, LinkedIn, Snapchat, and more. The giants in this space that will likely be affected the most, Google and Facebook, stand to lose a combined estimated $25 billion in the first 12 months after this change. (Forbes) This is almost solely based on the negative impact this privacy change will have on the targeted advertising capabilities and precise reporting metrics of these platforms. While Google has remained mostly quiet about their response to Apple’s upcoming change, Facebook has not. While the app itself is projected to lose large amounts of money, most of Facebook’s ads denouncing the change have done so on behalf of its advertisers and the loss of personalized advertising.

“44% of small to medium businesses started or increased their usage of personalized ads on social media during the pandemic, according to a new Deloitte study. Without personalized ads, Facebook data shows that the average small business advertiser stands to see a cut of over 60% in sales for every dollar they spend.” (New York Times)

This could be an enormous negative impact on advertising success during a time where businesses are already struggling during a pandemic and also already have to compensate for the disallowance of cookies later this year.

The Truth About Apple’s Privacy Changes

Apple very clearly understands the impact that this change will have on big tech companies and businesses who advertise, and if their longstanding feud with Facebook is any indication, they’re happy to make it and “stick it” to these companies. But, if this move was only to protect consumer privacy, as they say, they would’ve already done an extensive educational campaign with their consumers on what IFDA actually is (since it’s an Apple ID), how it’s shared and what data businesses can collect from it on Apple devices. When it comes to advertising on these big tech platforms and data that’s shared, actual advertisers get very little actual data on someone. They get general info like age range, interests (like gardening or fishing) and they get to see how many conversions/purchases their ads have generated, so they know what campaigns and creatives are working on and can make informed decisions on creative to move forward with. No advertisers are getting actual personal data about consumers from these platforms such as name, address, credit card data, etc. But because of the lack of education up to this point, most consumers not in the advertising industry probably don’t even know what IFDA is or how it’s used. Plus, the pop-up that will come across the apps is designed in a way that will make most consumers not want to share their info. Hitting a button that says “allow the app to track me across the internet” makes it sound like advertisers will get to see everything a consumer is doing and collect all of their personal data, which isn’t true now nor would it be after the change.

Most people see data sharing as a bad thing, and a way to get their identities stolen, which is not how the IFDA data works at all. It’s unfortunate that so many big tech companies have had large data breach issues in the past, because that will come back to haunt them now. Those breaches had nothing to do with the advertising side of the platforms, but that’s never really been clear to the consumer. They just remember that data was stolen from the platform, so if given the option to share or not share their information, most will not share, potentially up to 80%. (Forbes)

This will greatly affect advertising performance for businesses on the affected apps, especially those who are in a direct response situation with purchases or conversions being their main KPI. Right now, if a business sells tents, tech platforms have an overarching behavioral profile of its users that shows interests based on sites they’ve visited or articles they’d read, etc. If that information goes away and they can’t target people who like camping or the outdoors, then the number of impressions it will take to get someone to purchase a tent will skyrocket. Those ads will serve all people, including those who have no interest in camping. When doing traditional advertising like TV, having extra people see someone’s message isn’t a big deal because companies know they are also reaching the people that are interested. But digital advertising doesn’t blast out like a megaphone to many users at once. It serves with singular impressions to consumers and companies pay per 1,000 impressions. Having this change converge at the same time cookies are going away and during the COVID-19 pandemic will put a huge strain on small/medium businesses that are still struggling, making their advertising costs go way up and their efficiency go down.

Apple’s response to Facebook’s negative ad campaign about the privacy change was as follows:

“Apple said it was standing up for its users, who should know when their data is being collected and shared across other apps and websites. The company added that Facebook did not need to stop tracking users or creating targeting advertising, but that it simply requires they give users a choice.” (New York Times)

I wholeheartedly agree with Apple that consumers should be given the choice to share their data, but I also believe that they should have been educated about IFDA before this change is rolled out. It’s impossible for consumers to make an informed decision on sharing their data when they don’t understand what data, where, and how it’s being shared. Talking to people outside of the industry, everyone that I spoke to about this indicated that they would’ve automatically said no to sharing before talking to me because they didn’t know what it entailed. The rollout for this change is coming very soon, and here at The Brandon Agency, we’re working very hard at the agency to ensure our clients don’t see a drop in performance, that we have other tactics to pivot to if performance on these platforms starts declining and that we’re always up to date on the latest changes and workarounds to combat any issues.

Need help navigating this privacy change or other paid media opportunities for your brand? The Brandon Agency can help with all of your digital and traditional media placement needs. Contact us today to get started.

Courtney Olbrich

Courtney Olbrich

Chief Growth Officer

Courtney is our Chief Strategy Officer. She has over 20 years of experience in marketing and advertising, with a wide variety of clients. Hailing from Metro Detroit, Michigan, it comes natural that she is an avid sports fan. So much so that all of her pets are named after professional baseball stadiums!

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