Apple is now set to implement its App Tracking Transparency (ATT) feature which will ask users to confirm if they are okay with their data being tracked by apps. This has caused a stir within the tech industry, with Facebook coming out to strongly oppose the change.
By gaining insight from former Facebook insiders, this article will explain why the company is making such a big fuss over Apple’s upcoming privacy change.
Overview of Apple’s upcoming privacy change
Apple is set to roll out a major privacy change to its iOS 14 operating system by the end of 2021. This change will require users to opt-in before app developers can use their device’s data for targeted ads. As the most dominant mobile advertising platform, Facebook will lose billions of dollars in ad sales if users choose not to opt-in.
The privacy change represents a shift away from data driven marketing and toward more personal preferences-driven approach. In addition, Apple plans on letting users allow apps to collect only a portion of their device’s data, further complicating Facebook’s ability to serve relevant ads.
Facebook has responded by releasing its dedicated ad tracking prompt for iPhone and iPad users, hoping that people will opt-in and allow third-party app developers like itself access to data. At the same time, Facebook has gone on the offensive with a series of high profile campaigns arguing against Apple’s move as anti-competitive and hurting small businesses who rely on targeted ads for success. As a result, the companies are now locked in an increasingly high stakes battle which may determine how digital advertising works going forward.
Former Facebook insiders explain why the company is making such a big fuss over Apple’s upcoming privacy change
As Apple prepares to roll out a new privacy policy limiting the amount of data mobile app developers can access, Facebook has responded with criticism and warnings. But why is the company making such a fuss?
According to former Facebook insiders, there are some key reasons why the company is so concerned. In this article, we’ll look at those reasons and explore the implications of Apple’s policy change for Facebook.
How the privacy change will affect Facebook’s data collection
When Apple announced its new privacy initiatives in early 2021, it was clear that the tech giant was on a mission to ensure users had full control over their data. One of the changes in particular – the App Tracking Transparency (ATT) feature – is set to dramatically affect how Facebook monetizes its platform.
Under the ATT framework, developers must obtain the user’s consent before collecting or sharing data with third parties for targeted advertising. For Facebook this means that users must be explicitly asked for permission before Facebook can leverage their data to deliver advertising tailored to them. In other words, without users opting into being tracked and thereby allowing advertisers access to their data, businesses may have a limited audience to target.
The implications of this could be huge — as numerous former Facebook employees have pointed out — because tracking is one of their primary sources of income. Without access to detailed user analytics such as location, demographics and interests, providing targeted services will be difficult and they will likely have to resort to more generic but less effective strategies.
Moreover, without this granular level of tracking it could become more difficult for them to track user behaviour within certain areas or via certain devices which will inevitably lead them away from some key areas such as mobile advertising which accounted for 77 percent of total ad revenue in Q4 2020 according The Atlantic.
Thus far there has been no direct response from Facebook. Still, analysts suggest that if Apple’s ATT policy is embraced by other platforms then Facebook’s bottom line could take a hit— potentially signalling an end to the tech giants’ dominance in global digital marketing space.
How the privacy change will affect Facebook’s targeted advertising
Since the beginning, Facebook built its growth around collecting and leveraging user data for targeted advertising. Currently about 98 percent of its revenue in 2020 comes from ads. However, with Apple’s App Tracking Transparency (ATT) requirement coming into effect with Apple’s iOS 14.5, Facebook will no longer be able to anonymously collect users’ data across multiple other apps to more accurately target ads and measure their performance, leaving a massive dent in their advertising model.
The ATT privacy update requires app developers to gain explicit permission from the user before tracking them across other services or sites owned by third parties. It adds an extra layer of control to the user privacy experience. It gives users ownership over their digital footprint – something previously unknown to many people who may have been made vulnerable because of not understanding the scope of what they were sharing while using various apps and interacting with third-party websites or services.
Before this change, Facebook would access data points like what webpages or other apps you visit, purchase histories or videos watched through connected devices – all without users’ direct informed consent, which raised several privacy concerns within regulatory agencies and civil society groups globally. With this change it is anticipated that this will severely reduce the amount marketing information collected by social media companies which will decrease website sales leads generated through these channels as well as sales conversions generated from those leads since more precise targeting will be reduced drastically reducing overall campaign ROI’s for companies looking to use these channels for marketing efforts. As a result we can expect increased difficulty for companies looking at utilizing social media networks for advertising now that targeting capabilities have been compromised due to this privacy change affecting how much demographic detail can be used by platforms like Facebook to accurately place ad impressions into campaigns and drive traffic towards desired outcomes using their network providing lower visibility into customer behavior patterns online due to this shift in value exchange.
Facebook’s Response
Facebook has been vocal in its opposition to Apple’s upcoming privacy changes. The company has used its platform to publish full-page newspaper ads and a video campaign to push back against Apple’s plans. But why is the company making such a big fuss about this change?
Former Facebook insiders explain the company’s reasoning.
Facebook’s public response
Facebook has responded publicly to Apple’s newly implemented privacy changes, accusing the company of trying to harm small businesses with its update. However, the social media giant has also indicated that it plans on doing everything in its power to preserve user privacy and ensure that its advertising product remains effective.
In particular, Facebook has already changed its data-collection policies and is calling for further clarity regarding what type of data is being collected by the iPhone maker’s new measures. CEO Mark Zuckerberg said, “If Apple optimises [feature] releases only for their competitors while using their dominance to disadvantage others, it’s a serious violation of law and potentially worse than what you see from most companies in terms of anti-competitive practices.”
To contain the fallout from this latest controversy, Facebook has released multiple statements addressing the situation and how it plans to work with Apple moving forward. Additionally, the firm announced new tools for developers and marketers to allow them more control over their ad campaigns, eliminating any potential confusion over how ads are being served on those devices.
Facebook’s internal response
Facebook has expressed internal concern over Apple’s recent proactive measures to increase user privacy. In a leaked statement, Facebook claims that the security requirements of Apple’s iOS app analysis processes are “overly restrictive, arbitrary and capricious.” In particular, the company is concerned about a feature in the upcoming iOS 14 update requiring applications to prompt permission when tracking users across apps and websites run by other companies for advertising purposes.
Given Facebook’s reliance on targeted advertising, it is unsurprising that there was an immediate outcry inside the company. Employees expressed frustration at complying with new privacy features that could undermine their ability to use data for ad targeting. Other reports suggested that executives had held emergency calls to develop strategies for working around Apple’s changes. Still, despite this response from within Facebook they are yet to make any official public statement on the issue.
Implications of the Privacy Change
Apple’s upcoming changes to its privacy policies have stirred significant debate, with Facebook at the centre of it. Former Facebook insiders and observers have spoken up about the implications of the change and how it could affect the social media giant.
In this article, we will look at the potential impacts of the new policy and discuss why Facebook is making such a big fuss about the change.
Impact on user privacy
The impact of Apple’s new privacy update on Facebook, specifically the “App Tracking Transparency” feature, is clear. The change to iOS has been a major disruption to Facebook’s ability to effectively target its users with personalised, relevant advertisements. When Apple users opt out of ad tracking and targeting, they will no longer appear in custom audiences and lookalike audiences created by Facebook.
This update affects user privacy in a variety of ways. For example, when users opt out of tracking and targeting in their iOS settings, they also tell apps like Facebook to stop collecting data about them. Additionally, when their data is not collected for ads’ purposes anymore, it prohibits companies like Facebook from using it for analytics purposes or showing them personalised content in their newsfeeds or other parts of their experience on the app.
In turn, this lack of data will likely lead to decreased revenue for apps like Facebook because if users are not targeted according to personal preferences or demographics anymore then there is no guarantee these ads will be as effective as targeted ads once were before Apple put strict privacy controls into place across its devices. Ultimately, these stricter privacy protocols might make it harder for companies engaging in online advertising – such as website owners – to monetize their online operations successfully.
Impact on Facebook’s business model
Facebook’s business model relies on targeted ad campaigns tailored to users’ browsing interests. With detailed data collection, Facebook can offer its clients hyper-personalised ads that stand out. However, with App Tracking Transparency (ATT) in place, users cannot allow apps like Facebook to collect this data. This means that the carefully constructed microtargeting system is at risk and could be replaced by a much less efficient system of broad-based ads.
The potential loss of user data creates challenges for the ad-selling side of business, marketing efforts, and other attempts to personalise user experience on Facebook. Yet, despite fumbling over these issues countless times, Facebook is still heavily reliant on user data for growth and revenue optimization. As such, Apple’s ATT amendment represents a huge obstacle for Facebook, prompting multiple public statements from CEO Mark Zuckerberg and other senior executives.
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