Apple recently announced a significant iOS privacy update that will make it mandatory for the app owners to seek permission from the users before tracking their usage. Facebook soon released a statement against Apple, openly criticising this iOS update as they believed this is against the freedom of the Internet and will be detrimental to small businesses. So what’s the full story and the end game? Let’s find out!
As a digital marketer, it is a little frustrating when people loosely say things like :
“You know that all major tech companies track you every second.”
“I just told my friend that I want to go to McDonalds and wham! I started seeing McDonalds ads on Instagram.”
“How does Whatsapp make money?” When I ask this question in a digital marketing class that I am teaching, I often get an answer which is on the lines of “They sell our data”. While it makes for a good joke in the class, the ignorance that the general public has about data and privacy is staggering. Most people are under informed about the privacy debate. So, let me start by clarifying a few points.
What sort of information do the cookies track?
- You are on a website that belongs to the ‘XYZ’ domain.
- You opened an email from the ‘ABC’ Domain.
- You have visited the website 5 times in the last 7 days, and once every other day for the past month.
- Your timezone is GMT+05:30 (During Mon-Friday – Evening).
- Which city, state and country do you live in?
While these points may raise some eyebrows, an equally pertinent question to ask is:
What sort of information do the cookies NOT track?
- Your full name.
- Your email address (the mail client ID is kept, but for most websites, this doesn’t matter).
- Password or any sensitive information like a credit card number.
- Which school do you go to? Which college are you studying in? Which university/ institute do you work for?
It is important to note that cookies cannot track any personal information of an individual. It’s generally easy to get people riled up about privacy issues and how their personal details are being tracked and sold out to unknown third parties – much easier than getting them to realize that nothing of worth is actually going on. So who is listening to those cookies? Not really anybody! Maybe Google Analytics, but Google has been known to treat aggregated data from multiple sources carefully.
Another important piece of information that the general public needs to be aware of is:
Exactly who can access all the data captured by cookies?
Sundar Pichai made it clear that all the data captured by Google cookies is stored in secure servers, and no individual working at Google can access this data. This data can only be accessed by computers. You have to take on face value and trust the things these large, publicly listed companies say.
So in short, although the data is tracked, the (really) personal information is never captured. And no human can access the data that is tracked. I am sure most of the data privacy activists would be relieved if this information is communicated more clearly to them. But, there will still be a few people who wouldn’t want any sort of data to be tracked. I do respect these people who still want to use technology and want to steer clear of being tracked.
How can we use technology and yet, prevent our data from being tracked?
Fair Question. First and foremost, you need to stop using apps for individual platforms and start accessing their websites via a web browser. There is an incognito mode or a private mode in all the browsers. Use them, and your cookies will not be stored. Furthermore, there are VPS platforms that you can easily use to access the Internet, which will throw the cookie tracking websites off.
Moreover, Apple is coming with a feature in iOS 15 wherein you can disallow all apps from tracking your data. And that is precisely the point of this article. Android users currently don’t have a provision like this. It is not likely that Google will make such a provision, as it is counterintuitive to its own Google Ads ecosystem. However, there still are reasonably easy ways for a person who wishes to use technology and stay away from data tracking.
Why are tech giants protesting against this iOS update?
In India there is a saying, which is roughly translated as – An elephant has two sets of teeth. The one he uses for display, and the other he uses for eating.
Facebook recently issued a statement and openly challenged Apple’s update of taking users’ permission to track their data. It is believed that Facebook estimates 80% of its iOS device users to ‘deny’ this permission. This move from Apple, they said in the statement, will have major ill-effects on many small businesses that are struggling to stay afloat on the free Internet. There are hundreds of thousands of small businesses dependent upon hyper-targeted ads from Facebook, who will suddenly see their ads performing poorly. This will have a direct negative impact on these small businesses. Facebook stands in support of these small business owners.
These, one can say, are the ‘display teeth’ of this giant.
In most parts of the world, Google and Facebook dominate Internet usage. These two companies make a large amount of money off advertising, wherein they serve appropriate ads to their target audience. Approximately 70% of Google revenue comes from advertising whereas over 90% of Facebook’s revenue comes from advertising. Through this update from Apple, if a large number of people opt out of tracking, it is likely to deliver a major blow to the performance of hyper-targeted ads. If the performance of ads drops, the advertisers will be forced to find new ways of reaching out to their customers. Clearly, Facebook does not want any negative impact on their revenue streams. Therefore, Facebook is openly taking a stand against Apple’s iOS update.
These, one can say, are the ‘eating teeth’ of this giant.
Google too will be impacted in a similar manner, but their model is not as heavily dependent upon ads, as Facebook. So they have not taken as forthright a stand as Facebook, but experts believe that this is likely to have a big impact on Google’s revenue model too. Because of the large ads revenue numbers, Google and Facebook are able to offer most of their services for free to the consumers. If ads are taken out of the equation, these companies will be forced to charge the general public for using their platforms.
Can you imagine having to pay Google every time to search for something? Or having to pay to Facebook, every time you want to post an Instagram story?
But why is Apple showing so much concern for its users?
Apple has always stood for its customer-first policies. Among the many things Apple is known for, one prominent thing is its emphasis on the privacy of its users. They are the pioneers of technologies like fingerprint unlock and face ID. Additionally, all app developers know that if they wish to publish their apps on the App Store, they need to tighten all the loose ends for the security of the apps. Almost all app developers have seen their apps being rejected by Apple for security compromises. Overall, Apple has been successful in building a highly secure ecosystem across its hardware and software platforms. One can confidently say that Apple really cares for the ‘Security’ and thereby ‘Privacy’ of its customers.
When Apple started noticing that a lot of apps are tracking information of the users, they had to stand by the general public and disallow all non-permission tracking. I believe Apple too, has the same two sets of teeth and ‘care for the customer’ are the ‘display teeth’ of this giant.
In the year 2008, when the App Store was launched, it was as if Apple had suddenly discovered a new way of doing business. Many believe the App Store has been Apple’s single biggest invention in the four decades-long, illustrious history of the company. A large majority of apps were paid, and Apple shared app download revenue with the app developers. This arrangement earned several app owners millions of dollars, while Apple made billions. But along came Android, backed by Google and they quickly had to share the slice of the market with them. Android launched its Play Store (Android’s own version of the App Store), where the majority of the apps were free. This model complimented Google’s Adsense beautifully, as app developers still made a lot of money, but not because of app downloads, but by the courtesy of displaying Google’s Ads in their apps.
I am sure Apple didn’t see this coming. And when they realised that Ads are the way for them to make money, they had already missed the bus. Google had already built an Ads ecosystem far too sophisticated. Because most app developers still made good money with Google Ads, they kept their apps on the App Store for free, and Apple lost a major chunk of their revenue. Naturally, Apple had to retaliate. According to me, the retaliation came in 2021 with the major privacy update on iOS.
These, I believe, are the ‘eating teeth’ of this giant.
I don’t blame Apple or Facebook or Google for having done what they have done. These are just businesses. ‘Survival’ and ‘Growth’ are two of the biggest objectives for any business. All of them have been trying to achieve just that.
So how will this tug of war end?
I have three theories about the end game:
Scenario #1 : Apple Wins
If Apple wins, we all live in a world where finally technology users will not feel like they are being watched. There will only be permission-based tracking. However, there will be a cost. Just like the old times, there will be an annual subscription fee for most of the apps of today, which the general public will have to pay out of their pockets.
Apple iPhone’s market share will catapult, as people will prefer a device which they can use freely without worrying about who is watching them. Facebook and Google will have to reinvent their models or will have to die a painful death. Small businesses will struggle to run hyper-targeted campaigns and will have to discover and rely on new ways of customer acquisition. Several digital marketing companies will have to relook at their business models.
Perhaps this scenario will be the ‘ding in the universe’ that Steve Jobs was talking about.
Scenario #2 : Facebook and Google Win
If Facebook wins this tug of war, advertising will be the go-to monetization model for all popular platforms. Ads will become more and more targeted. Facebook and Google’s revenues will continue to grow aggressively. They will continue to make efforts to broaden the horizons of the Internet so that they get maximum people to become their users.
The general public will enjoy cheap Internet and subscription-free platforms. However, there will always be a looming danger of the data being tracked. The server where this data is stored, being hacked and all the data being leaked on the dark web. Apple will be forced to consolidate their stand. Digital marketing agencies will continue to flourish.
Scenario #3 : Coexistence
The most likely scenario according to me will be the coexistence of both the above scenarios. People who are willing to pay for their privacy will let Apple charge them. The rest of them will perhaps enjoy free usage of platforms, but with Ads being run.
Now how targeted and effective these ads will be is anybody’s guess. But basically, this scenario means that the general public will be empowered to make their own choice.
Do you think there can be any other possible scenarios? Do you agree or disagree with the thoughts put forth in this article? Please write your thoughts in the comments section below.