If you’ve been involved with online advertising off-late, you likely know what app tracking and anti-tracking entails. However, if you’re not, let’s get you up to date. App tracking is based on identifying a user’s online activity whenever they use their electronic devices. This allows marketers access to valuable information which enhances their ability to target interested audiences.
Haven’t you always wondered why you’re suddenly seeing ads for a keychain everywhere you look online when you only searched for one on Google yesterday? Yep, that’s app tracking at play. While such tracking has benefitted tech companies and advertisers for years now, it doesn’t seem like it’ll stick around for much longer the way it has thus far. The reason behind this is the growing concerns people across the world have regarding sharing their private information with tech giants and companies that want to promote their products and services online.
Sure, it’s nice to view ads that are targeted toward user preferences now and again. But how many people are happy with these ads when they realize the ads were based on their browser history, location, and other details? Not very happy, apparently. That’s why Apple recently decided to update its privacy policy for users by introducing transparency on app tracking. To no one’s surprise, Facebook tried to intervene and prevent this change from going through. And why wouldn’t it? It’s likely to lose a significant amount of revenue from advertising if advertisers aren’t able to target users as they did before.
This is why Apple has been witnessing a drastic cut in its share of the budget from large advertisers. Apple’s views on privacy have earned it a degree of trust from users, but the tech mammoth has paid for it dearly. However, it’s interesting to note here that Apple uses Google as the default search engine, knowing full well that Google still tracks and stores user activity. This means that with the new iOS update users can prevent apps from accessing their data, but Google is still privy to such information that allows it to use target-based advertising.
Last year, Google decided to disallow third-party cookies in an attempt to prevent online advertisers from accessing the private information of users without permission. And what about Google itself? Well, with the Privacy Sandbox initiative, it seems clear that Google is in no way ready to give up tracking people’s online activities. Through this initiative, Google can store and use the information it collects from those who use it. However, under this new arrangement, it wouldn’t be individuals that would be tracked, it would be groups of individuals. And who would do the ad targeting? Third-party services in the employ of companies wishing to advertise online.
It’s not hard to believe the announcement of this initiative stirred up quite the controversy last year when it was first made. After all, why would advertisers give Google the advantage of potentially using individual user information when they can only target people in groups? And more importantly, why are advertisers still using Google despite this policy when they aren’t willing to do the same with Apple? The answer is simple: Google’s privacy initiatives aren’t as stringent as Apple’s. Also, Apple’s changes are already in effect whereas Google’s policy to eliminate cookies won’t be implemented before 2023.
Even with the new policy in effect (does the acronym “FLoC” ring any bells?), advertisers would still have access to the kind of information that’s valuable to them and allows them to target audiences. The only catch here is that the information would be collected from groups rather than individuals, as I mentioned before. For instance, if you have been reading articles on trading and stocks for the past few days, you’d be included in a group of thousands of users reading the same kinds of articles online around the same time as you. The ads you then view would be the same ads they all view, based on your collective preference rather than individual preferences.
Sure, this isn’t as effective as using cookies to target individuals, but surely you can see why it’s effective enough bearing privacy concerns in mind. With all the hue and cry surrounding how user information is being accessed by companies online, this looks like a good alternative to third-party cookies, but is it? Considering that Google can still target users based on their activity on Google and YouTube, it’s obvious why kissing cookies goodbye won’t hurt its revenue and is unlikely to assuage privacy concerns completely in the long-run.
As for the question of why advertisers still opt for Google despite these impending changes, the answer is the same as above: Google can still target users based on their activity on Google and YouTube. Advertisers that no longer have access to cookies will inevitably turn to Google to target users. In other words, Google will have an ace in the hole while advertisers are left floundering to maintain the kind of conversion rates they enjoyed when cookies reigned supreme.
Besides, small companies that are just entering the market are likely to suffer from these policy changes. Older companies that have had access to user information such as their email addresses, phone numbers, and past web activity may hold an unfair advantage over newer companies that can only access the information that Google collects from users on its own sites. This is because third-party services would only be offering group targeting under the new system.
Guess who really comes out on top regardless of which way you spin this? Google, of course. While the stringent new reforms Apple has implemented recently have increased its standing in the eyes of its users, it hasn’t done its share of ad spending any favors. However, it’s worth mentioning here that Google is reliant on floating ads to make revenue and Apple isn’t. Therefore, it makes perfect sense that Google will always find avenues to keep advertisers satisfied in the long run.
