Last year’s mobile privacy move by Apple to limit consumer data tracking on its iOS devices was by far the most impactful change to mobile advertising in its brief history. Virtually overnight, mobile marketers lost much of their ability to target, personalize, measure, and optimize their campaign activity with deep granularity on Apple mobile devices.
App-first businesses—most notably, social companies that rely on mobile advertising revenue like Snap, Meta, Twitter, and Pinterest—have been hit the hardest:
Since Apple’s privacy update went into effect in late April 2021, these four social media companies have erased a combined $278 billion in market value. Meta’s value has fallen by $169 billion since April 26, 2021. Similarly, Snap has fallen by $50 billion, Twitter by $26 billion, and Pinterest by $33 billion. For Snap, Twitter, and Pinterest, those losses represent around half of their previous market values, a staggering decline.
With iPhones representing nearly half of all smartphones in the US, the silver lining was that mobile marketers have still been able to continue their advanced data-driven tactics on Google’s Android operating system.
However, now Google is following Apple’s shift on mobile via an announcement on its blog:
Today, we’re announcing a multi-year initiative to build the Privacy Sandbox on Android, with the goal of introducing new, more private advertising solutions. Specifically, these solutions will limit sharing of user data with third parties and operate without cross-app identifiers, including advertising ID. We’re also exploring technologies that reduce the potential for covert data collection, including safer ways for apps to integrate with advertising SDKs.
Five things to know about Google’s mobile privacy change announcement
Before Apple’s change, mobile marketers could track iOS users—anonymously—rather effectively to power data-driven targeting, personalization, attribution, and other powerful ad tactics. iOS users could always opt out of the tracking, but the policy change now asks users to opt-in to being tracked. The numbers vary across various studies, from just 4% of users choose to opt-in to rates as high as 21%.
It is unknown yet whether Google will enforce the same policy on Android, but it won’t be surprising if it did. If its policy is anywhere near what Apple has done with iOS, mobile marketers will have to strategically realign to this new reality.
Privacy is a ‘fundamental human right’
In a video from its Worldwide Developer’s Conference, Apple CEO Tim Cook outlined the company’s philosophy driving its decisions:
At Apple, we believe privacy is a fundamental human right. We work relentlessly to build it into everything we make. It’s fundamental to how we design and engineer every product and service we put into the world. While others are focused on making customers the product, collecting ever-growing amounts of personal information, we’ve kept the lens focused on how technology can work for people. And that’s meant introducing countless features that give users transparency and choice over how their data is collected used and shared.
Based on the low opt-in rate of iOS users enabling brands to track their activity, it would seem that the public agrees.
iOS + Android Privacy = a complete game-changer for mobile marketers
Once Android limits consumer data tracking, more than 99% of all mobile activity will be impacted. As a result, mobile marketers won’t just be limited with their legacy approaches—they’ll be completely shut down.
This doesn’t mean that marketers won’t be able to advertise on mobile devices effectively. Still, much of the innovation and tactical advancements that have been made in mobile marketing over the last decade will be severely impacted. As a result, marketers will have to get creative and figure out new ways to reach and engage their audiences.
Ultimately, privacy advocates have consistently focused more on limiting third-party data collection which is seen as infringing on consumer rights. So, one of the primary reactions to last year’s Apple’s change is that brands are looking to grow their first-party data and find more ways to leverage it.
How mobile marketers will continue to drive performance
We believe that there are many avenues available to mobile marketers to continue to advertise effectively in a data-safe environment.
- Make better use of the data they have. There are still myriad signals marketers can use to advertise effectively. Contextual data, demographics, lookalike targeting, first-party, and third-party audiences are just a few of the datasets that mobile marketers will need to master better in the age of privacy.
- Diversify spending. Some mobile channels and publishers are more affected than others by tracking limitations. For example, paid search, retail media, and app store advertising targets consumers via the keywords they query so they don’t require deep tracking mechanisms to target efficiently.
- Build up their brands. Brand-building is fundamental to advertising effectiveness. While highly-targeted advertising can help move the needle at scale, building strong trust and equity can offset the loss of advanced data-driven tactics.
- Build stronger relationships with consumers. Successful marketers don’t run relationship campaigns—they’re always looking for ways to get closer with their customers. Driving up opt-in lists for email marketing, for example, can pay dividends for companies who prioritize it.
Marketing measurement is a priority area to be addressed with mobile privacy
One of the areas most severely impacted by consumer tracking limitations is marketing measurement. Ask most digital marketers, and they’ll tell you that the key ingredient to driving ad performance is the constant optimization of campaigns—pausing poor-performing ads, testing creative messaging, shifting budgets to more profitable channels, etc. And optimization is driven by accurate measurement.
Without accurate measurement, marketers fear that they may be virtually running blind when it comes to improving campaign performance.
This fear is not completely unfounded. The changes to Apple iOS—and, presumably, the planned changes to Android—make it impossible to follow an ad click or impression to an app or website where a consumer buys a product or downloads an app, at least if you have opted out of tracking. This degrades the ability to directly measure the impact of mobile advertising, in large part because of attribution models that endeavor to quantify every touchpoint a consumer has with a brand on their path to conversion.
However, these attribution models are not without their drawbacks. For one, they can encourage measurement in silos, with marketers isolating the impact of individual ad channels and publishers, and sometimes losing the forest for the trees. They also require a more comprehensive set of inputs than is feasible for many advertisers.
Perhaps the biggest issue here is one of disruption. If a shopper buys a product after seeing, or clicking on, a social media ad, it still happens. That hasn’t changed. How we, as marketers, evaluate how and why that shopper made that purchase is what has to change.
And it is already changing. Since the introduction of iOS 14.5, when the first of these tracking changes went into effect, we have seen a myriad of potential solutions to this loss of signal. Facebook itself continues to fine-tune its conversion estimation tools. Incrementality testing allows advertisers to continually structure test versus control scenarios to gauge the impact of advertising campaigns more holistically. Data clean rooms and first-party data collection are frequently cited as promising ways for advertisers to understand how their programs are working. But it will require some investment of time and effort to rebuild those measurement platforms, and that can be both intimidating and a massive change from the status quo.
Our take: actionable, first-party data is the most future-proofed option
Privacy advocates have maintained for years that making the web more secure for consumers is a keystone for opening up the Internet’s full potential. While maybe in the short term, these changes are a tough pill for marketers to swallow, the idealistic ending to this story is that consumers feel safer online and accelerate growth for every company tied to the Internet.
What has also become clearer over the past few years is that there won’t be any loopholes or ways to circumvent these new privacy policies. On the standard web, popular browsers Safari and Firefox now turn off third-party cookies by default, and Google’s Chrome has already announced a similar change in 2023. Marketers hoping for a universal ID solution to enable business as usual should probably start looking for a Plan B and be more prepared for the inevitability of a data-less future.
At Skai, we suggest the potent combination of:
A) closed-ecosystem publishers with tremendous scale and reach (i.e. Google, Facebook, Amazon, Microsoft, Walmart, Apple, Snap, Pinterest, etc) that offer endemic targeting and measurement
B) powered by a brand’s first-party data
First-party data + closed-ecosystem publishers that can make it actionable give marketers the opportunity to continue to target, personalize, measure, and optimize. Skai is an independent, tech intermediary that can help brands pass their first-party data to publishers in a way that mitigates privacy risks for both parties.
For more information on how Skai’s suite of solutions can help your brand or agency navigate through the Privacy Era, please contact us today.