Apple vs. Facebook: Who Wins the Privacy War?
With iOS 14, released last year, Apple said it would add “privacy labels” to protect its users, telling them what information apps track and letting them choose whether to allow an app to collect their data. Facebook, which relies heavily on advertising revenue, went head-to-head with Apple.
ILING WuProduct Marketing Manager
With iOS 14, released last year, Apple said it would add “privacy labels” to protect its users, telling them what information apps track and letting them choose whether to allow an app to collect their data. The update dropped a bombshell on social media and the digital advertising industry, and Facebook, which relies heavily on advertising revenue, went head-to-head with Apple.
Under Apple's privacy rules, when users open an app they'll see a privacy pop-up asking for permission to access their Identifier for Advertisers (IDFA). The move is expected to hit social media and digital advertisers hard, since most users probably don't want to be tracked.
Apple says it updated its privacy rules with “users first” in mind, to protect its users' rights. Facebook didn't sit still. Last December, it launched a PR campaign against Apple, condemning it in The Wall Street Journal, The New York Times and on its own website for changing privacy rules unilaterally, a move Facebook said would hurt the small businesses that rely on its platform to advertise.
Facebook's position: suing Apple
At F8 2019, Facebook CEO Mark Zuckerberg said the company would put more emphasis on user privacy.
Since Apple announced the iOS 14 privacy update, Facebook has repeatedly criticized Apple's privacy policy. As a company that depends on ad revenue, Facebook is deeply unhappy with the changes, arguing that Apple is using user protection as a pretext while actually abusing its dominance to shut out competitors. Last December, Facebook ran full-page ads in The New York Times and other outlets declaring, “We're standing up to Apple for small businesses everywhere.” Recent reports say Facebook is now ready to file an antitrust lawsuit against Apple.
Restricting IDFA is a major blow to Facebook. Advertising accounts for 98% of its revenue, so this amounts to handing over its golden goose. Still, Facebook has proposed interim solutions, such as using the Conversions API to address current problems with third-party cookies.
Two years earlier, Apple had already designed SKAdNetwork, an ad attribution framework for iOS, as an alternative. Like IDFA, it measures ad performance, but unlike IDFA, SKAdNetwork doesn't track specific users or devices, only “behavior.”
***Further reading: ***Third-party cookies are going away. How should marketers respond?
For Apple, user data is the greatest asset
Photo Credit : Apple
iOS has always put privacy first. Apple adds value to its products by protecting user privacy more thoroughly, using stricter protocols to safeguard user data that used to be easy to obtain. In turn, users are more willing to buy products they see as safer.
Apple CEO Tim Cook has even said publicly that a business model built on using data to target ads only makes real-world consequences, such as fueling violence and eroding public trust in vaccines, worse and worse. “If a business is built on misleading users through data, it doesn't deserve our praise. It deserves reform,” Cook said. He didn't name names, but he was clearly talking about social platforms led by Facebook.
Clearly, Apple isn't willing to compromise on user privacy. With every major platform protecting its own interests, how should advertisers and merchants respond?
First-party databases, Social CRM and CDP are the future
Many big platforms have long been building first-party databases. Amazon, the global e-commerce giant, places great value on its customers and built a CRM to understand their buying habits, even pushing products to them when there are sales or discounts.
What Amazon achieves with CRM:
- Tailored offers and promotions
- Collecting and storing personal data
- Personalized product recommendations
- Customer service
- Extended user services
Keeping user data in your own database this way means you can get detailed customer information faster, resolve every issue faster, keep users happier, and then deliver the next shopping recommendation.
*Further reading: *What is Social CRM? Understanding the essence of SCRM
OakMega: the Social CRM built for marketers
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