Update: On Tuesday April 20th, Apple CEO Tim Cook announced that the next major update to the iPhone operating system, iOS 14.5, will be released “next week”. This update will include the App Tracking Transparency updates. In a Blog Post, Apple announced that these ATT requirements will apply to all apps starting April 26, 2021.
There is a data privacy war happening involving 3 parties: Apple, Facebook, and browser cookies. In 2020, Apple released a major privacy update to its native web browser, Safari, that automatically blocked all third-party cookies. This year, they announced a new App Tracking Transparency feature which forces app developers to ask for permission from users to track and share information explicitly for cross-platform ad targeting. This announcement has shaken companies like Facebook, whose business model relies on revenue from targeted ads.
In this article, we’ll break down all of the details. We’ll discuss:
- Back to the basics: what are cookies and how are they used for advertising today?
- What’s going on between Facebook and Apple in regards to privacy
- How this may affect marketing in the long run
What are cookies? How are cookies used for advertising?
Put simply, browser cookies are small pieces of data passed between websites. There are two types of cookies: first-party cookies and contentious third-party cookies.
First-party cookies are stored directly by the website you are visiting. Their main purpose is to remember the visitor’s profile and provide a customized user experience for them upon their return. This could look like language settings, saved passwords, or shopping cart items.
The store analogy: Using a first-party cookie would be like walking into a store you’ve already visited the day before and being greeted by an employee who remembers your name and what items you browsed last.
Third-party cookies are cookies that are created by domains other than the one you’re visiting. These cookies follow your online journey, collecting behavioral information as you visit various websites. Digital ads rely on these to serve relevant ads and for ad retargeting.
The store analogy: Using a third-party cookie would be like leaving a store and having the employee follow you around as you visit other stores, taking notes and reminding you about a similar item they have at their store.
What’s going on between Facebook and Apple?
Apple has announced the privacy changes to its App Tracking Transparency feature, set to roll out in “early spring” of 2021. The privacy implications are big. Currently, you have to opt-out of sharing your information with apps through your Identifier for Advertisers (IDFA). Apple’s change requires you to opt-in.
Every app will be required to request permission to share your IDFA with third parties, with a clear explanation of how the data will be used. It’s important to note, however, that apps will still be able to use first-party data for personalized advertising.
So what does Facebook have to say about it? Considering their advertising business model they are, predictably, not thrilled. Facebook CEO Mark Zuckerberg has publicly criticized the move, claiming the update could hurt small businesses and developers that rely on the revenue generated from Facebook ads.
How will this affect marketing in the long run?
It will be interesting to see how developers and platforms pivot once these changes take effect. Ad targeting may begin to go back to what it was before – more direct and long-term relationships with user groups. Advertisers will have to side-step the third-party cookie and cultivate trust to drive sales.
Marketing best practices change every day, and marketers have become very good at adapting.
Are you interested in building a forward-thinking digital advertising strategy? We’d love to hear from you. Contact us!