“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Uriah Av-Ron, partner and founder at Oasis Public Relations.
Apple may not be using its privacy-friendly reputation as a “Trojan horse against ‘the rest of the world,‘” but that doesn’t mean it really cares about user privacy.
Back in 2018, Tim Cook said, “The truth is, we could make a ton of money if we monetized our customer—if our customer was our product. We’ve elected not to do that.”
Cook has also said, “We’ve never believed that these detailed profiles of people, that have incredibly deep personal information that is patched together from several sources, should exist.” He added that these sorts of profiles “can be abused against our democracy” and “abused by advertisers as well.”
Fast forward to 2022, and, to deliver the most relevant Apple Search Ads, the company uses “information a customer includes in their Apple ID account” for ad targeting purposes. The data it uses “includes historical information about users’ transactions on the App Store, including apps they’ve downloaded and in-app purchases they’ve made.”
If that isn’t monetizing your customers, what is?
A tale of two opt-ins
While Apple monetizes its users’ customer data, it blocks others from doing the same. Apple can do so because its AppTrackingTransparency (ATT) initiative restricts ad targeting on Apple devices to methods that use first-party data exclusively, and Apple is the only one with this first-party data on iOS.
As Eric Seufert pointed out, Apple describes its collection and use of behavioral data for ad targeting as personalization in its own user consent prompt for Apple Search Ads. But third-party app developers are required to use Apple’s ATT consent prompt, which describes how the app will “track you across apps and websites owned by other companies.” Guess which prompt generates more opt-ins?
With the company creating a distinction between Apple’s use of targeting data and everyone else’s use of targeting data, the hypocrisy is glaring.
If customer monetization was so wrong in 2018, why is Apple doing it today?
Privacy is important, but targeting is too
Recently, much of the narrative around privacy has focused on Apple, Meta, Google, and Snapchat. But others in the digital advertising ecosystem were more deeply impacted by the end of Apple’s Identifier for Advertisers (IDFA).
In his response to the FTC’s Advanced Notice of Proposed Rulemaking on Commercial Surveillance and Data Security, Boston University Professor Garrett Johnson presented academic and industry research highlighting the benefits of targeting data for marketers, publishers, and consumers.
Johnson’s research found that “cross-site/app identity creates significant value for advertisers by improving targeting, measurement, and optimization.”
Furthermore, a recent large-scale experiment across almost all of Facebook’s conversion-optimized advertising showed that the cost of acquiring an incremental customer increased by 37% without the use of common targeting data. This research also revealed that small and medium-sized businesses are disproportionately hurt by eliminating cross-site identity.
Johnson noted that publishers and content creators, including news sites, also suffer without targeting including cookies and third-party data. This was supported by research from Google, which revealed that ad prices decreased by 52% due to cookie loss.
And even consumers pay a price when targeting data is not in play. They prefer to see more relevant advertising, which is made possible by ad targeting.
As someone who has been working with ad tech companies since 2003, it’s jarring to see Apple using privacy as a point in its revenue growth deck. After all, advertising will never come close to generating the amount of revenue Apple makes from iPhone or computer sales. And Apple’s ad business is just as dependent on user data as anyone else’s.
It’s time for Apple to be honest about the company’s stance on user privacy in 2022. And if Apple is serious about growing its advertising business, it’s time for Tim Cook to channel his inner Franklin Delano Roosevelt and support the value of advertising.
Follow Uriah Av-Ron (@Uriah_Oasis_PR) and AdExchanger (@adexchanger) on Twitter.
