Is Apple really protecting user privacy, or did it just wade into the data wars?

Apple finally made its move to allow users of its latest mobile operating system, iOS 14, to opt out of data tracking while browsing website or apps.

Considering around 46 per cent of smartphones in Australia are iPhones, and iOS web traffic represents 54 per cent of all mobile traffic, there’s now a significant proportion of online behaviour in Australia that advertisers may no longer able to use to target audiences.

The move follows a similar announcement from Google earlier in the year to ban the use of third-party cookies on its browsers.

Both announcements have been made in the name of privacy – supposedly to better protect personal data from being amassed and used by advertisers. But the actions taken by Google call into question the validity of the privacy claims; and raise new questions around Apple’s next move.

Is it really about privacy?

By limiting the visibility of online activity from iPhone users, Apple are inhibiting how effectively ads can be targeted, and as a result how valuable those ads are.

Facebook have been particularly vocal in opposition, claiming the move will hurt businesses, particularly small and medium, who rely on highly targeted, cheap advertising on the platform as a marketing tool.

There’s no word yet on what the end game is for Apple – will they charge other tech players like Facebook a fee for the data their customers are generating, or will they create their own advertising platform in order to leverage that data as a revenue stream?

Apple may claim this change in the name of user privacy, but you only need to look at Google’s behaviour in banning third-party cookies to see why the monetisation of user data could closely follow these privacy measures.

Google’s incoming replacement for third party cookies monopolises browser data by removing ways advertisers can target ads on Google’s internet browser, Chrome.

Activity on Chrome accounts for more than half of all web traffic in Australia, meaning that if advertisers want to reliably target a large share of the addressable online audience, the only choice is to put more of their advertising spend into Google’s ad products.

Apple, while not offering an ad model yet, might have just realised the value its competitors were getting from its customers’ activity.

But what does it mean for brands?

In the immediate future there are changes to online advertising strategies that brands must enable, however, it’s unlikely to significantly change the advertising mix and spend per platform. Facebook has been quick to create an alternative option to its website pixel that no longer works for iPhone traffic, and Google is already offering resources to teach marketers how to use its cookie-replacement platform.

However, a longer-term view has a more complicated outlook.

In a market where people are less irritated by ads in general but more annoyed by irrelevant ads, effective targeting will continue to be a priority when deciding on online advertising spend.

As major players further limit the use of their data outside of their own ad products, the choice for advertisers on where to spend their money will only decrease.

Google and Facebook’s combined market share for advertising in Australia increased to 80 per cent last year and is expected to continue to rise. Competition from other advertising channels will continue to be stamped out, unless another major player like Apple comes to the party.

You can reach out to the IMPACT team for more information on how to address these issues in your marketing strategy and how strategic communications plans will benefit your brand in a highly monopolised advertising market.

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