After Apple changed its privacy settings, Facebook and other four major social platforms lost nearly tens of billions of dollars

A British "Financial Times" investigation found that after Apple changed its privacy settings, Snapchat, Facebook, Twitter and YouTube lost approximately $9.85 billion in revenue.

In April of this year, Apple began to implement a new privacy setting-the "App Tracking Transparency" (ATT) policy. This means that apps must obtain permission before they can track user behavior and provide personalized ads.

▲ License interface.

Before iOS 14.5, developers can use a large number of tools to track user data within the app to help advertisers better serve ads to users. In addition to third-party tools, the main tool used by developers is an Apple-controlled system-Identifier for Advertisers (IDFA).

Technically speaking, the ATT policy will not completely change the way iOS handles ad tracking. What it does is to force developers to give users priority:

Users should know when their data is collected and shared by other applications and websites-they should have the right to choose whether or not to allow it. The ATT policy does not require Facebook to change its method of tracking users and creating targeted advertisements, it only requires them to give users a choice.

This is the point, and it is also called the "obvious baseline" by groups such as the Electronic Frontier Foundation.

If the user allows tracking, everything will be the same as before. Of course, most users choose "Do Not Authorize". In April of this year, Facebook internally estimated that about 80% of iOS users would choose to decline.

▲ Picture from: unsplash

After the implementation of the ATT policy, advertisers did not know how to portray users, thereby cutting spending on Snap, Facebook, Twitter, and YouTube, and shifting budgets to other places.

According to the Financial Times, compared with other social platforms, Facebook has suffered the most losses due to its large scale.

The strongest opposition to the ATT policy at the beginning also came from Facebook.

In December 2020, Facebook used full-page newspaper ads to criticize: Apple's new system will limit the ability of companies to deliver personalized ads and effectively reach customers, which in turn will hurt small businesses that rely on personalized ads.

This is true to a certain extent. Advertising on Facebook is really important for SMEs. But Facebook, as a near-monopoly social platform, is very hypocritical to hide behind small businesses. Users can also ask back:

It’s great to stand up for small businesses, but how does Facebook stand up for consumers who don’t want to be tracked? Is Facebook's business model based on consumers being tracked on every website they visit?

In fact, the impact on Facebook is far from hurting the bones. The type of advertising affected by the ATT policy is not an important part of Facebook's business model—less than 5% of Facebook's $84 billion in annual advertising revenue—but it is still a significant change.

After deleting full-page newspaper advertisements, Facebook also claimed that the ATT policy may damage free websites that rely on advertisements for their livelihoods, forcing users to pay for content that was once free. Facebook realizes that a more effective way is to persuade users to click "Allow Tracking" to trade privacy for convenience.

We often say that free is the most expensive, or as marketing professor Scott Galloway once said-"If you don't pay for the product, then you are the product."

This is similar to the "audience merchandise theory" proposed by Dallas Smythe in 1977-advertising time or page value is an indirect effect of communication, and media-produced programs, information, and entertainment are not its main products. They are just for attracting audiences. The "free lunch" provided, the audience is the real product of the medium.

Today the "audience commodity theory" is still established, even deeper and more concealed, such as the Facebook-Cambridge Analytic data scandal. We may also benefit from the free information and personalized advertisements on social networking sites, but when multiple interests are related and conflicting, technology companies should be more transparent and users should have the right to make their own choices.

▲ Facebook CEO Zuckerberg testified before Congress.

The ATT policy may promote social platforms and other applications to be more creative in advertising, and it is unclear whether developers will focus more on Android devices. Eric Seufert, an advertising technology consultant, pointed out:

Due to the ATT policy, some of the most affected platforms—especially Facebook—have had to rebuild their machines from scratch. I think it will take at least a year to build new infrastructure. New tools and frameworks need to be developed from scratch and extensively tested before being deployed to a large number of users.

After iOS15, Apple's own way of sending advertisements has also changed, which seems to indicate that it requires itself with standards similar to the ATT policy.

In the past, Apple collected content read, purchased, and searched on devices by default to provide relevant advertisements in the App Store, Apple News, and the "Stock Market." But starting with iOS 15, Apple plans to ask for permission, and the collected information is associated with random identifiers, not Apple IDs, so as to better protect user privacy.

Among all technology companies, Apple’s privacy protection is indeed unique, and it has the confidence to use this feature as a selling point .

On the one hand, compared to Google and Facebook, personalized advertising does not have much interest in Apple. It mainly relies on hardware for profit. All system functions and services basically provide added value for hardware products; on the other hand, Apple’s The closed policy controls the entire ecosystem from the device to the application store to the application, so it is qualified to require application developers to pay attention to privacy protection.

However, even if it is more and more common and inevitable to trade privacy for convenience, privacy is our private property. So my first reaction when I saw the ATT policy was-shouldn't you ask me?

Grapes are not the only fruit.

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