War of the Titans: How Facebook & Apple’s Privacy war is going to affect your Social Ads Business
Mark Zuckerberg goes to court as the trial of big tech begins
If you have any interest in big tech you would have probably seen that Apple and Facebook are at war.
As Anti-trust hearings across the globe begin to take shape against big tech, some of the industry’s largest players have begun to draw lines in the sand. However, despite the heightened media attention and war of words, nothing here is new.
If you listen to Apple’s marketing, they pride themselves on being ‘the Privacy company. ‘What happens on iPhone, stays on iPhone’ is used across marketing collateral, internal documents, and court hearings to place themselves as the only big tech company to care. While this is somewhat true, it’s probably no surprise to learn that as soon as you download a third-party app like Google, Facebook, Twitter, or Amazon, a lot of your privacy is lost. If you ONLY use Apple’s built-in services like Photos, iCloud, and iMessage, then you are safe.
In reality, not many people are doing this. iPhone users are heavily reliant on Data brokers like Google to store photos and in return, sell their data. While consumer habits are unlikely to change anytime soon, and with the American congress and the EU trying to break up the big boys, Apple is now taking matters into their own hands.
In early 2021, Apple drew a hard line in the sand. Across the app store, ‘Nutritional’ labels are now required for all apps to inform users of exactly what data that app needs in order to run. (Heads up; if an app wants access to your photos, location data, Bluetooth, or contacts, it might be worth thinking about if you really need that app). While the reaction of the rollout has been mixed, it is giving users a starting point to see how and why their private data is used.
If you look at the graphic above, you can see the stark difference in what messaging apps want from a user. Ultimately having this transparency is good for users, as they have the right to know what apps are requesting from them.
As you can see, Facebook doesn’t come off great from this new tool, and they are being extremely vocal about it. Along-side privacy labels, Apple is also rolling out new warning labels when people download an app in efforts to prevent cross app tracking. Facebook claims this will have detrimental impact on its ad business, and a knock on affect that will hurt small business that advertise through Facebook.
So, we have to wonder, will this privacy war affect your business?
This isn’t a straight forward answer, we don’t know 100% if Apple giving users the option to opt-out of cross-app tracking will hurt small businesses. The fact is, many users look at so much within the Facebook app that there is still a wealth of data that can be used for tracking. If you have tried to run ads over the last few weeks, you will see an automatic pop-up declaring that Apple is going to harm business with iOS14, and you need to take certain steps to ensure your ads still run.
While it would seem that Facebook is being honest here, we only need to look at their financial results for 2020 and what their 2021 projections to see the estimated impact privacy changes will have on their business. Facebook is saying that the incredible 22% growth in ad revenue they had seen in 2020 would not be maintained in 2021 because of Apple. While I’m sure this is partly true, 2020 did have a huge digital shift that we are already seeing dwindle down as things change around the world.
”Apple may say they’re doing this to help people, but the moves clearly track their competitive interests. This dynamic is important for people to understand because we and others are going to be up against this for the foreseeable future.” - Mark Zuckerberg
Advertising through social media isn’t a new thing and many smaller apps have extremely healthy sales growth without taking so much information from people. There is a real world cost to letting companies like Facebook take whatever they want. We have seen this time and time again over the last 5 years, so being skeptical of what Mark Zuckerberg says is more than fair and understandable. We also need to look at the bigger picture. While Facebook and Instagram continue to retain market dominance, that hold is slipping away in the West. While the company continues to report huge revenue and user growth, this is primarily coming from establishing markets. A new generation has moved to TikTok and existing social networks like Twitter & Pinterest are gaining popularity by the day as people look for alternatives.
Facebook takes out full page newspaper ads attacking Apples Privacy Policy
What can you do?
While scare-mongering does play up to legislators, we don’t have enough data to suggest this will impact small businesses as Facebook is saying. Again, users spend hours within the Facebook app and there is still a lot of data that can be used to target ads to them.
However, if this does have a material impact, it’s best to be ready. Think about how you can diversify your business marketing strategies through different channels. For us, we tailor advertising and targeting depending on the brand and products of our clients; using Pinterest Catalogues, PPC, Google Shopping, LinkedIn Ads, and traditional marketing outlets like TV.
Having your entire business rely on sales from one channel is a risky strategy. Of course, budget can play into this. If you are only using social ads through Facebook, make sure that you leverage your captured audience through Facebook to build lookalike audiences, or even just interacting with the people who like your page to continue sales growth.
No matter what these changes mean, we believe that not only will the impact be low, but this is a great opportunity to invest in diversification.
If you are not sure if your business is ready to traverse this new digital landscape, get in touch with a member of the marketing team to see how we can transform your digital marketing strategy.
