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How Recent Privacy Updates are Affecting the Golden Age of Data

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The Golden Age of Data

We’re living in the golden age of data. Well, for marketers, at least. Many consumers may beg to differ, especially when it’s their data we’re talking about. But it’s hard to deny that marketers have access to more consumer data today than ever before. We can get IP addresses (which can reveal your location), full names, spending habits, viewing habits, marital status, hobbies, interests, and more with little difficulty. Social media platforms are a treasure trove of information that millions of people make public, and companies like Facebook and LinkedIn make enormous sums of money by leveraging that data. We have fancy tools to collect and aggregate data, analyze it, and present it in an aesthetically pleasing way. We’re even developing machine learning algorithms and artificial intelligence (AI) to retrieve user data and make assumptions about it. The amount of actionable data available to marketers is the highest it’s ever been, with much of it being free.

Emphasizing Privacy

Although we’re living in a data-friendly world, it seems the times are changing. In the wake of Apple’s iOS 14 and iOS 15 updates that significantly limit developer access to your personal information, other platforms like Android are following suit with privacy dashboards and other measures that will dry up some data wells that marketers are accustomed to having. Marketers may have to live with less data, or data that’s harder to come by at the very least.

“Senator, we run ads.”

Although it’s easy to be pessimistic about these changes, data collection and all that comes with it aren’t going away; companies have much too significant a stake in it! More than 80% of Alphabet’s (Google’s parent company) revenue comes from Google Ads. Facebook’s numbers are even more staggering, with more than 98% of its total revenue for 2019 coming from advertising. During the 2018 Senate hearing, Mark Zuckerberg confirmed these numbers after being asked how Facebook can offer its services for free by responding: “Senator, we run ads.”

Eliminating all forms of data retrieval and targeting would be catastrophic for two of the largest corporations in the world, and they wouldn’t be the only ones. Advertising is a big business, and consumer demand for more privacy seems to contend with it directly. If consumers are putting a higher emphasis on privacy and are starting to claim ownership of their data, but some of the world’s largest corporations depend on ads to survive, then what’s the solution? Only time will tell, but the most prominent players in big data like Google and Apple are already coming up with unique ways to find that middle ground between privacy and profit.

Apple’s Private Click Measurement

Apple, or more specifically WebKit, the web browser engine behind Safari and other Apple applications, released a new iOS 14.5 feature called Private Click Measurement, or PCM. PCM is an on-by-default feature that eliminates cross-site tracking with cookies. If a user clicks on an ad in-app that directs them to the web, they will maintain their privacy. Businesses can still measure the effectiveness of their ads, but their collection capabilities will be reduced.

“On-by-default” seems to be the new theme for Apple as another part of their iOS 14.5 release, the App Tracking Transparency feature, will let users decide whether apps can track their activity for advertising. It seems the overwhelming majority chose “no,” as just 4% of iPhone users in the U.S. have agreed to app tracking after the update.

Chrome’s Privacy Sandbox

Google Chrome created the Privacy Sandbox to start the transition to a privacy-first browser by introducing new data collection methods and less intrusive attribution than cookies. Google’s ads teams are currently testing a privacy-first alternative to third-party cookies called Federated Learning of Cohorts, or FLoC. FLoC clusters people with similar interests into large groups that businesses can then target. On-device processing will keep browser history private while individuals will have their data hidden in the crowd. Companies will only have access to the group, not the individuals within it.

Chrome has also proposed changes to audience creation and conversion measurement by aggregating information, adding noise to the data, and limiting the amount of data sent from a user’s device. Google claims that these changes won’t affect marketing results, as they expect to see at least 95% of the conversions per dollar spent compared to cookie-based advertising. The only caveat is that marketers will have to be more selective with the data they retrieve and prioritize the most impactful information towards conversions.

What this Means for Marketers

After leaving the office, we tend to forget that we’re just as much a consumer as a marketer. These privacy updates will shroud a lot of data we rely on to create targeted ads, so it’s easy to look at these privacy updates with pessimism. But, these updates will benefit our families just as much as they may prove to be a temporary nuisance to our marketing teams. Again, only time will tell how much the current environment will shift, but it’s not all doom and gloom.

There’s also some good news when looking at these privacy changes from a marketing perspective. Companies that collect user data like Apple and Google are finding solutions that allow ad platforms like Google Ads to report on key metrics while keeping user actions anonymous. There’s too much money in data collection for it to go away entirely. Instead, it seems like data will be anonymized while still providing valuable insights for businesses looking to collect user data. The next few years will define what user privacy and data ownership will look like. Regardless, we may look back to this time as marketers and think about how spoiled we were.

If your business relies on targeted advertising and is overwhelmed by the constantly changing landscape of data, the Evolve team can help! We’ll clear up any uncertainties and keep your business informed and up to date with every new development in the advertising space, including inevitable future privacy updates.